Here's a target market right now that could be a massive opportunity for us:
We should be looking for opportunities. In every market shift, there's an opportunity. And one opportunity we're starting to see is retirement.
People are accelerating their retirement plans. In fact, the number of retirees in the marketplace is up 13.7% in the third quarter of this year.
A lot of people just don't wanna face the challenges of recessionary markets and things happening, and that's out of their control. They just want to exit and enjoy the rest of their time, right?
So when you have a retiree, by definition, a lot of times what they do is they want to downsize. They wanna scale back their lifestyle, so they can afford the retirement. And we're seeing this a lot with empty nesters and just people that are ready for the next phase of their lives.
So these retirees are perfect target audience for us in that they're probably...
What is the picky inspection?
Now, for years we've been in a seller's market. And the last thing we wanted an inspector to do is to come in and kill the deal, right? But today the market is shifting towards buyers. And buyers are starting to gain more and more leverage in the marketplace.
So when I'm counseling my buyers, I might say, "You know, we wanna get an inspection. That's a fair inspection. But I'm kind of leaning towards advising my inspector to be a little bit more picky than they might have been in the past. Let me tell you why:
Because what we're doing when we do an inspection is really looking at health and safety issues and really big structural issues. You know, the roof is going bad, or there's a bad foundation, or something like that. The minor stuff, the things like just noting the age of a water heater and you know that there's a crack in the sidewalk and you know, the basic stuff, the cosmetic stuff is...
You're probably hearing a buyer say this to you. They're saying, "Hey, I wanna wait. Let's put a pin in this because I wanna wait and see what happens with the market."
Now if they say that to you, what's your response?
The language of sales matters. We're not trying to manipulate people or push people, but we wanna understand where they're coming from. And help them understand the market a little bit better.
So my response to that would be something like this:
I'd say, "Hey, I totally get it. I wanna move at your pace. I don't want you to feel rushed at all. But I do have a question for you because I wanna understand where you're coming from: What's the value in waiting?"
I'm gonna let them answer and they're gonna probably say that they think prices or maybe interest rates will come down. And my response to that would be:
"I totally understand. And if that's where you're at, I'm totally cool with that, as I said. But...
We know interest rates are rising, right? I'm in contract on a couple of different investment properties right now. I'm still out buying despite the market conditions. Actually, it's an opportunity for investors. And when I got to the point of finding out what my interest rate would be on one of these properties at duplex, I was told that it would be 8.5%.
And I about fell over! 8.5%, that's nuts, right?
And she explained to me that, well, you could pay points, get that down to, you know, 7.5%, or even 7.1%. And there was a lot of strategies around that, but it was gonna be expensive on the point side. So when we're having this conversation, buyers like myself are gonna immediately think my, if I'm gonna pay that kind of points, I want somebody to share that cost with me.
Who do you think it's gonna be? It's gonna be the seller. If the sellers are gonna want top dollar, like these Impressment property owners do of course, they might...
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...
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...
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...
Here's an interesting question that we often get:
If I buy a house and sell a house in the same market, am I gonna give up some equity? Am I gonna make a mistake by doing that?
Well, generally when you're buying and selling a house in the same market, you're not gonna have any equity loss because you're just moving money from one house to the other. And actually in our current market, we have something kind of unique happening in a lot of areas of the country. Really it's a tale of two markets or maybe three markets.
But when you look at your market, it's not just one big market, right? It's broken down by price bands. And there's some price categories that are much hotter. They're much more active. People are much more engaged and that would typically be the lower price categories, right?
The first time home buyer categories. But as you move up that ladder to the second per home purchase, so maybe the starter luxury and the real...
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