Read Part 1: Creating Urgency with Clients in a Declining Rate Environment
Read Part 2: Creating Urgency with Clients in a Declining Rate Environment
In part 3 of our 3-part series, we discuss the ultimate sales script to help buyers feel comfortable with making a purchase before mortgage rates have bottomed out; a strategy we call ‘date the rate, marry the home.’
Did you know that 82% of buyers experience buyer’s remorse over the home they purchase? According to a September 2024 study by Clever Real Estate, featured in the Washington Post, nearly every buyer will experience a sense of regret over their real estate purchase.
Let that sink in for a minute. This is an alarming statistic, partially driven by the affordability gap plaguing the US real estate market post covid-19, and one we as practitioners need to consider when we’re working with our clients. Will a client refer you to their network or work with you in the future if 82% of the time they feel a sense of regret over their home purchase? As a professional and fiduciary, am I responsible for the satisfaction of my buyer’s purchase? How do I prevent my buyer from regretting their home purchase?
The genesis of such a high rate of buyer’s remorse is driven by a multitude of factors, but a key culprit is decision fatigue during the home buying process. Decision fatigue is defined by Websters as ‘a state of mental exhaustion that occurs after making too many decisions, making it difficult to continue making good decisions.’ Especially for first-time buyers, the process of purchasing and selling a home is fraught with anxiety, stress and complicated decisions that causes buyer’s to occasionally focus on the wrong factors when deciding to prepare an offer for purchase.
Keeping it Simple
A declining rate environment, while relieving to agents, can actually exacerbate decision fatigue as your clients balance even more decisions related to projected financing and affordability in future rate cuts. During these situations, it's important we KISS (as in, 'Keep It Simple Stupid!') We need to help our clients cut through the multitude of decisions and remind them the most important factor when purchasing a home is checking as many of the ‘wish list boxes’ as possible. Remind your clients that we date the mortgage rate, but marry the home!
‘Date the rate, marry the home’ is such a simple, but effective slogan to simply articulate the attitude towards home selection and maintaining urgency as rates are declining. Yes, rates may be coming down in the year ahead, but we should seize the buyer leverage available before buyer demand surges to negotiate a discount on the list price! Don’t believe me? Try this simple question in your next buyer consult, ‘Would you agree that buying the home of your dreams today, negotiate $10,000 off the list price, and pay an extra $100 per month now that you could lower in 12 months with a refinance is better than waiting 12 months and paying full price?’
What our clients need is clarity. When we cut through all the clutter and break it down to dollars and cents, we can get to the source of their decision-making quickly and effectively. When we are able to get to the source of their ‘high interest rate anxiety’ we can help them understand how to still win with the home purchase by beating the buyer demand surge and maximizing the buyer’s leverage in the early stages of a declining rate environment.
Look, buying a home is one of the most stressful decisions for most individuals that we will make in their life. Helping them understand the momentum they have at the beginning of a declining rate environment can help them not only achieve their dreams of home ownership, but make you look like a rockstar along the way.
Date the rate, marry the home.
Go get it, Handshakers!
