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Article Courtesy of: Banker & Tradesman
By Diane McLaughlin | Banker & Tradesman Staff

The maximum conforming loan limits for mortgages to be acquired by Fannie Mae and Freddie Mac will increase by 12 percent nationally in 2023 and the limit for Greater Boston (Essex, Middlesex, Norfolk, Plymouth, & Suffolk counties) will increase by more than $100,000 to a limit of $828,000.

The Federal Housing Finance Agency said in a statement today that the loan limit for one-unit properties will increase from $647,200 in 2022 to $726,200 in 2023. The FHFA adjusts the conforming loan limit annually to reflect the change in the average U.S. home price, as required by the Housing and Economic Recovery Act (HERA).

Because of median home values, several counties in Eastern Massachusetts will have higher limits for one-unit properties.
• Essex, Middlesex, Norfolk, Plymouth and Suffolk counties: $828,000
• Dukes and Nantucket counties: $1,089,300

The seven other Massachusetts counties will be subject to the $726,200 limit.
Almost every U.S. county will see an increase in conforming loan limits in 2023 because of rising home values, the FHFA said.

The baseline maximum conforming loan limit in 2023 increased by the same percentage as the FHFA’s estimated housing price increase. Using its third quarter 2022 House Price Index report, the FHFA calculated the increase based on estimates of the average U.S. home value over the last four quarters. According to FHFA’s seasonally adjusted data, house prices increased 12.21 percent between the third quarters of 2021 and 2022.

Greater Boston and the Islands will have higher maximum limits because 115 percent of the local median home value exceeds the baseline limit.

Both Dukes and Nantucket counties will qualify for the maximum limit of $1,089,300 on one-unit properties, up from $970,800 in 2022. HERA limits the maximum conforming loan ceiling to 150 percent of the baseline.

The 2023 conforming loan limit of $828,00 in Essex, Middlesex, Norfolk, Plymouth and Suffolk counties is up from $770,500 in 2022.



Conforming mortgages financed by government-sponsored entities and the FHFA are the most lenient, allowing eligible first-time homebuyers to put down as little as 3 to 5 percent in some cases. Jumbo loans, on the other hand, require borrowers to have higher FICO scores and larger down payments, and also come with asset and reserve requirements.


Greater Boston Conforming Loan Limit Raised to $828K

 

Article Courtesy of: Inman News
By: Bernice Ross

Because many agents wait to change offices until the end of the year, now is prime recruiting time. Take advantage of it with these strategies


You have generated a great recruiting lead for your office or team. Whether you’re a broker-owner, manager, or team leader, your ability to conduct a successful recruiting interview will determine the ultimate success of your office or team. 

A successful recruiting interview depends on how well you have prepared along with your ability to ask the right questions, assess whether the agent is a good fit for your company and to close the agent on moving to your office or team. 

Preparation

Create a job description 

A real estate’s agent job description comes down to six words: “Generate leads, convert leads, close transactions.” Your primary focus during the interview should be assessing the agent’s ability in each of those three areas. (For a more detailed job description at no charge, visit ziprecruiter.com.)

Prior to your interview, research the candidate

Research how many listings the agent has taken in the last 12 months, whether they have a website, as well as searching their various social media accounts and the types of posts they generally make. In addition, search their name plus the word “complaint” and also the word “reviews.
” 
Also be sure to check with your agents. Better to find out early if an agent has a bad temper, is difficult to work with, or any other facts that would make that person a poor hire. 

Have all candidates complete a written job application

Ask about where they went to school, any previous jobs they may have held, as well as where they have worked since they became licensed. Do not ask about age, ethnicity, family status, religion or any other issues that may run afoul of the many antidiscrimination laws governing these areas. 

Ask for 3 references

When I was the acting vice president for Keller Williams University, they required at least three references and that you also went “three deep.” This meant that you ask each person you interview if they can supply the contact information for someone else who would be willing to give the candidate a reference.

The idea was to receive at least one additional (third level) recommendation from the second tier of recommendations. In practice, it can be tough to do, but smart if the position is a key hire for your team or company. No matter what you do, however, be sure to follow up on all three of the first-tier recommendations the candidate gives you. 

Have a trusted member of your staff call the agent to inquire about a listing

This allows you to discover how they treat incoming buyer and seller calls from strangers as well as how quickly they respond to inquiries.

Anyone can bring their ‘A’ game once. Conduct more than one interview

Your first interview will be by phone. This allows you to assess how the agent will sound when they speak with clients.
The second interview should be face-to-face at your office. To make the potential recruit more comfortable, avoid sitting behind a desk — a round table is ideal. 

Interview questions 

The best questions begin with the words “how” or “what.” These two words generate longer, more detailed responses as opposed to asking “who,” “when” or “where,” which generally result in very short answers. Also avoid asking “why” because it puts the other person on the defensive. Other questions to ask include:

• What do you like about your current office?
• How is your firm investing in your success? 
• What’s missing from your perspective?
• What three tools does your company provide that you feel you can’t do business without? 
• If you were going to recommend that an agent join a brokerage other than your own, what about that company would cause you to recommend them? 

When it comes to changing offices or companies, the questions above help you identify what matters most to the agent you’re interviewing. Pay special attention to the “what’s missing question.” If you offer a service, product, or technology their current office doesn’t offer, you can use this benefit as a pain point to help you close the agent later in the interview.

Also be curious and “dig deeper.” To do that say, “Tell me more about that” or ask them for more information. For example, if their current office offers something you do not offer, ask them to explain what they like about it and how they use it in their business. 

Be sure to do this

Take notes on what they say. This shows that you are so interested in them and what they’re saying that you took the trouble to write it down. You will also be able to reference these notes when you’re ready to close them on joining your team or company. 

Ask experiential questions that explore the agent’s skill set

These next four questions allow you to assess how well the agent handles routine business challenges. It would be worthwhile to ask the following questions. 

• Tell me about your current production, including what’s working and where you could use some help. 
• If I were to refer a listing lead to you, how would you market it? 
• One of our agents had a problem in a transaction with XYZ. How would you have handled it?
• One of your listings is about to expire. What will you do to make sure your clients relist with you?

When you spot an issue, ask yourself whether this is an issue that can be addressed through training or by some other means or is it a deal breaker.

To close or not to close?

If you realize that a candidate is not a good fit, point out something they like or they deem necessary at their current company that your company or team does not offer. Next say, 

You said that XYZ was very important to your business, and we don’t offer that product/service. Thank you for taking the time to come in and interview with me. I very much appreciate it!

If you believe the agent is a good fit for your office, close on what they said is most important to them when you make your offer. In terms of solutions or benefits your company provides, show them how these tools or systems can help them overcome the challenges they’re facing.

Again, the groundwork you laid by writing down what the agent said earlier in the interview is critical to closing them.   

Following up after the interview

• Send every agent that you interview a handwritten thank you note.  
• If the agent is still unsure about joining your team or office, invite the agent back for a 1:1 coaching session with you, your office trainer or coach.
• You could also invite them to an educational event at your office.
• A third option is to have one of your agents arrange to have coffee with the agent and answer any questions they may have about joining your company.

Since many agents wait to change offices until the end of the year, now is prime recruiting time. Take advantage of it!

Bernice Ross, president and CEO of BrokerageUP and RealEstateCoach.com, is a national speaker, author and trainer with more than 1,000 published articles. Learn about her broker/manager training programs designed for women, by women, at BrokerageUp.com and her new agent sales training at RealEstateCoach.com/newagent.

Recruit Better Agents With This 15-Step Plan For Vetting Top Talent
Article Courtesy of: Inman News
By: Olivia Sundstrom for Real Geeks
 
Uncertainty in the market has a tendency to make people freeze. After all, a real estate transaction is a financial decision that can give some buyers and sellers cold feet.

Seasoned real estate agents must know how to hold the proper conversations with their leads to move them toward taking action, or at the very least, keep their leads engaged long-term.

After consulting industry leaders who have been through many market fluctuations, we at Real Geeks have compiled a guide on increasing your lead engagement, keeping your pipeline engaged for the long haul and scaling your real estate business successfully through a market shift.

Don’t be afraid to get real

You’re the real estate expert. You are the one that can provide your seller leads with the guidance and insight that can help them make the right decisions. Some of them may be reluctant to believe that a property they have invested in isn’t as lucrative as they hoped it would be. Your job as a real estate agent is to provide insight into how your leads can bring their property up to the market competition.

Regarding buyer leads, it is up to you to convey the real stakes as well as what could happen if they don’t opt into the market when it is affordable.

Interest rates can be refinanced

High-interest rates can intimidate buyers. However, the truth is that interest rates can often be refinanced.

Talk about inventory

Depending on your regional market, there could be a shortage of inventory, a backlog of pending inventory, or an abundance of inventory.

This is your opportunity to own your relationship with your leads and come to them as an expert regarding what is going on in their regional market.

This will establish authority and trust amongst your leads and will secure you a spot as a trusted real estate professional when the time is right for them to take action.

Don’t be too pushy

In a shifting market, buyers and sellers can be on edge — more so than they typically would be when buying or selling property.

Therefore, you want to be empathetic and careful with your messaging.

It is important that you do not come across as too emotional or aggressive when you are informing your lead on their regional market.

Experts know how to offer their knowledge sincerely.

It’s not about making a sale immediately

Getting a lead off the fence doesn’t always mean closing a sale. It is about keeping them engaged and helping them achieve their goals over time.

Did you advance the ball today? Are you taking a proactive role in engaging your leads with current information about their regional market?

Work smarter, not harder

Engaging a multitude of leads over time can begin to take up a lot of mental overhead fast. Using a CRM reduces the mental overhead while organizing all of your long-term leads, as well as, keeping your leads on drip campaigns with market reports that suit their interests. You can cater to various workflows towards educating them on their current market conditions.

Closing a deal is a series of small advances. You must be patient.
How to Increase Lead Engagement in 2023

 

Article Courtesy of: Inman News
By: Stuart Siegel 

Regardless of the market, a strategic approach to growth is necessary to sustain a real estate business long-term


Following the hottest market in decades, U.S. real estate appears to be normalizing in some markets and cooling in others as we enter the last months of 2022. During these times of market variability, planning for brokerage growth can be challenging. When the market is on fire — as it was in 2020, 2021 and early 2022 — it can be tempting to ride the wave, growing as big as possible and as fast as possible.

Conversely, during times of economic uncertainty, it can feel imprudent to invest in expansion efforts. However, regardless of the market, a strategic approach to growth is necessary to sustain a business long term. Here are three considerations for all brokerage leaders as they approach their growth strategy:

Find the opportunity in every market

Inflation rates reached a four-decade high earlier this year, and remain elevated at 8.5 percent. Economists agree that we are headed toward a recession; however, this doesn’t necessarily mean it’s time to hit pause on growth efforts. When others are hesitant, leaning into this type of opportunistic market can yield growth at a lower cost of investment.

Downsizing or layoffs by a competitor present an opportunity to recruit talent in the market and increase support for your real estate professionals. When others may be giving up office space or delaying on signing leases, the chance for a deal on a new office space in a prime location may present itself.

There is opportunity in every market. Strategic choices to invest when others are pulling back can pay off in the future; however, the ability to make these investments hinges on building reserves and sticking to your growth strategy when business is booming. 

Determine the sweet spot for your business and pursue it relentlessly

Success looks different for every real estate business, and the biggest or fastest-growing doesn’t necessarily mean best. Being the top brokerage in your market in terms of size means nothing if your office is a revolving door of agents ever in pursuit of a higher split. Growing beyond your ability to best service clients and creating a culture of burnout is also not conducive to long term success. 

Rather than focusing on size as the measure of successful growth, a more sustainable approach is determining the sweet spot of what success looks like for your business and creating an expansion strategy supporting that vision. This could mean achieving the highest average commission of real estate professionals in your market, being number one in terms of productivity, zero percent agent turnover or building a team of only full time real estate professionals.

These goals tend to be longer term and as such, lead to more steady, sustainable growth over time. What’s important is adhering to your goals, having a vision that dictates which growth decisions are right for your business, and more strategically taking advantage of market opportunities as they arise.

Retain company culture during growth

Maintaining culture during growth is a delicate balance, and sacrificing culture in the name of quick growth or hiring one “superstar agent” rarely ends well. A much more sustainable path to long-term growth involves a people-first approach. Build your business around the people who most exemplify your brokerage values and can help to achieve your ultimate vision.

In fact, across our network, we’ve found that prioritizing a culture fit within Engel & Völkers’ brand values when recruiting often correlates with better performance and longer, more mutually beneficial relationships. This is the difference between a brokerage “buying” agents versus agents buying into a brand and culture they want to be a part of and with which they would like to grow. 

Retention efforts are also key to retaining culture during periods of growth. Keeping your team engaged, feeling fulfilled, and productive is an ongoing effort, but happy agents will often do the best recruiting by spreading the word to like-minded peers.

Brokerage leaders should view retention efforts as a continuous cycle of re-recruiting current agents. Check in with your team regularly, see where leadership can be providing support or helping to troubleshoot, and perhaps most importantly, celebrate the wins, both big and small, to encourage the drive to keep getting better.  

Growth and longevity are likely goals for every real estate brokerage, but finding the balance in achieving both will look different for every business. Take the time to define your ultimate vision of success. This will help guide strategic growth decisions through any market conditions and help you find and take advantage of the opportunities that exist in every type of market.

During times of growth, don’t let the culture that’s gotten your business this far fall by the wayside. Fiercely protect your ethos and the agents that embody your brand values. While certainly a balancing act, prioritizing these elements can help to propel your business to new levels.  

Stuart Siegel serves as Chief Strategy Officer for Engel & Völkers Americas.
Expanding Your Brokerage: 3 Tips For Sustainable Growth
Article Courtesy of: Inman News
By: Carl Medford

Impulse purchases may come back to haunt you when you are presented with an investment opportunity but have no ability to capitalize due to past financial recklessness

Just in case you have not noticed, we are heading into a tough market. It was OK when we saw real estate companies laying off employees — that made sense. After all, we have come through an incredibly profitable real estate season and many brokerages were staffed for a market that no longer exists.

However, when Meta, Amazon, Microsoft, Twitter, Snapchat, Intel, Lyft and more are announcing layoffs and hiring freezes, where I come from, that is called “a clue.” Important to note, most of the aforementioned companies have billions in cash reserves, yet they are choosing to downsize and slash expenditures to prepare for the impending recession.

In contrast, many Realtors I know have no cash reserves and are still spending like there is no tomorrow.

A history professor at the college I attended was famous for beginning his first lecture with the following words: “The only thing we learn from history … is that we don’t learn from history.” We are at that point now in the real estate market, and those who pay attention to the lessons learned during the last major downturn will make it, while the rest … probably won’t.

Here are 10 guidelines for preparing for the market that lies ahead:

1. Don’t buy something because it’s on sale

Retailers have sales to motivate people to buy things they would not normally buy. Whether the normal price is too high or the specific item is not top-of-mind, sales are used to jolt buyers into buying things they most likely do not need and, in many cases, cannot really afford.

The logic is simple. “I need to buy this now because the price will soon go back up.” Ironically, most people have lived healthy, satisfied lives without the item in question and, if they refuse to get bitten by the “sale” bug, will continue to enjoy a happy life without that 85-inch screen or whatever else they think they “need.”

Bottom line: If you have managed to live without it until now, you can continue to live without it until we get through the current financial crisis.

2. Don’t buy with credit

Credit is a convenient way of buying something now that you most likely do not “need” and pushing the responsibility for paying for it down the road. The assumption is that while you might not be able to pay for it now, you will be able to afford it later. Heading into a recession, let’s call that logic what it really is: stupid.

Bottom line: You will need to maintain your cash reserves over the next number of months to make it through the recession. If you cannot justify paying cash for it now, then don’t buy it.

3. Don’t buy something unless it is critical to your current survival

We often confuse the words “need” and “want.” As I am involved with a charity that provides help to children without hope, I have been to Africa numerous times. I have walked through a dumpsite adjoined by caves where scavengers live, waiting for the next truck to arrive so they can walk, barefoot, in many cases, through the refuse which includes broken glass and animal waste hoping to find anything to make it through the day.

Let’s be totally honest: most of what we think we need is actually a want, and, unless it is critical to your survival, you should plan on living without it until we make it through this next phase.

Bottom line: Unless it is a critical medical need or something similar, you should be able to survive without it.

4. Don’t buy anything new when used will do

I have purchased a few new cars in my life, but the majority have been used. I have discovered a very important fact: Regardless of whether it was new or used, they all got me to my destination just fine. The only thing that suffered by driving a used car was my pride.

While it is totally awesome to be able to order a new vehicle to your exact specifications, the old adage, “It loses a significant amount of its value the moment you drive it off the lot” is absolutely true. When you buy something used you might not get the latest features, but truthfully, in many cases, those features are not critical to the purpose of what you are buying.

Bottom line: Buy used instead of new, and pay cash. If you do not have the cash for the purchase, then it is best to wait until you do.

5. Don’t buy 2 when you need 1

Years ago I heard someone joke about their purchases at Costco by stating, “By buying bulk quantities of everything, I am saving myself into bankruptcy.” Unless you are storing up for another pandemic, you probably do not need a three-year supply of toilet paper.

You also need to watch out for the infamous BOGO offers. If you only need one, buy only one. Look for the item you need at a discounted price. In most cases, BOGO offers are for items at full retail price.

Bottom line: Do not be lured into the trap of buying more than you actually need. If you find yourself giving away things you have purchased or putting them somewhere where they gather dust over the next number of months, then you bought too much and spent money needlessly.

6. Don’t buy the most expensive version

I grew up in the era of Timex watches and Bic pen commercials. They would do crazy things like strap a watch to a boat propeller or shoot a pen through a piece of wood. I can still remember the Timex slogan, “It takes a licking and keeps on ticking.” In the case of the watch, which was extremely inexpensive, no matter the abuse, it would continue to work.

In the same way, the Bic pen was only 19 cents, and could also stand up to significant mistreatment. The moral here is simple: While it may be nice to own expensive things, unless you are independently wealthy and earn more interest on your investments than you can actually spend, this is not the time to be buying a Rolex or Apple watch when a cheaper version will tell time just as effectively. The same goes for a Montblanc pen.

Again, it comes down to pride. To “keeping up with the Joneses.” If bad financial decisions are going to be made heading into a recession, then let the Joneses be the ones making the stupid choices while you maintain better control over your cash.

Bottom line: Do not fall into the trap of buying a luxury item when you cannot really afford it.

7. Don’t make impulse purchases

An impulse purchase is something you buy on the spur of the moment that you either were not planning on buying or did not include in your budget. For some people, this is a constant litany of small things: candy (any item surrounding a store cash register), clothes, trinkets and so on. For others, it can include cars or other big-ticket items.

Many people own a timeshare because they fell for the line, “This offer is only good today.” People who make snap decisions to buy something frequently regret it later. In fact, impulse buying can be addictive because the immediate rush of serotonin makes you feel good about what you just did. In most cases, impulse buys are things you do not need and require money you cannot afford to spend.

Rachel Cruz on behalf of the Dave Ramsey organization states, “Americans impulsively spend an average of $276 every month. That adds up to an extra $3,312 spent every year and about $198,720 in a lifetime!” She continues, “I had to plug those numbers into our retirement calculator. And listen — if you invested that $276 every month for 10 years at an 11 percent average annual rate of return, you’d have over $59,000! Nothing like the magic of compound growth to put things into perspective.”

Bottom line: Resist the urge. Have a checklist you go through before making any purchase that includes the following questions:
• Do I really need this or just want it?
• Do I need the money for something more important?
• If I wait 24 hours would I still make this purchase?
• Does this purchase fit into my overall financial plan?

8. Don’t continue to pay for things and services you do not need

A great example is the number of entertainment subscriptions available. In the good old days, you turned on the TV and watched your favorite shows and endured the commercials. To avoid this, many have started watching subscription programming including HBO, Netflix, Disney and so on. The list is endless.

Ironically, in order to boost revenue, many subscription channels are starting to display … wait for it … commercials. Since many people do not pay attention to their credit card bills, they never add up all their monthly subscriptions. If they did, in many cases, they would be shocked.

Truth is, even though they are paying for all the channels, they can only watch one at a time. While it might be nice to have all that choice, in a depression, it is not wise. While I am picking on entertainment, there are plenty of other subscriptions out there that have the same effect.

Bottom line: Go through all your subscriptions, and start chopping.

9. Don’t replace, repair

Whether it is the roof on your house or your car, it is better to repair, in most cases, than replace. While replacement may be necessary down the road, this is not the time for large capital expenditures.

Bottom line: Figure out a way to live with what you currently have, and only spend money on true emergencies.

10. Don’t buy bling

Seriously. This is pride at its worst. Some people think they need to show off their “wealth” by hanging stuff out there for all to see. King Solomon had a commentary on this in Proverbs 13:16, “Every prudent man acts with knowledge, but the fool flaunts his folly.”

By contrast, some of the wealthiest people in the world drive ordinary cars and live in modest homes. Rather than spending money to bolster their egos, they invest to build a solid financial platform that will support them through tough times. Warren Buffett would be a great example here.

Bottom line: Don’t bust your budget buying bling. Stop showing off, and put your money where it really matters.

While there are many more ways to be financially sensible in the days that lie ahead, these 10 would be a good start. Those who manage their finances wisely in the next year will be the ones who emerge from the recession in good fiscal condition.

In reality, a recession is a great opportunity to build wealth so long as you have money to invest when the opportunities arise. Those impulse purchases may come back to haunt you when you are presented with an awesome investment opportunity but have no ability to capitalize due to past financial recklessness. 
10 Financial Don’ts Heading Into a Recession
 

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