In another installment of what listing agents can do to improve their chances, let’s mention one of the habits that were made worse by the frenzy – responding to an offer.
Over the last two years, it became part of the business that buyers had to wait around for days while waiting for the listing agent to decide the winner. There weren’t many other homes for sale, and every new listing was priced higher than the last so buyers would tolerate a long delay.
Not any more.
Today, listing agents who are lucky enough to receive an offer should jump on it and respond the same day – and if possible, within an hour or two. Buyer’s remorse has never set in so fast, and in this environment, it is more than just an emotional bummer, it is a deal-killer.
Specifically, what can listing agents do better?
Answer your phone – it might be an agent with an offer!
Prepare the sellers to respond quickly, and be standing by, ready to sign.
Have a full set of seller disclosures and reports ready to send.
Don’t counter over stupid stuff.
Consider not countering at all, and just sign the offer.
Buyers are looking for ANY reason NOT to buy, and stay on the fence longer where it is comfortable. And you want to take a chance on countering over which title or escrow company? Or try to get the sellers a couple of months of free rent – heck, at least offer to pay for it!
The journey over the next couple of years will be a long arduous slog through the bad habits developed by realtors during the frenzy. It made agents lazier than ever, and gave them the impression that once they had a listing, it meant they were a real estate god and could boss people around.
Available to realtors in the on-going market shift is the chance to elevate their game from the frenzy era. My observations don’t come from being an old veteran because we are far removed from fax machines and the one-page contract (“press hard, there are four copies”). Instead, just basic common sense can reveal changes that would make it easier to sell a home in a tougher market.
Nobody had a problem getting showings and offers during the frenzy. But now it’s different, yet some of the same practices are still with us. You want more showings? Make your listing easier to show!
Two recent examples:
A. Early last Sunday morning, I received a request from a buyer to see six houses priced around $2 million later that afternoon. I guessed that only half of them would be available, and after calling/texting/emailing around to the listing agents, I was able to arrange TWO showings out of the six pursued.
B. Yesterday I had an all-time classic, though some version of this is fairly typical. In spite of the house looking vacant in the photos, the listing agent is requesting 24-hour notice to show. I call, but no answer, so I leave a voicemail. I’m having a busy day, so I had not sent a text yet when I get the call an hour later:
JtR: Hello, this is Jim, can I help you?
Agt: HELLO, you called me?
JtR: Hmmm, yeah maybe – what’s your name (I didn’t recognize the phone number)?
Agt: I’m so-and-so. Are you in real estate? (agent didn’t listen to my voicemail)
JtR: Yes, and I was calling about showing your listing tomorrow.
Agt: Text me your contact info. (I send my name, company, and license number).
The conversation is now changes over to text, instead of by phone.
JtR: I’d like to show your listing.
Agt: What time?
JtR: It’s looks vacant, does it matter?
Agt: Yes, the sellers have cameras, and they like to watch.
Agt: Ok, I’ll send you instructions.
Next, this comes over by text:
Lights in most rooms are on timers (living room, bedrooms, and dining room), so please do not move those light switches. But Lights in the entry, kitchen, and bathrooms are NOT on timers, so you can turn those on, and then off, when done. If you want window blinds opened, turn slats 90 degrees open to let light in, but please do not raise the blinds. When done, turn all window slats fully closed to avoid sun damage. Use slider door in kitchen to access patio. Please turn slider door slats to perpendicular first before moving the slats to the right to go outside. There is a ROD in the door track, just remove it. Please return rod to door track, lock door, fully close blinds when done. And All must wear Booties and Masks and all supplies are in entry foyer. If booties have run out, take off shoes. Water is turned off until accepted offer, so let your party know to plan ahead, as toilet can not be used and no water to wash hands (sorry). Office upstairs could be turned into mirror image of adjacent bedroom. Solar panels are owned by Seller. FYI. Cameras are throughout home. Thanks so much for showing. If you have any questions, please ring my cell phone for faster reply and text too. Thank you!
I’m sure the agent is probably thinking that this is all helpful information. But all I’m thinking about is how difficult it would be to try and negotiate an offer with them – they will want everything to go their way. During the frenzy, buyer-agents accepted that the listing agents were going to beat the crap out of you, and we just had to take it. But not now.
Yet, have listing agents adjusted their approach?
When you list your home with me, I’ll tell you up front that it is in our best interest to show the home seven days a week with little or no notice. Not only do we have more showings, but it also sends the message to buyers and agent that we have respect, and want to make it easy to buy the home – with no cameras!
The local market conditions appear to be getting worse every day, mostly because the headline writers and social-media experts are piling on now. What can listing agents do?
When most agents are content to show their listings and then go wait by the phone, there are alternatives. Hat tip to our manager Steve Salinas for bringing up the Reverse Offer technique in our sales meeting!
For two years, the buyer-agents have just been telling their clients to bid hundreds of thousands of dollars OVER the list price, so now they may need some help with advising their buyer on how to proceed in this market. When a buyer shows some interest in the home, the listing agent can reach out to the buyer’s agent with more than just a casual request for feedback.
The Reverse Offer is where the listing agent suggests price and terms to the buyer-agent that might be the foundation of a potential deal. It needs to be handled tactfully, and with the seller’s knowledge so it’s not a breach of fiduciary or a waste of time.
It can be as casual as mentioning any needs the seller might have in their exit plan, or for terms that would be advantageous to the buyer like seller financing or rate buydowns. But it can also be as formal as issuing written offers signed by the seller for the waiting buyers to consider – here’s more:
It’s worth considering because what’s the alternative? To just sit by the phone and hope it rings, and when it doesn’t, go tell the seller to dump on price?
This is the Wait-and-See period when buyers are so comfortable on the fence that it’s going to take something different to get them to buy a home. Dumping on price during the Wait-and-See period only makes the home buyers think that if they just wait longer, the prices will go down more.
Agents should offer their sellers some alternatives to that!
We opened escrow today on my first contingent sale in 2+ years – where my buyer has to sell their home to purchase the subject property.
There were two offers submitted – and BOTH were contingent upon selling another property!
Thankfully, the house we’re going to sell is a single-level home in Aviara, which was well-known to the listing agent – plus I submitted my price, a thorough set of comps, and photos to help him with the decision.
It means we’ll have an open-house extravaganza coming this weekend, and get to test the demand for a prime one-story home with all the extras….including an attractive price! Stay tuned for more on Thursday!
A remarkable achievement considering that Compass has only been a nationwide company for 3-4 years.
It will matter more later too.
CoStar is going to change the search-portal landscape, and if they spend enough advertising money to get all the eyeballs, the buyer-agents will be cooked. Unlike Zillow and Redfin who encourage viewers to contact their own set of agents, CoStar will direct people back to the listing agent of each property.
You can imagine the advertising that could change everything:
“Would you rather be represented by a third-party who doesn’t know a thing about the house in question, or do you want to speak to the listing agent who knows everything about the property – including how to get you the best deal?”
CoStar got a head start when they boughthomes.com, and are rolling out their first version this summer in New York City.
Buyer-agents will be forced to join realtor teams who have the listings, or just fade away.
Who has Compass been recruiting for the last four years? That’s right, the realtor teams.
The pandemic is still raging, the President of the United States is in the hospital, the election is right around the corner, and so are the holidays. The frenzy has to slow down at some point, doesn’t it?
So I schedule for 11am, and show up to find today’s list of showings taped to the front door:
The listing agent happens to be there, so we discuss the current market conditions. She is a long-time independent broker like myself (who now also works @ Compass) and we agree that the environment is ripe to convert to single agency naturally, and buyer-agents being eliminated.
It’s not because it’s what best for everyone involved, because clearly it’s not good for buyers and sellers – except maybe for those sellers who live in the house being barraged by showings the first few days on the market. It doesn’t sound like much of a price to pay, but for homebodies, or those with little kids & pets, it can be a major inconvenience.
Zillow is the only entity who spends eight or nine figures per year on advertising, so they will control our destiny – and with them setting up brokerage units manned by employee-agents in all 50 states, you can get a feel for what’s ahead.
In the meantime, consider these developments.
Today’s listing agents are making it harder to show and sell their listings, they are lowering the buyer-agent commissions (and taking the difference), and some realtors are advertising guaranteed cash offers as the better way to sell your house.
As is the case throughout America, the truth doesn’t matter nearly as much as how loud you can scream.
The greed displayed by these listing agents feeds upon itself, because other agents witness these practices happening without any reprimands, and they start to believe it’s acceptable…..and then they do the same thing. The game is evolving into how to beat the buyer-agents out of their commission.
In the short-term, realtors can justify this revolution by pointing to the commercial brokers who have practiced their real estate like this all along. Heck, less competition will slow down the rapid price increases we are experiencing, and help to trim the over-population of realtors everywhere too….so you can say there are good things about it.
But it all plays into the hands of Zillow, and eventually they will be who processes your order.
Today’s coronavirus news adds a new dimension to our real estate market, doesn’t it?
Or does it?
We can probably count on one thing to happen.
This will be the last straw for those home sellers who have been languishing on the open market for more than 30 days. They have heard how hot the market has been for others, but based on their overly-optimistic list price, their motivation wasn’t that great to begin with – and they are tired of the inconvenience that comes with not selling.
Those would-be sellers will be de-listing their homes, and waiting until next year.
Should buyers pack it in and wait until next year too? Not really – you’re still looking for the right house, at the right price, and it could happen at any time. Plus, if you were ever going to get a decent price on a home in this era, it would be in the next month or two when the competition should be dwindling. There will be more buyers in spring – it’s just a matter of whether sellers will come out in droves or not.
But consider this:
Any sellers who are still for sale on October – especially those who go on the open market after today – should be highlymotivated to sell. Nobody is going to casually throw their home on the market just days before the biggest election in history with the incumbent fighting a potentially life-threating virus.
Yesterday we closed escrow on our sale of 12911 Biscayne Cove in Del Mar!
I suggested our initial list price of $1,495,000, based on these recent sales:
The Barbados sale was off-market so we don’t know if that was high or low, so I didn’t use as a price gauge.
Though a list price in the low-to-mid $1,400,000s might have been more appropriate, there weren’t any other houses for sale nearby that were priced lower so I’m going to push it and see what happens over the first few days. We had a parade of buyers – 32 showings in the first 17 days on the market – yet no offers.
Originally I thought we’d see a steady flow of retirees flocking to this one-story home, but 31 of the 32 showings were to young families. Del Mar schools are the best, and while the 1,518sf was mentioned in the listing, I think the lack of other homes in this price range caused these buyers to check it out just to see if they could find a way to fit in a smaller home.
After 11 days on market, the 2,542sf Boquita house listed on the range $1,300,000 – $1,399,000, which crushed my chances of getting more. We lowered our price to $1,388,000 a few days later to stay in the game, and after a couple of weeks, we found a single guy to buy it for $1,344,000.
I found great joy in finding out that the seller had read bubbleinfo in the beginning, and it was one of the reasons why he left Michigan before the crash. Now he and his lovely bride are off to Boise, Idaho to be near the grandkids!
Just when we thought there was a set policy on Coming Soon listings, they change it again.
The IDX is the agreement among realtors to share each others’ listings on our own personal websites, which was a great idea before search portals. But IDX was written off as a waste of time because now consumers have found better options like Zillow.
Are they going to change to their realtor’s inferior website, just to see the Coming Soons?
Wasn’t the idea of Coming-Soon-listings-on-the-MLS supposed to give realtors the distinct advantage of controlling the distribution? Oh well, maybe that was just me who saw that advantage, because it sure wasn’t considered in this decision. They are all going to be out in the open now, and we might as well let Zillow have them too.
The water is already muddied by Zillow allowing the Premier Agents to do their own Coming Soon listings separate from the MLS, and by agents ignoring the rules on social media. Who knows if agents are flagrantly abusing the rules or just forgot them already (more probable) but I see the old standard Coming-Soon pitches on social media now that are supposed to be inputted into the MLS by the next day – but they show up a week or two later, just like before.
Here are the new/updated rules for those who care:
No mention of Private Exclusives – which are allowed by N.A.R.’s Clear Cooperation Policy – where any agent in the same brokerage can sell an in-house listing without any MLS or public exposure.
I don’t get the No Showings policy either. Do they really think an agent is going to deny showing their Coming-Soon listing to a buyer who contacts them directly and promises to pay full-price cash? I’ve already showed Coming Soons listed by other agents to my buyers, and the listers didn’t think twice about it. If they had a chance to double-end the commission, wouldn’t they just pay the fine and be on their way? The max fine is only $2,500.
This whole topic was a mess, and now giving buyers direct access to the list is not only going to tempt them to go directly to the listing agent (which is opposite to NAR’s intent) but consumers will also get a better look at how disorganized and unruly we are.
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