Market Challenges: Buyer ConfidenceJuly 28, 2016
Market Challenges: Buyer Confidence
The real estate market provides many different challenges. However, none are quite as hard to overcome as buyer confidence. When the market changes rapidly, it can cause buyer confidence to change rapidly, as well. Usually, when a specific segment of the market isn’t performing well or is in turmoil, buyer confidence is very low. This makes it a market challenge real estate agents have to address.
Top Fears Buyers Experience During a Real Estate Transaction
Buying a home is the largest financial obligation most people will make in their lifetime. It comes with plenty of possible pitfalls, but specific area of fears may keep buyers from actually going through with the purchase. Here are five of the most common fears buyer experience during a real estate transaction.
Drop in Property Value
Most buyers look at a home as an investment and not just a place to live. They want to see the home go up in value, but if they feel it may lose value, it could kill the entire deal.
It’s possible for neighborhoods to decline due to newly-built homes or other developments in the area not selling. The economy stalling is on of the most significant fears a home owner faces.
Unable to Afford the Payment
Mortgages can be very scary for buyers, as well. Often, people don’t know how they will pay the mortgage if they lose their job. If the mortgage payment is higher than they are accustomed to seeing, it can be very scary. Building a large emergency fund equal to 3 to 6 months of bills is a good way to help ease this fear.
Another thing that might shake the confidence of a buyer is a confusing mortgage. Buyers are often not financial experts and a mortgage with an adjustable rate may appear to be scarier than one with a fixed rate. A fixed rate mortgage is less confusing and may be a better choice for some buyers.
High Cost of Maintaining the Home
Every home comes with some costs to maintain it. However, if a home presents the possibility of higher upkeep costs, it may scare the buyer. Sometimes, if the home has a new roof, has been upgraded recently or other issues have been fixed, it can help mitigate this fear.
One of the most common fears buyers experience is buyer’s remorse. They may be concerned they didn’t buy the right house or a better house could have been found. However, if the home they commit to buying has everything or nearly everything on their wish list; it can help mitigate this fear.
Related: What is a Deed of Trust?
Buyer confidence can certainly be an obstacle to closing the deal when selling a home. However, the fears buyers experience can be mitigated by a professional real estate agent with the right training.