“One of these days, you are going to wish you paid more attention to me. Sincerely, Terms & Conditions” someecards
Real estate sales are still running hot in May of 2021, pushing the national median home price to $372,400, up over 16% from $310,100 a year ago. Low inventory of homes for sale continues to cause buyers to compete with other buyers for the same house. Buyers have to think fast and make their highest and best offer. The saying goes, “if you have to sleep on it, someone else will be sleeping in it.”
On one end of the see-saw, you see rising home prices. On the other end of the see-saw are low mortgage rates and high wages attempting to keep everything balanced. New homes hitting the market help maintain a balance between homes for sale vs. high demand from homebuyers.
Watch out for rising mortgage rates, though. Rising mortgage rates along with higher home prices could cause a correction in the rate of increasing home prices, even though prices are expected to continue to rise over the next year or two.
Other costly mistakes to avoid on the home purchase contract:
1. Carson and Casey thought they knew the neighborhood and made a competitive offer to pay $10,000 over the appraised value. They thought the house would appraise for $175,000, but it appraised for $225,000. Oops! The unexpected higher price took Carson and Casey way past their budget, and they did not have enough money to close without pulling money from a retirement account. Expensive!
2. Stay clear of clauses like, “seller to pay a $10,000 decorator allowance to buyer at closing.” Traditional mortgages prohibit the buyer from getting cashback from the seller in this manner. There are other solutions to appease both parties without giving cashback to the buyer.
Real estate and mortgage professionals bring value to home buyers and home sellers when they can apply their knowledge to avoid costly traps to these customers. When you save a customer from a bad experience, they reward you richly with referrals for years to come.
Memorial Day weekend has always held special meaning to me. As a young boy it was about parades, ballgames, and barbeques. Times when friends and families would gather and share stories. Mine was a generation of boomers, born in the 50’s, fresh out of the Korean War, WWII, and with plenty of those still around from WWI. As I grew up, the country faced Vietnam and as an adult, a number of conflicts around the globe in which brave men and women risked their all for their country. For this, we must take the time to remember those who gave their all.
I think it only fair to share that my belief is many will enjoy parades, games, barbeques, and family gatherings, but so many of the stories are either gone or will not be shared; some stories will not be heard. It is important to acknowledge the events of the past, not as if they were right or wrong; but that they were entered, people were called to duty and responded.
This weekend is about remembering and reminding us that we have the ability or disagree, get along, do what we please when we please, all because for 245 years, brave patriots have responded to the call freely and were willing to give their all for us to do as we do.
Have a safe and sound holiday weekend, be sure you take some time to remember those who have come before us and gave the last full measure of devotion. God bless the United States of America!
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Almost every buyer in today’s market has faced the challenge of the seller’s market. Homes selling the moment (or even before) they are listed, homes with multiple offers, and of course, the dreaded multiple offers, sold over asking with appraisal and inspection waivers! Just to name a few!
Never before has it been so important to set the proper expectations with your buyers and arm them, and their buyer’s agents” with all the strategies at their disposal to make the odds move in their favor. This also includes defining for each buyer all the things they can be doing every day to improve as buyers.
We have talked a great deal about this before, but we are seeing solid results from people who are on the ground and getting deals done because they used one or more of these strategies:
• The quality of the offer is stronger because of the fully documented preapproval.
• The speed at which we can close can make our offer stand out over others.
• Working to bank as much money as we can to make stronger offers. Additional part-time work is available in most of the country.
• Using stimulus money, tax refunds, gifts, retirement funds, and even selling off other items to improve cash position.
• Considering paying off outside debt to improve scores or increase purchasing power.
• Lowering the down payment to free up cash so if the house doesn’t appraise, cash is available if the buyer chooses to do so. Even if that means accepting PMI to make it work.
• Increasing down payment to improve loan program and/or to lower borrowing costs.
• Getting really clear about the child tax credit that starts July 15th 2021 for most families with small children. Up to a $300 payment each month per child from July through December could really help the situation during the looking process, or for those who begin the search soon.
There are many challenges in today’s housing market for buyers. However, everyday people are getting offers accepted and families are winning the home of their dreams! The key for us in helping our clients and referral partners is to be certain we are helping our buyers buy better, by having all the tools and strategies at hand to help them win the deal!
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In today’s world of dealing with unproductive Internet leads, it is time to cultivate the tried and true methods of yesteryear, the referral. A referral is often a warm lead from a trusted source. But have you ever sent a referral to another broker, and then never heard from that broker again? Join the club.
What is your conversion rate on getting or giving referrals? With over 2500 referrals given each day in the US between agents, you may want to focus on building a stream of income from this underserved resource. But when you are actively giving or receiving referrals, keeping track of status might be a challenge.
The communication of status and updates might be consistent or ,all too often, you never hear what the status is. Did the client have a good experience? Did the referral result in a sale? With the success or failure of the transaction, would you ever refer to that agent again?
Statistics tell us that people are moving to many different areas, and when they are referred to a professional by another professional, confidence levels raise to a more comfortable level.
However once referred, the referring agent is often not compensated with future referrals. Losing the contact, or infrequency of prospects wanting to buy or sell in a given area, can block getting a steady stream of future referrals going forward.
Want more referrals? Here are a few tips to increase the flow of referral income to your bottom line:
1. Have a referral marketing plan in place to intentionally solicit and offer referral reciprocity. Include in your current marketing messages an offer of specific relocation resources to target groups of prospects that may be in a position to give you referrals. Tailor your messaging to engage other real estate professionals in neighboring states that you are a resource for anyone coming to your destination area. Follow up with your sphere of influence and update them on migration trends for second home destinations. Poll your past clients with a non-solicitive checkup/check-in and remind them that you can leverage your services all over the country through your network to help their friends and family.
2. If you are located in an area with close proximity to other states, consider contacting top producing agents and companies of your offer to help their agents and their prospects that might be coming your way. Be consistent with updating this group with recent changes in your area that may be a new asset to those considering moving to your area.
3. Check out a new referral platform that organizes the referral process. Created by a practicing agent from Nevada, Todd Miller saw the need for a more systematized process for giving and getting referrals. He and his partner, Oana Sterlacci, developed ReferralCloud.co. (Note: Not .com- www.ReferralCloud.co)
This system acts as a referral coordinator for any real estate agent client referral and rewards those agents using the platform to more referrals acquired from inbound resources.
They addressed the fragmentation of the referral process by streamlining the online platform that shares real clients, not just a “lead”. With no monthly fee, ReferralCloud.io includes other strategic partners for referrals like lenders, to promote their services. With their position as a directory, agents who want to increase referral business may want to consider a platform that supports the referral process.
For more information about ReferralCloud.co,visit their website and click here for our video interview with this dynamic team.
Todd is the owner and broker of Nevada Realty Solutions, with his partner Oana Sterlacci. In 2009 Todd and Oana sold over 1,100 houses and were the #1 team in the nation as reported by the Wall Street Journal. Todd lists properties for banks, and regular sellers, including short sales. Todd also works with investor buyers and regular home buyer with his team of highly talented agents.
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“I don’t regret the things I’ve done. I regret the things I didn’t do when I had the chance.”
We have seen lots of moving and shaking going on this week in the home financing market. The inflation data ran hot, sending the 10-year bond yield into a spike. When the bond yields spike, it typically bumps up the price of mortgage rates. Rates were up about an eighth of a point. This Richter scale blip could spell higher bumps in the mortgage rates later. When the financial markets move around, you may want to put yourself in a solid place.
Several mortgage clients put themselves in a stable place and are enjoying some bragging rights right now. The Smiths refinanced and lowered their interest rate and freed up a few hundred dollars per month by lowering their mortgage payment. They plan to take part of the extra money and pay off debt. The other part of their savings is to take some memorable vacations.
The Millers have ratcheted down their mortgage rate and eliminated ten years off their mortgage term. Now they can retire without being tied down to a mortgage payment.
I have celebrated with the Garcia’s who took this opportunity to refinance, pull cash out to upgrade, or modify their home. John and Jane Doe bought an additional house.
The Johnsons bought their first home and locked in a fixed-rate mortgage in the high 2’s that will help them build wealth and keep their budget on track. They don’t have to worry about the landlord raising their rent every year.
The opportunity is there now but will be gone one day, and we don’t know when. Do something today, and don’t regret missing the opportunity.
Home prices are steadily rising. The National Association of Realtors announced that the median home price rose 16.2% year-over-year to $319,200. That means the houses selling in the neighborhood where you want to live selling at $200,000 last year are now selling for about $232,000. That is a $32,000 difference over 12 months or a $2666 per month increase.
The Millennial generation leads the home buying market, with Generation Z making their entrance into the real estate market. Demand is predicted to remain strong for home buyers. The lack of homes available to buy is currently continuing to push prices up.
As mortgage professionals, we can win trust and appreciation from our mortgage clients when we listen carefully to what the customer wants to accomplish from the new mortgage. Ask good questions like, “What do you want to accomplish with this mortgage?” “What is the maximum house payment that is personally comfortable for you?” Asking open-ended customer questions like these can move you to the customer’s side of the table. You will be in a better position to help them choose the very best mortgage terms to meet their goals.
While some are struggling to get deals to go together, those focusing on what it takes to win the deal keep on winning. As I spoke to the issues in the past about “winning vs. whining”, you can make a choice every day about your approach to the market in which you work. You can whine about the issues and the challenges, or you can identify the solutions and the strategies necessary to help your clients win!
Record numbers of homes being sold tell us that there is an opportunity. Greater numbers of buyers wanting these homes creates the challenge of how to navigate the market to put your client in the best position to win. However, the plan is not a one and done solution or strategy that will make it all come together for you, it takes a series of strategies to optimize results and secure the win. Remember, more than one strategy at a time to make the win a reality, and the process of winning incorporates the possibilities that there are losses along the way. The good news is; your client only needs to win once!
A few things to keep in mind are:
1. Get your client in the best possible position to buy.
2. Give them a buyer improvement plan to follow each week so they become stronger and more flexible in their options.
3. Set the stage by setting expectations about their specific market.
4. Use all the tools available to be sure your clients and referral partners can make their best offer possible and be sure to include the power of speed to the closing table.
5. Be sure you, the client, and your referral partners are on the same page and working toward the same solution!
As originators you need to use your experience about what people are doing to win their offers and help your current clients benefit from your experience. Yes, it is a challenging market, but it also a market ripe with opportunities. Use your winning strategies to keep on winning!
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Near the end of Stidger’s book I was inspired to read a quote from Bishop William Quayle (1860-1925)… “Ah, my soul, hast thou learned the lure of the book, and hast thou learned what a book is as a delight, and hast thou learned, not as a scholar reads, to get to be great, or to read as the egotist reads, to be thought wise, but hast thou read as God would read, to catch good and to see far, and, to learn to live, and to blazon thy scutcheon with the radiance of the morning light?” Read on, friends, and inspire others to do the same!
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