Reassuring clients that it’s still okay to buy a home today is becoming a larger part of a real estate agent’s job. Focusing on these six key points can help educate and persuade clients to not give up or delay the search for their perfect home.
Reassuring clients that it’s still okay to buy a home today is becoming a larger part of a real estate agent’s job. With the coronavirus ushering in high levels of uncertainty, people look at the housing market with more and more questions. Shopping for a house today can feel rushed. Sellers, buyers, and agents are constantly adapting to new rules and technology, in addition to feeling unsure.
As a real estate agent, it’s up to you to effectively communicate to clients the variety of reasons that now is still a good time to shop for and buy a home. Focusing on these seven key points can help educate and persuade clients to not give up or delay the search for their perfect home.
Reason 1: Mortgage rates are low
Mortgage rates are on the move. While they dipped historically low in March as the coronavirus pandemic unraveled, they’re still fluctuating a bit. Regardless of where they settle, it’s likely they will stay low relative to the past few decades. According to The Mortgage Reports, rates for 2020 will average around 3.7% for the year. Although these forecasts were made before the pandemic, they’ve so far shaped up to be surprisingly accurate.
The best advice you can offer clients is to keep an eye on rates, but don’t wait too long. It’s impossible to time rate fluctuations. Rates may improve as the summer starts, but anyone with a good credit score can get a pretty good rate now.
Reason 2: Price discounts aren’t guaranteed
In an economic downturn, asset prices tend to drop, including house prices. That may be the case in the aftermath of COVID-19. But home shoppers shouldn’t hold their breath waiting for big discounts. If you have clients who see their perfect home but don’t want to buy before a price reset, explain to them that it might never happen. Prices might not decline much for the following reasons:
- Housing supply is tight as many owners are opting not to sell.
- Foreclosures, which were a major driver of price declines in the 2008 downturn, are less likely this time around because the government has offered forbearance and mortgage relief as part of the CARES act.
- A lot of well-funded buyers are beginning to step into the market, which will support higher prices.
Reason 3: Real estate is a long-term investment
What clients often lose sight of during a home search is its investment opportunity. Help them focus on the long-term aspect of homeownership. Remind them that historically speaking, riding out an economic downturn can leave owners with a piece of property that should appreciate. In fact, most financial advisors agree that, while it may not be for everyone, buying a home is one of the best long-term investments you can make. Over time, residential real estate investments compare favorably with stocks, bonds, and other assets. Encourage clients to look back on past sale prices of houses to see how they’ve appreciated. Most likely they’ll see a natural increase in value which can help them visualize the equity they’ll build as homeowners.
Reason 4 : It’s becoming a buyer’s market
Another consideration that can resonate with clients is that we’re probably facing a buyer’s market. Coronavirus has stalled out the frequency of home sales and many people who currently have their homes on the market feel a pressing need to sell. This keeps prices a little more fluid. The Housing Center at the American Enterprise Institute observed recently that buyers are gaining the upper hand as others decide to delay their home search. This could cause home value to slip by a few percentage points entering the high season for real estate. Price shifts are definitely something buyers should watch for in order to get the best deal on a home. It’s up to you to help make them aware.
Reason 5: Tax benefits abound
If you’re working with a financially savvy client, remind them of the tax benefits to home ownership. Throw in whichever points you think will resonate the most with each individual client, including insights on some of the best available tax deductions:
- Loan mortgage interest
- Private mortgage insurance (PMI) payments
- Points and other closing costs
- Property taxes
- Homestead exemption (if they plan to live at the house)
At a time when many are trying to save money where they can, these reminders can help sweeten the pot for purchasing a new home.
Reason 6: There is safety in isolation
Aside from the numbers and percentages to recommend, there’s also a psychological argument you have in your arsenal. In the post-coronavirus world, people feel safer with social distancing. Living in an apartment, for example, they’re constantly interacting with people who might not be taking health and safety seriously. Multifamily apartment buildings have a ton of high-touch communal areas, as well. From elevator buttons to the building’s access pad, it’s hard to keep everything disinfected all the time. Owning a home is the best way to limit person-to-person interaction on a regular basis and keep safe.
There’s also the argument of space and privacy. When your whole family is stuck together at home, in a tiny apartment, having more space is a game changer. Those working from home will feel more productive with a little more room, and everyone can take a moment to relax if they have a private room or area where they can relax. If clients are already considering moving, why wait when they can have a safer and saner experience riding out coronavirus in their new home?
Reason 7: Responsible buying can still reap benefits
While encouraging your clients to keep moving forward in their home search, it’s also important to remind them to shop responsibly. Continue to promote yourself as their partner and best resource for navigating the unique environment we find ourselves in for buying a home. Make sure they don’t forget to:
- Shop within their actual budget. This means more than just affording the cost of the actual home. Will they be able to afford the ancillary costs of homeownership including the costs of moving and maintaining the property?
- Keep a close eye on home prices. Drops in housing prices may not happen quickly. As inventory goes down, and sellers begin to list more out of necessity than anything else, prices will change. Helping clients watch for signs of these changes can enable them to get the best deal.
- Browse online regularly. Inventory will shift daily for a while, and most likely not be very high, as people settle into a more digital way of selling a home. Looking online for virtual walkthroughs and more detailed listing information can help prospective homebuyers narrow their search as well as get a clear idea of what’s out there right now.
- Expect the unexpected. Uncertainty is always a part of buying a new home. With the coronavirus, that risk only goes up. But you can never know the perfect time to buy a home, so don’t let clients wait too long or feel frustrated if things aren’t going their way.
Staying optimistic about the future
For people looking to buy a home today, it’s important to remain hopeful. It’s your job as their real estate agent to remind them of why they shouldn’t give up. Should you need a little extra support with real estate sales during this unique time, consider joining the agent network at Sundae Homes. We can help you build your buyer database and share listings and opportunities for continued partnership. Contact us today to learn more.