Five Key Things That Agents Must Be Doing Right Now

1. INCENTIVISE THE MARKET- When there are MORE listings on the market than there are buyers to buy them, the negotiating dynamic in that market (known as a buyers market) is SELLER vs. SELLER. Therefore, the Realtor has to help their SELLER effectively COMPETE with all the other sellers in the market in order to become a successful seller and not an EXPIRED. Realtors representing BUYERS will typically show 5 or 6 properties to that buyer prospect out of the 40 or 50 that are available. With that being the case the seller only has a 1 in 8 chance that their home will be shown by any given BUYERS agent. To INCREASE those odds dramatically the seller can offer a 4 or even a 5% COOP commission. This added 1 or 2 percent cost to the seller is far less expensive than the size of a price reduction that would make the same amount of noise in the market. The tool we use to illustrate this is attached and shows the commissions being offered for 48 similarly priced homes for sale. The seller sees by showing him this tool, that there are only 6 other sellers offering 3% and there are none offering 4 or 5 which then becomes the POINT OF DIFFERENTIATION in the market. It will help to drive all of the QUALIFIED buyers for THIS to this seller RIGHT NOW!
   
2. PRICE THE PROPERTY AGGRESSIVELY- From the time Realtors are first taught how to do a CMA, they are taught that there are HIGH comps, MIDDLE comps and LOW comps. The pricing strategy that ALWAYS works for the fastest sale is to have the seller priced closer to the LOW comps than the HIGH comps. In PAR markets and SELLER markets this is NOT that critical and, especially in the SELLERS market, not advisable. However, in a BUYERS market (by definition, there are MORE sellers than buyers), it is CRUCIAL to price the property BELOW the middle and closer to the LOW comps. The BUYERS market we are in right now is DRIVEN by BARGAINS and TERMS. Realtors absolutely MUST get to the SELLERS motivation about selling in this market and ONLY work with sellers that are motivated to SELL (not just LIST). Getting to the sellers motivation might begin with the something as simple as the following question: “So, what are you going to do with the money when this sells?” (assuming it’s not a troubled sale which is a HIGH motivation in itself) Because the HIGHEST and most common motivation to sell is to be a BUYER, we are teaching all of the agents we coach to TREAT ALL SELLERS AS BUYERS FIRST. This gets the BARGAIN into escrow and makes the seller much more reasonable about pricing the home they have to sell to get their new BARGAIN. We show the following as an example of a move up buyer (BELLER as we call them) needing to sell their $750,000 home to buy their dream $1,000,000 home. The trouble is, they can’t get $750,000 for their home anymore so they’re ready to quit. Show them that while it is true that their $750,000 home may now only fetch $675,000 (a paper loss of $75,000 to the market), their NEW DREAM home can NOW be gotten for $900,000 (a paper GAIN of $100,000 from the market)!! That’s a $25,000 HOME RUN!! Let’s get to it RIGHT AWAY!! We use the attached LADDER tool to help with PRICE REDUCTIONS which most Realtors find themselves in need of right now. There is A LOT more on this part of the presentation but this will get enough of their juices going for a short presentation. ANY of you that would like me to make a full presentation of this to an office of your choosing need only to ask (and, of course, schedule).
   
3. OFFER TERMS- One of the challenges in the current market is the shift away from JUMBO loan products at desirable rates. To combat this, a seller COULD offer a simple solution called a BUY DOWN. Simply put, a BUY DOWN does exactly what the name implies; it BUYS the RATE of the loan DOWN for the new buyer. This has a VERY important impact in the current market. It makes a loan EASIER to qualify for than it otherwise might have been. The buyer needs a smaller amount of income for this loan than he did before the BUY DOWN. Remember, the negotiating dynamic in this market is SELLER vs. SELLER. If we can get JUST ONE MORE BUYER to be ABLE to buy OUR listing than all the others, we have put our seller in a position to WIN that buyer over the others. A second consideration for TERMS to be offered by the seller is buyer closing costs and, more importantly, SELLER FINANCING. Many lenders are now moving to 80/20 financing only. That is 20% down and an 80% loan secured by a first trust deed. Again, many would be buyers don’t have the 20% down payment for this program. They MAY have 5% however, and if the seller would “CARRY” the other 15% we might open up more of a market for our seller. Remember SELLER vs. SELLER!! How can I get MY SELLER to be the ONE seller that SELLS!!
   
4. LOOK FOR CHANCES TO TRADE- With SO MANY SELLERS on the market, one silver lining is that there are bound to be two who are trying to sell what the other wants to buy!!! This comes back to our conversation about how CRITICAL it is to ask for and understand the seller’s motivation for selling. Realtors should be asking sellers 100% of the time, if they are open to a TRADE. We have been coaching our agents to make sure they are PREVIEWING PROPERTY EVERY DAY. In order to know about a potential trade, you HAVE to know the inventory in the market!! Get out and see the available inventory!!!! Ask the sellers you preview if they are “open to a trade”. Find out from other REALTORS, if they are working with any one who is looking for a trade. ADVERTISE that you have inventory for TRADE. Open up this avenue and watch the prospects COME TO YOU!!!
   
5. UPGRADE PROPERTY APPEARANCE AND MARKETING MATERIALS- In a BUYERS market, properties that are “tired looking” are going to have to be discounted heavily to sell. This is because there are MANY properties that will appear to be a better value if the condition of the property is not good. These “tired looking” properties can often be spruced up with very minimal effort and cost. Carpet, paint and landscaping are generally inexpensive and quick upgrades bringing maximum return. Consider staging the property professionally. Also, make sure that the FRONT of the property is in presentable condition. Curb appeal is CRITICAL in this market. No peeling fascia boards, no grass in need of mowing and no JUNK on the lawn or around the outside of the house. Pay attention to the KITCHEN and the MASTER BEDROOM & BATH in particular when renovating. Finally, make sure that the marketing effort is FIRST RATE. Make a good looking DESCRIPTIVE flyer for the property. Make sure that the internet listing venue HAS PICTURES!! Consider a video tour as well. Those listings without pictures are not as attractive as those that have them and with so many to look at they will be passed over in this market. Consider an 800 call capture system to give potential buyers more information about the property and to be able to follow up QUICKLY. Have “SPECIAL SHOWINGS” instead of plain OPEN HOUSES. Invite the people in the neighborhoods where the potential buyer for THIS property is living now to a special showing of the property exclusively for THEM. The invitation card might read something like “You have been carefully pre-selected for this invitation to a special showing of the property located at 124 Main Street in YOUR HOMETOWN USA. This SPECIAL SHOWING is a limited engagement and is not open to the public. Please bring this invitation with you when you arrive. There will be a discussion of current financing options including TRADES and LOW cost SELLER assisted financing at the showing as well as a FREE custom REAL ESTATE portfolio analysis provided to each attendee. There will be a drawing held for a $200 Nordstrom’s certificate and refreshments will be served. Public showings will be held at a later date.” Of course, we take this opportunity to show the agents how we can be helpful with our FARM PACKAGE to Identify their potential buyers with this strategy.