The Federal Reserve’s September meeting and interests are making big headlines these days. Not only do interest rates have a huge affect on housing and the economy, the news around them can create big waves in consumers confidence and transaction activity.

As an agent, from understanding your prospect’s outlook to knowing how lending changes will effect your local market, it’s critical that you stay in the loop.

To help, here’s a starter list of ## broad effects a pending interest rate change may have on your business:

1. Qualification Becomes Bigger Deal: Sorting the Dreamers and Planners

According to attorney, financial planner, Forbes contributor Steve Parrish, “As the Fed’s bond buying slows, it becomes more expensive to borrow money, To the extent that you’re dependent on credit, your [lending] costs are likely to go up.”

As consumers get wind that borrowing, and consequently buying, are going to get more expensive you may see an uptick in leads. Be thankful, but be careful. Sometimes buyers moved by the headlines, aren’t really prepared to pursue their dream.

As an agent, having a proven and concrete qualifying process that includes a trusted mortgage lender are going to be critical to reap the benefits of the buzz.

2. Down Payment Digging Might Get Tougher

According to Financial Analyst and CNN contributor Patrick Gillespie, “Once the Fed raises interest rates, savers will gain more interest on the money they deposit at their bank.”

When people who are used to making nothing off their money in the bank see the effects of a rate increase, they could become more skeptical about withdrawals.

As an agent, that means you need to be educated and know an expert in downpayment assistance programs and how likely certain loan scenarios are to close.

3. Approval Deadlines Will Be More Serious Business

Anytime a major factor or big news hits the lending environment changes, the speculation alone can affect real estate and the interdependent mortgage industry in a flash. When market’s decline, the standards and terms of lending change. When interest rates move, the same can be true. In changing paradigms like these, buyers and their agents may want to work extra hard to close on time. A change in rates or the headlines could mean a higher rate loan or dealing with a deal-breaking change in valuation if their loan approval expires.

Data To-Do: Get Local to Get the Win Big changes can have significant local effects. To stay abreast of the changes, talk to your local associations, MLS’s, and mortgage brokers to get the neighborhood scoop that will help you plan to win as market seasons change.

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