Every day news that affects real estate pours out of sources all over the country. But which topics might a local real estate professional be able to use effectively in their every day presentations? What news tidbit could push a client into (or out of) a purchase? What national statistics might be useful at a local level? We asked our instructors to share with us some key indicators that they have used in their own real estate practices. Below are the major headline grabbing national items that in some cases can be shared with clients at the local level.
First, a disclaimer - taking a national news story and putting a local twist on it is key to making a point with a client. While it may not be important to that client that the housing market is picking up somewhere else, it never hurts to show positive statistics. None of these ideas will replace local knowledge and market factors, but they can help a real estate professional gain the confidence of a client or customer.
Interest Rates and the Federal Reserve
It's almost impossible to go a few days without hearing what the Federal Reserve is doing, but making sense of fiscal policy and how it will affect local markets can be difficult. The key according to one instructor is to use the Fed as a long term factor. "Telling a buyer that the Fed has promised to keep rates low for a period of time can give them confidence that they will have enough time on the market to find the right buyer. Using that information with a buyer might be tricky, as they will think that they have lots of time to shop. Who I mention the latest news from the Fed to depends on what that news is."
But making a point about uncertain markets and bringing that back locally can be more useful. Need to give a buyer a push? Maybe mention that while mortgage rates are low today, there is no guarantee that they won't rise tomorrow - and a tenth of a percent rise in rates can equate to almost $5,000 in increased interest payments over the life of a loan on a median priced property. (read more by clicking here)
New Construction - Building Permits
When the builders start to build, they believe the buyers will follow. "By checking on how many new permits have been recently issued in a given area, I can get a glimpse into what the potential customer base will be for a commercial property" says one appraisal instructor. "Any government report showing new construction and new home sales is a good starting point."
A real estate agent can use this information to show how an up and coming area is growing, or how a community is slowing down. Either way, this is useful information that can be shared readily with clients who are both buying and selling.
Recent Home Sales and Pricing Indicators
It happens every month - prices and sales are reported with a huge headline that either shows the end of the world as we know it or that every garage will soon have a Luxury Yacht parked next to the luxury sedan. "Prices Rise Again" and "Sales slow as concern grows over economy" seem to be the only headlines. But the reality is usually between those extremes, and that either of these is a good thing for a real estate agent.
"When the prices rise in the headlines start calling your potential sellers. Now is the time to gain those extra listings." reports one instructor. "Smaller markets will show lower gains but also lower declines, so sometimes the National headlines are all we have to use in discussions with our clients."
And what happens when the prices drop and sales slow down? "Great time to work with buyers - get on the phone, out at their homes and write them letters. 'Prices are down and you could be taking advantage of it.' is a powerful message." And if presented correctly to a client could be the thing that pushes them into a purchase." And this instructor should know, having been licensed since the 70's and working through multiple down markets. "It's about connecting their desires and needs to what information you are presenting to them. It's about making them happy."
Using a National Unemployment rate is difficult, but you can almost always find a local tilt to the statistics. "If the National rate goes up, dig deeper and see if local rates or statewide numbers have beat the trend." says one instructor. By reframing a national statistic as more positive locally agents can increase a seller or buyers confidence level in their own decision.
As you watch national headlines make sure you can reframe the information to suit local conditions. By staying current on national, state and local news the real estate professional can increase their clients confidence in the service that you will be providing to them.
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Written and Published by: VanEd