We’ve been faced with an inventory-depleted market unlike ever before since the start of the pandemic. Now, with this challenge being present across markets all over the nation, it has become a real estate professional’s priority to prepare buyers for strong competition and provide them with what they need to make a strong offer.
In this week’s blog post, we’ll be identifying how agents can guide their clients through this stressful process. Clients will be more prepared and better suited to deal with these challenges by sticking to their budget, managing expectations, and advising on the terms.
3 Guiding Principles for an Inventory-Depleted Market
1. Stick to the Budget
One of the first steps to the home buying process should always be setting a maximum budget. Advise your clients to speak to a financial advisor for a detailed consultation. In other words, determine how to proceed with their investment and how they’ll stick to their budget.
Recently, buyers have been submitting offers far over the listing price in fear of getting outbid or losing out on a great property. Moreover, remind your clients not to get caught up in the market madness and remain committed to their budget! Consistently going over numbers and discussing them with your clients will help them stay on track. Don’t get swept up in the frenzy of an inventory-depleted market.
2. Manage Expectations
It’s your responsibility as an agent to make sure your clients are prepared for any unforeseen complications. What if an offer isn’t accepted? What if they need to negotiate terms or pricing? The last thing you want is for your client to make a regrettable decision.
It’s imperative that you manage expectations throughout each step of the home buying process. This is even more important in an inventory-depleted market. For example, do this by discussing finances and budget and providing consistent market updates on a regular basis.
Be sure to provide relevant market data that will keep them informed of current market conditions. Solutions like Zentap’s automated local market report flyers and videos are great for this.
These will keep your clients informed and in the loop. Sharing the latest market data and brand new listings through video and in-person will educate your clients through their search. Above all, you want the expectations of what they may experience to be well-managed.
3. Advise on the Terms
When a client is ready to make an offer on a home, advise on the terms of the deal. Offer your experience, expertise, and recommendations. Keep them informed of the terms the competing offers may include. Guide them to making the strongest offer possible. Remember, it’s your job to make sure your client understands all aspects of the terms.
There will be advantages and disadvantages to various approaches to submitting their offer in an inventory-depleted market. As an agent, it’s imperative to educate your clients on what those advantages are and how they could strengthen, or weaken their offer.
When negotiating, it’s important to remain confident, yet open-minded to new ideas. In an ideal situation, a client won’t have to make concessions. It may not always be that way. Alternatively, you can always advise on less expensive options that create value for the sellers and will not lead to costly mistakes down the line.
Don’t forget to reassure your clients that you are their go-to resource as they enter the final steps of the home buying process. Above all, you are there to make the sale as smooth as it can be.
While negotiation can be competitive, especially in an inventory-depleted market, it’s crucial to keep a positive attitude. Finally, When your client has agreed on all the details, help to make all parties feel like they’ve won. Most importantly, reassure those feelings of excitement and confidence!