Look, I get that the real estate industry is struggling.  I understand closings are down 35% from three years ago.  I understand that the economy is a challenge.  I understand that there are 40,000 agents on FB trying to get the attention of your friends to motivate them to use them as their agent.  I get that we all want to motivate people to consider selling and buying right now.  But, some of the tactics being used are just silly.

I’ve seen scans of newspapers from the 70’s with mortgage rates in the upper teens.  Then an agent says something to the effect of, “7.5% interest rates are not all that high in an historical context.”  The idea sounds great.  But, the math doesn’t work and agents using this tactic end up looking silly.

According to Go Banking Rates, in 1978 the median home price was $55,700*.  A buyer that would purchase this home with 20% down at 17% interest on a 30-year mortgage would have a monthly Principal and Interest payment of $635.20. This doesn’t include insurance and property taxes.  That’s not a bad payment by today’s standards. Even thought the rate is 17%.

Before we get excited, let’s take a look at the data from 2022.  The median house price in 2022 was $454,900. That’s an 817% increase.  Let’s assume the buyer has a 20% down payment of $90,980 (NOTE:  This may be a very large assumption, but let’s go with it).  With a 7.5% interest rate on a 30-year mortgage the buyer of this property would have a monthly Principal and Interest payment of $2,544.58.  That does not include a higher insurance premium and certainly does not include the exponentially higher property tax payment.  This could be an additional $5-600 a month.

When agents attempt to lure people with the “it’s-not-that-bad” bate, it’s likely going to leave a bad taste in the targeted client’s mouth when they realize the actual cost.  In the process, we lose the trust of those we are asking to put a great deal of trust in us.  Once you’ve lost trust, you’ve lost your potential client.

If that’s not the path, what is? 
Be the solution provider.  In the idea above where were are trying to entice people by the “it’s-not-that-bad” strategy the impression is very much one of drumming up business.  It’s like you’re hunting for clients.  Stop hunting clients!  Instead, shift from the mindset from “how can I get more business?” to “how can I hope more people?”

Offer professional support like:

• “Anyone feel like they’re outgrowing their home?  It’s a challenging market.  I don’t know if I can help, but I’m willing to meet for a cup of coffee and see what solutions we can find.  Shoot me a message.”
• “I know a lot of my empty nest friends are trying to figure out how their home equity will benefit their retirement someday.  Let’s meet up and talk about it.  I love this conversation and would be honored to hear your thoughts and tension around the topic.”
• “As Gen X families have their parents aging many people are exploring multi-generational living.  If you’d like to understand what options may be available to have a property where you and your parents can live let me know.  I’d love to share my understanding and explore this further with you.”

Consider areas that you are passionate about helping people navigate.  Find ways to offer that as a service.  Operate out of that love and passion and anticipate people will be drawn into that.

When people interact with you feel like they have a bullseye on their back and you are the hunter it is hard on business.  When people interact with you and feel like they have a trusted advisor they feel like a friend.  Let’s get better at serving people instead of hunting them!

What are your thoughts?  How do you view the difference between hunting and helping clients?