How do you get transactions when there isn’t any inventory? Creative sales associates know how.
2021 looks to be a strong real estate market with rising prices and low interest rates. Right now, the only headwind seems to be a shortage of inventory in many markets. How do we close transactions when there isn’t enough inventory? The most creative sales associates are what I call Puzzle Makers. They create off-market transactions.
What’s An Off-Market Transaction?
To clarify, an off-market transaction is NOT a listing that is being held off the market. It is a transaction that does not exist in the normal marketplace. Off-market transactions consist of sellers who want to sell but are not on the market, and buyers who want to buy but are not actively looking. How do you find these parties and match them up? That is the magic of the puzzle makers. One of the best puzzle makers in our office creates about 12 off-market transactions every year. I asked her to share her secret sauce. Here’s what she said, “The key is knowing your people’s dreams. Knowing their pain and their pleasure and then helping them get from the life they have to the life they dream about. This may require going out and finding a home for them that is not on the market. The key is the depth of your relationship with them.”
Three Groups of Magic Questions
“How does this work, specifically?” I asked. “How do you discover their pain, pleasure, and dreams?” She offered three groups of magic questions. F.O.R.D. questions. Here are the questions and some recent responses during the pandemic:
- Family. “How’s the family?”
Response: “We are doing OK, although we are struggling with homeschooling. Our house is not set up for a classroom.”
- Occupation. “How’s work?”
Response: “Both of us are working from home right now. It’s a challenge not having a home office—especially with the kids at home all day.”
- Recreation. “What are you doing for fun?”
Response: “Not much. We can’t watch live sports or go to restaurants and church. About the only thing we can do is walk, and we are not really in a very walkable neighborhood.
- Dreams. “If you could wave a magic wand and have your home just the way you want it, tell me about that.”
Response: “We would have a bigger house with two home offices and a work-out area. We would be in a neighborhood with open space and a walkable environment.”
“With today’s low interest rates, have your thought about doing this sooner than later?”
Response: “Yeah we have, but we don’t want to put our home on the market until we find our new home, and there’s not much to pick from right now.”
“If I can find you a home that fits what you are looking for, would you take a look at it?”
Response: Well, we really aren’t in the market right now.”
Puzzle Maker response: “Sure. You don’t need to buy but you always need to look. There’s no harm in looking.”
Response: “I guess when you put it that way, we’ll take a look at it.”
The Mechanics: How do you put an off-market transaction together? There are a number of ways:
- They solve it. It’s amazing what happens when buyers get the bug to move and find a home they love. They suddenly find ways to make it happen. They discover extra cash or a bridge loan/HELOC that doesn’t require them to sell their house first. Or, they decide to keep their house as an investment property.
- An experienced puzzle maker often already has the potential buyer for their house in mind. Puzzle makers are masters at putting “chains of transactions” together.
- Does your company offer a guaranteed sales plan? This is where your company guarantees the sale of their current home. Many companies are developing these plans due to the marketplace need plus the competition from iBuyers.
- Enroll iBuyers to help sell their existing home. Don’t be afraid of iBuyers. Use them as a resource to help your clients. Be proactive. Take control of the situation and orchestrate the iBuyer offers.
Here’s the bottom line: We get paid to help people go from the lives they have to the lives they dream about. The creative puzzle makers are masters of helping people make it happen.