Does it seem like you’re spending more time with fewer qualified leads? Does it seem like every transaction is more challenging than the last? Are you working twice as hard for the same amount of income or less than you made in the past few years?
You’re not alone. This is an emerging symptom of the changing market, and it’s not your fault. It’s time to recognize the problem so you can get back into control of your year.
Here’s what’s happened that has largely taken the ‘FOMO’ (Fear of Missing Out) buyers and sellers out of the market.
- Purchases by investors have dropped by nearly 50% year over year in 2023, according to Redfin.
- 34% of buyers are first-time buyers and many of them either no longer qualify or have chosen to step away from buying for a while. We have 7% interest rates to thank for that.
- Mortgage applications are down, and prices are up. There is no ‘housing crash’ on the horizon, but many people have sidelined themselves wishing for prices to collapse or interest rates to down. This keeps uncertainty in the market. When people are uncertain, they tend to wait and see what happens. This means fewer transactions.
Nevertheless, 4 to 4.4 million properties will change hands this year. Most agents only need one or two transactions per month to make a good living and three to four per month to make close to or over a million dollars in gross commission income.
The challenge is finding those transactions when they are less obvious than in previous years. You have to be more proactive than ever before, and that can feel a lot more challenging! This is because the less motivated leads cover up the more motivated and qualified prospects.
Are you forcing deals to happen?
Let’s take a look at some of the signs you may be spending too much time trying to force deals to happen that might not come to fruition. Next, I’ll present to you a few easy solutions to make your life easier, more productive, and less stressful for the rest of the year.
How do you know if your prospect may never transact? Are any or all of these situations happening to you? Here’s a short list of situations to watch out for.
- You found your buyer client exactly what they’re looking for. The house checks all the boxes. You excitedly text, email and call them, but it’s crickets.
- You have a listing and have received several offers at the list price, but your seller won’t accept those offers because they expected over the list price, with competing offers.
- You’re working with buyers who are enthusiastic and qualified to purchase, but refuse to write offers that are competitive. They’re coming in way too low, asking for too many concessions, and/or have a weak lender’s letter. You keep losing, house after house but they (and you) keep hoping for a miracle.
- You have a listing that you thought was priced right. The condition and location are great, but after sitting on the market for more than 30 days, your seller wants you to raise the price, not lower it, in spite of slow or no showing activity.
- You have tons of buyers who say they want to buy, and ask to see homes but haven’t gotten pre-approved yet.
In short, you may want the transaction to happen more than the client does. ‘Real’ buyers and sellers act differently than in the above scenarios.
‘Real’ buyers are calling you just as much as you’re calling them to see what meets their criteria. They are loan-committed and willing to do what it takes to compete if necessary. They don’t ghost you!
‘Real’ sellers confirm all showings, stage the home prior to those showing appointments, are calling you for feedback, and are open to negotiating to get the job done. Sometimes they’ll even call you for a price improvement. They’re motivated and ready to sell.
How do you sift and sort so you know whom to spend the most time with?
How do you know who’s a time vampire versus who will transact? There’s only one solution and that is to use buyer and seller pre-qualification scripts. A script is simply a conversation outline that is question-based and establishes the prospect’s time frame, motivation, and expectations.
Make sure you are actually asking the following questions, using the pre-qualification scripts: (this is just a sampling)
“Which home in the area do you plan on selling?”
“What price has your lender advised you not to go over?”
“Assuming I find you the home that checks all the boxes you mentioned, on a scale of 1-10, 10 meaning you’re ready to go for it immediately and one meaning you’re just kicking tires, how would you rate your motivation?” (If it’s anything less than a 10, “What would it take for you to be a 10?”)
“How do you feel about being in a multiple-bid situation?”
“What are have-to-have features and what’s a bonus for you in your next home?”
“Tell me more about why you’re planning this move. Paint me a picture of your ideal scenario…”
“What price do you have in mind? How did you arrive at that price?” “Is keeping the home an option?”
In addition to well scripted, question based pre-qualification scripts, you also must embrace the fact that generating more business means you won’t tolerate the less motivated, combative, or unresponsive prospects.
When you generate, you don’t have to tolerate. Many times agents work with the wrong prospects simply because they’re the only leads they have. This is becoming more and more problematic as the FOMO continues to dry up.
Tim and Julie Harris host a podcast for real estate professionals. Tim and Julie have been real estate coaches for more than two decades, coaching the top agents in the country through different types of markets.