The Hot Market Leaves The Best Agents Scratching Their Heads
Last week I wrote a post about an agent who intentionally listed a home nearly $200K under asking in order to generate offers. That in itself was pretty irresponsible, but what made the story become ground zero for the greater symptom was his bragging about his office betting on how many offers he was going to receive. I think we would all agree that his comments, forever available on-line, will go down as the most obnoxious in the history of Real Estate. It occurred to me that this type of sheer insanity would be the perfect time to drag that agent in front of a professional standards committee. Perhaps boards, Like TREB, need to make sure this type of thing doesn’t happen again. Just a thought.
Then again, there are situations when agents get it wrong…..way wrong. Despite all logic a house sells for what best can be described as “crazy money”. Accountants will tell you that numbers don’t lie….except in Toronto real estate where a competitive market analysis seems to have little or no meaning . It is important to distinguish between the two scenarios of our white-hot market. It is happening with more frequency and homes that defy pricing logic are leaving some of the best agents in the city scratching their heads. So it begs the question; if experienced agents are having a hard time negotiating these turbulent waters, how the heck are new agents coping? 20+ years ago an agent proved his or her worth by surviving in a recessionary environment. Today, an agent has to survive in a market that could best be described as a feeding frenzy. strangely, while equally challenging, their survival will be based on a different skill set.
As any coach will tell you, real estate is a numbers game. If you want to achieve income X you simply work backwards to determine how many deals you need to make based on statistical averages. For example; if you want to sell 10 properties you will probably need to have 400 meaningful real estate conversations. In a more or less balanced market that seems like a fair assessment. But today, having 400 meaningful conversations may only mean that you get to the negotiation table 10 times. At that table there may be as many as 15 other realtors. Your odds of success have just dropped dramatically. So what are the keys to improving your chances;
- Knowledge of the market is critical. With so much going on in the world today, our market can be affected by the mood of the financial markets in Europe.
- Develop relationships with the agents who work in your neighbourhood. Visit their listings, follow-up after each sale and get an understanding of the back story.
- Ask the listing agent lots of questions like how they arrived at the price. If they aren’t from the area, they may not know what you know and that could play to your advantage.
- Talk to the agents in your office who work the area. They may have extra insight into the situation.
- Sharpen your skills by practicing and fine tuning your delivery. Sometimes a minor change in how you say something will make all the difference.
- Arrive at the presentation on time and with a pristine offer. You would be surprised how many agents show up with offers that look like chicken scratch.
- Keep your offer as clean as possible. Conditional offers have no place in a multiple offer situation, so make sure your buyer’s financing is in place and you have done a home inspection.
- Have a certified check with you. No excuses.
- Look successful. Address the sellers in a professional matter and leave your ego in the car. Being courteous, and connected to the seller will go a long way.
While there is no guarantee that these few suggestions will help you succeed at the negotiation table, I do believe they will increase your odds and in today’s market every little bit helps.
Have a great week and, as always, I welcome your contributions. If you have other ideas please let me know.