The timing doesn’t quite work out as desired when there’s little housing inventory on the market yet great interest—whether due to pent-up demand or new buyers seeking a home. And along with the frustration that that buying process may spur comes extra anxiety about whether one’s preferences regarding location, price or amenities will have to be compromised.
What can real-estate professionals do to help their potential buyers find that which they really desire? What can buyers do for their part? We asked several experts for their ideas, and here are a baker’s dozen we heard that may certainly help.
- Secure buyer and agent compatibility. A buyer needs to pick a salesperson or broker who is able to work well with them since rarely does finding a home in a tight market go fast or without additional stress. The buyer needs to feel confident he or she has easy access to their professional, day or night, and that the person is willing to drop almost everything to work hard for them, says Mimy von Schreiner, a real estate consultant based in Naples, Fla. And both sides need to feel they can trust the other, she says, adding, “The right combination can make the difference between a great deal and a nightmare.”
- Work with one agent. Kimberly Gibbs, a salesperson with Keller Williams in Vero Beach, Fla., urges potential buyers to stick with one agent to avoid conflicts and wasting time. “We all work with each other but with working with one we can move faster and be more available to our clients,” she says.
- Position a buyer for pre-approval. Von Schreiner, who focuses on the luxury market, stresses the importance of a buyer needing to get their offer accepted rather than someone else winning out. The first step to do so, she says, is by identifying the proper price range for the buyer’s wallet and lifestyle. “DO NOT under ANY circumstances let them (buyers) get into your car until you know what they can afford to really buy. You don’t have time in a competitive sellers’ market to be messing around,” she says.
- Prepare buyers to preview a new property quickly: Homes sell fast—sometimes in hours in strong markets. That means a buyer has to be prepared to make decisions quickly. “Don’t let them disappear or be out of touch or they may be surprised when someone else ends up living in their dream house. You all may kick yourself later,” von Schreiner says.
- Highlight what’s good. In a hot market, an agent needs to help the buyer focus on the available opportunities. “We try to create visuals and reports that organize what is available more clearly,” says Charles L. Covell, president of Covell Communities, which builds homes in the Maryland market. His company color codes site plans for pricing tiers and/or views, for example. He also stretches his design team to develop creative solutions for much that it may have overlooked in the past, and sometimes its efforts shift from selling to assisting and advising, he says.
- Urge flexibility. If a buyer is already near the top of his or her budget, Ian Katz, a real estate broker with offices in New York City and Westchester County, urges them to consider alternative areas that might meet their other needs and which have less tight inventory. “This can be tough since location is often something that’s hard for a buyer to change, but if they are in a tight market and have to move they might,” he says. The first thing he’ll do is to take them to a new area after not finding in their desired area. “I’ll do a fact finding day with them in the new town, showing them the train station and one to three properties without overwhelming them. We make lunch a part of the day as well as parks and schools,” he says. Another way to be flexible is to encourage them to stretch their budget if they’re not yet at the top of what they can spend. By going a bit higher, the market expands and there may be more inventory that the buyer hadn’t previously considered. How much higher depends on their budget for the house, plus taxes and closing costs.
- Think out of the box. Katz also asks his buyers to let him search the market for properties that are available for rent but which otherwise meet their needs. Then, he contacts those properties’ listing agents and asks if the owners would consider selling instead of renting. “This has succeeded in the past a few times and allowed my buyers to bid on something without competition,” he says. He has also sent mailers to homeowners, explaining he has clients interested in a home similar to theirs.
- Consider the ugly duckling or what’s less popular. Look at what others overlook is the mantra here. Examples: Fixer-uppers for those willing to tackle work—or have others do so since many busy homeowners aren’t, or consider architectural styles that don’t appeal as much in a certain area such as ranches or condos without a view. “Typically, the ranches tend to be smaller than some buyers want in the areas where I work so I’ve introduced them as an option that’s a better financial deal, and which can be opened up,” Katz says. In such cases, he might encourage a potential buyer to bring in a contractor to offer a vision. Or in Gibbs’ Florida area, many buyers don’t want a house with stairs and prefer a ranch so a two-story might be more available and affordable.
- Shine a spotlight on a buyer. A salesperson can do this by crafting a great story about the buyer, says von Schreiner. The reason to consider this tactic, she says, is that one of the first questions she and colleagues often get asked by sellers is: “Who are these buyers? All sellers secretly want to know who your buyers are (background, family, profession, etc.), why they want their house, why this buyer is their buyer, and to feel that you and your client actually do care about their home,” she says. She suggests the salesperson attach a little note with the offer letting them know the back story and why the buyers love their place. “We have seen a strong, sincere story sway a seller to choose one offer over another, especially in these days where everyone is tossing around all-cash/quick close deals!” she says.
- Remember money talks. The moral here is that when the right house comes along; submit a strong competitively priced offer. Don’t waste time. When it’s the right house, go for it since there likely will be multiple offers, von Schreiner says. What’s a strong competitive offer? “Know what other competing properties have sold for so you can be sure you are positioning your client properly,” she says. Also, minimize or eliminate contingencies and remember that all-cash speaks loudly, when possible.
- Include a substantial earnest money deposit. Acceptance of an offer sometimes is determined by the amount of the deposit. A larger amount may signify a bigger commitment to the seller, so now’s not the time to hold back, von Schreiner says.
- Let the seller choose the closing date. Often, the right timing can be worth more than money to certain sellers. So if your client can let the seller choose the closing date, your buyer will build good will and set their offer apart, or at the very least, help to make the rest of the negotiation and time to closing go more smoothly, von Schreiner says.
- Remind the buyer that patience can be a virtue. When inventory is low, many builders start to build new homes to suit demand. Unfortunately, that may mean waiting six to eight months or longer. But if buyers can wait, they may be able to lock in a good sales price and mortgage rate and get to choose colors and finishes for a win-win all around, Gibbs says.
Besides heeding these tips, educate yourself more by going online with LearnfromGreen.com, the Global Real Estate Education Network’s wealth of information.