Major turn in landmark real estate case
Plus, what you should say to hesitant buyers
Welcome back!! We hope you had a great holiday and a chance to recharge. We sure did, and now we are raring to go!
Now we know everyone could use some motivation, including your prospective clients, so here’s a helpful script for you to use if you’re having a hard time landing a listing.
We know what you’re thinking. “Prices are very high. Mortgage rates are very high. Now is certainly not the time to make a move!”
But… with everyone sitting on the sidelines, what do you think is going to happen the moment rates drop to 5%? Everyone’s going to come racing back to the market like it’s 5am in a Best Buy on Black Friday. It’s going to be an absolute stampede!
And THEN you know what’s going to happen? Prices are going to skyrocket EVEN HIGHER than they are now. So yes, you can wait, but if you’re planning to buy and own a house for 20 years, I’d say this a pretty good time to make a move.
Take it from us. That might be the message your next client needs to hear.
- James and David
Post-Labor Day housing market update
Prices of homes for sale are up 4.5% annually, the biggest increase we’ve seen in nearly a year. That’s according to Redfin’s latest market update. Here are other key numbers to note:
Median sale price: $378,725, up 4.5% YoY
Median asking price: $379,747, up 3.7% YoY
Median monthly mortgage payment: $2,612 @ 7.18%, up 15% YoY
Pending sales: 83,271, down -13.3% YoY
Active listings: 798,259, down -18% YoY
Months of supply: 2.8 (4 to 5 months is considered balanced, with a lower number indicating seller’s market conditions)
These are great stats to have on-hand. It’s so crucial to know all the key metrics for each market that interests you. Agents should be knowledge brokers. Become the trusted consigliere to your clients. In the current market, clients will really need to see why either selling or buying makes financial sense. To persuade them, agents will need to know their stuff and have their pitch dialed in. When you know your numbers, they’ll be dialing yours!
Mortgage Rates: Past, Present, and Future
Mortgage rates eased again this week, dropping below peak levels that we saw in late August. However, they remain above 7% for the fourth consecutive week. That’s according to Freddie Mac’s weekly mortgage survey. Here are the key points:
The 30-year fixed-rate mortgage reached 7.12% this week, down from last week’s 7.18%
The 52-year average for the 30-year fixed-rate mortgage is 7.7%
The 15-year rate dipped to 6.52%, down from last week’s 6.55%
Right now, our clients are going through sticker shock since they’ve gotten used to such low mortgage rates. But they need to swallow the bitter pill and accept that, even as inflation goes down, those rates aren’t coming back anytime soon. It’s going to take time. Until then, start acclimating your clients to the new normal with hard facts and figures. Explain why buying in this market makes sense. For more on that, scroll down to today’s Foundation Plans.
Anywhere settles in landmark real estate case
A major development has occurred in the Moehrl and Sitzer/Burnett class action lawsuit. Anywhere Real Estate has agreed to settle. Here’s what we know so far from court documents submitted on September 5th.
In the proposed settlement in the Moehrl case, Anywhere will pay $83.5 million.
No details about the proposed settlement for Sitzer/Burnett were included in the initial documents filed, but Anywhere’s attorneys have asked that the company be excused from the pre-trial conference, suggesting that the settlement is likely to be approved.
Other defendants in the cases, including NAR, HomeServices of America, RE/MAX and Keller Williams, are still on track to go to trial.
We welcome this bit of good news, but not all parties have settled, so things are still in flux. We hope the current system can be salvaged, but we encourage agents to prepare for the worst. Start incorporating buyer agreements in your practice.
The news that just missed the cut
Myrtle Beach: https://tinyurl.com/yckyte7j
Advice from James and David to win the day
It’s more important than ever that you have your presentation or pitch down pat. When speaking with potential clients, our job is not to try and convince them to do something. Leave that to the salespeople! Our goal is to become trusted advisors. To do this, we make sure to have these three key pieces of information at every single appointment with a buyer or seller.
Their financials – One of the most important things to bring on an appointment is the Seller Net Sheet or the Buyer Closing Cost Estimate. Show your clients exactly how the numbers are going to play out. Aim to give them a deeper understanding of how this will impact their finances.
The predictions around mortgage rates – Talk to your clients about where mortgage rates stand and where they’re headed. It’s a hot topic that’s on every client’s mind. Be ready with the latest predictions, facts, and figures from all the important sources. We’ve compiled them for you. Know them like the back of your hand.
Mortgage Bankers Association—Average 5.9% in Q4 2023
Morningstar—Average 6.25% for 2023 and 5.0% in 2024
Goldman Sachs—6.4% by the end of 2023; averaging 5.9% in 2024
National Association of Realtors® (NAR)—6.4% by the end of 2023; 6.0% average in 2024
Morgan Stanley—Starting 2024 at 6.0%
Moody’s Analytics—Average 6.5% for the majority of 2023; 6.0% by the end of 2024
Realtor.com—Starting 2024 at 6.1%
Fannie Mae—Average 6.6% in Q4 2023; down to 5.9% by Q4 2024
The current lock-in effect – The lock-in effect is real, so you need to be able to contextualize it and show what options your clients have. Use the script we mentioned in the intro or the script found here. However you do it, you’ve got to deal with this head-on.
Just in Case
Keep the latest industry data in your back pocket with today’s mortgage rates:
Source: Mortgage News Daily
That’s a wrap on this edition of The Blueprint!
Remember: each day is a gift and a new opportunity to lead the life you want and to become the person you want to be. The mistakes and missteps you’ve made in the past don’t define you. Live as intentionally as you can and be ruthlessly focused on the goals you’ve set out to achieve. You can do it!
Thanks for reading, and we’ll see you back here on Tuesday!
- James and David