Educating buyers and sellers with correct information and proven data

It is crucial for loan officers and mortgage advisors to educate buyers with correct information. The mortgage market is constantly changing, and there is a lot of misinformation circulating, especially through the media and 24-hour news cycle. This misinformation can create fear, anxiety, and uncertainty among buyers, causing them to hesitate and wait for better rates or home values.

To combat this, loan officers and mortgage advisors need to provide buyers with accurate and up-to-date information to dispel any myths or misconceptions. By educating buyers with correct information, loan officers can help them make informed decisions and take action.

One of the first steps in educating buyers is acknowledging that it is not their fault for being misinformed. They may not be aware of the misinformation being spread or the power of appreciation in the current market. By reassuring buyers that it’s not their fault and that everything will be okay, loan officers can establish trust and build a strong relationship.

Loan officers should position themselves as professionals who will walk buyers through the process and provide them with the right information, documents, and data. By arming buyers with the facts, loan officers can help dispel fear, anxiety, and myths that may be holding them back. The use of accurate documents and data in the right order and place can turn fear into action steps.

Another important aspect of educating buyers is highlighting the current market conditions and trends. Loan officers can use graphs, statistics, and historical data to show buyers that the current market is favorable for purchasing a home. For example, the Mortgage Bankers Association (MBA) projected that 2023 will be one of the top purchase money markets in over 20 years. By presenting this information, loan officers can instill confidence in buyers and help them understand that now is the right time to buy.

Educating buyers with correct information is crucial in today’s marketplace. Loan officers and mortgage advisors need to counteract the misinformation and fear that may be preventing buyers from taking action. By acknowledging that it’s not the buyers’ fault, reassuring them that everything will be okay, and providing them with accurate information and data, loan officers can empower buyers to make informed decisions and take advantage of the current market conditions.

Reluctance to give up low rates.

Steve Kyles discusses on a recent podcast the issue of reluctance to give up low rates in the housing market. He acknowledges that many buyers are hesitant to move up to a more expensive house and acquire a higher interest rate when they already have a low rate. However, Steve proves that this reluctance is unfounded and provides several talking points to dispel this concern.

First, he highlights the average homeowner’s equity, stating that the average homeowner has $274,000 in equity in their current home. This means that despite the higher interest rate, moving up to a more expensive house can still be financially beneficial. Steve Kyles suggests using this equity to pay off high-interest consumer debt, which can provide significant relief and free up cash flow on a monthly basis.

Steve emphasizes that the interest rate is not the most important factor to consider. Instead, the mortgage is seen as a tool to leverage equity and improve overall financial health. By using the equity to pay off debt, homeowners can reduce their monthly expenses and potentially have enough money to put down for a move-up home. This can result in a lower monthly payment overall, even with a higher interest rate.

The second challenge discussed in his podcast is waiting for rates to come down. He argues that waiting for rates to decrease is a guessing game and may not be worth the wait and provides an example using a $400,000 loan amount, stating that a 1% difference in interest rate only saves $250 a month. While some may consider this a significant amount, the speaker points out that it is only $3,000 a year.

In conclusion, this episode of the podcast highlights the importance of educating buyers with accurate information to overcome the reluctance to give up low rates. He suggests that loan officers and mortgage advisors should address buyers’ concerns by providing data and showing how leveraging equity can improve their financial situation. By countering misinformation and fear, loan officers can empower buyers to make informed decisions and take advantage of the current market conditions.

Don’t wait, buy now.

The podcast emphasizes the idea of “Don’t wait, buy now” by debunking common misconceptions and providing evidence to support the argument. One of the main points made is that waiting for rates to come down is a speculative gamble. Steve explains that even if rates do decrease, there is no guarantee of how much they will go down, and in the meantime, buyers would be missing out on potential appreciation and incurring additional costs.

To support this argument, he provides data on home appreciation rates in America. They state that the average home appreciation is currently 5.8% over the next 12 months. Using a $400,000 loan amount as an example, Steve calculates that waiting one year to buy a house would cost an additional $23,200 in appreciation. He compares this to the potential increase in monthly payments if rates were to go up, which would amount to $3,000 more per year. Even with the additional interest costs, buyers would still come out $20,000 ahead by buying now instead of waiting for rates to come down.

Furthermore, the podcast addresses the misconception of waiting for house prices to come down. Steve presents historical data that shows home values have gone up 73 times and only declined seven times since 1942. He highlights that even during periods of economic downturn, such as the housing crisis in 2007 to 2011, home values have continued to appreciate in the long run. He also mentions that low inventory and the increasing number of millennials entering the market to buy homes are factors that are likely to drive appreciation higher rather than lower.

Another topic is hesitancy to pay over the asking price. Steve states that with the average appreciation rate of 5.8%, buyers would still gain $23,200 over the next 12 months even if they have to pay 15% over the asking price, suggesting that paying more now to secure a house is a worthwhile investment, especially considering the potential for even higher appreciation rates in the future.

This all emphasizes the importance of buyers and sellers taking action and buying now rather than waiting for rates to come down or house prices to decrease. Steve Kyles provides data and historical evidence to support the argument that waiting is not a winning strategy. Loan officers can encourage buyers to overcome their hesitancy by focusing on the potential gains in equity and appreciation. By addressing buyers’ concerns with accurate information and countering misconceptions, loan officers and mortgage advisors can empower buyers to make informed decisions and take advantage of the current market conditions.

Now is the right time.

Many buyers and sellers may be on the fence about making a move in the current market is what we as loan officers are facing right now. Steve reassures the loan officers that it’s okay if buyers don’t know certain information or if their agents are unaware as well. It wasn’t their fault and loan officers can use this opportunity to provide guidance and tools to help them overcome any fears or hesitations.

In our Freedom Club membership, this kind of presentation is available at no additional cost.  We actively provide resources and support to help our members navigate the market with confidence. 

If you’re not yet a member, schedule a call with our team to get access to the presentation talked about here and in the podcast.

Now is the right time to buy – “propaganda versus the facts of the market” is important in understanding the power of numbers, documents, and data. When buyers and sellers have a clear understanding of the market conditions and potential gains, it dispels fear and anxiety.

Listen to the full podcast here.