Kevin Ward advises real estate agents to use rising interest rates as a sales opportunity, not a crisis. Tell fence-sitting buyers that higher rates cut their buying power, and tell sellers now is the time to list while buyers are motivated to act.
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Interest rates are on the rise. Hey, YouTube, it's Kevin Ward, your real estate success coach, helping you get more yeses and more successes in your business and in your life. And interest rates are on the rise. They are going up. They've been going up. And then the Fed, the, the Fed chairman just announced interest rates are going to keep being raised this year, 2018. What do we do about it? What does it mean for the real estate market? And so let's talk about it. What it means for agents, what it means for buyers, and what it means for sellers. And I'm going to tell you, the good news is, is that it's good news. It's good news pretty much all the way around. Obviously, for those buyers that don't take action. Now, good news becomes bad news when interest rates are on the rise. So here's what you do about rising interest rates. Number one for you as a real estate agent, if you're watching this, I'm assuming you're a real estate agent, what do you do? You use it. You use it as a cta, as a call to action for your buyers that have been kind of dragging their feet, piddling, sitting on the fence. We're not sure we're thinking about it. You've got people that they're able to buy a house, they're willing to buy a house. They just kind of haven't got ready to pull the trigger yet. Well, this is the time to tell them to get up and it's time to move. So for you, rising interest rates give you great leverage. So here's what I want to say, a counteraction to some of the emotional response that agents have. And that is whatever you do with interest rates on the rise, don't freak out. It's not the sky is. Interest rates rising does not mean the sky is falling, okay? It actually causes people to take action. And so you use it as simply an alarm to say, look, if you're thinking about doing something, now's the time to do it. I'm not trying to make you move if you don't want to move. I'm not trying to make you buy if you don't want to buy or sell, if you don't want to sell. But if you're thinking about doing something, interest rates mean something's going to happen. Now, that is important to understand. So as a real estate agent, do not freak out and go like, oh, my gosh, now it's going to get harder to help buyers, harder to get buyers to buy. And all of that kind of stuff. If interest rates were to keep rising interminably, then it comes to a point where, yes, it kind of hurt, it can hurt the real estate market. The fact that interest rates are going up is actually a good thing in the big picture because, look, higher interest rates are normal throughout the history of the world and we have been in historically low interest rates for a historically long time and we have been spoiled. And whenever an economy is healthy, people that have money actually like the fact that there is interest on money. Borrowers, debtors, don't like interest. They like low interest. People that actually have money like interest rates to be a little higher because it means they make more money on their money anyway. Bottom line is, use it as leverage to get people to take action. Now what do you tell your buyers? Well, here's how buyers need to deal with rising interest rates. Don't snooze, okay? Don't you snooze, you lose. Right now, it is time to take action, okay? It is. If you don't use the low interest rates that are here right now, you're going to lose it. And interest rates have already been going up. They've already been going up for a while now. And based on everything that's happening and what the Feds are saying is interest rates are, they're going to, they're, they're looking at raising, they're predicting, projecting that they're going to. The interest rates are going to be raised four times this year. Now, the mortgage rates do not, are not 100% tied to that. But when interest rates start going up, mortgage rates are going to go up. So if you're, you got that buyer, you let them know it is time to get a move on. It is time to get out there and buy a house. Because as your interest rate, as the interest rates goes up, their buying power goes down and it goes down dramatically. When interest rates rise a quarter of a point, their buying power drops dramatically. When it goes up a half a point, their buying power goes way down. And so if you got somebody ready to buy, now is the time. Now for sellers, what should sellers do? The fact that interest rates are going up. Look, with everything else that's happening in the market, sellers, if you want to sell your house, you've been thinking about selling, you've been thinking about is it time to move or not? It's time to jump on it. And for you that are watching this, as real estate agents, your job is to educate buyers that it's time to move. Don't snooze sellers. Look, this could be the best opportunity to sell your house. We've been in an upward trending market now for years and years and years. So long that if you're a real estate agent, you've been in the business less than 10 years, you've never really been punched in the mouth, as Gary Vaynerchuk says, by an economy. You've never really had it tough. Well, we are in a great position where the economy is strong. Interest rates start going up, it puts pressure on buyers to take action. So you've already got the fact that we've had home prices have gone up dramatically. When interest rates are going up, in a sense it can be the beginning of the end. Now it doesn't mean that you're, don't be a, you know, a doom and gloom type person that goes like, oh, you know, this is about it. If you're going to sell, now's the time you're going to lose because maybe, maybe not. But it is a great time to move. Because when interest rates are going up, buyers get motivated for multiple reasons. One, they see prices still going up, the interest rates going up, they know their buying power is going down. So what that means is now you got more buyers out there that are more motivated than they've been before. So if you're interested in selling, there's going to be more buyers that are more motivated. That means upward pressure on the price of your home. Once the interest rates have gotten to those higher points, it can eventually mean downward pressure on pricing because buyers ability to buy more goes down. As interest rates go up, their ability to buy goes down. So it can actually put a downward pressure on pricing. But right now we're on the front end of the interest rate increases and so it is a great time for sellers now. Since 2007, my crystal ball broke in 2007 when the economy collapsed. So I'm not predicting projecting what's going to happen. I'm telling you this is what is happening. It's already happening. And I'm simply saying this is how as a real estate agent you can leverage it. Always watch what's happening in the market, take advantage of it, leverage it. It's good for you, it's good for buyers and it's good for sellers. Celebrate interest rates and win. If you got any questions, make sure you post them below. If you got comments, post them below. Don't give the video a thumbs up. Get out there, play to win. And always expect yes.
