Building Client Confidence
This week, I've spoken with agents across the country about buyer and seller concerns, commitment, and confidence. Interest rates are high, leading buyers to question affordability. The impact this is having on sellers is also being heard. They worry about selling and losing the low rates they secured a few years ago. Buyers are questioning how commission payments might impact them, while sellers are worried about value. Overall, there appears to be an increased level of consumer caution, and let's face it….the market is still unpredictable. Many homes are selling right away with multiple offers. Some great properties are sitting longer than we would expect, and cash buyers north of the $2m mark seem to be abundant. Watching this unfold is leaving many buyers and sellers confused.
How can we cultivate confidence in our clients beyond merely sharing our opinions and experiences? How can we assist our clients in making the most informed decisions? We need to back our experience with facts.
Part of the journey from novice to real estate mastery involves transitioning from being solely a salesperson to becoming a market expert. Being a market expert requires a thorough understanding of critical data points, such as current market metrics, interest rates, the economy, forecasts, and trends. More importantly, it entails understanding how these data points correlate to your client's needs or situations.
When I begin coaching agents or teams and ask them about their market, it is surprising how many cannot clearly articulate vital market statistics such as how many new listings are hitting the marketing each week, the number of pending transactions, the number of closed transactions, the current absorption, or appreciation in the markets served. As professionals, we need to know all of this information. Not only does data help an agent communicate effectively with buyers and sellers, but it also creates an unwavering confidence in agents. Use your market knowledge to seek opportunities for your clients. Use the data to educate and inform.
Save property view count data on listings at different price points. Use this when talking to sellers about the negative effects of listing too high. Save graphs like the one below to show sellers how online views drop significantly the longer a home is on the market. This allows you to speak based on fact, not just experience.
Know exactly how a .5% increase or decrease in interest rates can affect your buyer. For example, at 7.375%, a buyer can purchase at $550,000. For the same monthly payment, that same buyer can purchase at $578,000 if rates are 6.875%. Have your lender run these numbers as soon as you begin working with a buyer. Religiously watch rates. Connect with your buyers on them. When rates drop, send them a message about the opportunity it presents.
Monitor lockbox access data if your MLS supplies this. If there are 20,000 lockbox openings in a week and a seller has yet to have a single showing, it might be time to change the approach. Communicate this data to your sellers often if their home is not getting traction.
Set yourself and your potential or active sellers up to receive property alerts for new listings, status changes, and price changes so they see local activity and what is happening with the competition. This will remove your opinion from the conversation if you need to discuss making adjustments.
