By Brian Icenhower
(Editor’s Note: In this article, experienced real estate coach Brian Icenhower shares some of the systems and secrets of top real estate agents and brokerages that he has witnessed over his 30+ year career.)
The hardest market in which to be a buyer’s agent is in a buyer’s market. In 2009 and 2010, you would have to show 30, 40, or 50 properties just to get something under contract. And then it would likely fall out because buyers are fickle, and they found another house they like more around the corner. If you need buyer’s agent motivation, just think on that for a moment.
Right now, you do not have to show any properties! In fact, you will be lucky if you find a house that you are able to show. Showing houses is usually 80% of the job of a buyer’s agent. It is the most time-consuming part of the job! Of course, your tasks as a buyer’s agent have shifted a bit.
Now, you are writing way more offers. That is what you do during a housing boom. From 2004-2006, it was the same way. Buyer’s agents were busy writing offers all the time because it was a seller’s market. Last year, if you were going to close 20 buyer side transactions, you needed to have 30 buyers because 10 wouldn’t make it. This year, you need 80 buyers to close 20 transactions. It’s a four-to-one ratio. You will need to write (at least) four offers to get just one under contract.
Buyer’s Agent Motivation: Get More Buyers!
Let this light a fire under you. The more buyers you can pipeline right now, the more contracts you will get signed each month. It is a numbers game, and it has never been easier to take on more buyers at once than now. There were more listings in the first quarter of this year than there has ever been. It might not feel like it, but that’s because they are selling so fast!
Change your mentality. Do not worry about the large percentage of your buyers that won’t get a home this year. It’s likely that 75% of your buyers aren’t going to be able to buy a home this year for one reason or another. That’s not on you! You can’t change the economic situation in the United States. All you can do is try your best to help all your buyers have a shot. You write as many offers as you can, and the good news is, you don’t have to show so many homes. It will take way less time and work — that means fewer working evenings and weekends.
Another great point of buyer agent motivation: contracts aren’t falling out. Once you do go into contract, there is a very low chance that it will fall through. No one would do that in this current, hyper-competitive, low-inventory market. Prices are skyrocketing. Any house that can be purchased right now is “cheap” compared to how it would be priced a month or two down the road.
Have Confidence and Share It with Your Buyers
We know that prices are only going up. In fact, they are going up dramatically. Share these facts with your buyers to instill confidence in them. You must be confident in your knowledge. Don’t let your clients decide to just “wait a while to see if prices drop.” They won’t. Every expert in the industry is saying the same thing. Hedge funds and real estate investment trusts are buying up houses everywhere right now.
Buyer’s Agent Motivation: What to Share in Your Buyer Consultation
First off, you must have a buyer consultation. It is not an option at this point! This is where you get to educate your clients on the current market and what they will need to do to get a house right now. Here are a few pointers to bring up during your buyer consultation.
- Do not use a loan. Ask your buyer if they have anyone in their lives with cash? Advise them to buy the house with cash and refinance later. Non-cash offers are simply not getting accepted right now because they can’t compete.
- 75% of the buyers out there are investors, flippers, and large corporations — all of which are buying with cash. Your buyers are not just competing with other families.
- Share helpful infographics. At ICC, we say, “Don’t just tell them, show them.”
- Remind them that they will need to make multiple offers. From the get-go, advise your client that getting them a house will take stamina.
Brian Icenhower is the Chief Executive Officer and Founder of Icenhower Coaching & Consulting, which provides customized coaching and training programs to many of the highest producing real estate agents, teams, and brokerage owners in North America. Having spent decades in real estate and law, he has combined his experiences working with the top producing real estate agents in his book, “The High Performing Real Estate Team: Five Keys to Dramatically Increasing Sales and Commissions.”