Whether your local market is truly a seller’s market, or you are working with buyers looking in a specific neighborhood or for a certain property type, the challenges are similar. As a professional who is advising buyers, your primary goal is to help them navigate these challenges and help them find and secure a home in a competitive environment.
Here are some recommendations for working with buyers in a high demand market:
Set Realistic Expectations
It’s critical to establish with your buyers the current market conditions as it pertains to them. Help them to set realistic expectations while truly listening to their requirements, especially in today’s market where affluent buyers want it all but are also ready to pay the price!
Provide Market Insights
Share your expertise about the local market and provide insights into trends, pricing, and neighborhoods. This will help buyers make informed decisions throughout the process and perhaps allow them to look in a different direction or view properties outside their initial checklist.
Explain the Challenges
In addition to the market itself there are other challenges that buyers can face in a seller’s market and it’s important to share these possible experiences and emotional impacts with your buyers. These will include everything from:
- Taking longer to find the perfect property.
- Not having the winning bid
- Being patient and resilient
- Exploring other opportunities
- Competitive overpaying
- Making a quick decision
- Multiple offers
Know How and When to Act Quickly
Buyers need to be ready; they may be prepared to wait for the perfect property but in a high demand market they also need to be ready when it becomes available for sale. Remember, sellers are often more drawn to a buyer whose finances are in place as it shows they are working with a serious buyer.
Understand the Art of Negotiation
Even in a market that is more favorable to the seller, understanding how to negotiate is critical to securing the sale:
- Make a strong offer: Depending on the market conditions, this could involve offering full asking price, or even slightly above. In some very hot markets, consider including an escalation clause – this allows an automatic increase of their offer by a certain amount if there are competing bids.
- Be flexible: Buyers need to be ready to have a degree of flexibility, so it is important to discuss their absolute checklist against their “desire to have” requirements. Even the affluent who are ready to wait may be ready to consider a little compromise if the near-perfect home comes up for sale.
- Limit the contingencies: Advise buyers to limit the number of contingencies in their offer to make it more attractive to sellers. However, stress the importance of including essential contingencies, such as a home inspection.
Become Their Expert Guide
Be there to support and guide buyers every step of the way. Buying a home in a seller’s market can be stressful, so offer reassurance and expert advice to help them navigate the process successfully.
Stay ahead with The Institute
If you want more guidance on how to grow your luxury real estate practice and develop your skills when working with the affluent, learn more about the Institute’s training options here.
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Comments
Very interesting insights on working with buyers in a high demand market, this is a good read! Thanks for sharing this!