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Thursday, March 26, 2015

Mortgage Bond Market Analysis - Are you "just" a Realtor?

Good morning on Weekly Jobless Claims Thursday.  Weekly claims came in just a little better than expected at 282K vs. forecast of 290K.  While this isn't a huge win for the economy, there were still more profits to be taken so it is helping to drive more selling in the mortgage bond market.  After the 42 points beat-down yesterday, the FNMA benchmark bond is down 16 basis points and at 101.92 is 4 points above the new first level of support (101.88). 

The RSI has been pushed down to slightly below overbought so from a technical standpoint it's possible that we can bottom out here.  What traders decide to do will depend on the data points tomorrow which include GDP, Consumer Sentiment Index and Gross Domestic Purchase Price Index.  The rest of the world will also have some influence as well which means that bad economic news or news of more unrest will be good for bond prices and rates while signs of strengthening economies and calm will be bad for rates.

As a follow up to yesterday's post where I gave a list of homeowner's tax deductions I want to ask a question:  Are you "just" a Realtor?  Let me put it to you this way, what do you do to differentiate yourself from your competitors?  Your answer can't be great service or your great marketing plan or any other number of canned responses because Realtor is going to say these things and the client won't find out whether it's true or not until after the transaction.  It's like lenders, we're all going to tell you we have the lowest rates (having worked at a number of companies of all sizes throughout my 20+ years in the business, I know our rates are extremely competitive) or the fastest closings (and we'll bring you doughnuts with that rate sheet).

I've seen some Realtors try to dazzle potential clients with statistics - market statistics as well as their own - in an effort to prove their claims of greatness.  Some of this can be good but we all know that numbers can be manipulated and twisted; like the saying goes, there's lies and then there are statistics.
I think it's important to add value to every relationship you have and in business, that means adding value to your clients and partners.  Many people talk about how the home is the biggest single investment that people make but they don't carry that conversation any further than that other than to circle back around to their statistic and why the client should use them to buy or sell this huge investment.  If you really think a home is the largest investment that most people will make, and I believe it is, then why not provide the client with strategies and expertise that helps them take advantage of all the wealth-creating benefits real estate has to offer?

What I'm suggesting is to partner with professionals who can help clients have great success not only with the purchase of a home but in creating wealth for retirement.  A good estate planning attorney can set up a trust (and LLCs as needed) to help protect a client's assets and avoid probate.  A good CPA can make sure that clients are taking advantage of all of the tax deductions (especially for investment properties) that real estate has to offer which will, in turn, help clients maximize their cash flow and wealth creation.  Last but not least, a good lender should be able to provide valuable insight to how leverage can really help create great wealth.  I have a fantastic spreadsheet that I've created to help real estate investors see the kind of wealth they can create by investing in real estate; the spreadsheet gives numbers on income, expenses, appreciation, rental increase, leverage vs. non-leverage investing, tax benefits and more.  Integrating these numbers with some good investment strategies and the expertise of the CPA and estate planning attorney can add enormous value to your clients and generate a lot more business to you due to more transactions per client as well as more referrals.  I'd love to share my system with you so feel free to contact me at 702-812-1214.  Don't just be a Realtor - be the person they go to because you give them so much more than any of your competitors can dream of giving them.  Make it a great day.

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