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Recent reports indicate that new construction is in such high demand that existing residences will be ready to list in the coming months. 2021 saw the highest rates of home construction in the last decade-plus.
The gap between home construction and household formations grew in 2021, so the housing industry should expect to see optimistic builders continue to accelerate home building. This trend may be beneficial for sellers hoping to buy, however. Even if current inflation slightly dampens demand, sellers will find more options for their own purchases, enabling them to enter the market without the risk of selling before securing a home.
Future new construction projects are building hope into the horizon for low inventory woes, but you’ve got buyers looking now. How do you help them find the home they need in today’s market?
The National Association of Realtors also reported that 68 percent of sellers used an agent recommended by friends or family, and 58 percent used the agent they previously worked with. This means the inventory you need is likely already in your database.
So how do you find it?
Real estate coach Tom Ferry said to begin by recognizing the three questions you must answer for your clients to stay relevant as the real estate expert:
- What is the current value of the client’s home? You can either provide this information for them, or you can let them find it on Zillow. The choice is yours.
- Does the client have the best interest rate for their situation? There are 138 million homes in the U.S., and about half of those that still have a mortgage attached to them have an interest rate that is higher than the current rate.
- What is their future plan for the home as their family grows and their needs change? Is this the forever home, or is this the home for a season?
Agents must address these questions for the people in their database — using email, phone calls, direct mail, video messages or any other means of communication — or those clients will likely find another source for the details they are seeking.
The easy question is whether you want them to get the information from you or from some other source.
Done well, the comparative market analysis can answer questions No. 1 and No. 3 for your clients. And if you invest just a few minutes every single day in the CMA-a-day process, statistics show that you’ll land a listing appointment about every 16 tries. But you must follow the steps below thoroughly, and in order, because the process won’t work otherwise.
Step 1: Build a list of all the people you’d like to send a CMA to
Ideally, plan to send one a day, but if you can send two or three each day with the help of a team, you’ll likely get really busy, really fast.
Step 2: Build the CMA in email format
Use the subject line Best Email You Will Receive This Year and the suggested format below.
Hey Tom & Bridget,
Congratulations! I was taking a couple of minutes thinking about the house that I sold you nine years ago, and OMG, have you seen what has happened to home values in the current market? From what I can tell without seeing your home, the property is worth about $275,000 more than what you paid for it nine years ago.
I’m going to call you tomorrow because I’d like to know whether you’ve upgraded the kitchen, remodeled the bathrooms, or finished the basement like we discussed when you bought the home. If you’ve done any of these things, the house could be worth even more.
As part of the same email, you include a video of yourself sharing the same basic information you wrote in the body of the email, with a promise to call them tomorrow to get more details.
Step 3: Call them like you promised
Verify that they saw the home value you sent, and ask whether they have completed any upgrades to the home. If they have, you can offer to come to take a look at the house and give them a more customized valuation of the property.
If they aren’t ready to sell, you can address question No. 2 above by asking about their interest rate.
Then, you can offer to connect them with someone you know who can help them evaluate their interest rate to see if they have the best option. If this isn’t their forever house but they plan to be there for several more years, refinancing will save them money even as the value of the home continues to increase.
Suggest, too, that they get a second opinion from their bank, which may offer them a lower rate if they have enough assets parked there. Then, tell the customer that you’ll call back the following week to ensure that they got the help they needed with a lower interest rate.
Finally, close the phone call by asking the customer whether the email was, in fact, the best email they ever received, and then request that the customer let you know if they have any friends or family who might benefit from the same email.
Data shows that every 16.5 times you send a CMA, you’ll find a homeowner who is interested in selling. Though you’ll still have to do the hard work of landing the listing, you will have proven your relevance by delivering information that helps the seller make an informed decision about their home.
This is a value-driven proposition that never once tries to sell anything to the homeowner, but rather seeks to provide information and expertise. If you follow these three steps, and send at least one CMA a day, your business will grow quickly and you’ll remain relevant to all the people in your database.