As real estate agents, difficult conversations make up a large portion of our days. “Your offer wasn’t accepted.” “Your buyer is backing out of the deal.” “Your home isn’t worth what you think it is.” “The buyer has decided not to make an offer after all.”
Now, more than ever, we find ourselves having difficult conversations with our clients; in particular with our sellers.
In Boston the market has slowed considerably. It would be too aggressive to say that prices have dropped significantly, but what has happened is a shift in control. In a classic supply/demand situation, the buyers, with whom there is much less demand, have taken the upper hand in a market where there is surplus supply.
What does this mean for your sellers? And how do you explain it to them? Communication is key during times like this. Your clients are not immersed in the market like you are and sometimes some simple explanations can help your clients understand what’s going on.
Here are a few talking points to help you with those difficult conversations:
1. Showing activity: Because of the lower demand and higher supply in the market, homes for sale are seeing much less showing activity than in recent years. This is normal in a high inventory market.
2. Timing: Fewer buyers in the market and an increase in available inventory has given buyers the opportunity to slow down their search and take time to review all their options, perhaps visiting homes more than once. Buyers have more time to make a decision because the risk of losing a property to another eager buyer is no longer a concern.
3.Low offers: In a market where it might take a few weeks for a buyer to make an offer on a property, the urgency to offer full price or more has all but gone away. Therefore, buyers are making offers below the asking price, often considerably so. A starting low offer doesn’t have to mean an ending low offer. Every offer is worth responding to. Sometimes the low offer from a buyer is a test, to see how motivated the seller is. It’s advisable to see it as a conversation starter.
4. Tough negotiations: Whether or not it is true, the perception in the buyer pool is that every seller is anxious and motivated, and this can lead to tougher negotiations along the way. Again, this is normal in a “buyer’s market” and it just might take a little longer to get to an agreeable place with an offer.
Setting expectations with a seller before their home is listed is a sure way to prepare them for slow activity, lower offers, difficult negotiations. Frequent communication is essential for sellers in situations like these. Consider a weekly check-in, via phone or email, with your sellers. Even if you have no new activity to report to your client, sharing your observations of the market, reminding them that what they are experiencing is normal, and reassuring them that their property will sell eventually will go a long way to helping them cope with a stressful home sale process.