Faster Closings: 60 Days to Hot Sales in a Down Market
Follow these tips to sell your listings quickly, even in slower markets.
January 1, 2006
Selling a home within a reasonable timeframe becomes more challenging when the market slows down, but it certainly isn’t impossible. If you know how to determine the needs and motivations of your clients—and to accurately gauge the market—there’s no reason you can’t have your listing sold within 60 days.
To maintain sales momentum during slower market cycles, follow these tips:
- Listen to market signals. Once the house is listed, the market will provide several relevant pricing signals. Tell your sellers upfront, “If we don’t get any showings and we don’t get any activity, the market has spoken and the price is too high.” If the sellers ask for other alternatives, such as spending more on advertising, respond by saying, “In real estate, 80 percent of the marketing of a home comes from setting the price. I could rent a plane and advertise the house on a banner all over town or I could spend every penny I have on marketing your home, but if your house is overpriced by $30,000, the advertising won’t help.”
- Calculate the market absorption rate. This rate will give you an indication of how long it takes the average home to sell in your market. To calculate the absorption rate, divide the number of listings in your market by the number of sales during that month. For example, if your market had 300 home listings last month and 100 sales, the absorption rate is three months. When the absorption rate increases, say to six or 10 months, it means that the existing inventory is taking longer to sell and buyers are getting pickier; then the best-looking and best-priced homes will inevitably sell first.
- Emphasize the need for top condition. When buyers have dozens of similar homes from which to choose, your listings must be the most attractive and in top condition if you plan to turn the sale quickly. In today’s market, more and more people are looking for turnkey homes. Here’s what you can say to introduce the topic of home condition to your sellers: “Our market analysis shows the price of your home is correct, provided it is in very good condition. If your home is less than top-notch in appearance, you can expect the buyers to demand a price reduction. My goal is to get top dollar by conditioning your home for sale. Here is a list of things I recommend you do to get your home in peak condition so you can sell it for top price.”
- Turn away unmotivated sellers. Even experienced practitioners will occasionally chase an unmotivated seller too long. To accurately determine sellers’ motivation, you must fully understand their situation. For instance, sellers who say that they “eventually want to move up to a nicer home” are far weaker prospects than sellers who are relocating to another state next month. Early on in your discussions with sellers, ask them why they are selling, how soon they need to move, and if they are interviewing any other real estate professionals.
- Hunt for buyers. Don’t wait around for the right buyer to stumble upon your listing. Instead, take a proactive approach by asking other real estate practitioners if they have any buyer clients who are looking in the same price range or neighborhood as your listing. Promote your listing within your company, and encourage other real estate professionals to show your listings to their buyers.
By following these practical tips, you will sell your listings within a shorter timeframe, which will allow you to keep sales churning at a solid pace until your market makes an upward turn.