In a new blog this month, First American Chief Economist Mark Fleming predicts that “the big short in housing supply will continue into 2021 and likely keep house price appreciation flying high.” As a real estate agent, you know this likely means a homeowner who is planning to sell their home in the New Year will be in the driver’s seat.
Conversely, Fleming’s forecast means housing affordability for potential homebuyers will be impacted, even if low mortgage rates continue to help provide some home-buying power for your clients.
Whether or not these data points prove out, the coming year is likely to remain much like 2020 for real estate agents like you: challenging.
So, to continue building your business in 2021, you may be looking for different ways to market to buyers, help the homes you’re trying to sell stand out, and gain a competitive edge in what could be another year with fewer homebuyers overall.
In short, you are going to need some creative incentives. Here are five tools and tips to add to your marketing toolbox now, and in the new year, to help attract buyers.
1. Get Creative and Make the Listing Shine
When you create a great listing it can evoke wistful feelings in homebuyers, even before they see photos of the home. Tell a story about the home you're selling that makes it a call to action for prospects. If you are busy with all of the other day-to-day activities of running your real estate business, consider hiring a copywriter. Be sure to provide every detail you can about the home, as well as photos and any video you have, and let your copywriter tell the story. The upfront expense may well be worth it to find the right buyer quickly.
As the expert, you also know the "insider" words to include in a listing that gives the story of the home that added lift. So be sure you edit the final copy to spotlight the home's best features accurately before you post the listing in MLS.
2. Highlight Aspects of Home That Reflect the Times
The coronavirus, which is likely to remain a troubling influencer for most, if not all, of 2021, has been responsible for driving many homeowners home. Your sellers in 2021 may have already converted an extra space into an office, and if so, that feature of their home has become a selling point. Be sure you include features like "dedicated office space" in your listing and other marketing materials.
If the home does not already have an office space but has a spare bedroom, finished garage, or basement, those aspects also can be incentives to buyers in these times. Homebuyers often may be looking for usable spaces to accommodate a home office and features like a home theatre or a workout space. Be sure you highlight any of these potential or actual qualities in your descriptions.
3. Offer Help with Some or All of the Closing Costs
With housing affordability expected to be an issue in 2021, your homebuyers will likely want to hold onto as much cash as they can for inevitable moving and home repair costs. You and your home seller can entice individuals and families ready to buy with help on closing costs. When you are creating marketing materials for a home for sale, you can include the offer of help with some or all of the closing costs for qualified buyers.
4. Offer a Home Improvement Allowance
If the home for sale needs certain improvements, whether they are minor or lower in cost, such as changing plumbing fixtures and hardware, or larger, more expensive improvements like new carpet or tile, when you work with the seller to offer an allowance at closing, it can help a buyer keep more cash on hand to use for other improvements. An allowance can be a powerful incentive, especially for first-time homebuyers.
While this, and the incentive on closing cost may be slightly more costly to home sellers, the higher appreciation they are enjoying can easily offset the cost in the final sale price, especially if the overall housing market has fewer homebuyers able to afford a home. Buyers know that home repairs and closing costs will make a huge dent in their cash flow so incentives like these can make a difference.
5. Add a Home Warranty on Every Transaction
Are you offering a home warranty? Sellers that include a home warranty as an additional feature can get a competitive edge over other homes on the market. Buyers also can have more confidence in purchasing a home and get a little peace of mind knowing they have the protection of a home warranty from First American.
A home warranty covers many of the home’s major systems and appliances that can fail during the homebuyer’s first year of ownership. Today’s homebuyers are picky; give them something extra and grab their attention.
You can also incent buyers with the offer to purchase the home warranty at the close. The home warranty cost as a percentage of all closing fees will not be very high, and it could be an enticement that helps pave the way to a quick, smooth transaction.
Our home warranty can:
- Enhance the value of the home during the listing period
- Reduce after-sale liability for the buyer, seller, and broker
- Lessen the risk of delays during the sale of a home
- Protect the homeowner from paying thousands of dollars on unexpected repairs or replacements on the home’s covered major systems and appliances
Home warranty claims are up significantly in 2020, as homebound customers put more wear and tear on appliances and home systems. Every home needs a home warranty and First American's home warranty plans are providing more value than ever in these times.