It’s been a year since mortgage interest rates hit the 7% mark and there seems to be no end in sight for rates to fall to where more new buyers feel comfortable with a mortgage. In fact, in late September, the 30-year fixed-rate mortgage was at its highest level since 2000 at 7.31%. Add this to the fact that home prices have increased by 4% year-over-year with median prices at $376,250 and median monthly mortgages are up by 14%, numerous buyers are simply canceling their contracts near the very end of the process. Yes, about one in seven pending sales in August 2023 did not close!
There are many reasons why buyers who were so excited about their home purchase end up not signing. Financing problems and appraisal shortfalls are common problems when it comes to contract cancellation. Today, these are exacerbated by buyers who experience sticker shock when they look at all elements and expenses of their home purchase. As they review that final contract, their income and assets, the state of the economy, and personal problems, they decided to forfeit expenses incurred to avoid the 30-year commitment.
Keep More Closings from Canceling
For frustrated real estate professionals whose closing in 2023 have been impacted by the hike in cancellations, it can feel like there’s no end in sight and not much that can be done. But Workman Success Systems has created a method that will help you shift that “no go” to a final signature at closing. With THE SHIFT, agents are able to overcome buyers’ uncertain mindsets and objections to see how a home purchase today can be a reality.
With THE SHIFT, Workman clients have access to a tried-and-true method that helps clients sign that deal without being deterred by market changes. Our proprietary systems – including stories, scripts, guides, worksheets, and calculators – provide the information you need to work with even the most reluctant buyer at closing. Some of the focus areas of our resources include:
The River of Real Estate
Named after the mighty Mississippi River to remind agents that new and existing home sales continue to flow, no matter the economic environment, this resource focuses on a formula to calculate the number of existing and new home sales that should take place in a specified market area annually. Materials in The River of Real Estate include:
- Calculation worksheet to use for your specific market
- The full story on The River of Real Estate that you can share with your clients
- Home Buyers by Metropolitan Statistical Area report developed by the National Association of REALTORS®
- Access to Who is Moving and Why article developed by The Joint Center for Housing Studies at Harvard University
Interest Rate Offset System
At a time when historically high interest rates are making many potential buyers believe they can’t afford a home, our Interest Rate Offset System shows the homebuying dream can be realized! With this proprietary system, learn how using price reductions and seller concessions can offset high interest rates. Learn more about the System through:
- Interest Rate Offset System calculator
- Story of the system that you can share to potential buyers
Discount Points Rate Reduction System
To make buying a reality in today’s market, knowing how to get sellers to contribute toward a buyer’s closing costs — which can allow the buyer to use these funds to pay discount points to their lender — may be just what your clients need to know. To help you explain how to use discount points to buy down an interest rate, this resource comes with:
- Calculator so you can help your clients understand how discount points may reduce monthly payments
- Story of the system that you can share with potential buyers
New Construction Advantage System
Many potential home buyers are under the misconception that their only choice is an existing home because new construction is out of reach. In reality, there is a glut of new homes due to a large number of deals falling through. This means new home ownership might be a reality for your clients. The New Construction Advantage System resources include:
- Eight Tips for Negotiating with Builders
- Story of the system that you can share with potential buyers
Learn more now about THE SHIFT and be ready to conquer any worries or misconceptions your potential buyers may have!
