Across the United States, lenders and real estate agents are navigating a similar challenge: the lack of housing inventory. Properties are selling fast. Days on the market have turned into hours in some locations, thanks to interest rates remaining low (while still fluctuating a bit) and a continued increase in buyer demand.
Here’s the top 5 ways to help you and your buyers win in a multi-offer situation:
1. Build your reputational capital: You want to be known in the real estate industry as someone who works well with other agents. The goal here is to collaborate and get everyone to the closing table together. Recognize that no one wins by being right—just look for solutions. More than ever, people are now paid for the problems they can solve … and that means focusing on being nimble and collaborating as a team.
If you’re newer to the housing industry and haven’t built up your reputational capital yet, oftentimes people will rely on the reputation of the firm you’re associated with. Agents often look for other agents’ names as the offers pile in during a bidding war. Bottom line: It pays to be nice.
2. Take the phone call: Proactive communication is essential to building a solid network of clients and partners. Real estate is a time sensitive business, so everyone wants to work with partners who make the extra effort to be accessible. Pick up the phone when someone calls you, it could be the difference maker when it comes to landing a contract. This may seem antiquated, but easy access to a person is truly important, especially when the stakes are high in a competitive housing market! Be available to have real conversations on a flexible timeline— not everyone is available during the traditional 9am-5pm workday.
3. Ask questions: This one may have you thinking to yourself “of course I should ask questions.” The key here is to make sure you are asking the right questions for the seller (not necessarily the buyer, in this case). By asking the seller’s agent what is really important to their client, you are making an offer stronger for your Spoiler alert—cash is not always king when buying a home in a tight inventory market. Closing on time, or a lease back, may be of more importance. You won’t know until you ask.
4. Find accessible partners: You want your strategic lending partners to have multiple strategies to help your clients. What happens if your home buyers planned on getting a conventional home loan, but they experience an appraisal gap and don’t have enough funds to cover the contrast in price? You and your buyers need a plan (and a backup plan).
The earlier you get your home buyers working with a lender, the more alternative options can be weighed for each home buying scenario. It’s also critical to make sure your clients are Certified Home Buyers so they’re not wasting anyone’s time. You’re in it to win it for your clients!
5. Create a new way of thinking: If you’ve been in the real estate industry for a while, you’ve become accustomed to protecting your client from buying anything risky by getting home inspections, appraisals, etc. In today’s market we’re seeing home buyers bypass appraisals and inspections just to win the contract. In fact, waiving all contingencies (or protections) has become standard in certain regions to make offers stand out to sellers. Some home buyers are still skittish about this option, while others just want to seal the deal. As you know, all deals are unique, so you need to step in and be the guide for your clients.
There’s no doubt about it: it’s a tough time to buy a home.
With the U.S. housing market currently short nearly 4 million homes of meeting current demand, it’s important to make sure you are a valued expert in your local community during this competitive time.
Home shortages seem to be in all housing types, but first-time home buyers looking at entry-level houses are experiencing the most difficulty finding a home. And not all of this can be blamed on the pandemic. A lot of the problems seem to go back to slow growth from new home construction dating back to 2007 through 2009, in addition to the influx of millennial home buyers entering the market.
So, where does that leave us for the upcoming summer housing market? You probably guessed it… more of the same:
Continued low inventory and affordability issues will likely continue which means sellers will continue to have the upper hand in negotiations.
Home prices are projected to continue to climb.
Home builders appear to be working to ease inventory demand based on the current building permits, but it will still be hard to meet demand.
If you're looking to work with a strategic lending partner to help your clients in all facets of their home buying experience, connect with Churchill Mortgage today.