High-producing real estate agents understand how to flip buyer objections into sales opportunities. Responding to buyer concerns with professionalism and market expertise will turn even the most uninterested customers into raving fans. Despite the ups and downs of the housing market, the root of buyer objections comes down to four main reasons.
- Finding the Right Home
- Future Unknowns
OBJECTION #1 Affordability: “I can’t afford a home right now!”
Before you begin the home search process with your buyers, it’s time to discuss the elephant in the room: mortgage rates. Even though rates rose sharply, they did so from historic lows of around three percent for a conventional mortgage. So even if your buyers lock in a rate now, it is still lower than eight percent and higher rates from the 1980s to 2000. Better yet, your clients can always refinance in the future when rates come down. So the “marry the house, and date the rate” response applies here.
OBJECTION #2 Timing: “It is not the right time to buy a home because…”
Homebuyers stress over choosing the absolute best time to purchase a home. Major life milestones such as marriage, employment change, a new baby, and health concerns, to name a few, play a role in a purchase decision. How can you blame them? It is the largest investment they make in a lifetime. The key is to hone in on the exact root of their concern through a line of questioning.
In general, timing concerns lead back to affordability. Lifestyle changes typically have a financial component. Is there a change in monthly income, another mouth to feed, or other unintended healthcare expenses? Pinpoint the source of the obstacle, then use your real estate expertise to find an acceptable solution. For example, if the buyer needs help with a down payment, partner with your preferred lender to discuss financing options like the FHA, VA and Agriculture loan programs. Stay updated on federal, state and local assistance programs to guide your clients through timing uncertainties.
OBJECTION #3 The Right Home: “I can’t find my dream home!”
Low housing inventory makes buyers struggle to find the right home. Reassure buyers that they will find a home to suit their needs with patience and consistent effort. Before beginning the home search, establish a wish list of key specifications and rank items from most to least important. Know the deal breakers upfront! Depending on the list, you might be able to find a home that satisfies their wants and needs for the right price. But often, buyers need to make tradeoffs. Set expectations at the onset that an existing home may require remodeling or a new build requires a year or more. Don’t be afraid to set them straight on the realities of the market. Your clients will appreciate your honesty and want to do business with you.
OBJECTION #4 Future Unknowns: “What if I lose my job or the economy tanks?”
The goal in overcoming this objection is to highlight the risk of waiting to buy a home. Given the cyclical nature of the real estate market, competition for limited inventory, mortgage rates, and prices may increase if the buyer waits for a life-altering event that may never happen.
Obviously, no one has a crystal ball to predict what the future holds for the economy. However, historically the value of residential real estate has withstood the test of time. The current market is unique because homeowners have accumulated record equity levels as housing prices grew dramatically. Negative home equity is close to zero. So even if home prices drop, the property value will not be wiped out. Additionally, mortgage rates trend downward during a recession, so opportunities to refinance loans locked at a higher rate will become available. The best time to buy is NOW!