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Best Practices: Prospecting tips in low-inventory world

posted Mar 1, 2018, 2:54 PM by Paige Campbell   [ updated Mar 2, 2018, 11:06 AM ]
In today’s market, you already know that inventory is constrained, yet demand is still high because people still want to own their home. Even while home prices are appreciating, real estate remains a safe investment over the long haul. Millennials are looking for a home to raise their families, households formation is rising, flips of older properties continue to provide returns and foreigners are still eager to own U.S. property. Even gen Xers want a bigger house.


As we heard recently from an economist from the California Association of REALTORS® (C.A.R.), housing availability will remain a challenge in 2018. We ended 2017 at the lowest level since June 2004. Because we’re dealing with a supply and demand mismatch, shrinking inventory will be a major factor shaping this year’s housing market.


So, when it comes to prospecting for new clients in a low-inventory world, what tips should we keep in mind? Let me recommend three strategies, including: (#1) find a farm and nurture it; (#2) tap your sphere of influence; and, (#3) host fun open houses.


-- Became a farmer.


Ignore the naysayers who ignore the benefits of farming. Yes, neighborhoods will change and the market will fluctuate, but I really believe that developing a strong farm area and sticking with it can really pay off in the long term.


Door knocking is still viable for generating new leads. While you’re hitting the streets with your door-hangers or letters, it’s likely you’ll pick up a few new listings. Also, you will learn how many other agents seem to also be focusing on the same neighborhood and what it will take to carve out and scoop up your own slice of their market share.


If you’re not sure about where to start homing in on homes, answer these questions: Where was your last lasting? Where would you love to have your next listing? Where do you sell the most homes? Where do you live? Who is your ideal client, and where do they live? The answers will give you valuable insight.


-- Tap your sphere of influence.


They might call it old-school tactics, but I really believe that staying in touch with an ever-expanding list of contacts can pay big dividends for your business. Perhaps you would prefer to maintain top-of-mind awareness with a postcard or newsletter that is mailed on a monthly basis. Perhaps a follow-up phone call to past clients or referrals or prospects is more your style: “I was thinking about you today, is there any real estate-related question I can answer or do you know someone who might need help with real estate?” Perhaps an e-mail with links to content-rich, consumer-oriented housing market update articles from the Association will work for you. Maybe all three.


Another group of people to connect with can include probate and family law attorneys, financial planners, tax advisers and CPAs. Offer to provide their clients with a free market analysis of a property. Invite them to a one-on-one over coffee to share your unique selling proposition and what makes you stand out from your competition.


-- Turn an open house into a party.


Open houses have the potential for becoming a really fun event. Start by asking the seller for a list of their friends and family members and send invitations asking for an RSVP so you can order enough refreshments. Invite the neighbors to drop by to pass along your contact information to their friends who might want to move into their same neighborhood. On the big day, treat everyone who walks in like a friend who’s come to enjoy the fun party. Take photos and video during the event to show future sellers how you go above and beyond. Take down names and contact info and have a stack of business cards ready to distribute to expand your sphere of influence.


Ours can be a challenging profession, especially when tight inventory has pushed purchasing power and affordability to a 10-year low, according to C.A.R. Still, on the bright side, the rate of homeownership is still increasing. Last year, the U.S. homeownership rate continued to rise, climbing to its highest level since 2014 and proving American home buyers are nothing if not tenacious and resourceful.