Affordability, foreclosures, mortgages: How to navigate tough real estate conversations in 2023

As real estate agents, you know that some conversations with clients can be difficult. With the changing market conditions, navigating through the tough conversations about what those changes mean to clients will be more critical than ever in 2023. 

I don’t have a crystal ball, so I’m not 100 percent sure of what lies ahead for the rest of the year. However, we can make some informed guesses and help you with some homework so that you are better prepared for any conversation you may find yourself facing. 

Topics that will inevitably come up 

When you look at the current state of the real estate industry and the varying degrees of economic fluctuations the U.S. is experiencing, there are hot topics that you know are going to come up frequently. Your area of the country may be experiencing different issues than other places, so it’s vital to be tapped into your local market as well as the national one.  

Conversations about affordability 

One of the significant conversations that may come up is related to affordability. People who are looking to purchase property may not be able to afford certain areas due to high prices or rising interest rates. As a real estate agent, it’s essential to know your local market and its trends so you can provide helpful advice about affordability options within their budget range.

It helps to partner with local trusted lenders as well so you can always have up-to-date financing information so that you can best help your buyers navigate their options.

Also, it’s really important to stay positive, especially in your conversations with buyers and sellers who are reading so many of the world’s “doom and gloom” headlines and have a lot of concerns. People want to work with optimistic people. They need someone who can be a resource and a solution-finder.  There’s enough negative news out there; you don’t need to lend your voice to that.  

Conversations about foreclosure 

Another conversation that may come up is related to foreclosure. In recent years, foreclosures have gone down significantly, but there is still a possibility of them increasing in the future due to economic changes or other factors.

As a real estate agent, it’s important to stay informed on current trends as well as potential future trends when talking with clients about foreclosure possibilities. It’s also essential to approach these clients or potential clients with care. This is a sensitive subject. 

Agents who specialize in this niche bring together powerful research and resources to help distressed homeowners navigate this difficult scenario and know what options are available to them. 

Conversations about mortgages 

Finally, mortgage conversations are likely to arise that were rare before due to changes in interest rates and other economic shifts. As a real estate agent, it’s crucial for you to understand how mortgages work and how different types of mortgages might impact buyers’ finances over time. That way you can advise them when it comes time for them to make their decision on which mortgage works best for their needs and goals long-term.

If you have a mortgage lender who you like to work with, you can introduce your clients to them if they have more in-depth questions.   

How to prepare for these conversations 

The best way to face these conversations is by doing your homework. Fix yourself a cup of coffee or tea, and get comfortable — you have some preparation to do.

Do your research 

The best way to prepare for a conversation with your client is to do your research ahead of time. You should understand the local market well, what other properties are selling for in the area, and what trends you expect to see in 2023.

Being familiar with industry news and developments will help you anticipate any questions or concerns your client may have about their property’s value. It’s also important to stay up-to-date on current events that could affect the housing market, such as changes in interest rates or new zoning regulations. 

Be honest while staying positive 

When talking to your clients about their property’s future value, it’s essential that you’re honest and open with them. If they ask questions that you don’t know the answer to, don’t be afraid to say so — but make sure you follow up with them later once you have the information they need.

Additionally, use this opportunity to educate them on why certain factors can positively or negatively impact their property’s value in 2023, such as market conditions or new construction projects nearby. Staying positive about the industry and having a mental list of benefits to this current market will reassure your clients that the headlines they are reading may not accurately reflect the reality of the industry. 

Know when to ask for help 

Real estate agents are expected to have all the answers — but that doesn’t mean you always do. If you feel like a particular situation is out of your comfort zone or expertise level, don’t hesitate to reach out for help from another agent or an expert in the field (such as a financial adviser).

Having a network of knowledgeable people from all facets of the real estate industry can be just what you need to ensure that your clients have peace of mind knowing that their questions are being answered accurately and professionally. 

How to approach conversations with clients 

You might be nervous that you’ll be stumped by a question from a worried buyer or seller. You know they’re going to ask, but there is no need to be afraid. After all, real estate is your playground, and this is your time to prove that your clients can trust you. 

Be proactive 

The key to having successful conversations is to be proactive. By preparing ahead of time for potential questions or concerns, you can anticipate your client’s needs and address them before they become an issue.

This can help create a positive conversation and avoid any misunderstandings down the line. Also, your clients may be impressed that you are anticipating their concerns and working to allay those proactively. 

Listen more than you talk 

When having a challenging conversation, it is crucial to listen more than you talk. I often say we have two ears and one mouth, so we should use them in that proportion.

Make sure to ask open-ended questions so that your clients have the opportunity to express their thoughts and feelings without feeling rushed or judged. By listening to what they have to say, you can better understand their perspective and come up with solutions that work for everyone involved. 

Remember, clients need you

Having tough conversations about real estate can be difficult when the news isn’t ideal — but remember that your clients are asking you because they trust you and your expertise. By being prepared for these conversations, you are serving them when they need you most.

Coaching them through various scenarios and knowing what supports are out there for them if they need them is vital to taking care of your clients. The goal is to be ready so that your conversations are productive, informative and positive. With these strategies in place, you’ll have an easier time having meaningful conversations with your clients about their real estate needs and wants, both now and into the future. 

The goal for working with clients should always be to coach, not close, and to serve, not sell. When you approach your business and your conversations with this intention, you’re already ahead of the game and in the best position to make a positive difference in people’s lives.