Shed the Limiting Beliefs that Hold You Back with Buyers!
As Realtors we spend a good deal of time working within the confines of our “limiting beliefs” (definition: A state of mind or belief about yourself that restricts you in some way…many professionals and even entrepreneurs struggle with self-limiting beliefs that can hinder potential success.) The key is learning to identify limiting beliefs in order to overcome them.
Real Estate is a self-driven business – it is up to YOU, the REALTOR, to set your own schedule and hold yourself accountable to do the actions you must do daily with consistency in order to develop a steady and successful business. Do you lead gen every day? When your alarm goes off in the morning, do you jump out of bed, or do you roll over and sleep until 10:30am (“since you don’t have an appointment until 11 anyway…”)? Do you make your calls, send your letters, run your ads & do the things you need to do to grow your business?
2022 is turning out to be a banner year for offering writing…but not necessarily in the way we had hoped. Never have we written SO MANY OFFERS…to no avail. The perfect storm of opposing forces has created a market unlike any we have ever seen – record low inventory and record demand from millennials aging into the market, as well as historically low interest rates have created a true “Seller’s Market” leaving Buyers battered and bruised from the fight for houses. We are seeing Buyers taking a longer time to get into a home, some putting in 3, 5, even 10+ offers throughout the buying season to try to win a house. So many Realtors I know have practically given up – written off working with Buyers, citing the fact that they don’t know how to win in a market like this. But what if you CAN win?
Limiting Belief #1: It’s too hard to work with Buyers right now because there just aren’t enough houses!
SOOOO…I ran the total sales recorded in the Garden State Multiple Listing for 6 popular northern NJ counties (Essex, Bergen, Morris, Union, Passaic, Somerset) with relative ease of amenities for commuting to NYC, but that were just west of the urban area of Hudson County (which suffered from population outflow due to COVID in a similar fashion to NYC). See attached chart:
Note that the last 2 years have seen the highest number of sales EVER in these 6 counties in the GSMLS – scratching my head and wondering why anyone is saying there are no houses to sell? As a matter of fact, a simple re-sort of the chart shows that with the exception of 2004/2005, the last 5 years have consistently produced an increasing number of sales, which seems to defy the idea that “there are no houses!” However, there is obviously a reduction in the number of homes PER BUYER, which means that the active buying pool simply has less homes to choose from when deciding on which homes to pursue and bid on. So, let’s widen our interpretation of “inventory” to expand to include homes that aren’t just the perfect turn-key cream puffs, shall we?
Limiting Belief #2: How can we compete against all cash buyers?
Well, this one is hard, but in this market environment, let’s presume that all of your Buyers are using all the tricks of the trade: waiving inspection remediation, offering strong appraisal floors, offering cheap use & occupancies, “like cash” offers & even showing up with loan commitments pending chosen property, to name a few. The truth is, cash offers promise certain things that a borrowing buyer has to negate:
- Short closing time period (find the lender that can do the 14-21 day closing)
- No appraisal (provide a full appraisal floor with proof of funds)
- Not dependent on Buyer qualification (show up with the loan commitment in hand pending property)
Despite countering all the seller objections above, the final sweetener is, without a doubt, PRICE. At what point does a Seller feel that taking the cash deal is leaving too much money on the table? $10k? $15k? $25k? $50k? Look, if the seller is bent on a cash offer, then you are up the creek, but if you are able to refute their objections, then the kicker at the end is to offer enough over the cash that the seller is willing to take a chance on your mortgaging Buyer. Let’s be honest, if a cash offer is $500K and you are offering $525k or more with a full or significant appraisal waiver, you better believe a Seller is going to take a long hard look. It won’t win everyone over, but it just might with the Seller you are trying to impress.
Limiting Belief #3: It’s so hard to win against multiple offers!
And yet…someone WILL. Did you do all the things that set your client up for success? Before you show a house, did you:
- Run 5 min comps on a house before you show it to know if your client is truly able to afford it?
- Set your client’s expectation as to where this said house will land?
- Call the agent to see how many offers were in hand already? How many showings were scheduled already? If there was a specific time offers were due and if there were special terms the Seller thought to be CRUCIAL?
- Speak with your client to know the maximum inspection waivers & appraisal floors they are capable of offering?
- Work closely with the loan officer to find the best loan product and structure to maximize your client’s capabilities in a competitive market.
- Set up expectations so that your client understands that the ultimate winning factor for a home is SIMPLY PRICE – money speaks, and it is the clearest way to indicate to a seller that you appreciate their home and want to make it yours.
So 2022 isn’t exactly a market for the faint of heart – it takes a steel will and persistence to match, but don’t let the limiting beliefs creep in to destroy your confidence. Every house that enters the market WILL find its right Buyer AND it’s right Buyer Agent. It could be anybody that is armed for this market, so…WHY NOT YOU?
Investor, Realtor, Rainmaker @ Keller Williams NJ Metro Group
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