Here's something we should all be doing with a seller at the beginning of our relationship:
When we take that listing, we should be resetting expectations on the number of live showings that will occur.
Last year, when we took a listing, we'd have 20, 30, 40, 50 showings in the first week. Today, that number maybe two or three or four or five. It will not be the same as it was last year at the same time.
So how do we reset this expectation?
One thing we need to talk about with the seller is the way the average buyer looks at homes. So last year in 2021, the NAR measured this and they found that buyers, on average, that purchased a home, looked at homes for eight weeks. And during that eight week period of time, they viewed eight homes. But of the eight homes they looked at, they looked at three virtually. And in the buyer's mind, that was a showing.
So we need to educate our sellers about what people consider to be a...
Here's something that's come off the table over the last few years:
And that is the idea of an owner carrying their contract. We don't hear that term anymore because interest rates became so low, that no one would consider carrying a contract. Well with interest rates rising, this conversation would be something that we should be having with sellers now again.
And that conversation could be as simple as this:
"Hey, Mr. And Mrs. Seller, I just have a quick question. You guys have a pretty good equity position in your house. And just one thought came to mind. As interest rates are rising for typical mortgage rates, have you guys ever considered carrying a contract yourself? In other words, acting as the bank. This is where somebody would offer you a down payment, large enough to pay off your note that you have now and pay all the fees and everything else that's associated with the closing.
"But then after that, you'd have an income...
Now here's another question that a lot of us are getting:
Is the market turning into a buyer's market?
This is really a market-by-market conversation. But I will tell you that we could easily have a situation in a lot of markets where you actually have a couple different markets within the larger market.
Here's what that means:
Markets aren't just one thing. They are a whole list of price bands, right? So you have lower tier price bands, mid tier price bands, and higher price bands. And in your market, as the market is transitioning, it's not all one thing. So you could have a lower tier price band that's still a strong sellers market. Lots of demand because that's where first time home buyers go, right?
But then as you move up the ladder, you might see that at the higher tiers—the luxury housing, for instance—that it is a buyer's market.
So what's the defining factor here?
You gotta ask yourself, how do I...
What is an anchor point? And how can it benefit you when you're talking to sellers about getting their prices down?
Well, an anchor point is a way that we can help sellers recognize where they're at relative to the competition of the market. And what's gonna happen to them if they don't take action.
So let me give you an example:
If you have a seller in a neighborhood and you call them and you say:
"Hey, Mr. And Mrs. Johnson, I was hoping I'd have a conversation with you because I did a little research in the neighborhood, and I know we haven't had the activity that I've been hoping for. And so I'm concerned about getting the house sold. So I did some research. I know, you know, the property over on fourth street. It's been sitting in the market for a hundred days. I know you'd drive by it every day.
"And I did a little research on that one. It looks like they started at $600k and now they're down to $550k,...
Hey guys, now that the market's becoming more competitive, one idea to help your sellers be more competitive is to use the "Buyer Eye Strategy."
What's the "Buyer Eye Strategy?"
When you're sitting with the seller and you've just listed to the property, you might say something like this:
"Hey, Mr. And Mrs. Seller, now that we got the property listed, here's what I'm gonna do when I get back to my office. I'm going to treat you guys as if you were a buyer for a property that's very similar to yours. So here's why I'm doing that:
"I'm gonna set you up an MLS on a search pattern that's gonna include your house, but also any other houses that are listed that are similar. This way, you're gonna see everything in real time, every single listing that's happening. Every price reduction, every pending, every closing that's occurring in your price category. And this will really tune you into the market.
"And if you decide, Hey, look at this as a new...
There's a new stat out that shows some unprecedented numbers. And the numbers reflect that home buyers entering the market today are paying 39.4% higher mortgage than they did last year at the same time.
Now, why would their mortgage go up almost 40%?
The number one reason?
Also a bit of home price increases as well. But by and large interest rates going up seven of the last eight weeks. They've gone up so fast.
So when we look at this, some of our buyers may be saying, "Hey, let's pump the brakes on me buying."
How do you respond to that? Well, the response should be a reflection on what happens if they don't pull the trigger now and they wait. We know the Fed is already planning to do six more rate hikes this year, starting right now in May.
So as we begin to roll through the rest of the year, it's highly likely these interest rates aren't gonna go lower. They're gonna go much, much higher as the Fed tries to break...
One thing we should all be aware of right now is that a lot of home sellers are reevaluating their price.
And one thing you should be monitoring in your own market area is the number of price adjustments that are occurring every 24 hours. Maybe on your hot sheet, your MLS data sheet, it's gonna show that number. Keep it a close eye on that, and then think about it with your own sellers.
Here's something that's interesting:
In the last few weeks we've seen 3.5% of all the sellers in America reduced their price.
Now that doesn't sound like a lot. But remember, we're coming off one of the hottest real estate streaks we've ever seen in our market.
But the market's starting to cool when it comes to pricing and people are starting to adjust to get ahead of the market. Typically we don't see price adjustments begin to happen at this level until July or August.
So why are sellers starting to adjust prices much, much earlier than ever before?...
Here is a crazy stat that will be interesting for your sellers when you're sitting down to talk about a listing:
84% of the properties coming on the market are selling in less than 30 days across the country.
Now I would encourage you to dive deeper into your own local MLS and see what the number is for your local MLS. But it's probably gonna be somewhere in that neighborhood.
Now, another inverse number to that is what percentage of properties are staying on the market longer than six months? When you go back to 2011, that number would've been about 35%. Today, it’s 2%.
2% listings coming in the market are staying on for longer than six months.
You can just see how the market is so strong right now for sellers and how it's such an advantage to put your home on the market today as a seller.
Another great number to pair with these numbers is the fact that on average sellers are receiving 4.8 offers per listing. That's coming on the...
Hey guys, quick market update for you:
We know that the CPI—the consumer price index—has risen dramatically. And right now it's running about 7% to 7.5%, depending on which economist you talk to.
That means that inflation's skyrocketing. The cost of goods and services is skyrocketing. Wages are skyrocketing. And so is the cost of getting a new loan or a new mortgage on a home.
Now, why are loans affected? They are affected because the federal government looks at this as a lever that they can push on the economy to slow the economy down and put the brakes on the growth in the country.
So since November of last year, through roughly today, we've seen a 300-point basis jump in what interest rates are costing Americans.
Now to put this in perspective because what does 300 basis points even mean?
It means that if you were gonna try to get November's interest rate today, it would cost three points. Three points, every a hundred...
Hey guys, I wanna give you a quick strategy when you are listing a house for the first time and you're having a conversation with a seller.
I call it my "Many Buyer Eyes" Strategy. And here's how it works:
"Hey, you know what? One thing I do with all my sellers when I list their properties for sale is I treat you as a buyer. And what that means is that I'm gonna act like you're a buyer for your own property and your own price range. So I'm gonna set you up in the MLS as if you're a buyer looking in the 400-500k price range in your market area, in our MLS zone that we're in with similar attributes of your house. Here's why I'm doing this: I want you to see in real time the listings that are being presented to buyers that are searching for home like yours.
So you're gonna see all your competition, all the price reductions, all the pending transactions, they're gonna be coming to you. And I want you to look at them because we...
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