The Market Intensity Trick to Landing More Listings

           

What is the meaning of measuring market intensity and why does it matter?

Market intensity is an interesting way to look at the market. I was given this idea by my friend, Lennox Scott. So when we look at market intensity, the way we measure it is by how fast listings are going pending the first 30 days they hit the market. So if we go back in time and look a year ago in a lot of markets across the country, when you look at how many listings were going pending in the first 30 days, it was like 80%, 85%, 90% of listings were going pending at that point.

Fast forward to today: What's that market intensity reading? I'll tell you what mine is. For the last two weeks, in my local market that number is 60%. 60% of listings are going pending in the first 30 days.

It's still a high number. It's a lot, but it's not 80%. It's not 85%.

So that market intensity comes down a few notches, and that's the conversation we need to be...

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4 Bulletproof Reasons Buyers Should Buy A House in Today’s Market

        

Why should a buyer buy a home in today's market?

If we don't know the answer to that, then it's gonna be a struggle to talk to buyers about why they should buy. Because everybody thinks they should wait:

"Shouldn't I wait for prices to come down? Shouldn't I wait for interest rates to come down? Shouldn't I wait for the recession to kind of come and go?"

There's gonna be a lot of those mindsets. And we have to be able to answer the question: "Why should I buy now?" 

And really we have to sell ourselves first before we sell anyone else. So I'm gonna give you four reasons here that someone should consider buying now as opposed to waiting or not buying at all.

1. Some sellers are panicking.

Why are they panicking? Because they put their home on the market yesterday and they expected just to get overrun with buyers. Then maybe two or 3, 4, 5 days goes by and they still don't have multiple offers. They don't even have very many...

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Warren Buffet’s Secret to Thriving in a Down Market

         

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...

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Date The Rate, Marry The House

        

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...

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The “ARM” Secret That Unlocks Massive Savings for Your Buyers

           

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...

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How to Normalize Price Reductions with Your Sellers

              

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...

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This Stat Will Convince Your Clients To Get Into The Market Today

        

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...

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Breaking: 3.5% of Home Sellers Reduced Their Price — Here’s Why

        

One thing we should all be aware of right now is that a lot of home sellers are reevaluating their price.

And one thing you should be monitoring in your own market area is the number of price adjustments that are occurring every 24 hours. Maybe on your hot sheet, your MLS data sheet, it's gonna show that number. Keep it a close eye on that, and then think about it with your own sellers.

Here's something that's interesting:

In the last few weeks we've seen 3.5% of all the sellers in America reduced their price.

Now that doesn't sound like a lot. But remember, we're coming off one of the hottest real estate streaks we've ever seen in our market.

But the market's starting to cool when it comes to pricing and people are starting to adjust to get ahead of the market. Typically we don't see price adjustments begin to happen at this level until July or August.

So why are sellers starting to adjust prices much, much earlier than ever before?...

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Why 80% of Millionaires Come From Real Estate

       

I had a real estate coaching student come to me recently and asked me if she should invest her equity of her home into other real estate.

And it's a question she was getting from her clients as well.

So I explained this to her in a story form, so she could explain it to her clients as well.

So let's assume that you had $400,000 in equity in your home. And you leave $200,000 equity in your home and you pull $200,000 out.

Now, how do I pull it out? I refinance it or I get a HELOC loan for that $200,000.

So now I have $200,000. Of course, I'm paying interest on it. It's not free money. Let's assume I'm paying 5.5% interest today.

With that 5.5% interest, I now have to beat that rate of return in order to make money.

So let's assume then I go out and I take that $200,000 and I find an investment property. Maybe it's a duplex or a triplex, and I spent $700,000 on it.

That's reasonable because they gotta put 25% down generally on investment...

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Why The Best Time In History to Put A Home On The Market Won’t Last

        

Here's a shocking number:

For every listing in America right now, on average, those sellers, when the listing goes live, are getting 4.8 offers. Let's call it five offers per listing.

It's truly one of the best times in history to put a home on the market, but will this be changing soon?

The answer is yes.

What will change this dynamic is a buyer's ability to afford the house. And what's impacting that right now is interest rates.

Interest rates are rising rapidly, approaching 5% in a lot of markets. And with that, it's pricing a lot of buyers out of the market. And if they're not priced out of the market, it's for them to readjust what they can afford downward. They can't afford that high price because the interest rate won't allow it.

So when we're looking at working with sellers, we need to tell them there's a five alarm fire going on in the real estate industry right now.

And it's interest rates. They're rising so rapidly that...

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