Spring Madness is a week-long Inman series analyzing this year’s spring homebuying season. We’re digging into the state of the housing market, the impact of rising mortgage rates, the role of open houses and the rapidly vanishing starter home, among other big issues. It’s total madness, all week long.
Jay Thompson is a former brokerage owner who spent over six years working for Zillow Group. He’s also the co-founder of AgentLoop. He “selectively retired” in August 2018 but can’t seem to leave the real estate industry behind. His weekly Inman column is published every Wednesday.
In most parts of the country, real estate has seen a seller’s market of unprecedented strength for going on two years now. You know the drill. Low to no inventory, multiple offers over list price, buyers waiving appraisal and inspection contingencies. Buyers, and their agents, are losing their patience and their minds. It’s a bloodbath out there.
With a new year upon us, the economists, prognosticators, self-proclaimed gurus and pretty much everyone else are offering thoughts and predictions of where the real estate market is heading.
Truth be told, no one has a functioning crystal ball, so anything you read about the future of the market must always be taken with a grain of skepticism. One thing we know is prices can’t go up forever and inventory can’t decline forever. Problem is, forever is a long time and when prices will go down (or at least level off) and when the inventory issue might shift is anyone’s guess.
Then there is all the uncertainty. Just when the COVID pandemic seems to be taking a turn for the better, we’re in what feels like a perfect storm of uncertainty. The Fed has been signaling they will raise interest rates. Why? In a nutshell, they’re doing that to curb rising inflation. The stock market is quite volatile, swinging up and down wildly, sometimes across a single trading day. Misinformation is flourishing. There are midterm elections this year, and the campaigning and mud-slinging has begun. Of course there’s that war in Europe with a refugee crisis of proportions not seen since World War II.
If all that isn’t enough to load you up with unhealthy doses of fear, uncertainty and doubt (FUD), you’ve got FUD-factors specific to the real estate industry in play. Class action antitrust lawsuits continue to weave their way through the courts. There’s downward pressure on commissions. Some big brokerages are sparring. Companies are exiting iBuying. No, wait, they’re growing. It can be quite confusing, and more than a little intimidating.
FUD abounds. While some of these issues (like interest rates and inflation) could have a direct impact on the real estate market, others (like KW and eXp exchanging legal blows) won’t. However, they all contribute to fear, uncertainty and doubt for consumers and, importantly, you.
Personally, I think the growing FUD may have the biggest impact on the spring market. There’s a lot of anecdotal evidence that buyers and sellers are already pondering pulling back from the market due to their uncertainty. It’s not healthy to wake up in the morning wondering “what now?” when you crack open the overnight news stories.
There is always uncertainty in the real estate market, and life, to deal with. With this perfect FUDing storm of uncertainty careening out of control, it’s more important than ever to help your clients, and yourself, navigate the choppy waters.
How to talk to your clients about uncertainty
It’s important, crucial in fact, to remember your limits and to stay in your lane. I was aghast, though not surprised, at some ways agents said they were addressing client concerns over Russia’s invasion of Ukraine. Seemingly overnight, they became experts in geopolitics and the effect of war on the world economy. It was not unlike the explosion of medical and infectious disease masters that surfaced in the days after COVID first struck.
Look, I get it. You want to quell your clients’ fears and concerns. You need a paycheck. But your expertise lies in real estate sales. In holding together transactions with duct tape and baling wire. You are not an economist, a political pundit or an expert on monetary policies to curb inflation.
What you can do is acknowledge your clients’ fears and concerns. You can employ good listening techniques and display empathy and understanding. You can provide them with historical mortgage rate data that shows 4% rates are far from all-time highs (but again, be empathetic and understand their concerns about a higher payment).
You can help your clients avoid misinformation. The fog of war amplifies it and spin, partisanship and misinformation always accelerate in midterm election years. It’s more important than ever to not share misinformation. Stick to verifiable facts. You may feel that war half a planet away won’t impact you or your clients, but you don’t know that for a fact – no one does. Now is not the time to opine, and you need to keep your politics in check.
How to help yourself
You have a tough job. Living on a commission-based income is never easy, and adding fear and uncertainty to the mix doesn’t help. It’s more important now than ever before to practice good self-help techniques. Burnout is all too common in this business, and FUD accelerates it.
Find a hobby. Meditate. Journal your feelings. Talk to your friends, family, and significant others. It’s OK, necessary in fact, to take some “me time.” Partner with an agent friend and trade off a showing or two just to escape for a few minutes. You can’t help your clients if you don’t help yourself first.
Some things are out of your control
Agents are prone to wanting to fix everything. It’s the nature of our business. One of our strongest “value adds” for our clients is being able to navigate through complex and trying transactions. That makes working through fear, uncertainty and doubt an arduous task.
You have got to realize that some things are out of your control and help your clients understand that. Whether you are a new agent or a grizzled veteran who has been through the FUD wars before, you need to take care of yourself, listen to and empathize with your clients, and understand that while things may seem beyond trying at times, you and your clients will get through it.
Jay Thompson is a real estate veteran and co-founder of AgentLoop living in the Texas Coastal Bend. Follow him on Facebook, Instagram and Twitter. He holds an active Arizona broker’s license with eXp Realty. Called “the hardest working retiree ever,” as the founder of Jay.Life, he writes, speaks and consults on all things real estate.
