In this monthly column, Anthony Askowitz explores a hypothetical real estate situation from both sides of the broker/agent dynamic. Askowitz is the broker-owner of South Florida’s largest RE/MAX office, and a working agent who sells more than 100 homes each year.
This month’s situation: After several consecutive years of a strong sellers’ market, an agent must help her clients accept a major market shift. What tools can her broker provide to enlighten these sellers who may have missed the “peak,” but can still have an incredibly profitable sale?
The pandemic created extraordinary conditions for home sellers in my market, but those who waited too long on the sidelines may have missed their chance to get in the game. Over the past two years, the residential market has been rocket-fueled by domestic buyers, and (with the loosening of travel restrictions) the return of international buyers.
My sellers who took advantage of this timing enjoyed that special joy of hitting the very top of a cycle.
But while still historically great, prices have cooled down considerably in recent months, and my hesitant sellers who missed that cycle summit are now super-frustrated. They think their 2022 homes deserve 2021 prices and refuse to see the reality of current trends or the upside of listing at the right price for these current circumstances.
I try to explain that they don’t want to be following a market that is spiraling down, but many of them believe that I just want to list their homes for less, so I don’t have to work as hard. (As if I don’t want them to net as much as possible on their sale.)
To make matters even more frustrating, buyers are being just as unreasonable. They believe they can wait for prices to continue dropping and eventually get the property they want for a steal.
To illustrate how shockingly fast this market turned: Three months ago, buyers were offering to pay appraisal deficiencies, and now, they want sellers of “as-is” homes to fix everything that comes up in inspections, down to repainting rooms.
What tools can my broker provide to enlighten these sellers who may have missed the “peak,” but can still have incredibly profitable sales?
The agent must be the calm voice of reason regardless of cycle conditions and work persistently to bridge the gap between buyers and sellers.
These past few years certainly have been a rollercoaster ride, and when my agents realized the floodgates were about to be opened for their sellers, they showed tremendous resilience and resourcefulness. They navigated all sorts of restrictions with in-person showings, pivoted to drone footage and live video home tours and dramatically expanded their capacity for handling more business.
With this latest shift in the market, however, agent resourcefulness and flexibility will be tested yet again, as multiple challenges abound: There is still very little inventory, fewer qualified buyers (making the ones who are qualified much stingier), dramatically rising interest rates, gradually reducing home values, and while sellers are refusing to list at current market values, buyers are waiting for prices to hit rock bottom.
Essentially, both sides truly believe they have the upper hand, leading to unacceptable offers and counteroffers that only generate hostility.
How to resolve
Challenging moments like these are when the agent-broker dynamic needs to be strong, open and transparent. Brokers should be providing constant positive motivation for their agents and encouraging them to maintain open lines of dialogue with their sellers.
One tactic might be to discern the sellers’ primary objectives or ask them to rank what is the most important piece of their prospective home sale. Is it price? Timing? Post-occupancy flexibility? Reduced out-of-pocket costs or repairs? Although we may think pricing is the top consideration in all situations, that may not always be the case.
Brokers should also take the initiative to provide updated, verified, reliable data that supports their advice and justifies their clients’ offers. The agent must be prepared to support the value of a property with market information showing critical data points such as recent sales, ratios of sale price to list price, and days on market and be able to demonstrate trends by comparing current data with that of last month and the months prior.
If the market shows a downward trend, the seller should be advised of the risk in pricing high as the values continue to drop.
Ultimately, the market dictates pricing, and brokers, agents, and clients must navigate dramatic shifts with the best information they have on hand and live comfortably with the consequences.
Anthony Askowitz is the broker-owner of RE/MAX Advance Realty, with offices in Hollywood Beach, Davie, Miramar, North Miami, South Miami, Kendall, and the Florida Keys, and where he leads the activities of more than 190 agents. Follow Anthony on Instagram.
NOTE: Anthony Askowitz is not an attorney and does not give legal advice. Please consult a licensed attorney regarding matters discussed in this column.