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Dr. Dani Babb Discusses “BC570 – Business Management”

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Hear what REALTOR® University Professor, Dr. Dani Babb has to say about her course, BC570 – Business Management.

I recently taught “BC 570 – Business Management.”  In my course, we explore real world business and economic conditions that effect our jobs in the real estate market.  This past term, my students studied ways in which the federal reserve, currently buying about $85 billion in bonds a month, is impacting interest rates, and how that does not necessarily translate to a decline in home sales – which doesn’t necessarily make common sense.

In other words, when we overlay the graphs of interest rates in home buying, there is no direct correlation between the two.  However, if we dig deeper into the data, we can see that interest rates impact the affordability index.  Which means, that while people may be still buying homes they will buy less expensive homes.  Real estate professionals need to adjust accordingly, and find out what their clients are really able to afford and purchase.  We talked about the clients’ comfort zone, which is not necessarily what the bank approves them for.  Sometimes the clients due to other factors in their life, needing to save for college for example, or retirement, actually need to spend much less money on a home.  We talked about doing the right thing by the client and how to still make a sale regardless.  This is one of many examples of how we look at real world data in our classes and interpret its meaning in the market.

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