Educate, don’t defend. 

I heard this from Sharran Srivatsaa, the president of Real Brokerage after information about the NAR settlement came out. And it hits home on many levels, specifically when it comes to data in the housing market. 

So today, I’ll share a couple key examples, along with some scripts you can use to educate clients and consumers and help them see the road ahead more clearly. 

Two key charts + questions to ask

There’s a lot of data around mortgage rates and inventory right now, and it seems as if people are more realistic about what’s going on with the market compared to what was going on last year. 

I’m a big believer that agents need to back up their statements with data and ask the right questions to find out who’s really ready to transact. 

Because the most serious consumers are going to transact no matter what’s going on. They’re not going to try to time the market. They’re doing it for a life reason. 

Those are the kind of people you want to work with as a real estate agent because it’s more predictable and more scalable. 

So, today, using a couple of charts from Lance Lambert at ResiClub, I’m going to give you some questions to ask. To make sure you’re prepared for these conversations, I suggest downloading these charts on your phone.  

Chart #1—Mortgage rate predictions

The first chart shows mortgage rate predictions, with projections from Mortgage Bankers Assocation, Fannie Mae and Wells Fargo forecasting rates to get into the low sixes by the end of the year. 

ResiClub-mortgage-rate-predictions-table

Source: ResiClub

Review this chart and keep it handy. 

There’s an objection out there that boils down to “I’m going to wait for rates to come down.” So a simple script you can use is— 

“Hey, totally get that. We all want to have a lower monthly payment. How certain are you that we’re going to see lower rates in the next six to 12 months?” 

Then just stop talking and see what the prospect or client says. 

Once you hear their reaction, you can show them the data. And you can get really granular and show them the difference in their monthly payment at today’s rates versus waiting six months, showing the loss in equity they would build if they bought today versus waiting six months. 

Also, if they’re paying rent, show them how much rent it’s going to cost them. I would use this chart specifically to help potential buyers see the real cost of waiting. Even if they do decide to wait anyway, at least they’ll have a clear cost-benefit analysis to work from. 

Chart #2—Share of outstanding mortgages by interest rate

A second objection, and this may be more challenging, is inventory. 

A lot of people say, “I’m going to wait for more homes to come to the market,” or “I’m going to wait for the right property to be out there.” 

Another chart from Lambert shows the percentage of mortgage holders who have less than a 6% rate on their home. From the chart, you can see over 86% of people with a mortgage have a 5.99% or less rate on their property. 

ResiClub-Percentage-share-of-outstanding-mortgages-by-interest-rate

Source: ResiClub

Here’s where you can combine the two objections: 

“Knowing we’re probably not going to see lower rates this year based on this data (chart #1), and also understanding that over 86% of homeowners have a 5.99% or less percent rate on their current property, we’re probably not seeing an influx of inventory unless they’ve got something really important going on that they have to move no matter what. 

“So how certain are you that we’re going to find a better home than this one by waiting?”

That’s a great question to ask because we all know there are people out there who’ve passed on a property and then kicked themselves over it. They didn’t want to make an offer. 

It’s our obligation as agents, as knowledge brokers, to share this information with people so they understand the implications of their decisions. 

But don’t just tell them that. Don’t talk down to them. That’s the worst thing you can do. 

Show them the data. Then ask the right question:

“How certain are you that ____?”

The above examples I gave you are Phil Jones’ Magic Words. When you’re learning how to have conversations with consumers that enable them to make smart decisions for themselves, learn from the best. 

My goal here is to take what I’ve learned and make it tactical for you so you’re able to go execute and use this data and ask these questions to go out and help consumers.