One of the key factors in deciding which part of the country to live in includes the cost of living. It’s no secret that it’s much cheaper to live in metros like Cleveland (Go Browns!) or Pittsburgh (Go Steelers!) than it is to reside in parts of Florida or California. Not only do goods and services typically cost less in smaller metro markets, but so do houses.
However, one of the interesting effects of the pandemic is that home prices and values in these typically less-expensive regions are rising sharply. According to the Federal Housing Finance Agency, smaller metropolitan markets like Pittsburgh, Cleveland, Cincinnati, Indianapolis, Kansas City, and Boise are seeing some of the strongest price gains in the nation right now with prices in those cities at least 10 percent higher than a year ago.
Why is this happening?
One reason is that some workers suddenly have the option to work from home, instead of commuting to the office. That means you can live in the Midwest, where life is more affordable, and still hold down employment at a company whose headquarters are located across the country where the cost of living is much higher.
As a result, there is now more demand for homes in less expensive markets where buyers can get more home and land for their buck. You know what that means – if demand is high and supply is low, home prices go up. And, as you likely know already, housing inventory is at historically low levels. That means as an agent working in this area, you have a seller’s market on your hands.
But not everyone wants to sell their home right now – especially with the uncertainty of the pandemic, the school year being in full swing, and the hassle of trying to move in the middle of winter. What they need is a little nudge – from you.
So how do you sell homeowners on listing their homes now and hire you to help them sell at a nice profit? Here are some ideas:
Show them the money
Money talks. Loudly. Do your research and show potential sellers just how much value their home has in the current market. Maybe it’s been 5 or 10 years since they’ve had their home appraised. They may be severely underestimating how much they could make by selling right now.
It doesn’t hurt to give them the information so they can make an informed decision. Of course, you can’t guarantee them any specific number, but the more evidence you can provide that illustrates how high the home values in their area are, the more convincing you’ll be. Give them the information and let the money do the talking.
Calm their fears
Some homeowners are afraid to sell anyways, even if they can make a buck. Afraid that if they give up the place they’ve liked enough to call home for a decade or more that they won’t be able to find something else at least as good. What if the seller-turned-buyer gets into a bidding war with someone on a new home and doesn’t land it? Will they have to rent for awhile before finding the new place?
These are all questions potential sellers may wrestle with. Put their minds at ease by answering their questions, addressing their concerns, and offering to help them in their quest to find their next home. Make both their selling and buying experience as easy and successful as possible.
If they are going to be willing to sell their home, they will want to be confident it will sell at a handsome price. Likewise, they’ll want to be confident they won’t end up homeless after they hand over the keys to the old home.
Share information and provide a plan
Selling a home isn’t always painless or fast. Especially for first-time sellers, it can be stressful. Part of the reason is because of the uncertainty and emotional roller coaster that are part of the process. Sellers aren’t the professionals, so the home-selling process and market are often a mystery to them.
To make them feel more comfortable about the selling process, be an open book to them. Explain how the process will work, how long it could take, what they need to do to help, what your responsibility is, and what the overall plan is. Share stats, market information (and how it affects them), inventory information, expectations, and give them an idea of what potential buyers might be thinking. The more information they have, the more at ease they will be about the whole thing.
*Not all borrowers will qualify. Contact us for more information on fees and terms. Not intended as legal, financial, or investment advice. Contact your financial representative for more information.
Diana Olick. (2021, January 04). Home prices are rising faster in the middle of the U.S. as Covid drives people away from coasts. Retrieved January 08, 2021, from https://www.cnbc.com/2021/01/04/covid-real-estate-home-prices-rise-faster-in-middle-of-us.html