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17 APR

20 Strategies to Win Deals In a Hyper-Extreme Seller’s Market

By Blog

“Meant to Be”

There is not a worse curse word in real estate.  Buyers often say that it was not meant to be when a deal is lost. Sometimes it’s good to have a line in the sand as another home usually comes up right around the corner. But this market is different.

Right now, the market is an extreme sellers’ market. There are a lot of reasons for this. Covid was like an earthquake and the market settled differently than before it occurred although some things might have already been at play.  You must walk through what is going on, why its occurring, and what you need to do to win a deal.

The goal is for you not to miss out on a home and get your hand burnt on the stove. There just is not the inventory available to mess around.

By being educated and prepared with proper strategies, we can avoid saying “it wasn’t meant to be” and instead say that home we just secured was “meant to be”.

 

20 Strategies to Win Deals in a Hyper Extreme Sellers’ Market

  1. Prepping yourself.
    • A separate meeting in person or on Zoom must take place with your agent. It takes time to absorb just how difficult this market is and understand all strategies available to you.
    • Reasons why include Covid reshuffling of where we want to live, work from home opportunities, new appreciation of the house, new need for space, low rates, less market supply, individual market supply (our NE corridor of Palm Beach County is built out but demand of people moving here is speeding up), more stimulus, shortage of homes nationwide, savings in the economy, and more.

 

  1. Understanding the market
    • Go through national statistics. This includes NAR and other stats and how much prices have risen.
    • Go through local county and local subdivision statistics.
    • Hearing exact stories of how Buyers have lost properties. Storytelling that you came in over asking price by $10,000 and cash and a client did not get the deal because another agent used an escalator clause that went to $20,000 over asking, helps illustrate that point.  You need to hear stories.

  1. Read articles
    • Reputable journalistic articles. Both locally and nationally. Outlets like Bloomberg, Inman, Wall Street Journal, and in our local market that tell stories.  The more you read up on what is happening, the more you get in step to be a good client.

 

  1. Give the lady what she wants!
    • Marshall Field, the department store owner, won over customers by always taking returns and having the motto of “Give the Lady What She Wants”. When your agent is talking to the other agent, its important for your agent to find out what the Seller wants. Price is important but oftentimes something else from a flexibility closing date to taking care of unwanted old furniture is just as important.

  1. Pay out of the Box Costs!
    • In our market, the Seller picks up most of the closing costs. Offer to pay it.  Everyone can come in at full price and a bit more but sometimes an extra which might cost less money sticks out and is a difference maker.

 

  1. Escalation Clause – Price
    • Kind of like a reverse price guarantee. Put in a clause in writing that will match any bona fide offer through X date by $1,000.  We just did this on 2 deals.  The deal got complete at $640,000 but we put in a $20,000 escalator clause for $660,000 and won the deal.

  1. Escalation Clause – Date
    • Same idea here but giving flexibility on the closing date. If the Seller wants to give written notice to move up or move back the price by giving written ample notice.  This works if you have flexibility and gives options for the Seller to shop for something else with unknown time frames.

 

  1. Big Deposits
    • The days of 3% down or over. Come in with 10% or more.  I have seen 25% and even 100% all paid up front!

  1. Do not come up short!
    • Think Big. If multiple bids don’t just come up $1,000 or 1% more. Oftentimes its 5-10% more.

  1. The Early Bird Gets the Sale
    • Get their as early as possible. We pushed for one appointment at 8am and settled at 9am. Hours and minutes matter in this market.

  1. Cancel Golf and Bridge
    • We had one deal lost because our Buyer insisted on playing golf. His wife will never let her forget that round.  Play your round after the showing.

 

  1. Nice Bulldog
    • You and your agent need to assertive but must not do anything to put off the other side. The Buyer saying to tell the Seller to “Pound Salt” will just leave you and your client with a lot of salt.

  1. 5-7 Day Inspections
    • In our market the default for inspections is 15 days. Often it can be brought down to 10 days. Right now, our offers are 5-7 days.

 

  1. Bring in Your Broker.
    • You need to think through every deal and get the agents broker on the phone along with yourself. I’m in consultation on lots of deals right now because lots of strategy and tools need to be used to secure the deal.  Every thought must be played out.

  1. Inflation and rising construction costs and delays
    • There is an unprotected amount of stimulus and printing money. This coupled with less going out has also caused more savings and now spending. Inflation is probably coming, and housing might just be a precursor to that.
    • On top of that builders are in some cases shutting down production because of raising costs of construction and/or raising prices.

 

  1. Mortgages – Local and in 10 days
    • I highly recommend using a local mortgage broker who knows the local market and who answers the phone and texts back to you within a few hours. Firm loan approvals need to be done in 10 days, not 30, so you can compete with cash.

  1. In Writing
    • Every offer needs to be in writing. People think about things and take it more seriously when in writing. Its also not a done deal unless in writing.

 

  1. Super-fast acceptance times
    • Do not offer deals with a day to think about it or with in our market of the default 48 hours for counter offers. If writing an offer in the morning make it good for 5pm.  If later in the day make time of acceptance the next morning at 10am.  You must be fearful that another deal is going to come in. Time is not your friend.

 

  1. Growth Mindset
    • In a normal deal, there is give and take. Right now, a “good deal” is getting the house. You are not in control. The Seller is holding a ridiculous number of cards.  Your buyer must be flexible in understanding that.

  1. Pick a veteran agent. Hint Hint for Echo 😊
    • You can make giant mistakes, get yourself in trouble and lose deals. The right agent is more critical than ever right now.

 

Jeff Lichtenstein is owner and broker of Echo Fine Properties, a luxury real estate brokerage selling real estate in Jupiter  and homes in Palm Beach Gardens, Florida. He has 20 years of real estate experience, has closed over a 1,000 transactions, and manages over 50 agents in a non-traditional model of real estate that mimics a traditional business model.  Some publications he has been quoted in.

Feel free to ask him a question directly at jeff@EchoFineProperties.com.

Posted in Open House Blog, Uncategorized on April 17, 2021 at 7:18 am.

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