Mentor Mondays – Who’s afraid of buying a house?

Hey, everybody, it’s Jeff Petsche with Benutech, and welcome to another session of Mentor Mondays, your online connection for ideas and concepts to better your real estate business.
In this session, what I want to talk about are some of the worries that buyers are going through. The anxiety that they’re feeling. If you’re working with buyers out there, you know exactly what I’m talking about. Inventory is low. Prices are on the rise. Interest rates are on the rise. And I want to cover some of this stuff with you today because I know and feel your frustration, and I know what your buyers are going through. It can be very very very challenging out there for a lot of buyers right now.

Not sure if any of you follow the Trulia blog or not, but Trulia puts a blog out that has a lot of great training and valuable information for the real estate community and professionals like yourself. And I highly encourage you to glance at that Trulia website and look at their blog from time to time, because there’s a lot of valuable information, some of which I’m going to be sharing with you today.

So there was a blog that was recently submitted, or, I should say, put out, and it should have been emailed to everybody out there, most real estate professionals that are affiliated with Trulia. It was a survey that was done with buyers with regards to the things that they’re most concerned about going into 2013, or finishing up with 2013 and possibly into 2014.

So I’ve got some information here, I’m going to be glancing over at the computer from time to time, so I apologize if I’m not addressing you directly, but I want to let you know that this particular survey that was completed was… Trulia had worked with Harris interactive, and they surveyed over 2,000 US adults between June 24 and June 26th of this year. So that’s where the data’s coming from, so that’s the source that I wanted to make sure that I mentioned.

Just like I said, your buyers are going through a lot right now, a lot of anxiety, so I want to go over the top seven house hunting worries that buyers are experiencing right now. The number one worry that buyers have, with 41% overall that were surveyed said, that mortgage interest rates would rise before they’re able to buy. So a lot of you are probably experiencing that with your buyers. Their biggest concern about purchasing is that the interest rates are going to be going up before they’re actually ready to buy. The number one biggest worry amongst the 2,000 adults that were surveyed.

Number 2. Home prices would rise before they’re able to buy. So, not quite sure if they’re sitting on the fence, just kind of figuring out what they’re doing and where things are going to be going, but that’s the number 2 worry, with 36% of those that were surveyed saying that home prices are actually going to increase before they’re able to buy, which means that the market’s going to price them out of the buying market for them.

Number 3, which is “I would not qualify for a mortgage.” 30% of those surveyed basically said they’re not going to be able to qualify for a mortgage for one reason or another, whether it’s job security, whether it’s the length of the time they’ve been on the job, whether it’s something to do with just their personal credit, but it also could be that they just don’t qualify because the prices are higher or the interest rates have gone up for them.

Number 4. “I would have to compete with many other buyers for the home that I most want.” Absolutely true. 27% of those surveyed basically said “I’m going to have to compete for a house. If I find it, I like it, I’m going to be competing” and that’s absolutely true because the inventory is so low.

Number 5, I’m sorry, Number 6 concern was “Home prices would fall after they purchase.” Only 25% of those surveyed basically said “I’m going to buy, the home prices are going to drop, “ so maybe they’re a little reluctant to go out there and purchase. Really comes down to the purpose for which they’re buying right now. Are they in a short-term purchase, or is this a 20-year long-term purchase, and that’s something you need to do when you speak to these potential buyers is educate them as well as find out, digging deeper into why they’re purchasing. Are they going to purchase now to move in 3 years, move in 5, then maybe those concerns might be valid. But if they’re a 20-year purchaser, personally, for me, don’t care what the market does tomorrow or even a year from now, I’m going to be in this house for 20 years. We all know that over time real estate’s going to be your better investment.
Number 7, and the last one, is “I would have to decide on a home very quickly because homes for sale are not staying on the market very long.” Absolutely true. 19% of those surveyed basically said that is one of the reasons they’re worried about purchasing right now.
So those are the top 7 most house-hunting worries that buyers are going through.

The reason I wanted to share this information with you is because over the 10 years plus that I’ve been in this business, part of which I’ve been a manger and a broker, I see that a lot of real estate agents out there – hopefully not you watching this video – but a lot of real estate agents out there are just not taking this information to heart, and they’re not being the true professional they need to be, which is educating themselves on surveys and studies that are done just like this, so that you can pass that information on to the prospective consumer. Most consumers aren’t seeing this information, and if they do, they’re glancing at it and not taking it very seriously, they’re not processing it into their own world. It’s important that you as the professional, the real estate professional out there, know that these numbers are important, know why buyers are not buying right now. What their worries are, so that you can be the true consultant. Get out of your sales mode. Take the sales cap off and throw it away. Become an educator. Become a consultant with your clients. The sales will happen, the more you can be empathetic, as well as appealing to what your buyers are going through. If your buyers are the survey being done, if we can take that across a broader spectrum and assume that it’s going to be consistent because… the number of people that are being surveyed is a big enough of a sample for us to dictate future surveys with bigger groups. It’s safe to assume that these seven worries are not just in those 2,000 but it could be in hundreds of thousands if not millions.

Knowing these numbers as a professional, very very important key. Sitting down with your client at a table just like this and having a dialogue with them about what it is that they’re worried about. At the end of the day, they’re still going to have to make the final decision. You’re going to basically be guiding them into an educational mode, not guiding them to a decision so much. You do want to help them get to their end result, but I want you to be more of an educator, more of a consultant with these individuals, and know what they’re going through. If I know that my client across the table is having some of these worries, it could be all 7 or it could be only one or two, and I’m aware of that, I as a professional can then react to their emotion and I can then educate them even more as to helping them make that decision that best fits their needs.

So, if you haven’t seen this, it was sent out in an email. Go to Trulia, I’m sure you can go there and click on their blog location, and this was actually published by them. I wanted to share the information. The question that they actually asked the surveyors, and I’ll close with this is, “If you were to buy a home this year” and maybe this is a question you want to sit down and memorize or write down and then be able to address it with your buyers – “if you were to buy a home this year, 2013, which of the following, if any, would be among the things that you would worry most about?”

Maybe you can rephrase that, and talk to your buyers. If you were to choose to buy a home this year in 2013, what are some of the concerns you have about buying right now? What are some of the worries that you have about buying right now? Don’t lead them into giving them a list like they did because it was a survey. Don’t lead them into that. But just ask them that question. What is it that you’re worried about, about buying? And if, my guess would be that maybe of the seven on the list they’re going to hit one or two of them, and you’re going to be able to relate knowing that you’re not alone, and you can now have an empathetic conversation with them. So, it’s really important that you the professional understand that this information is very valuable. It’s very valuable in your business. Take the sales hat off, throw it away, and become an educator and a consultant with your clients, and I guarantee you, in my opinion, that you will get more business and people will develop that trust with you.

I hope you found this tip helpful, and remember, it’s your business and what you do with it is totally up to you. Until next time.