Buyer demand is back in a major way, shifting the summer/fall real estate market to lean towards favoring sellers. On top of the continuous inventory shortage, buyer demand is on the rise, meaning: sellers have the upper hand.
The surge in buyer demand is likely due to a number of factors:
- Remote Workforce
- More People Spending Time in 1 Home
- Pent-Up Demand After Spring Shutdown
- Life Events Don’t Stop!
- All-Time Low Interest Rates
In a seller’s market, real estate agents are more valuable than ever when it comes to helping buyers make the best choice and find the right deal on their dream home. Here are a few tips for being the buyers agent in your market.
1. Help Them Establish Concrete Numbers
One of the biggest risks for buyers in a seller’s market is waiting too long to make an offer due to uncertainty about the listing price. Help them understand that they’re likely looking at a listing that’s going to move quickly and that there’s potential for a bidding war. You can help them be prepared for these situations by encouraging them to establish a clear and defined budget ahead of time. That means making sure they’re pre-approved (or approved) for a mortgage before their search gets moving. Also having a hard number defined for their max budget will alleviate any uncertainty or grey area about what type of offer they’re comfortable putting forward.
2. Prep Them for a Bidding War
The reality in a seller’s market is that your client might find themselves in a bidding war if they’re putting in an offer on a house that they’re dead set on getting. It’s your job to help guide them through this process. First and foremost, manage their expectations and make sure they’re prepared for the possibility of a bidding war so that they’re not caught off guard. You could encourage them to keep their search a little bit below their budget so that if they do have to outbid another offer, they’re less likely to go over budget. Additionally, help them create an offer that’s desirable to the seller. If they have certain repair contingencies or demands that they could live without, help them decide what to drop and/or keep.
3. Educate Them on The Market
Certain strategies work during a buyer’s market that don’t work during a seller’s market. For example, coming in below listing price on an offer to try and get a deal. Obviously this is a reasonable and desirable tactic for a buyer, however, it’s less likely to work when inventory is low and buyer demand is high. Help them understand from the get-go what they need to do in order to have the best possible chance of getting their dream home at a good price. It’s all about managing expectations and having hard data to back it up.
4. Help Them Write an Offer Letter
In the situation that your seller is considering multiple offers, consider helping your buyers write an offer letter. This might be the one thing that adds a personal touch and sets them apart from the other buyers. Keep things concise and professional, but encourage them to share a little bit about themselves and why they appreciate this particular home so much.
5. Keep Your Information Hyper-Organized
Buying a home in a seller’s market can be a stressful process, there’s no denying it. When your buyer is looking at a few different properties, they’ll need a wealth of information to compare: property reports, neighborhood data, offer due dates, etc. If you can not only provide that information but provide it in an organized and easy-to-understand way, your clients will provide you referral business for life. A good rule of thumb: anticipate their needs and give them the information they need for each property without them having to ask for it. And keep it organized for yourself so that you can reference what you need at the drop of a hat.
6. Pinpoint Their Personality Type
We all know that high-level customer service is essential in real estate. But what if excellent service looks different from one client to the next? It’s helpful to take a step back and analyze the psychology of the homebuyer. The Four Personality Types is a centuries-old psychological theory that defines the most common personality types that people embody. And they can easily be applied to homebuyers!
Is your client a Driver, Expressive, Analytical, or Amiable personality type? Understanding that upfront and adjusting your communication moving forward can help you ensure a smooth transaction. (And a glowing review!)