Agree To Let Sellers Wait To Sell Their Homes (Not!)
Many frustrated Sellers have withdrawn their listings or have let their listings expire because they believe they will do better if they wait for the market to improve. This same group is typically bombarded by agents attempting to get the Seller to sign a new listing agreement with them. This strategy doesn’t work well, because it runs contrary to what the seller believes will work. (Ie; waiting for the market to improve before they sell.) Rather than contradict an already frustrated Seller’s intentions, why not use a strategy that is consistent with their intent. By acknowledging their strategy of waiting and offering help to carry this strategy out, a relationship can be developed that will put you ahead of all of the other agents that are trying to get the listing. Here a great phone or face-to-face script you can use:
“Hi _______, I’m calling (or wanted to stop by) because I notice that you recently had your home listed for sale and took it off the market. I was wondering, are you like many of the seller’s that I’ve met. Have you decided to wait until the economy and real estate market improve before you sell?
That’s exactly why I’m glad I have an opportunity to talk with you. We all know how important timing can be. And, the best way to determine the best time to sell, is by having current information on what the real estate market is doing, and what it could do in the future, don’t you agree. Well, I’ve been doing extensive research on the market and have been sharing this information with people like you, so they can be confident about when the best time to sell will be. Everyone has told me they really appreciate getting my updates.
I’ll be happy to share this information with you as I’m sure you’ll find it most helpful. All I ask is that when you do decide to relist your property for sale, you consider talking with me before making your final decision. Here’s my most recent update. I’m anxious to see if this trend continues when the data is release next month.”
This approach is ideal because there is no pressure felt by the Seller to list with you right now. Conversely, if it’s logical that they sell now after a Seller Proforma Analysis, they are likely to use you to represent them. Remember, this works, because it’s different than what every other agent is saying to them.
Seller Argument #8 -The 4 Key Indicators
One of the best approaches to use with sellers has to do with identifying the trends that impact them with Supply, Demand, Consumption and Value. Let’s consider each:
- Supply– Even if supply levels are increasing or have leveled off, The number of active listings still is extremely high in most areas when compared to a healthy market. Point this out to Sellers as an indicator it still may take a long time to get back to normal, especially with the Shadow Inventory and Pent up Seller demand issues.
- Demand- Even if demand is increasing, the Seller should be reminded that this may just be a “Window of Opportunity”. Remind the seller how much instability there is in the economy and how the demand could drop quickly if interest rates increase. Encourage them to exploit the window of opportunity while it is still open.
- Consumption- Even though the month’s supply of inventory may have decreased, it still is very high when compared to what is considered to be normal. This can be especially risky when the Seller considers that every time the absorption rate has been above 6 months, there has been pressure for price depreciation. This history portends the likelihood of future price drops.
- Value- Most of the area’s have seen a continuous drop in prices for several years now. The percent drop in prices during the past year, and averaged over the past several years should be calculated to show what the potential depreciation could be in the coming year. It is better to use price per square foot, as an indicator as opposed to average price which can be impacted by more high-end sales.
Buyer Argument #8- All Bad News Is Good News For Buyers
Reports about poor economic conditions and negative data about real estate trends, leads to uncertainty, which ultimately causes paralysis. The strategy is: “If I’m not sure, I should do nothing.” Unfortunately, for buyers this is a terrible strategy. Consider two things:
- When the market improves or the economic news is positive, all of the Pent-Up-Buyer demand will come to the surface and the buyer will be competing with many more buyers than exist at present. This will lead to higher prices and less of a selection.
- Simultaneously, when the news is good, Sellers are re-assured, and are much less likely to negotiate a good price for buyers. It makes sense to make offers when the news is the worst, because of the risk it causes for the Sellers.
Use Spaced-Repetition to teach your buyers to “fear good news”. All good news is bad for them. Conversely, all bad news can be good for them.