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Listen "What Real Estate Agents Need To Know About Recent Bank Failures • Learning With A Lender • Joel Schaub"
Episode Synopsis
Welcome to the March episode of Learn With A Lender with Joel Schaub of Guaranteed Rate!
In this episode Joel talks about the second largest bank failure in the US, and how this situation puts pressure on the Fed to change the course of rates. Joel explains a strategy on how to use higher rates and educate clients and not to buy just because the rates are low but always ask the question “WHY”. Lastly, Joel emphasized agents should organize events, spend money and engage with mortgage people to broaden their network.
If you’d prefer to watch this interview, click here to view on YouTube!
Joel can be reached at [email protected] and 773.654.2049.
This episode is brought to you by Real Geeks.
Transcript
D.J. Paris 0:00What's going on with these bank failures? And how is it going to impact your customers abilities to get mortgages? 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 called 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. Which, by the way, 20 years congratulations. And he's got to that level because of what he does specifically for agents, which is that he gives back part of his commission to the client to the buyer on every transaction. Now last year alone, Joel gave back over $300,000 in closing costs to buyers who worked with them. And that put Joe's volume in the top 1/10 of 1% of all loan officers nationwide. In fact, out of 400,000 loan officers Joel is currently ranked number 137. Last year he closed 319 transactions, his highest amount ever, for 126 million this year. To date, he has closed 43 purchase transactions for just shy of 18 million. So if you are looking for a loan officer or a loan officer to partner with or for your customers, we cannot more highly recommend Joel he's the very best we've ever worked with. I use them as well. Joel can be reached at here's his email [email protected] [email protected]. Or you can shoot him a text message or call him at 773-654-2049 Let's say hello to the biggest Cubs fan. I know Joel, welcome back.
Joel Schaub 3:06DJ, thanks for having me on. I love that you made the Cubs reference at Spring Training. It is a new season right. And it's kind of a new season right now for real estate agents out there as well. We were kind of talking before the show started about how people are getting more energetic and they're getting back into it. And there's just a lot to talk about.
D.J. Paris 3:26It's exciting, the sun's coming out. So if you're listening and you're in a in a northern part of North America, where you haven't maybe seen the sun so much, it's starting to get a little warmer. If you're in the southern part where it's always sunny, then, you know another sunny day down there. But yeah, it's it's exciting. We're starting to see activity as far as real estate, at least here locally in Chicago, this spring market has started we've seen activity rates have have been you know, okay, and so I think buyers are back at it. But curious to hear your your perspective, because right now we're dealing with while by the time this release is you know, this will be probably after but we had some some banking turbulence. You know, we had Silicon Valley Bank, which which basically failed, and is being recovered by by the US government, you have a couple other smaller banks, regional banks chat being challenged as well. And then Credit Suisse overseas. So there's a lot of uncertainty around the banking thing. And then it's also like, what's the Fed going to do? Are they going to raise rates, lower rates, how's that gonna affect everything? Obviously, our listeners want to know, obviously, no one's got a crystal ball but curious to hear what what what your interpretation of what's going on right now is all about.
Joel Schaub 4:45We're back to this phrase. DJ, we're bad news is good news. Okay. And it's strange, but it's true these bank failures actually put pressure on the Fed to change the course of rate increases. So this Bad news, which by any stretch of the imagination, having the second largest bank in history fail is bad news. And what that meant was more money rushing into the bond market. And as the price of those bonds went up, the yields went down. And so did mortgage rates. And so even though we're not anywhere near the lows of the last six months and rates, the news is telling us that rates are down, and it's an opportunity for agents to get back out and talk to buyers, because rates are down significantly, from just last week, by the time this airs, we're probably going to see more of this continued rates and buyers are not afraid now, to see rates in the sixes or sevens. And that's just kind of the norm. And are you seeing? Yeah, yeah. And so if you're an agent, right now, if it was a year ago, people seeing rates creep up into the fives or sixes, that put a halt on a lot of buyers. Now we're into a new year where that's the norm. And we shouldn't see them continue to creep down. But we still will see the Feds raise rates in the short term. But we're already looking ahead to what they do in 2024. And they're thinking that we're going to see a cut early next year already.
D.J. Paris 6:14Yeah, I think, you know, the, maybe it's kind of a, a byproduct of our diminishing attention spans as Americans with technologies kind of I think zapped our attention spans tick tock in particular social media. I think I think hopefully, one of the maybe one of the benefits is that people who were upset that maybe they felt they missed the that that amazing rate, time period from a few years ago, I think the you know, I think we've forgotten, I think I think it's we're moving forward. Now, I feel like the public sentiment is changing. I don't I don't hear as much from agents saying, all my clients are really bummed that they missed the three, you know, three plus percent kind of era. I feel like we're turning the corner on that people are starting to realize, you know, the six is is not a bad place to live. And even the seven sometimes it's not, it's not the worst place to date, to data rate. And you can always like Joe, you say, you know, date the rate, marry the home, you know, you can always refi in the future. So I think we're starting to get more acceptance from the public about about where we're at currently.
Joel Schaub 7:24But if I'm an agent, I'm also talking to buyers right now, I want them to know that there are rate options in the fours and fives, there's ways to do this. So let's talk about two things that the agents that I know are really using seller by downs to fund the rates. Okay, so let's talk about what that to one rate, buydown looks like or a three to one rate by down, understand the mechanics of this. And this could literally make the difference of you getting a buyer that wants to write an offer, or then waiting, okay, so the problem is that rates are high right now. And we think there'll be high for the next a year or two, we can get sellers to give a closing cost credit to drive the rate down in the first one, two or three years. And so let's just take a minute and talk about how that works. And how you can use this so that you can go educate buyers on this. And even if you're a seller, you've probably seen this come across your desk. So making sure that you understand this, and can talk to your sellers about why the buyer is asking for our credit.
D.J. Paris 8:27Yeah, let's talk about it.
Joel Schaub 8:3030 year fixed rate mortgages, they're right now in the mid sixes as the time of this taping, but if you got the seller to give a 3% closing cost credit, we can take the rate at any bank and drive that down for the next two years. So that in the first year, the rate is 2% points lower. In the second year, it's 1%. Lower. And then for the rest of the life and loan, it's fixed. So it's not hard to get rates that are in the fours right now. Sellers can pay for this. And it really changes the monthly payment DJ people are saving hundreds of dollars by using this exercise.
D.J. Paris 9:06Yeah, no, it makes it makes sense. So the seller basically pays this concession. And does it go? Does it go directly to the bank? I'm guessing does it go into? Does it pay for principal interest or it's just a part of the package or
Joel Schaub 9:22it's an escrow account so the client doesn't lose the money let's say next year rates have dropped drastically and we want to refinance, the money the seller gave is still there, and that will actually go to reduce the principal. So that's a whole other strategy. Okay.
In this episode Joel talks about the second largest bank failure in the US, and how this situation puts pressure on the Fed to change the course of rates. Joel explains a strategy on how to use higher rates and educate clients and not to buy just because the rates are low but always ask the question “WHY”. Lastly, Joel emphasized agents should organize events, spend money and engage with mortgage people to broaden their network.
If you’d prefer to watch this interview, click here to view on YouTube!
Joel can be reached at [email protected] and 773.654.2049.
This episode is brought to you by Real Geeks.
Transcript
D.J. Paris 0:00What's going on with these bank failures? And how is it going to impact your customers abilities to get mortgages? 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 called 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. Which, by the way, 20 years congratulations. And he's got to that level because of what he does specifically for agents, which is that he gives back part of his commission to the client to the buyer on every transaction. Now last year alone, Joel gave back over $300,000 in closing costs to buyers who worked with them. And that put Joe's volume in the top 1/10 of 1% of all loan officers nationwide. In fact, out of 400,000 loan officers Joel is currently ranked number 137. Last year he closed 319 transactions, his highest amount ever, for 126 million this year. To date, he has closed 43 purchase transactions for just shy of 18 million. So if you are looking for a loan officer or a loan officer to partner with or for your customers, we cannot more highly recommend Joel he's the very best we've ever worked with. I use them as well. Joel can be reached at here's his email [email protected] [email protected]. Or you can shoot him a text message or call him at 773-654-2049 Let's say hello to the biggest Cubs fan. I know Joel, welcome back.
Joel Schaub 3:06DJ, thanks for having me on. I love that you made the Cubs reference at Spring Training. It is a new season right. And it's kind of a new season right now for real estate agents out there as well. We were kind of talking before the show started about how people are getting more energetic and they're getting back into it. And there's just a lot to talk about.
D.J. Paris 3:26It's exciting, the sun's coming out. So if you're listening and you're in a in a northern part of North America, where you haven't maybe seen the sun so much, it's starting to get a little warmer. If you're in the southern part where it's always sunny, then, you know another sunny day down there. But yeah, it's it's exciting. We're starting to see activity as far as real estate, at least here locally in Chicago, this spring market has started we've seen activity rates have have been you know, okay, and so I think buyers are back at it. But curious to hear your your perspective, because right now we're dealing with while by the time this release is you know, this will be probably after but we had some some banking turbulence. You know, we had Silicon Valley Bank, which which basically failed, and is being recovered by by the US government, you have a couple other smaller banks, regional banks chat being challenged as well. And then Credit Suisse overseas. So there's a lot of uncertainty around the banking thing. And then it's also like, what's the Fed going to do? Are they going to raise rates, lower rates, how's that gonna affect everything? Obviously, our listeners want to know, obviously, no one's got a crystal ball but curious to hear what what what your interpretation of what's going on right now is all about.
Joel Schaub 4:45We're back to this phrase. DJ, we're bad news is good news. Okay. And it's strange, but it's true these bank failures actually put pressure on the Fed to change the course of rate increases. So this Bad news, which by any stretch of the imagination, having the second largest bank in history fail is bad news. And what that meant was more money rushing into the bond market. And as the price of those bonds went up, the yields went down. And so did mortgage rates. And so even though we're not anywhere near the lows of the last six months and rates, the news is telling us that rates are down, and it's an opportunity for agents to get back out and talk to buyers, because rates are down significantly, from just last week, by the time this airs, we're probably going to see more of this continued rates and buyers are not afraid now, to see rates in the sixes or sevens. And that's just kind of the norm. And are you seeing? Yeah, yeah. And so if you're an agent, right now, if it was a year ago, people seeing rates creep up into the fives or sixes, that put a halt on a lot of buyers. Now we're into a new year where that's the norm. And we shouldn't see them continue to creep down. But we still will see the Feds raise rates in the short term. But we're already looking ahead to what they do in 2024. And they're thinking that we're going to see a cut early next year already.
D.J. Paris 6:14Yeah, I think, you know, the, maybe it's kind of a, a byproduct of our diminishing attention spans as Americans with technologies kind of I think zapped our attention spans tick tock in particular social media. I think I think hopefully, one of the maybe one of the benefits is that people who were upset that maybe they felt they missed the that that amazing rate, time period from a few years ago, I think the you know, I think we've forgotten, I think I think it's we're moving forward. Now, I feel like the public sentiment is changing. I don't I don't hear as much from agents saying, all my clients are really bummed that they missed the three, you know, three plus percent kind of era. I feel like we're turning the corner on that people are starting to realize, you know, the six is is not a bad place to live. And even the seven sometimes it's not, it's not the worst place to date, to data rate. And you can always like Joe, you say, you know, date the rate, marry the home, you know, you can always refi in the future. So I think we're starting to get more acceptance from the public about about where we're at currently.
Joel Schaub 7:24But if I'm an agent, I'm also talking to buyers right now, I want them to know that there are rate options in the fours and fives, there's ways to do this. So let's talk about two things that the agents that I know are really using seller by downs to fund the rates. Okay, so let's talk about what that to one rate, buydown looks like or a three to one rate by down, understand the mechanics of this. And this could literally make the difference of you getting a buyer that wants to write an offer, or then waiting, okay, so the problem is that rates are high right now. And we think there'll be high for the next a year or two, we can get sellers to give a closing cost credit to drive the rate down in the first one, two or three years. And so let's just take a minute and talk about how that works. And how you can use this so that you can go educate buyers on this. And even if you're a seller, you've probably seen this come across your desk. So making sure that you understand this, and can talk to your sellers about why the buyer is asking for our credit.
D.J. Paris 8:27Yeah, let's talk about it.
Joel Schaub 8:3030 year fixed rate mortgages, they're right now in the mid sixes as the time of this taping, but if you got the seller to give a 3% closing cost credit, we can take the rate at any bank and drive that down for the next two years. So that in the first year, the rate is 2% points lower. In the second year, it's 1%. Lower. And then for the rest of the life and loan, it's fixed. So it's not hard to get rates that are in the fours right now. Sellers can pay for this. And it really changes the monthly payment DJ people are saving hundreds of dollars by using this exercise.
D.J. Paris 9:06Yeah, no, it makes it makes sense. So the seller basically pays this concession. And does it go? Does it go directly to the bank? I'm guessing does it go into? Does it pay for principal interest or it's just a part of the package or
Joel Schaub 9:22it's an escrow account so the client doesn't lose the money let's say next year rates have dropped drastically and we want to refinance, the money the seller gave is still there, and that will actually go to reduce the principal. So that's a whole other strategy. Okay.
In God we trust