If you follow the news about real estate, you’ve likely noticed a dramatic direction turn in the tenor of headlines over the last year or so. From underwater seller woes, foreclosure highs and listings lagging on the market with no sale in sight, the stories have turned to reporting on multiple offer buyer woes, interest rate lows and listings flying off the market with no inventory in sight!
Every time the market turns – in either direction – the flood of information and opinion about it always comes with a few myths and misconceptions that have the potential to send you off course in terms of how you respond and reposition yourself and your business in the current market climate. And this time is no exception: here are five myths of the current market rebound that we should bust, with no further ado.
1. This is a momentary uptick – nothing to get excited about.
No one can say for 100% certain how long this ascending market will last. The unemployment rate is still relatively high. Relatively large numbers of people are dropping out of the job market altogether – though some of this is likely due to retiring Boomers and people shifting to self-employment.
But the good signs are also plentiful. Banks have gotten savvy about releasing their foreclosed inventory in a trickle, rather than flooding the market with it; the foreclosure rate has declined, increases in buyer activity have driven home value increases in many area, resolving some of the appraisal issues that so plagued the market during the downturn. And looser lending guidelines with low interest rates are making it easier for buyers to, well, buy – when they are victorious over other offers, that is.
And aside from the issue of how long the uptick or recovery will last, my advice is this: you should get excited. As I see it, there are 3 different types of agents. The first type are the agents who blow stay stuck in the fear and disappointment of the past few years
The second are the agents who will get just a little temporary bump in revenues, but will fail to fully reap the business-building opportunities of today’s market because they lean back and take the few extra calls the upturn brings them, instead of diving in and doubling down on their marketing and skill-building.
Then there will be agents who take full advantage of this rebound – whether it lasst 6 months or 6 years – as an opportunity to grow their businesses and reposition them for a new level of lasting prosperty, by:
- increasing their listing business
- increasing the price point of their average sale
- closing deals for new buyer niches, and
- using their increased income to level up their marketing, give their brand stronger footing in their local market (one way: our Local Ads) and render their business more recession-resistant than ever.
You get to decide which type of agent you’ll be. Up to you!
2. The famine is over – it’s feast time, baby!
Yes – it is true that there is much abundance on the market, compared with what we’ve had to deal with in the last 5 or 7 years – an abundance of buyers, for certain, and also a relative abundance of loan money. But that doesn’t mean that it’s easy money time, nor thaat big profits will just fall into your lap, though I happen to believe there is massive opportunity for agents who want to grow their businesses to do it now.
It will just take some work, because there are some critical scarcities to deal with, too. Inventory is low – extremely low, compared with buyer interest. As a result, buyers are having trouble closing, which also impacts some owners who would be sellers (see #3, below). Prospective listings are definitely out there, but all the smart agents are after them. And over the past decade, both buyers and sellers have developed a whole new level of expectations, technological savvy and expertise demands.
It can be a time of abundance, but big profits won’t just fall into your lap. If you want to use this market recovery to build and grow a thriving, long-term business, you’ll have to up your game, when it comes to marketing, fluency with the market data metrics that matter to buyers and sellers, and client management skills.
3. Sellers are your for the picking.
There is certainly a pent-up cache of potential listings, representing people who wanted to sell but were stuck in underwater mortgages that are now – or will soon be – back in the black. This is a potentially massive growth opportunity for agents who want to increase their seller business. But one thing that many agents are overlooking is that most of these sellers are also prospective buyers.
So, when they see and hear about low inventory conditions and the problems buyers are having being successful in multiple offer situations, many simply stay put, disqualifying themselves from ever even calling you in for a listing interview because they don’t want to deal with the possiblity of selling and finding themselves unable to buy.
As you market to your farm, write posts or answer questions about your local market on Trulia Voices, or reach out to your past clients, address this very real concern that is holding some prospective sellers back from listing their homes. Educate your local market audiences about possibilities and insider tricks you can offer to help workaround this issue, like strategic transaction sequencing, rent-back agreements and listing to sell contingent on buying.