professional development — Chance Brown's Real Estate Blog

Why Rising Mortgage Interest Rates Are Good For Realtors

March 30, 2017 By Chance Leave a Comment

Much ado has been made over the impending doom of rising mortgage interest rates as response to the Fed raising its benchmark rate this month. If I had a dollar for every “Buy now before rates get too high” post on Facebook from Realtors around the country, I wouldn’t be rich or anything, but I could buy a decent lunch or dinner. I certainly hope, for their sake, that they result in business coming their way. However, in the big scheme of things, I think it is relatively short-sighted and they would actually benefit more from the rising interest rates they think are going to be a market killer.

There, I said it. Rising mortgage interest rates are a good thing for Realtors in the long-term.

Don’t get me wrong, I’m not advocating for Carter-era rates or anything. That would be terrible and would definitely be a market killer. What I am saying is that a return to 2001-2006 rates would be a good thing, in my opinion. So, here’s my case for higher interest rates…

Higher Interest Rates Indicate a Healthier Economy

The quantitative easing that has resulted in the low Fed rates since the economic downturn began in ’07-’08 is neither sustainable nor healthy for the overall economy. The Federal Reserve should not be in the business of essentially printing money to prop up the economy. This is not intended as a political statement, but fact based on testimony from multiple Fed Chairs and members of the Board. The fact that rates are increasing is a sign that the Fed believes the economy is on the mend.

A healthy economy should be a no-brainer for a Realtor to see the benefit in, right? The healthier the economy the more jobs created. The more jobs created, the more people who can qualify for loans. The more loans qualified for, the more sales. You do the math. In most markets there is a ratio of jobs created to how the market can handle rising mortgage interest rates. For example, for every X,000 jobs created, interest rates could go up Y% without negatively affecting the housing market. If you have the interest and a state or local real estate economist, feel free to inquire about it for your market. Regardless, a healthy overall economy typically equates to a healthy real estate economy.

Higher Interest Rates Bring More Flexible Financing Options

Let’s take a total hypothetical here. If you had the option of investing in a mortgage not that paid 4% interest or in an index fund that was currently blowing through the roof, which would you choose? Exactly. That’s one of the many reasons we have been so reliant on government-sponsored entities over the past decade. For the record, if the recent downturn in the housing market didn’t teach us that reliance on government backing is bad, I don’t know what will. We bankrupted Fannie and Freddie.

As mortgage interest rates rise, private money returns to the market. Because, historically, mortgage debt is a relatively safe bet, the returns don’t have to be as sky-high as the Dow Jones these days. As private money returns to the mortgage market, more flexible and creative loan products become available, we become less reliant on government backing, and a trickle-down effect of great things happens.

Higher Interest Rates Means More Moving

Again, let’s play a hypothetical game. Let’s just say that you wanted to purchase a home. You just got married and you are looking to start your new life together in your first home. Sure, you’ve talked about kids, but it’s still in the future for you. All you really need is a home for the two of you. In a 5.5%-7% interest rate environment, you buy a home for just the two of you. On the other hand, in a 3.75%-4% interest rate environment, for the same amount of monthly payment, you can go ahead and buy a larger home for when the kid or kids do come. Which do you do?

Higher interest rates keep that first-time buyer from skipping the first-time market altogether and moving straight into the move-up market. Now, that first-time buyer stays a first-time buyer and, in a few years, they become a move-up buyer. So, for the Realtor, that one transaction just turned into three if they play their cards right. Otherwise, in a low rate environment, the buyer buys a bigger home and stays there longer.

Higher Interest Rates Means More Inventory

Here in Houston, we have a serious shortage of home inventory. I know we are not alone in that condition nationwide. The example above should illustrate the point of this section. As more people move more often instead of staying in their homes longer, more inventory is available. More inventory leads to more level markets. More level markets lead to more opportunities for buyers. More level markets lead to healthier price appreciation rates instead of spiking prices. All of these are obviously good and lead us right back to our first point about a healthier overall economy.

So, there you have it. My take on why rising mortgage interest rates are good. I’d love to hear your thoughts.

Book Review – Start With Why

November 27, 2016 By Chance Leave a Comment

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This month’s Book Club selection was Start With Why by Simon Sinek. We chose this book for October’s group because of the TED Talk. If you haven’t seen it, Sinek’s TED Talk is one of the most-watched ever and is genuinely great. Here it is:

Pretty good stuff, huh? So, we thought the book would be just as good. I hate to say that we were wrong.

It’s not that the book is bad, because it isn’t. There is valuable information in there. The problem is in the delivery. The book is at least twice as long as it needs to be. It also jumps around a bit. In fact, I had such a hard time reading it that I bought it on audio and still had trouble because things I was hearing at that time were things I had heard several chapters before, almost verbatim. I seriously, a couple of times, thought the audio was jumping around.

All that being said, there are some treasures in there. I think, if nothing else, if this book is able to get people thinking about their why and starting to really pinpoint the cause of what they do, it could help make significant progress in creating happiness for more people. I’m a huge believer in allowing your why to drive you and this book is a valuable asset in getting you to think about your why, even if it is really tough to get through.

Next month’s book is Contagious: Why Things Catch On by Jonah Berger. You can find it on the reading list by clicking here.

Book Review: The Miracle Morning for Real Estate Agents

September 26, 2016 By Chance Leave a Comment

The second book in our brokerage’s Book Club is The Miracle Morning for Real Estate Agents, an adaptation of Hal Elrod’s bestselling The Miracle Morning. On this version, he gets help from Michael Maher, Michael Reese and Jay Kinder. I swear when I ordered this for our crew I had no idea that it actually picked up the same story from our first book, Seven Levels of Communication, which I reviewed here.

Now, in fairness, while I found this book very useful, you have to take what I say here with a grain of salt. Go back and look at the time stamps on these posts. I am clearly not a morning person. If this had been named The Miracle Midnight for Real Estate Agents, it would have been perfect for me. That being said, this is a small book packed with valuable info and an easy ready because of the parable format similar to our last book.

The book revolves around a pretty simple acronym that will walk you through a very solid morning routine that is not only designed to put you in a powerful mindset for the day, but will also probably make you healthier, both mentally and physically. I can tell you that by just putting two of the items into my morning routine, I can feel the difference in how I approach the day. Oh, and it took about five minutes to do them both. Seriously, it’s that easy. Other parts of the routine I do at different times of the day and, still others, I need to work on.

Despite the fact that this story picks up after Seven Levels of Communication, I would probably recommend someone read this one first, get the routine to the habit stage of acceptance, and then read Seven Levels. I think you would be more prepared for taking on the things in Seven Levels if you were already doing the things in Miracle Morning. The mindset and attitude that will result from taking the steps in this book will make your ability to digest and execute the things from Seven Levels much easier.

In a business where it is easy to get frustrated, get complacent, and/or just get lazy, executing the morning ritual you find in this book is a nearly foolproof way to keep yourself focused and moving forward. I’ve said it many times, but your mindset drives your attitude which drives your success and this book will teach you how to start each and every day with a bulletproof mindset. Go read it and start implementing the steps today!

Next month’s book is Start With Why by Simon Sinek. Give it a read and let me know your thoughts.

Book Review: Seven Levels of Communication

September 14, 2016 By Chance Leave a Comment

From the last post, you know that our brokerage has started a monthly Book Club. Our first book was Seven Levels of Communication by Michael Maher. As promised, a couple of times, here is my review of the book.

Bottom line: If you’re in sales or marketing, you need to read this book.

I have a general rule to judge the quality of a business book – If you can take two things out of a book and apply them to your business, it was worth the read. In the case of Seven Levels of Communication, if you can’t take a dozen tips out of this book, read it again. Seriously. It’s that good. Did I mention that I was serious? I don’t want to sit here and gush over 150 pages of paper, but this might be one of the best business books I have ever read.

First, Maher does a great job writing in parable format. The book follows a real estate agent, Rick Masters, as he transforms from a near drop-out to top producer through a coaching program that walks through the 7 Levels. I’m a huge fan of story-telling in non-fiction and Maher does it in a way that is both engaging and lacking arrogance. Honestly, as valuable as the information is, I’m not a fan of books by people like John Maxwell because they tend to be too much “Look at me and what I’ve done and you should be just like me.” This book is written from a perspective of a Coach and, as such, comes off as genuine and truly helpful.

Now, about the tips that the book gives you. The information contained in the book isn’t a reinvention of the wheel. To tell the truth, I imagine that the end product that Rick Masters becomes looks a whole lot like top salespeople from about 30 years ago. He’s more personal, caring, and doesn’t rely on technology and other new gimmicks to build his business. Instead, he relies on tried and true messaging and communication, but he does it with a plan and strategy.

The other great part of this book is that none of the strategies are really that hard to implement or expensive. The result of these strategies is a business that every agent dreams of, one built on referrals. The trick, like with everything else, is that the strategies have to be implemented with a personal touch and executed with discipline and consistency.

So, here’s the deal. I’m not going to reveal everything in the book because you really need to read it. I will tell you this, you will probably want to read it twice. Once you’ve read it once, you can go back
and take it tip by tip to implement in your business. Trust me, it’s worth it.

In conclusion, if you feel like you’re in a rut and need to get out of it, or your new to the business and want to get a jump-start, or are already producing at a good clip and want to take it to the next level, you need to read Seven Levels of Communication. Even if you only get a couple of things out of it or only implement a couple of the strategies, you will without doubt see the results in your business. You can pick up a copy on our Reading List page. Do it.

Our second book, Miracle Morning for Real Estate Agents, will be the next book review. You can also pick it up on the Reading List page.

Real Estate Book Club

August 31, 2016 By Chance Leave a Comment

In the words of Harry Truman, “Not all readers are leaders, but all leaders are readers.” I love to read, but have found that as we get busier and extra time gets harder to find, my reading time has started to vanish. So, we made the decision in our brokerage to start a book club. Now, I have to keep reading so that I can participate with our team. I’m still wishing I was reading more than one book a month, but at least I’m getting it done.

So, I figured I would invite you to participate with us. We’re already on month two, so you’ve got some catching up to do. Last month we read 7 Levels of Communication by Michael Maher. Generally when I read a business book I look for one or two things to take away from it and try to apply in life or business. Now, I could be a real smartass and tell you that I took 7 things away, but I won’t. I took way more than 7. I’ll be writing a full review soon, but this is a book you should buy today!

This month, we are reading Miracle Morning for Real Estate Agents by Hal Elrod with some help from a few others. It’s a take off of Hal’s book Miracle Morning that is designed specifically for Realtors. I’m not finished with it yet, but so far it is pretty darn good. It’s particularly challenging for me given that I am in no way, shape, or form a morning person. I need someone to write a book called Miracle Midnight for Real Estate Agents. Maybe I’ll work on that.

Each month, I’ll be writing a review and thoughts on how you can apply principles from the book. I’d love for you to join us and share your thoughts as we go through a new book each month.

In the meantime, for those of you who are eager to read more than one book a month, I created a page with a bunch of books that I’ve read and recommend. Trust me, there are a lot that were left off the list. I’ve still got a few to add, but it’s a good start. The link to the page is also in the navigation menu on the right side of the page. In full disclosure, the links are Amazon Affiliate links. They’ll help me buy more books to tell you about, so thanks in advance.

Oh, and if you have any suggestions to add to the list for the book club, hit me up.

Set Up Two New Classes – Weekend Challenge

February 21, 2014 By Chance Leave a Comment

Expanding your knowledge base and comfort zone are important to continued personal and professional growth. It can also be a boost to your business. So, signing up for two new classes is this week’s challenge.

1) Personal Enrichment

The first class shouldn’t be real estate related. Think ballroom dancing, cooking, photography, or something like that. Make it fun. Look at your local community college’s continuing education classes for some great ideas. You never know, but you might find a great new hobby and meet some potential clients in the process. Don’t go into it for business reasons though.

2) Professional Development

The second class should be all business. Whether it’s the beginning of a new designation or just a piece of technology you’ve been wanting to learn, make it about expanding your skill set and potential for making more money.

Easy enough, right? Have a success-filled weekend.