Identify the Market You’re In
There are three types of markets; seller’s markets, buyer’s marketss, and a balanced market. Knowing what market you’re in is essential for making the right decisions with the home your selling, but not all agents are conscious of this. Here’s how you can understand what market you’re in and how that should inform your decisions.
How to measure your market
What unit of measurement is a sure way to understand the market you’re currently in? The best way to understand your market is to look at your months of inventory. This measures how many months it would take for all your inventory to be absorbed.
Markets and their months of inventory:
- Seller’s Market is 0 to 4.99 months
- Balanced Market is 5 to 6.99 months
- Buyer’s Market is 7 or more months
Do you have a “want to” or a “have to” seller?
If you don’t have to sell, you have some thinking to do. In a buyer’s market, for example, where sellers are dancing to the tune that buyers are playing, you may just want to hold on to your home. Selling now would require you to compromise your price and the condition you want to sell it in.
It’s vital, whether you’re sitting with a buyer or a seller, to educate them on the three different markets so they could make the best decisions on whether to buy or to sell.
Three levels of qualifications
Once you finish looking at what market you’re in, you need to look at the qualifying factors that are pushing the decision. The three qualifications are whether they are ready, able, and willing.
Readiness is all about personal reasons. They are either vitamin moves or aspirin moves. Vitamine moves enhance life, and aspirin relieves pain.
Willingness in large part is influenced by an understanding of the market conditions, which is why they need to understand the differences between buyers, sellers, and balanced markets.
Ability is about how easily your buyer can gather the capital to make the purchase, whether that be putting the cash upfront or financing it.
Three ways to energize a sense of urgency
Creating a sense of urgency is crucial for signing and getting a house on the market quickly and without any hiccups. Speaking to a client’s sense of urgency also requires you to understand their motivations, and ultimately how you can satisfy their goals.
1. Become the local economist of choice
This requires you to have an understanding of your market and be able to communicate and articulate that to people.
2. Help them tap their “why”
If you can help your client tap their “why”, you can motivate them to get over almost any barriers. Be creative and make sure to listen.
3. Address reluctance
Page 178 in Shift: How Top Real Estate Agents Tackle Tough Times will show you the three ways to energize urgency to help motivate your sellers to get their properties listed and take advantage of this market. Also worth noting are the four strategies given on page 188 to help overcome reluctance. These strategies are “why wait and the hazards of timing the market”, “trading up”, “less is more” and “find a great buy”. Now, these tactics were written in a buyer’s market, but they hold just as true in a seller-dominated one, simply replace the word “buyer” with “seller”.
I urge you to read the entirety of Shift, but if you simply can’t find the time, then at the very minimum reading the introduction, the first tactic and tactic #9 will give you some essential tools.
I trust you found this useful and hope that you’ll take it and use it. Make it a great day!