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10 tactics for working with low inventory

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While much of the nation has only recently gotten a glimpse of a glowing real estate market, bid wars and poor supply have been the norm in the San Francisco Bay Area for over two decades, which means agents there have learned a few things that Agents elsewhere can work with buyers and sellers.

At an Inman Connect Now session on Tuesday titled “Boots on the Ground: Tactics for Working With Low Inventories,” presenter Vanessa Bergmark of Red Oak Realty spoke to agent Ana Forest of the same broker and agent Frank Nolan of Vanguard Properties.

Here are some of the tactics they recommended to get the most out of the one-sided market:

Don’t cut corners

Just because this is a seller’s market with overwhelming buyer demand doesn’t mean those buyers won’t expect a listing to look like the often literal millions of dollars they’ll have to pay for it.

“I would say 50 percent of the time you will be in front of a salesperson and they will try not to stage, not to go through pre-inspections, not to do repairs,” said Nolan. “It’s all these little things that add exponential returns.”

According to Nolan, a seller can spend $ 30,000 to $ 50,000 to upgrade a property and get a return that is between five and ten times that outlay. If a seller at Vanguard doesn’t want to spend the money upfront, the broker offers a concierge service that does the staging for them and is paid for when the trust agreement is signed.

“My advice to all of you is not to pay for it [staging] You yourself, no matter what, ”Nolan said to the participants.

He also lets sellers prepare the property for an unconditional listing by having repairs and home inspections performed before listing the property so buyers can get “the nicest package” along with professional photos and virtual and print marketing.

Sell ​​the imagination

When the majority of shoppers are shopping online, sometimes up to six months, first impressions are important.

“It’s almost like tinder,” said Forest. “You scroll right past the houses that aren’t sexy and don’t look good, they don’t have good curb appeal. You only have one chance to make your first impression as a real buyer or active buyer will check out these listings every day. “

Red Oak also has its own concierge service so salespeople don’t have to dig too far to get the most bang for their buck.

“We would never advise a seller to put money into a property that is not getting anything back,” said Forest. “So if you’re going to sell your house, it’s not time to change the roof. It’s time to make the landscaping look amazing, redesign, paint, stage the floors and make them look flawless. We sell a lifestyle. We are selling a fantasy to live in this house. So it will be so important to invest that extra money and time, listening to your broker, and working with real professionals who will make it look really sharp in order to get your highest price. “

Provide a package with details

When Bay Area buyers show interest in a home, the listing agent will provide a package of details including inspection reports.

“It’s not all good stuff,” said Forest. “There are some things that look kind of alarming and scary and sellers don’t always want to get that out right away.”

The reason listing agents do this is because buyers don’t feel blind and know what they’re getting into, so Forest says they’ll be more comfortable making an informed, non-quota offer.

“When people don’t have that information and they get an offer on a house and find out something later, it always feels kind of gross,” she said. “It feels like a nasty surprise and this is where the negotiations begin. We kind of cut that part out. “

That means sellers will have peace of mind that the deal will close and they can move on, Nolan added. His company uses Disclosures.io, which is owned by HomeLight.

Know what’s wrong with buyers

Nolan said he doesn’t use the same bid strategy on every property, e.g. B. Accepting offers only after the property has been listed for two weeks.

“You have to assess and make sure you are involved and really understand what the buyers are doing and you know what they are saying,” said Nolan. “Be there at the demonstrations. If you only plan to market the home for two weeks, do as many demos as possible so you can let your seller know the best. Take a preventive, that is, a lot of people don’t like it or find something wrong with it, or there are better things in the market, but you have a person who is ready and so eager to write an overused listing now you take that You will have a hard time answering this question unless you have actually been there. “

Use your sold offers to get other offers

Listing agents recommended by Nolan will send “Just Listed” and “Just Sold” postcards for each listing to pique the interest of other homeowners. He also suggested that listing agents write handwritten notes to neighbors to introduce themselves, invite them in advance to see the new listing, and apologize for the expected increase in traffic in the area.

“It’s simple and easy and easy,” said Nolan. “And then the other great way to do this, when you have a buyer and someone in your sphere, and you know houses go together and you don’t necessarily have a listing, is make a really nice handwritten note card and say,” I know that someone is looking for what you have. “

Use your CRM

While many agents have a customer relationship management system in place, not all use it.

“You have to work with your own sphere, build that trust and make sure everyone knows what you are doing,” said Forest. “I use a lot of social media. I’m out there on Facebook and Instagram. It’s probably disgusting, but let me tell you that everyone who sees me knows what I do for a living. Hopefully they trust me too and will call me. “

Manage buyer expectations

“The first buyer acquisition meeting is essentially a firework of information,” said Forest. Red Oak also offers buying guides. “The hard part is when a buyer comes up to us and says, ‘I can spend $ 700,000 and I just saw this place for $ 695,000. Let’s see it, ‘and I think,’ Mmm, no, we can’t see it because it sells for 30 percent more, ‘said Forest. “It’s a conversation. Sometimes it also means, “Yes, okay, I’ll show you, you will make an offer [and] you will lose, ‘but sometimes that’s the only way for someone to really learn.’

Nolan agreed: “You can’t be afraid to hurt your feelings,” he said. “You have to tell your truth.”

Have more data than the buyer

“Our industry has changed because buyers now have a lot of the same data that we work with, but we just need to analyze and understand it differently and really understand the comparable lists that are supposed to be sold [price ratios]how many bids have been received for a particular property, ”said Nolan. “Sometimes when you just have one, two, or three really good stories about the data you’re looking at and tell those stories that can put your mind at ease.”

Forest also noted that she prefers to refer to Comps as “recent sales in the region” because of the speed at which the market is moving.

“Because when you look at these compositions, you’re essentially looking in the rearview mirror as you speed down the highway at 100 mph,” she said. “You have to look at the compositions, but you have to add these anecdotal stories too. You need to talk about your experience, you need to know the neighborhood the house is in and know the other agents. “

Buyer agents who know listing agents can tell their buyers whether that listing agent transparently rates homes or tends to keep them down to encourage more bids, she added.

Tell buyers to be both realistic and picky

After one bidder war after another, buyers can become discouraged. So Nolan said he advises his buyers to be both realistic and picky.

“I encourage people to be selective, even in a market like this, because then it’s just a targeted search,” he said. “If you write one offer per week or one offer every two weeks, that’s pretty good. You don’t want to write 10 quotes a week. I don’t, and I don’t think it’s good for the buyer either. That’s why I always tell everyone at the beginning, unless there is a massive sense of urgency, just be very picky and realistic. “

Forest agreed, saying that sometimes their buyers have to look at disclosure packages before seeing homes so that they limit themselves to what they really want to see. “By the time we get there and walk in the door, they’ve probably almost decided to make an offer,” she said. “And it could be that the visit is actually just an affirmation and confirmation to make sure that this is actually what I think and what it is mostly.”

Don’t overlook outdated offers

Even in markets with scarce stocks, there are some houses that just sit. Nolan advised agents to look at these traits and not assume that there was anything wrong with them.

“Often that is not the case,” he said. “Not always, sometimes something is wrong and usually it’s the price, but when it’s the price just go in depth and sometimes these are the best deals that can be found.”

And on the buy side, agents should make sure their buyers are nimble and ready to move, Forest said.

“You can’t just sit around and think about it and say, ‘Well, we’re going to see it in three or four days. ‘When you are ready, you have to come here. “

Email Andrea V. Brambila.

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