Hey guys, quick market update for you:
We know that the CPI—the consumer price index—has risen dramatically. And right now it's running about 7% to 7.5%, depending on which economist you talk to.
That means that inflation's skyrocketing. The cost of goods and services is skyrocketing. Wages are skyrocketing. And so is the cost of getting a new loan or a new mortgage on a home.
Now, why are loans affected? They are affected because the federal government looks at this as a lever that they can push on the economy to slow the economy down and put the brakes on the growth in the country.
So since November of last year, through roughly today, we've seen a 300-point basis jump in what interest rates are costing Americans.
Now to put this in perspective because what does 300 basis points even mean?
It means that if you were gonna try to get November's interest rate today, it would cost three points. Three points, every a hundred...
Hey guys, I wanna give you a quick strategy when you are listing a house for the first time and you're having a conversation with a seller.
I call it my "Many Buyer Eyes" Strategy. And here's how it works:
"Hey, you know what? One thing I do with all my sellers when I list their properties for sale is I treat you as a buyer. And what that means is that I'm gonna act like you're a buyer for your own property and your own price range. So I'm gonna set you up in the MLS as if you're a buyer looking in the 400-500k price range in your market area, in our MLS zone that we're in with similar attributes of your house. Here's why I'm doing this: I want you to see in real time the listings that are being presented to buyers that are searching for home like yours.
So you're gonna see all your competition, all the price reductions, all the pending transactions, they're gonna be coming to you. And I want you to look at them because we...
This is an amazing number:
63% of home buyers that are out shopping today believe that the homes that they're looking at should look like the homes that they see on TV on HGTV and other shows like that.
That is interesting because that's something we've got to educate our sellers about. Because if that's the buyer's expectation, if we don't meet that expectation, we may not get top dollar.
So when we're sitting with sellers, how do we have those conversations? There's another study that might help with that conversation that will actually incentivize them to want to do this.
The new study shows that of 13,000 homes in the country that were studied in 2020 -- a very recent study -- 85% of those got between 6% and 23% more for their home because they were staged compared to the competitors in the neighborhood.
Those are powerful numbers to motivate your sellers. And then we have to define what staging actually means anyway.
Hey guys, a new study from NAR shows that...
75% of homeowners in America believe now is a good time to sell.
By the way, this is way up from where it was last year at the same time when that number was about 45%.
And what's the difference?
Well, one big difference is that we've had a huge run-up in prices. So sellers are starting to say, "Hey, I can see that this could be a good time to sell because prices have gone so high."
We're also seeing the record low 60-year lows on interest rates, which is another reason why home sellers are thinking they should sell and move up to their dream home. So that's a big reason why a lot of homeowners may be considering selling.
But even though they say it's a good time to sell, does that mean they are going to sell?
Yes, they are going to sell!
According to a new study done by Zillow, 1 in 7 homeowners are planning on selling their home in the next three years.
That's a massive number guys!
What if from every listing you take, you received five transactional sides? Imagine you take 10 listings in the next 12 months. And that leads to 50 transactional sides.
Is it possible? Absolutely.
And more importantly, we have to look at what we've done the last 12 months — how many listings did we take and how many sides did we create? If we are leaving money on the table, it's probably coming from the activities that we're not doing when it comes to our listings and those opportunities are so massive.
We have a system which I call the "5 Star Listing System" and it identifies the five easy transactions we can secure from every single listing we take.
1. We're going to sell the listing that we take
Now, that sounds simple in today's market. 95% of listings are selling as soon as they hit the market. But as the market transitions, as the market shifts, believe me, we're going to need to be able to refine our presentations and...
How much does what someone sees on TV impact their buying patterns or buying behavior?
And that's a question that was asked within the new staging report from the NAR — the National Association of Realtors. And here's what they found:
63% of REALTORS say that when they're out showing homes to buyers, that the buyers requested to view homes that were comparable to those that they had seen on TV.
Because of that, 35% of REALTORS say that they have patterned their staging around what they see on TV as well. So TV is definitely having an impact in the real world of selling real estate.
So when we look at those numbers, when we dig deeper, here's what's interesting:
When we ask the bigger question, how many REALTORS are actually staging listings at all?
Here's the numbers:
* 31% of REALTORS stage every listing.
* 13% only staged difficult homes
* 8% only stage high priced homes
But most interesting...
You'd think by now everybody that was going to refinance their home would have already done it.
Interest rates have been at record lows for months, right? But the answer is, that's not true.
There are 5 million homeowners in America that could benefit from refinancing. And here's how it breaks down, which is crazy:
450,000 of those loans have interest rates above 6.17%. Isn't that amazing In this day and age?
A million of those loans have interest rates above 4.39%.
And 3.6 million have interest rates above 4.21%.
So when we look at that, that's a huge opportunity for you to educate the market in your local area about the power of refinancing. Try partnering with a lender in your local market. And you guys could talk about that through a video or email — really reaching out and doing a good job with communication.
Now what's more powerful about this?
Did you know that when you refi a house, you don't get quite the best rate. You know...
"Should I wait to buy a house?"
The real question behind that is, do they think prices are going to go down or are they going to go up?
Buyers are always debating this in their mind. They think that there's going to be some kind of dip. But statistically, according to every model we're looking at today, that's not likely because this isn't a "housing bubble." This is a "housing shortage" that we're in.
This is a supply versus demand issue more than anything else. And actually, the experts in the industry have just upgraded their projections for what they anticipate sales prices to do in 2021.
Here's the latest update:
I'm going to compare this to what they said in January. In January, Mortgage Bankers Association, Fannie Mae, Freddie Mac, Zelman & Associates, and the National Association of REALTORS consensus was that home prices during 2021 would go up 5.3%. Somewhere higher, somewhere lower, but the consensus was 5.3%.
In 1918, a guy named Ivy Lee was approached by Charles Schwab. Now, when we hear the name Charles Schwab, we might think of the Charles Schwab we know today who invested and traded stocks. But this isn't the same Charles Schwab.
Charles Schwab at that time was one of the most wealthy people in the world. He owned Bethlehem Steel and steel was, of course, a huge deal. So he was a hugely successful entrepreneur.
And so what happened with Ivy Lee and Charles Schwab was Ivy was a consultant — like how we have consultants and coaches today.
Anyway, Schwab came to him and said, "Hey, I want to increase my managers' efficiency and productivity as well as my proficiency and productivity. I want you to give me your best idea. What's it going to cost me?"
So Ivy being a smart salesperson, did a couple of things.
First, he said I'm not going to charge you anything. I'm just going to just give you the idea and then you can pay me what it's...
There's something happening in the market right now that really will impact your sellers. And that is interest rates are starting to climb a little bit.
When interest rates climb, it affects sellers in two different key ways:
1. It affects what's called buying power of all the buyers in the marketplace.
Here's what that looks like when you're talking about buying power:
If you're a buyer who is going to get a loan of, let's say $300,000, and you had your average down payment that would equal a payment and interest charge of about $1,225 per month. Now that interest rates have come up about a half percent, what does that mean for you?
If you still want to have that same payment, roughly $1225 a month of principal and interest, your buying power actually goes down because interest rates have gone up. You can no longer afford the $300,000 mortgage. Now you can only afford $285,000.
This puts "pricing pressure" on the market.
Now we know...
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