It is no secret that the real estate market now has even more challenges than it brought a few years ago. What seems to be a secret is that some people in the industry have not yet adjusted their work ethic because of the added challenges. This is the case whether for residential or commercial. The world of rent algorithms, rent control, office to residential conversions, ADUs, data centers, working from home, and several other trends were not prominent if they even existed years ago.
As one that keeps tabs on certain agents and brokers over the years, I'm noticing how some of them continue to pursue deals (whether on the sell or buy side) without changing or updating their methods. A question from an investor that is one of my coaching clients earlier this week helped me to realize how I am helping my clients and connections to be able to utilize researching (and the all important digging for research) to their personal advantage.
My "student" told me that she found a property that seems to match her criteria, and was going to meet with the seller the next day. (Prices changed to use round numbers) She said the seller initially mentioned $200,000, but when setting up the meeting told her "but I don't think the price will still be $200,000". Her next question to me was about how she should handle that.
Next, she told me about one of the comps she found, which was a similar nearby property for $190,000. Next, she talked about another at $210,000, and another for $220,000. She was not sure her numbers "would work" at $210,000. Compounding the problem is that the current tenant in this single-family property was going to be leaving within the next three months, leaving a vacancy. The seller wanted out to use the funds toward a more expensive rental property he is pursuing. This tells us there is plenty of motivation, since the hopeful seller is losing a tenant and wants to move on to a bigger and better deal.
Here is where the "work ethic" comment comes into play. I don't know who the seller is, but I would bet the ranch that he expects his eventual buyer to go up from $200,000. My coaching student was concerned about being able to "make this work". I went on to tell her how to "make this work for YOU!" and not the seller. The mission is to compare that $190,000 comp to everything about the listing she "might" pursue. There is the square footage, age and condition of the property, total acreage, location and proximity, and every possible amenity. Upon drilling down on that, look for comps for the $190,000 property and find what you can that is at or below that price. Find advantages that are on par or better than the subject property. Do a print out of everything favorable to go to her meeting with a stack of papers to show the seller.
A big part of my coaching is the public speaking and presentation element in addition to the real estate part. My mission was to get her ready to go to her meeting with printouts to prove her research. It was also to start the meeting by saying, "I'm glad you agreed it's not a $200,000 listing". And continue with, "I'm thinking around $185 to $190, depending upon......" and go from there. Next you go into how soon you may have to replace the roof, the HVAC, and so on and how you may "need" an additional credit on the purchase price. There is also pointing out how she would have to spend to market and take on added risk if she could not find a tenant right away. Ideally, by the time the seller could speak, he would be concerned about how much less than his $200,000 he could get from her, or if he would have to start over with another potential buyer. Meanwhile, my student either gets an even better deal on a property she is already interested in or goes on to her next possibility.
There are too many people in real estate that never had to make this kind of an effort to get a favorable transaction done. Many of them are not willing to do so. If you are, you could open up an opportunity for a favorable transaction and be on your way.
https://RealEstateMediaCoach.com
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