If your buyer plans to wait out the market, here’s what you should say.
I’ve been selling real estate in the Valley of the Sun for over 36 years, and in that time, I’ve helped a lot of buyers successfully purchase homes. However, in today’s market, many homebuyers say that they want to wait for the market to come down before they make a purchase. How do you respond when one of your clients says this? Today I’ll use an example to help you explain to your buyers why they can’t afford to wait.
At a 5% interest rate, a buyer with a $400,000 loan would have a monthly payment of $2,147. If that same buyer waited to make a purchase and home prices rose by 10%, their monthly payment would go up to $2,362, which is $215 more per month, or $2,580 a year. Over 10 years, that adds up to $25,000 lost.
Suppose the price stays the same, but interest rates increase by 1%. The buyer’s payment would go from $2,147 to $2,463. That’s $316 more per month or $3,792 more per year. Over a 10-year period, that’s $37,000.
What if the house goes up 10% in value and the interest rate rises by 1%? In that case, the monthly payment would increase by $562 per month, or an additional $6,744 per year.
The bottom line is that your clients don’t have time to wait—they need to act now. If your buyers tell you they plan to wait for the market to improve, explain to them how both interest rates and home prices are set to rise, which will only negatively impact their ability to afford houses.
If you need help getting your buyers off the fence or have any questions, give me a call or send me an email. I’d love to help you.