Making Friends with Crocodiles

Rethinking your 2017 marketing plan with rising interest rates:

"If you live in the river, you should make friends with the crocodile." -Proverb

I love that quote, but let me adapt it for you-the Realtor: "If you work in real estate, you should make friends with change!"

And of course, the change everyone is talking about these days is interest rates. It happened -- and no big surprise: As expected, for only the second time since the Great Recession, the Federal Reserve opted to raise interest rates one-quarter of a point. And I wouldn’t be a bit surprised if we see more rate increases during 2017. Many economists agree and predict
mortgage rates will keep climbing.

In fact, Lawrence Yun, the chief economist for the National Association of Realtors (NAR), expects rates for conforming loans to hit 4.5% by the end of 2017 and says that jumbo loans should be roughly in line with the conforming rates. “Historically, that’s a very favorable rate, but compared to recent times, it is pinching the consumer,” Yun says. “The period of ultra-low interest rates is over. We are getting back toward normalization, so this rate increase should not be viewed as alarming.”

The big question for Realtors, of course, is this: “How can I still have a stellar 2017 despite those rising interest rates?” Glad you asked. First, no fretting because you can have a great year.

Consider these items as you plan for the rest of 2017:

  1. We’re coming off a remarkable year. NAR predicts 2016 existing-home sales will reach 5.42 million – that’s 3.3% higher than 2015 and the best year since 2006. Plus, in 2017, sales are forecast to grow an additional 2%, to 5.52 million.
  2. Rates are still low by historical standards. Yes, rates have jumped over the past few months, pushing the average rate on a 30-year, fixed-rate mortgage to over 4.3 at the start of 2017. It was April of 2014 when we last saw rates at this level.
  3. Rates won’t price most buyers out of the market. Sure, mortgage rates do affect affordability, but they don’t shut down home buying altogether. Instead, prospective buyers may just look at different neighborhoods or houses that need some repairs. So now, those buyers who’ve been on the fence and who’ve been worried about rising rates have another reason to bid on a house. All you need to do is give them a little nudge.
  4. You can now play the role of educator. Remember, borrowers might have a good chunk of equity in their homes from rising prices, so homeowners in high-cost areas can tap that equity to use as a down payment on their next home. And don’t forget the possibility of fast-tracking a refinancing. Sure, those with 4% mortgage may not see a refinance over the next year, but those still in a 5 percent mortgage might be perfect for that option.
  5. Get started now! Winter can be a great time to buy and sell. Winter can be the perfect time to sell: there’s less competition and you have more control in the schedule to show homes because of a smaller buyer pool.

I’ll close with this: I think the key for 2017 will be about responding to market changes and working as a consultant to keep your clients informed of those changes and their impact.
Before I let you go, I invite you to get a free copy of “Essentials of a Business Plan” that offers details and helpful items to consider as you plan for 2017. Write me at and I’ll email this to you.

And let me hear from you. What do you think about the rising rates? What concerns you most for 2017? Do you have a written
plan for 2017? If not, why not? Please send any comments or questions you have to or

Article by Bubba Mills

Bubba Mills is the CEO of Corcoran Consulting and Coaching Inc (, 800-957-8353), an international consulting and coaching company that specializes in performance coaching and the implementation of sound business systems into Real Estate Companies, Mortgage Companies and Small Businesses. Bubba Mills is a nationally recognized inspirational and education speaker, coach and mentor to the top real estate agents and mortgage companies. To find out more about Corcoran Consulting & Coaching, call 1-800-957-8353 or visit us at

Grace Sanderson