Summary

With interest rates going up, is this a good time to buy? 

YES, if at least one of these applies:

1. The buyer wants a place to live and plans to stay for 5-10 years. 
2. You’re in a market where buying is cheaper than renting.
3. You as the agent can help the buyer negotiate the best terms and price. You can negotiate to have the mortgage company buy down their interest rate (with seller concessions) 

What to do with a lead or prospect that wants to wait

1. Identify their motivation. The most important thing is to identify their reason for wanting to buy a house 
2. Be the problem solver. If their problem is high interest rates, give them several options (i.e. you can negotiate to have the seller do a concession to buy down your interest rate, figure out ways to make it as good a deal or better than if they had bought 6 months ago.
3. Keep building the relationship. Shoot straight with them, so you earn their trust. And stay Top of Mind with them, so when the time comes that they’re ready to buy, they will reach out to you.

If you want to learn more about the changes happening in the market, and how to adjust so that you can win (both for your clients & yourself), then make sure that you register for my FREE Masterclass coming up called, Winning in a Changing Market. Click here to sign up for free.

Full Transcript

Interest rates are through the roof. Is this a good time to buy, or should I wait?

Hey there, it’s your coach, Kevin Ward, the founder of YesMaster’s Real Estate Success Training, helping you get more yeses and more successes in your business and in your life. These are conversations that I know you as agents are having with buyers and sellers these days and if you happen to be a buyer or seller watching this and you’re going “Ah, is it a good time to buy, or should I wait?”

So in this video, I’m going to talk about the factors that are affecting whether it’s a good time to buy or not, as an agent, what you should be doing to help buyers make a decision about whether or not it’s a good time to buy or sell. 

And also, I’ll let you know if you’re a real estate agent watching this, the most important thing for you is to know what’s happening and know what to do about it, both for your business and for your sellers.

If you want more about how to do that, I’m going to invite you to join me for a free master class called Winning in a Changing Market. Just click on the link in the description and you can register for that free master class, and we’re going to dive deep into what’s happening in the market and what to do about it for you and for your clients.

And also, if you have not yet watched last week’s video that I did on, “Is it a good time to sell?”, again, I’ll put that link in the description so you can click on that link and you can go watch that video first. Because also, in that video, I talk about the five major factors that are driving the economic instability and what’s happening and how it’s affecting the housing market. So that is in the other video. You can click on it, “Is it a good time to sell?”, and watch last week’s video?

So here’s what’s happening right now in the market. 

Sales are down. Home sales nationwide are down. That’s not the same in every single market. There are some markets where inventory is shooting through the roof and prices are in a free fall. So we’re seeing markets like Phoenix, Las Vegas, Austin, Texas, Boise, Idaho, where things really have completely turned. And so the conversation is very much dependent on what market you are in and what is happening in your market right now, but also knowing what’s happening in your market right now is probably going to change or is going to continue to change.

So if you are an agent and you’re like, I’m dealing with this and I got buyers saying, we’re thinking about waiting. Should we wait? Interest rates have doubled, it’s just like, Ah, we’re just… We’re thinking about waiting.

So here’s what you have to do as an agent with a client or a prospect or a lead that is thinking about waiting. 

1.So number one is what is their motivation? Just like with sellers, the most important thing is why you want to buy a house. It’s your motivation. That’s the most important thing. And for you as an agent, you have to understand what their motivation is. So you are serving their motivation, not yours. Okay? 

2. Become the problem solver. Number two, then once you understand their motivation and you have the knowledge of what’s happening and know what to do, you become the problem solver, where you can help lay it out for them. 

Here’s the pros of buying now and now here’s the pros of waiting. So you’re laying out pros and cons. If you buy now, here’s the pros, here’s the cons. If you wait, here’s the pros, here’s the cons of that.

And if they want to buy now, here’s what I can do to help you still make it a great move for you to buy and be in a house, and do it in a way that’s affordable and helpful for you. And so this becomes then, a part of that, of being the problem solver, is knowing that right now, for example, if you’re in a market where inventory has gone up dramatically, things have started softening, price reductions are happening, homes are sitting on the market longer, and prices are starting to drop. 

Now if you have a buyer, even though their interest rates are higher, there’s several things you can do for them to negotiate and make it as good a deal or better than if they had bought six months ago.

One is you’re probably not going to be dealing with multiple offers in some of your markets. So no longer are we dealing with multiple offers, which means we are in a better position to negotiate a better sales price for you, Mr. And Mrs. Buyer, so we can get you a better price. Plus, we also are able to negotiate concessions from the seller to help make the terms better for you. For example, we can buy down. We can negotiate to have the seller do a concession to buy down your interest rate, so we can get that 6% interest rate down to under 4%. Okay? 

All of this just you knowing how to be a problem solver and negotiate for your buyer to help make it a good deal for them now.

3. Relationships are everything. And then the third thing as an agent you just need to be aware of is the most important thing as I’m working with clients is the relationship. Don’t use BS because you must have built credibility and trust. 

They’re looking at and going, “I need to know who I can trust.” It’s gotta be you as the agent. So when you go in and what’s happening, you know what to do about it. You’re paying attention to what they want, their motivation. And you’re a problem solver for them.

You’re building the relationship, so even if they do decide not to buy right now, there’s people out there who are going to be ready to buy right now and people who are going to be ready to sell right now. You’ve got to master the process of finding the people that are ready to do something now and the people that aren’t, and building a relationship with them so that you can get their business when the time’s come. 

Now, this is what I train in our masterclass on. How do you do that? How do you build the relationships? How do you lead people to make good decisions that will help them do what’s right for them?

Okay, so now let’s talk about is this a good time to buy or not? 

Okay, so is it a good time to buy? Yes, if one of these three things are in play. 

1.Number one, if you are wanting a place to live and you’re planning to stay for five or 10 years. If you’re looking to buy a place and you’re only going to be there for a couple of years, this is probably not the time to buy because interest rates are high and prices are probably going to come down. It’s probably going to happen in most markets. Interest rates may continue to go up, we don’t know. But right now, if you’re looking for the best deal, this is probably not the day to get the best deal.

But is there ever a day that you’re going to get the best deal? Because you look at all the people that bought houses over the last two years, did they get the best deal? Probably not, but they bought anyway. 

So if you’re looking for a place to live and it’s going to be your home for the next five or 10 years and you’re ready to buy a house now, buy a house now. I will be able to negotiate for you to get you the best terms and the best price. We’ll negotiate the best price for you, we’ll negotiate to get your interest rate bought down with the mortgage company with seller concessions and we can help you do it. You’re going to be happy in your place. So yes, if they want a house to live in, they want to buy, and they’re planning to stay in it, it’s a good time to buy.

2. Number two, it’s a good time to buy, yes, if you’re in a market where buying is still cheaper than renting, and that is still true in a lot of markets. Rents have gone through the roof in a lot of places and a lot of places it is cheaper to buy than it’s to rent. You’re going to live somewhere. And if we can negotiate and get you great terms, a great price on the house, it’s going to be in your own home now and you’re going to be building equity into your home. So your mortgage payment every month, your house payment is making… Your mortgage payment is not making somebody else’s mortgage payment. So it’s a good time to do that.
3. And number three, yes, it’s a good time to buy if they have an agent that can help them negotiate the best terms and price, get seller concessions, buy down the interest rate, and get a great price because you’re no longer having to deal with multiple offer situations. 

So there’s a lot of situations, I’m seeing this with a lot of my coaching members that I work with that are agents that they’re getting their buyers much better deals today than they were getting able to get six months ago because of the changes that are happening in the market as it turns from being a heavy, heavy seller’s market toward becoming a buyer’s market.

Now, when is it not a good time to buy right now? 

So is it a good time to buy now? 

1.No, if you are buying for appreciation. So for investors right now, if they’re buying and appreciation is a big part of the game or homeowners are like, it’s a big deal to them. If you’re buying for home appreciation and we’re going to buy today and we’re going to live here for a few years and home will be worth more, probably not the best time to buy a house because the indicators are saying more likely housing prices are going to drop in most markets and they are not going to go up. So if you’re buying for appreciation, no, this is probably not a good time to buy.

2. Number two, it’s not a good time to buy if you’re happy where you are. If you’re happy where you are and you’re looking for the best time to buy, this probably is not the best time to buy. When will it be? Nobody knows. There are very, very, very, very few buyers ever that find the best time to buy. They just don’t. So it really comes down again to motivation. 
3. And another reason it’s not a good time to buy right now is if you got a buyer and they’re just absolutely adamant, I want to buy at the bottom. When the market hits the very bottom, that’s when I want to buy, this is probably not the bottom. We are at the top, not the bottom. So it’s probably a good time to wait for that person.

So again, as an agent, as you’re thinking through all of this about what the client wants and then helping them find the best way to get them the best terms in pricing, get them into a house that’s what’s good for them. And not trying to force somebody into it that doesn’t want to do it. That’s somebody that they had their eye set here and interest rates have gone up and so now they’re having to lower to here and they’re not happy with it, wait. 

Build the relationship. But if they’re just looking and going, I just want to buy, I can buy, I need to buy. I just don’t like the idea of paying higher interest rates, no problem. I can solve that problem. I can get the seller to buy down your rate. Well, I just don’t want to pay so much. No problem. There’s lots of inventory here in your market. We can negotiate prices down now because there’s more inventory and there’s fewer buyers so now we are in a better position to negotiate.

So you, as an agent, become the one who leads clients to make good decisions and help make win-win scenarios for you and for them. 

Now again, if you want more about what’s happening in the market and the changes, how it’s going to affect your business and how to adjust so that you can win with buyers and sellers and for yourself in the market, make sure that you register for the free master class that I have coming up. 

And if you like the video, make sure you give it a thumbs up and subscribe to the channel. If it’s your first time here, play to win and always expect yes.