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Power Broker Strategies: Low Inventory? Get Sellers to Sell
By Paige Tepping
After talking about getting buyers off the fence for several years now, it’s hard to believe today’s problem is actually getting sellers off the fence. From tight inventory to financing obstacles, Real Estate One’s Dan Elsea implements a slew of traditional and new-fangled strategies to keep sales humming.
Dan Elsea President, Brokerage Real Estate One Michigan 2012 Transactions: 18,564 2012 Sales: $2,622,833,861 Source: RISMedia’s 2013 Power Broker Report
Paige Tepping: Please describe the current conditions in your market. Dan Elsea: We are experiencing a very strong market and like most of the country, we are seeing a significant shortage of inventory of homes for sale due to the high buyer demand. Today’s market is probably one of the most active markets we’ve seen in the past 20 years. We’re seeing a wild ride, but we’re enjoying it.
PT: In terms of getting buyers off the fence and into homes, what steps has your company taken? DE: We aren’t having a problem getting buyers off the fence because they are everywhere. Our challenge today is actually finding sellers, so we are dusting off some old tricks and giving them more of a sophisticated twist in order to find sellers. When it comes to finding sellers, our approach includes sending out good old-fashioned mailings on behalf of our salespeople describing the buyers we have for a particular neighborhood and whether or not homeowners in particular neighborhoods know of anyone that’s interested in moving. The overall message that we’re trying to get out to sellers: values have risen faster than you think, so you will be pleasantly surprised at what you can get for your home today. Sellers are responding to our efforts in this area, and we’re actually seeing about a 10 percent return on these mailings. We have a huge database of buyers that register on our website, so we are really working on taking a modern, big data approach.
PT: What strategies do you have in place in terms of working with the rental market to bridge the gap? DE: The rental market—single family rentals especially—is very strong in our area, so we are using the same techniques when it comes to reaching out to this market. We don’t farm for rental markets as hard, however, since those transaction values are lower; it doesn’t pay to send mail, etc. We have found that if we put an ad on Craigslist or anywhere online for lease, we will typically get 4-5 offers within a week.
PT: How are you helping eligible homebuyers navigate the challenging home financing marketplace?DE: We are the only broker in Michigan that has integrated title, mortgage and insurance services under one roof, so we are able to package everything together and offer clients a one-stop shopping experience. One of the specific tools that we have found to be the most useful is the FHA 203k program, which enables buyers to purchase a home and fix it up through the mortgage. In addition, we are the No. 1 MSHDA (Michigan State Housing Development Authority) lender in the state as well as a top FHA lender within the state. These products have been instrumental in helping us reach out to first-time homebuyers in order to expand the pie of who can own a home today.
PT: How are you working to keep buyers educated about the buying opportunities available today? DE: We’re keeping buyers educated about the buying opportunities available today through good old-fashioned mailings in addition to really utilizing email and social media. We take the time to provide our agents with market information and monthly analysis reports so that they can then pass the information along to the public. Our agents are also taking advantage of tools such as Facebook, Twitter, LinkedIn and Pinterest in order to get the word out. As far as keeping first-time homebuyers educated, the financing piece is huge. The MSHDA and FHA loans are primarily for first-time buyers, so these products are drawing them to us. We’re also reaching out to first-time buyers by targeting apartment buildings with mailing campaigns.
PT: How are you promoting homeownership in general? DE: Through our-one stop shopping program as well as the financing products that we offer. When you buy a car, you don’t buy a car. You buy a car payment. The same is true in real estate. When you buy a house, you don’t buy a house. You buy a house payment. Our financing products have been instrumental when it comes to expanding and developing homeowners. In the end, the more people we can get qualified to buy a house, the bigger the pie becomes.