Some of your clients may have started their transaction in a market that’s different from the one we’re in now. Stan Ponte offers advice for having important conversations and providing timely information to successfully reset client expectations.
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Navigating client relationships over time often includes a reframing discussion of what the client’s perceived objectives may have been at the beginning of the relationship versus current expectations. Some of your buyer clients may have started their home search in a market when interest rates were lower, and there were bidding wars on every property.
However, they may find in today’s market that while higher interest rates might increase their monthly mortgage cost, they might face less competition when making an offer on a home. They also may have more ability to negotiate pricing and not feel as rushed into making an offer.
The secret to a successful agent-client relationship is to continuously communicate and set expectations, especially as we are trending toward more of a buyers’ market rather than a sellers’ market. There is more housing inventory to choose from today, more room to negotiate, and less pressure to decide on a home instantaneously.
In short, agents must blend both the advantages and disadvantages of the current market to help clients feel like they are in the driver’s seat. Below are five ways to reset client expectations, even if you’ve been working with each other for a while.
1. Gather and present real-time market data
As agents, we must advise our buyers and sellers based on real-time market data. Market data from a month ago is too old in a shifting real estate market — present current market data to your clients throughout the entire process. The most successful agents are the ones that are arm-in-arm and walking side-by-side with their clients throughout the entire home buying or selling journey.
I send weekly reports with market information and comparable apartment sales to my clients, which has worked well for me over the last 20+ years. For my sellers, my weekly reports also highlight website activity for their property and provide a marketing recap.
Over the past several weeks, I have advised a number of my sellers to decrease their property listing price by 10 percent due to changing market conditions. In each case, the result was a signed contract on their property within two weeks of the price adjustment.
2. Leverage your agent relationships
There is always a gap in market data between when a contract is signed and when the deal is closed. Leverage your relationships with other agents to call and ask for an indication of the sales price. This information will reveal current market trends so that you can advise your clients accordingly and help them make a decision.
Real-time information and decision-making are key to navigating expectations with a client mid-relationship.
3. Move ahead of the market to catch the best and highest price
Experienced agents should share their experiences with previous market fluctuations with their clients and communicate market information ahead of public knowledge. For instance, the public and the broader real estate market look at quarterly reports with closed data. Agents should communicate with clients based on live contract signing data, which is the most accurate measure of where the market is.
Agents must be ahead of the media headlines and empower clients to make decisions so that they obtain the best price, whether it’s a buyer or seller. Agents must be the conveyers of real-time market data to advise clients in the moment.
4. Understand your clients’ priorities
Not all clients make home buying and selling decisions based on market data. Many make decisions based on their needs. Agents should understand their clients’ goals and needs and clarify their preferences throughout the relationship.
If you are working with a seller, you may ask questions such as:
- Given the most recent market data, we believe your home will likely sell at a lower price than what we initially listed it at. What price are you willing to sell it at?
- It may take longer to sell your home in today’s environment. Is there a timeframe in which you need to sell?
- Do we have other options like renting rather than selling your home if the market doesn’t meet your sales price expectations?
If you are working with a buyer, you might want to ask the following questions:
- Interest rates are predicted to increase even more this year. Have you spoken with your mortgage broker to clarify the type of mortgage product you will need to meet your monthly cash flow?
- Is an all-cash offer an option?
5. Trade optimism for realism
Finally, don’t be afraid of delivering straightforward and accurate market data to your clients without sugarcoating it. You must be honest, candid and clear. In changing markets, having the courage and taking the time to provide the information your clients need will set you apart and earn you respect and future referrals.
Stan Ponte is a senior global real estate adviser and associate broker at Sotheby’s International Realty – East Side Manhattan Brokerage. He was named the No. 2 agent in Manhattan by sales volume for his work in 2020, achieving $144 million in sales, according to The Wall Street Journal and REAL Trends. As a Realtor in New York City for the past 21 years, Stan’s client list ranges from first-time homebuyers to CEOs, philanthropists, hedge fund managers, tech world innovators and entertainers.