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Between rising interest rates, stock market fluctations, worsening affordability, continued inventory challenges and seasonal slowdowns there’s plenty of reasons for buyers and sellers to put their plans on ice this winter. While some consumers will be steadfast in their decision to wait, others just need plenty of education and a helping hand to seize the diamonds buried in a rough market.
“We handle objections every day,” Spark Tank Media founder Jeff Lobb told the Connect Now crowd. “This is our life, right? We handle this every day. Now we’re in a bit of a shifting market, so things are a little bit challenging.”
Lobb, Smart Inside Sales founder Dale Archdekin and Christie’s Director of Agent Development Crystal White said the most common objections revolve around the decision to wait for more favorable conditions, whether it’s lower home prices, lower interest rates, or stronger buyer demand.
Although those metrics are slated to improve in the next year, all three said it’s important to help consumers focus on the present and make decisions based on today’s market.
We’ve decided to wait.
Lobb, Archdekin and White said the biggest obstacle agents will face in the coming months are from buyers and sellers who’ve become bearish in the face of increasing headwinds. Although it’s tempting to dissuade clients with loads of market data, all three said the best strategy is showing empathy and asking questions.
“I’m not gonna make you wrong, I’m not gonna argue with you right now,” Lobb said. “I’m not gonna try to educate you, right? And I’m not gonna try to close you into the face of that, right? What I’m gonna do instead is I’m just going to ask you really great questions.”
Archdekin and White said price fluctuations are at the core of most buyers’ and sellers’ reasons for waiting, but for different reasons. While buyers fear overpaying, sellers fear losing out on the full equity they’ve built up, they said.
“I mean nobody wants to overpay,” Archdekin said in reference to what he’d tell a wary buyer. “That makes a lot of sense. I don’t know if you’re aware of this, but over the last 100 years, we’ve had 11 recessions. And over the last 11 recessions, home prices have only gone down twice — once in 1980 and once in 2008.”
“I’m sure you remember 2008,” he added. “The economists that I follow say that the five key factors that caused prices to go down in 2008 aren’t actually here right now, which is that we still have really low inventory, huge buyer demand, very low foreclosures, and really tight lending standards.”
On the seller side, White said agents must focus on managing expectations after an abnormally strong sellers’ market. Most sellers, she said, will bring up what their neighbors’ were able to sell their homes for in 2020, 2021 and early 2022 with the hope they’ll be able to garner the same profits, even as the market slows.
“I am big on educating because we have to sell confidence and when clients are educated, they’re more likely to feel confident and less likely to feel sold,” she said. “My first thing would be to really let them know it is best for us to plan and execute on what we do know instead of the unknown.”
“We do know what the market is doing now. We have no idea what the market’s gonna do in the spring,” she added. “Part of that planning is listening to the clients, their needs or concerns [and] then educating them based on what they need and not based on my agenda.”
Archedkin and White said leading with an open ear and mind is key in downturns, as consumers are more sensitive to market shifts. “You educate people with facts and data and then roll into a soft close,” Archdekin said. “You’re not gonna force anybody to buy a home. You just make [them] understand a little better.”
The market is going to crash. Why should I buy now?
Lobb said more and more often, homebuyers are mentioning the possibility of a housing crash as a golden opportunity to finally afford a home.
“I’m gonna shift gears a little bit. I’m going to take an extreme approach now,” he said. “I’m a buyer, and I’m watching a lot of the media, and I’m gonna make a purchase, but I’m gonna wait for the market to crash first. I’m gonna wait for that crash, and I’m gonna pick up stuff at a discount, and I’m just gonna hold until that.”
Although home prices are expected to cool next year, White said they’ll be nowhere near the basement bargain prices of the Great Recession. Instead of launching in with a bunch of data, she said it’s best to confront this objection with a careful line of questioning that will often lead buyers to realize waiting on a crash is a bad bet.
“Can you tell me a little bit more about what indicators you are seeing that would show that this plan is gonna happen?” she said. “[Can you tell me why] homes are going to depreciate in value and that there’s gonna be foreclosures? Can you point me in the direction of where you’re getting those indicators?”
“The reason I would start with those questions is because you don’t really know the objection to overcome until you dig a little deeper sometimes to find out where they’re getting this information from,” she added. “And to be honest with you, sometimes when you ask the right question, they will overcome that themselves.”
Based on the buyer, Archedkin said agents can take another approach — agreement.
“I would also come with a lot of energy and agree with you,” he said. “I’d be like, Jeff, man, I’m praying the market does that. I want it to drop. I’ll buy a 12-pack of houses if that happens, right? So can you tell me, apparently you have the crystal ball man, when do you think it’s gonna happen?”
From there, Archedkin said agents can follow up with another series of questions that reveal whether a buyer has a valid reason to wait or whether they’re simply chasing the possibility of bargain prices. “Unfortunately, as you guys know, agents are out running around with this kind of [bargain-chasing] buyer all the time,” he said.
I want to sell, but only after the holidays.
Beyond a general fear of the market or the hopes of a housing crash, Lobb, Archedkin and White said sellers are often wary of placing their homes on the market during holidays due to less foot traffic. All three said sellers often choose to wait until the spring because they’ll be more buyers — however, they forget the spring also brings more competition.
“What they don’t tell you is that there’s also a whole lot more competition,” Archedkin said. “That’s when most people think they should put their house on the market. So now you’re competing with 10 other houses instead of you being on the market now and competing with one or two at most.”
Beyond less competition, Archedkin said it’s important to tell sellers that listing during the holidays provides more opportunities for creative staging that attracts buyers and usually ensures you’re getting serious inquiries since looky-loos are less common during winter weather.
“No buyer likes trudging around this in this weather man, and so if they’re out there, they’re serious about buying and they won’t nickel and dime you as much,” he said as an example of what he’d tell a seller on the fence. “So if we could get you a really amazing offer in the next 30 days or so and we could schedule showings around any of your holiday plans, so we never disturb you, would you want to take advantage of getting sold before waiting for the spring, where there’s more competition and potentially higher interest rates?”
If that’s not enough to turn the tide, White said agents must refocus their clients to focus on short-term sacrifices for long-term gain.
“It is a sacrifice showing your home during the holidays,” she said. “[But] to piggyback on what Dale is saying, in the winter, if someone’s coming out to see your house, you have fewer showings that equate to more offers because if they’re out looking, they’re interested.”
“So you need to find out is it really worth their time to do that? Is it worth the short-term sacrifice for a long-term gain if you’re wanting to buy now?” she added.
The interest rates are too high.
Last but certainly not least, Lobb said rising interest rates will remain a common objection from buyers. Although rates are nowhere near the double-digit rates of the 1980s and 90s, the quick rise from rates over the past year from the two percent range to the seven percent range has consumers in a tizzy.
“I would first say marry the house and not the rate,” White said. “It’s easier to refinance than it is to come back later on and buy and sell the house over.”
“Lastly with that, I would also say agents, it’s time to start negotiating. Sellers are willing to help buy down points right now,” she added. “If you don’t know how to do it, well then reach up and reach out to someone in your brokerage or a coach that can help you with your negotiation skills because it is the time to negotiate.”
If buying down points isn’t an option, Archedkin said it’s important to help buyers properly understand how a two or three-percent jump in rates actually impacts their monthly payments. Oftentimes, he said, it isn’t as much as buyers expect — which gives them the option to buy now and refinance when rates drop.
“What if we can lock in today’s prices and then shoot for tomorrow’s interest rate so that you don’t lose the perfect home?” Archedkin said as an example of what he’d tell a buyer. “Your wife stays happy with you, you don’t sleep on the couch and we can fix that whole interest rate thing [later] since you can afford [the current rate] right now. Maybe we should execute that.”
Lobb, Archdekin and White said agents may not be able to overcome all the objections they’ll face in the coming year, but they can position themselves as a trusted and educated advisor — something that’ll benefit them when the market recovers.