Change the Script You’re Using With Buyers and Sellers
As seen in RealTrends
The situation in today’s housing market is consistent with that of the previous two years: a lower inventory of houses available for sale than the demand. There is talk that “the bubble is coming” but this is doubtful at the present time. In fact, experts and think tanks such as Fannie Mae are predicting another rise in housing costs of at least 4 to 5% this year.
Today, people who own their homes aren’t willing to spend all their equity in their house compared to 15 years ago, so they aren’t interested in lowering its price. Also, lending guidelines are much tighter today than in previous years so banks aren’t approving risky loans to potential buyers.
That said, although houses are still selling, sales have definitely cooled in some areas. We are not seeing as many multiple offers on properties – it may take a little longer to sell a house than a few months ago; it may take 21 days instead of a few days. With mortgage rates rising some potential buyers may decide that now is not the best time for them to make a purchase.
However, in spite of some slowing down of sales there are still not enough existing houses for the demand out there and we can’t build new houses fast enough to meet that need. Because of today’s tight market agents have a great opportunity to assure sellers get the best price for their home.
Here are some ways to retool and change the script you use in the past with buyers and sellers:
When representing sellers
First, advise sellers to invest in professional photos. Chances are homeowners won’t sell their house with pictures taken with an iPhone. Eighty-five percent of buyers start shopping for a home online; they will click through pictures and spend just 15 to 20 seconds scanning houses and floor plans. If a picture doesn’t immediately attract them, potential buyers will move on. Photos are more for elimination than possibilities, and good photos are a necessity.
A good agent should help a seller make his home as appealing as possible. Rooms should be decluttered, unnecessary furniture should be removed along with personal photographs and if needed the interior as well as the exterior of the house should be freshly painted. Since the outside is the first thing people see, an overgrown and messy yard or gutters hanging off the front of the house are immediate turn-offs.
Finally, you should really have an in-depth knowledge of your client’s neighborhood and community. This can be an invaluable aid in determining the price of the house and in getting the word out.
When representing buyers
On the buyer’s side, strongly advise your clients to be 100 percent prepared to write an offer before they start looking. Your clients should be conditionally approved, and if they need money transferred from one account to another they should do so before writing an offer so that funds are liquid and available. Suggest they eliminate any contingencies that they can and that they need to realize that the best offer isn’t always the most money.
The worst mistake buyers can make is to look at houses selling for more than what they can afford. Often after looking at a house out of their price range buyers won’t be satisfied with homes within their budget. This only makes the process harder for the buyer and his agent.
As an agent representing the buyer you should call the seller’s listing agent who can help you gain knowledge regarding what the sellers really want besides a great price. This could involve a quick settlement, a rent-back offer, a home inspection without repairs, or doing away with other contingencies. This will enable your client to write a contract catered to the homeowner’s specific criteria.
Another important step to take: call your buyer’s lender and have him send you a preapproval letter, with funds in place, so your client will be ready to go in with an offer.
What you need in today’s market
A Network. To be a successful agent you need to work with a good local loan officer, someone who can help you promote your client’s offer to the seller’s listing agent and assure the agent your clients are well-qualified to make their offer. A good local loan officer can also call the local lender who can play a pivotal role in a successful transaction.
Additionally, it is important to have two or three lenders you have previously collaborated with and whom you know are reliable. A good lender will assure that appraisals are done on time, the financing commitment is done correctly, and that all the boxes are checked so you won’t have an issue with the financing.
Access to Data. To keep up with the latest trends, agents should do their homework every day. You need to see what’s going on in the market, where residences have sold, and how many offers are coming in.
You must discern how long the average home for sale stays on the market, and if houses are sold at the asking price, over the asking price or if prices are stabilizing. The market changes quickly and things are changing not in months as in the past but in weeks.
Expect the unexpected. Outside forces can have a huge impact on housing sales. Natural disasters, volatile markets and yes, a pandemic, can have the last word in determining the stability of the real estate market.
In 2005, Hurricane Katrina swept the south and, within two weeks, the market changed dramatically. Properties ended up selling for anywhere from $50,000 to one million dollars less than the previous two weeks. You should always have a back-up plan if things go differently than you anticipate.
Rory S. Coakley is president and founder of Coakley Realty.
Tom Nalls is residential sales manager/associate broker at Coakley Realty.
FIND THE PROPERTY YOU NEED.PROPERTY SEARCH
CONTACT US TODAY
Featured Real Estate Listings
Under ContractFlex (Condo)100 Executive Drive,
PRICE REDUCED!!! Reliable investment property, fully leased. Excellent location right off 606, adjacent to Dulles Airport. This flex/office condo is Unit #2, and is divided into two units, each just under 5,000 SF. The First floor is built out as office/warehouse, and the Second floor is office.VIEW LISTING
Residential 20700 Ashburn Station Pl,
Ashburn, VA 20147
Beautifully renovated and meticulously maintained, this fabulous brick colonial is located in one of historic Ashburn's most desirable neighborhoods and sought-after school pyramids - Cedar Lane/Trailside/Stone Bridge! Gracefully sited on a premium corner lot (nearly half an acre), this property showcases all the distinctive details you are looking for.VIEW LISTING