Only 16% of buyers believe it's a good time to buy a home today. That's according to a new study from Fannie Mae. So when we hear that number, it's kind of a shocking number and it's a record low. Let's not put any sugar on this. It's not good.
So when we're talking to our clients that may have thought about buying but are on the fence right now, how can we have just an honest conversation about the market today?
Well, I like this idea of a "then versus now" conversation. The "then versus now" conversation is dealing with real world numbers. And so let's assume you have a situation where you say, "Hey listen, I know you're kind of on the fence about buying right now, but I just wanna walk you through something to think about. If you were back in time six months ago when we started talking about buying, and you bought a house back then, let's just run through some numbers. I'm gonna compare that to where we're at today.
So back then, let's assume you were at $450,000. That was your purchase price. And because of multiple offers and how hot the market was, we might have gotten bit up between escalation clauses and multiple offers to $500,000—happened all the time. If we were putting 10% down at four and a half percent interest, that'd be about a payment of about $3,000 a month.
Now let's fast forward to today. If you're shopping for that home for $450k because you now have buying power and there's less buyers in the marketplace, we're actually seeing people negotiate better deals.
Let's assume you get that house for $425k instead of $450k, still 10% down. Interest rates have gone up, that's the, that's the little bit of a rub. But let's say they're at six and a half percent. What's my payment now?
My payment is roughly still $3,000. But here's the advantage of what people that are super savvy, smart buyers are looking at:
In the second scenario, buying now as opposed to six months ago. What I can do is when interest rates come back down—and they always do after a recession—they come back down, I'm gonna refinance so I can actually bring that payment down. If I had bought the house and gotten bid up to $500,000 and I'm already at a low interest rate, there's no getting that payment down. I just gotta wait for the market to kind of catch up to my pricing when I overpaid for that property. Now I have this opportunity where I'm gonna have instant equity in the house, and be able to refinance and get a lower payment.
So people would argue that it's not a great time to buy. I think it's the best time to buy. I think this is a buying opportunity, and I think the smart buyers are jumping in right now to lock in one of the best prices they possibly can.
I liken it to 2008, 09, and 10. Nobody was buying back then either. But I guarantee if we could all go back in time, we'd buy every house we could. Because home prices just want so much higher over time. And the market was gonna do the same thing here. Small balance because of interest rates, it's gonna come back down. We're gonna see this run start to happen again. So just think about it. I just wanna put that out there in the universe."
So there you go. Little thought process about educating buyers. Being real with people, just walking 'em through a scenario.
Want more scripts like this that help you dominate your market? Then join The Path!
The Path is a mentorship and coaching program for agents and brokerages.
Here's a sneak peak of what you get when you join The Path:
+ 20 Weeks of Daily On-Demand Coaching so you can find more high-quality leads more often and turn them into more listings
+ Hundreds of Downloads - System, Forms, Checklists, and scripts to make your job easier
+ Live Coaching - Multiple Times a Week
+ Goal Tracking and Activity Tracking
+ New Marketing Assets Delivered Weekly
And you get two weeks to try it out for free. Visit https://www.erealestatecoach2.com/Three%20Reasons to start your trial.
Jim would like to talk to you about your real estate business with a complimentary 30 minute coaching session.
During the call be prepared to discuss - Your goals for the next twelve months. Your time management and priority management strategies. Your willingness to change and adapt to a changing market landscape, and your biggest choke points - what's really holding you back
The road to transformation starts with small steps. Take your first towards a better real estate business today...