Countering Objections from Buyers and Sellers 112211
Countering Objections:“I think I’ll wait to buy/sell.” 1
Real Estate as an Investment Since 2000 Is it really as bad as everyone says? You be the judge. Source: MSN Money.com / Case Shiller Graphic courtesy of KCM Blog 2
What the experts say about buying . . . “It’s an excellent time to buy a house, either to live in for the long term or for investment income.” - October 15, 2011 “Now could be the best time in history to buy a home.” - October 3, 2011 3
What the experts say about buying . . . “Many buyers who waited for rock- bottom prices know that now is the time to buy.” - November 1, 2011 “It is important for America to realize that when it comes to Market Insights housing, now is the time to buy.” - October 2011 4
What the experts say about buying . . . “It’s hard to see the possibility of losing on a home purchase right now with these mortgage rates.” - October 24, 2011 “The previous declines in house prices and theCapital Economics more recent drop in mortgage rates to record lows have created an unusual situation in which the median monthly mortgage payment is more or less the same as the median rental payment.” - October 12, 2011 5
“I’ll just rent until things get better.” November 2011 (today) November 2012 Sale Price: $150,000 Sale Price: $142,500 1 Mortgage: $142,500 Mortgage: $135,375 2 Interest Rate: 4% Interest Rate: 5% Term: 30 years Term: 30 years Payment: $680.32 Payment: $726.72 Monthly Payment Difference: $46.40 Difference Over Life of Loan: $16,704 Still think it pays to wait? 1 Assumes sale prices will dip 5% over the next 12 months 2 Assumes interest rates will rise 1% over the next 12 months based on NAR economic projections 7
What the experts say about selling . . . “While foreclosure activity in the third quarter continued to register well below levels from a year ago, there is evidence that this temporary downward trend is about to change direction, with foreclosure activity slowly beginning to ramp back up.” - October 11, 2011 8
What the experts say about selling . . . “At this point, we maintain the expectation that a definitive bottom will not occur until 2012.” - October 11, 2011 “The housing market has yet to demonstrate the fundamentals necessary to overcome a seasonal slowdown over the next 6 months, which drives our projected drop in prices of 3.2% through Q1 of 2012.” - October 6, 2011 9
What the experts say about selling . . . “According to Fiserv, a financial analytics company, home values are expected to fall 3.6% by next June.” - October 31, 2011 “The glut of houses in the process of, or likely to be in, foreclosure is depressing prices even further. Prices are expected to drop another 5% over the next few months.” - October 14, 2011 10
What the experts say about selling . . . “Home prices could dip 6% “Home prices could fall up to 7% before hitting rock to 7% by the end of the bottom in early 2012, 2012 1Q, Barclays Capital according to analysts at JP said in a report to clients.” Morgan Chase.” - October 14, 2011 - September 9, 2011 11
“I’ll wait till Spring until the market gets better.” November 2011 (today) April 2012 2 Sale Price: $150,000 Sale Price: $145,500 1 1 Expenses: $10,500 Expenses: $10,185 Net: $139,500 Net: $135,315 Difference: $4,185 Still think it pays to wait until the market gets better? 1 Assumes a 1% transfer tax and a 6% selling commission. 2 Assumes a 3% reduction in market value over the next 6 months. 12
Chasing the market doesn’t pay! Seller wants to test the market 60 Days Seller agrees to reduce the list price Seller reduces price again and is now priced at market value from 120 days ago 60 Days 60 DaysPrice Listing expires and Seller is still not any closer to selling their home because their True Market Value price is still too high Decreasing by 5% Time 13
About the Author & Presenter Tom Blefko is a real estate broker with over twenty- five years experience in all facets of the residential and commercial real estate industry including sales, leasing, office management, property management, development, marketing, construction, brokerage and training. During the course of his career, he has successfully closed hundreds of real estate transactions as well as provided fellow agents with valuable advice during contract negotiations and settlements. Prudential Homesale Services Group 4309 Linglestown Road Harrisburg, PA 17112 Office: (717) 657-8700 Cell: (717) 587-6600 Web: www.prudentialhomesale.com Blog: www.tomblefko.com 14
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