6 Profit Strategies In A Buyer’s Market - Part 1
Topics: real estate, mortgage, foreclosure, buying a home, real estate investing
This article details the power of being a Buyer in today’s real estate market.
Some may read this and find it to be a bit harsh. That’s fine, it’s obviously not that kind of reader that this article seeks to reach.
I am speaking to the maverick. I am speaking to the man or woman who can look themselves in the mirror and unabashedly exclaim, “I am a Capitalist”!
This article is written to speak to those who are aggressive in their pursuit of profit. Steadfast in their sojourn for success, and ready to seize 2008 as the year that they have decided to make a change in the way that they do business.
If you thought that 2007 was the Year of the Buyer, think again. It was merely a pre-cursor, a warm up, an appetizer for the capitalist feast of 2008.
Don’t believe me, then you are not reading or understanding any of the stats, forecasts or projections.
If you choose to continue listen to Lawrence Yun of the National Association of Realtors paint a rosy picture of the housing market …then pretty much you can stop reading now.
If you are hoping this all goes away, meaning foreclosures, short sales and massive REO’s, then you can stop reading now.
This article is for investors, principals, the 10% of real estate agents who are actually doing something, and part of the other 90% who want to grow their business but don’t know how or who have not been trained.
If you continue to think that there is no money to be made in this market or that agressively and voraciously seeking profit is wrong then you will not succeed in 2008, if ever.
On so many different fronts, in so many different facets of this business it is time for change. To make this change, there are a number of caveats that must be understood and accepted from the outset.
1. There is no such thing as a lowball offer.
An offer is just that, an offer. It is the truest barometer of value in a free trade society. It represents what someone is willing to pay for a particular product or service.
You’re a professional, understand for yourself and explain to your Seller, the simple Economics 101 principle of Supply and Demand.
Forget comps, forget CMA’s throw them out the window. Buyers and principals, stand firm on what YOU want to offer.
Ignore listing prices completely, The list price is the figment of a starving listing agent’s imagination.
Listing agents listen up, it is absolutely imperative that you realize this and impart some wisdom to your Seller clients.
You are supposedly the professional. Patients don’t read x-rays, legal clients don’t interrogate witnesses, Seller’s seek your PROFESSIONAL opinion and it is your professional responsibility to truthfully explain to them the reality of the housing market.
All too often I hear from agents who say my Seller won’t listen. If that’s the case then either don’t take the listing or let us all know you are dealing with an ignoramus.
You put everything else in the broker’s remarks section of the listing. Why not insert a comment such as “Client is a moron and still thinks it is 2004″. Enough said, we won’t bother you with the call that you won’t answer anyway.
2. In today’s real estate market, the Buyer has all of the power. Finally in the real estate industry, the customer is king!
It is amazing that in just about every other sales market, the customer is king. The customer, or the Buyer, is most assuredly who is in control and deservedly so. It is the Buyer who must be catered to, not the Seller.
When you walk into a fine dining restaurant, the Maitre d’ greets you with a smile and your “buying experience” begins and ends with people catering to your every need. When you buy a Rolls Royce the salesmen book you an appointment and lavish the Buyer with all kinds of goodies.
Many fine oriental restaurant offer their customers hot towels so that they can refresh themselves and relax.
They all understand that the customer is king. He or she is in their establishment with the expectation of spending money and in return helping the establishment earn a profit.
If I was an agent in today’s market I would wash Buyer’s feet! I would pick their dry cleaning up, I would be a complete sales concierge.
The customer is about to make one of the biggest, most expensive purchase of their entire life and most agents act as if they are being bothered!
So in speaking to you Buyers, investors and principals, you must understand and remember you are the one in complete control.
You are the most sought after commodity in the real estate marketplace. Many Sellers and agents do not even know you exist.
What a great position to be in. Turn the tables, announce your presence and let the Seller and agent who truly want to serve you, give you a reason to spend your money and time looking at their product.
Make the salesperson actually sell. There’s a novel concept. The sellers need you. You don’t need them. The agents need you. You don’t need them. Your sole concern is getting the right property at the price you are willing to pay.
3. Be absolutely merciless on the Seller.
No I did not stutter. In a prizefight you absolutely seek to take your opponent down. When you sense weakness in an adversary it is time for you to absolutely exploit that weakness and to only show mercy upon complete submission.
Be relentless and merciless on your opponent and recognize you have two opponents, the listing agent and the seller.
In this market, don’t ever become concerned with what the listing agent or seller needs, wants or even show a modicum of concern for their situation.
Don’t even ask, you may have performed your own due diligence and you may be pouncing on a wounded animal but never show concern or care. Take them down and take them down hard!
In football, some of the most vicious hits take place during a sack. The intent is to completely destroy the will of the opponent. Afterwards we can all shake hands, but during the game, you need to not even show a hint of fear.
Don’t care that little Johnny grew up in the house, don’t care that they are losing the home to foreclosure, don’t care if they are on the verge of bankruptcy. This is not charity.
When you go to a “going out of business sale” at a retail outlet do you care why they are going out of business? Of course not, you buy that couch and haggle for the best price and walk out of the store with the best deal you could possibly make.
Did it matter to you that the store took 40 cents on the dollar? No, you were on a mission, you smelled blood and you took advantage of the situation.
You probably even made the salesman throw in free delivery. And you know what, I’ll bet you dinner that the salesman at the store, even during a going out of business sale, smiled and treated you better than most listing agents do when they get what they consider a lowball offer.
Barry Cunningham is one half of the B&B Crew who are the hosts of Real Estate Radio USA.
Real Estate Radio USA is broadcast daily live worldwide at 4PM-6PM at www.realestateradiousa.com We invite you to listen in and participate in lively and spirited discussion.
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