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Anthony: Many home sellers are making a mistake right now, home sellers that are also want to be buyers, want to be sellers, want to be buyers, sell buyers. They’re making a mistake right now at this time. I don’t think enough realtors are helping them realize that they’re making a mistake. Today, you with crushing real estate from the beautiful Disney world. I am here to talk to you about this.
What I’m realizing is many sellers are holding off on the listing because they’re finding out how much the rate is now, the interest rate is now and they’re going, “What? I’m in a house that’s 2.8% and 2.7% and you’re telling me if I move, I’m going to be at 5%, 3%, 5%, 4% or 5% even?” Yes, that’s correct. That’s what you’re going to be at. What many of them are doing is saying, “Forget that. I’ll just wait till they come back down again. Folks, coming back, back down again is basically over.
You might see a day or two or even a week here or there that they float down to 5.1% or something like that, the bond market gets a little better, but is there going to be some large-scale, sustainable, lower interest rates? No. They are trending upward and it is going to continue to trend upward for at least a couple of years. How fast it does that? I’m not exactly sure. I feel like it’ll probably remain somewhere in the five this year, but I work with a lot of people who know what they’re talking about to think we’re looking at 60s.
The point is you need to make it clear to sellers that waiting and sitting around and hoping for a lower rate in this environment is not going to happen. The Fed is scared to death right now of inflation and frankly, they should be, and they should have made moves to correct it sooner and they waited. Now that they’re waiting, they’re overreacting. Historically, they have done this. This happened in ’06, it’s happened many times. They do not want a 1981 scenario and they know that they may be faced with it, but they don’t want that.
They don’t want to have to push interest rates in 19%, 20%, 21%, whatever it was. You need to make clear to sellers that there is no signs of them going down because sellers that say, “Oh, forget it. I’ll just wait,” they’re not going to wait. They’re not going to wait 10 years. They might put off buying and selling because people have a tendency, sell buys have a tendency to sit in their hands for a little bit when things aren’t exactly the way they want, but they’re not going to sit on their hands forever.
When little Johnny that’s 6 years old turns 20 and says, “Mom, why did we stay in this two-bedroom home when there’s four kids?” the mom and dad aren’t going to say, “Well, that’s because interest rates went up so high. We didn’t want to pay it.” No. That’s not how consumers behave. It’s not how it’s going to go down. At some point, the seller/buyer is going to cave and they’re going to list. People have living needs. That’s the beauty of the real estate business. No matter what happens, there are always sales, right?
They’ll put it off for a bit, but they’re not going to put it off forever. What’s going on right now is we’re in the middle of that, putting it off for a bit. I do think some sellers, many sellers will put it off for a year, maybe two, and you as their realtor, as their advisor, as the person guiding them need to be clear with them that, “Hey, waiting is only going to give you an even higher interest rate. The higher they go, the less affordable homes become and the less buyers there’s going to be out there.”
If you wait too long, not only you might not get as much money for your home at some point, but you also will be paying a higher interest rate. We’re in a odd time now. Make sure to educate your sellers on this and I will tell you all, make sure you are watching interest rates in reading the background of interest rates and what causes them to go up and down. Read about that. Mortgage Daily News, they send articles out every day. I read them every day. You’ve got to wrap your mind around what’s going on with this and you need to educate your clients.
Remember what I always say, when you educate, you attract. If you go to your seller and say, “You list right away because interest rates are going to go up,” they’re not going to hear that and think you’re just being a salesperson. When you show them the data, show them their information. Don’t just tell, also show. Then they’re more likely to believe because you’re educating them along the way. Think about that. Our job as realtors is to guide people. That’s what we do. We are advisors. Rates are not going down.
The threes are over. The twos are– We’ll be talking about that in 30 years. “Remember when they were at 2%? It was unbelievable.” Fours are over. I don’t even think you’ll see a day where they’re high floors. I’d be surprised. Maybe, but it won’t really happen. That’s all, my friends. All right, got to get back to my leg workout. Have a great day.