How to Combat the State of the Rates
It’s no secret that interest rates are anything but stable at the moment. Since about a year ago, rates have increased by two percentage points and are predicted to continue rising. So while the current rates aren’t out-of-this-world-knock-your-socks-off high, their volatility is something we should have on our radar.
Many of the market’s current buyers don’t have an in-depth understanding of the homebuilding industry. They haven’t studied the patterns of fluctuating interest rates in the same way we, as industry professionals have. To them, these shifting rates are entirely foreign, and, as a result, they don’t fully understand the weight of their impact.
While the current state of rates can be an intimidating mountain to conquer, there are minor adjustments we can institute to significantly impact our overall success. Check out these three tips on how to adapt your practice to combat the state of the rates.
Utilize Your Preferred Lenders
Your preferred lenders are a fantastic tool to help navigate this unsteady market. Use them! Ensure you communicate the benefits of working with your preferred lenders to your buyers. Let them know that this relationship will work in their favor when finding solutions to the instability of interest rates.
Contact your preferred lender about establishing a mortgage lock program that will benefit you and the buyer. These programs are an excellent way to ensure that the buyer can still qualify for a loan upon completing their home. Be sure to promote this program throughout your social media, website, and customer interactions. It will also incentivize the buyer to work directly with your preferred lender.
Understand Affordability
It’s imperative that your buyers fully understand the affordability of their home. Encourage your buyers not to max out their lending potential at the beginning of the home building process. Their ability to qualify for a loan now doesn’t necessarily guarantee that they will qualify again in a few months.
Be mindful of your buyer’s budget throughout the selection process. Then, work to help them understand which options and upgrades they’ll be able to afford if rates continue to rise.
Communicate the importance of adding a buffer in their budgeting to account for the shifting market. Be sure they understand the likelihood and consequences of rising interest rates before signing with you. At the end of the day, you want what is best for your buyer. Let them know that you are here to guide them through the process and help get them into their perfect home.
Communication
Communication is everything, especially in a flexible market such as this. It’s important to have conversations with your builders about the possibility of rising interest rates. Many homebuyers have minimal knowledge about the housing industry. Let them know, from the beginning, that the current rates are likely to change.
It’s important to stay calm, cool and collected. You don’t want to cause any sort of panic in your buyer but rather help them understand every facet of their choice to buy a home.
Above all, be sure you remain transparent with your buyer through every step of the process. Maintaining open and constant communication will help you successfully complete the mission of every homebuilder: helping people find their perfect home.
Categorised in: Home Builder Marketing & Sales
