The Next Niche in the New Market with Tough Realtor® Love: 101

by 25 Mar 2012
( --  I’m going to tell you something you do know, tell you something you don’t know, tell you what you need to be doing, tell you why and tell you how. Easy enough??? Let’s go - this is Tough Realtor® Love: 101. You may not want to hear this, but turning things around is all up to you.

News Flash (Well, not quite) The pool of buyers has been shrinking steadily for the last few years. Potential buyers have been scared by the media into believing that either A: they will never be able to buy a house due to shaky financial histories, B: they should be able to buy any house they want for next to nothing because the market is “down,” and/or C: they shouldn’t have to “settle” for anything less than perfect if they do have a good credit score.   Annoying? Yes. Surprising? Not at all. The only thing the buying public has to go on are news reports that often rely on scare tactics and sensationalize to capture an audience’s attention, or horror stories from friends (or most often, friends of friends). Think about it...we aren’t taught the most important life and financial skills in school. Buyers who could be buying homes from you are left in the dark due to one thing.......LACK OF EDUCATION.

So, Here’s What You Need To Do You need to educate them - plain and simple. Again, annoying? Maybe to some of you. A requirement? Absolutely! It’s up to us – Real Estate Agents and mortgage brokers - to educate the public on the truth.  The freakin’ truth.  Novel idea right? Yes, this will initially be more work, but who better to do it?  Is this charity work for you?  Absolutely not, because here’s the most important part to all of this…  While you’re serving the public with invaluable education on how to buy their next property, they come to know you, trust you, and (naturally) want to work with you. No objection handling, high-pressure maneuvers or any other cheesy sales crap needed.   Tough love the above paragraph again. Let it sink in. Now one more time. Okay, if you don’t get on board with this and figure it out, you’re done - case closed.

In Case You Need a Little More Convincing or Just a Kick in the Butt   The majority of our market is FHA, right?  Look at the following chart of monthly payments (not including taxes or insurance) at various interest rates.  This is based on a purchase price of $200,000 with 3.5% down, on an FHA loan.
Interest rate Monthly Payment (including P, I, MI)
3.5% $1057
4% $1113
4.5% $1170
5% $1229
5.5% $1289
6% $1351
6.5% $1414
7% $1479
7.5% $1545
8% $1612

Interest rates are INSANELY low right now.  Down to 3.5% on an FHA loan.  Say interest rates climb back up to 5%.  The same house would cost $172 more per month in interest.  For every $10,000 more your clients borrow, their monthly payments increase by about $50/month.  At a rate of 3.5%, your clients can purchase $30,000 more than they would be able to at a rate of 5%.  Yikes, what if they climb back to 6%?  That’s a $300 more per month payment for the same house.  SO right now they can buy $60,000 more of a house than they would be able to buy at 6%.  Do you think you might be able to get people motivated with this?  This doesn’t even go into the cost of borrowing the money over 10, 5, even 30 years.  Staggering!   Do you know of a few people renting or where to find people who are currently renting?  With the cost of rent increasing (based on supply and demand) and the cost of buying decreasing, rent versus buy is in our favor like never before!   Pair this with showing them how to buy and fix up a property by leveraging the bank’s money through an FHA 203k loan to build instant organic equity, and I think you may have a winner (link to January’s article on how to build a business around FHA 203k loans).

Turn Inexperienced, Uneducated Buyers into Confident Investors What’s the difference between a buyer and an investor? Well, buyers rely exclusively on your education to guide them, making the final decision primarily on emotion. Investors on the other hand know the facts, have a strategic plan, and work with you to acquire equity and assets that may or may not become their home.   An investor knows how to buy with minimized risk. An investor knows what their financial foundation looks like, what position it puts them in to buy, why owning a home is the least expensive option and whom they can trust to make things happen.   So analyze your area and figure out a lesson plan. You need to educate yourself first and foremost.  Start by interviewing appraisers, investors, financial planners, mortgage professionals, contractors, etc.  Select a team of people to help who have the same mindset (don’t mess with people who don’t get it, there are too many that will).  The Niche Report is a great resource for gaining all the facts you need to become an expert. The search bar on the home page guides you to a Pandora’s box of information.

No Excuses (and a Special Enticement) The moral of the story? You’re not just a Real Estate Agent anymore. Your days of slinging houses to folks who would take the plunge based on emotion are dead and gone. You are now an equity-creating ninja who is responsible for creating a future of financially literate Americans.   The truth is, most people won’t do this. It takes time, and it requires patience and making absolutely sure you are staying up to date on everything. Let me sweeten the deal though...people who have had a foreclosure are required to wait 3 years before buying again. People who have had a bankruptcy have to wait 2 years before buying a home. There is a BOATLOAD of people reaching that 2- and 3-year mark every single day. They are ready to buy a home, but they need to be shown the right way.   People are starving for a fiscally minded leader (grounded in common sense) that can teach them the right way to buy a home.  Are you the leader your buyers desperately need?  If so, I guarantee you will add an extra ‘0’ to your income in 2012.

Jocelyn is a progressive entrepreneur who has established herself as a leader in the real estate, mortgage & technology realms. As founder & CEO of Limetree Lending Group she has created a lending company that is consistently named #1 out of all of the 100+ mortgage bankers under the Universal Lending Corporation umbrella in Colorado.

If you would like more information on this program, join our weekly webinar.  Contact me at for registration details.


  • by Mark | 3/26/2012 12:27:23 PM

    Also the principle difference!!! If you buy a 300k house at 4.0% 30yr fixed, vs 6.5% over the next 5 years 10kmore in principal will be paid down due to the lower rate, assume the exact same start date on both mortgages!!! That is 10k net worth that they have on top of the 30k in payment savings over that 5 year timeframe!!

  • by Sharon Falvey | 3/27/2012 8:36:10 AM

    I could not agree with you more and enjoyed reading your article. Each of us must do our part to create our own market share if we want to pull out of this slump. Opportunity is all around us we if will just open up our eyes and DO what we need to do.

  • by Rudy | 3/27/2012 11:45:16 PM

    Wow, u r a genius. Of course I am being sarcastic. First of all what you are saying is nothing new. I'm not a "realtor" Hell, I learned this is basic Econ & Finance classes. What is aggravating is that y'all are the same "professionals" that were peddling: interest only and variable rate mortgages just a few years ago and would still be doing it if your little ponzi scams would not have crashed the US economy. Unbelievable!! Just please do us all a favor. Check the credit of buyers, show the properties, and close the deals. Stop trying to be anything more then you are. Sales People. Which there is nothing wrong with sales just do it ethically.


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