April 14th, Monday Market Update and Mindset Call with Nikki, Cari and Angie

Nikki covers interest rate volatility, USDA financing changes for manufactured homes, and strategies for maintaining client relationships.

• Interest rates are correcting after last week's tariff-related volatility, settling back into the low sevens and high sixes

• Previous clients are re-engaging in the market due to lease expirations, credit improvements, and life changes

• USDA/Rural Development now allows manufactured homes with 0% down financing, expanding options for rural homebuyers

• Self-employed borrowers changing business structures need to demonstrate "continuity of income" for mortgage qualification

• Real estate professionals should focus on organizing and nurturing their "databank" of contacts through consistent communication

• Staying top-of-mind with clients is crucial as everyone experiences various life changes that can trigger real estate needs

Chapters

• 0:00 Market Update and Rate Volatility
• 2:45 Past Clients Re-engaging in the Market
• 3:32 USDA Financing Changes for Manufactured Homes
• 4:25 Self-Employment and Continuity of Income
• 7:17 Client Reengagement Reasons and Triggers
• 9:13 Building Your Real Estate Data Bank

Transcript

Speaker 1: 0:38

All right, welcome to the Monday Market Update Call with Nikki and myself. And, yeah, it is April 14th and without further ado, nikki, I'll let you go.

Speaker 2: 0:51

Awesome. Happy Monday everyone and happy almost tax day. But I don't know if that's a happy thing or not, but regardless of that.

Speaker 2: 0:58

So in the market this morning interest rates are doing a little bit of course correction from the events of last week. So last week after the tariff announcements were happening, we were having tons of volatility from an interest rate standpoint. I mean we're seeing rates like down to 5.875, up to eight and a quarter in a single day and just a lot of volatility happening in the market throughout the week. Since the announcement of the 90-day suspension or 90-day delay in the tariffs, we are starting to see that course correction happen in the interest rates. Now we're down into the low sevens, maybe the high sixes, depending on if you want to pay points or not, but things are starting to course correct to the rates that we were seeing into the mid sixes and we're hoping that things will kind of level out from a playing field standpoint. We can kind of hover in that mid six range while that information is, you know, keeping going and wondering. You know what the tariffs are going to actually be and any other you know announcements or market information that could affect the interest rates. So the good news is is that we are seeing the course correction. Super important that we're paying attention right now to what the media is saying and then helping our clients understand you know what the reality is, and so that's really what the concentration is on right now. Ironically, I have seen a lot of people reaching out to me wanting to get pre-approved again that I hadn't worked with either in a year or a year and a half or so, and so there's been I think I've got like six applications from prior clients that I hadn't really been in a ton of contact with and now they're wanting to re-engage and, you know, start the pre-approval process over again. So it might be a good idea for you guys to contact people that you know maybe were a year out or a year ago, that you might have lost contact with, and re-engage them to see where they're at from a you know feeling standpoint and where they want to be, also from a you know on the street standpoint.

Speaker 2: 2:47

Usda or Rural Development made an announcement last week about changes to their financing information that they're willing to do so. They historically have not allowed manufacturer homes to be eligible for rural development financing. Now they have actually corrected that and they are allowing manufactured homes for RD or USDA financing. As a reminder, manufactured housing normally requires at least 5% down, but with rural development. This is a 0% down mortgage. It is 0% down, it is income-based, it is for people living in rural areas and it has a lower mortgage insurance amount than you would find on a conventional or an FHA loan most of the time. So a lot of really positives to that program. But now that they're allowing manufactured homes, that's an additional positive.

Speaker 2: 3:46

The other thing I wanted to talk about is a little nuance with self-employed borrowers that I have actually had to deal with twice this past week. So when you have a self-employed borrower and they are using a Schedule C on their tax returns or they are an LLC on their tax returns or something of that nature, and they're switching from that Schedule C to an S-Corp or a corporation or some other way of tax filing, from a lending standpoint they are allowed to do that as long as we have what's called continuity of income. What continuity of income is is making sure that the business that they had showing on the Schedule C is the same business as the one that is filed under the new way of filing. So whether it's an S-corp corporation or if they're going from a corporation down to an S-corp or whatever the change in filing is. We need to make sure, as a lender, that there's that continuity of income. To be clear, the client is allowed to change their business structure for tax purposes and still qualify for that mortgage. We just need to make sure that if there is a business name change so in other words, if you just filed a Schedule C under your individual name and now you're filing an S-Corp under an LLC or a different name that those two businesses are the same business if there is a name change and then if identifying through two years of tax returns, that that is the same business that has been in existence.

Speaker 2: 5:10

And so really what we look for from a lending standpoint is that continuity of income piece. It is important not only to tie the two together, but it's also important for what we can use for qualifying income. So when we have a client who's been self-employed for at least five years, most of the time we can use one year of tax returns for qualified. If we have a self-employed client who is self-employed for less than five years, then we need two-year average. That could be very important for people who have, let's say, got a huge increase in their profit from their business in 2024 versus 2023, or people that are changing the structure of their business. We need to be able to tie those two together, and so it's really important that you know us as lenders, know that up front and then also can just speak to the client about how we're going to set them up from a pre-approval standpoint.

Speaker 1: 6:02

Absolutely Thank you for that. And then I just wanted to go back. So I think that is great that you have some clients coming back. You said you had six coming back who are kind of on hold. What, just for all the agents listening and I definitely agree, you should always be reaching out Anybody that gives you a timeline, automatically split it in half and then quarter it and just continue to stay in front of them. But what are exactly those conversations or what are they saying? Or if you had the top, you know a couple reasons of why they're resurfacing. That will just give the agents listening a little bit more inkling of who to really reach out to and what to say.

Speaker 2: 6:44

Yep. So anyone that had you know really a couple of them were that they signed a lease and the lease is coming up in three months. One of them very credit specific, that they've been working on their credit all year. One of them, you know really, was from 2023 that just randomly reached back to me and said, hey, I want to try to get through this process again. Another one had a job change where they were making more money. So they're coming back and saying, ok, now what can we qualify for?

Speaker 2: 7:13

So all those different life changes that have been happening that are really like job related, credit related, you know things of that nature. That's why they're coming back. You know, oftentimes it's we're having another baby. Oftentimes it's, you know, we're getting married. You know things that are changing life events that, again, we all talk. We talk about it all the time. But just knowing when those things are going to happen and being able to reach back out and not necessarily talk about whether or not they're going to buy a house, but just congratulate them on the life events and you know, eventually that helps, helps them to remember you and to reach out to you when, when they need something.

Speaker 1: 7:52

Absolutely, and I think that that's a perfect, perfect segue into kind of what I want to talk about today. And that's everyone you come in contact with is fighting their own battle. Everyone has stuff going on and everyone has life events coming up. So a lot of agents what I've noticed in coaching and mentoring them is we get into our own heads and we make up these whole stories that you know why we should call or we shouldn't call, or what might be happening, or why this person's ghosting us or why they're not responding to us. And so I really Really want to say it again, especially for the agents on here that I coach it's us, we're the problem, you're your only problem and your only solution. So it's really getting out of your own way and out of your own head and not making up the stories or the excuses and letting the doubt creep in as to why you shouldn't be reaching out to these people. And that's why I love all the examples you gave, nikki, because things change, circumstances change and what's our role in you? As a business owner, an entrepreneur and a real estate agent, your role is to be top of mind, and what that means is, when their hand goes up and they're ready. You should be the first name in person and real estate agent they think of and if you are not, that's on you. So it's really important that you and I've had with another agent this morning that's new to eXp and she's blown away by KVCOR and all of the campaigns and everything that you can automate so that you having to show up and make the call or make the text can be once a quarter. But what are you doing in between that? What are you sending out newsletters? Are you on a holiday drip? Is there a home anniversary? Is there a birthday? Their kids birthdays, their spouse? I mean, you can have so many things in your drip campaign that are customizable to that specific person and it will feel like it's coming from you. And if you don't have KB Core, again, technology and AI is off the charts and it's only getting better. So whatever CRM you are running should have some sort of capability and we I have.

Speaker 1: 10:13

Yet, honestly, in the hundreds of agents that I've coached and come in contact with, I don't think I've met one yet that has their data bank. It's not a database, it's a data bank in order. Because if you don't have your data bank in order and have these prospects, your people that know you, like you, trust you, past clients, people, you know your sphere of influence, all of it. If you don't have them in your data bank and you have these campaigns set up and you're out buying leads, that's you're stepping over $100 bills to pick up pennies. It's all there, it's all ready to go. You just have to tap into it. So I just wanted to give that friendly reminder and, nikki, exactly what you said. Six people came back around and I know how you show up and that's because you showed up and you were there and when their hand went up or their lease came up or they're thinking about this or had a job switch, they knew first and foremost to call you.

Speaker 2: 11:16

Yeah, that's a lot of stuff that we you know, that we talk about all the time with your data bank I'll use that same term is, you know, a lot of times I won't even get a response for an entire year from these clients, or you know potential prospects or whatever it is, and so when I'm not getting responses, then I have to go back and I have to analyze, like, is this the type of client that I want to continue to pursue, or is this the type of profile or client that I really want to be able to do business with? And that's when you can take all that, all those people that you know, and you can start to funnel them down of people who just aren't responding, and really then deciding is this a person that's ideal for my business, and narrow it down that way as well.

Speaker 1: 12:00

Absolutely. Was there anyone on the call that wants to come off mute? Do you have a question for Nikki or myself? Before we wrap it up, I always like to give the people that show up live the opportunity, all right, well, with that said, then the recording will be on my YouTube channel and podcast, and if you have any needs for a great lender, reach out to Nikki. Coaching and mentorship, regardless of if you're with eXp or not, reach out to me. We're here and happy to help in any way at all. Have a good one everyone.