Understanding Your Buyer’s Interest Rate Fears

Buyers tend to catastrophize their biggest fears. This is especially true when it comes to financial concerns. For homebuyers right now, that fear is centered around interest rates. Our customers aren’t wrong for having those fears. However, it is our job to help de-catastrophize and show them why moving forward is still the right solution. Today, I’ll share key strategies for helping buyers overcome their interest rate fears, drawing from a recent experience with my own family.

Gabriel and Ali’s Homebuying Journey

In late 2022, my little brother Gabriel and his new bride Ali set out to find their first home. After shopping, they settled on a new build opportunity in the beautiful Timothy Lakes community. The initial monthly investment was estimated with a conservative, at-the-time interest rate of 3.9%. By the time my brother called me in an absolute panic, after his home had already broken ground, he was looking at an extended rate lock of 6.3%. This translated to a solid $650 more per month for the exact same home.

The Equation of Buyer Motivation

We know that customers like Gabe will buy a home when their current dissatisfaction times their future promise outweighs their cost and fear. In the past couple of years, there has been a focus on the cost and fear side of that equation. Rising interest rates and home prices have presented very real and tangible costs. So, where can we, as new home professionals, help the most? We can assist the current buyer pool by regulating their fear and making a positive change.

The Three Cs of Overcoming Customer Fears

Let’s dive into the key skills that will help with these conversations, which I call the three C’s of overcoming interest rate fears: Confidence, Curiosity, and Connection.

Confidence

If you are scared of interest rates, there is a 100% chance that your buyer will also be scared of interest rates. Imagine a doctor who’s nervous about a diagnosis—that wouldn’t inspire confidence, would it? As sales professionals, we need to approach interest rates with the same confidence and competence as a seasoned doctor. Your assurance will help your buyers feel more secure in their decisions.

Building Buyer Confidence: A Step-by-Step Approach

In the case of Gabriel, when he called me, his fear was off the charts. We had to calmly walk through, step by step, his options. Getting a handle on his reality—facts over fear—helped Gabriel more calmly assess his own situation.

Curiosity

Just like any objection, when your buyer raises a concern about interest rates, it’s our job to seek to understand before we seek to solve. This means we have got to get curious. What we often find is that buyers aren’t scared of the actual number of the interest rate. What they’re really scared of is the unknown future and how committing to that mortgage payment, whatever it may be, will affect them personally. Whenever a buyer has a concern, a good go-to question is, “Tell me more about that.” But then, we need to take it a step further and find out specifically what they envision their future concern to be. Only by drawing out the specific fears can you address the real issues that are unique to that particular buyer. Once we understand the unique concerns, we can collaborate on unique solutions.

Addressing Specific Buyer Concerns

For Gabriel, his fears took the form of a long list of “what ifs.” What if he became house poor so early in his new marriage? What if they had to postpone their dream of having kids? What if he made his new wife unhappy and disappointed? Helping draw Gabe’s specific and very personal fears to the surface helped him sort through his own concerns. This, in turn, helped us collaboratively think of solutions for the most relevant of those fears.

Connection

If you know your customer well enough, they will show you how to sell them a home. The number one service we provide as new home sales professionals is to bring clarity to our customer’s mission. If your buyer already understands the cost and fear side of their equation, we need to help them bring clarity to the current dissatisfaction and future promise side.

The Importance of Connection in Sales

Interest rates have been relatively stable for a while now. So, if a buyer is darkening your doorstep in today’s market, you can reasonably assume two things: One, they likely know what the rates are, and two, they have a story of why they’re there. No one shops for a new home unless there’s a problem or a challenge in their current situation. Connect to your customer’s mission and bring clarity on if buying a home will ultimately be a positive decision despite the costs.

Applying the Three Cs to Real-Life Scenarios

In the case of my brother Gabe, they couldn’t stay where they were living. He and Ali had just gotten married, and they wanted more than just a house—they wanted a home they could be proud of. Despite the significant change in their interest rate and payment, today, they are still happy residents of Timothy Lakes.

So, next time you have a buyer in front of you showing interest rate fears, remember the three C’s: Have confidence, get curious, and connect to your customer’s mission. If you do, you will have the blessing of changing your customers’ world for the better.