By Alissa Williams | Real estate agent
Real estate agents’ cellphones are quieter since the mortgage rate hikes began earlier this year.
Depending on which way you look at it, this could be a good thing.
Buyers are now able to negotiate closing costs and potentially get a contract price cheaper than the listed price.
This has been unheard of for the past two years.
However, since most people finance their homes, they live in the payment and not in the price. Higher interest rates mean higher payments.
What does this mean for buyers? As an example, consider a conventional mortgage at 3% on a $350,000 loan.
You would pay an estimated $1,180 monthly if you put down 2%. At today’s rates of 7%, that same mortgage would be $1,863 a month, according to Sammi Sammis of Thrive Mortgage in Kingsland, Georgia.
We are seeing this hurt our first-time homebuyers the most.
Many of them have had tight prequalifications before rates increased because of inflated home prices.
This was caused by the lower interest rates in 2021 and the lack of supply and high demand for available real estate.
Buyers are having to lower the price they are willing to pay for a new home because of the mortgage rate hike. It has raised payments that significantly.
However, sellers are also affected. Because of longer on-market times, sellers are finding they are having to lower their prices. Buyers can negotiate closing costs and sellers’ concessions now as well.
What does this mean for agents?
Deals are not going to be as easy to finalize. Agents who got sloppy with their service may find they need to go back to the basics.
My approach has not changed. I work by referral. I do not buy leads.
Why is this important? It holds me accountable to a higher level of service.
I hold client parties, send notes, make calls and do pop-bys.
I try to be an ongoing resource to my clients before, during and after the sale. I go deep, not wide, with my client family.
When the Zillow leads are drying up for other agents, my pipeline stays consistent.
Alissa Williams is a licensed real estate agent with EXP Realty LLC in Florida and Georgia.