How Smart Real Estate Agents Answer “Should I Buy a House?”

Real estate agents are always fielding difficult questions. But some of the most challenging questions to answer are those relating to whether someone “should” buy a house in your market. After all, everyone’s situation is different. 

But, as a licensed real estate agent, people will naturally look to you for guidance. You might not have a crystal ball, but you do have market data. And instead of just throwing out a “yes, you should buy a house,” you can show your clients why buying a house makes sense for them.

How to Help Buyers Know the Answer to "Should I Buy a House?"

Start by Qualifying Your Buyer

If the prospective buyer asking “should I buy a house?” doesn’t qualify for a mortgage, they probably can’t buy a house until they improve their personal finances. So finding out if your buyer is financially able to buy a house is step one. 

You could respond to “should I buy a house?” with something like:

Generally, homeownership is a smart financial move, and I would love to see everyone buy a home! But the timing of buying a house comes down to personal factors. Have you already been pre-approved by a lender?

If your buyer has been pre-approved, great! You can move the discussion on to general market conditions. 

If your buyer has not been pre-approved (or even heard the term “pre-approval” before), invest some time in educating them. Explain that pre-approval isn’t just about confirming that they’ll be able to get a home loan, but also about finding out how much of a loan they can get. This is critical information that will help your buyers search within the right price range. Don’t forget to mention that the pre-approval letter will strengthen their offer when they find the right house.   

Compare the Costs and Benefits of Buying vs. Renting

When you’re sure your potential buyer can qualify for a mortgage, you can run some quick calculations to confirm that buying makes good financial sense compared to renting.

When you know the average prices for your market, you can run a quick exercise with your prospective buyers right there on the spot. Grab a piece of paper (or your phone or tablet if it’s easier for you to crunch the numbers with an app). Draw a line down the middle and label “renting” on one side and “buying” on the other. Then show your buyers the financial outcome of just five years of renting vs. five years of buying. Jot down:

  1. The monthly payment amount for each

  2. The total cost of those payments over five years

  3. Tax deductions for homeownership over five years (make sure you know current interest rates so you can estimate the tax deduction for interest paid over five years)

  4. The projected appreciation over the next five years (using reasonable averages)

Then calculate the net cost of renting vs. buying. In most cases, your buyers will come out well ahead by buying. Then you can move into the final step…

Explain the Benefits of Buying Now

Whether you’re in a buyer’s market or a seller’s market, there are benefits to buying now. You can explain how today’s low interest rates give buyers greater purchasing power. Or talk about how prices are trending up, so your buyers can get in before values increase further. 

In a slow buyer’s market, you could explain the low buyer competition and how the negotiating power is in a buyer's favor. No matter your market conditions, there are always compelling reasons to buy now. 

So, Should I Buy a House?

Assuming you’ve confirmed that your prospective buyers are financially able to buy, will come out ahead by buying, and have a good reason to buy today, the answer to “should I buy a house?” is a resounding “yes!” But by taking your new client through these steps, you’ve helped them see the answer for themselves rather than just giving them your personal opinion in response to their question. 

Now you can move the conversation toward your buyers’ needs and wants. And close the conversation with an appointment to tour a home!

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