What's Ahead For Mortgage Rates This Week – Sept 22, 2014

Last week’s economic news largely concerned the Federal Reserve’s FOMC meeting statement and a post-meeting conference given by Fed Chair Janet Yellen. The FOMC statement indicated that the Fed continued its wind-down of Treasury and mortgage-backed securities and that its purchases are expected to cease after the next FOMC meeting.

What's Ahead For Mortgage Rates This Week Sept 22 2014Last week’s economic news largely concerned the Federal Reserve’s FOMC meeting statement and a post-meeting conference given by Fed Chair Janet Yellen. The FOMC statement indicated that the Fed continued its wind-down of Treasury and mortgage-backed securities and that its purchases are expected to cease after the next FOMC meeting.

The FOMC statement said that committee members find the economy to be improving at a moderate pace and currently strong enough to further reduce the QE3 monthly asset purchases. The Fed seeks to achieve and sustain its dual mandate of maximum employment and an inflation rate of 2.00 percent. While the unemployment rate is lower than the Fed’s benchmark of 6.50 percent, FOMC members cited concerns that the labor force is underutilized and that labor markets, while recovering, could use further improvement. The Fed repeated its customary statement that the Fed’s monetary policies are not on a pre-determined course, and that FOMC members continually review and interpret developing financial and economic news as part of their decision-making process.

Chair Yellen explained during her press conference that it is not possible to provide a specific date when the Fed will change its target federal funds rate. Economists and media analysts expressed concerns that raising the target federal funds rate, which is currently at 0.00 to 0.250 percent, could cause overall interest rates to rise. Chair Yellen said that she expects the current target federal funds rate to remain for a “considerable time” after the QE asset purchases cease. She also said that it is impossible to provide a specific date when the Fed will change its target federal funds rate and cited multiple influences considered by FOMC when changing monetary policy.

Home Builder Confidence Grows, Housing Starts Fall

The National Association of Home Builders Housing Market Index rose by three points in September for a reading of 59. Analysts had predicted an index reading of 56 against August’s reading of 55. September’s reading was the third consecutive reading above 50. Stronger labor markets were cited as supporting the higher reading, but builders were also concerned by tight mortgage credit standards. Any reading above 50 indicates that more builders perceive market conditions for new homes as positive as those that do not.

August’s housing starts were inconsistent with the Home Builders Index; according to the Department of Commerce, construction of new homes fell by 14.4 percent from July’s reading to 956,000. Analysts expected 1.03 million starts against July’s reading of 1.12 million homes started.

Mortgage Rates Rise, Weekly Jobless Claims Fall

Freddie Mac reported higher mortgage rates last week. Average mortgage rates rose across the board with the rate for a 30-year fixed rate mortgage 11 basis points higher at 4.23 percent. The rate for a 15-year mortgage also rose by 11 basis points to 3.37 percent and the rate for a 5/1 adjustable rate mortgage rose from 2.99 to 3.06 percent. Average discount points were unchanged for all mortgage types at 0.50 percent.

New weekly jobless claims dropped to 280,000 against an expected reading of 305,000 and the prior week’s adjusted reading of 316,000 new jobless claims. The original reading for the prior week was 315,000 new jobless claims. The less volatile four-week average of new jobless claim fell by 4,750 new claims to a reading of 299,500 new claims.

What’s Ahead

This week’s scheduled economic news brings multiple housing-related reports. The National Association of REALTORS® will release its Existing Home Sales report for August. Case-Shiller’s monthly Housing Market Index report and the FHFA’s Home Value report will bring new light to national market trends. The Department of Commerce will release its New Home Sales report, and as usual, Freddie Mac’s weekly report on mortgage rates will come out on Thursday. To see houses for sale in the Northern Virginia area please click here.

List to Last-Seven Steps To Success

List to Last-A Blog Series: By Rick Guthrie #4 Seven Steps To Success Continuing on with my “List to Last Series”, did you practice the appraisal script? Like I’ve said I believe your ability to explain that process is crucial in you getting the proper initial list price. Moving forward I want to talk about […]

List to Last-A Blog Series: By Rick Guthrie
#4 Seven Steps To Success

Continuing on with my “List to Last Series”, did you practice the appraisal script? Like I’ve said I believe your ability to explain that process is crucial in you getting the proper initial list price.

Moving forward I want to talk about my seven steps to success. Initially you had a great rapport building conversation, with the sellers, when you set up your listing appointment. Then you put together a Kickin’ Listing Presentation using my A.B.C listing format. Now it’s time for the appointment. These are the seven things I constantly do once I arrive and before the actual presentation or conversation. So here are the seven steps to success;

  1. Show Up On Time. Everyone knows you always arrive on time, but don’t arrive early. They’re trying to get meals done or kids to bed or whatever. Just show up on time.
  2. Knock on the door, hand them a card and offer to remove your shoes. Removing your shoes shows them that you respect their property and sets a precedence in their mind.
  3. Greet Everybody. You may see some little ones, hanging around, at their parent’s side seeing who’s at the door. Showing them that they’re important sends a message to everyone. Occasionally you’ll see a retired couple in the living room hanging around. That’s most likely Mom and Dad watching out for their kid’s best interest. Maybe that’s in reverse and it’s the adult kids watching out for Mom and Dad’s best interest. You just need to say hi to everyone. Getting all of the adults to the table for the presentation is important. If you can make that happen you’re golden…Trust me!steps to success
  4. Go to the Staging Area and Lay down your Presentation Packet. This is where the presentation will take place. This needs to be an area where the sellers can be across from you. This way they can see the presentation and you can see them. Preferably the dining room or kitchen table works the best. The reason I place my packet there is to let them know this is where it’s all going to take place.
  5. Ask For a Tour of the Home. Lead the tour if you can. The script may sound like this: “Mr. and Mrs. Seller may I get a tour of your home? Hey let’s start in the kitchen and then we can move to the family room.” The reason I like to lead the tour, if possible, is to show them a “Take Charge” type of attitude. The tour should take as long as it takes and you should have a pen and pad taking notes. Any professional would take that approach. Caution, at this time try not to make negative observations about the condition of the home. We’ll handle that after we go through the presentation. If they ask questions on that topic, during the tour, my script is this; “You know once we get your home listed tonight, I’ll walk through your home with the eyes of a buyer and make some humble suggestions on what you need to do to get you home ready to sell. Fair enough?”
  6. Go Back to The Staging Area and Seat everyone like its Thanksgiving Dinner. The reason I seat them is the couple tends to go to their usual chairs, which is at the opposite end of the table. You want them right in front of you.
  7. Don’t Accept anything to Eat or Drink. What happens is that a great host or hostess will see your coffee cup or water glass empty and they will get up from the presentation to fill it. This breaks your pattern and you don’t want that. When they ask, I just politely say, “No Thanks I’m fine”.

 

So practice my “Seven Steps to Success” and see how that works for you. It gets you and the sellers in a great mindset and sets the stage for an incredible presentation.

 

Try it out and as always, “You have a Great Month Today”.

 

List to Last- Explaining The Appraisal Process

List to Last- Blog Series #3 Explaining The Appraisal Process. By Rick Guthrie I hope you’ve tried my A.B.C. listing format. If you haven’t go to www.rickguthrie.com and read that blog. In the ‘’A” section or the Agreement on price section it is extremely important to explain the appraisal process to the sellers. This well […]

List to Last- Blog Series
#3 Explaining The Appraisal Process.

By Rick Guthrie

I hope you’ve tried my A.B.C. listing format. If you haven’t go to www.rickguthrie.com and read that blog.

In the ‘’A” section or the Agreement on price section it is extremely important to explain the appraisal process to the sellers. This well help you get market pricing based off of your comparables. Once a seller understands what the function of an appraiser is and how they protect the lending institution’s interest, you can have more of a business conversation about pricing. Most transactions will obviously have an appraiser involved and believe or not most sellers are not aware of how this works. Until you have that conversation with them I find pricing is more an emotional decision rather than a business decision. I remember a script I learned from someone 15 years ago, it went like this;
     “Mr. and Mr. Seller, once your home goes on the market it is no longer a home but a commodity so   we need to treat it as such”.

The appraiser places a value on behalf of the lending institution on that commodity and the sellers need to understand that. I explain the appraisal process right in the beginning of my listing conversation. My appraisal script is this;

Mr. and Mrs. Seller the first thing I want to you talk about is the appraisal process. Once we get your home listed tonight and a buyer brings an offer, the buyer’s lender, not the buyer, is going to engage the services of an appraiser. The appraiser is determining value for the lending institution. The appraiser is looking for three like properties (apples to apples) that have sold within your area within the last 3 months. They want to find at least one or more that have sold at your contracted price or higher. Do you understand? Certainly a lending institution would not lend more money than a home was worth and you as a buyer wouldn’t want to pay more than a home was worth right?”The Appraisal Process

Now once I have gotten verbal acknowledgement that they understand, I move forward. When you backup this script with great comps and what I call a location of comparables map you’ll find they will choose realistic pricing, which is good for everyone. Poor pricing costs you and more importantly them time, inconvenience and definitely money.

So try this appraisal script in your next listing presentation or conversation and see how it works. If you would like to see this in a YouTube video just email me at www.rickguthrie@kw.com and I’ll send you a private link.

As always, “You have a great month today”

 

List to Last-The A.B.C. Listing Presentation

List to Last-A Blog Series: By Rick Guthrie #2. The A.B.C Listing Presentation I hope you’re using a great Rapport Building Script like I outlined in my last blog. So let’s move forward and talk about your listing presentation or conversation which is what I like to call it. Years ago I realized that sellers […]

List to Last-A Blog Series:

By Rick Guthrie

#2. The A.B.C Listing Presentation

I hope you’re using a great Rapport Building Script like I outlined in my last blog. So let’s move forward and talk about your listing presentation or conversation which is what I like to call it.

Years ago I realized that sellers prefer to hear information in a certain order. If you ask yourself what would be the first thing a seller would want to hear? Well the answer of course is what their home is worth. Enter my A.B.C. listing.

The first section is the “A” section or “Agreement on Price”. I’ve found that if you’re talking about anything else first, at your listing appointment, the sellers are not really listening. So if I’m giving them my marketing plan first and they’re wondering what their home is worth at that point my information on my marketing plan is not really getting through. So in my “A” section I’m explaining in detail the pricing on their home backed up with comparable properties and illustrating why the market will bear that particular pricing strategy. Once I’ve done that I get their agreement before I move on. Once I get an agreement on price then I move to my “B” section.

The Listing The “B” section is for “Build Value”. This should define your marketing plan, your open               house schedule or whatever you do to bring them a buyer. Understand that when you get an  agreement on price a clock starts ticking. They’re wondering how much they’re going to put back in their pocket after they close. So move through this section quickly but still make it impressive and informative. If you do a pre-listing packet and drop it off it should be this Build Value Section or your Marketing Plan. When you get to this point in the conversation ask them if they’ve reviewed your marketing plan and do they have any questions. Then move on.

The “C” section quite simply is the Close. All this is for me is a customer estimated net sheet already filled out. Now I have a self-figuring net sheet and I know many do. It should be easy to explain and be padded with estimated buyer costs paid by seller. We want to show them worst case scenario what they’re going to be putting back in their pocket after a successful close.

After that is my closing question. You have to have a closing statement or question! Here is mine;

“Mr. and Mrs. Seller do you have any questions? No…. Great! When can we get your house in inventory?

If there’s any concerns they will come out then. I like to get all of the concerns or objections out on the table at the same time. One you should not hear is a pricing concern because we agreed on price 15 minute ago. Hmm you feeling the love.

I have a pre-made template and I teach this in a two day seminar so agents know it inside and out. The presentation is kind of plug and play. If you’re in the Northern Virginia area and you would like to attend, just email me at www.rickguthrie@kw.com and I’ll let you know when the next seminar is taking place.

As always, “You Have a Great Month Today”!

List to Last-A Blog Series: The Rapport Building Script

List to Last-A Blog Series: By Rick Guthrie #1. The Rapport Building Script Over the next couple of weeks I’m going to go over some great techniques to consistently help you get ink on paper at your listing appointment. Remember the stats tell us that 65% of sellers were referred their agent by someone else […]

List to Last-A Blog Series:

By Rick Guthrie

#1. The Rapport Building Script

Over the next couple of weeks I’m going to go over some great techniques to consistently help you get ink on paper at your listing appointment. Remember the stats tell us that 65% of sellers were referred their agent by someone else or they have used them before. Also, 60% of those sign with the first agent they interview. The moral of the story? Work your database!

Building rapport with sellers before your listing appointment, I believe, is responsible for 50% of your success in getting their business. Let’s face it, if they feel like they know you and are comfortable with you, before you come to their home for the appointment, well that sets them at ease. I’ve used my rapport building script in two ways. Either as a questionnaire in a pre-listing appointment or over the phone days before my listing appointment. I’m a one stepper, which means I really don’t do pre-listing appointments. So the phone is my choice for the rapport building script. You would never have them just fill it out, it just defeats the whole concept of building rapport. My script is designed to do 4 things:

  1. Build massive rapportthe listing the rapport building script
  2. Identify concerns or objections before they come up and before my appointment
  3. Identify the sellers expectations
  4. Identify possible competition

Imagine if you went to your listing knowing what the seller’s hot buttons were. Or how about this; knowing what a concern or objection might be so you could handle it in your presentation before the sellers even bring it up. Would it be helpful if you knew about the 4, 7 and 15 year old that will hanging around during your appointment? Do you think your clients would appreciate a customer estimated net sheet that will show them what they will clear after a successful close? The rapport script asks for their estimated payoff to help you prepare that documentation.

Building rapport before the appointment will open up a whole dialogue that will initially pave the way to a great presentation and then cement a foundation to a long professional/client relationship. My rapport building script asked questions line by line with lines for seller responses. Also, it has an area at the end so you may identify possible concerns or objects and write them in. If you determine that you may have a possible concern that you will have to navigate, you can take it to a coach or manager that may be able to help you with a solution.

If you don’t have a rapport building script of your own, just email me at www.rickguthrie@kw.com and I’ll email you mine.

And as always…..You have a great month today!