What is the single biggest obstacle that prevents new home customers from purchasing a home today? Affordability? No. Sub-prime loans? Not really. The No. 1 reason customers delay their home purchase is the fear they won't be able to sell their existing home.
What are the choices for new-home sales professionals? (1) Wish your customer good luck in selling their home and encourage them to return when it sells; (2) Offer a contingency program on the purchase of the new home; (3) Work in collaboration with a "guaranteed buy" program on existing homes; or (4) Provide a well-researched road map on why now is the right time to sell the existing home.
While options 2 and 3 offer viable alternatives for house-to-sell customers, option No. 4 is the most valuable strategy in getting house-to-sell customers off the fence and under contract for your new home.
Let's look at five basic reasons why now is the right time to sell an existing home:
Reason No. 1
Job growth is very good. Tucked away among all the doom and gloom that follows the housing industry is the fact that the economy is producing about 120,000 new jobs per month. Job creation is one of the single biggest factors affecting housing demand. The time to list a home is when jobs are being created.
Reason No. 2
Mortgage rates are reasonable. While no one can predict future interest rates, a look back at historic mortgage costs shows that today's rates were below the monthly mortgage rates charged 78 percent of the time over the last 20 years.
Reason No. 3
Consumer confidence remains solid. When people feel good about their jobs and the economic outlook, they feel better about major purchases such as a home.
Today's consumer confidence rate is above 100, which means most consumers feel confident making a decision that has a long-term impact on their lifestyle.
Reason No. 4
People are buying homes. While 2007 will not be a record year for home sales, the fact is that it will represent one of the top five years in the history of U.S. home sales.
Look beyond the headlines and understand that more homes will be sold in 2007 than, say, 2003.
Reason No. 5
When the seller's market returns, our current prices on a new home will be a thing of the past. While everyone would like to perfectly time the market so they sold at the top and bought at the bottom, it's simply not realistic. What is realistic is to expect to sell an existing home at a fair price and purchase a new home at a fair price in today's market.
With new home prices having fallen faster than prices of existing homes, now is the best time to sell an existing home and take advantage of today's great prices on new homes. You can allow the media to influence your customers' decision on when to sell their existing home, or you can stake out the leadership position as an expert in all aspects of residential real-estate and provide the road map to action. The choice is yours.
|John Rymer is the founder of New Home Knowledge, which offers sales training for new home builders and real-estate professionals. He can be reached at firstname.lastname@example.org .|