You Can Do Much Better

If You Use A Trusted Real Estate Advisor

 

We’ve discussed the importance of your clients trusting you as their advisor, but many of your Buyers and Sellers may not realize why it’s so important for them to have your services. If we look at the history of their actions during the past several years, the reason becomes evident. Consider the following Scenarios:

Scenario #1 Waiting to Sell

Many Sellers have chosen to wait to list their homes, or refuse to lower their prices because they believe it makes more sense to wait until the market comes back and they can get their price. This strategy has caused sellers to lose tens of thousands, if not hundreds of thousands of dollars. If you had been around to share with them the risk of waiting until later to sell, they could have saved all of this money. In other words, they didn’t have a Trusted Real Estate Advisor, and it cost them hundreds of thousands of dollars.

Solution– Secure the services of a Trusted Advisor that can give them sound advise on Real Estate and Economic Trends.

Scenario #2- A Buyer bought at the height of the market

Lack of knowledge about the risk of buying at the height of the market may have caused this buyer to lose a significant amount of their equity after purchasing what they believed would be their dream home. This Buyer didn’t have the trusted advise that could have helped them manage their risk.

Solution- Employ your services to ensure that they are aware of the potential risk and make the best possible decision.

Scenario #3– Buyer obtains a once again popular adjustable rate.

A buyer obtains a mortgage with a great rate that is adjustable because someone else heavily promotes this program. The buyer keeps the home for 20 years and pays significantly more mortgage payments that he would have with a fixed rate.

Solution– Obtain your advise as a Trusted Real Estate Advisor so the buyer could have analyzed the additional costs of higher interest rates in the future.

In each of the above cases, the buyer or seller did it their way, moving forward without having someone on their team that could help them manage risk. The definition of Insanity is to keep doing the same thing over and over again while expecting different results. Isn’t it time for these clients to have the benefits of someone that can help them protect their real estate holdings?

Best Seller Arguments #3- Interest Rate Window Of Opportunity

Sellers must realize that prices are determined primarily by supply and demand. In addition to the risk from massive shadow inventory, Seller’s must also take into consideration what will happen to the buyer pool if interest rates increase. Most experts expect the rates to increase sometime in the near future because of the record amount of money the government has borrowed. As the mortgage interest rates increase, the number of buyers that can afford to buy the seller’s home drops. With less demand, the seller may find it necessary to lower the price to attract more qualified buyers. Encourage every seller to take advantage of the window of opportunity they have with the lowest rates in 30 years, by selling now.

Best Buyer Arguments #3- Rental Rate Increases

Many buyers have been concerned about the risk of buying and possibly losing more money if home prices continue to drop. These same buyers have been successful obtaining low rent payments. What these buyers don’t realize is that the rental rates are also determined by Supply and Demand. On the supply side, there has been very little construction during the past 5 years to compensate for the increase in population in most parts of the country. At some point, the lack of building will lead to a shortage of units and prices are likely to skyrocket.

A substantial increase in demand is likely to cause skyrocketing rental rates much sooner than later. Consider the millions of people who have lost their jobs and can’t afford to buy, the number of people who have lost their homes and good credit, that must now rent for years to come, and the number of people that will be losing their homes in the future to foreclosure. Also, consider that the population continues to increase. All of these factors will come together creating a perfect storm of opportunity for investors and a disastrous situation for renters who didn’t buy.

Rental Rates have already begun to go up in most areas. Once most renters realize how important it is to buy, they will be faced with greater competition and higher interest rates, a “double-whammy”. Strongly encourage your buyers to buy now, not rent.