In many ways, today’s real estate market is like the popular reality TV show, “The Bachelor.” Not sure what I mean? Stick with me for a minute…
Imagine that you’re the bachelor on this show. You go on the program knowing that you’re going to wind up getting the girl. On the other hand, if you’re one of the girls participating in the show, you know that – not only are you probably not going to wind up with the bachelor – you’re probably also going to get your heart broken in the process!
The situation is pretty skewed towards the bachelor – just as today’s real estate market is skewed towards sellers.
Currently, most of the US is facing a low inventory/multiple offer environment. And given that the market appears to be heating up, prices remain low and rock bottom interest rates aren’t budging, it appears that we’re going to see this scenario continue through the rest of 2013 (and possibly into 2014 as well).
If you’re selling a house in this market, you’re like the bachelor. You’ve got the goods, and you know that there are plenty of people who want what you have to offer. Buyers – unfortunately – take on the role of the bachelor’s dates in this set of circumstances, as their number and availability gives them less negotiating power overall.
But what if you’re the real estate agent in this situation? How can you get your bachelors and your bachelorettes on the same page when it comes to closing deals in a multiple listing environment? Well, I’ve got three tips for you…
In low inventory markets, you can either be on the side that has what the market wants – or you can be one of the masses scrambling to win homes for their buyer clients!
I think you can guess which of these two scenarios I prefer!
Whenever possible, choose to take on seller clients instead of buyers. That way, instead of spending your nights and weekends arranging showings and helping buyers navigate challenging purchasing situations, you put all the other agents in your market to work for you.
Of course, taking on only seller clients isn’t a realistic proposition for most agents. So how can you work effectively with your buyers?
The key is education. Don’t be afraid to be realistic and upfront with your buyers about the situation they’re in – heck, even use “The Bachelor” scenario above to get them to reframe their home buying prospects in their minds.
One of the most common things you’ll hear from buyers in this market is that, “We just want to get a good deal.” The thing is, in a multiple offer environment, the only one who actually gets the good deal is the one who buys the house. If you have eight buyers bidding on a property, only one of those people is going to walk away with any deal at all – no matter how “good” or “bad” it may seem.
It can be difficult to break through to some buyers, but be clear about your concerns. Just like the ladies on “The Bachelor” can’t risk being too coy or hard-to-get, your buyers need to show up with their best offers if they’re going to wind up in the homes they’ve fallen in love with.
Now, if working with buyers is so difficult in this market, representing sellers must be a total breeze – right?
Well, yes and no.
The problem with low inventory markets is that sellers can get too cocky about their prospects. They might dismiss perfectly reasonable offers or play other games with buyers – all out of the misguided perception that the market will support this type of activity.
The thing is, though, that buyers eventually get sick of these games. No matter how nice a property may be, buyers don’t like to be toyed with – and, sooner or later, they’ll move on to other opportunities.
As an agent, your job here is to manage the expectations of your sellers and to counsel them to accept good offers when they do come through. Remind them that even though they might be the bachelors in this situation, there are always other ways that their “ladies” (aka – their buyers) can find love. Keep their egos in check and you’ll dramatically increase their odds of reaching a successful sales resolution.
Are you seeing any of these scenarios being played out amongst your buyer and seller clients? If so, share your thoughts on how to best handle low inventory markets in the comments section below!