May Buying Advice: Choked by a weak housing inventory, some agents are coaxing homeowners to the market with a different approach.
Frustrated with the lack of housing inventory, homebuyers in many markets are taking matters into their own hands by sending letters to homeowners and asking them to sell. In this month’s Buying Advice, we’ll consider this direct approach and its effectiveness. We’ll also check in with the latest housing numbers and dish out some tips for first-time buyers who are insuring a home.
After about nine months of unsuccessful home searching in the historic Olde Worthington neighborhood of Columbus, Ohio, real-estate agent Anne DeVoe’s clients were frustrated. No homes were coming up for the couple in the small, 10-block neighborhood.
So she suggested they make a wish list.
“I asked them to drive around and identify the houses they were interested in,” says DeVoe of Coldwell Banker King Thompson. She drafted letters to the owners of 35 homes, asking if they would consider selling. Two were interested. After looking at both houses, the couple put in an offer on one of them, a two-story Colonial. The deal is expected to close this month.
“I made the same suggestion last fall, and it was a success,” DeVoe says. “It’s great for someone who wants a particular street or neighborhood.”
Jeff Beggins of Tampa, Fla.-based Century 21 Beggins says he agrees that sellers are few and far between. He says many owners who were once underwater still mistakenly believe that property values are lower than they are. Others have seen the gains and are holding out for more appreciation, despite today’s low mortgage rates. Either way, there are far more buyers than homes to buy, he says.
To generate some listings, Beggins and his team have begun courting homeowners in coveted neighborhoods, mailing monthly newsletters with recent sale prices and current listings, as well as an offer of a free home-price analysis. In many areas, his agents are even going door to door to solicit homes to sell.
“Our message is simple: Our South Tampa market is hot. Interest rates are low. It’s a great time to move up, move down or just move around” to a new area, he says.
The appeal has had limited success, he says, but it’s worth it when an agent walks away with two or three new listings.
Suzanne Zinn Mueller, chief marketing officer for CB Bain in the Seattle area, says a letter or postcard from a local agent can be just the reassurance a would-be seller needs that there are enough buyers waiting in the wings to ensure a speedy home sale. “One of the biggest fears of sellers tends to be concern over the hassle of selling,” she says. “How long will it be on the market? How long do I have to keep my house looking perfect?”
These days, she says, this shouldn’t be a concern for most Seattleites. As of April 25, the absorption rate for homes in King County, Wash., was 105%. For every home sold, only 0.95 of a home came on the market — a far cry from the 30% to 40% absorption rate that is typical in that market.
Nationally, the inventory of for-sale homes is down 17% from last year’s levels, according to the National Association of Realtors.
Hence the flurry of agent letters hitting mailboxes around the country. Indeed, in DeVoe’s case, her letter reportedly wasn’t the only one the seller received. But her timing was spot on: Both of the owners who responded had recently contacted agents and were thinking of listing their homes this summer. Her letter was enough to speed up those plans.
Of course, agents say, the letters have more luck if they are targeted to specific types of homes, specific houses or blocks within neighborhoods. Mass mailings haven’t directly brought in listings for Kim Drusch of Century 21 Award in San Diego. But they do get her name out there as an agent, she says.
If you keep coming up empty in your search, agents say, maybe your agent should try hitting the streets for you. If he’s not willing: “Find a good, aggressive agent who is willing to go above and beyond for you,” Beggins says.