What are the biggest mistakes that real estate agents make in a seller's market? Well, the first thing is that many times, while the market is favoring the seller, agents will try to give tips to buyers. For example, teaching buyers what they need to do in order to get their offer accepted.
That’s great information and a good idea, But not in a market where you don’t really want buyers. So I'm going to give you a few tips and strategies on what to do in a seller's market to actually get more sellers working with you. We may touch on buyers too, but first I'm going to start with sellers.
The first thing you want to identify is the biggest problems that sellers are having right now in the market.
For example, there are bidding wars and multiple offers all over the country right now. Everyone knows that it's a seller's market. One of the biggest worries for sellers is not being able to find a replacement property. Even though they know it's a great time to sell to get a high offer, they might not want to for fear of not being able to find a replacement home of choice.
As an agent, you could say something like, “Are you thinking of selling? Or are you afraid to sell because you're afraid you won’t find a replacement property, and you're going to be homeless?”
Now, you’ve got that seller’s attention because you said exactly what they’re thinking. As if you read their mind. They now feel heard, so they’re listening to you. Because if you knew what problem they were thinking about, then maybe you also have the solution (which you do).
What you want to do is hone in and identify what kind of problems sellers are going through. You need to put yourself in their shoes. Think about what you would want if you were selling your home. What would you be worried about?
Once you do that, you can speak directly to those problems. There are solutions, right? You could do an extended rent back. Or you could sell your home and maybe rent for a little while. You could sell your home and live with your family for a while. You could do a bridge loan. There are also programs where they’ll actually sell your house for you and give you the cash. Then, you could make an offer on another property and still live in your home.
There's definitely some solutions out there. It's more about making people aware about the solutions.
Another really big mistake that I see agents making is saying that marketing is not important because It's a seller's market. Or telling sellers that they don’t need to do anything to their house. That is a huge mistake. And guess what?
Think about if every single agent is saying that. Now what if there's one agent that disagrees and is showing why that's not the case? They’re showing the difference of properly marketing a home no matter what. Doing that is going to discredit all of the other real estate agents. They’ll stand out and be the winner.
This is what I would say to a client: “Mr. and Mrs. Seller, I'm sure you might have been hearing from people that the market's so competitive right now that you don't need marketing. Well, the thing is, that's really not the case. Let me show you why.” Then I pull my statistics showing how I sell my properties for an average of 19 to 21% higher than my competitors in the exact same market. We also explain how that equates to about $166,000 more for them. So when they see that number, I can show them, “Hey, here are 20 properties that we sold in this city under one acre. Here is the average price. This is what they're selling for and here's what our homes are selling for. Oh, by the way, Mr. Seller, in this city, in this exact specifics, we sold 20 homes just like that.”
You can actually prove just how much more significant you are selling your homes for. Don't make that mistake.
Another mistake that I see people making is they sell the home in one day. Now I get it. I get that when you put your house in the market right now, you're getting 15 calls in the first hour. You're getting 20, 30, 60, 70 showings in a weekend. But I hear all the time, “I sold my house in one day”.
If you sell a house in one day, you are doing a disservice to your seller. Now, that's not the case if your house has been on the market. If it's a total buyer's market. Houses are sitting on the market for three months, four months, five months, and you happen to list a house and you get an offer, that first day and the market does not reflect that. Then, you might want to consider as long as it's a really good offer, right? As long as it's a really good offer. But right now, even in this market, that's super competitive, where houses are flying off the shelf. If you are selling your house in one day, you are leaving money on the table for your seller, and you're also leaving better terms.
If you just give it a little bit more time, you're going to be able to show the seller that you're working on their behalf, that you're not afraid to do a little extra work, talk to extra buyers, agents, do extra marketing, do what it takes to really, really negotiate the strongest offer and the best terms for them. Even in this crazy competitive market, you should at least at bare minimum, leave the house on the market from a Thursday through a Sunday and make offers, be available on Monday.
That's what we're doing. What we do is we say, “Okay, offers are due at this time.” Then when we get all the offers in, we call all of the buyers agents. We call all the lenders and we talk to them about their buyer. How qualified are there? Do they understand what type of market it is? Do they have TBD approval or desktop underwritten approval? We ask the agent, “Have you really talked to the buyer about what's happening now as far as repairs and requests? And have you really educated them on what's standard and what's not standard.” We do that, right? Then we say, “Okay, now we've got 20 offers and now we want your highest and best offer.”
This is all before we even show the offers to the seller. Now the seller knows the offers are in. We get their permission to do it this way. They say yes. Now, all of a sudden we have all these offers. We then counter all the offers for our highest and best offer, letting them know how many offers that we have. Then when we get that back, then we go ahead and meet with the seller and we categorize the offers and to cash offers. How much down payment are they putting down? How much deposit are they putting down? Is it a VA offers? An FHA offer? And then we discuss all the different offers with the seller.
There are definitely more things that we can do, but I don't want to bore you. So, that's exactly my advice on what not to do as an agent during a seller's market.
