Guaranteed Winning Soft Market Strategies -- Part 2
(This is part two of an article on Soft Marketing Strategies. Click here for Part One.)
A major newspaper in New York had this as a front page above the fold headline, “Home Sales Fall Again.” The second paragraph reads, “There were 1,076 closings in the region last month, almost 12% fewer than the same month a year ago.” This is very good news for Agents. Each closing is two sides of a transaction, buyer and seller. So, there were two times 1,076 which are 2,152 commissions collected just that one month. The point is that over 88% of the business is still out there. Are you getting your share of it.
The article goes on to say that the listed inventory is down by 9.7% from a year earlier.” That is more good news for homeowners and Agents. That means there are fewer homes for sale which should stabilize if not increase prices.
There are two obvious reasons that investing in Real Estate right now is a brilliant idea. These reasons apply to both the purchase of homes and investment property.
Everyone knows the age-old investment philosophy, “buy low and sell high.” Real Estate investments are taking a beating in the media right now. No one is talking about investing in Real Estate. That means that the demand is down and prices are low. It is an ideal “buy low” time for Real Estate investors.
“But Rich, why would anyone be selling now?” Good question with an easy answer, people need more space or they need to downsize, people move for jobs, people retire, people want to cash out, people want cash in, people make bad decisions then need to sell something to pay off debt, just to name a few. The fact is that there is inventory on the market at good prices and even more inventory not on the market but available if you go looking for it.
So, the first obvious reason that investing now is a brilliant idea is that the prices are low.
At the same time there is growing talk of inflation. It is not just talk. Without going into all the economic factors and indicators, they all line up to reveal impending inflation. What does inflation mean? It means that the price of nearly everything is going up. It means you buy less for your money. Your paycheck buys less. The price of oil and gas is driving the price of everything higher. Your dollar used to buy a loaf of bread. Now it takes a dollar and a half. Inflation spreads to all hard goods. Real Estate is one of those commodities that it will take more dollars to purchase.
Between 1981 and 1984 there was a period of rampant inflation. House prices in most of the country rose by fifty to a hundred percent. This was during a recession. Interest rates were at those record highs you always hear about, 15% to 20%. And house prices rose dramatically.
A loosening of lending restrictions that created a flurry of home buying followed that period which drove prices even higher. Is this beginning to sound somewhat familiar? Instead of the high interest rates driving up inflation and creating the pent up demand it is the cost of fuel, tightening of lending criteria, and concern over the liquidity of the secondary market wholesale buyers of mortgages that is creating pent up demand. That, fueled by inflation is going to create a significant increase in home values.
Bottom line, as a strategy to winning in this soft market, begin to prospect for investment property. Begin to learn about buying and selling investment property. Begin to communicate and network with investors. Take this article and discuss it with them. The savvy ones are going to understand that this is very likely a perfect time to be buying property. And if they are selling, they will realize that your sharp thinking and insight is just what they are looking for to get them the most.
Strategy #4: Smart Marketing
What is smart marketing? And why is that guaranteed winning soft market strategy?
Smart marketing accomplishes one goal. It makes you top of mind as the Real Estate Agent of choice to the market (group of people) most likely to do business with you. Smart marketing sends a clear message that you are the best choice of Real Estate Agent to successfully buy or sell property.
It is a guaranteed winning soft market strategy because everyone is thinking about their Real Estate and looking for someone to make sense out of all the confusing and contradictory news. They are looking for some credible source to understand how it affects them as they think about their next move. The soft market is the ideal time for an Agent to step up as that credible source.
Question: Who is likely to find you most credible?
Answer: The people that already know you are in the business?
Question: How do you prove to them that you are credible?
Answer: Send them information that shows you know what is happening with some insight as to how it affects them.
Question: What do I send? How often?
Answer: Send postcards that are nicely branded with your picture, a consistent color scheme, and layout. Put houses recently listed or sold on it to show that you are active and finding success. Give some Real Estate facts about sold prices, listing inventory, foreclosures, and days on the market, etc. Follow that with a brief, two or three sentence explanation of what it indicates for their specific community. End with an invitation to call you or e-mail to discuss how that may impact them, their property value, or their plans to move.
These are the second two of many soft market strategies I will share with you. Others have to do with the goals you set and what you focus on each day; marketing with immediate results; strengthening your pricing skills and strategies; strengthening your listing presentation and more.
Please remember this. Real Estate markets are cyclical. They always get better and they always get worse. Good markets nearly always last longer than bad ones. Most importantly, those Agents that gain strength and learn to be successful in softer markets become the most successful, wealthy ones as the good market emerges.
Oh, good coaching helps too.
Negotiating Tip 111: In Over Your Head
March 26, 2019
Negotiating Tip 110: Standard Practice
March 25, 2019
Negotiating Tip 109: Silence: A Success Story
March 24, 2019