How To Talk About 7%+ Rates To Buyers & Sellers • Learning With A Lender • Joel Schaub

Welcome to the October episode of Learn With A Lender with Joel Schaub of Guaranteed Rate! In this episode Joel explains what the FED raise of the rates means for the real estate market in general. Joel discusses the importance of educating your clients and never give up. Joel also emphasizes the importance of building relationships between realtors and lending professionals. Last, D.J. and Joel explain Joel’s Weekly Market Update and Lender Introduction Template is, how agents can subscribe for them. If you’d prefer to watch this interview, click here to view on YouTube! Joel can be reached at joel@rate.com and 773.654.2049. This episode is brought to you by Real Geeks and FollowUpBoss . Transcript D.J. Paris 0:00 Now that rates are above 7%. How are you talking about them with buyers and sellers? We’re going to discuss that today. Stay tuned. This episode of Keeping it real is brought to you by real geeks. How many homes are you going to sell this year? Do you have the right tools? Is your website turning soft leads and interested buyers? Are you spending money on leads that aren’t converting? Well real geeks is your solution. Find out why agents across the country choose real geeks as their technology partner. Real geeks was created by an agent for agents. They pride themselves on delivering a sales and marketing solution so that you can easily generate more business. Their agent websites are fast and built for lead conversion with a smooth search experience for your visitors. Real geeks also includes an easy to use agent CRM. So once a lead signs up on your website, you can track their interest and have great follow up conversations. Real geeks is loaded with a ton of marketing tools to nurture your leads and increase brand awareness visit real geeks.com forward slash keeping it real pod and find out why Realtors come to real geeks to generate more business again, visit real geeks.com forward slash keeping it real pod. And now on to our show. Welcome to another episode of Keeping it real the largest podcast made by real estate agents and for real estate agents. My name is DJ Parris. I’m your guide and host through the show today, once again is our monthly series learn with a lender with Joel shop from guaranteed rate. Now Joel is the vice president of lending at guaranteed rate. And he’s been doing loans at a high level since 2003. And he’s gotten to that level because of what he does specifically for agents, which is he gives back part of his commission to the buyer on every transaction. Now last year alone, Joel gave back almost $300,000 in closing costs to buyers who worked with him and that puts Joe’s volume in the top 1/10 of 1% of all lenders nationwide. In fact, out of 400,000 loan officers in the country, Joel is ranked number one 137. Now last year, he closed 619 transactions, his highest amount ever, for one year for almost $250 million. And already this year, Joel is close to 162 transactions for $106 million. Now if you’re looking for a loan officer, we cannot more highly recommend Joel he’s the very best we’ve ever worked with. PS I’ve worked with him too. And I say the same thing. Joel can be reached. By the way, here’s his email address joel@rate.com J oel@rate.com. Or you can shoot him a text message or call him at 773-654-2049. Both of those ways to contact him are in our show notes. So you don’t have to write that down. Just go to our show notes. And you can click and call or email there. Now let’s say hello to the biggest Cubs fan. I know Joel Schaub welcome Joel Joel Schaub 3:08 adj, thanks so much for having me. It’s crazy when you hear those numbers. But it’s always so good to come on here and give back and actually share the insight that I’ve gotten from other real estate agents who call me. And every single time we do it, we really have a black. D.J. Paris 3:24 We do and we should start out by saying just yesterday, the the news that was being seen all over television and print and online, was of course that the Fed raised rates, raise rates, again, 75 basis points, so three quarters of a percent. And I know that you know I when I first saw that I thought oh, what does that mean? Meaning how does that affect me personally? How does it affect the real estate industry? How does it affect, you know, anything related to housing. And so I am excited to sort of get make sense of what that means and what agents can you can do with that information to help keep their business rolling. Joel Schaub 4:05 I’ll break it down into two easy centers that you can have if you’re an agent when you’re talking to buyers, because agents really come to me and they go, how do I explain this? Right? And so, by the time this is happening, we’re getting ready for another federal rate increase of short term rates. Okay, but let’s stick with what happened yesterday, where we had a well choreographed increase of 75 basis points to the short term. And what that meant was it was already baked into mortgage rates. So people ask me all the time, how did mortgage rates not go up on a day where the Fed just raised rates 75 basis points. And as an agent, you can explain it to borrowers pretty easily. The Federal Reserve meets every six weeks, but the bond market reacts every single day and sometimes hourly, right? So the Federal Reserve increase was already baked into array So we saw them go up for sale, this announcement was already in the cards. D.J. Paris 5:06 Yeah, the you know, I think one thing that’s that’s way to explain that for agents is to realize that these these banks, these lenders are higher economists who are tracking the what the Fed is telegraphing through some of their meetings. I know this 75 basis point height increase was absolutely expected. All the news outlets were talking about it days before it even happened. And of course, you know, companies that live and die on rates, which, of course, are lenders, this is this is their whole entire existence is making sure they’re aware of this. So the good news is, as as from what I understand, you’re saying is rates really didn’t move very much as of yesterday, because of the announcement. Joel Schaub 5:48 And then by the time that we’re listening, we’re already getting ready for the next federal rate increase. And so what we’re going to see is pretty well choreographed another 75 basis point, hopefully, followed by a 50, and then a 25. So from here, we’re gonna see another 150 basis points of increases. So they’re not done yet. And what that means is, there’s still going to be a little bit more pain in terms of mortgage rates, which right now are already over six and a half percent. But as soon as the Federal Reserve indicates that they have completed the rounds of increases, the big mistake and the big myth, it’s wrong. And I’ll tell you as agents right now, we don’t need the Federal Reserve to cut rates for mortgage rates, the drop dead again, we’re not waiting down the line for Federal Reserve’s to cut the rate, as soon as next year happened. And they decide that they’re done with the rate increases, mortgage rates are going to come down. And they’re going to come down sharply. Okay, they don’t know how long it’s going to take. So I talked about it being next year. And that’s really what the economists think, is that they will have this under control, that the Federal Reserve might not cut interest rates for two years, two and a half years. So we’ll see exactly what happens. But as soon as they’re done with the increases, DJ, we know that anybody who’s buying today can refinance that mortgage. All right, so we go back to that one phrase, right, we’re gonna marry the home and date the rate. D.J. Paris 7:19 Yeah, and, and so this idea, and that is such a great phrase, I kept I kept seeing this phrase over and over again, in the articles yesterday, you know, you marry the home, you date, the rate, it is such a great and imperfect, I remember back in the days, where there were even interest only loans, which I don’t, I’m sure, maybe they still exist to some capacity these days. But they were very prominent, as you remember, back in the early 2000s. And, and people would that that was part of the pitch was like, hey, as rates move, you know, you can obviously refinance. And and that’s something and also, I’m thinking as an agent, you know, if I’m thinking there’s going to be more rate increases coming, which, you know, you seem to suggest, as is happening, that you’re hearing another great reason to reach out to the buyers and say, hey, you know, rate increases aren’t over yet. And if you are, you know, thinking about making a purchasing decision, it might actually be a good idea to get in sooner rather than later not to use that as a scare tactic. But just to explain, here’s where here’s where our economists think rates are headed. And if we can get in sooner, boy, that might actually help us plus a lot of buyers sitting on the sidelines. Oh, yeah. And when rates stabilized, we can always refinance down the road. And you know, and you’re maybe not paying a premium for the homes that you would have made a paid a premium for back when rates were in, you know, much lower. Joel Schaub 8:42 I’ll tell you a story. I’m glad you said that, by the way. DJs. Last week, I had several clients that knew that the federal increases were coming, right. And so what they wanted to do is they wanted to secure a rate even though they did not have a property. So I went down and I had probably five or six different clients that will buy sometime in the next couple of months. And what we’re able to do is do a rate lock before the increase and make sure that their rate was locked in for 90 days. And what that allowed them to do was not so much with this increase because it was just last week, but it’s going to insulate them over the next couple of months. So that when the next increases come, they still have a rate that was as of last week. And what does that mean for an agent if you’re listening, reach out to your lenders that you’re working with and ask them to do the same thing for any buyers that you have. Now you have a buyer that’s locked into a rate and as they go up, think about how much they’re going to be calling you to actually go out on showing they have a rate they’re going to have FOMO DJ they’re going to have a fear of missing out that if I don’t find a home and go under contract, I’m going to lose the rate that I have locked in. Okay, so banks have different names for this contact your mortgage advisor that you work with closely. Our our company called Audit lock and roll similar to rock and roll, where you can lock a rate and roll go out and find a home over the next 75 to 90 days. And this is one of the big advantages as an agent would be working with somebody that can do that for you. And just think of the power there, right DJ, you see how this could be an advantage for agents. D.J. Paris 10:19 I see it as a huge advantage. I think it was much harder trying to get deals closed when rates were, you know, much lower, I think because we had more buyers, we had less, you know, less inventory, we had more competition. i All I heard was agents stressed out during that that time period, yes, deals got done at a record number. But boy, it seemed like a pretty stressful time to be a practicing agent. All of our listeners can probably remember. So even though you might have done more deals, you know, back then, remember what what amount of stress remember how many offers you were submitting? Remember how hard it was to get in touch with the other realtor? It’s actually much easier now. Yes, the hurdle is you have to educate your clients. But that’s your job, right? The job is to educate your client. So think about this, whereas I see realtors? Well, Joel does to us every single day. We have a lot here at our company, Joel works with hundreds and hundreds of agents. And he also sees this as a lot of people are kind of depressed right now. Agents meaning they’re going on. Gosh, it’s just hard. Okay, Joel Schaub 11:20 it’s everybody. Right? Everyone seems to be that way. But there’s a light at the end of the tunnel, I know you’re going to say, D.J. Paris 11:26 well, the opportunity is always still there. And in fact, I every successful not every a lot of successful business owners that I know, say it’s in these times of challenge that the real opportunities are born because a lot of people just kind of, you know, fall fall apart. And now as you were telling me, before we started that you’ve you’ve put the gas on about doing more events, where now you have time to do more events, which is kind of nice. And you can you can actually put more into marketing so that when things do stabilize, you know, you’re going to reap the benefits of that as a loan officer agents could do the same thing. Now’s the time to do client appreciation events, you know, different maybe volunteer stuff, you could do volunteer events with your with your sphere. So if you don’t want to spend a lot of money, do a volunteer event, bring your sphere. There’s lots of things you can do right now as an agent to be proactive. Joel Schaub 12:19 Right now, I fully agree with you in the sense that it seems slower for me personally. And the volume has dropped to about 10 to $12 million a month, when a year ago, we were doing much, much more than that. The difference here of doing 10 to $12 million on a monthly basis is that it’s so much easier for buyers to get an offer accepted. Okay. So when I’m submitting an offer, now we’re really talking about how much under the asking price we can get. Whereas almost six months ago, DJ, we were still saying, I’m going to submit an offer at full price and probably lose. Yeah, yeah. So there’s definitely a mindset here that you can definitely take advantage if you’re a buyer, if you can take some time and find the right place. As these rates stay high and maybe go even higher, there’s going to be sellers, where they’re just going to take a deal on a home to get it off the books and a dominant agent, I’m touching base with all of the people that are renting at a pretty high level, they can afford a certain dollar amount per rent, they can get out there and buy and let’s go make sure that they know there’s an opportunity coming up for sellers that will be selling under asking price. D.J. Paris 13:33 Absolutely. I think now is the time to educate customers there, educate your sphere of influence, tell them what the reality of it is, with this rate increase and don’t take your foot off the gas with respect to staying in touch now is the time now is the best time probably to reach out because if if your clients or your sphere are watching the news, and they’re like, Oh, the sky is falling, you get the opportunity to reset that expectation and provide value and that’s, that’s really I think what separates, you know, whether it’s a loan officer or realtor from the very, very cream of the crop, the people that do the most business, they are proactive, they reach out they’re not afraid to share the truth and also it helps them reset expectations and everybody in life I don’t know I always want I always have these fantasies that like I’ll start getting phone calls from my service providers, accountants attorneys, you know, financial advisors going I have an idea for you and you know what I get very few of those phone calls and I think I would love it in my life if somebody were to call me once in a while and go I have an idea for you and this is what agents can do is partner with loan officers find out what what the real story is and then be able to share that with your customers so they’re not sitting at home freaking out. 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So you’ll get the help that you need when you need it and get this follow up boss is so sure that you’re going to love their CRM that for a limited time, they’re offering keeping it real listeners a 30 day free trial, which is twice as much time as they give everyone else. And oh yeah, no credit card required. So you can try it risk free. But only if you use this special link visit follow up boss.com forward slash real that’s follow up boss.com forward slash real for your free 30 day trial. Follow up like a boss with follow up boss. And now back to our episode. Joel Schaub 16:10 Agents right now can go out and talk to buyers. And the same thing that why are people afraid to buy something when it’s on sale? Right? I talk about sports teams when the team is really hot. Everyone wants to go to the game and they’re willing to overpay now the theme is not so good. We can go get really good seats and get a discount and Phil have the same show. Right? So when Hamilton was in town, and it was really expensive to get Hamilton tickets, once it was lower price today, did they give a half a performance? Was it not the same show. And I know it doesn’t equate exactly the same. And people say oh, that doesn’t make sense. But it’s true. Like, I like buying my soup on sale. I like buying shoes on sale. I’m telling buyers, let’s go buy some real estate on sale. And when rates drop, you can refinance the debt, but you can never refinance if you overpaid by 40 grand. D.J. Paris 17:06 Yeah, and you can now show with data through the MLS or whatever data systems you might be using, you can actually show how price values falling. And so it allows the person to to maybe make up that difference where they might feel the rate isn’t exactly where they want it to be. But that home price might be exactly where they need it to be. And that wasn’t the case, a year or two years ago, it was those home prices were like oh my goodness, that was that was actually in my in my mind, those were bigger hurdles to jump, I actually think the rate hurdle is is is is not as big of a hurdle. But Realtors need to sort of reset their own expectations and realize there’s opposite, there’s always opportunity, but it’s harder to sell a stock when it’s undervalued versus when it’s overvalued. Right. So it’s it is hard, but that’s your job is to reset your customers expectations, buy things on sale rates are still reasonable, although uncomfortable for some people, but they’re still very reasonable in my opinion. And I think if you’re able to have those conversations and then go, you know, hey, we’re going to have a refinance opportunity shortly anyway, then, you know, I think you should be able to proceed as as normal. And Joel Schaub 18:15 he was telling me the story last week, DJ, and they were telling me how they were overcoming objections from a buyer, several buyers, a lot of times the objection came in that I’m gonna wait until rates come down to buy a property, right, I think I’m gonna wait. And I want to buy right now. All right, throw up I want to buy when these rates come crashing back down. And instead of putting up a big objection, the agent agreed. They said, You’re right, I think rates are going to come down in the future, too. So let me paint the picture of what that looks like. If you bought then the agent went on to describe the scenario in which if some day happens, where rates plummet? What are we going to see a bunch of buyers rushed back out into the market. Then he said, let’s talk about a scenario in which we bought right now and got a deal on the home, you owned the property. And then when rates drop, you don’t have to rush into anything. You can call your mortgage professional refinance down to the rates that you think they’re going to be. And we bought the place under value. And then we refinance the debt in the future. That client went under contract a couple of days later after them doing that. So you control the narrative, and really talk from you know, speak from the heart. D.J. Paris 19:30 I absolutely agree. And I think part of it is just the reluctance to reach out with tough news. And I think if for all of our listeners, if you can be the proactive person that reaches out when there’s tough news to your sphere, you are so incredibly valuable to that sphere. They’re not going to choose anybody else. And so I love the fact that you come on every month and share with us and it’s not always Wine and Roses. Sometimes it’s it’s tough news, but you’re willing to share Eric, you’re willing to say, even though things have changed, here’s how to talk about it. I mean, you’re providing you’re doing the same thing that Realtors could be doing here on this podcast, I know you do it with your customers, and the agency you work with as well, we should actually mention that, that you still partner with agents, and if there are agents who are listening, who are looking for partnership opportunities, maybe sponsoring events, maybe co branding, certain, you know, flyers, brochures, loan officers can help with that, especially right now. So if anyone out there Joel is wanting to partner with you, whether they’re an agent, or maybe they’re a buyer or seller who found our podcasts or listening to you and say I would love to have a loan officer for my own property that has this much information, what’s the best way someone should reach out? Joel Schaub 20:47 I’m happy to do that. And we could set up a conversation and just the easiest way would be there’s an email address, where I would send you the lender introduction template, where if you did have a buyer, and you wanted to refer them over to us, we would waive the fees on the lending side really partner with you. And so it’s just joel@rate.com. And I know I mentioned this probably two or three segments ago, and I paid literally 100 the agents across the United States where I’ve had email conversations, long phone calls, I talked to so many people in so many different markets. And whether we do business or not, they’re like, Wow, you actually answered, wow, you’re replying. And they think there’s like five or six of me. And sometimes DJ, I think there might be five or six of me. But there’s an opportunity out there, whether it is me or a local lender that you really like, if you’re doing business, you’re valuable, okay, so you make sure you get something from the lenders that are all reaching out asking for business. So one of the things that we deal with give back in that way. And then the second thing is you can even email us asking for the weekly market update. The market update DJ, you’ve seen this before? Tell everybody, D.J. Paris 22:00 I love it. So every week, Joel’s team sends out a how to make sense of what’s going on in the lending world. In very short an email, very short, bite sized, digestible, easy to, you know, basically sound bites that you can then just take and use with your own clients. It’s, it’s, you know, like, for example, I’ll go to the the big mortgage website, if a news website is called mortgage News Daily, and they just aggregate tons of stuff. And I oftentimes as I read through mortgage news, daily stuff, I’m like, I don’t know what any of this means. It’s very complicated. And your team will actually take a lot of the data that’s out there and make it really digestible and easy to read in a short email format, with graphs and information. And then you can take that directly to your clients. Joel Schaub 22:44 It just makes you sound better. And that’s what we’re about is getting information and making sure that you understand enough, and then be able to actually explain a few things to buyers. So that wow, that that email really helped from Joel. D.J. Paris 22:58 Yeah. So if they want to join your email list, which everyone should there’s obviously no cost for it. And Joel, and his team would be happy to share that with you, should they just email joel@rate.com? Joel Schaub 23:09 Yeah, we’d be happy to do that, we can add them directly to the list. So it’s Joel JOE l@rate.com. And so that’ll apply to the weekly newsletter. And then as for a partnership, you can absolutely ask for the lender introduction template, it’s already written out the way that you can introduce potential buyers and we can start working together and we really will, anybody that reaches out, we will absolutely partner with you and help you on your next transaction and get the lender fees waived in full and make you look good, really helped you grow the business to the next level? D.J. Paris 23:40 Well, I love it. I hope all of our all of our listeners consider reaching out at the very least please subscribe to his newsletter, I promise you, it’s amazing. And it will help you be a better realtor, because you’ll have more information. And you don’t have to read, you know, 10 different articles, you know, to get this information, they do the hard work for you. So you can just sit back and let it hit your inbox. And then you can if I were an agent, I would take what you send every week and I would call a certain number of people in my database every single day for that next week going, Hey, I have a couple bits of news for you just wanted to keep you up to date on what’s going on. You could even leave it on someone’s voicemail really, it doesn’t have to even be you know, you don’t have to get them on the phone. And boy can you imagine I don’t get those kinds of voicemails. I don’t know about you with your different service providers in your life. But boy, I’d love to get messages like that. So I imagine your clients, everyone’s clients here would as well or sphere of influence. And you can really provide value versus just going Hey, you want to buy yourself something right now which of course you can do to but you can only ask that so many times before your friends stop answering the phone right? So if you call with with purpose, they call it I call it marketing with purpose. This is you know, obviously Joel’s team can provide you the purpose and the reason to reach out so everyone subscribed to his newsletter just email joel@rate.com asked to be placed on it. They’ll do that. And then of course you can reach out to him for any and all opportunities to work together to? Well, Joel, what a great, what a great way to sort of talk about what’s happening right now we appreciate it. I was even scared because I’m seeing all this news about the rates. And even though I know that it shouldn’t necessarily affect, you know, our business, you know, directly, I still I was freaking out yesterday, and I’m like, wait a minute, I know what I’m, I know enough to not freak out. So if I’m freaking out, your clients are probably freaking out too great opportunity to reach out calm the waters. And then you can, you know, provide some value. So anyway, Joel, thank you for helping call my waters and also for helping provide so much value here on the show. You’ve done it year after month after month, and year over year. And you have shown up every single month for gosh, years now. And that is really impeccable, remarkable, and probably no secret to the reason why you’re so successful. So everyone out there, discipline, and consistency and value. If you just focus on those three things, you’re going to be successful, you’re gonna get through this sky is not falling and stay positive. Right. All right, Joel. Well, thank you for keeping me positive, keeping us positive and keeping our show full of value. So on behalf of the listeners, thank you. And on behalf of Joel and myself, we think the listeners the viewers, you’re the reason this show, we just surpassed 2 million downloads. I think in the last week or so. We are so grateful to everyone who listens. And so please tell a friend let’s help us keep growing. Just talk to one other person about the show, send them a link, we would really appreciate it and that’s all we ask. Joel thank you so much and we will see everybody on the next show.