Current social and economic conditions have put the breaks on many homeowners’ plans to sell. This can be discouraging for real estate agents who depend on sales transactions, but there are ways to encourage sellers to move.
Reluctant sellers have various concerns swirling in their minds, many of them financial. However, you can overcome their hesitations by understanding what motivates their fears and learning how to support them in their goals.
Today’s real estate market, as with many markets in the past, is riddled with complexities. Low inventory, soaring interest rates, high home improvement costs, and other factors define what we’re currently working with.
Many sellers are locked into low interest rates they don’t want to lose, with some homeowners securing rates as low as mid-2% during the COVID-19 pandemic. Given the prospect of taking on a substantially higher rate, these homeowners understandably recoil at the thought of mortgage payments that increase by hundreds of dollars. Soaring interest rates have been the main financial reason for seller hesitancy since 2022.
Due to an imbalance of supply and demand, with low inventory across the United States, many sellers currently find themselves in a situation where they can’t locate a suitable new home. Those eager to sell often have to put plans on hold to find a property that meets their size, location, and budget requirements sometime in the future.
Potential property tax increases also act as a deterrent to selling. Higher taxes can add another layer of financial worry or uncertainty that many sellers think twice about before listing their homes.
The cost to improve or build a dream home has skyrocketed in recent years, as evidenced by rising lumber and other building costs countrywide. Many homeowners can’t even renovate an existing home to ready it for sale due to the exorbitant prices of essential materials.
Sellers contemplating a move typically entertain all financial considerations, including homeowners insurance premiums on their new home. Higher premiums like we see today become a concern among those thinking about moving into larger homes or properties in specific risk areas like wildfire zones.
Homeowners are currently showing concern about the state of the housing market. The days of homes selling within 24 hours and buyers waiving all contingencies are pretty much over. Roughly a fifth of homeowners earlier this year reported that slow buyer demand and low offers in their area were troublesome.
So, how do you motivate a seller who has legitimate reasons for waiting out the market? Your job, as an agent, isn’t to change minds necessarily but to help homeowners make wise financial decisions and to walk with them through unpredictable times. This is true even if that means being there for a sale when the market changes.
Knowing current market conditions to the best of your ability is the first step in being able to guide sellers on the right real estate path. This means agents need to make market research a part of their daily or weekly business tasks. Sign up for email newsletters, read industry experts’ blogs, and keep tabs on the current economic landscape in ways that are conducive and meaningful to your business model.
Then, stay in touch with your clients. Check in with them periodically (in person, via email, or on social media) to advise on sales trends, interest rates, and other helpful information like current building costs and homeowners’ insurance premium averages. Many agents have adopted the strategy of helping potential clients find a handful of possible new homes before they seriously consider selling theirs. This allows the homeowner to imagine a future scenario and what they might be able to afford.
Homeowners who don’t want to sell obviously have the right not to do so. It’s not your job to convince them otherwise. Your task is to educate them throughout the ups and downs in the market and to be the professional they trust when they decide to list their homes.
Focus on relaying trends and predictions. Use tools and technology to stay current on market conditions and in your clients’ minds. Reassure potential sellers that they’re in good hands with you at their side and that you’re willing to sit down with them to navigate the waters and answer their questions.