In Today’s Ultra-Competitive Market, There Are Three Steps To Setting Realistic Buyer Expectations

In Today’s Ultra-Competitive Market, There Are Three Steps To Setting Realistic Buyer Expectations

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"Wow, that went from bad to worse in a hurry." Ron Burgundy (Ron Burgundy)

The Broke Agent recently compared the current buying landscape to Anchorman's enormous battle scene - and he's not exaggerating.

Today's listings appear to attract a slew of offers, with one party emerging successful and a slew of other potential buyers crushed, unhappy, and licking their wounds.

As an agent, it's your role to prepare them for the fight and set reasonable expectations from the start.

You're merely setting them up for dissatisfaction if you don't, and you're wasting your own time in the process!

So, today, I'm going to give you three measures to include in your Buyer Consultation to ensure that your buyers are "battle ready."

Let's get started...

 

Step 1: Educate And Inform

It's critical that any potential buyers are aware of the very competitive environment they're going to enter.

Take nothing for granted. Even though the inventory scarcity has made headlines, don't expect your customers to fully comprehend what it means to them. Keep in mind that they aren't doing this on a daily basis like you are. As a result, you must sit them down and explain everything to them.

The first thing you should do is present them all of the data, which includes anything from pending sales to active inventory to new listings to the numerous offers generated on recent transactions to interest rates and more. Use this to demonstrate that it is unquestionably a seller's market.

After that, give them real-life instances. "Tell the narrative of the market," as I like to put it, is when you utilize an example or two to show – in layman's terms – exactly what's going on in the market.

Finally, have a look at some basic "supply and demand" economics. Prices rise when supply is limited and demand is high, and buyers lose leverage.

You may turn some individuals off with this teaching process, but I believe it is better to realize that early in the process than to waste time showing them places on which they will never make a reasonable bid.

 

Step 2: 5 Essential Components Of A Strong Offer

After you've defined the battleground, go over with the buyer the five elements of drafting a strong offer in today's competitive market:

  1. Minimal or no contingencies - Don't let them get their hopes up that the old carpets will be replaced or that the contract will have complicated conditions. In fact, if they truly want the property, it's probably best to prepare them to make concessions.
  2. Strong financing — Make sure the buyer's finances are in order and that they've acquired the best loan available to put them in the greatest position to win a bidding war.
  3. Include a "love letter" from the buyer – The National Association of Realtors has highlighted Fair Housing concerns regarding the practice of sending a letter to the seller in the hopes of emotionally altering their decision-making process, so tread carefully here. However, if it's legal in your location and done right, it can be a strong tool for making an offer stand out.
  4. At or up to ten percent above the advertised price – Today's bidding wars aren't for the faint of heart, and winning a desired home may necessitate an offer that is significantly higher than the asking price. Make sure your customers are aware of this potential.
  5. Act promptly and decisively - Make sure your buyers understand that there is no time for hesitating and hawing when they see a home they like. They need to strike as soon as possible!

 

Step 3: Three Compromises And A Question

If your potential purchasers haven't been scared off yet, get them to agree to three conditions first, and then ask one final question. Ascertain that they comprehend:

  1. It's possible that you won't be able to get everything you want from the property.
  2. You're placing yourself in a position to profit from your investment.
  3. It's possible that you'll have to submit several offers before one is accepted.

If they agree to those terms, finish with the following question: "Knowing this, are you still willing to proceed to BUY A HOME in this competitive market?"

Congratulations when they say YES... You've gained a new customer and, more crucially, you've accomplished the onerous task of properly setting process expectations.

Now go assist them in finding their ideal home!

Experience The Difference

With Therealestateuno