According to a new Bankrate survey, millennials are having high levels of buyer's remorse in this market.
In fact, two thirds of millennials experience high levels of anxiety after the purchase, while they're in escrow, which can lead to escrow failures.
What are you doing about that?
Not just with millennials, but with all buyers in this topsy-turvy market. How are you addressing buyer's remorse? And for that matter, seller's remorse?
I'm going to give you a strategy called the Three R Strategy, which can help you deal with remorse in a unique way.
The first R is Reconfirm.
Reconfirm with people about why they made the decision to buy or sometimes sell. So you might say things like:
"Hey, won't it be nice not to be a renter anymore? And every single month when you're making that payment, it's building your equity, not building your homeowner's net worth. You're going to be benefiting from that."
"Hey, just imagine now that you've bought this house, you're going to have that extra bedroom next month when we close. You're going to have that half acre of space. You can have that extra big garage. You got to be closer to work and closer to school."
So you paint the picture and reconfirm why they made the decision to begin with.
The second R is Resell.
You're need to resell people on the decision itself. Reselling it reaffirms that they're making a good decision. So you might say,
"Hey, you know what? You made a great decision. The house across the street just went four X —way above what you paid. So you killed it. You crushed it, good job!"
"Hey, good news: Interest rates have floated down a bit so you're gonna get a little bit better interest on your loan. Congratulations! I don't think you could've timed this any better."
And the last R here is Reassure.
Let them know it's going to be okay. And here's how you to do that. You might say,
"Hey, you know what? I want you to know something. Every single person that's ever bought a home has felt a level of nervousness about the transaction. Even as a REALTOR, when I buy home, I still feel a level of nervous and a little anxiety. It's totally normal. Totally to be expected."
So we use the Three R's:
We normalize it. We resell it. And we reassure or reconfirm their decision-making.
I'm going to give you a little bonus tip here:
Explain the processes and possibilities that can occur.
One of the processes that we need to explain is the process of inspections. Because that's a big place where people can have high anxiety, more nervousness, more buyer's remorse when they enter that review of that inspection report.
We need to coach that and help them understand what that inspection report is really designed to do. So we might say,
"Hey, you know what? When we have an inspection, it's really to identify any large unknown structural problems. We'll be less concerned when we have cosmetic things that come up in that easy fix items. Because every home has a lot of those — even brand new homes."
Now we're painting the picture that we're only looking for large structural defects.
Something else we can deal with is appraisals, which can be an issue in today's market. So we might say,
"Hey, an appraisal is going to be required. It always is when a loan's involved. No two appraisals are alike. And the reason why is because every appraisal is just really an opinion of value. So one thing to be aware of about appraisals is that they're always based on comparable sales that have already closed like three or six months back. Appraisals are always looking backward into the past instead of current sales or pending sales -- like what we're in right now -- which I would call the present. So in our fast moving market, what can happen is we do see some appraisals that don't match the current sales price because they're based on the past. It doesn't mean the market doesn't support the price. It just means that comparable sales just haven't caught up yet. Does that make sense?"
Now we're explaining it. And if they get a low appraisal or an inspection report with a lot of cosmetic issues, this will take a little bit out of sting out. Why? Because we had the conversation in advance.
Same thing with remorse. When we talk about remorse, we normalize it, it won't be that big a deal. People will know what to expect, and that's half the battle.
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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
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