Sell your client’s Danville Real Estate even if rates increase!!!

Comments(0) By Mike Miller •October 31st, 2008

How to sell your Danville Real Estate listing even if interest rates increase!

There is something that your clients can take advantage of that most Danville Realtors do not know for some reason. It’s not new, but again it’s rarely talked about. It’s very important for you to have this info for your clients. This is not a sales pitch. It’s something that has always been available, but for some reason many Realtors do not tell their clients about it. What I’m about to tell you will:

#1. Save your clients a ton of money

#2. Help your seller clients sell their homes faster and at the sales price they want

#3. Help your buyer clients either buy a higher priced home, or allow them to buy now rather than later

#4. Position you as a hero to your clients for being so knowledgeable

#5. Your clients will be indebted to you for saving them so much money, (buyer clients) or for creatively selling their home for them. (listing clients)

#6. Increase your business as a Realtor for the reasons listed above

So here we go:

We all wish that rates would go back down to where they were 5 years ago. The big REFI BOOM time!!! We were doing deals in the 4′s and 5.00% range. Whereas today we’re in the 6% range and in some cases over 7% depending on the situation. There is a way to get the “good old” LOW rates we had a few years ago and make homes more affordable for your clients.

Most lenders will allow a seller credit toward NRCC up to 6% of the purchase price (an FHA loan allows 3% credit). Now most of us think about this as a credit toward closing costs. What most of us don’t realize is “Lender Discount Points” are a Non Recurring Closing Cost (NRCC) as well. Points that can be used to buy a rate DOWN.

Here is an example:

6.5% is an average rate today

Seller credits 6% of sales price toward NRCC

4% of that credit is used to “buy” the rate down

2% of that credit is used to cover the other NRCC

5.00%: New rate after paying the points with the seller credit

So you’ve now gone from 6.5% down to 5.00% just like that. You’ve turned back time to 2004 for your clients. 5.00% will make this home much more affordable. It’s the type of rate we saw 5 years ago. Now you might say, sellers will not want to credit 6% toward NRCC. Well you can tell them this:

#1. It might be better than their house sitting on the market for 6 months

#2. This buydown provides greater “marketing leverage” than a similar price reduction.

#3. You can increase the sales price 6% to cover the credit as long as the appraisal will justify the increase. Then it’s a wash to the seller.

#4. Usually a 6% credit is much better, money wise, than a $100k price reduction to get a place sold

Again this is not something new. It’s always been around but for some reason it’s rarely offered or talked about. Now I understand that the whole “points and rates” conversation is not your side of the business. I realize that some of you are not comfortable talking about it with your clients. If you would like me to explain how it works and the benefits of this, let me know. I’d be more than happy to have a conversation with you and/or your clients to clearly explain this to them.

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Filed Under: Realtor Tips