Eighty-two percent of homeowners feel locked into their current property.
It’s been a bit of a grind so far in 2023, and we all know about the lock-in effect. There are fewer homes selling right now than last year. If you’re paying any attention to the market, this is all common knowledge at this point.
Some homeowners who are feeling locked in do want to move. They’re just concerned about the financial payment and the long-term outlook.
Feeling locked in, in a lot of cases, makes people want to get out even more. Now, we’ve had mortgage rates above 7% for some time, and a lot of experts are predicting we’re going to see rates come down at the end of this year and down again in 2024. And I would liken that to a rubber band. Ricky Carruth said the longer rates stay higher, you’re just pulling that rubber band back and back and back and back, and there’s more tension on it and there’s more pent-up demand. And what’s going to happen is when that snaps, there could be a pop bigger than 2020 and 2021 and the first half of 2022.
So, the question is, how are you getting your business ready for it? Let’s dive in.
Commit to Filling Your Pipeline
There needs to be a daily commitment to filling your pipeline with people who feel locked in right now. People who want to make a move, but have a 3% rate and don’t want a 7% rate.
We’re seeing more people that are in their early thirties, than we’ve ever seen before. Think about what people do when they’re in their early thirties: they’re getting married, they’re having kids.
They start to think about where they can raise their family for the next 20 years.
And when people feel locked in, it tends to mean they don’t like their home. And the longer this goes on for the folks that have real intent and want to buy and sell, they’re going to hate that home more and more every day.
So, someone who’s 33 today, they’re going to be 34 next year, 35 the year after that, which tells me you want to be playing the long game. And the way to win the long game is with long-term nurturing.
Develop a Plan
Look at how you can develop a seller-focused business where you have a daily intention of how many potential sellers you are talking to. What activities are you planning to have those conversations, and how can you really work on your listing presentation? That’s the skill-building phase. And it starts with a plan:
- How many listings do you want to take this year?
- How many listings do you want to take next year?
- Do you have a monthly number?
Come up with a number that’s going to help you hit your goals. That’s step one.
Nurture Your Leads
Then there’s going to be some key elements of having those conversations to move those folks into your funnel, into your nurture plan.
So you’ve got your daily number, how many conversations you want to have, how many appointments you want to hit—you’ve done the business planning. Now what you want to do is look at the components of the conversation. Talking to homeowners without real intent is fine – you’ve got to get nos to get yeses. That’s how this business works.
But if you’re not looking at the components of the conversation to determine if there are real prospects or not, you’re missing the boat. And that’s what we’re going to talk about next.
Five Steps to Determine if Your Leads are Serious
To find out how serious and ready your leads are, follow these five steps.
#1 – Determine next steps
Where are they planning on moving to if they do decide to sell their home?
If the seller doesn’t have a plan, I have news for you—they’re not moving. So you have to determine where they’re moving to once they decide to sell.
#2 – What’s the Motivation?
What’s important to them about making the move? What’s their motivation? It’s the same question, but you don’t want to ask, ‘Hey Nick, what’s your motivation?’ You’re going to sound like a crazy person.
Instead, say, ‘Tell me what’s important to you about making that move to that four-bedroom single-family home in X, Y, Z town.’
That will help you determine what their motivation is—because you need motivated clients in order to move forward.
#3 – What’s the timeframe?
When would you like to get this move done?
There are going to be conditions that come up like, ‘My kid’s finishing elementary school,’ or, ‘I’m waiting on a job change to come through,’ or ‘I’ve got to make sure that I help my parents get settled,’ or, ‘We’re getting married.’ So, find out the timeframe upfront.
#4 – Determine the conditions
Once you get a sense of their timeframe, determine if there are any conditions you need to navigate. They might have a 3% rate and don’t want to go to a 7% rate. That’s a condition.
By talking through their conditions, you can gain a better understanding of how serious they are about making a move.
#5 – Market Knowledge
Lastly, what do they know about the market? And is it correct, or are they misinformed?
If they have a misconception about the market, you’ve got an obligation as a knowledge broker, as a real estate agent, to tell people exactly what’s happening. Share data and facts with them in a way that’s not going to tick them off. You don’t to make them upset, but you need to share information to help them understand the market better and make the right move for their household.
When you break it down to those five key elements of a conversation and have a seller-focused business, that’s where things are going to get exciting. You’ll determine who is ready to sell this year, next year, 2025, and beyond.
Because every piece of listing business requires that kind of nurturing and that kind of conversation.