Most professionals in the real estate industry accept that recovery will continue to be up and down from month to month—sometimes even day to day. You understand that prices and sales will likely be skipping along the bottom for the next year or two before housing is back on a steady growth track.
But the more important thing to recognize is that savvy prospective buyers are aware of this, too, and the sawtooth activity is adding to the natural jitters that come with deciding to make a significant purchase such as a home.
Their discomfort is among various factors contributing to gaps between pending home sale reports and subsequent totals of closed monthly sales. The National Association of REALTORS® reported that pending transactions increased in both May and June this year, but gains in existing-home sales ran short of forecasts from the earlier pending data.
So why are fewer contracts making it to the closing table? It’s a combination of tighter lending standards, low appraisals, sellers who are hesitant to negotiate too freely and buyers who decide to walk away from the process when it’s too heated.
Although there are some roadblocks and detours that can’t be helped on your clients’ side of the transaction, there are ways to help keep buyers’ confidence on course—all the way to the closing table.
Know the Market
It’s always good to bolster your monthly local market report with a macro view of what’s happening in real estate. By keeping your sights on local and national real estate legislation and policy debates, you can better anticipate potential negative influences on your buyers. They’re reading some of the same news, and you’re the right person to help them make sense of it. It takes 15 minutes each morning to read the latest headlines and pass along key information. Whether the news pertains directly to their situation or not, your attention, initiative and analysis can provide valuable reassurance to nervous buyers that you’re on top of things and sensitive to their concerns and interests.
Buckle Them In
Identifying buyers’ motivation is an important step in helping you manage their expectations throughout the process and keep them on track past any speed bumps. Most buyers start the process already visualizing the finish line, so come right out and ask how they see it all going. That’s the time to address any misperceptions or unrealistic outcomes. No matter how much homework they’ve done before consulting you, they’re coming to you because it’s much easier to wade into uncomfortable territory with a guide who knows the terrain better than they ever could. Anticipate their questions, offer emotional reinforcement and be the confident expert they need.
Buying a home can and should be exciting—even in challenging times—and you can preserve the enjoyment right through to closing by using cautious optimism to help your buyers focus on the prize. When you’re steady throughout the process, your clients will more likely go with the flow as well. And it’s okay to point out that you continue to be successful in this business because the dream of homeownership is alive and well.
The fact remains: It’s a great time for qualified, prepared buyers to act. Although the process isn’t always as seamless as it was in the boom times, the results are the same: buyers find a place to call their own.
Margaret Kelly, CRB, is chief executive officer of RE/MAX LLC. For more information, please visit www.remax.com.