How to Overcome Real Estate Hesitation Today

North America is full of consumers who love to buy stuff. Buyers want to buy and sellers want to sell. 

So, why aren’t they buying real estate? Why are closings down over 40% from just a few years ago?

In a few words - procrastination, uncertainty and confusion.

An entire generation of first-time homebuyers has never experienced mortgage interest rates above 4%. With rates where they are, these people are not buying unless they have to.

There are approximately 85 million owner-occupied single-family homes in the US. and 60% of them have mortgages below 4%. With rates where they are, these people are not selling unless they have to.

The most common hesitation in real estate today is, “We’re going to wait to sell/buy until rates come down.”

When you hear this hesitation often enough, it can start to feel like almost everybody’s playing the waiting game.

There might not be enough people in your market who “have to” buy or sell to fill your pipeline.

So, how prepared are you to help your potential clients make a decision to move if they only “want to?”

Here’s something to think about on the buy side.

Mortgage interest rates go up and down. They always have and they always will.

If in 1972 you had waited for rates to come down before purchasing, you would have waited until 2003. That’s 31 years of paying your landlord’s mortgage.

What happened to home values in that time?

The average sale price of a single-family home in 1972 was $30,500.

In 2003, it was $256,000, roughly 8 times higher.

Date the rate, marry the house and refinance when rates come down.

By the way, what kind of interest rates are people paying on credit card debt today?

On the sell side, do the math.

If you’re moving up in size and value, yes, the payment will be higher, but so will the appreciation amount and interest rate deduction. If you’re downsizing, yes, the payment might be the same or even higher for a smaller home, but your maintenance, utilities and insurance costs will be lower.

What’s the message?

If you don’t have enough “have-to” clients, sharpen your skills at helping those who would like to buy or sell but who are waiting for conditions they have no control over. 

Floyd always said, “You can’t sell what you don’t buy.”

When you believe it’s a great time to buy or sell real estate, you will be able to persuade those “discretionary” clients despite their feelings.

The real estate market, like all financial markets, is driven by a lot of emotion and little logic. It is also cyclical. Remember, nothing lasts, not the good times and not the bad times. When everyone else is waiting, prepare your people to take action.