4 Things to Tell Clients Who Want to Wait...
Is there a “best time” to buy a house?
Mortgage rates have risen steeply from last couple years' lows. But should that be enough to make your clients feel like they’re being pushed out of the market? If buying is still within your means, we say make sure your clients understand they’re still in the game!
It’s up to you to be in the know and in turn educate your buyers on the facts and what the future can look like. Point out the positive aspects of this situation- your buyer will not be competing with as many people looking to buy the same home they have their hearts set on, like others have had to for the past two years. Again, if the client can afford the mortgage, give them the green light and make them feel comfortable to take the next steps.
Explain what refinancing is, and remind your buyers that it is always an option if the rates drop in the next year… But if the rates continue to keep rising, they will be glad they are locked in a deal now, rather than waiting until the last possible moment and having to accept ridiculously high rates.
Although interest rates are rising, the prices of homes are not in most areas. The market has officially shifted from a sellers’ market to a buyers’ one! This works in their favor, so explain the situation. If a buyer locked into a deal 2 years ago, they may have received a lower interest rate but they may have also offered $150,000 over asking prices to beat the competition. Are interest rates high enough, that after a couple years of refinancing they’ll be paying $150,000 more for that same house? Seems unlikely, and as history has shown the value of the property will continue to rise in the long run so buying is ALWAYS a good idea.
Most mortgage reports have signified that the fall and winter months are the best time for home buyers! Even in normal times, with average interest rates and prices, homes prices tend to drop during these seasons as houses tend to sit on the market longer. Make sure your client is armed with these facts and ready to make a commitment ASAP, as prices are in their favor - the future is unpredictable.
With this decrease in competition, and homes spending more time on the market buyers have the luxury of time (compared to the past two years). Sellers are no longer receiving 50+ offers within the first 72 hours of putting their home on the market, so your buyers have the time to see multiple properties and carefully consider the decision! It’s important to find a home that’s right for specific needs, not just a budget, and if you can understand and help a client realize these needs you will be more successful.
Another big advantage to share with your client is that inventory is rising in most areas… the numbers may not have changed in your state but the demand sure has, so your buyer has a better chance of getting the home they have their eye on. This all gives buyers more power, they can negotiate a better deal on the sales price and better concessions too. These concessions can be important for buyers, as they help cover closing costs or cover future repairs the buyer would have had to pay for.
The bottom line
Buying a home might seem scary for your clients with mortgage rates on the rise. But ,if they can make it work right now, make sure they understand the serious advantages to purchasing in today’s shifting market.
If you need help getting your buyers off the fence or have any questions, send us a DM on thepocketnetwork.com or on any social media platform. We’d love to help you!