Sometimes the way you say something is just as important as what you have to say. Case in point:
Wednesday, on the Help-U-Sell Broker Roundtable call, we were talking about fence-sitting buyers. There seems to be a lot of them out there today, people who want to buy but who are afraid to pull the trigger because they think they may miss out on another drop in prices. We were commiserating along the lines of, ‘It’s such a shame, because rates ARE going to go up soon – everyone knows this – and they’re going to miss out by not buying now.’
It seems the ‘interest rates are going to rise’ news has not been powerful enough to motivate many. They hear numbers (4.5% could become 5% and 5% could become 5.5% and so on), but the numbers don’t seem to move them.
Finally the wise voice of Jack Bailey rose amid the clutter.
‘I don’t talk about rising interest rates,’ he said. ‘That doesn’t mean anything to most folks. Instead, I talk about lost purchasing power.’ Suddenly he had everyone’s attention.
‘What do you mean?’ asked Maurine Grisso, ‘How do you do that?’
‘I just show them what a 1% increase in interest rates would mean in terms of the house they’d be able to buy. If they are comfortable with a $1,500 a month payment (that’s the comfort payment) and that means with their available cash they can buy a $200,000 house – which in my market is probably 4 bedrooms, 2 1/2 baths, I just show them that a 1% rise in interest rates would drop the home they’d be comfortable with to about $170,000, which would probably mean 3 bedrooms instead of 4.’
It was one of those lightning bolt moments. Of course, people don’t think about rising interest rates in this way. Rising interest rates are one step removed, maybe two; they are abstract. But how much house I can have is real, tangible. Jack was simply packaging the truth in a way that those on-the-fence buyers would absorb. It was brilliant.
Everyone on the call was scrambling to locate resources to create some kind of chart illustrating this. My Google search turned up a chart that focused on how much less you qualify for when interest rates rise. I thought it was good and sent it out to a few people.
Maurine Grisso called me to say, ‘close but no cigar.’ She pointed out that what was important was not what you qualify for (most people qualify for a higher payment than they want to make!), it’s what you’ll be comfortable paying for. Her plan is to continue to work on numbers and charts but to take it one step further, to actually show examples of houses in her marketplace at each of the levels.
This little gem was just one of several that came out of Wednesday’s call. Dan Desmond wowed everyone with a video addition to his website and also with his very productive buyer offer. More on that later. The point is, the call rocked – and it’s been rockin’ for some weeks now. I don’t know what’s gotten into the gang lately, but the ideas they’re coming up with are something special; and you really ought to be in on those calls.