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As the real estate industry reels from the chaos created by the commission lawsuits and the new Federal Communications Commission (FCC) rules upending the cold calling and paid lead models for lead generation, and with escalating world conflicts and inflation soaring even higher, agents may be feeling discouraged with the economy.
Instead of the long-awaited reduction in interest rates, higher interest rates and even a potential recession are once again on the horizon. Surprisingly, the best possible time in 2024 for sellers and buyers to make their move is probably right now.
Atlanta Fed president Raphael Bostic was already warning that if inflation remains high, there may be zero interest rate cuts in 2024. JP Morgan Chase’s chief executive Jamie Dimon predicted that we may see 8 percent interest rates before the end of the year. Others warn the Fed may soon tip us into a recession to control inflation.
Despite the ongoing bad news, appropriate strategies and tactics will help agents cultivate deals while others fall further behind. Here are seven strategies to help turn the sour news cycle into a golden window of opportunity.
Strategy 1: Prepare an ‘equity checkup’ or ‘annual report’
Preparation is the key to your success during this golden window of opportunity.
Here’s how to prepare using the Realtors Property Resource (RPR) app:
- Download the NARRPR mobile app (a member benefit for all Realtors).
- Create a mobile comparative market analysis (CMA) for sellers, do buyer tours and provide sharable market trends.
- Use your location to easily search and analyze on-and-off market properties, provide mapping and valuations, locate tax and mortgage info, as well as distressed data, flood zones, demographics, schools and neighborhoods.
- Most importantly, create beautiful property reports in just seconds to share with your lead from the convenience of your mobile device.
Combine your personal CMA with an RPR report to create an ‘equity checkup’
Compile your CMA and the RPR report into a PDF document that you can send from your mobile device on the spot. When the prospect is a seller, use an “equity checkup” to obtain their contact information. (You can use the same approach with buyers, except call it an “Annual Report” that provides them with general data about the area where they will be looking.)
To convert potential sellers, ask them if they would like an equity checkup to determine how much their property is currently worth. If you’re already face-to-face, bring up the report, ask for their mobile number or email so you can send it to them on the spot — instant lead conversion.
If they’re a phone or internet lead, offer to drop it off in person. You can also use this data to set a face-to-face appointment to view the interior of the property and then provide potential sellers with the most accurate comparative market analysis (CMA) possible.
Strategy 2: Get back in touch via text, email or phone call
If you’re like many agents, you probably have a lot of past clients you haven’t communicated with recently.
Remember that your focus during this current window of opportunity is to schedule a face-to-face appointment. Here’s what to say:
Hi Sally — Way too long since we’ve talked. I would love to buy you a cup of coffee (tea, drink, meal — whatever is appropriate) and get caught up. How’s Wednesday or Thursday after you get off work?
When you meet with them, be sure to print up an Equity Checkup for their property and give it to them when you meet. You can then ask:
If you know of anyone thinking about buying or selling, now is an excellent time for them to transact since the interest rates are likely to go up due to increased inflation from higher oil prices.
Or:
If you know of someone who would like to receive an equity checkup, I’d be happy to prepare one for them as well.
When you reach out to that person, do your best to schedule a face-to-face appointment.
Strategy 3: Apply the 80-20 rule
Focus 80 percent of your lead gen efforts on your sphere of influence and past clients. According to the NAR Home Buyers and Sellers Generational Report, 56 percent of all buyers found their agent from a referral from a neighbor or relative (38 percent), had used the agent previously to buy or sell as home (12 percent), or were referred by another real estate agent or broker (6 percent).
Currently, Likely.AI is offering agents a complimentary Database Refresh Report that allows them to identify the contacts in their database who are most likely to transact in the next 90-180 days.
The Database Refresh Report provides:
- The percentage of contacts in your database who have valid contact information
- The percentage of your contacts who either listed or sold their property during the past 9 months
- The percentage predicted to transact during the next 90-180 days along with who those contacts actually are
The U.S. Census estimates that Americans move on average 11.7 times in their lifetime. If you have 2,500 valid contacts in your database, that means about 250 will move in the next year. Likely.AI identifies who that 10 percent is most likely to be. If their prediction is correct, and hypothetically, 30 percent of your 250 contacts convert, that’s 75 potential listings waiting for you in your current contact database.
This is the quickest and least expensive way to quickly target who your high-probability leads are and where your prospecting time is best spent right now.
Strategy 4: Be hyper-focused on face-to-face lead generation and lead follow-up
You have a narrow window — between now and July, when the new MLS rules go into effect and late December 2024, when the new FCC rules go into effect — to put as many properties under contract as possible. This means spending every spare moment you have doing lead generation.
- According to the 2023 NAR Profile of Home Buyers and Sellers, 80 percent of sellers only interview one agent in person whom they subsequently hire. Consequently, always ask for a face-to-face meeting whenever possible. You want to be the first agent they meet with in person when they’re ready to sell.
- Second, 58 percent of buyers are living in a property they own and may need to sell. In other words, for every five buyer leads you don’t respond to, you may have missed up to three opportunities to take a listing with a homeowner who is ready to transact.
- Third, focus on face-to-face prospecting. Twilight open houses are an excellent way to catch people when they’re out before or after dinner. In terms of which houses to hold open, you can certainly hold your own listings open. However, if there’s a new listing or one that gets a lot of traffic that hasn’t been held open very often, ask the other agent if their sellers would be OK with you doing a twilight open house.
- Be sure you have your equity checkup for the subject property with you and have the NARRPR app loaded on your mobile device to share the information about the home you’re holding open. Also, there’s an outstanding app called Spac.io that is, in my opinion, is the best open house lead conversion system on the market.
- When you receive an incoming lead by phone or text, immediately respond the same way they contact you, by phone or by text. You can no longer afford to ignore these leads or wait to contact them. If you don’t get there first, your chances of converting that lead later are minimal.
Strategy 5: Show your value to potential buyers
This campaign can also be used in print and digitally on social media. Visit the Fannie Mae Home Ready Mortgage (it has a $2,500 credit) to learn the details about that program.
A number of lenders offer different versions of Fannie Mae’s HomeReady low down payment mortgage program that allows buyers to put 1 percent down and then provides 2 percent of the loan amount as a grant.
Rocket’s One+ Mortgage program is different in that they also pay the buyer’s private mortgage insurance (PMI), which can be over $200 per month.
I suggest teaming up with a local, experienced lender to work on RESPA-compliant mortgage advertising. Many disclosures are required when pitching mortgages to consumers, so team up with an expert to help you find programs to advertise to your database.
Often, lenders have compliance-approved consumer advertising materials you can share on your social media feeds to help buyers understand there are programs out there to help them.
Hot tip: To quickly locate what down payment assistance programs are available on current active listings on Zillow, scroll all the way down to the bottom of the listing, directly below the monthly payment calculator, and click on the tab below that for “down payment assistance.” That will give you all the different down payment assistance programs for that property.
Strategy 6: Talk about the NAR settlement with your clients
Like it or not, you’re going to be asked about commission litigation and what it means for buyers and sellers. Rather than trying to explain this, give them sections 19 and 20 from the NAR fact sheet about the settlement (which are listed below.)
Here’s the script to use:
Agent: Because I’m not an attorney, I’m not qualified to comment on the ongoing litigation or any settlements. The National Association of Realtors, however, has provided Realtors with this information to help our buyers and sellers better understand exactly what is happening with respect to commissions and how they would be handled if the court approves the NAR settlement.
According to NAR:
- After the new rule goes into effect, listing brokers and sellers could continue to offer compensation for buyer broker services, but such offers could not be communicated via the MLS.
- MLS participants acting for buyers would be required to enter into written agreements with their buyers before touring a home. These agreements can help consumers understand exactly what services and value will be provided, and for how much.
- […] using the MLS to communicate offers of compensation would no longer be an option.
- Offers of compensation could continue to be an option consumers can pursue off-MLS through negotiation and consultation with real estate professionals.
- The types of compensation available for buyer brokers would continue to take multiple forms, depending on broker-consumer negotiations, including but not limited to:
- Fixed-fee commission paid directly by consumers
- Concessions from the seller
- Portion of the listing broker’s compensation
- Compensation would continue to be negotiable and should always be negotiated between agents and the consumers they serve.
You can emphasize this last statement by saying:
“Commissions have always been negotiable, and they will continue to be so.”
Although this approach may not be ideal, it’s the best way to stay out of trouble, especially if your brokerage, association or MLS has not released any guidelines about how to handle the commission conversation. Again, it’s business as usual for most agents until your MLS or broker advises you otherwise or until the NAR settlement is approved by the court.
Strategy 7: Eliminate the contingent sale issue
Homeowners often worry that if they sell their homes, they will be unable to find a replacement property. Those who need financing are also concerned that they will be unable to compete with all-cash buyers when there are multiple offers.
You can now eliminate the contingent sale issue with home swap and home trade-in programs from the companies listed below.
These companies either purchase the replacement home for the seller and then sell it to them once they sell their current home, or they provide them with the financing they need to become an all-cash buyer without first selling their existing home.
Don’t wait — The time to take action is now
We are currently in a very short window of opportunity that is unlike any other in the history of real estate. Now is the time to put in those extra hours prospecting and following up on every lead you receive to schedule a face-to-face appointment before the real estate environment becomes even more difficult than it already is.
Bernice Ross, president and CEO of BrokerageUP and RealEstateC
