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8 December 2008

Attention: Agents, Brokers, Builders, Lenders… We have some work to do!

When I saw the headline in the Saturday New York Times entitled “It May Be Time to Think About Buying a House”, I thought to myself…  “Good, a positive article about the housing market.” A few of those, coupled with the rumored drop in the 30 year fixed to 4.5{0a8e414e4f0423ce9f97e7209435b0fa449e6cffaf599cce0c556757c159a30c},  might just be what we need to begin to turn things around and kick-start a housing recovery. After all, it has been said that the return of a stable housing market will lead us out of the recession we are currently in (and have been for the past 12 months).

Then I started reading all of the comments on the article made by potential home buying consumers, and I realized as an industry, we have some work to do ourselves to help consumers regain confidence in real estate as a long term investment. To be honest, consumers are scared. They are scared that they cannot qualify for a mortgage, so they aren’t even trying. They are scared if they step up and buy, the prices will plummet even further. They are scared of losing their down payment. While we are starting to see some positive light at the end of the tunnel in some locations across the country, it’s going to take more than a few positive media stories to help consumers feel comfortable enough to actually make an investment.

What can we do as an industry to help?

  • Get serious about working with first time home buyers. The more than 70 Million 18 to 34 year olds will be driving our business for the next 30 years. Get to know them now, and show them why this is a good time to make an investment in real estate. There is more to choose from right now, owners may be more  flexible, nobody knows when the market will “bottom out”, but I would rather buy with more choice near the bottom, than buy with less choice as the market begins to strengthen.
  • Reinforce the fact that real estate is a long term investment, and that investment is going to experience some peaks and valleys along the way.  The National Association of Realtors reports that recent survey results show the typical first time buyer plans to stay in their home 10 years, up from 7 last year. NAR also reported in June of this year a 7 year average appreciation rate for homeowners nationally at 37.8{0a8e414e4f0423ce9f97e7209435b0fa449e6cffaf599cce0c556757c159a30c}.  We need to show buyers how their investment will work for them in the long term. During the boom years, the increases were just assumed. Now we need to prove it. And it is our job to do that.
  • Work closely with a lender you can trust, know today’s lending guidelines so you and your buyer are not surprised or embarrassed. We need to help ease buyers into the market by giving them honest and transparent information. We need to help them take the necessary steps towards qualifying for a mortgage tomorrow even if they do not qualify today. Interestingly, this business has become one of long term, rather than short term relationships.
  • Communicate the details of recent transactions openly and widely to your rapidly growing database. Hearing positive news about recent sales will help people sitting on the fence feel more comfortable about making a decision. The turnaround will not happen overnight, but I believe taking control now (and not waiting for the “turnaround” to happen) will benefit everyone.

3 thoughts on “Attention: Agents, Brokers, Builders, Lenders… We have some work to do!

  1. Excellent suggestions, Sherry. I am reminded of a recent post on Agent Genius where the author posited that we professionals can either get bogged down in the negative news and pessimism or step up and take control of our businesses by rethinking our strategies. And your suggestions, which remind us of our roles in helping consumers combat that same negativity and pessimism, are great ones to add to that list of suggested strategies.

    (If you’re interested, it can be found here: http://agentgenius.com/?p=7824)

  2. Amen. There’s been so much negative news and sound bite pummeling that Joe The Plumber and everyone else believes that lenders aren’t lending and nobody can qualify. Know what? There are legions of real estate agents who believe it too.

    As positive news begins to build, mortgage rates drop and consumers begin to peek, it’s critical that leadership reinforce, promote and educate the agent population and the civilian population. Address the fears, answer the questions, remove the barriers….minute by minute, hour by hour, day by day, week by week, month by month.

    Let it begin now!

    Thanks.

  3. LIsa, thanks for sharing Benn’s post on Agent Genius – he is spot on… we need to “take back the business” so to speak, and the sooner the better…

    Ken, you and I are always on the same page. If we were to pick a moment in time to be proactive, that time is right now.

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