There's a new survey that was done by the National Housing Survey, which was just done in June. So it's fresh data. And it shows a divergence that we haven't seen probably in the last 10 years or more.

It shows how many people think that the economy is on the wrong track:

81% of Americans believe the economy's on the wrong track.

So when you look at that number and we put it in perspective of people that are buying and selling real estate, how do we have that conversation? Where people think, oh my gosh, we're on the wrong track. I don't know that I should be buying.

We call that consumer sentiment. Or I don't know if I should be entering this real estate marketplace.

What can we say?

How can we address that concern where people think it's the wrong time to enter this market?

Well, a good lesson for us is to model successful people. People that are more successful than us, right?

One of the most successful people in our country, one of the richest people on earth i...

Date the rate. Marry the house.

Now, what does that mean? That means that if we went back in time to a year ago, the market was a completely different animal. Right?

A year ago, buyers that were in the marketplace were experiencing multiple offers on every listing. They were being asked to sign escalation clauses that would maybe sometimes mean they were paying 10, 20, 30, 40, 50, a hundred thousand dollars more than the list price. People are being asked to do appraisal waivers, inspection waivers, appraisal gap language, non-refundable earnest money.

It was an incredible time to be a buyer in what we might call a frenzy market.

Now, fast forward to today:

The market's undergoing a complete shift, right? And what that means is there's a lot more to choose from. There's a lot more listings on the market. List prices are coming down in a lot of price categories. We're seeing a lot fewer buyers in the market. So that means that the buyers left have real power to come in ...

New study out from the Mortgage Bankers Association shows that ARM demand has reached a 14-year high.

And now what's an ARM?

An ARM is an adjustable rate mortgage.

A lot of you that have entered the business over the last 10 years may have never used an ARM.

They became almost invisible for many, many years. Why? Because we've had the lowest interest rates in history. No one would bother doing an ARM. But over the last quarter, just to here in 2022 ARMs have gone up to a 14-year high.

So an ARM is an adjustable rate mortgage. Generally, it's set interest rate for the first 3, 5, 7 years. And then it resets based on the current rates of that time. There's a cap on it. Every loan's a little bit different, but here's some examples of what that looks like:

Right now, as I'm talking to you today...

The current interest rates are about 5.5% while the ARM rate is about 4.5%. So people are getting about a 1% discount for going into an ARM situation.

But 1% on a monthly b...

A stat from a Zillow study that came out shows that 30% of Americans have cited climate change as a reason to move in 2022.

Now, I think about that and I reflect on my own market where I live here in Southern Oregon. And I think, well, a lot of people wouldn't consider this being a climate change issue here, but it is.

You see, we've had, and we've been surrounded by fires for the last four or five years in our community. And those fires create smoke. And it creates a situation where people don't love going outside during the summer, one of the best times to be outside. Coupled with the fact that last year we had a fire rage through the entire city and burned down 2,700 homes. I had three duplexes burned down myself.

So when people have that experience, it's very detrimental. They are in fear of it. Of course they might think about moving. And a lot of people did move away because of that.

Or think about your own community:

Are you a place where people may be exiti...

What is an anchor point? And how can it benefit you when you're talking to sellers about getting their prices down?

Well, an anchor point is a way that we can help sellers recognize where they're at relative to the competition of the market. And what's gonna happen to them if they don't take action.

So let me give you an example:

If you have a seller in a neighborhood and you call them and you say:

"Hey, Mr. And Mrs. Johnson, I was hoping I'd have a conversation with you because I did a little research in the neighborhood, and I know we haven't had the activity that I've been hoping for. And so I'm concerned about getting the house sold. So I did some research. I know, you know, the property over on fourth street. It's been sitting in the market for a hundred days. I know you'd drive by it every day.

"And I did a little research on that one. It looks like they started at $600k and now they're down to $550k, but it's still sitting there. It's still stagnant on the m...

How do you normalize a price reduction?

People don't wanna feel like they're the only ones reducing their price. And some sellers may not be in tune with the market like we are. They may be assuming that the market's like it was six months ago. And they're the only person that's not selling right now.

Of course, we know that's not true. We know the market's changing. We know there's more inventory hitting the market than we've seen in a long time. We know interest rates are impacting the marketplace.

So how do we normalize a price reduction?

The way you do it is to show others in your market that are also reducing their price at the same time. So here's how you do it.

When you're talking to a seller, you can say:

"Hey, Mr. And Mrs. Seller, you know, we haven't had a lot of showings and that's probably directly to related to our price. We're seeing more competition. Interest rates are definitely eroding buyers' buying power. But I wanna share something with you t...

Hey guys, I'm seeing something in the market that I've never seen before, which is really interesting.

We're seeing a mass migration of people moving from one state to the next because of political reasons.

Now, we haven't seen that. In my 33 years in the industry, I've never seen a mass migration because of political reasons. People are moving because they don't agree with the local politics or the state politics. And they're going to where they agree more with the politics of that other state.

So you might say, well, that's interesting, Jim, but how in the world do I capitalize on? How do I use that in my real estate business?

It's interesting because we all know some folks around us—family and friends—that have actually made the move. So isn't like way out there. This is like close to almost all of us.

So I'm gonna give you a simple technique today that you can implement right now.

Here's what you're gonna do. You're gonna put out a social media post and you'...

We're still in a highly competitive market. There's still lots of multiple offers happening. The market is changing, but there's still high demand out there.

So I want you to think about what can you do to incentivize people to take my offer over maybe a cash offer if my buyer is being financed.

What would be a unique strategy for that?

One unique strategy I found from one of my top producing teams is this:

They use a closing guarantee. Maybe you're already using one, but if you're not check this out, here's what they do:

When they write an offer, they include a closet that says, "Hey, listen, just for accepting our offer and considering us, we're gonna guarantee that we're gonna close it by this specific date. And if we do not close it by that specific date, we're gonna give you a non-refundable earnest money of $10,000, $5,000, $20,000."

By using that closing guarantee, what you're doing is providing clarity to the seller, so they can feel confident that your offer ...

One conversation that can come up as you're out there taking listings is, of course, centered on commissions.

And here's a great script to help your sellers look at the commission, not just cost, but as a marketing incentive to encourage showings and to encourage more offers.

So the script kind of goes like this:

"Hey, Mr. And Mrs. Seller, one thing I wanna talk to you about is the commissions that we charge. Now, I charge a listing marketing fee of X [fill in the blank, whatever you're charging]. And all we have to decide now is what we're gonna pay the buyer's agent. Now there's a little secret sauce here that a lot of people don't understand. Which is, that marketing fee that we're paying to the buyer's agent to bring that buyer in can actually incentivize them to show your home.

"Let me show you an example:

"I did a commission survey in your market area where your home is. I went out about a mile two miles, and I looked at every listing that sold in the last six mont...

There's a new stat out that shows some unprecedented numbers. And the numbers reflect that home buyers entering the market today are paying 39.4% higher mortgage than they did last year at the same time.

Now, why would their mortgage go up almost 40%?

The number one reason?

Interest rates.

Also a bit of home price increases as well. But by and large interest rates going up seven of the last eight weeks. They've gone up so fast.

So when we look at this, some of our buyers may be saying, "Hey, let's pump the brakes on me buying."

How do you respond to that? Well, the response should be a reflection on what happens if they don't pull the trigger now and they wait. We know the Fed is already planning to do six more rate hikes this year, starting right now in May.

So as we begin to roll through the rest of the year, it's highly likely these interest rates aren't gonna go lower. They're gonna go much, much higher as the Fed tries to break the back of inflation.

So with th...