How would you, as a real estate agent, like to know how to read the proverbial crystal ball 🔮 of pricing property, so that your sellers are getting the absolute most money 💰 and that your buyers aren’t over paying. Here in the Dayton area market, we are solidly into what they call a sellers market, where there is less supply of homes 🏘 than there are of buyers to buy them. However there are 3 crucial mistakes that real estate agents are making that are screwing their buyers and sellers and leaving money on the table 😱
❌Crucial mistake #1. Real estate agents are using what’s called a CMA to price properties. What CMAs do is the old school 🧮 way of evaluating the approximate value of a home. They are using the history to predict the future. You look at some past sales, 90 days, 6 months, a year ago… who cares in this type of market what sold 90 days, 6 months, a year ago? We need to make sure we are looking into the future by using absorption rates and analytics 📈 to figure out how to price the property… not too high, but at the highest height where the sellers can still get bidding wars and still sell the property for more 💰. There is a science to listing/selling properties and pricing them correctly, because even in this market, even 5% can stop it from selling. So the trick to doing that is understanding market absorption rates 👍.
❌Crucial Mistake #2. The mistake that real estate agents are making in this market (and hopefully you aren’t😮) is they aren’t leaving the property on the market long enough for the seller to get all the offers that are available in the market. Ya you guys, it looks really good if you sell the house in 4-6 hours, however, not all buyers can arrange their schedules, or not all real estate agents are available at the drop of the hat to help their buyers who are really qualified to buy that property. It looks good, but if you think about it logically, and in theory 👨🏫, it’s not the best for the sellers. So maybe get you them asking price or even a little over, and if it’s an FHA buyer with closing cost to pay, that’s awesome 👍. However, what if you left it on the market for another day or two, only to get an all cash offer that is $20K over asking with no inspections 🤑. It’s not unrealistic. It’s happened and it happens. So taking the first offer or the first batch of offers in a few hours is really not doing your seller any benefit. In this market, you’ll know within 24 to 48 hours if you have left it open long enough to get all the buyers in. it’s the best thing for your clients, maybe not the easiest for you. But the best thing for your clients is to have a choice of not only the price, but terms and buyer’s qualification 📊. I know, this isn’t talked about much.
❌Crucial mistake #3. Probably not something you want to hear, but is absolutely your duty to the seller, is to verify all the financial letters and proof of funds that you get ✅. I know you, as have I, have seen multiple properties 🏘 come back onto the market after 2, 4, or 10 days. We know normal is through inspections. But when properties are coming back on the market that quickly, it’s typically 1 of 2 things that are happening. Either the buyers had to make a decision so fast, that they got buyers remorse. Or it’s the second option, the buyers could not get pre-approved 🚫. There is a big difference between pre-qualification and pre-approval and I will preach it forever. Pre-qualification simply means that the buyers applied for the loan (maybe 🤷♀) or just talked to the lender on the phone and they’re credit worthy, so they have the credit to purchase the home property, but they have not verified their income or their assets. So they are credit worthy and they are breathing.. but that’s it 😳. A true pre-approval means not only are they credit worthy and they are breathing, but the lender has actually verified their income and their assets to transact the loan 🆗. With proof of funds, you also have to verify the legitimacy of the letter you get. So it’s our job, our fiduciary duty, to verify and inspect all the letters that we get in from lenders, whether the buyer is pre-qualified, pre-approved and the proof of funds letter is legit.
So if you absolutely learn how to use analytics and absorption rates 📈 to price a property, make sure you leave property exposed long enough so the seller can have their choice of offers ⏳, not just the first few that come in, and you actually verify the legitimacy of the letters, whether they are pre-qualified or pre-approved 📑, can you see how your going to be able to get better transactions and even more money 💰 for your clients. Isn’t that our job 😁? And in representing a buyer, it benefits them too, because how many times do you have buyers really upset with you because they don’t even get an at bat on the property. I have, it’s horrible to see a new property at 9 am in the morning and set a viewing for 4 pm in the afternoon and it’s already sold 🙄 by then. So if you think about it, slowing the process down will actually help your clients on the buy and sell side 👍.
If you have any question or there is anything I can do to help, call or text me at 937-619-7454 📱. You can also visit me at DeniseSwick.com. Thanks for watching. Hope this helps. Go make some money 💵 for your clients and yourself!