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3 Homeowner Secrets Your Buyers Would Love to Know

 

June was Homeownership Month. And as a REALTOR, your job is to emphasize the value of homeownership. It's the product you sell, and you need to let people know that being a homeowner has significant financial advantages.

Here's the first one:

The average homeowner has 40 times the net worth of the average renter.

Why?

The number one reason is that every time you make your monthly mortgage payment, a portion goes towards principal reduction. It's like a forced savings account, building up over time. When you sell the property, you benefit from this accumulation.

Additionally, you have appreciation. Every year, the home's value increases, sometimes more, sometimes less, but over a 30-year mortgage, the property value generally rises.

On top of that, homeowners receive substantial tax benefits that renters don't.

These are three key reasons why someone should consider becoming a homeowner today.

Your job is to provide people with a path to homeownership. The biggest resistance point...

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2 Reasons Why Today is The Best Time to Buy a House in Recent Years

          

Would it be crazy to buy a house now?

This is a question that people are gonna ask you. I've heard this question come up a few times just in my social circles.

I'm gonna tell you there's two key reasons why it's a great time to buy a house. Not just a good time, but a great time to buy a house.

1. You have more buying power than you've ever had in the last 10 years.

Think about the last year. Just last year, if you were gonna go buy a house, you're competing with 10 other buyers, you're always gonna be in a multiple opera situation. You're gonna have to come in with non-refundable more money, go over full price, have an appraisal gap language, remove inspections before you've even done an inspection. You were at such a disadvantage as a buyer.

Let's contrast that with today:

When you come in as a buyer, first of all, sellers are reducing their prices en masse. Plus, they're gonna reduce their price again, when you make an...

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How “Parity Pricing” Helps Buyers and Sellers Win (Even in this Market)

         

I have an important concept for you as we're coming into this challenging market with interest rates.

So I want you to think about something I call parity pricing. Let's paint a picture:

Imagine you're a buyer now. You have a $400,000 budget to buy a house. And you found one and got it in contract. Your budget for your payment is $1,767 a month. That's for principal and interest — we won't worry about taxes and insurance for this kind of demonstration.

So how we came to that number is if we were buying a home in April and we were lucky enough to get a 5.25% interest rate back then, that's what that payment would equal. But fast forward to today, we were shooting this around September where interest rates have shot up to 7.25%. In order for that buyer who only has a budget of $1,767 a month, or for that buyer to buy a house based on today's interest rate, how much would the seller have to come down to get to a parity...

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The Weird Real Estate Secret to Fighting Inflation

          

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...

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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 $5 Billion “Hedge Fund Secret” You Can Steal For Your Business

        

The Wall Street Journal just put out an interesting article about a company called Invesco putting $5 billion into a hedge fund that's purchasing single family homes.

And they're not alone. There's another $6.5 billion dollars targeted with other hedge funds doing exactly the same thing.

Now, why are these hedge funds going after single family homes?

Well, they've identified that they can get a cap rate of as much as 6.8%. That's the target rate that they're comparing to apartment buildings and commercial — which is like the low sixes.

So what they're saying is: we're going to make money on this. And we're going to rent these houses to millennials that are choosing not to become homeowners.

What we need to do as an industry, number one is to recognize that we should be investing in single family homes as well. But also we need to encourage everybody that's not a homeowner today to get into the real estate arena and buy their...

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