New Rules for Real Estate
The Real Estate Market has shifted as of mid 2022. Have You?
Here’s what you’ll need to do to be successful going forward - even when the market shifts again.
BECOME A FACT BASED AGENT
Buyers and Sellers are going to have a lot of opinions and emotions. Sellers because they most likely will NOT be getting the price they want and Buyers because not only are rates high, there is economic uncertainty.
You can’t “win” a debate or influence anyone in an emotional state. The best approach is to be “fact based”.
Here’s some examples. Come up with ten variations to fit your market and situation:
There are currently 57 homes on the market. Of those, 40% have had price reductions.
This month the median sales price was $1,450,000. Last month it was $1,475,000 and last year at this time, the median was $1,500,000. Clearly prices are trending down.
The median days on market right now is 47 DOM. Last year it was 18.
Of the properties that have recently sold, 23 (30%) sold for less than the asking price.
Based on what is in escrow, there are 2.5 months of inventory and based on closed sales this month, there are 3 months.
To become a fact based agent you will have to study the data and have it at your fingertips at all time.
PROVIDE SOLUTIONS
There’s going to be a lot of headwinds to getting deals done particularly as Buyers and Sellers adapt to the new rules.
You will get business if you offer solutions and thought leadership. Here’s some examples.
SELLERS: Instead of lowering your price, let’s try offering an incentive to Buyers. You can offer to pay $10K of the Buyer’s closing costs.
BUYERS: If you want to get a lower rate, let’s write in a credit from the Seller in the purchase offer. You can use those funds to pay down your rate.
CHANGE YOUR MESSAGING
This is the time to be extremely direct and honest in your communications. Don’t tell your Sellers how much your listings sold over the asking price last year. Tell them what is going on in the market right now and what you are going to do to sell their house this year. (See point one about Fact Based and point two re solutions.)
With Buyers you will have to address their concern about buying in uncertain times. Don’t sugarcoat things. Yes prices might go down, or maybe they won’t. Either way they need a place to live and home ownership has proven to be a great wealth builder over the years for many people.
EXPAND YOUR FARM
This assumes you are a listing agent of course.
Instead of targeting 2500 homes, increase that to 10,000 or more. If you are mailing letters or postcards, it would be better to touch 4X - 5X the homes even if it is not every month. Cast a wider net because there most likely will be fewer Sellers.
As you are expanding your geography, also broaden your price point. This is a good time to go both aspirational to higher price points and also to lower your price point to more affordable properties.
ASK YOURSELF WHERE YOUR BUYERS WILL COME FROM
And if you don’t like the answer - ie “I’ll meet them at Open Houses” come up with another strategy to find Buyers. Unless you have a steady stream of Buyers, you will be holding listings that will be more difficult to sell than pre 2022 Q2 and that’s not a good formula for making money.
This is a good time to go back to basics in prospecting and networking.
EXPAND YOUR SOCIAL MEDIA / VIDEO / INTERNET PRESENCE
You should be posting on at least 5 platforms every week. Choose from:
Facebook
Instagram
Twitter
YouTube
TikTok
Pinterest
LinkedIn
What to post? Original content you create is the most powerful.
A lot of agents outsource this or use posts their company comes up with. That’s better than not posting at all but not really what you want to be doing.
Posting is also a great way to develop your “fact based” approach and messaging.
If you are using FB and IG, have a healthy mix of stories, reels and posts including videos. Mix it up.
DOUBLE DOWN ON WHAT WORKS
….and then double down again.
If your postcards are getting results, do more. If your social media gets traction, do more.
WORK HARDER AND SMARTER
For the last few years, many agents stats made them look better than they really were. It was the market. Did you really think it was “you” that sold that house for $400K over the asking price? It was supply and demand fueled by extremely low mortgage rates.
What I’m asking you to do here is work harder “on your business” and be smarter.
Becoming “fact based”, consistently posting great content, creating videos, coming up with solutions to address pain points and prospecting for Buyers isn’t easy.
Just do it and get ready to count the commission checks.