It’s no secret that the hottest pandemic purchase is a home. With more and more buyers taking advantage of record low mortgage rates and first time home buyers entering the market, we are seeing sizzling hot markets across the country. The question is… Are you equipped to thrive in this environment? If not, you’re about to be! Real estate agents who know how to navigate through low-inventory markets can turn minimal supply into maximum returns.
Here’s the reality: everyone is struggling to get their buyers into their dream home. If you want to close more deals than your competitors, you may have to step out of the box and try things that your competitors aren’t doing.
Understanding homeowners’ mindsets
Before diving into some strategies that will help you thrive, let’s take a moment to identify the problem. Many sellers are reluctant to list their homes during the pandemic because they’re waiting for more stable conditions before deciding to sell. Everyone needs a place to live after they’ve sold their home, and finding a new home is definitely more difficult than selling your current one in these market conditions.
In any time period, there’s always problems: too many homes on the market, not enough buyers, interest rates are too high, ect. The key to success in a low-inventory market is being able to provide solutions. The better you are at helping people solve these problems, the more business you’ll attract.
Action step #1: Engage with past clients and existing leads
Staying top of mind is always important, but it’s even more necessary in low-inventory markets. The goal is to associate your name with selling houses so that when homeowners are ready to sell, you’re the agent they call.
According to the 2020 NAR Profile of Buyers and Sellers, 89 percent of sellers said they would rehire their agent for future services, but only 26 percent actually did because they lost touch with their agents. Don’t let this happen to you! A great way to stay in touch with past clients is by adding them to your newsletter database, sending holiday and move-in anniversary cards, and keeping them updated with market conditions.
While you’re staying connected to past clients, don’t forget to engage with your existing leads! Buyers often have a property they need to sell before purchasing their next home. If you’re not following up on every buyer lead and asking if they need to sell their current property, you could be leaving money on the table.
Action step #2: Prospect FSBOs
Reaching out to homeowners trying to sell on their own is a great strategy because you know they’re motivated to sell. Many sellers who choose the for-sale-by-owner route are adamantly committed to doing it on their own, but others won’t fully understand what the process entails. These are the people you’re looking for!
Explain how listing with you will net them more money – with less risk – than selling it on their own. Here are some key points you can use to demonstrate your value and expertise:
– Price negotiations take skill – your inexperience could cost you.
– Real estate is a full-time job. Can you excuse yourself from a meeting every time your phone rings with a potential buyer?
– An agent's job is to drive qualified buyers to your home. If you don’t understand how to weed out dreamers or curious neighbours, you’re going to end up wasting a lot of time.
– A lot of legal paperwork is involved in selling a home. Any mistakes you make can be a legal liability.
Action step #3: Marketing still matters
When the market shifts, your marketing plan should remain the same. Instead of putting your marketing strategy on hold, tweak the messaging to be more relevant to the current market.
Potential sellers are hesitant to sell right now, so address their concerns! Show them that now is the perfect time to sell and they’re gaining nothing by waiting. Do this by:
– Write & share blog posts about market conditions
– Sharing recent client testimonials
– Sending out newsletters
– Being active on Instagram and Facebook
– Running sellers ads
– Offering free home evaluations
Now is the time to step up your marketing game and experiment with different types of content!
Action step #4: Use your buyer’s desired neighbourhood
When people aren’t listing their homes, you have to be proactive and go out there to find them. An effective strategy is to prospect in your buyer’s desired neighbourhoods to generate a larger volume and higher quality of seller leads.
When you door knock or cold call someone and ask “Are you thinking of selling?” you’re probably going to get a lot of uninterested, low-quality answers from people who want you to leave them alone. You’re asking that person a broad, non-specific question that they haven’t given too much thought to.
Here’s what you can do to actually pique their interest: create a printed proposal of a pre-qualified buyer who’s having a difficult time finding their dream home and what they’re prepared to offer. The goal with this approach is to inject emotion into your pitch.
Here’s an example:
“Dear Mr. & Mrs. Homeowner, I represent these buyers (describe them in detail) who want to live in this community so they can (start a family, raise their kids in this school catchment, be closer to work).
They are particularly interested in (property type) with (home features), and are ready to make a competitive offer today.”
See the difference in messaging? Now you’re not talking to them about selling their home someday, but you’re presenting them with a specific and very real offer right now.
How many of these actions will you take?
One of the most effective ways to thrive in a low-inventory market is to be proactive and get creative with where you look for leads. Instead of hoping that more homes will magically appear on the market, reconnect with past clients and leverage your pre-approved buyers to find off-market sellers.
It’s a tough market out there right now, but with these action steps you can still make 2021 an extraordinary year!