Learn Barbara’s expert tips to sell smart and grow wealth in real estate.
What are the biggest challenges for home sellers in today’s market? Today, we will answer some of the most common seller concerns with the help of Barbara Corcoran, a real estate mogul, and get valuable insights about real estate.
Is it worth it to let go of low interest rates and sell my house instead? Many homeowners are in a tough spot right now. They’re wondering what to do if they’ve outgrown their home or fallen out of love with it and want to make a move but are stuck with golden handcuffs because of the low interest rate on their current mortgage.
When faced with this situation, Barbara said to ask yourself: “Can I see myself living here for the rest of my life?” If the answer is no, it might be time to absorb a slightly higher interest rate and move on. It’s not fun to feel stuck in a home you’re not happy with because of a low interest rate.
The good thing is that now might be a great time to consider selling. The Fed is lowering rates by about 5% to 6%, which usually means more buyers in the market are willing to pay more money to take on a house at a slightly higher price.
It’s all about seizing the moment. Prices will inevitably go up quickly right now. You want to grab that window and get a good price for your home when you can. Experts agree that the super low rates you might be enjoying of around 2% to 3%, which a lot of people are still waiting for, will never come again.
Why does real estate remain a valuable investment for individuals and families? Barbara explained that most Americans still prefer to own what they can afford. For many, their home’s equity becomes a crucial nest egg for retirement.
Homeownership is a persistent dream for us, and even if it means starting with a smaller home, it allows them to enter the market and eventually trade up. This strategy allows them to build equity over time without missing the opportunity to own their first home.
What’s your take on the new rules regarding real estate commissions? Everyone in and outside the industry agrees that it’s added a lot of confusion upfront, but the difference in the end is very small. About 90% of buyers and sellers still use agents, and this is unlikely to change dramatically.
The main shift is in how agents are compensated. Now, buyers and their agents must agree on compensation in writing upfront. Importantly, this agreement can be non-exclusive, which gives buyers more opportunity to negotiate commissions.
How do you keep sellers from panicking about the market? Having lived through many real estate storms, Barbara said it’s normal for people to panic when the market is going down or starting to tip a little.
They’re paying a lot for real estate, and prices are high, which is hard for many. Barbara lived through sky-high interest rates of 18% while selling in New York City, and the city was going bankrupt, yet the market came back.
“Real estate always goes up, and now might be the perfect time to seize the moment.”
Barbara also mentioned a situation during the pandemic when rates were 2% to 3%. During that time, everybody said they wouldn’t buy again until rates came down that cheap, and they were nervous about it. But today, people are buying again.
In the end, real estate always goes up. She invested heavily in real estate and has consistently made money without any losses. Rates of 5% to 6% today seem to me like bargain basement prices. There are more $1 million homes than ever.
What would you tell first-time homebuyers trying to navigate this market? It’s very hard for young people to get into the market when they are facing prices around $1 million.
Most people buy their first home with the help of their mother or father, and there’s no shame in asking for help. The best approach to your family is to offer them a partnership in your home; when you sell, you give them back a percentage of what they contributed based on your new sales price.
She also said that it’s good to remember that your first home is never your forever home. You might be particular about what you’re buying, but it’s really just getting you in the game early to have a home to trade up from. The best deals today are still out there in every market. A two-family home can allow you to have a tenant upstairs or downstairs to help pay the mortgage.
Do you have any secrets about this season’s Shark Tank you’d like to share?
Barbara shared that it was an exciting season especially since it’s Mark’s last season. While she felt like she was losing her big brother and didn’t know when we’d have such a moment again, they celebrated his farewell on set.
Tune in for the next season, as they will feature smaller deals, a return to their roots, showcasing street-smart entrepreneurs in need of funding.
How has your advice to entrepreneurs changed over the years? Her advice has shifted significantly in the past 3 to 5 years. Social media is now essential, and she won’t invest in businesses lacking a strong social media presence. It’s like buying a business without a foundation. Barbara mentioned that Social media is no longer optional; it’s essential. If you can’t manage it effectively, hire someone who can.
What was your primary strategy for building wealth before Shark Tank?
Before Shark Tank, she focused on real estate for wealth building, contrary to the advice of money managers. She trusted her knowledge of real estate over other investments and made more money from purchasing properties for her company than from selling my real estate business.
Real estate is a slow path to wealth, and those who don’t understand it risk losing significantly. Despite being considered very wealthy, she still invests in real estate continuously.
If you have any questions about real estate, whether you’re buying, selling, or investing, reach out to us. You can contact us at (808)212-9188 or info@TeamLally.com. We’d be happy to help.