Buyer’s market = Right time to buy
Today’s biggest challenge is on the buy side of the business. There are some key things we hear frequently:
1. The media has created misconceptions about buying homes.
2. Buyers fear paying too much
3. Many buyers don’t have any sense of urgency to buy.
However, the most challenging aspect of making it in real estate today may not be the buyer’s mindset. It might be your mindset. Many agents think this is not a good time to buy.
Truth is though; many people are buying and selling homes in this market.
The solution: Visualize how you can succeed with buyers.
1. Be an expert on your real estate market and the economy.
2. LISTEN to your buyers.
3. Find houses that are priced correctly and in good condition.
4. Show buyers houses that match their needs and wants.
5. Assuage fears about buying.
6. Find solid financial institutions offering good, reliable mortgage programs.
This is a time to provide leadership for your buyers so they feel comfortable and are willing to make a purchase. As Dwight Eisenhower, former US President said, “Leadership is the art of getting someone else to do something that you want done because he wants to do it.”
This is a BUYERS’ MARKET. By definition, it is a great time to buy!!!
SCRIPT:
Mr/Mrs. Buyer, in this market, every house that’s a good buy is in the lower part of the chart. Those homes are IN the market. Buying today would be a great idea. The problem is that if you don’t buy one of those, they’re all going to be gone, because they’re selling. Some are getting multiple offers. And if you aren’t IN the market, then you’re going to miss the market. So you have to be looking and ready to act. When a house fits your criteria, and it’s a best buy, that’s when you buy. You don’t wait for the price to come down because the only ones that are going to come down are the ones that are overpriced. The ones that are currently priced right aren’t going down any further. They’re being bought.
Tip!
To get buyers to buy, show them houses IN the market and explain to them that houses IN the market sell fast. The best homes sell fast in any market.
Buyer Fear:
Interest Rates will drop.
Script:
Interest rates may drop and they may also increase. We just don’t know where they will go. Comparing current rates to the past thirty-five years, what is available now is good, and history shows that rates have rarely been better. When rates have been lower, it’s not been by much. What we do know is that rates are about the best they’ve been in thirty-five years.
Buyer Fear:
Home prices will drop further.
Script:
The media tells us home prices will continue to drop. The media looks for dramatic stories because that is what sells news. Newscasters can’t predict the future. They can only report on what has happened. Eventually home prices will increase. They always do over time. No one can predict when prices will hit bottom. We only know prices hit bottom after they start to rise again, and it is too late to buy at the lowest point. We also know many homes are selling for less than comparable properties sold for in the recent past. Combined with sellers who are willing to make concessions and low interest rates, it is a great time to buy.
Properties that are priced right sell quickly. It is only overpriced homes that drop in cost.
OR:
If we’re at the low or near the low point of this shift in the market, and you’re buying a house to live in and stay in for a multiple number of years, then five years from now, you’re not going to be sitting around saying, “I should have waited another month to buy the house because I could have gotten a slightly better price.” You’re just going to be glad you bought in this general time frame because your home’s value will have gone up.”
OR:
“Do you want to risk missing a house that is perfect for you because you’re waiting for a sliver of savings that may or may not be there?”
Buyer Fear:
Something better may come on the market.
Script:
Inventory is high. Buyers have many more choices than they had in the recent past. In this market, like any other market, the best houses (priced right and in the best condition) sell fast. Skilled buyer agents find the best buys for their customers. Buyers who wait will get to select from the leftovers.
Create a BEST-BUY list. The homes that are IN the market and have no problem selling.
Once a buyer becomes your customer (a person who has signed a buyer representation agreement), prepare the customer to act fast when you show best buys.
SCRIPT:
“Mr. /Mrs. Buyer, not every home on the market is a good buy. But there is a set of homes that really are, based on their price, their condition, and the motivation of the seller. And those homes are the ones that are selling. I’ll take you to see those homes and you have to be ready to act. When a house fits your criteria and it’s a best buy, that’s when you buy. You can’t expect the price to come down in the future because only the overpriced homes will come down. The ones that are currently priced right are being bought.”
When you find out about a great buy, contact your customers right away and have them see the property as soon as possible. Let them know how quickly the best houses go under contract.
SCRIPT:
“Hi Mr. /Mrs. Buyer, this is YOUR NAME. I’m sorry to interrupt you at work, I know you’re busy, but here’s the thing. A home that fits your criteria just hit our best-buy list. This is probably THE ONE. Our experience tells us it could be gone within a day. We can’t get out there fast enough and I don’t want to delay. Can you and spouses’ name take a long lunch to see the property?”
“You should bring your checkbook and I’ll bring the paperwork. Be ready to act. It would be hard to find anything that is better than this. If we miss this opportunity, I’ll feel like I let you down.”
Buyer Consultation
Ask about Their Needs and Wants
The majority of time in a buyer consultation is devoted to asking about lifestyle and what the buyers need and want in a house. Don’t stop at the first level of questioning, such as “How may bedrooms? Go deeper with questions to get at their real needs, values and motivation.
Questions to dig deeper
Script:
“What exactly do you mean by _________________? (e.g., large kitchen)”
“What does having ___________________________ do for you?”
“What does that look like to you?”
“Can you explain that in more detail?”
“How does that make you feel?”
“Why do you suppose that is?”
Ask about Their Motivation and Urgency
People buy homes for a reason. You should ask about their motivation because it’s an indication of their urgency.
The most common reasons people buy homes are:
Ø Relocation – buyers must move due to work or other changes in their lives
Ø Dissatisfaction – the neighborhood has changed for the worse, they are living with other family members, or they are too far from school or work
Ø Positive Live Changes – marriage, the arrival of a baby, promotion, inheritance
Ø Negative Live Changes – death, disease, divorce, loss of income
Ø Second Home – for retirement or vacation
Ø Previous Home Sold
Ø Lease Ending
Ø Investment
SCRIPT:
“Mr. /Mrs. Buyer, out of curiosity, do you mind my asking, what’s prompting your move?”
“What does the next home need to accomplish for you?”
“When do you need to be in your new home?”
“On a scale from 1-10, with 10 meaning you must buy a home as quickly as possible and 1 meaning you’re not sure you’ll really buy anything, how would you rate yourself?”
“What would it take to for you to become a 10?”
Listen to What They Tell You
Buyers Who Want a Deal
In a buyers’ market, many buyers are looking for a “deal.” What constitutes a deal may vary from one buyer to the next. In that case, figure out what they are willing to give up.
Agent: Do you want a home for you and your family or do you want a deal? You can’t have both.
Buyer: We want a deal more than anything else.
Agent: Tell me, what is a deal to you?
Buyer: Getting below market price.
Agent: How far below ---10 percent, 20 percent, 30 percent?
Buyer: Twenty Percent
Agent: Okay, 20 percent below market price. That’s reasonable. I can find it for you. Do you want to do some work?
Buyer: Yeah, we’ll do some work.
Agent: Okay, great! How much work? Are you willing to paint and change carpet or do you want to knock down walls?
Buyer: We don’t want to knock down walls.
Agent: You don’t want to knock down walls. Okay. I think we can probably find something around 20 percent below market that needs paint and cosmetic work.
Your knowledge of the market and list of BEST-BUYS will help you find the best opportunities for your buyers.
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