The best ways to handle these three buyer objections in today’s market.
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Let's discuss some common questions and objections I've recently encountered regarding the current real estate market.
One of the primary objections is concerns about high interest rates. To address this issue, I've consulted with lenders, and one effective solution is to consider a seller buydown. Here's how it works: as the buyer, you can negotiate with the seller to provide you with a credit to lower the interest rate from its current level. The amount of the credit will depend on factors like your FICO scores and debt-to-income ratios. For example, if your interest rate is at 7%, you can ask the seller for a $15,000 credit to buy down the rate. This means that for the first year, your interest rate would drop from 7% to 5%, and in the second year, it would be further reduced by 1%. This approach can result in substantial monthly savings on your mortgage payments.
Another common objection relates to saving for down payments. Given the rapid rise in property prices, many buyers are finding it challenging to come up with a sufficient down payment. One effective strategy is to receive a gift from a family member or friend. It's important to initiate this process while you're in escrow, ensuring that the funds don't need to be seasoned or sit in your account. When you identify a property and enter escrow, consult your lender to arrange for a letter from the person gifting you the down payment. This approach can significantly assist first-time homebuyers in achieving a manageable monthly payment.
"A skilled agent understands that every objection comes with an opportunity."
Lastly, FICO scores have become a concern for some buyers. High debt-to-income ratios are affecting FICO scores, impacting the ability to secure favorable rates and manage monthly payments. To address this, it's crucial to determine your FICO score accurately. While some commercial-based apps can provide an estimate, your lender's credit check may yield a score about 30 points lower. To improve your FICO score, allocate time to reduce debt, pay off outstanding balances, and lower credit card utilization to around 30%. Taking these steps can help you secure better rates and ensure manageable monthly payments.
If you have any questions or need further assistance, please don't hesitate to reach out to me via phone, text, or email. I look forward to speaking with you soon and wish you a wonderful week ahead.
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