How to Encourage Buyers in Today's MarketNov 03, 2022
Today’s buyers, especially those who have never seen interest rates above 4%, are in sticker shock. This emotional state causes doubt and procrastination. Here is an approach to help them get over the shock and get back into the market.
To convince today’s buyers to buy now, get them to think like an investor. Because that is what they are. The single-family home is the best investment a family can make – to build wealth, hedge against inflation, enjoy the safety of ownership, save on income taxes and enjoy a great return on investment through leverage.
As an added bonus, markets are normalizing and buyers are no longer having to outbid each other and routinely pay 10% or more above asking price just to win out over multiple offers.
How does an investor think?
They ask themselves, “What could happen if we buy now?” There are three possibilities:
ONE. Rates could continue to go up. If they do, we can congratulate ourselves on getting in when rates were lower, and we can enjoy all the benefits of homeownership now.
TWO. Rates could stay the same. If they do, we can enjoy all the benefits of home ownership now, instead of waiting for the lower rates that don’t arrive.
THREE. Rates could go down. If they do, we can refinance to lower our monthly payments or take cash out, and still enjoy all the benefits of homeownership now.
What’s the “Worst Case Scenario”? Rates go up and prices go down. If prices do go down, history teaches that they have always gone back up. Our “investment” might not be immediately liquid, but we still get to enjoy the benefits of home ownership.
Remember, paying rent is like paying 100% interest.
Using the logic of the investor’s perspective with the emotion of ownership benefits will help your buyers see things in a new light, and they will thank you for it.
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The Floyd Wickman Team Blog by Mike Pallin
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