Most agents make the mistake of speaking in general terms when trying to make an important point with their clients. The point can be a very strong one, but when you make the mistake of letting your clients identify how it directly affects them, your argument loses most of it’s impact. Instead of speaking in general terms, use a sheet of paper and take an extra step by showing exactly how the point impacts them. Consider the right way and wrong way to present to your clients:
Example #1 Buyer on the fence
Wrong Way—”You know Bob, if interest rates go up, you could be paying more for your house.”
Right Way—”You and your wife want a $300,000 mortgage. Less than a year ago the rates had already increased from 4.5% to 5.5% before they went back down. Had these rates not dropped back down again, you would be paying $180 more for every single month you own the property. The experts expect interest rates to increase again and you could be stuck paying hundreds more every month. So, let’s jump on the mortgage rates while they’re low and save you hundreds of dollars every month”.
Optional Right Way– “When the mortgage interest rates went up recently, you would have only qualified for a house worth $30,000 less. Experts agree that the rates are going to increase, possibly even significantly. If that happens you could be paying the same monthly mortgage payment for a house that’s $30,000-$100,000 less, and you don’t want to be stuck with a house that’s not near as nice for you and your family, do you”?
Example #2 Seller holding out
Wrong Way— “If you keep your house until the economy and real estate market improves, it could cost you in the long run”.
Right way– “You may think you will be ahead if you wait for prices to go back up, but for every year you hold onto your home, it’s costing you $20,000 in carrying costs and another $15,000 in lost opportunity on what your money would be earning if you sold it now and reinvested the equity. And, don’t forget it could go down in value another $30,000 if things don’t improve. Based on these numbers, you could be end up losing $65,000 more instead of $50,000. Remember, it’s already happened for the past four years”.