How Do You Create Urgency in a Market That Has No Urgency?

How Do You Create Urgency in a Market That Has No Urgency?
by Dan Polimino

If you’re a seller in this market, that is the question that you must ask and answer. “How do you create urgency in a market that has no urgency?” If you can answer that question with certainty, then you have the best chance to sell your property before your competition.

First, let’s explore the problem. Why is there no urgency? As you know, I list many properties for sale on behalf of homeowners, and this is what typically happens during a showing. The buyer comes in with their agent to look over the property; this person has been cyberstalking it online for quite some time. They walked through with a critical eye, and I turned to them and asked them what they thought. They typically say the following: “You know I like it a lot, and I think it checks a lot of boxes for us.” Then I turned to them and said, ” That’s great. Would you like to make an offer? At which point they gave me the following response, “You know, I think we’re going to wait a little bit more and see a few more properties. We’re not quite ready to decide.” Why are they saying that? Well, here are the reasons in the exact order:

1. They can afford to wait and see more property. You see, it doesn’t matter if it’s Kona, Hawaii, or Denver, Colorado; there’s plenty of inventory on the market, and so there’s really no need to decide. They can take their time and go look at more homes.
2. More homes are coming on the market every day, which creates FOMO for Buyers (the fear of missing out on the next great deal). You see, in their mind, if they just wait a little bit longer, a better property is going to hit the market at a lower price, and they’re going to miss an even better deal. And you know what, they’re probably right.
3.  In the history of real estate, buyers have been six months ahead of the market, and sellers have been six months behind the market. So, it’s safe to say that there are very few properties on the market priced correctly, and as such, buyers have all the leverage and no urgency to make an offer.

Given the scenario above. What are the mistakes that sellers are making in this market?

1. They lull themselves into thinking we just need more time. We just need more time to find the RIGHT buyer, and we’ll get our price. ****Alert**** – offers on your property don’t get better with more time. Offers on your property get worse over time. The longer the home is on the market, the more buyers start to wonder what’s wrong with it. They start to ask why no one wants to purchase it. They start to think that the seller is vulnerable and will take any low offer. Your single best chance to sell your home at a premium price is in the first 30 days, when urgency is highest.
2. They begin to think that all they need to sell their home at top dollar is more or better marketing. Now, I can’t speak for all Real Estate agents, but I can tell you here at The Hawaii Team. We spend thousands and thousands of dollars marketing the homes that we list for sale. You’ve heard me say it before, and I’ll say it again. I think our marketing here at The Hawaii Team will blow the competition away, and I’d be happy to compare it head-to-head. So much like the debate in this country about education, throwing more money at the problem isn’t always the answer. It’s certainly not the answer in the properties that The Hawaii Team is marketing

So, we’ve established that there’s no urgency in the market and why there’s no urgency. We’ve talked about the mistakes Sellers are making in selling their property, and now we return to the essential question: how to create urgency in a market that has none.

The only way to do that is with PRICE! I know that’s not what you want to hear, but that is the answer to the question. And here’s why:

1. We are working in a price-based market. Nothing else matters right now in the real estate market. Every buyer is honed in on price like a laser. Every buyer brings a spreadsheet of data to every showing, and very few buyers make emotional decisions. They are making data-driven decisions based on the market correction over the last three years, and they are correctly predicting the market’s trajectory. Think about this! Today’s buyer has more data access than ever before in real estate history. And AI has just taken all the guesswork out of determining your home’s purchase price.
2. I’ve seen Sellers and agents try to lure buyers into making an offer with incentives, but I don’t see those incentives making a difference. It’s not offering the home fully furnished, it’s not offering to pay a year’s worth of HOA dues, and it’s not offering to do a rate buy-down on their loan. I have done all those things over the last two years, and they didn’t move the meter one iota. The only thing that matters is the price.

So, here’s your game plan. Don’t price your home competitively. It won’t work. Offer your home with a COMPELLING price. And what I mean by compelling is that the price on your home is so good that you are daring the buyer to write you an offer. The buyer will walk into your house and say, “Oh my gosh, I get all of this for ‘X’? At this price, I must write an offer on this property. This is the only way to create urgency in a market that has none. Right now, buyers don’t have ANY reason to write an offer on your property. They aren’t going to write the offer on your property because it’s pretty, or it’s got a terrific layout, or it’s in a great location. None of those things is going to move the meter because the reality is there are other properties on the market that are pretty, in a great location, and have a terrific layout. Why is yours different than any of the others, and the only differentiator is going to be the price?

There you have it. I didn’t hold back any punches. I laid it out in cold, hard terms, and it’s backed by 20 years of experience and 1,300 transactions. I don’t know how long we’ll be in this type of market. What I can tell you is that every year we are either in a seller’s market or a buyer’s market (we are in a buyer’s market). It’s extremely rare that we are in a balanced market, and when we do, it’s rare. It doesn’t last very long. Every balanced market I’ve seen only lasts about a year; for the most part, the real estate business is always swinging in one direction or the other.

Price your property accordingly, and you have the right to completely ignore what I said here. Just understand that the alternative is to show your property for sale for 3, 6, 9, or 12 months, or maybe not sell it at all. Or you could do what some people do: chase down the market with small incremental price drops over a period of 6 to 9 months, which will eventually fetch you the same price you could have gotten in the first 30 days after the listing went live.

I wish I had better news, and the minute that the market turns in your favor, I will be the first one to let you know. And if you’re thinking about selling your home on the Kona coast, we would love the opportunity to earn your business.