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There’s a lot in the market to frustrate real estate agents right now — high mortgage rates, high prices, low inventory and written agency agreements.
But the important thing agents should keep in mind when working with their clients through this tough market landscape, Pamela Liebman, president and CEO of Corcoran Group, told attendees at Inman Connect Miami, is to keep everything in perspective.
Liebman told moderator Jim Dalrymple II she expects rates to eventually come down, but it likely won’t be as steep as many are expecting. She said her biggest worry at the moment is a surge of market activity once rates do start to come down.
“My fear is that when finally the interest rates do start to go down, everybody’s going to jump in so hard that the prices, which are already high, they’re not going to come down. So when you start thinking about affordability, what’s less affordable? A higher interest rate and price here, or all of a sudden more and more competition for a few more houses and a price that’s up here?
“I think agents have to carefully advise their customers as to, they’re not the only ones waiting for interest rates to come down, and look at the bigger picture,” Liebman added.
When rates do come down, perhaps by the fourth quarter, Liebman guessed, they may still be in the 6’s. And she said that’s a hard pill for a lot of people to swallow, given the recent past rates.
“Forget everything we had in the past,” she said. “It was a moment in time when everything was free … It’s not going to come back like that.”
She also added that clients who work with the right bank will often get an opportunity to refinance once for free.
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Prices across all sectors continue to go up, and it’s about consumers being able to adjust to that reality and to be able to prioritize what they spend their money on, Liebman added, making reference to the $28 cocktail she bought the other night.
“What’s more important? A drink, a stone crab or a place for you to live?” she asked.
“The enjoyment that you get out of living in these places — and this is what we have to convince people of — you’re too hyper-focused on the money. Get focused on your life and what it means to live where you want to live.”
Liebman added that getting sellers to want to move is a huge part of the equation right now. But matching consumers with the right agent is also extremely important.
“You have to work with the right agent — there are so many trades off-market,” Liebman said. “It’s really important to have great relationships with your fellow agents because that’s how deals get done.”
Some of the ways that agents get those off-market listings include being responsive and courteous and generally easy to work with.
“When I call you and I ask to get into your listing and you don’t call me back for three days and I call you and chase you, and I’m so annoyed that I say, ‘Oh I should call the seller. Does he know Jim is doing a bad job for him?’ That’s not great for you,” Liebman told Dalrymple.
“It’s very easy to be nice to people,” she added. “I always say, ‘There’s no crowd on the high road.’”
“Don’t waste my time … Don’t be arrogant, and know your stuff.”
With all the press that the commission lawsuits and settlements have received in the mainstream media, Liebman said agents now also have to battle with attacks to their reputation.
“We work so hard, and I think when you read all these horrible articles about these settlements and how they’re so disrespectful to brokers, and how we’re getting paid so much money and what do we really do? Walk you into a house? They know nothing about the lives of everybody sitting here.”
Similarly, having to engage in new conversations with clients about buyer-broker agreement is generating a new kind of fear and stress in agents, Liebman said, which has spurred her to bring in a lot of coaches to work with Corcoran agents on speaking about these topics in a confident way.
“What I’m trying to say to my agents now is, think about who you are, think about who the company is you work for.”
When clients press agents about their value and why they should be working with them, Liebman said agents should think about their own unique qualities and value proposition, but also the value proposition of the brand they work with.
“The [broker] fee should not be the first thing you’re talking about,” she added.
Liebman said that she herself had to engage in a lengthy conversation with the high-end seller of one of her agents to explain to him the value of both brokers in a transaction, and why it’s worth paying for their commissions.
“At the end of that conversation, did he get it?” Dalrymple wondered. “Did he understand what you were trying to say?”
Only sort-of.
“The truth is, he said, ‘I see what you’re talking about,’” Liebman said. “‘I want to talk to my family office and we’ll get back to you.’ He got back to my agent saying, ‘It’s an $85 million [listing]. I’ll pay you the 2 percent, and I will pay the buyer’s broker, but for the next few months, I’m just going to do it as an open listing because I think other [agents] will come in and do it for less.”
“She said to him ‘Ok, they’re going to do it for less, and guess what? You’re going to get less, so good luck and I’ll see you in October.’”