Date The Rate, Marry The House

Date the rate. Marry the house.

Now, what does that mean? That means that if we went back in time to a year ago, the market was a completely different animal. Right?

A year ago, buyers that were in the marketplace were experiencing multiple offers on every listing. They were being asked to sign escalation clauses that would maybe sometimes mean they were paying 10, 20, 30, 40, 50, a hundred thousand dollars more than the list price. People are being asked to do appraisal waivers, inspection waivers, appraisal gap language, non-refundable earnest money.

It was an incredible time to be a buyer in what we might call a frenzy market.

Now, fast forward to today:

The market's undergoing a complete shift, right? And what that means is there's a lot more to choose from. There's a lot more listings on the market. List prices are coming down in a lot of price categories. We're seeing a lot fewer buyers in the market. So that means that the buyers left have real power to come in and negotiate. Some of 'em are even coming in under list price. They're certainly not letting go of inspections or appraisals now.

So what a change. Now, what's the hesitation though? Why wouldn't a buyer wanna buy today? When they've got more power in the market than they did a year ago?

The reason why some buyers are hesitating is because of interest rates. It's no secret. And interest rates are probably gonna be rising even further.

So this idea that we date the rate, but marry the house is such an important idea to explain to your buyer clients. Because if their hesitation is interest rates, what we can do is say, "Hey, listen, we're gonna get married to the house. But if rates in the future—over the next two-five years—come down, you simply can refinance that property."

If we all agree that home prices, even though they're not gonna appreciate at the same level they did for the last five years, but they're still gonna appreciate—which is what every economist in the country believes, by the way. If homes appreciate at 3%, 4%, 5% a year back to healthy pre-COVID level, then that means waiting to purchase a house will cost us more. Because home prices are gonna rise while we wait."

And it's likely guys that interest rates are gonna continue to rise at least for the foreseeable future.

So a buyer has a couple of choices:

You can enter the market now and get the lowest price and interest rate you're gonna probably get. And if they change, you can refinance.

But if you wait, here's the challenge:

You're probably going to be a renter. And what we know is rising without question is rental prices, right? Rental prices are on track rise at least 10% this year, maybe more, and they're gonna continue to rise going forward.

So if there's a difference between being a renter and being an owner, let's be an owner, right?

Date the rate, marry the house. Great concept. I love it. Go out there and try that language with your clients.

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