BAM Key Detail:
- Byron Lazine, Tom Toole, and Lisa Chinatti offer strategies to gain listings and help buyers while mortgage rates remain volatile.
If you’ve been out there in the field, showing properties, making phone calls, and staying on top of the latest developments, you know this market calls for a different approach from the one that worked in early 2020.
And unless you’re taking the time to build relationships with other people in your industry, you might have no clue how to set yourself apart—in a good way—from other agents in your market.
Fortunately, in last Friday’s episode of The Knowledge Brokers Podcast, Byron Lazine, Tom Toole, and Lisa Chinatti shared a variety of scripts and talking points their teams are using to gain listings and help buyers—even when faced with 7% mortgage rates and low inventory.
Because, first and foremost, real estate agents are in the business of information.
As the legendary @BobKnakal always says, if you are in the business of real estate, you are not in the business of bricks and mortar, but in the business of information. Those who have the information have the edge. #FutureCity is all about information. Looking forward. https://t.co/qdyAColBZF— Amir Korangy (@mrkorangy) March 3, 2023
Be prepared to take advantage of opportunities
With mortgage rates hovering around 7%, it’s not surprising so many would-be home buyers are backing away from the market. But even with the obvious challenges, it doesn’t mean buyers should take a break from home shopping.
When a buyer is up in the air about putting their home search on hold, be prepared to tell them the advantage of buying today—higher rates and all. Of course, a lot of this boils down to what is happening in your local market.
In some markets, higher mortgage rates mean less competition and homes staying on the market for a bit longer. In these areas, there’s even the potential to secure a home for under that asking price.
Right now, at 7%, there are gonna be other (buyers) who withdraw from the market. If you withdraw from the market, you might miss your opportunity to get a deal at 11% lower than the asking price. And 11% and 1% on a mortgage rate equal the same thing. So, if we’re shopping right now, and we find a floor plan that suits your needs, in the perfect location, and we can get it at the number that works for you, then wouldn’t that make sense to move forward and buy the deal today? Secondly, are you not going to be the most educated home shopper in 2023 if we continue to go out there and look at the market?
Lisa Chinatti shared how being able to think creatively and come up with solutions will allow consumers to act on opportunities when they strike.
It’s actually a huge opportunity. We all remember when rates hit 5.99% for, like, a couple hours on one day. How many people were in a position to take advantage of that? Not many. Because you’d have to have had an offer accepted very recently, accepted that day, or in a position where you were in prime time to refinance. One of the opportunities we have to speak to is that, I think over the next few months, we’re gonna see some of that volatility continue, and we have to put our clients in a position to capitalize on it.
Of course, working with the right lender can greatly help buyers who close on a deal with a higher rate. Let’s dive into that next.
Work with lenders who can provide real opportunities for buyers
Working with the right lending partners is critical to making home purchases as affordable as possible for motivated buyers in this market. How much a lender is willing to give you in exchange for referrals is a non-issue compared to what they can do for your clients.
Until you invest the time in finding these lenders and getting clarity on what they offer, you won’t be able to share that crucial information with your clients—and save them a considerable amount of money, upfront and in the long run.
Here’s what Lisa, Tom, and Byron are seeing some lenders do in their markets:
- A primary lender for Lisa’s team agreed to a free refinance within the next 24 months. As soon as the consumer wants to act upon that rate drop, they’re guaranteed at least one free refinance, which gives consumers a bit of security.
- Other lenders offer a 2-1 buydown. Basically, it allows you to buy down the rate of the loan for the first two years—2% the first year and 1% the second year, then it goes up to the existing rate. In short, it gives the loan holder some time with lower rates. In the meantime, they’re building equity and wealth.
The net worth of the typical homeowner in the U.S. is 40 times the net worth of a typical renter. And since you’re in the business of helping consumers build real wealth by becoming homeowners (in a sustainable way), you need to educate yourself and your team on the best ways to make that happen and how to present that information to buyers.
The knowledge broker is talking to multiple lenders right now in the market and seeing who is savage about providing the best experience for home shoppers and giving them the best number.
What agents need to be doing right now to create opportunities
Buyers and sellers alike have their reasons for shying away from the market, especially if they don’t need to move—or if other priorities are making a home purchase impractical (as well as financially challenging).
For those who are motivated to buy or sell, driven by a particular life event (divorce, death, diapers, or diamonds, as Tom put it), providing value-based follow-up is critical to building trust and giving people a reason to think of you first when they’re ready to transact.
Before you can follow up, though, you need to find people to follow up with. And that means being out there in the field, showing homes and becoming an expert on the listings in your market—so you can help buyers find exactly what they’re looking for as soon as it’s available.
You will naturally—being out there, showing buyers properties—generate more business. When you get the call this weekend, and the home shopper says to you, ‘Hey, I’m thinking about 123 Main Street,’ you can say, ‘Yeah, I showed it Thursday. I also showed it Tuesday. Here’s what I know about the house. I’m an expert on the inventory in this market. Tell me exactly what you’re looking for, because I’ve also shown 14 other homes in the area in the last seven days alone.’ That’s the knowledge broker. That’s the separator.
While no one can tell the future, multiple offers and offers over the asking price are back in some markets. Lisa brought up the importance of knowing how to recognize the homes likely to get multiple offers from those just as likely to sit on the market indefinitely—based on specific factors and selling points.
The more you know about the market and about your client’s home early in the game, the better you can advise them on how to improve their chances of selling at the best possible price.
One of the things we’re seeing in Boston is multiple offers are back. We’re seeing homes selling way over asking again. And it’s going to be just as important this year that agents are staying in tune with how far things are selling over asking and what unique factors with each house are contributing to why homes are selling. Just as some homes are getting multiple offers, we’re still seeing some sit on the market. And being able to really understand the difference is critical.
And Tom drove home the point that the agents who are out there doing the work, educating themselves, and making the best use of their time are the ones who make things happen and see consistent growth in their business, no matter what the market is doing.
How many times have you made a bunch of phone calls and then something falls out of the blue onto your desk? It’s not because you got lucky, it’s because you were out there making things happen and this is the universe thanking you. There’s no data that backs this up, but it happens over and over again in businesses like real estate, like mortgage, and everywhere else.
Make the best use of your time
Why waste time between appointments and showings when you can reach out to a client or prospect with news about a property you just walked out of—one that meets the needs and preferences of someone motivated to buy?
After all, when you’re serious about serving the buyers and homeowners in your community and making the best use of your time, your mindset is on a completely different track. Keep the conversations going all day by utilizing the extra few minutes in between appointments to make a few phone calls.
That extra couple minutes you take, it works every single time. Driving around listening to Howard Stern or talk radio isn’t gonna cut it right now. You have that time in the car. Make those minutes matter. That’s one of the key hacks to productivity—taking the time you have and expanding it…You can be productive in that time. And that’s what it takes in a 7% climate.
One way to get people to stay on the phone with you is to hook them as soon as they answer. We always talk about hooks for social media content, but the same applies to making calls.
A great hook when you’re in the car is ‘I’m heading over to 123 Main Street. It just came on the market and I was thinking about you. Didn’t know if you wanted me to send you this other house I just got out of.’ You’re telling them, ‘I know the inventory better than anybody. I can text you the information (on this house) over, and I’ve been inside of it. I know about it.’ That brings an edge to the information you’re providing.
Speak to the Pain Points of Your Clients
In their discussion on the demographics to focus on to increase available inventory, Byron, Lisa, and Tom brought up Baby Boomers. Boomers own one-seventh of the world’s wealth, and as an agent, you need to know their pain points, so you can draw attention to the best opportunities for them.
We know that older folks in Massachusetts don’t want to live here because of the weather. We’re about to get another foot of snow tomorrow. They often have very high equity—if not 100% equity in their homes. So, selling en masse and moving to Florida or the Carolinas, where they can pay cash for a home, be a little bit immune to those high rates, and still put money into their savings, is one of the opportunities that we’ve been capitalizing on and might apply for a lot of people in different areas of the country, as well.
The next level to this, especially if you’re in one of the Sun Belt states people are going to for retirement, is to find the pockets where there’s an increase in inventory. Share with consumers they can get near-peak pricing if they are looking to move out of a market like Massachusetts and be able to find a new property in a community where inventory is rising.
For Baby Boomers who have built up a lot of equity, today’s market is an excellent opportunity to cash out high. But homeowners may not realize that Q1 and Q2 are going to be the best times to sell this year.
This is the chance that everyone’s been waiting for, and a lot of these people aren’t getting the right information. They’re not getting all this data and understanding where the market’s going. And sellers are typically the last ones to find out the market’s turned…You’ve gotta get the word out with this. Because some of them don’t know because they’re not in that decision-making phase yet. And they’re gonna be disappointed someone didn’t tell them to help them cash out on their asset.
Another group of people you can focus on is condo owners who may be ready for more space.
(Condo owners) are gonna feel the pain of their space before folks in a single-family are gonna feel the pain of their space, by virtue of not being able to put on additions, potentially not finishing basements, not finishing attics.
Condo owners are gonna have pressure on their HOAs right now, too. Because we all know how hard it is and how expensive it is to get consistent contractor agreements…. It’s very hard to keep the HOA cost down when you’re dealing with these contracts. So, that’s gonna be a pain point that you might reach out to them with marketing or with data and saying, ‘Hey, sick of HOAs going up? Your walls aren’t growing and you aren’t able to put that addition on? Here are the opportunities in the market….
Top takeaways for real estate agents
Your clients and prospects depend on you as a real estate professional to know what’s going on in the market and whether it’s a good time for them to buy, sell, or refinance. And it’s on you to keep them in the loop so they can take advantage of opportunities when they come.
Always be educating yourself about the market and about how the most trusted agents grow their businesses. There’s no shame in borrowing a script that works, as long as you back it up with current market data and action.