Working With Buyers in a Thin Market

Is buyer competition for good listings fierce in your market? Here are three strategies for dealing with the lack of sellers and continuing to grow your business.

DECEMBER 2012 | BY SCOTT NEWMAN

Two years ago, REALTORS® were submitting offers for 70 percent of list price, and they were being accepted. Why? There were dozens of listing competing for one or two buyers. But today, the entire balance of power seems to have done a complete 180-degree turn. What gives?

What real estate professionals are experiencing is common as local housing markets continue to stabilize, shifting the power from the buyers to the seller. This is a great thing for the overall economy and our industry, but if you’re not prepared, it can throw a real monkey wrench into your business planning and bottom line.

In this article, I’ll outline some simple yet effective strategies for working with buyers in thin markets where good listings are few and far between and qualified buyers are plentiful.

Set Proper Expectations

Prior to scheduling appointments and conducting showings, and certainly before you start writing offers, it is imperative that you have a frank and honest discussion with your buyer about what to expect out there.

Most buyers aren’t up to speed on what’s happening in the market. They still feel that they’re doing sellers a favor by making an offer because they think the market is terrible. When you tell them that they will likely have to pay full list price — or perhaps even more depending on where you live — they are likely going to think you’re crazy. The sooner you can get them beyond this mind-set, the sooner you can actually get down to the business of helping them find a home.

Come prepared with data to back yourself up. For instance, show them how the last three one-bedroom condo sales in a popular building in downtown Chicago have sold for 103 percent of the asking price. Make sure to constantly reiterate how cheap money is and what it would have cost for them to buy the same home five years ago when there were much higher interest rates and much higher purchase prices. Even at or slightly over the asking price, buyers are seeing substantial deals today.