Mark my words, the summer of 2009 will be a hot one for real estate sales. And the absolute worst mistake you can make is not to be prepared.
Economists, analysts and the National Association of Realtors (NAR) are predicting first-time home buyers will turn up the temperature on the 2009 real estate market. In fact, NAR announced that 53 percent of all home sales came from first time buyers in March of this year.
Why? Well, first timers have plenty of incentives. Of course there’s the $8,000 tax credit in the stimulus bill for first-time buyers that earn less than $75,000 ($150,000 for couples).
Next, there are the super low interest rates and extraordinarily low home prices (the average cost of an existing home in 2009 is about $20,000 less than a home listed during the same period in 2008). Then, add the fact that first-time buyers don’t have a home to sell, and you have a clear forecast for a fertile summer.
So how do you take advantage of this superb selling scenario? Here are four ways to capitalize and cash in:
1. Know who you’re going after. Any archer will tell you it helps if you can see the target before you shoot. Who are first-time home buyers? According to Quantcast, a research company in San Francisco, Calif., 2009 first-time home buyers look like this:
- 58 percent female
- 41 percent are between age 18 and 34 (59 percent are 35 and older)
- 62 percent are Caucasian (26 percent African-American, 7 percent Asian and 4 percent Hispanic)
- 80 percent have no kids
- 35 percent earn between $30,000 and $60,000
- 58 percent have some college education
Also, know that they’re likely anxious. Allay those fears by acknowledging their anxiety, then focus on all the benefits of building equity in a home (something they can’t do while renting) and push home warranties (some studies have shown homes with warranties sell 23 days faster than homes with no warranty coverage). Also, talk about all the other buyers you’ve helped. If others are buying, then it must be okay.
2. Create a sense of urgency. If there’s one thing consumers hate, it’s to lose out on a deal. And 2009 is about the best deal buyers have seen in a long time – maybe ever. Let me share a little secret: most consumers don’t know there’s a time limit on the tax credit. So remember this phrase: Time is running out. I love that phrase because it gets people’s attention and makes their inner buying alarm go off – and best of all, it gets the phone ringing.
3. Stay focused on lead generation and lead management. If you’re doing a good job of hitting first timers with your marketing, then your next -- and most vital -- step is to not let them slip through your grasp. If you’re not responding to leads within 15 minutes, you will lose business, guaranteed.
4. Work closely with mortgage brokers. Credit remains tight, so those seeking mortgages will need a good job history and credit score to qualify. And consider focusing on small to medium-size homes. Why? Some high-earning first timers will find it tough to get jumbo loans, typically more than $400,000, because those loans are seen as high risk because of the amount. Lawrence Yun, NAR’s chief economist, says sales in the upper price ranges “remain stalled because of higher interest rates on jumbo loans.”
So there you have it -- a market ready, waiting and willing. Splash on your SPF and make the summer of ’09 a day at the beach!
Best of luck to you!
Bob Corcoran is a nationally recognized speaker and author who is founder and president of Corcoran Consulting Inc. (CorcoranCoaching.com, 800-957-8353), an international consulting and coaching company that specializes in performance coaching and the implementation of sound business systems into the residential or commercial broker or agent’s existing practice.