YES Talk 265- Sellers: “Should I sell now or wait?”

Is it a good time to sell my home? Yeah. This is a question that you're hearing more and more. If you're a real estate agent. And then with that is some, you're going like, you know what? We decided we're not going to sell right now. We're just going to wait. Is that a smart decision or is that a bad decision? Hi there, it's Kevin Ward, the founder of yes Masters Real Estate Success Training, helping you get more yeses and more successes in your business and in your life. And we all know the market is changing. The real estate market is turning. Just came out from Redfin as I'm recording this. It just came out from Redfin this week that luxury home sales are down year over year last summer to this summer by nearly 30%. That is dramatic. Well, what's happening and what does that mean? And so in this video, I'm gonna talk about, what does that mean for sellers? And if you're an agent and, and you're watching this and you're talking to sellers, what do you say when they say, well, is it a good time to sell or should we wait? Or if they say, well, we're thinking about waiting and we're thinking, maybe if we wait by next spring or whatever, it's going to be better. What should we do? So in this video, we're going to break down the pros and cons of should we sell now or should we wait? And as an agent, how do you help sellers make the best decision now? First, there are five factors right now that are happening and the economy that are driving this entire conversation. And these are major factors. Number one, our interest rates. Interest rates have more than doubled in the last 12 months. That's major when it comes to buyers buying. So that's kind of driving things down. Number two is inflation. Inflation has been up near double digits now for months. And even though it's dropped a tiny bit, we're still up over 8% inflation just in the CPI. And that is causing people's money to not go as far far and people are not having as much extra money. So it's just making people a little bit more nervous. Number three is the stock market. Now, the stock market has not crashed, but the stock market is down considerably this year. Over $3 trillion in retirement Nest eggs in wealth has been lost in the stock market. Bitcoin. Over a trillion dollars lost there and over 80,000 bitcoin millionaires wiped out. So stock market is going down. That is dramatically impacting people's financial retirement Nest eggs and money that a lot of people live on out of their 401k. Number four is that we are, by most accounts, we are in an economic recession, which means businesses are making less money, the economy is contracting. And the fifth factor that is coming with that are layoffs, which are coming more and more. We're getting more and more layoffs every month. All of those things are creating some uncertainty and certainly some fear in the market. Well, right now, sellers are used to having it their way. We've been in a seller's market now for years, and they're going like, our house is worth a lot of money. This little thing of housing not moving the way it's been moving. We're just going to wait it out. Is that a good move? Well, with all those five factors that's happening, here are some things that are happening year over year. Home sales across the country are down over 20% from last summer to this summer. Again, that is dramatic. And that's not true in every market. Different markets are having different amounts of ups or downs and so forth. It's still a seller's market in a lot of markets. But the trends and the factors that are happening in the economy are just kind of some headwinds of some indicators of what could be happening. And so in a lot of your markets, inventory is starting to go up. In some places it's doubling and trip. It's doubled and tripled this year. And price reductions are going through the roof and prices are starting to come down. Nationally, average home sales prices have dropped now over the last few months. So what do you do as an agent when you're dealing with a person who's thinking about selling their homeowner and they're like, what should I do? Or we're thinking, probably not going to sell right now. So there are three things I want to give you, three steps as an agent for you to approach this. So number one is identifying their motivation. Most important thing with anybody at any time, good market, bad market, whatever's happening, is why do they want to move? What is their motivation? If they have to sell or need to sell, then it's probably the best time for them to sell. Okay? Just if there's motivation, it's like, why are we selling? Okay, so that's the first factor. The second factor for you as an agent, once you identify what their motivation is to sell versus not to sell, is number two is what? How can I be the problem solver? So you become the problem solver by helping them look at the Pros and the cons and with your knowledge and your expertise, then you're able to give them some guidance, say, okay, well here's the pros. If you sell now, here's the pros of that. If you sell now, here's the cons of that so that you can help them make a good decision. Now here is to me, one of the most important things. Don't BS people, okay? I believe totally that one, they don't want BS and number two, you don't need it. So I'm hearing just kind of whispers of like trying to tell people things. That's a little BS Y to me, it's kind of like what you're telling them is not really true or certainly not something that you know. So don't BS people. Find out what people want, why they want it, and then help guide them by giving them the pros and cons and being a legitimate guide. Because here's the third thing. As a real estate agent, the most important thing is the value of the relationship. And the way you build a relationship is you tell people the truth and you make it about them, not about you. It's about what's best for them, not about what's best for me of me needing a commission check. Because when you get the relationship right, here's the thing, when the day comes when they are ready to sell or they're ready to buy or they know somebody who's ready to sell or buy, they're going to refer you and they're going to use you. If you've created trust and credibility in the the relationship by putting their interest in front of your own, of just saying, hey, I just want a commission. Okay, so that is the steps for you as a real estate agent. Now let's talk about when is it a good time to sell? Now Is now a good time to sell? Yes or no? So three factors. It is a good time to sell. Yes. If one of these three things, Number one, if it is somebody who is thinking of been thinking about downsizing. They've been thinking about it. They've lived in this house. It's their youngest child, just graduated and has moved off. Now they've got this big 4,000 square foot house and they bought it 15 years ago or 22 years ago or eight years ago and the price has gone up dramatically. Dramatically. And all of a sudden they've created huge equity and they've been thinking about downsizing. We don't need a 4,000 square foot house anymore. So we've been thinking about Downsizing, getting in a better area or whatever. And they've been thinking about it. If they have been thinking about downsizing, this is probably a great time to sell. Why? Because the market, the real estate market has probably peaked. Okay. Now I'm going to talk more about that in just a second. Number two second reason it's a good time to move is yes, if they're wanting to get the most equity out of the property. So again, they bought the property probably a few years ago, prices have appreciated, appreciated their homes worth a lot right now, they, they have a lot of equity. And if they want to get the most equity out, now is probably the best time to sell because the trend is looking like prices are starting to drop. Okay. And in some markets, again, some markets are already dropping, some pretty dramatically and some they haven't started dropping yet. But the things that are affecting the leading markets where home prices have started dropping already are probably going to then move into markets where inventory has not yet started climbing. The because the things that we are seeing, those five factors do not look like any of those are going away anytime soon. There's just still so many things happening in the world that those things are still going to be in play. Okay? So if they want the most equity out of their property, their home is probably going to be worth less a year from now than it is today. If they've been thinking about downsizing, selling the big home and buying a smaller home and now sell the big home at the highest price and if they, if they want to wait a few months, they can probably get even a better deal on the lower priced homes. Now there's some different factors in here which we're going to continue talking about. So here is the third reason that it's a yes, is a good time to move and that is if you are planning to buy right away. So if you're planning to sell and buy is probably a good time. And here's the reason. Because interest rates are dramatically higher, but there is a high probability interest rates are going to continue to, to go up for the foreseeable future. Why? Because the Feds have said we just to try to stop inflation from just running away, we're going to continue to raise interest rates. Now the French Fed rates are not the same as mortgage rates, but they tend to track alongside each other. So here's the thing. Whenever you have a seller that says we're thinking about waiting for this to kind of get, for this kind of blow over, so when the market starts going back up again, so here's what a lot of people do not understand. They don't understand historically, when home prices go up and down, the cycles of home prices are not like the stock market, where it may go down for a few months and then it bounces back. When a housing market has been in this long period of appreciation like we have been in, this is the longest housing bubble in US history from 2012, when prices bottomed out after the glass collapse. Since 2012, home prices have risen consistently for 10 years and now they're starting to turn down. When a market turns, it tends to not turn for a short period of time. Okay, so the housing market collapsed 2007, 8. What happened was home prices started going up about 2000. They went up, up, up and bubbled up for five or six, seven years. And then in 2006, prices peaked nationally. And then they started coming down in 2006 at the end 2007, 2008, and then the bottom dropped out and home prices did not bottom out until 2012. So it was six years after the bubbles, six years of dropping prices. Now, what's going to happen this time compared to last time, I don't know. But what we do know is home prices, when they truly turn home values, they tend to not be up and down, up and down. Why? Once they turn down, they tend to continue to go down. So it's probably not going to bounce back in a few months. So if they are thinking about selling, they want the most equity, or they've been thinking about downsizing, now is probably the time to get the most money out of your house. Because six months from now, a year from now, two years from now, there is a high probability they are going to get less money. Now, I am not a prophet. You're not a prophet. We can't predict for sure exactly what's going to happen, but based on all the trends, that is the most likely scenario. So somebody who's been thinking about selling and what happens on the back end of it is they've got options, is if they want the most money, if they want to get the most equity out, or they're planning to buy. And if they sell and they buy now, what I'm going to talk about is it a good time to buy next week? I'm going to talk about a video on that. Is there are some scenarios that make it a good time for people to buy who are selling, especially if they're downsizing. Again, it goes back to motivation. Do they want to relocate? Do they want to get into a different neighborhood, do they want to? Is there a reason that they need to sell? And it's their benefit to sell now. It is as good a time to sell as it is going to be probably in the next six to 24 to 36 months, okay? And maybe beyond. Again, we just don't know exactly what's going to happen now. When is it not a good time to sell right now? For whom would it not be a good time to sell? So is it a good time to sell? No. If no, number one, you're happy where you are. So if you got somebody and they're like, yeah, we were thinking about doing this, but it's, you know, things have changed. Interest rates are so high. We've got a 2.7% interest rate on the house we're in now. We like the house. If we bought another house, we're going to be paying 6% interest. It just doesn't make any sense. But we're pretty happy where we are. So we are just happy to stay where we are. Then for them, for that time of seller, it's not a good time to sell. Stay, don't move, okay? And again, if you're the real estate agent, just build a relationship with them, build credibility and trust. You'll get referral business from them. And when the day comes, they are ready, then you're going to get the deal because you built credibility and trust over time because you're not trying to convince people to do something for your benefit. Okay? And another reason it's now is a no. Is it a good time to sell? Is no. If they are willing to wait out the market cycle and they're like, I want to sell at the peak, we missed it, our prices have dropped in our market 10% or 5% or whatever, and if it bounces back next year, okay, we'll sell. But if it doesn't, I'm willing to wait five years, I'm willing to wait six years, I'm willing to wait 10 years. If you got somebody like that, or if that's your scenario and you're a homeowner, don't sell, okay? If you're happy where you are and you want the most equity and you feel like you missed it and you're willing to just wait it out for years, not months, then it's perfectly appropriate to wait, okay? But again, the number one thing for all of you, whether you're a seller or you're an agent, is motivation. Why do you want to move? And if the reason for it is compelling now is probably the best time. And if getting the most money out of the seller property is what matters to you, now is the best time. If you're selling a bigger house to buy a smaller house, it's probably the loss of value in the bigger house is going to cost you more by waiting than it is by waiting to try to get a cheaper deal on the next house that you are buying. Especially because interest rates may continue to rise. Now, if you're as an agent, I'm going to be doing a masterclass where we're going to dive deeper into all the forces and changes that are happening in the market and what to do about it to help your business rise even if the market continues to fall. So if you like this video, make sure you give it a thumbs up. Subscribe to the channel, but also click and join me for a free masterclass on how to win in this changing market as a real estate agent. Most important, no bs. Pay attention to the sellers and what's best for them. Have the expertise to help them make good decisions to be the problem solver. Build that relationship and you will always win.