360Modern broker Heidi Ward shares what it takes to be a successful broker during a recession and how the market has emotions, just like us.
This week, we’re taking our recurring Instagram Live series Getting Real {Estate} With Heidi Ward analog. Below, Heidi, a 20-year Seattle real estate veteran, shares her insight into the ever-changing real estate market and how she’s ending up on top.
Last time we talked on Instagram Live, the real estate market was a seller’s market. Is that still the case?
Statistically, it’s still very much a seller’s market. It would take a substantial amount of new inventory to begin to tip the scales more towards a balanced market, let alone a buyer’s market. With that said, there are indicators of a shift beginning. We are definitely seeing an influx of inventory across all sectors of the market, and stagers and photographers are extremely busy, which predicts there’s more to come.
Interesting. Could you expand on that?
I could have conversations with two different brokers on the same day, and have one lamenting that things feel as though they are cooling off, while the other declares it’s gang-busters with no end in sight. In my opinion, both perceptions are true. Inventory is increasing and buyers are still out shopping. I’m super interested in behavioral economics. I just find human behavior fascinating in a variety of ways, but particularly when it comes to how we make big life/purchase decisions. I’m much less likely to get in the weeds of specific data points, and much more likely to home in on trends in buyer behavior.
How are you responding to a market that is changing every day?
I’m constantly watching for indicators, and I reach out to other brokers consistently—I ask a lot of questions. I’m trying to get a feel for whether a situation is a one-off or a trend (for instance, a home not receiving multiple offers on the offer review date).
I’ll tell my sellers that we won’t lock in on our final list price until just before we go live on the MLS. I know this can drive some of our sellers nuts. Typically, they want to know the price a week before our list date and I’ll say, “Not yet, we have one more week of data and indicators to look at.” It’s a bit difficult to articulate my process since much of the decision-making is my gut-feel of the listing price “sweet spot”. Ideally, it’s a number that elicits a buyer’s response with a sense of urgency. It’s not about just pricing very low in order to create an auction. You’ve got to set the bar in an appropriate manner so that you’re reaching the right buyer audience.
As I stated earlier, it’s a subtle, nuanced process. I think of it as about 30-percent science and 70-percent instinct. It definitely takes a leap of faith on the part of our seller clients, and I work very diligently from the very first meeting to cultivate that trust.
What behavioral trends are you seeing with buyers these days?
With buyers, the trend is to descend upon any new listing in the first few days on market, make an instant value judgment, and either be in or move on. The first two-to-four days of any new listing are absolutely crucial. That’s when the bulk of the buyer visits occur, and the listing either takes on the momentum of a competitive situation, or it doesn’t. We, humans, crave validation, and buyers will second-guess their interest in a home if other buyers aren’t clamoring. That’s why early momentum is imperative with each listing. You only get to be a new listing once.
That makes a lot of sense. Your listings have had an extremely quick turn-around lately. How are your sellers coming out on top in a competitive market?
Well, the overall market has trended toward quick turn-around for quite a while. That said, it is true that the vast majority of our listings this year (and last year for that matter) have sold very quickly, often for well above our list price. The best results, in any market, come when we and our sellers are on the same team, with the same goal in mind. The homeowners who reap the biggest rewards are typically the ones who really go all in, tinkering with little details of their home up to the very last minute so that it shows in its best possible light. The ones who really join in on the pricing strategy conversation in a meaningful way, and who believe wholeheartedly that every single suggestion I make along the way is one hundred percent rooted in what I believe is in their best interest. When we get into that flow of working together it is so much fun and of course, incredibly gratifying when there is a big payoff at the end.
You have been very busy this summer! Is that typical, or is this year different?
Without a doubt, this August was the busiest month ever for me personally, and I’ve heard the same from broker friends of mine. It seems as though we experienced our typical spring market later this year, which I fully attribute to COVID. I don’t think any of us expected the market to slingshot out of the lockdowns quite like it did though. The instant things started showing signs of opening back up, the buyers came back out with a vengeance. And initially, there was very little inventory to service the demand, since many sellers who had intended to list in the spring had pushed the pause button.
The one thing this year that is unlike anything I’ve personally experienced, is how quickly sellers seem to want to move. I’m talking about taking an initial meeting, with a seller asking if I can get their home on market the following week! That is certainly unprecedented. It feels as if sellers have this sense of wanting to strike while the iron is hot. People know that markets can’t go up forever, especially this year with a presidential election looming. Markets don’t typically like uncertainty, and I can’t think of a more uncertain time than right now. And yet our local real estate market remains robust. But it is robust energy that feels more manic than anything.
As you mentioned, the market is constantly shifting, sometimes by the day. How do you describe its volatility to your clients?
I try to refrain from using judgment words whenever possible. Who am I to label a market as ‘good’ or ‘bad?’ If a market is ‘good’ for a seller, is it not ‘bad’ for a buyer? When I’m speaking with clients, I try to use words that actually express how a market feels: sluggish, brisk, nervous, anxious, jittery, or perhaps cold or hot. The market is truly unpredictable right now, which can be exciting and also nerve-wracking.
That’s such an interesting perspective. I feel like you have to have real insight into the market to understand it from an emotional, human level.
Well after 20 years I do believe I’ve gained a fair bit of insight into our local real estate market. I personally believe that my inherent curiosity about a lot of things has been a driver of my success. Why do hot markets turn cold? Why do buyers tend to behave as one organism so often? And there is some gravitas that comes with having done something for a long time, with demonstrable success. I can push the envelope with more of an unconventional approach because I can e-mail a link to my listing business over the last years and the results are pretty hard to argue against.
I should have a hall of fame of sellers over the years who really went all in. When it’s apparent that they understand what we are trying to accomplish and they trust my guidance, I can’t describe what that feels like. When I’m painting a picture of why pricing even $10,000 less might just deliver $50,000 more in the end, and the sellers over the years that ultimately really took the plunge and even went more aggressive than what I had suggested, (listing a bit lower) then knocked it way out of the park with a sales price that blows their minds. I get to look like a rockstar, but really we did it together. My team plus the homeowners, working toward a common goal and then far, far surpassing that goal. Doesn’t get much better than that.
To view Heidi Ward’s current listings, visit her website and explore her Modern listings at 360modern.com. For more real estate market discussions, visit Heidi’s IGTV to watch her Instagram Live series Getting Real {Estate} with Heidi Ward.