Fear commonly immobilizes buyers from making the choices that will ultimately enhance their lives. Here’s how to coach your clients to succeed despite the potential risks. 

After a buyer’s agent showed one of our listings, I recently called her. It turns out the buyers loved the home and were considering writing an offer

“They are afraid, however, and might not actually write,” stated their agent. 

I asked the obvious question, “What kind of fear would keep them from writing an offer?” 

The response floored me. “They are concerned the price may go way over the asking price, and so they are afraid to write.” 

In my world, fear usually flows from the possibility of potential harm or damage. A valid fear might be the thought of being alone with a lion due to the chance you might end up injured or even dead. On the other hand, what possible harm could come from writing an offer that does not effectively compete with other offers?

There is no end to valid potential homebuyer fears. Some are obvious: 

  • “What happens if I lose my job down the road?” 
  • “What happens if one of us gets sick?” 
  • “What if we discover something horrible about the home after we move in?” 
  • “What if the market collapses and my home loses a significant chunk of its’ value?” 
  • “What if I discover I don’t like my home or neighborhood?” 
  • “What if a sexual predator moves in next door?” 
  • “What if a natural disaster damages my property?” 

Like it or not, life is all about risk. Whether asking someone out on that first date, visiting a new restaurant, or investing in the stock market, there is no end of uncertainty in just about every facet of our lives. That adage is true: No risk, no reward. 

It’s the same when working with buyers, especially in a volatile market such as the one in which we find ourselves. The key is to help buyers identify valid risks and then work with them to overcome their fear by providing appropriate responses.

First, you have to figure out if the fear is valid. Although every fear has a basis of some kind, some are more valid than others. When you hear words relating to fear (“afraid,” “concerned,” “anxious,” “worried,” “trepidation,” “apprehension”), try to find out what is under the fear itself. 

Using the “fear of writing an offer” as an example, if a buyer does not think they have a reasonable opportunity to win in any given offer scenario, they might be concerned that they will be wasting the sellers’ or their agent’s time. On the other hand, if they believe they might need to offer more for a property than they can afford, that is not fear: It’s common sense. 

Rather than letting “fear” prevent your buyers from writing an offer, coach them to write one that’s within their financial parameters. If their efforts are not enough, no harm, no foul. Move on. 

Although no sellers like receiving lowball offers or those with ridiculous terms, the only bad offer is the one that does not get written. Obviously, balance and common sense are required, but never make assumptions when writing offers. The highest-priced offer is not always the winner. Cash does not always triumph. Sellers do not always pick the obvious winner. And so on. 

We encourage our buyers to ascribe to the spaghetti theory when writing offers: “If you throw enough spaghetti at the wall, something will stick.” 

Hopefully, every time you write an offer but fail to secure a contract, you are using the knowledge gained to improve your future offers. It goes without saying that if a buyer continues to lose out when submitting offers, they need to change their parameters to put themselves in a category where they are more likely to win. 

The truth is, if your buyer has valid fears about writing offers, then it’s probably best they stop viewing homes until they get their concerns resolved. If they visit a home they love, but balk at writing an offer due to fear, sit down with them before showing them another property to find out what the source of the anxiety truly is. 

Ask searching questions. Once you have uncovered the real fear under their actions, then coach them forward. Here are the top four buyer fears and how to mitigate them:

1. Fear of buying the wrong home

With the pressure generated by a critical shortage of available homes and the resultant multiple offers on anything decent, many buyers are concerned that the decisions made in such a highly competitive and emotional environment might end in buyer’s remorse. This rings especially true for first-time buyers who are at-bat for the first time. 

Although they might end up in a home that either does not meet all their stated needs or is less than they hoped for, first-time buyers need to understand that their first home is, in the majority of cases, a steppingstone to the home of their dreams. Put another way, very seldom is their first home their “forever” home. 

With this in mind, it’s more critical to get a home than to find one that checks all their boxes. Buyers who approach the current market with an immutable list will be those still sitting on the sidelines while others are moving into their new homes. 

Due diligence is in order: Do all the proper inspections, scrutinize the home, and get rational boundaries in place. For example, a family of six should not be buying a two-bedroom condo. 

When coaching, help them understand that they might need to be flexible on other parameters, such as square footage, the number of bedrooms or bathrooms, local schools, and even the city. 

Coach them to realize that though criteria are important, securing a home in the current environment is essential. Even if the house is not optimal, most buyers can live in less than ideal conditions for a few years until it’s possible to move up. 

2. Fear of financial loss

Buyers already stretching to their outside limits can reasonably be expected to be concerned about financial loss. From what I have seen, the primary concern in an escalating market is the fear of a possible collapse in prices. 

“Why buy now, if my home will go down in value in the near future?” they ask. The underlying issue here is thinking of your primary home as an investment rather than a place to live. 

If you buy an investment, you want it to do well. If you are buying a roof over your head, then what happens to the value does not matter: The key is whether you can continue to make the payments. 

Those who bought homes at the top of the market back in 2005-2006 were horrified when the market subsequently collapsed, and their values plummeted. Homeowners who sat tight and continued to make their monthly payments are now sitting in homes worth more than at the previous peak. 

Real estate is cyclical, and what goes down will eventually go back up. Even if a home goes down in value after purchase, as long as the buyers keep paying the mortgage, they are still reaping the benefits of homeownership, including accompanying tax benefits. 

Coach your buyers to understand that it’s more important to focus on their ability to make a monthly payment and reap all the benefits of homeownership than to be concerned about short-term fluctuations in market values. 

3. Fear of environmental harm

Living in the San Francisco Bay area, we experience frequent comments from those across the country questioning our sanity for living in an earthquake-prone area. I have the same misgivings about those living in areas affected by potential floods, tornados, hurricanes, wildfires and the like. 

Regardless of where you live, there is the potential for harm. Ironically, a recent survey revealed that approximately only 10 percent of Californians carried earthquake insurance

Other forms of harm can come from various sources, whether housefires, break-ins or other uncontrollable events. Coach nervous buyers by explaining the protection options available. 

4. Fear of personal harm

Fear-raising questions that plague buyers include the potential of job loss, sickness or even death. Again, there are protections available in varying types of insurance. Coach them to weigh all their options so they understand what might be best for them. Ironically, I am amazed at the number of buyers who don’t have any personal insurance. 

Life is full of risk. Those who succeed in reaching their goals are the ones who accept that risk lines the pathway to success and choose to go up the road anyway. You might fall off the path occasionally, but in the end, the benefits of owning real estate far outweigh the risks.

Carl Medford is the CEO of The Medford Team.

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