As a real estate agent, you likely encounter a lot of people who are “kind of interested” in buying a home but, for whatever reason, are hesitant to take any sort of tangible action.
There are quite a few objections real estate agents are likely to encounter. “I want to save up just a little bit more before making a down payment”, “We’re currently waiting for the market to change”, and “I don’t know if I’m ready to buy just yet” are just a few of the most common.
In many cases, these objections are legitimate—after all, until you take a closer look at the personal and financial situations, you can’t really know that your prospective clients are ready to buy just yet. But in many situations, these objections (and others) might really just be a sign of cold feet. Buying a home is a major commitment that some people simply might need a little bit of talking into.
Keeping this in mind, what are some of the best ways real estate agents can create a sense of urgency? Especially in the 2022 housing market?
1. Talk About Interest Rates
In late 2020 and early 2021, interest rates were the lowest they have ever been for conventional mortgages. Due to a combination of several factors, including low-interest rates from the Federal Reserve, large amounts of government stimulus, and a general housing shortage, this was probably the best period in time for new homebuyers to secure a mortgage.
Though the absolute low point has probably passed, interest rates are still quite low. As of April 29, the national average for a 30-year fixed mortgage (the most common type of mortgage) is 5.4 percent—well below historic averages but notably higher than where it was in January (around 3.3 percent). However, these rates will likely keep rising. In fact, the Federal Reserve just announced a decision to increase its own rates, which will almost always be reflected in the mortgage market. That means prospective homebuyers should try to act now—allowing rates to rise by even an additional percent could potentially cost them tens of thousands of dollars over time.
2. Create a Bit of FOMO
The past two years have been incredibly lucrative for American homeowners. It is not uncommon for people who bought a home in 2020 to have had their home increase in value by 20 percent (or even more) in a very short amount of time.
In many cases, the equity gains that have come from homeownership have been greater than the sum of all mortgage payments that have been made in this time. And while this hot market will not continue forever, it certainly sparks a sense of urgency. If a client is hoping to wait a year to save up $10,000 more for a down payment, this may end up costing them $50,000 or more in equity (not to mention the money being lost to rent). Sometimes, it pays to act fast.
3. Identify Your Clients Current Needs
One of the worst things a real estate agent can do is use a “one size fits all” approach for each of their clients. And if you’re clients feel as if you are reading from a script or are using prepared talking points, they will be even more likely to be turned off by your marketing approach.
Take the time to get to know each client and understand what they are looking for in a home. If they have (or are planning on having) children, then finding a home in a good school district is likely a top priority. If they are hoping to rent part (or all) of the property, then spend some time learning meaningful facts about the rental market. Regardless, using a personalized approach will be very beneficial.
4. Explain the Benefits of Homeownership
One reason some people are hesitant to buy is that they are comfortable where they are living and don’t really see a need to change. To them, homeownership is something they likely consider to be very similar to renting but with more space and more costs.
Frankly, there are a lot of benefits of homeownership that the general public tends to overlook. Tax benefits, equity accumulation, and access to certain municipal resources are things that all might seem obvious to a real estate agent but might need to be explained to someone less familiar with the market.
5. Be Confident—but Not Desperate
Confidence—when selling anything—is something that can really go a long way. If you can project an image to your clients that suggests, “I know buying this home will make your life better and I want to make that happen”, then you’ll be much more likely to close on your desired sale.
At the same time, you don’t want to appear arrogant or desperate. If you project to your clients, “I need you to buy this home in order for me to pay my bills”—a message that seems all too common in the world of real estate—they will likely be turned away.
Ultimately, this means that creating a sense of urgency is all about finding nuance and balancing multiple competing interests at once.
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