Feb 21 2023

Clients have tough questions, we have answers

real estate agent
real estate agent

As a real estate agent, you’re going to encounter difficult questions. Here’s how to answer them.

For real estate professional use only and should not be considered an advertisement to the general public.

The odds are high that your clients are seeing headlines about what’s happening in the housing market. With buzz about inflation and a possible recession, homebuyers and sellers are likely to turn to their local real estate agent for guidance.

Anticipating needs and having answers (and educational resources) prepared can help instill confidence in your clients.

4 answers to your clients’ toughest questions

Here are some hard questions your clients might ask, and how to address them:

real estate agent

1. Are we heading into a recession?

Whether or not your clients are well-versed in economics, almost all people have heard talk about a recession. We suggest you:

  • Read this helpful article* on how past recessions have impacted the housing market, and then contact your local Academy Loan Officer for an email version and social graphic you can share with your clients.
  • Remind clients that multiple factors influence our current economic climate. Though inflation is easing, the latest forecast shows around a 60 percent chance of a recession in the year ahead.

The good news is that housing prices aren’t guaranteed to fall in a recession, evidenced by recent history.* In the last four out of six U.S. recessions, home prices actually appreciated. Today’s housing market is also distinctly different than what we saw in 2008. This is valuable information that a real estate agent can use to reassure concerned clients.

2. Are rates going to go up or down?

Mortgage rates rose rapidly over the past year, indirectly related to the Federal Reserve’s efforts to curb inflation. As a real estate agent, you probably observed that rising rates caused many homebuyers to put their house hunt on hold. Thankfully, rates have declined from their peaks and are ultimately expected to moderate.

“With inflation showing a tangible slowdown, I do expect mortgage rates to follow suit in the months ahead,” George Ratiu, Realtor.com® Senior Economist, said.

Your clients will be happy to know that even a small drop in mortgage rates can improve their buying power. Many clients who sidelined their house hunt last year may now find it more affordable to purchase. While no one can guarantee exactly what mortgage rates will do, there’s reason enough to be optimistic.

It’s our privilege to be part of such an important milestone in your clients’ lives.

How can we help? Find your local Academy Loan Officer.

3. What if I buy, and then home values drop?

This might be every new homeowner’s biggest fear. Worries about possible home price depreciation related to a recession have caused many homebuyers to wait.

Fortunately, you can ease these concerns by letting your buyers know that:

  • Even if a recession occurs, it doesn’t mean home prices will plummet.* While there are always fears of a repeat of 2008, today’s housing market has far fewer foreclosures. Most homeowners who need to sell are sitting on more than enough equity to do it.
  • Home prices are expected to stay relatively stable with some minor gains and dips, depending on the local market. “There will essentially be no change nationally,” Lawrence Yun, National Association of REALTORS® Chief Economist, said.

Yun also noted several other factors that separate today’s housing market from 2008. Today, we have more employment stability, much less new construction, historically low levels of housing inventory, fewer delinquencies, and virtually no subprime mortgages. When buyers ask about 2008, you can assure them that our present-day real estate market is much different.

4. Aren’t homes in negative equity?

Negative equity is another topic that has made headlines. But much of this coverage is short-sighted. While Black Knight recently reported that some homes purchased in 2022 are “marginally underwater,” this number is only 8 percent.

As you know, 2022 was an atypical year for real estate. Home prices surged and then slowed. A buyer who purchased their house in 2022’s peak might find themselves marginally underwater. But this is likely to be temporary. Homeownership has been proven to help Build Prosperity over time. Those who own their home for longer are expected to gain equity as they pay down their mortgage and home values appreciate.

David Stevens, CEO of Mountain Lake Consulting and the former Assistant Secretary of Housing, views today’s market as a unique opportunity: “For the first time in many years, potential homebuyers can now bargain a bit for their purchase... As the Federal Reserve data shows, home prices only go up and always recover from recessions, no matter how mild or severe.”

Do you work ‘banker’s hours’? Neither do we.

When a real estate agent has a question, need, or concern, we make ourselves available. Our local Academy Loan Officers provide their partners with direct phone numbers, consistent communication, and personalized support, whenever it’s needed. Want to learn more? Reach out any time.

Please consult a trusted professional as personal circumstances may vary. No specific results are guaranteed. Not all applicants will qualify. MAC124-1485084.