There is housing inventory, it’s just not sitting around. Use these five tips to find success in today’s hot seller’s market.
Ask any sales associate, “How’s the market?” and most will reply, “There’s no inventory.” Let’s look at the facts. In his latest market update, Dr. Lawrence Yun, Chief Economist of the National Association of Realtors, reports that 2021 home sales are on pace to beat last year’s hot market by 10%. How can we have record setting home sales if there is no inventory? There is inventory—just not standing inventory.
In most markets, new listings are strong (as strong as last year), but sales are stronger. There is inventory, but it’s selling so quickly that there is little standing housing inventory. Houses come on the market and are sold in a matter of days – or hours. Some sell before they even hit the market. Being able to move at the speed of the market is a key success factor today.
Here are five tips for success in today’s hot seller’s market:
1. Mindset. Shift your mindset to “There is inventory. I just need to find it.” The reticular formation of the brain is a filtering and focusing device. If you continually tell yourself there is no inventory, this part of your brain will make sure you don’t see it. Instead, program your brain to look for inventory, and you’ll see more of it.
2. Go slow to go fast. Take the time upfront for the buyer counseling interview. Prepare your buyers to move at the speed of the market. Have them ready to go with verification of funds and pre-approvals for their loan. Counsel them on the five negotiating points of a contract so they can write an offer that wins. An hour of preparation with a buyer upfront can save days or weeks of frustration on the back end. More importantly, they have a better chance of getting the home they want.
3. Widen your search criteria. Many buyers seem to be looking for their forever home, and they want it perfect—very specific location, features, condition, and price. When you load these criteria into an MLS search, you will often get no results. The specific house they just described simply doesn’t exist. The conclusion: There’s no housing inventory.
Widen your geographic search and solve for price, i.e., leave the price blank and see what the buyer will have to pay to get the house they want. An associate recently complained that there’s no inventory for their buyer in a specific neighborhood. I had them solve for price and there were five homes available that had been screened out by an unrealistically low price criterion. When we expanded the geographic search to the zip code (versus just the neighborhood), there were 17 listings available—so much for the no-inventory mythology.
4. Pay attention! This is a market for the professional – not the hobbyist. Every day, your mission is to find housing inventory. Search your hot lists and warm lists, attend Coming Soon sessions in your company, conduct real estate reviews, contact out-of-town owners, call expired listings from two years ago, and connect with your relationships. Stay focused and relentless in your search for inventory. Then, have your buyers prepared to move at the speed of business.
5. Negotiate like a Ninja. Master the five negotiating points of a real estate contract—Price, Terms, Inclusions/Exclusions, Dates (Closing & Possession) and Contingencies. Help your buyers write contracts
that win and protect your sellers from contract cancellations.
The multiple offers and bidding wars grab the headlines and the imaginations of the marketplace. But, there’s still inventory if you look for it. An example is our red-hot market in Northern Colorado. Buyers, sellers, real estate professionals, and the media tend to focus on the 61% of homes that sold last month in bidding wars above list price with an average of just five days to offer. But, 39% of the homes sold at or below list price in an average of 34 days to offer. There is inventory—just not very much standing inventory. Are you focused on finding it? The best properties have a very short shelf life. Are you prepared to move at the speed of the market?
Larry Kendall is one of the founding partners of The Group, Inc., a real estate company that is owned equally by its sales associates and staff. He is also the author of “Ninja Selling.”