In my local market (Calgary), we are experiencing the lowest inventory levels since 2006, with absorption rates well over 100% (less than a single month of inventory) in many segments.
This means every decent property listed at a reasonable price gets snapped up, often well over asking, which can obviously be super frustrating for buyers.
(If your local market is different, please read on anyway. The underlying message here is about improving communication, regardless of market conditions.)
Recently, after a showing, one of my newer buyer clients told me, “Hey, we’ve been thinking. We’re not in a hurry, so we’re going to back off for a while and wait for the market conditions to cool down, and then we’ll get back at it.”
Oh, oh. Time for a talk! I suggested we stop at a nearby coffee shop for a quick chat, and they agreed. The following is, in essence, what I told them:
1. “I completely understand how you feel. This is highly stressful for everyone, and sometimes it must feel impossible to succeed.
2. However, by the time the market cools down, prices may have gone up 10% or more, so if you back off now, you will have completely missed out on this gain!
(These clients were looking around the $500,000 range, so I put it into numbers – $50,000 – which is more impactful.) So rather than missing out on a $50,000 gain, consider doing this instead:
3. Accept the situation. It is what it is, and you (or I) can’t change it.
4. Think about viewing properties as “doing your homework.” You need to see properties to get a feel for the market and be confident to act when the right opportunity presents itself. This will give you a significant advantage over competing buyers. Believe me, the clients who have done their homework are always the winners in a competing offer scenario.
5. Know this: Viewing properties is my favourite part of my job BY FAR, so please NEVER worry about “wasting my time!” (This is 100% true.) Even if we know you’re just doing your homework and you’re definitely not going to write, this is all part of the process, and I’m absolutely fine with it!
6. Keep an eye out for every property that pops up on your search, and if it looks good, let’s book a showing ASAP. Time is of the essence, and the early bird often catches the worm. So if it’s a good property offering good value (I’ll be able to tell you), let’s go ahead and submit an offer! You probably have little to no leverage in negotiating a better price on the first day on the market, but it’s better to pay the full price today rather than 5% over tomorrow.
Of course, this depends on how well-priced the property is, which is all the more reason to do your homework.
7. If you miss out on one (or two or three), try not to despair! I’ve had numerous occurrences this year where we’ve successfully got a great property after a few tries.
In summary, be both diligent and calm!
Don’t give up, but don’t stress yourself out, either. Hey, I can handle the stress for both of us. I’ve done this a thousand times.
And remember, I ❤️ looking at properties. So call me. Please!”
That’s the essence of what I told them, and by the end, they were right back on board, and I’m sure we’ll find them a good property soon.
Think about it this way: If your clients are thinking the wrong way (to their own detriment), it’s probably your fault. They need better guidance. Maybe it’s time to take them out for a coffee and a talk!