Winning With Buyers in a Seller’s Market
Today I want to talk to you about a formula, a play, that we’ve been running to help people win with buyers because, as you know, it’s an extreme seller’s market out there. We’ve developed four questions to take into your business, whether you’re an individual agent or maybe you have a team to really help focus on what matters most.
Here are two resources you will need for this Growth Tool. The first is a visual aid containing those four questions, the second is the book SHIFT.
The first thing that you are looking at is, do you understand what ready, willing, and able means? This is on page 174 in the book SHIFT, but readiness is all about personal reasons. When a buyer is purchasing a home, they have a why behind that move. One thing that’s kind of cool is that all those whys, those reasons people move, fit into one of two categories, they are vitamin moves or aspirin moves.
Vitamin moves are what we call life-enhancing. We got married, we have a baby on the way, we got promoted, or relocated. Think of it as a very positive move. Then there are aspirin moves. Aspirin moves are pain-ending moves. Death, debt, divorce, are the big three that we see as a reason why somebody needs to buy a new home.
Just to paraphrase readiness is all about personal reasons, it’s all about their why and their why is driven by a vitamin or an aspirin.
The second is willing. Willingness is understanding the expectations of today’s market. For example, if a buyer says to you, “I’ve always paid $10, 000 or $20,000 under the asking price” in today’s environment, that’s not going to happen. Unless they’re purchasing at the very top price range of the market. If they’re purchasing anywhere near the average or the median of the market, they’re not going to be able to do that. Willingness is understanding the market conditions today and accepting them before attempting to purchase.
And then last is ability. Ability is having access to capital or credit in order to compete in today’s market. What I really want you to understand is that in today’s market, there are two types of buyers; want to buyers and have to buyers. Unless you live in a second home market you literally cannot afford to work with want-to-buyers. They will run you ragged and you will be left with nothing to show for your efforts except a whole lot of frustration. Learn to use the six connecting questions from page 95 in the book Shift to properly prequalify each buyer before you start investing your time with them. Scuba dive, don’t water ski, on their answers so you have a deep understanding of what is causing their move and what type of buyer they actually are. If you choose to ignore or gloss over this step you will be kicking yourself later.
Think of ready, willing, and able like it’s a recipe. Imagine that your goal was to bake brownies and there were three ingredients. (I know there are more than three ingredients but play along here) There’s flour, sugar, and butter, right? Well, if you decide to leave the butter out and just use flour and sugar, you’re not going to end up with brownies.
For you to work with a buyer today, they need to have all three ingredients- ready, willing, and able – and if they check all three boxes, then they are a have-to-buyer. I understand for some of you, this is a challenging thought to wrap your mind around because you’re a people person and you want to help everyone. But, I would invite you to live by a principle that I’ve been living by as a coach for some time, which is don’t cheat the ones you can help by focusing on the ones that you can’t.
This first step is by far the longest, but make sure that you or your team truly understand ready, willing, and able, and that you’re only working with people who are have to buyers.
Now the second step is, looking at the buyers that you’re working with and asking “Who is my most ready, willing, and able buyer?” Out of all the people you have, who is your most ready, willing, and able? Then look at your second, third, fourth. But I want you to rate and rank the buyers that you’re working with through the lens of ready, willing, and able so you can give your time to those most likely to actually purchase.
The third step is to ask yourself “What is my weekly contract goal?” One thing I’ve noticed in coaching people through this market is when I ask that question they say, “I want to get as many as possible.”The problem with this is it’s too general. If you were in the market for shoes you wouldn’t go to Google and type in the search “shoes.” You would type in Rothy shoes, red, size 7. Or you would just type in Rothy and go to their website. Either way, you would narrow your search to exactly what you want. If you aren’t narrowing your focus on the priority of people and knowing how many you need to put under contract, then understand that your approach is kind of the equivalent of just going to Google and typing in shoes, hoping that Rothy is going to just pop up. Narrow it down to how many do I need to put under contract? For most agents who are buyer specialists or individual agents, one or two contracts per week will absolutely do the trick. Look at your most ready, willing, and able person or top two, and really focus on just putting those folks under contract.
Now for the fourth step imagine that those buyers came to you and they said, we’re going to prepay you your commission. Let’s just say that they’re purchasing a $400,000 home. You’re an agent on the team, right? So you’re on a 50/50 split with your rainmaker. And if the commission was $12,000, you would get 50% of that, which is $6,000.
If your buyers came to you and said “We really want to find a home and we realize that you’re working with other buyers. We want to be at the top of your priority list. We’re going to just write you a check, here’s $6,000, but here’s the thing. You’ve got seven to 10 days to find us a home or we want that money back and we’re going to use a different realtor. We want you to refund it and then use a different REALTOR.” Think about that. If they were pre-paying you for the commission, you can deposit the check, but it was conditional on you finding them a home in the next seven to 10 days. What is it that you’re not doing now that you would instantly start doing? Knocking on doors, calling for sale by owners. The thing that I’m noticing is many people are looking for strategies when what they need is urgency. If your buyer was pre-paying you, what is it that you would start doing that you’re not doing now? How would that dial-up your urgency?
Another question I would ask you to consider is “What are the vending machines I use to find homes?” See most REALTORS only use one vending machine called the MLS. Quite frankly everyone has access to that one at a moment’s notice. What are four to five other vending machines you could use to find inventory for your buyers? For sale by owners, for rent by owners, builders, calling your database, golden letters all come to mind. Are you using them?
Those are the four steps, ladies and gentlemen, I think if you took those and absolutely apply them in your business today, you would see your revenue start to go up. You would have some happy clients. Start to build some momentum and win in the market that is for some very, very challenging.