Use this buyer presentation script for low inventory real estate markets in order to set proper buyer expectations before writing offers.
What buyer presentation script do you use to set proper buyer expectations in this current low-inventory market? Today we are going to give you some great material to use in your buyer presentations going forward. We are going to be in this low-inventory market for a while, so you need to prepare accordingly. It’s going to take a very long time to get supply back in alignment with demand. So, buckle up!
VIDEO: Buyer Presentation Script for Real Estate Markets with Low Inventory
We are in a unique market right now
For those real estate agents that weren’t practicing in 2004 and 2005, this is all new. You’re a rookie. Even if you’ve been in the business for 13 or 14 years, you’re a rookie because you haven’t completed the full real estate cycle yet. It’s unique when a market pivots up. As you know, that’s what’s happening right now. The market is suddenly pivoting up, and fast. I’m going to show you why this isn’t going to stop anytime soon. And, these are the same important points you need to be making in your buyer presentation script.
Prices are going to keep catapulting upwards with inflation. Supply and demand is out of whack right now, with no easy fix available. You must take this low-inventory market in stride and get used to it because it isn’t going anywhere.
Follow the “smart money”
When I say to follow the “smart money,” I’m talking about real estate investment trusts, monstrous hedge funds, large investment firms, real estate flipping firms, etc. These are people that buy hundreds of thousands of residential properties per year. They are buying more than ever right now because they know there is no way that prices will come back down right now.
Some people are talking about the “bubble bursting.” This is very different than 2006. People are talking about foreclosures, which is kind of ridiculous after all the deferred foreclosures, even though it’s just a tiny number. That’s just what the media does — they put these ideas out there. The “dumb money” gets freaked out at these ideas. “Dumb money” is what I use to refer to just everyday people. These people don’t know any better! And these are the people you’ll be talking to with your buyer presentation script. You must help them learn about why this isn’t a “bubble” and prices aren’t coming down anytime soon.
Buyer presentation script: don’t just explain, SHOW
This is absolutely key when developing your buyer presentation script. You need to be able to show your buyers exactly what you are talking about. Share these facts and figures in a way that helps them understand. If you have buyers that are going to get the home of their dreams right now, they must be confident buyers. Therefore, we as real estate agents must be confident. Here at ICC, we coach some of the highest producing teams, and those team leaders have to motivate and teach their agents in this same way.
If your buyers don’t have confidence, they will be “dumb money.” They’ll be sitting on the sidelines, waiting for prices to come down, and that’s not going to happen. Your buyers will become those people who look back and say, “Man, I wish I would have known to buy way back then.”
Helpful graphics to use in your buyer presentation script
We’re going to share with you some great charts and infographics that you can use as you go through your buyer presentation script. With each graphic, we’ve included some text to help you with your talking points.
Median Sales Price of Houses Sold
These are average home prices in the United States. You can see, starting all the way back to 1960, housing prices have not come down. The one exception we can see where it dips down was during The Great Recession. This was a very weird time and not typical. In your buyer presentation script, remind your buyers that typically, housing prices never go down. Also note that prices jumped right back up a few years later after the recession. Your buyer presentation script: When is the best time to buy? NOW.
Annual home sales
This chart shows annual sales volume in millions in the United States. In 2005, we hit our max of $6.2 million. It dipped down, and started to tick up again and has been moving up ever since. In 2020, we made it up to $5.6 million. In 2021 we have seen this continue to increase. More and more people are buying and selling. Even during the 2020 Covid-19 pandemic, we had the second highest total sales volume in this history of our country.
Remember, agents are paid as a percentage of sales volume. That’s our commission. The more sales volume means the more commission agents are earning. This also means more listings. Last year, we had more listings than we’ve ever had since 2005. This year, we’re likely to blow past 2005’s number and have more listings than ever before. The listings are out there! The inventory is there! We just have a wildly reckless amount of demand. Share this during your buyer presentation script.
Annual appreciation home prices
This infographic is a great way to show your buyers the rate at which appreciation is increasing each year. Even during the Covid-19 pandemic that disrupted our lives last year, we saw appreciation jump up more than 5%! As you talk to your buyers and run through your buyer presentation script, you should talk about appreciation. This year, experts have been projecting 10% appreciation. And, now they are saying it may be closer to 15% because supply is so low and demand is so outrageously high.
If your buyer wants to wait, you can tell him this. It may cost you 1% a month or more to wait — that’s how fast prices are going up. You can’t time the market or wait around for the next recession to cause prices to go down. You, as a real estate agent, need to be confident about this information so you can instill these facts in your buyers.
Homes built vs. population growth by decade: a powerful visual to add to your buyer presentation script
Supply and demand control the market. This may be one of the most important graphics you can share during your buyer presentation script. I don’t care what happens with interest rates. I don’t care what happens with politics, global health crises, foreclosures, etc. If supply can’t keep up with demand, prices will go up. There is no way that anything will trump the supply vs. demand rule in economics. This is why all the “smart money” is investing in residential real estate right now. In the last ten years, we haven’t built at the rate that we needed to in order to keep up with demand. This is what tells the “smart money” that it’s going to take a very long time to get supply back in alignment with demand. In fact, most people are predicting that the federal government will start subsidizing home builders to get more homes built.
These are conversations that are starting to happen right now. Every one of your buyers needs to see this and understand this. Our duty is to provide our clients with all the information they need to know in order to make informed decisions with regard to their purchase and sale of real estate. If you’re not having these conversations with your buyers, we have a big problem. If you are just walking around spreading fear about housing crashes without any economic evidence to support it, you’re doing something very wrong.
In your buyer presentation script, talk about mortgage delinquencies and foreclosures
The blue line represents people that have gone 30 and 60 days without paying, and that’s at an all-time low. This is good information to share within your buyer presentation script. You can see that there are VERY few people in the foreclosure process in 2021. We did spike up with people who went into a 90-day period without paying. Even so, you can see that is trending down, too. You just can’t have foreclosures when you have such high appreciation. People won’t go into foreclosure when they can sell their house and pay off the bank.
It’s a crazy notion, a “dumb money” argument, that massive foreclosures are coming. We are down to 7% delinquent. We are in the hottest market. This needs to be a part of your buyer presentation script. Show your buyers that this is not a housing bubble. There won’t be massive foreclosures and the market is not going to tank.
How much does my rent cost?
If your buyer is thinking that renting right now would be the best choice, so they can “wait and see,” show them the above chart. This should be a part of your buyer presentation script — renting is not wise. They are not investing their money, they are throwing away their money.
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