They mean business
Attention, you picky buyers who think you have all the time in the world to house hunt before you ink an offer. (And this goes double for those of you who think that a listing price is just some silly number pulled from the air and that you can offer 30% less.) Listen up: Agents are mad as hell and aren’t going to take you anymore.
And sellers -- those of you who don’t believe that your palace won’t fetch what the shack up the street sold for a year ago -- you aren’t making any agent’s short list of whom to call back today.
Here’s the realization that some agents and brokers are taking to heart: They have neither the time nor the money to waste on a lot of us.
They are done spending days driving buyers around who want to leisurely ponder whether House A’s carpet is the right shade of beige or House B’s basketball hoop will leave marks when the sellers take it down. And the real estate profession’s once-popular practice of treating listings as a land grab -- get as many as you can as quickly as you can because they pretty much sell themselves -- has fallen by the wayside. Advertising those listings costs agents money, and payday doesn’t come until the sale closes. Do the math: No sale, no payday. And who has thousands to throw away on homes that will never sell at the prices their owners think they are worth?
Walter Sanford -- a top-producing realty sales agent for more than 20 years and today a sales-coaching guru -- is brutally blunt on the topic.
In a down market like this, he tells agents, dump the buyers and spend your time and budget cultivating more listings of motivated sellers and only motivated sellers. It’s a way for agents to avoid financial ruin.
“Buyers take longer to make decisions, they ‘nibble’ more, and they will actually eradicate your net profit if you continue to work buyers as a major part of your income flow,” Sanford says.
He adds: Nothing saps an agent’s time and energy or cuts into potential income like showing unmotivated buyers house, after house, after house, and still not making a sale. “So don’t do it, is what I tell them.”
Them’s fightin’ words.
Valerie Van De Zilver, broker-owner of the Zilver Realty Group in Tustin, shares the sentiment. If a buyer doesn’t commit after being shown available properties, he or she is enrolled in Van De Zilver’s automatic e-mail program. Those buyers receive instant messages about new listings on the market, price drops and changes of listing circumstance. This enables buyers to keep current on the sales inventory and ensures they won’t miss out on a property they have their sights on. It also means they won’t tie up Van De Zilver’s time.
“If they see something they like,” she says, “they call me.” She has dozens of buyers on her e-mail program. “And it’s working just fine.”
Sanford has a multi-step process to help realty agents separate the serious buyers from the looky-loos. Only he doesn’t call them “steps;” he prefers “hoops” -- and he expects buyers to jump through them.
The first hoop is a 35-question form that begins with a version of “How long have you been looking and why haven’t you bought yet?” He builds up to requiring that buyers get pre-qualified for a loan -- not pre-approved, which he says is just a meaningless letter from a mortgage broker saying everything looks rosy -- but actually pre-qualified with a lender’s commitment. If a buyer’s credit is in need of repair, Sanford enrolls him or her in a budgeting or credit repair program with his lender. And somewhere along the way, he insists on a loyalty agreement, restricting the buyer from agent-hopping.
Sellers too -- at least the unrealistic ones -- are getting the same tough-love treatment.
“Sometimes,” Van De Zilver says, “I have to tell a client that he just isn’t going to be able to meet his price goal in this market and that maybe he should think about holding off on his plans to sell.”
Other agents are turning down potential listings if they sense that the seller is inflexible in price.
“You can’t waste time with cement-head sellers,” is how Sanford, formerly of Long Beach and now based in Kankakee, Ill., puts it.
Sanford advises his disciples to do their best to talk current-market sense into the seller, but should the asking price remain unrealistic, he says, agents should lateral the listing to a newbie agent in the office, politely explaining to the seller that the new agent will have more time to try to help him or her meet those goals. And, he adds, the original agent will get a referral commission in the unlikely event that lightning strikes and the house actually sells.
By his estimates, 30% of experienced agents are walking away from overpriced listings. Florida Realtor Magazine reported that some sales associates said in the last year they’ve regularly refused one out of three listings because they believed them to be out of the ballpark.
Many agents entered the business during the flush times when listings flew off the shelves, Van De Zilver says, and they functioned pretty much as order takers.
“Now, you really need an agent who knows what it takes to get the home sold,” she says. “And if a seller doesn’t want to hear it, there isn’t much point in taking the listing because it won’t sell.”
Occasionally, she says, she’ll take an overpriced listing anyway because she wants to put out her sign in a particular neighborhood. But by and large, she only deals with realistic sellers.
She recently declined to list a property when the owner wanted to put it on the market at $100,000 more than what he paid for it in January. He had painted the property and made minor cosmetic repairs. “I told him that this was perhaps not the best time to list the house if getting that price was his goal,” she says. Another agent took over the listing; it remains unsold.
Lonnie Maples, who has been selling real estate for 29 years in inventory-saturated Riverside, says he too has turned down listings.
Over the summer, he had a listing appointment with a seller whose property had been in the Multiple Listing Service for more than a year. The owner had made several price reductions from it’s original $1,095,000, and he was now ready to list at $895,000.
“I knew it wouldn’t sell for even that,” Maples says. “That house, in this market . . . $750,000 was more like it. I declined the listing because I didn’t want to waste my time and money.”
Maples says it would have cost him $100 a week just to advertise the listing in the local newspaper. Beyond that, there are fliers to have printed, lock boxes to install, mailings to send out.
“It all adds up to a big zero if the house doesn’t sell,” Maples says, adding that he would rather “catch the listing” on the second or third round, once it expires from its initial agreement. “Sellers get more realistic then.”
Some agents are tempering the touchy situation by compromising. They’ll agree to take a listing at the seller’s desired price for 10 to 21 days if the seller agrees in advance to drop the price if it doesn’t sell in that time frame.
And then there are those who say they never walk away from a potential listing.
Anthony Marguleas, broker with Amalfi Estates in Pacific Palisades, says he and his agents never turn down listings. Period.
The onus, he says, is on the agent to educate the client. “If all the comps show a house is worth $1 million and the seller wants $2 million for it, it’s the agent’s job to explain to him why that’s not possible. We won’t give up. We show the seller market analysis, comps of recent sales; we show him what else is currently on the market. It’s our job to not let him make a mistake.”
As for agents who sideline buyers if the buyers don’t want to commit, Marguleas says that behavior is just plain “lazy.”
“It’s actually more than lazy; it’s insulting,” he says. “Buying a home is the largest investment of someone’s life, and an agent doesn’t have the patience or time to show them homes anymore? That’s not right.”
Marguleas says he’s shown some clients more than 100 homes before they’ve made a successful offer.
“Some buyers look at five houses; others need to see more. That’s what we agents do: show them houses.”