Consumers live in the payment and not in the price. Think of how we all justify logically when buying something by the monthly payment and let’s be honest never really consider the price of the big ticket items. Now more than ever Realtors© need to know and understand the financing world and lending world and how it is impacting our real estate markets. Remember the classic monthly payment sheets that we had the lender do for our listing showing what the down payment amounts were, the monthly payments and minimize the purchasing of the home down to the simpler decision?
We see it in the cars, boats, electronics, pretty much everything is living in the payment to make the buying decision easier for the consumer. We need to take those payment sheets now and put them on steroids. Show the consumers what the down payments are, the monthly payments are but more importantly what they will be if they wait and time the market! Show them the financial impact on them if the payment goes just 2% higher on them. How does that look for them now? The payment jumps on them but show them the overall impact of borrowing costs for the higher interest rate if they wait.
The cost of borrowing will be higher than the anticipated correction of their house payment I guarantee it. For our sellers we then show the income qualification that is required for a buyer to purchase their home and show them how fewer buyers can actually qualify to buy their home at the new interest rates versus the interest rates in 2021 folks.
The money is the monster not the market and not the agents. Know and understand the money and advise the impact on buyers now with the rates, payments, down payments, income and qualification criteria getting tougher every week now and the sellers that buyer pools are being eliminated that are able to buy their home now. This isn’t about the market and the agents and what is happening in North America, it is all about the money.
Think about it, the government wants to curb inflation, curb our spending, allow for supply chains to catch up and make sure those that used their home and rates to spend away, get out of the housing market before defaulting and they are doing that through the money and raising the interest rates. Our clients need advisement on the money and education on the impact of the money on them at home, if buying or if selling and it is our jobs with the help of our mortgage partners to do that and educate them now more than ever. Should I refinance? Should I buy? Should I sell? What finance options are best for me the next 5 years? What do I need to do to get my cost of living in check? How do I avoid defaulting on my home? These are the conversations, questions the consumers (including myself the other day) are asking and wondering if I should be locking in my variable mortgage now?
Join the conversations the consumers are having and show up and educate and advise our clients on the financial and economic shifts and changes that are happening. Don’t by like my financial advisors who have been silent and never even called, emailed me as the stock market has completely shifted the last few months and not a word. Don’t be that advisor agents! Show up and explain, advise and educate our clients on the shift and we are here to help. Remember this is just a correction and a shift and not a crash and what else has been better for anyone investing than real estate. This is time to gain market share agents and to really do what we do for our clients.
Strength and courage,
Wade
