Signs in the market today point toward leveling prices and gradually increasing inventory, but some housing markets are still experiencing competition involving bidding wars, which can be a turn off to potential buyers.
When a client decides to put a pause on their home search for a few weeks, months, or even a year, how can an agent ensure that client sticks with them when they’re ready to reenter the market? Experts told Inman it’s about staying in a client’s sights and continuing to be a valuable resource.
Agents who spoke to Inman had differing opinions about what modes of communication are most effective, but all agreed that keeping in regular contact with clients who are taking a break is crucial.
“Definitely staying top-of-mind to retain [clients] is key,” Tony Rodriguez-Tellaheche, broker/owner of Prestige Realty Group in Miami, told Inman. “What I like to say is, don’t just send a text message — a text message is not staying in touch or following up. You need to call them. You need to talk to your clients every week. Go see them.”
Liz Lopez, vice president of RelatedISG Realty in Miami, said that the mode of communication isn’t as important as making sure to keep clients informed about the state of the market so that they feel prepared when they’re ready to jump back in, and do so when the time is right for them.
“Via email, via text, via social media — it doesn’t matter,” Lopez said. “Providing them valuable information about the market or housing inventory in the area, and especially interest rates, are the key…”
Lopez added that giving updates on market factors at least once a month is necessary to keep clients current.
Be a source of knowledge
Providing information that’s valuable to clients so they’ll be better informed when they reenter the market than when they left it is also a way to gain their trust and make them more likely to remember their agent.
“Keeping the client up to speed on what’s actually happening in the market, what’s changing, what’s shifting, and making sure that’s in front of the clients so that they’re getting first-hand knowledge … credible information, from a professional,” is one way to make an impression, Ryan McLaughlin, CEO of the Northern Virginia Association of Realtors (NVAR), told Inman.
Communicating what kinds of homes are going under contract quickly, which ones have recently come onto the market, and even which off-market properties will be available soon also shows buyers that an agent has their finger on the pulse of the market, which is helpful to the buyer at the end of the day too, Rodriguez-Tellaheche said.
“Make sure you show them that you’re an expert in the market and keep them updated as much as possible,” he explained.
Lopez added that client education begins with an agent’s own education and ability to keep up with market fluctuations.
“I always say knowledge is power,” Lopez told Inman. “Keep your clients informed, but also be informed yourself.”
Listen and set expectations
There comes a point, however, when agents might inadvertently cross the line between being helpfully communicative versus being overbearing in how frequently they reach out to clients. McLaughlin said avoiding that mistake is all about taking the time to really listen to and appreciate a client’s needs.
“What I hear most often is, it comes back to that listening and understanding your client and what their needs are, and setting up expectations up front with them,” McLaughlin said. “So if [an agent is] listening to their client and they’re understanding, this is how often we want to be in touch, this is the kind of information they want to hear and what they need, [then an agent can better understand,] this is what I think that they should be looking out for.”
Every personality is different, McLaughlin added. For some buyers, “taking a break from the market” might still mean they want to receive any new listings that fit their search criteria as they become available. But for others, it may mean they prefer more sporadic, and more general updates on the market until they’re truly ready to get back in it in a serious way.
Make sure they’re financially prepared
Offering a little friendly advice and concern for how buyers should handle their down payment during their break from the market can also help both client and agent when it comes time for them to reenter the market.
“Making sure that their savings are liquid, that they’re not tied up in investments that they can’t easily access should a property or an opportunity come up” is an important step, McLaughlin advised.
In addition, reminding clients not to open any new lines of credit or make very large purchases is also wise, so that their credit isn’t impacted once they’re ready to buy.
It’s also important to remember that mortgage preapproval letters will expire, typically after about six months, Rodriguez-Tellaheche said. So buyers and agents will want to keep tabs on how much time has passed since a preapproval letter was issued by the lender, so that they can be prepared to ask for a new one even before it’s needed.
If buyers can use their break from the market as an opportunity to pay down any debt and bulk up their cash reserves, that can also significantly help their future prospects in the market, McLaughlin added.
In terms of where, specifically, buyers should put a down payment while they’re waiting things out, Shari Greco Reiches, co-founder of Rappaport Reiches Capital Management, said the short answer is to keep it someplace safe and accessible.
FDIC-insured vehicles that have very low (or no) minimum balances and no penalties for making early withdrawals are probably the best bet, Greco Reiches said. Online high-savings accounts, money market accounts, and certificates of deposit (CDs) all might be good options for a buyer who needs a few months, a year, or two years before they jump back into the market.
However, it’s important to become familiar with all the terms associated with these accounts, because money market accounts, for example, often require a minimum balance, and CDs may have a penalty for account holders who withdraw funds too early.
“If you really think you’re going to use [the money] within a year, two years, three years, you really need almost a minimum of three, conservatively five, years if you really want to try to invest that money,” Greco Reiches said. “Because the flip side is you could lose it.”
Remind clients the market can be unpredictable
Many buyers who have decided to put a pause on their search now are likely doing so because they assume market conditions will improve for buyers in upcoming months. However, it’s very difficult to predict exactly what conditions will be like in the next six months to a year, McLaughlin pointed out. And it’s worth giving buyers a gentle warning that things could actually go in the opposite direction.
“It certainly is possible that the market may cool down, but it’s really impossible to time the market,” McLaughlin said. “There’s advantages to waiting — there’s possible advantages to waiting — but there’s also potential disadvantages to waiting as well, and it’s such a deeply personal decision and choice. That’s where a Realtor can come in and kind of help advise them and guide them on what’s happening using their local market expertise …
“You can wait on the sidelines, you can sit it out, but you run the risk that prices continue to rise.”