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In many areas all across the country, the real estate market is declining. For some it seems like it may have come to a standstill – excellent homes sitting there, just begging and waiting for some to make an offer.
Some lucky homes that have sold did not sell for their asking price – many as much as 10-20 percent lower than the list price. These sellers, just grateful to be able to get an offer, willing to take less sales price than pay for the upkeep or risk foreclosure.
Then there are buyers who want to buy a house – but getting financed is like pulling teeth as many lenders are also in deep financial trouble.
And yet, despite this going on in many markets – there are agents still thriving, still selling, and doing just as well as ever before.
What is their secret? How do you deal with a bad real estate market?
Here are some things they’re doing:
Find the sellers who need to sell, the buyers who need to buy: No matter what the market conditions might be, there are always people who NEED to buy or sell a home. They’re A-LIST clients, and usually need to act fast. These clients may come in the form of referrals, company transferees, or marketing to a specific niche of people.
Creative Deals: If you can offer something that is absolutely too good to pass up, it can create excitement in a down market. Some people are offering “Money Back Guarantees” – “Sell in x Days or we buy the house from you” or even “Buy one house, get one free” kind of offers. Auctions can also be a way to create excitement or buzz about a property. These may not all be in your best interest, but for some markets, they can be enough to help you slide through a tough market until things get better.
Become a Foreclosure Specialist: If your market is plagued by foreclosures, learn how to become a foreclosure specialist in your area. While it takes some time and practice to understand everything from short sales to bank paperwork, it can be another way to get through a bad real estate market – and service the customers who may be facing potential foreclosure or interested in picking up a few bank owned properties at a steal.
Don’t Say the Market is Great if it’s Not: It’s important to be upfront and honest with your clients and anyone else you may talk to. Be realistic when you talk to people and explain what DOM and the list to sales price ratios mean to them. Show them you know the market and what you can expect, and they will trust you. If they think they’re home will sell in two weeks and it sits there for 4 months, you’ll probably lose the listing to another agent.
These are just a few ideas I thought of from the top of my head this morning. Do you have any tips on being an agent in a bad real estate market? I’d love to hear your ideas in the comments below.
9 Comments
The best thing you can do for your business in a bad market is to diversify! Teach MCE classes, learn a new skill (like short sales), volunteer in your your community, work on your website, call past clients for referrals, the list is endless. We just have to DO SOMETHING! If you keep doing what you have always done in a different kind market you will not get the same results. Change what you are doing, be adaptable and you will succeed.
I think diversifying is a good idea. It might also be a good idea for agents to look at part time jobs to suppliment there income.
in a down market I think it is very important to only work with clients that are able and willing to buy and not take on a bunch of listings that are not priced to sell.
I whole-heartedly agree that it is critical to be upfront with your customers. Great advice.
One more tip to toss in is the importance of “going where the custoemrs are.” Regardless of how bad things may seem, there are still closings happening every single day.
The key is to “go where the customers are.” Sure it involves more digging, but with the right approach, and by cornering a market, you can still dominate your competition even in a down market.
Great blog.
CW – http://www.fsboleadportal.com
I just want to sell my 2 loser California investment properties. Sometimes I’m just tempted to “let them go”
You already gave few great tips. The most important thing is to act very smartly and few others said to diversify. When markets are bad you will have to work little more, bad if done correctly results will come. They will be always be times when markets are bad, so we must deal with those fluctuations.
You are absolutely right about telling people how the market really is. There are too many agents out there who will run with scripts to make things seem better than they really are. Another great client to go after right now depending on where you are is the second home buyer.
Are you still seeing a lot of people interested in buying investment property on the cheap but with margin? I have no problem with cash buyers taking the risk but I get nervous for our economy when people think flipping houses is the easy path to wealth. Yeah those houses look cheap now but they can always go cheaper and if you don’t have the cash to ride that out you are in big trouble.
Thank you for your opinion Dena and I agree. We have them up for now until we are able to sell the space to home builders or real estate agents.