Hey guys, I've got another tool for you:
When you are going out to take a listing and the seller is asking you about getting top dollar for their home, one question you can ask which relates to them getting top dollar is, can I ask you how much do you owe on your current home?
This is gonna reveal how much equity they have and how much they have left to pay off.
Some—about 30% of the people you're talking to—will own their home outright. And the vast majority will have some kind of loan. But a lot of those people have paid down their loans dramatically and they have a very small balance. What if you said something like this to them?
"I got something to ask you guys based on what you just told me:
We're in a high interest rate environment. So it's making affordability a really big issue. And because of that, when people are paying more in interest, they can't afford to pay at a higher price. But if we were able to offer an...
Hey guys, have you ever heard of a blended interest rate?
A blended interest rate is gonna become really important to a lot of us selling real estate in the coming months and years as these high interest rates stick with us.
So here's what a blended interest rate is:
Imagine a buyer has a budget, and they're gonna go out and buy, let's say, a $700,000 house. They have $100,000 down, and now they have $600,000 they're gonna finance. But they can't quite swing the high interest rates that are out there today. It's just gonna put 'em in a place where they can't afford it.
But they're willing to be creative and if you have a seller that's going to be creative, you can still put this deal together.
So here's an example:
Let's say that they were able to go out and get a first mortgage for $400,000 at the current interest rate. Let's call that 7.5%, which is probably where it's headed pretty quick. And the seller was willing to carry a...
Join this incredible interview with Dr. Cindy McGovern. Dr. McGovern is the Wall Street Journal Best Selling Author of Every Job Is a Sales job and the founder of Orange Leaf Consulting, which helps organizations, entrepreneurs, and individuals create dynamic and robust sales processes to grow their business. She has worked with hundreds of organizations of all sizes and specialties across the globe and is now one of the most sought-after business and sales authorities.
What is the rule of five? Well, the rule of five was something that author and speaker John Maxwell came up with.
And what John came up with was this idea that if you have a big task at hand, something you really gotta get done and it can seem overwhelming or just completely out of your reach, how do you make that happen? Despite what might seem like overwhelming odds?
Well, he used the rule of five.
And the rule of five is simply this:
Imagine that that goal is a tree in your backyard. And you have one tool that you can use to cut down that tree: an ax. And so you go outside and every morning you take that ax and you swing it as hard as you can, three times into that tree. And then you put the ax down, you go back inside, and you wait for the next day to come. And the next morning you do it again. And again, and again.
Now, we would all agree that eventually that tree's gonna fall down. No matter how big the tree, it's gonna topple...
Here's some good news about the real estate market, and we need some good news right now:
As of the second quarter of 2022, home ownership rates were rising. So that's good.
And we say, well, why would anyone not want to be a homeowner? Right? When we're in the real estate business, we think everybody should be a homeowner.
But sometimes, renters have a hard time getting over the hump of deciding if it is a good idea to become a homeowner. Especially when we're seeing interest rates rise. We've seen prices still rising in some markets by double digits.
One thing you can point to, which is really powerful, is the concept of inflation.
Everybody knows what inflation is and inflation is touching everybody. And so you can point out that, "Hey, you know, I'm sure you're aware that inflation right now is at a record high, a 40-year high. The last reading was 8.5% inflation. But what people don't realize is that rents are...
Is it a good time to buy a house today?
It's an important question for us as REALTORS to be able to answer and really be passionate about it. This isn't just an answer we're giving because we wanna sell a house, but an answer that's actually backed up by real data.
That way, buyers will actually believe what we're saying and be influenced by what we're saying.
So here are 5 key reasons, backed up by data, why people should be excited about entering the market today:
1. Rents are rising quickly.
So if you're not a homeowner, what are you by default? In most cases, you're a renter. So latest reading shows that rents are up 14.8% compared to a year ago. And they're likely to continue to rise at a fast pace going forward.
2. Interest rates.
Interest rates have settled back down a little bit. They're not at the peaks anymore. So interest rates historically, when you look at the last five decades, have averaged 8%. Right now, we're in the high...
A number that we should be concerned with right now in the market is 16.1%.
So what does 16.1% represent?
It represents the number of transactions that were canceled last month. The last time we saw a number that high was at the beginning of COVID when buyers really didn't know what was gonna happen. March, April, when COVID really went into full effect in our country in 2020. That's when you saw this same level of cancellations. And that's what we're seeing again right now.
So how do we tighten down offers so that sellers have some clarity that they know they're gonna get to closing?
I'm gonna give you several things to think about. You might have a few more. But one of the things is getting the disclosure statement signed as quickly as you can.
Most states require a disclosure statement. This is where we're the seller's gonna disclose everything they know about the house to a buyer. But not waiting around, not delaying getting that...
Here's something we should all be doing with a seller at the beginning of our relationship:
When we take that listing, we should be resetting expectations on the number of live showings that will occur.
Last year, when we took a listing, we'd have 20, 30, 40, 50 showings in the first week. Today, that number maybe two or three or four or five. It will not be the same as it was last year at the same time.
So how do we reset this expectation?
One thing we need to talk about with the seller is the way the average buyer looks at homes. So last year in 2021, the NAR measured this and they found that buyers, on average, that purchased a home, looked at homes for eight weeks. And during that eight week period of time, they viewed eight homes. But of the eight homes they looked at, they looked at three virtually. And in the buyer's mind, that was a showing.
So we need to educate our sellers about what people consider to be a...
53% of today's clients that you're dealing with in the real estate industry are actually millennials. They represent the largest group of buyers and sellers in our business today.
And here's what's interesting:
Millennials actually trust referrals from family and friends over all other advertising messages. In fact, they're very distrustful of traditional media marketing.
So what do we do with that information? How do we adjust to that information?
Well, one thing we have to understand is that reviews and recommendations are becoming a really important part of our business. Which means we need to be focused intently on getting reviews and recommendations and endorsements online.
So, I want to ask you: do you have a process? Do you have a plan in place for collecting these reviews and recommendations?
Here's an example:
If we take a brand new agent in this industry, but an agent that's aggressive and doing well, and we...
I had one of my best agents come to me a couple years ago and she said, "Jim, I got a listing that's priced right. And we're getting showings. But we're not selling the property."
And I said okay, let's go take a look at it. So I made an appointment with her and we went up and looked at the property. And immediately when I pulled up, I knew what the problem was. The property had a steep driveway. And I told her I bet a lot of people were commenting on the driveway. And she said, "Yes, true. We're getting a lot of negative comments on the driveway. And I think that's really the biggest reason why people aren't, you know, looking at the house. Or looking at the house, but then rejecting it."
So we went in and explained to the sellers that they can have the best price property in the world. And actually, have the best house in the world, but that driveway could be the stumbling block for getting it sold.
So I'm gonna give you a...
Jim would like to talk to you about your real estate business with a complimentary 30 minute coaching session.
During the call be prepared to discuss - Your goals for the next twelve months. Your time management and priority management strategies. Your willingness to change and adapt to a changing market landscape, and your biggest choke points - what's really holding you back
The road to transformation starts with small steps. Take your first towards a better real estate business today...