Twenty-seven tips to succeed with sellers in a slower market

You’re getting more listings, but they’re taking longer to sell. Now what?

by Chris Heagerty   The real estate boat does not remain on an even keel for very long, it seems. Over the past year, many Texas markets have coped with multiple contracts on listings and buyer frenzy that fosters overbuying and overpricing. But now across the state, markets have changed as our economy has slowed. The frenzy of last summer has been replaced by a slower market where the buyers are fewer and the listings are plentiful.

The up side is that listings are much easier to come by. Expired listings are plentiful, and FSBOs seem to acquiesce to REALTOR® hands readily when not bolstered by a market where even the dregs sell quickly. We were all raised on the mantra of "don’t list, don’t last," so we should be elated.

Still, this phenomenon brings with it additional challenges for the listing agent, and servicing a larger listing inventory for a protracted period of time becomes a bigger burden. The listing agent who has solicited these listings has the mandate of retaining them until they sell. This is time-consuming and requires creative thinking. Not only must you work harder to get a listing sold, but you have to make the seller aware that you are doing everything within your power to make this happen.

Below are tips to help you adjust to these market conditions. Some will increase the success ratio of your sales, and some will keep your seller at bay and satisfied while you get the job done. Both are equally valuable, because a dissatisfied seller will not relist if his home doesn’t sell during the first listing period. If a seller truly believes that you worked very hard on his behalf, he is more apt to remain loyal to you. If a seller doesn’t relist, then all of the work that you expended on his behalf during the first listing period will not come to fruition for you.

Some agents have the tendency to avoid the seller when they do not have positive results to report. This situation creates a potential real estate minefield. The biggest threat to seller satisfaction is the seller who doesn’t have his property under contract and who has no idea what you are doing to make things happened for him.

A full frontal assault has three strategic ploys: upfront seller education and communication, activities to make the property sell sooner than later, and keeping the seller at bay while you get the job done.

Seller education and communication

Managing seller expectations is a critical first task. At the time you first list the property, the seller is full of hope and expectation for a quick sale. If the seller is not educated and remains ignorant of the market environment in which he competes, then he will have no one else to blame but his agent for lackluster results and a prolonged listing period. Upfront, it becomes incumbent upon you to expose the underlying market conditions that provide potential for delay. There should be a checklist of what to do to prepare the seller.

1Clarify with the sellers at the time you take the listing how each person likes to communicate and receive feedback. It is very important to understand if the seller prefers e-mail or phone calls. Also, let the sellers know at what junctures you intend to communicate with them and how. Be wary of communicating with one spouse and not another. It only takes one to undo you should the question of relisting come up. Both need to feel you are doing your job.

2Train the seller to contact you when a showing has taken place and provide you immediately with the agent-contact information for follow-up.

3Set up expectation for re-evaluations of the marketing strategy at predetermined intervals along the way. These intervals are micro-market specific. The seller should have a very clear expectation (e.g., that after 30 days you will be calling on him to re-evaluate pricing, condition, incentives, etc.).

4Inform the seller at what point he should consider price reductions and discuss upfront what those reductions will be. Get the price reductions postdated and signed at the listing appointment.

5Be forthright about what market obstacles you anticipate will hamper his sale. These should never come as a surprise down the road.

Strategies to make a property sell sooner than later

6Showing-agent feedback is invaluable to adjusting our strategy. Yet today, it is very difficult to get a busy showing agent to pass feedback along to you. Offer to pay for his opinion. Prepare feedback sheets for your listing with a dollar bill or some other consideration attached. The feedback sheet should be easy and quick for agents to fill out. They can either fax it back or leave it for the seller and take the dollar as a token of your appreciation.

7Prepare an e-mail version of a feedback sheet that can be sent electronically to the showing agent. You are more likely to get the feedback you need from the showing agent if you make it easy for him to respond and avoid phone tag.

8Coordinate your open houses in an area with other agents as a progressive open house. Offer a drawing for a prize at the last house if each buyer goes to all of the homes on the tour. Have a card that the buyer must get stamped at each location in order to be eligible for the drawing. Costs for ads and the prize are split among all agents. A buyer interested in a given area would be glad to see multiple properties at one time.

9Combine an open house with a garage sale to increase traffic through the property. Since the owner will be there, you will have help manning the property if a large group came through. Exposure is the object of this maneuver.

10Offer on-site financial qualifying. Invite a mortgage lender to host an open house with you.

11Invest in your own bandit signs that look and feel different from what is traditionally available at your board office. These bandit signs should be stand-alone signs and used in addition to the for sale sign on the property. They create interest and urgency to see inside the listing. Sign messages could be Blue Ribbon Property or Ask about Custom Financing Package. Get creative!

12Have the seller prepare a list of his top 25 people (with their e-mails) who should know about his house and who would either spread the word or otherwise work to get it sold. These then become a target for all marketing communications.

13Combine the list above with your top 25 area agents who have sold property, who have listings in the area, or who work this price range. E-mail all of these the link to your Web site where the property is posted.

14Prepare a Flash (or other digital) presentation on your property for distribution to your target e-mail list and any buyers who have expressed interest in the property.

15Cold-call the area around the listing with the object of collecting the e-mail addresses of 50 owners. This then becomes a new target list. Promise to send them the particulars about your listing, so if they know of someone who might be interested, they can pass the interested party’s information along to you. This has the added benefit of pre-marketing to potential future sellers.

16Furnish a vacant house with items from a local decorator and offer two hours of that decorator’s expertise as a closing bonus.

17Create an event and combine it with an open house on the property. This could be a face-painting clown, a local author book signing, a local official addressing a neighborhood change, or get creative with your own ideas.

Keeping the seller at bay–making sure he knows that you are doing your job

18Prepare a formal report card for the seller at regularly agreed-upon intervals–either monthly or biweekly. In the report card, you should analyze why the property has not sold and what remedy is available to correct this. This is a two-edged weapon because not only does it inform the seller about what he needs to do, it forces you as the listing agent to really focus on the obstacles and how to take charge.

19On a regularly agreed-upon schedule, you should present the seller with a market-assessment report that tells him what has gone under contract, sold, and closed, and what has come onto the market since the property was listed or since the last report.

20Prior to approaching the seller about a price reduction, prepare a handout that focuses on the psychology of his price reduction. Make sure he understands the time theory of value (the length of time it takes to sell a property is directly proportional to the price) and the pyramid of value (the number of people willing to buy a property is inversely proportionate to the price). Help him put a real dollar value both on the stress that keeping a property on the market has on his family harmony and on the increase in price that he faces with his next home because he delays making the necessary price adjustments on his present home.

21Prepare a list of refreshers for a listing that may have become shopworn. A seller who has had his home on the market for a long period invariably slips in the maintenance routine that accompanies being ever-ready to show. Although you counseled with the seller when you took the listing about how to make the house more marketable, review those items again and revisit the ones he elected not to do.

22If there are not regulations in your MLS against this, pull the property off the market and resubmit it to the MLS as a new listing. New listings get new eyes.

23Have your broker prepare a market update every two weeks that gives a bird’s eye view of what is happening in the marketplace. When it comes from your broker, it comes from a different and higher authority and will carry different weight than your opinion.

24Information from area publications, MLS-provided statistics, and links to online articles that address market facts are invaluable in helping the seller assess when his property is in line with other sellers. Remember, we want his to sell before his competitors, and the only way you can do this is have him informed enough to make educated decisions.

25Call the seller often, even if there is no news. A call to say there is no activity is better than not calling, leaving the seller to suspect that you are not working hard enough on his behalf or you have abandoned him.

26Understand what your area new-home competition is and offer improvements, upgrades, or financing that makes your listing a better buy.

27If in the end, you are destined to lose the listing, make sure that your rapport with the seller over the listing period remains at a level that he will allow you to refer the listing to a fellow agent. At least you can collect a referral fee when it sells through a competitor.

Chris Heagerty, CRB, CRP, GRI, is market director for eRealty.com in Austin. E-mail her at cheagerty@eRealty.com.

Illustration © Artville.

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See the common causes of seller/listing-agent angst and suggested remedies.