The current socio-economic situation has hindered many homeowners' plans to sell. This can be discouraging for real estate agents who rely on buy-sell transactions, but there are ways to encourage sellers to move.
Many fears, most of which center around finances, run through the minds of reluctant sellers, but by understanding the source of their fears and learning how to help them reach their goals, you can overcome their hesitation.
Why are sellers hesitant to sell?
Today's real estate market, like many in the past, is rife with complex issues. Low inventory, rising interest rates, soaring home improvement costs, and other factors define what we're in for right now.
Fear of losing low interest rates
Many sellers are locked into low interest rates they don't want to lose, with some homeowners having secured interest rates as low as the mid-2% range during the COVID-19 pandemic. The prospect of shouldering significantly higher interest rates and increasing mortgage payments by hundreds of dollars makes these homeowners understandably hesitant. Rising interest rates have been the primary financial reason sellers are hesitant to buy since 2022.
Can't find a replacement home
An imbalance between supply and demand has left many sellers struggling to find the right new home, with low inventory across the U.S. Those eager to sell often have to put their plans on hold to find a property that meets their size, location and budget requirements at some point in the future.
Potential Increase in Property Taxes
The possibility of increased property taxes can also be a deterrent to a sale. Higher taxes add another layer of financial anxiety and uncertainty, making many sellers think twice before putting their home on the market.
Skyrocketing construction costs
The cost of renovating or building your dream home has skyrocketed in recent years, as evidenced by the rising cost of lumber and other building costs across the country. The exorbitant prices of essential materials prevent many homeowners from even renovating their existing homes to make them sellable.
Anticipated high insurance premiums
Sellers looking to relocate typically take into account all financial considerations, including homeowners insurance premiums for their new home. Rising insurance rates, such as those seen today, are a concern for those looking to relocate to a larger home or a property in a particular risk area, such as a wildfire zone.
Concerns over declining buyer demand
Homeowners are now expressing concern about the state of the housing market. The days when homes sold within 24 hours and buyers waived all conditions are all but over. Earlier this year, about one-fifth of homeowners reported that weak buyer demand and a lack of offers in their area were an issue.
How to change a seller's mind
So how do you motivate sellers who have good reasons to wait until the market calms down? Your job as an agent isn't necessarily to change minds, but to help homeowners make smart financial decisions and walk with them through unpredictable times. This is true even if it means being present for the sale when the market turns.
Know your market and listen to sellers' concerns
Knowing as much as possible about current market conditions is the first step in setting a real estate seller in the right direction, which means real estate agents need to make market research a part of their daily or weekly routine. Sign up for email newsletters, read blogs from industry experts, and stay up to date on the current economic climate in ways that will benefit your business model and be meaningful to you.
And keep in touch with your clients. Reach out regularly (in person, by email, or on social media) to advise them on sales trends, interest rates, current construction and homeowner's insurance averages, and other helpful information. Many agents employ the strategy of helping potential clients find several new homes before they seriously consider selling their own. This allows homeowners to envision future scenarios and what they can afford to pay.
Don't force sales on customers
Homeowners who don't want to sell have the right not to, of course. It's not your job to convince them. Your job is to keep them informed through the ups and downs of the market and to be the expert they can trust when and if they do decide to put their home on the market.
Focus on communicating trends and predictions. Leverage tools and technology to stay on top of what's going on in the market and what your customers are thinking. Reassure potential sellers that you're there for them and willing to sit down with them to solve any problems and answer any questions.
Are you looking for educational articles and marketing to serve your clients in today's market, including how to be a better agent and real estate skills to master? Read our Be Better blog.