New podcast now out!

Last week on Rise Above the Ranks, we delved into our absolute favorite business-building strategy: door-knocking!

This week, we’re excited to share a Part 2 of sorts… how to work with developers! We got our start not just by door-knocking on luxury homes, but development sites (...even if the door hadn’t been installed yet).

We built our careers off of these two key skills, and we can’t wait to share them with you. Check out the latest podcast (Apple, Spotify, YouTube) and leave us a review to let us know what you think!

- James and David

The Fed addresses the “housing correction”

Until recently, the Federal Reserve has been reluctant to admit that a housing correction was coming. However, in a speech last week, Fed Governor Christopher Waller acknowledged that there may be a “material correction.” However, he allayed fears of a market crash. He said that, due to relatively tight underwriting, mortgage borrowers have generally higher credit scores than they did before the 2008 downturn.

 Here are key takeaways from Waller’s speech:

• The decline in pending home sales in August suggests that sales will continue to fall

• Builders have already begun cutting their list prices, offering large incentives, and pulling back on starting new single-family homes.

• While this market correction could be fairly mild, there may be a much larger drop in demand and house prices before the market normalizes.

Our take

This announcement shouldn’t come as a surprise because it’s exactly what agents have been seeing for months. Prices in many areas became unreasonably high, and now we’re seeing normalization across the country. Yes, there will be some market discomfort in the short term, but in the long run, this is exactly what the market needs. 

Down payments have gone up, up, up

This summer, the average buyer’s down payment was higher than it’s been in almost a decade. This is happening for two key reasons: a) the typical 5%-20% required down payment rose as home prices hit historic levels, and b) some buyers have been able to put down bigger payments after selling their homes at raised prices. Here are some key stats:

• In May and June, the average down payment reached $66,000. 

• The typical down payment was 18% of the average home’s purchase price, which is a nine-year high

• In July, the average down payment declined to $62,500, but it was still nearly double the median down payment in July 2019 ($32,917)

Our take

This is another sign of why it’s becoming so hard for first-time buyers to get into homes. Remind your buyers that although it is more expensive now to buy a home than it was last year, historically rates are still lower than they were decades ago. Get into a home now, secure a great investment, and then refinance later when the rates are better!

Developers are banking on conversion projects

Developers are taking advantage of the estimated 4,500 bank locations in the United States which closed between March 2020 and February 2022. Since banks are well-suited for conversion projects, developers are already repurposing many of those buildings into sought-after community spaces, clinics, condos, and apartments. 

Companies like Gardner Tanenbaum in Oklahoma and Baum Revisions in Chicago see opportunity in these ventures, since a successful conversion can have an ROI of 20%. They’re currently working on projects expected to add hundreds of units in the two cities.

Our take

We love to see people get creative and create their own opportunities. Banks are empty, people desperately need housing, so why not repurpose the empty spaces? We’ll be interested to see if this conversion work becomes a larger trend. 

Schematics

The news that just missed the cut

• Tom Brady and Gisele Bündchen have a healthy…  portfolio

• This real estate strategy is helping one woman replace her income

• Looking to buy international properties? Consider Portugal

• 50 of the strangest Zillow listings

• A quick guide to calculating property tax

• Rumor has it… Compass might be going private

🎧 Rise Above the Ranks

In this week’s Rise Above the Ranks podcast, we share the best ways to develop a network of developers who will feed your business for years to come. Here’s a preview: 

• Start with the deals. The best way to get noticed by a developer is to bring them an amazing deal. Instead of approaching local developers asking for opportunities, bring them a deal they can’t pass up!

• Take buyers to the site. Developers want to work with agents who are constantly making connections and finding new buyers. This proves you’re the kind of agent who will do everything you can to find the perfect buyer when the property is ready.  

• Practice your pitch. Know what you’re going to say before you set foot on the jobsite. Developers want to work with confident, knowledgeable agents, and your bold pitch is your one shot to prove that’s you!

Want the full scoop? Check out the in-depth episode here → Apple | Spotify | YouTube

Q&A

You ask, James and David answer!

We’ll be back next week with another answer to a real reader question. Submit yours here!

Just in Case

Keep the latest industry data in your back pocket with today’s mortgage rates:

Today’s Rise Above the Ranks podcast is best applied once you’ve absolutely nailed the art of door-knocking. Before you start networking with the builders and developers in your area, study these free resources: 

• Rise Above the Ranks— How to Generate New Business by Door Knocking (Part 1)

• The Essential Real Estate Toolkit— Delivered straight to your inbox when you share The Blueprint with a fellow agent or real estate pro (click the share link above)

• Broke Agent Media + The Blueprint— Door-Knocking 101: Strategies, Scripts, and Objection Handling

-James and David

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