Here's something that's come off the table over the last few years:
And that is the idea of an owner carrying their contract. We don't hear that term anymore because interest rates became so low, that no one would consider carrying a contract. Well with interest rates rising, this conversation would be something that we should be having with sellers now again.
And that conversation could be as simple as this:
"Hey, Mr. And Mrs. Seller, I just have a quick question. You guys have a pretty good equity position in your house. And just one thought came to mind. As interest rates are rising for typical mortgage rates, have you guys ever considered carrying a contract yourself? In other words, acting as the bank. This is where somebody would offer you a down payment, large enough to pay off your note that you have now and pay all the fees and everything else that's associated with the closing.
"But then after that, you'd have an income...
Here's some information that I think is super powerful that really no one talks a lot about. But it absolutely will impact you and I as REALTORS.
From 1968 to 2000, the average building in the country was 1.5 million new units. That's a long history there, 1968 to 2000. From 2000 to 2010, that number dropped to about 1.28 million units. Okay. Then we had a big building boom during the run up to the Great Recession. But then it collapsed and builders stopped building at all.
At the end of the day, when you add all those numbers together, what you find, and what analysts have found is that we are not building enough homes by a mile, right? And in fact, in order for us to just meet the supply demands of the country, we need to add 5.5 million housing units to our current inventory out there. And if we don't do that, we're gonna have perpetual low supply, which leads to higher prices and leads to kind of the market that...
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...
Here is a crazy stat that will be interesting for your sellers when you're sitting down to talk about a listing:
84% of the properties coming on the market are selling in less than 30 days across the country.
Now I would encourage you to dive deeper into your own local MLS and see what the number is for your local MLS. But it's probably gonna be somewhere in that neighborhood.
Now, another inverse number to that is what percentage of properties are staying on the market longer than six months? When you go back to 2011, that number would've been about 35%. Today, it’s 2%.
2% listings coming in the market are staying on for longer than six months.
You can just see how the market is so strong right now for sellers and how it's such an advantage to put your home on the market today as a seller.
Another great number to pair with these numbers is the fact that on average sellers are receiving 4.8 offers per listing. That's coming on the...
Part of what we should be doing with our clients, especially our buyer clients, is educating them about the reality of the market.
Here's one example of that:
Did you know that right now in America, 48% of buyers are offering above list price by about 2.9%? So when we look at that on the average purchase price in America, which is about $357,000, it's roughly $10,000.
So 48% of the buyers in the market are offering over full price. That number being an average of $10,000.
Now that's an interesting bit of education we can share with buyers to help them understand what they're dealing with when they're out there in the marketplace.
Then you can pair that with another important piece of data, which is:
On average, buyers are gonna compete on a listing 68% of the time.
68% of the time buyers are gonna be competing with another buyer in the marketplace. Because of that, they've gotta be super competitive when they're bringing that offer in. And...
Hey guys, there's a new study out from The REALTOR Organization talking about the consumer index. They're asking consumers questions about the real estate market.
One of the questions they ask homeowners is: Do they think it's a good time to sell?
What percentage of sellers do you think would answer yes to that question in your market?
Across the country, 76% of people that own a home believe now is a good time to sell.
That's excellent news because when you have such a high sentiment, when you're out there talking to people, they're much more likely to be open to having that conversation.
Not that long ago, just a few years ago, that was more like 30% or 40%. Today, it's 76%. That means over two-thirds of the people you're talking to think it's a good time to sell. Now it's just a timing issue — whether they're ready to sell today or not.
And here's some more good news:
A Zillow study reveals one in seven homeowners over the...
At this time of year, a lot of sellers will say something like this:
"Hey Jim, I think I'm just going to wait because I will probably get more from my house later anyway. So I'm just going to wait until spring or summer and see what happens then."
How do we address that comment or that concern?
I'm going to give you one script that's worked for me over the years. And it works by talking about the fact that when we're staying and rebuying in the same market, waiting doesn't make a lot of sense.
So let's put this in practice. You might say,
"Hey, I hear what you're saying, but here's something to consider, right? If you're buying or selling in the same market -- because the entire market's going up in value at the same time -- waiting to sell your home to buy another home just means the other home you're buying is also going up in value at the same time.
In fact, there's a little bit of a Delta that if you're buying a higher...
What are the top seven reasons why someone would want to sell in your market?
Well, according to the National Association of REALTORS new profile of home buyers and sellers across the country, here are the top reasons:
1. They want to move closer to family and friends — 18% of the time.
2. Their home is too small — 17% of the time.
3. Their neighborhood has become less desirable — 11% of the time.
4. Their home is too large — 9% of the time.
(Add the too large to the too small, and you got 26% of the time they want to sell has to do with the size of their home.)
5. A change in their family situation — 9% of the time.
6. Moving due to retirement — 7% of the time.
7. Job relocation — another 7% of the time.
So why do we care?
Here's the reason why:
Instead of talking about generalities like do you want to sell your home? Are you ready to move? Let's talk about specifics when you're doing...
Zillow announced recently that they've stopped buying homes!
In their press release, they said they had supply chain issues and labor shortages, which is interesting because when you look at what they actually did in Q2 and Q3, where we've had kind of the same issues going on, they actually doubled the amount of homes that they purchased during that time compared to last year.
So why would they go from twice the amount they were buying last year to stopping on October 18th?
Some people are saying that one reason might be they're seeing market changes, just like we've been talking about. They're seeing a lot more listings coming to market which creates pricing pressure and competition. So they may not be able to come in and pay these high prices and then resell it at an even higher price. Because Zillow runs a flipping operation, right?
So we're actually seeing that. I've got a lot of students and a lot of parts of the country that...
When do listings peak? In other words, when does the total number of listings hit its apex every year?
Well, it's an interesting question and it's definitely been affected by COVID.
Let me break it down for you:
In 2017, the peak was August.
In 2018, it was October.
And in 2019, it was September.
What do you think it was though for the COVID year 2020? And we're still in COVID, but at the beginning of the COVID years:
That number was shockingly (or not so shockingly) April — as March was when it was starting to gain some steam and when we had the shutdown. April was the peak of listings last year, and then it fell off from there pretty dramatically.
What do we expect for 2021 though?
We can't look at the seasonality of real estate anymore. The seasonality of real estate, where we used to know that spring and summer was the peak. And then it came over the top and fall and winter was the slow period.
That's not going to be true...
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