global investment strategy | Finance & Investment

Why non-QM is keeping top mortgage brokers in business

Mortgage

globalinvestmentstrategy.com

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12 November 2026

Kevin Oto: Nobody knew what a high rate looked like. I’m always optimistic. Even in markets like this, I feel like there’s always opportunities.

Matt Sexton: Hello again and welcome to the latest edition of MPA TV. I’m Matt Sexton, mortgage journalist here with Mortgage Professional America. Today we continue our broker intel series featuring discussions with the top mortgage pros across the US on the most important mortgage topics of the day. I’m honored to be joined once again by two esteemed guests on this episode. They are Kevin Oto, broker owner of Pinnacle Mortgage Corporation, and Damon Germanides, co-founder of Insignia Mortgage. Gentlemen, thank you so much for joining us on today’s edition of MPA TV. Thanks for having us. Yeah, a lot has happened since the last time.

Matt Sexton: we chatted. So, let’s dive right into where the market is since the last time we spoke. Obviously, mortgage rates have increased now floating back toward the mid7s, although we did get a little bit of a reprieve today from the Freddie Mac rates. We’ll start with Kevin on this one. What direct or indirect impact have you seen rates have on your business if any?

Kevin Oto: I mean, obviously it has had an impact. You know, obviously the biggest impact which you would see right away is affordability, but really other than that is there’s like a psychological effect that I’m seeing with my borrowers when rates go up. it just affects their confidence and their urgency and you know they get to this analysis paralysis and they start becoming uncertain you know they think about maybe should I wait are rates too high are they going to come back down so you know really the rates go up they still may qualify but it just creates that uncertainty Damon your thoughts.

Damon Germanides: I mean yeah Kevin’s spot on I feel like uh just having done this for so many years feel like anything under 6% is uh people are uh happy to go buy a home. Uh where we are today um a lot tougher to qualify folks. Uh some folks even if they do qualify uh the payments are higher than they imagined especially like you know we’re a uh I’m not sure where Kevin’s at but we’re out of California predominantly so obviously costs are high here on insurance on all other cost of living. So, putting that all into the, you know, kind of bundling that all together as part of their process after they know what the home financing is going to cost. You know, lot lots of lot lots of uh tension there on whether or not they want to move forward. Um, and you know, and I will say this though, uh, it’s not a direct answer to your question, but we’re we’re working very hard, as I imagine Kevin is too. I am sourcing so many banks, credit unions, non-QM lenders, trying to find an edge. Uh who needs volume? Who’s going to price sharper? Uh what local banks that we have access to are maybe uh not as uh needing volume. So maybe keeping rates uh you know under that seven, maybe in the low sixes. And so that’s that’s been the positive in a market like this. But the general trend is not our friend here at the moment. So, uh, definitely, uh, a difficult time to approve, uh, borrowers for financing.

Matt Sexton: That kind of leads into the next question. So, Damon, we’ll just stay with you to start this one. Obviously, there’s opportunities in every market, no matter what rates are. What would be your advice to mortgage brokers out there as it relates to trying to find these opportunities in the current market? I mean, look, I think it’s like you got.

Damon Germanides: to be a student of the game here. like this isn’t like just take the call and pass it on to your processor to figure out, you know, is it going to it sounds like it works great. I mean, these are I could just speak the way I’m attacking uh like yesterday is a great example. I had four uh you know, four folks call me for loans. Two actually, two and two refinances, two um uh purchases. I mean, I spent 45 minutes on each call trying to figure out if I could help them because we had to go that deep because there’s so much going on. There was a lot of questions. Um I wasn’t sure if we needed to bring a co-barorrower in. I was explaining to them on one self-employed borrower, we can do a bank statement loan and a combination of a pay stub for your wife. Like going through all this takes time. Um so that those in the in a few years ago, those four calls would have been done in 15 minutes, maybe an hour total with all four. So it’s 3x the upfront uh effort. Same thing applies on the back end. our team, you know, who, you know, day by day pricing is volatile. Who’s in the market? Who’s out of the market? Who’s got that niche for the non-QM product that the that’ll make this loan work? It’s really, you know, you have to be very uh diligent about uh your lenders and who does what well and putting that into the memory bank. And obviously some of this is helpful with AI now too where you can you can uh start to feed it a lot of information, guidelines and stuff and have it help you be uh guide you where the deals should go. But yeah, that’s that’s I mean that’s that’s what I’m I’m doing.

Matt Sexton: Kevin, your thoughts? Yeah, I agree with a lot um with what Damon said, but you.

Kevin Oto: know, from a borrower perspective, um you know, I’m spending less time trying to convince someone that rates aren’t that high and you know, it’s still okay time to buy, but it’s really from a borrower perspective, asking a lot of questions, spending more time like Damon said, but how can we create a transaction that makes more sense and just kind of reminding people that, you know, if it is more of a buyer market, there’s opt there’s actually more opportunity, right? There’s negotiation for the purchase price. Maybe we can get seller credits to do a 2-1 buydown or a permanent buy down or looking at ARMs or changing your down payment or just comparing different, you know, financing strategies just to try to make the deal make sense, right? And if the buyer can get a credit for a 2-1 buydown or get the house 20 grand under what they’re expecting, you know, in the long run, that could be still a good deal for them. Um, but really I understand it is harder to find new clients, but like Damon said, leaning on different lenders, seeing what products they have, trying to find solutions for these borrowers that, you know, are scared off by the higher rates. But a lot of times, you got to just look at the market you’re in and look at how to solve the market you’re in. It’s not waiting till rates drop. It’s not, you know, hoping things change. It’s like, look, this is the market we’re in, and this is how we’re going to solve the problems and get you in a home and get you a comfortable payment. So, um, it’s really just spending more time with borrowers, looking for more opportunity, and trying to take advantage of having less buyers in the market. Kevin, I’d.

Damon Germanides: like to that you make a really good point and I was just at a real estate office and the there was a lot of questions from realtors uh at this meeting that normally they didn’t ask about the treasury market, what’s driving inflation, what’s what’s driving rates higher and then productwise these uh in we’re we’re more of a jumbo lender. So 2-1 buydowns the jumbo space is not that common. I mean, it’s there, but not at like some of the portfolio banks we work with, but there are a couple that offer that. And that was a great uh that was a great um conversation with the realtors because they didn’t really know how they those things even work. So, we walked them through the calculation and how you could go back to your seller and say, “Okay, you don’t want to drop your price by 50 grand because you’re worried you’re going to have to keep doing it. offer a lower mortgage uh rate by giving a credit to the to the to the uh to the for the buy downs and then if that doesn’t work then you can go back to your seller and say look we’re going to have to reduce the price if you want to sell but giving another tool in the toolkit and again I’ve been doing this for so many years most of the time at these lunch and learns and stuff you know four or five people show up I mean it was a full house if that’s any indication what’s happening in and you know of the realtors trying to figure out Okay, how can I get some, you know, get this get some activity going? You know, how what could I do to kind of educate my seller on what’s going on and then what could I offer them to maybe get them to uh help move this home? So, I think that’s a great point you made, Kevin, with these buy downs. Thank you. Yeah. Well, I’d like to add.

Kevin Oto: one more thing, too. So, like I also notice when you know things are slow, there’s a lot of agents and there’s a lot of loan officers that actually take time off, too. So that gives you an opportunity to capitalize on maybe some new relationships. I actually I’m part of real producers in our area in Sacramento. I’m in California as well. I hosted an event yesterday and I talked to a few agents and they actually said, “You know what? My loan officer hasn’t been as responsive as lately. She has a family. She’s with her kids, which is great, but you know, when business is slow, sometimes they check out and focus on other things. And unfortunately, that gives opportunity for people who are in the business at their desk every day to capitalize on new opportunities as well.

Damon Germanides: 100%. That’s such a great point. And by the way, those realtors and the downtime if you’re helping them and really trying, that’s a great way to build like sticky long-term relationships because you’re everybody knows it’s tough, right? And I again with Kevin, perfect, you know, point as a pro. Yeah, we’re not going to sell that rates are great or whatever. I mean, rates are high. They’re not like they’re they’re just back to historical norms, maybe a little bit above now, but this is we’re just coming off such a low level of interest rates for so many years. I mean, almost dating back to when I started the in my career like in ‘ 04. So maybe by ‘ 07 till 2023, nobody knew what a high rate looked like. I mean, so uh you know, it’s it’s definitely a different world and it the it happened so fast. Uh, I mean it didn’t go up gradually. It went up all with inside of six months. So, it’s a it’s been a big adjustment period for a lot a lot of folks.

Matt Sexton: Absolutely. Great stuff, guys. One of the things I want to talk a little bit about this month at MPA, we’ve been focused on non-QM lending. It’s obviously been a growing sector. We’ll start with Kevin on this one. What are your general thoughts about what non-QM and non- agency lending has done with the mortgage industry, especially considering its continued growth here in 2026?

Kevin Oto: You know, non-QM has never been a huge part of my business. But recently, when markets get tougher like this, you find yourself stumbling into more non-QM loans. I recently did a non-warrantable condo, more bank statements, a DSCR loans. So, I actually think non-QM has really helped the mortgage industry catch up with the way people actually earn and invest money, right? Not everyone’s a W-2, stable employee, predictable income. You know, things change. You know, you have business owners, consultants, like I had, you know, a music producer making, you know, royalties that was hard to prove. So, there’s really a lot of different ways people are making income. And I think this non-QM product has really just given a lot of opportunity to not just loan officers but you know home buyers and people out there to really qualify for good loan programs that they wouldn’t have qualified for before.

Matt Sexton: Damon, your thoughts?

Damon Germanides: I mean non-QM has kind of been what we’ve we’ve always done even before it was called non-QM. Um look, I think it’s it’s a major difference maker. It’s it’s probably the reason why we’re we still have the lights on. I mean, if we were just relying on traditional jumbo financing, uh, with the outlets that we have, uh, it would be very tough. Uh, the ability to go to a borrower and say, I can do a, uh, like a portfolio bank loan, and if that doesn’t work, I can go to a like a different product that’s a little bit wider with respect to guidelines. Interest rate not that all that much different. Um and then when you have these situations where you have a borrower who has a W-2 but a bunch of non-passive losses uh or passive losses on the tax return, other types of activities that are going on, you could just focus on the income from the W-2, not even deal with the tax returns. These are these are major difference makers and uh um without the product, I mean, we would candidly in our market be in trouble. I mean there it’s probably every other loan is going non-QM route right now. So one it used to be maybe every third or fourth loan but like Kevin was saying with affordability where it is I mean uh self-employed borrowers I think are more risk tolerant and they also uh understand their cash flows in even if they don’t know them perfectly intuitively given what their expenses are what they’re rolling into their business expenses that they can adjust or whatever. So, these products are allowing folks to buy homes. All we need is that we need we need home prices to come in a little bit to adjust for the higher rates and we’ll we’ll see, you know, I think that’s kind of what we need if rates stay up here to kind of reactivate the market. But, but the non-QM stuff is that it’s it’s big uh for us right now. Very big. Another thing I wanted to talk a.

Matt Sexton: little bit about is especially in the technology front, it feels like things are changing so quickly. Damon, we’ll start with you. Is there any new technology or maybe it’s new products or just a new way of doing business that you found over the last year that could be something that brokers could use to uh help get them more business especially in this current market? I.

Damon Germanides: mean, look, the AI and the automations and the ability to read uh unstructured data uh is huge. Uh we’re spending, you know, unfortunately, in a tough market, a lot of money on really uh re imagining our uh internal uh processes and where these fantastic tools can help us. Um, you do got to be careful because it’s not like you can take someone’s personal information and put it on a, you know, a chat GPT that’s not been or one of these, uh, uh, you know, kind of AI tools that hasn’t been, uh, ring fenced internally because you don’t, you do not want that stuff leaking out. Um, but I see a world where uh an a loan officer inside of a couple years, even a small shop, can have uh connect their CRM, to their LOS, to their email, to their Box accounts or where they’re storing the data uh to their LinkedIn, to their all of their social stuff and kind of get a run by day type of dashboard where you’re reminded that John, you know, ex borrower called you 6 months ago for a loan. This time, maybe you should check in. These three realtors have just posted new homes on LinkedIn, LinkedIn or on some social media or MLS. Hey, that you’ve done like bunch of stuff for them. Why don’t you go call them, see what’s going on? Like all of these things to just help manage your day. Like for me, I got so much going on sometimes I forget to email somebody back, which is fine if it’s something not important, but what if it’s a lead that came in at like five o’clock and I was distracted? like I should be getting back to that person right away just like Kevin said previously because in this market dude that realtor is relying on you to connect right away because he might he or she might only be selling a few houses this whole year. So if you’re like that slips till tomorrow like that real estate broker’s calling the next loan broker uh for the next deal because that guy’s going to get back to them right away. So all of these things just to make you more efficient and better um uh be more responsive and um you know more control of your of your pipeline and informed of what’s going on even internally or externally with the with your clients and with the market.

Matt Sexton: Kevin, your thoughts? Yeah, I agree with them. I mean, we’ve.

Kevin Oto: been investing some time and money in, you know, AI governance and making sure that we’re using AI responsibly um to really just eliminate a lot of repetitive tasks, become more efficient, limit the errors, and just help our loan officers just better convert their leads, and just be sharper. Um, I know it’s going to come to a point where most of these tasks are going to be automated and it’s really going to boost efficiency, but just to be one step ahead, putting tools in place and making sure that we’re giving our loan officers everything that they could possibly get to give them the edge, to be more competitive, to help convert, to be smarter, faster, stronger. I mean, that is what we’re doing right now.

Matt Sexton: One thing I wanted to ask both of you, we’ll start with Kevin. This kind of a busy time of year for trade industry shows just came off of NAM personally. Uh but it was a stretch of shows that a lot of brokers are headed to. Just curious to get your general thoughts about these shows and these trade groups and if there’s, you know, one thing that might be really good about what they’re doing and maybe something that they could do better to either make the shows better or just make the or make the mortgage industry better.

Kevin Oto: I mean, for me personally, I feel like I need to go to more shows. It’s been it’s been actually a couple years since I’ve I’ve been to any. But I think the best thing about it when I did go to any of these shows was just getting out of my own company’s bubble and just meeting these other people, meeting, you know, networking, seeing what they’re doing different differently than what I’m doing. I think that added a lot of value. Um, you know, as far as what they can do differently, I think some of the information you get from some of these people are just surface level. There may be some gatekeeping. It may not be all that helpful, but I found the thing that is most helpful is really just building the relationship and just seeing what other people are actually doing differently and trying to get some value from that and actually sharing what we do as well just to try and help the other people in our industry as well. Damon, your thoughts?

Damon Germanides: Well, to my wife’s displeasure, I’ve been a big show guy for a long time. Not too many, but I’m on my I’m on my circuit starts actually uh Monday. I’ll be at uh I’ll be on our private uh direct lending business. I’ll be at a conference there. Then I’m headed to a uh another conference and then and then I got another conference and then two more uh beginning of next year. Um so uh but in terms of what I try to get out of them um you know they’ve been very valuable uh for um general information on you know what’s going on in the economy. Uh get a lot of value out of that. Meeting a lot of different vendors all at once. you know, kind of understanding what’s coming down the pike with respect to technology. Um, meeting folks in the industry. Uh, I mean, we found a uh at these conferences through the years. I found a bank to do business with. I found a whole loan buyer on our bridge lending business at them. So, they’ve been they’ve been valuable. Plus, you meet people in your industry uh that like Kevin was saying that you could connect with and you share information and just someone to talk to. Um so yeah, I’ve I’ve gotten conferences have treated me well, but I do pick the ones that make the most sense. I just don’t go to go. And I do think the one thing that I think is missing in a lot of these things is there a way to bring um like brokers, mortgage brokers or mortgage bankers together with any of the actually the real estate um uh agents that might be there or real estate, you know, other types of brokers that do different things. So, it’s a little bit not all conferences are created equally, but the some of the networking stuff can be a little bit uh like just it’s not really um that thought out and so that makes it a little bit hard to go find who you really want to talk to. Sure, you can look through the app, but that there might be 600 people there like how you doing that. So, I just, you know, I’m sure that would be my only gripe sometimes with these things. Totally makes sense. I’ll leave you with.

Matt Sexton: this last question, Damon. I’ll start with you on this one. Well, since we’ve talked about some heavy topics, let’s try to find a silver lining to wrap up as we head toward 2027. What is one thing that you’re optimistic about? Uh whether it’s about your business individually or the market in general as we head into the new year.

Damon Germanides: I mean, I think two things. Uh again having been at this for like 25 years uh just about or 24 years um you know instinctively it’s I feel I’ve got a good emotional memory of things and I’m sensing like in a different way you know not um not a great financial crisis kind of event but I am seeing stresses and uh you know with the rates and everything else. So maximum pain uh with our with our colleagues like you’re going to see people just not uh be in the business anymore as Kevin was saying they’re just not making any money. So like how long do you go without doing a deal before you say this isn’t for me. Um so I think if you can get through to the other side there’s still a need for these services. I think that’s good. And the other thing I believe will happen, again, we’re more of a jumbo focused uh originator there. There’s a lot of loans that are starting to uh adjust. So, a lot of these seven-year arms that were taken out during COVID or before when rates were low, five-year arms, people thinking they were going to move in 5 years, those are all coming uh to adjustment periods. and those rates, if you count the uh interestonly period burning off and the amortization getting squeezed, those payments are going up almost 3x. So people are going to be forced to make a decision to either refinance or sell. And so I think 27 if is going to be a better year for refinances. And then hopefully if again if rates come down or home buyers start to accept a little bit less, you get a little drop in price. I think the combination can put the business in a better place uh than it is today.

Matt Sexton: Kevin, your thoughts? I’m always excited about the market.

Kevin Oto: I’m always optimistic. Even in markets like this, I feel like there’s always opportunities. Even when, you know, people might be taking time off, I’m investing in my business, investing in relationships, thinking how I can better prepare myself. So if rates do drop next year, I can capitalize on all these loans and more and capitalize on more market share. So, you know, I’ve been in it for over 20 years as well. I started in 2004, so I understand that there’s ups and downs. And, you know, if there are down times when rates are higher, the longer that is, the bigger the refi boom down the line of rates drop. So, it’s all about being patient, being smart, and investing with your business in your business. And I believe that, you know, when the market shifts to our advantage, you know, we’ll be there to capitalize.

Matt Sexton: Closing with a little optimism today on MPA TV. That’s going to wrap things up for this edition of NPA TV. Thanks again to our guest and thank you for watching this edition of MPA TV. For my guest, I’m Matt Sexton saying so long and we’ll see you again next time.

What playing cricket for the U.S. taught me about the hardest decisions CEOs face

Finance

globalinvestmentstrategy.com

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12 November 2026

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What playing cricket for the U.S. taught me about the hardest decisions CEOs face

Long before I became a CEO, I played international cricket for the United States. The lesson I draw on most in business is this: Before deciding how aggressively to play, you have to read the pitch.

In cricket, the pitch is the strip of ground at the center of the field. Its condition can change the game. On one surface, 200 runs might be an excellent score. On another, 400 may be achievable. You have to judge the surface, the opposition, and your team.

Misread it, and you can execute exceptionally well and still lose. You might reach the target you set, only to discover you aimed far too low.

CEOs face a similar risk. We spend enormous energy asking whether teams are performing and plans are being executed. Those questions matter, but they come after a harder one: Have we correctly understood what is possible?

A CEO’s highest-leverage contribution is setting the right ambition. That requires three judgments.

1. Identify the few decisions that actually change the game

CEOs don’t create value by making the most decisions. If an organization works properly, people make thousands of decisions about products, customers and operations every day. The CEO’s disproportionate value often comes from a few choices that determine where all that execution is directed.

I faced one within my first few months at Bluebeam. There was pressure to move more aggressively from 2D into 3D. Newer technologies were attracting attention, and it was reasonable to ask whether our established approach would remain relevant. I had to decide without anything close to perfect information.

I had customer conversations, research, and pattern recognition from other industries, where technologies sometimes remain valuable long after people predict their replacement. I came to believe 2D was not a declining market we needed to escape. It was a growing market where Bluebeam already had a significant advantage.

We made two deliberate choices: stay focused on 2D rather than aggressively pursue 3D, and resist becoming a broader platform company. That simplified our strategy and freed resources to invest in what we did well. We chose where our innovation could matter most.

The results reinforced our conviction. When we made that decision in September 2023, Bluebeam had more than 3 million users worldwide. By the fourth quarter of 2025, that number had reached 4 million. Bluebeam also experienced approximately 45% new-user growth from 2024 to 2026.

No single decision explains a company’s growth, and user counts alone don’t show what caused it. But the results strengthened my belief that focusing on a proven strength could be more valuable than chasing an adjacent opportunity simply because it was attracting attention.

I knew the decision carried real risk. Had I misread the market, we might have directed the organization away from its future. But that is exactly where CEOs have to add value: choosing among plausible paths when information is incomplete and waiting for certainty has a cost of its own.

Organizations naturally gravitate toward visible problems: a struggling product, a weak geography, a missed target. The most visible problem, though, is not always the largest opportunity. Sometimes the best allocation of leadership attention is to contain a weakness and put disproportionate resources behind a strength.

2. Decide what the conditions actually support

When I joined Bluebeam, I had to determine not simply whether the company was performing well, but what it could become. Those are different questions.

I looked at the market, product, team, and broader environment and believed the company had more potential than we were asking of it. The cricket analogy I used internally was simple: We were playing as though we were on a 200-run pitch. I believed it was a 400-run pitch.

So we raised the ambition. Importantly, much of the same team began performing against a higher bar. That experience reinforced a mistake leaders can make: confusing limited ambition with limited capability.

Leaders’ instinct is often to change the people, rewrite the strategy, or reorganize. Sometimes that is necessary. But a company can hit its plan and still underperform its opportunity.

“Think bigger” is not a strategy. Ambition must be grounded in what the market, product, and organization can support. Sometimes the right diagnosis requires lowering expectations. Other times, the greater failure is asking too little of a capable team.

3. Know what would prove your diagnosis wrong

Experience makes those calls possible. Over time, leaders build a library of patterns from markets that turned, products that succeeded, and strategies that failed. But experience can also become a trap. You begin seeing the same pattern everywhere.

I try to treat pattern recognition as a hypothesis, not a verdict. The question is not only why I believe I am right, but what evidence would change my mind.

When we made the 2D decision, I knew which signals to watch. If customer conversations shifted decisively toward other needs, or sales and revenue failed to respond, we would need to reconsider our judgment.

But once a strategy has been funded, presented to a board and communicated to employees, reversing course becomes psychologically expensive. Leaders can end up defending the plan rather than testing its assumptions.

The answer is not to react to every new data point. Constantly changing direction makes sustained execution impossible. It is to distinguish noise from evidence, and conviction from stubbornness.

Execution starts with diagnosis

Cricket taught me that before deciding how aggressively to play, you must understand the game in front of you. Business leadership is much the same.

Before concluding a team is underperforming, ask whether the objective is right. Before fixing the most obvious weakness, ask whether a bigger opportunity deserves your attention. And before celebrating that the company hit its plan, ask whether the plan captured the opportunity in the first place.

Sometimes the most consequential thing a CEO can do is see the same company and the same market everyone else sees — and recognize that they are playing a 200-run game on a 400-run pitch.

The opinions expressed in Fortune.com commentary pieces are solely the views of their authors and do not necessarily reflect the opinions and beliefs of Fortune.

a view through the lens of a structural model – Bank Underground

Banking

globalinvestmentstrategy.com

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12 November 2026

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a view through the lens of a structural model – Bank Underground

Daniel Albuquerque, Jamie Lenney, Matthew McKernan, David Murakami, Peter Paz and Philip Schnattinger

Wholesale energy prices surged in 2021 and again in 2022, but UK inflation remained high well beyond the direct pass-through of higher energy costs. With energy prices moving sharply again following the recent conflict in the Middle East, could a similar scenario happen again? We use a structural macroeconomic model to show that the answer depends on labour market conditions. When workers are scarce, they are better able to recoup real income losses through higher wages, raising firms’ costs and broadening inflationary pressure. The model implies that the same energy shock is roughly twice as inflationary when vacancies are plentiful relative to job-seekers as when the labour market is loose.

The tight 2022 labour market

In 2022, UK vacancies were near high while unemployment was low. A useful way to summarise this is the Beveridge curve: the empirical relationship between the vacancy rate and the unemployment rate, shown in Chart 1. When the labour market is ‘tight’ (top left), firms find it hard to hire. When vacancies are low and unemployment high, the labour market is ‘loose’ or ‘slack’, workers find it hard to get jobs. During the 2022 episode (red triangle), the UK labour market was off the historical Beveridge-curve relationship: for any given unemployment rate, vacancies were far higher than past experience would predict. This contrasts with the position in 2025 Q3 which is much closer to the historical curve, suggesting the labour market has markedly loosened since the 2022 episode.

Chart 1: The UK Beveridge curve

Notes: The UK vacancy rate against unemployment rate with past episodes of large unemployment increases (1975, 1980, 1991, 2008 and 2020) traced out very different cycles. Arrows trace the labour market’s path over time; the black line is the fitted Beveridge curve.

Standard linear model solutions impose that the economy responds to a shock in the same way regardless of where it starts: a given energy shock adds the same amount to inflation whether unemployment is 3.5% or 8%. However, when the labour market is tight, firms face greater hiring pressures, production is closer to capacity and workers have more bargaining power, so an energy shock is more likely to translate into higher wages, costs and inflation. Our analysis asks whether the state of the labour market matters quantitatively, and finds that it does.

Why labour market tightness matters in our model

We use an open-economy New Keynesian model that integrates the search-and-matching labour market of Broer et al (2025) with the treatment of energy in Chan et al (2024). The broader macroeconomic structure is related to COMPASS, the Bank’s workhorse forecasting model described in Burgess et al (2013).

We solve the model in a way that allows for non-linearity. Specifically, we solve the model using higher-order perturbation rather than linearising it around a long-run average. We then use the time series generated by simulating the non-linear model to compute generalised impulse response functions conditional on the state of the labour market. This preserves three sources of non-linearity already present in our model’s search-and-matching foundations, rather than assuming them away via a linearisation:

How full is employment? When firms are already running close to full capacity each new hire adds a bit less to output than the last, so a labour market tightening shock pushes costs and prices up more quickly. In the model this is captured by diminishing returns to labour in the production function.
Matching is harder when slack is scarce. If unfilled jobs outnumber job-seekers, firms end up competing for the same workers. The result is that any change in firms’ demand for labour produces larger moves in vacancies, wages and how quickly people find jobs, that’s the steep part of the Beveridge curve. In the model this is captured by the curvature of the matching function, which makes vacancy-filling rates fall sharply as tightness rises.
Workers’ bargaining position. When jobs are easy to find, workers are better placed to secure pay rises that keep up with the cost of living because employers competing for scarce staff are more likely to meet them. So an energy-driven jump in prices feeds through more strongly into wages, and from there into firms’ costs. In the model this is captured by the wage bargaining process, in which workers’ effective bargaining position strengthens as the labour market tightens.

All three sources of non-linearity pull in the same direction in our model: a tight labour market amplifies the inflationary effects of an energy shock. Their combined effect can be summarised in a stylised Phillips curve implied by the model:

Here π_t is inflation, 𝔼_tπ_t+1 expected future inflation, mc_t^nonlab non-labour marginal costs such as energy, and x_t labour market pressure on inflation. The key term is φ(V_t/U_t): the effect of labour market pressure on inflation depends on tightness, and φ′ > 0 means it strengthens as vacancies rise relative to unemployment. In other words, the Phillips curve is steeper when the labour market is tighter.

Previous studies find that the Phillips curve steepens in a tight labour market. These include Schmitt-Grohé and Uribe (2022) and Benigno and Eggertsson (2023) for the US. For the UK, this is consistent with machine-learning evidence of non-linear relationships between inflation and labour market tightness by Buckmann et al (2025) and the evidence in Gaffney et al (2026) using a threshold VAR. These papers establish the state dependence either empirically or in stylised settings. Our exercise is different in kind: because the state dependence arises inside a fully specified structural model solved non-linearly, we can decompose which mechanisms generate it, run controlled experiments that hold monetary policy fixed, and compute how the optimal interest rate response varies with the state of the labour market.

We also examine the effect of real wage resistance: an idea dating back to the 1970s energy crises that workers try to make up lost purchasing power after a burst of unexpected inflation, closely related to the mechanism outlined recently in Lorenzoni and Werning (2023). In response to a squeeze on living standards, people seek pay rises to keep their spending power in line with the cost of living. The economic question is not whether workers want to restore their real wages, but whether prevailing labour market conditions give them the bargaining power to do so. In our model, a worker’s bargaining power depends on labour market tightness, which links real wage resistance directly to the state of the labour market.

Energy shocks bite harder in tighter labour markets via a steeper Phillips curve

We trace the effects of a one-standard-deviation energy-price shock, equivalent to a 13.5% increase based on historical volatility, across tight and loose labour markets. This is smaller than the exceptional increases in 2021–22, and because our model is non-linear, our estimates are therefore conservative for shocks of that magnitude.

Our model simulations confirm that the shock is more inflationary when the labour market is tight: peak wage inflation is roughly twice as high as in the loose regime, and CPI inflation also rises more sharply. Chart 2 summarises this non-linearity through the slope of the price Phillips curve, holding the monetary policy response fixed across regimes. The differences are substantial. In tight states the simulated Phillips curve slope is roughly three times that in loose ones.

Chart 2: Price Philips curve non-linearity

Notes: The chart plots the slope of the reduced form price Phillips curve against the log vacancy to unemployment ratio. Each bin groups Monte Carlo draws by their initial tightness and computes the average price inflation response per unit of output response. The chart shows separate linear fits for the loose half of the distribution and the tight half of the distribution.

What does this mean for monetary policy?

The structural model allows us to go beyond describing the shock’s effects and ask what interest-rate response best stabilises the economy in different labour market states. We compute the model-implied optimal interest-rate path using a stylised loss function that penalises inflation, the output gap and changes in the policy rate. Chart 3 shows the results under alternative policy objectives.

Chart 3: Optimal Rate paths by labour market state in the baseline and wage resistance case

Notes: The chart shows the nominal Bank Rate paths that minimise the policymaker loss function following the energy price shock shown in Chart 2, for the tight, normal and loose labour market regimes. Panel (a) reports the baseline specification; Panel (b) reports the case with consumption wage resistance. In each panel, the solid lines are the usual OPP, which targets CPI inflation, and the dashed lines are the look-through variant, which instead targets domestically generated inflation. The counterfactual paths are constructed from local, model-based approximations to monetary transmission that are specific to each regime.

Three key results emerge:

The model-implied optimal interest-rate response to the energy shock is earlier and larger when labour markets are tight. In panel (a) of Chart 3, the peak rate response starting from a tight labour market is roughly twice that starting from a normal one. In a loose labour market, rates rise only later as activity recovers.
The case for ‘looking through’ an energy shock is stronger in a loose labour market than in a tight one. In loose states, much of the inflation increase proves temporary and returns to target largely on its own. In tight states, energy prices feed more strongly into wages and other goods inflation, requiring rates to remain high for longer.
Real wage resistance amplifies inflation persistence in tight labour markets. In panel (b), stronger wage resistance makes the model-implied rate response materially larger and more persistent in a tight market, while making little difference in a loose one. Attempts to recover lost purchasing power translate into wage growth more strongly when workers have greater bargaining power.

Conclusion

The labour market changes how an energy shock affects inflation. In our model, the same shock generates roughly twice the wage inflation and warrants roughly twice the peak interest-rate response when the labour market starts tight rather than normal. The UK labour market has loosened since its 2022 peak, so this amplification mechanism appears less pronounced today than during the 2021–22 energy crisis. A renewed tightening of the labour market would steepen the Phillips curve and raise the inflationary effects of a fresh energy shock. These state-dependent effects are invisible to linearised models, supporting a role for structural models with non-linear labour markets for understanding inflation dynamics.

\pi_t = \mathbb{E}_t \pi_{t+1} + \kappa {mc}_t^{\textrm{nonlab}} + \varphi\left\(\frac{V_t}{U_t}\right\) x_t, \quad \varphi ‘\left\(\frac{V_t}{U_t}\right\) > 0.

Daniel Albuquerque, Jamie Lenney and David Murakami work in the Bank’s Macro Model Development Division, Matthew McKernan and Philip Schnattinger work in the Bank’s Structural Economics Division, and Peter Paz works in the Bank’s Economic Outlook Division.

If you want to get in touch, please email us at bankunderground@bankofengland.co.uk or leave a comment below.

Comments will only appear once approved by a moderator, and are only published where a full name is supplied. Bank Underground is a blog for Bank of England staff to share views that challenge – or support – prevailing policy orthodoxies. The views expressed here are those of the authors, and are not necessarily those of the Bank of England, or its policy committees.

Chase Offers/BofA: Get 10% Back At Marriott, Up To $85 Cashback

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12 November 2026

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Chase Offers/BofA: Get 10% Back At Marriott, Up To $85 Cashback

Update 11/11/26: Deal is back until November 23, 2026

Update 2/6/24: Deal is back through 3/11/24; this time it’s for 10% up to $85. There are also various offers showing for specific Marriott brands.

Update 3/22/22: Deal is back and valid until 4/29/22.

The Offer

No direct link, check your Chase Offers

Save the offer to get 10% back at Marriott Bonvoy hotels purchases of $100+, up to $80 maximum cash back.

Offer is showing with Chase and various banks: Chase, Bank of America, Regions Bank, Suntrust Bank, BBVA, BB&T, PNC, Columbia Bank, Beneficial Bank, and Christian Community CU. You can read this post for more information.

The Fine Print

Offer valid one time only
Complete payment for your stay must be made by 9/1/20
Offer valid at all Marriott Bonvoy brands
Payment must be made directly with the merchant

Our Verdict

Nice discount for Marriott. You can often buy a gift card at the front desk of Marriott which is useful for locking in the discount for the future.

There’s also an AmEx Offer for Marriott.

Nvidia’s Board May Oust Jensen Huang. 5 Major Consequences Could Follow

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12 November 2026

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Nvidia’s Board May Oust Jensen Huang. 5 Major Consequences Could Follow

A forced exit could create a power vacuum, deepen Nvidia’s stock slide, invite competitors, and expose the risks of a company built around one leader.

INVESTORS MASTERCLASS

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12 November 2026

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INSANE WEEK!!!

SNAP: SHANE.STOFFER
KICK: TOGI
INSTA: STOFFER__

**THIS VIDEO IS A SKIT FOR ENTERTAINMENT PURPOSES ONLY
ALL ITEMS IN THIS VIDEO ARE PROPS.

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How to Buy Your Next Rental With Seller Financing (No Bank Needed)

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12 November 2026

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You could buy your next rental without a bank on terms you help write. That’s the power of seller financing, and it often opens up when high rates leave sellers short on options. Here’s how you can set up seller financing, and negotiate the terms to work in your favor!

Welcome back to the Real Estate Rookie podcast! Ashley and Tony have both bought with seller financing. Today, we’re showing you exactly how to structure a deal of your own. You’ll learn where to find sellers who are open to owner financing, the one follow-up question that can turn a seller’s “no” into a “maybe,” and why offering a higher price can actually get you a better deal on your next rental property.

From there, we’ll go through every lever you can negotiate: the price, rate, down payment, amortization, balloon payments, and prepayment penalties. We’ll walk through who pays the taxes and insurance, what happens if you miss a payment, and what to do if the seller (or their heirs!) wants out early. Plus, you’ll hear how to plan your refinance before the balloon comes due, and why your contract should come from an attorney (not an AI template).

Ashley:
When rates are high and sellers run out of options, a door opens that most rookies have never even walked through. Seller financing. No bank, no traditional lender, no underwriter telling you no.

Tony:
And the best part is that you and the seller make the rules. So you decide the down payment, the interest rate, how long you have to pay it back, and literally everything in between. But that freedom is exactly where a lot of rookies get it wrong because nobody hands you the exact playbook.

Ashley:
So today we are giving you that playbook. We’re walking through the exact six steps to set up a seller finance deal from agreeing on the price to who holds the deed to how you actually make the payments. By the end of this episode, you’ll know how to structure a deal that works for you and the seller so you can buy your next rental without the bank. Okay, Tony, how many seller financing deals have you done? You’ve done a really big one actually. Welcome to the Real Estate Rookie Podcast. I’m Ashley Kehr.

Tony:
And I’m Tony J. Robinson. And with that, let’s get into the first piece. So I mean, yeah, Ashley, I think both of us have done some seller financing deals in the past before. I did mine on our first motel. That was actually the first seller finance sale I ever did. And I know you’ve done a handful as well, right?

Ashley:
Yeah. So I did one. My first one I ever did was in 2018, I bought a six unit property and then I currently have one that I’m still in right now. It’s a four-year hold and then I have to go and refinance and pay it off. So a balloon payment in four years on a five-unit building. So let’s first start off with what seller financing is. What does that actually mean? So basically the seller of the property is going to act as your bank. Just like you would go to the bank, you would get a mortgage, they would give the money to the seller, and then you would make payments to pay them back. Instead of having the bank involved, your seller is just going to take payments from you. So you’ll be making payments to them. You’ll maybe pay them a down payment and then you’ll make monthly payments as if they loaned you the money to purchase the property because in a sense they kind of did.
They didn’t get that lump sum of payment as they would if you went and got money from the bank. So that’s really what seller financing is, is that you’re not paying all of the proceeds or all of the sale price to the owner of the property, you are making payments to them. And honestly, it doesn’t even have to be payments. It’s just that they are going to be the holder of the lien on the property saying that you owe them X amount of money and then you can negotiate and set up how that money is repaid to them over time. And that is one of the beauties of seller financing.

Tony:
All right. So let’s talk now about how to actually find a seller financed deal. Now you might get lucky going on a Zillow or a Redfin and hunting and sometimes you’ll see in the notes seller will carry or open to seller financing.ou might see some of those if we’re looking at smaller single family homes. But generally on the single family side, a lot of these transactions happen through off-market deals. This is generally what I’ve seen as I’ve talked with other investors. I will say on the commercial side, I’ll tell you the story of how we found our first one. On the commercial side, it is much more common I think to see seller financing seller will carry in the listings, especially if you’re targeting, like we were, properties that are older, these kind of mom and pop run type properties where their books aren’t great.
And the reason that folks are, at least what I’ve seen, are more willing or just easier to find on the commercial side is that if I’m selling, in our case, a 13 unit motel and I don’t necessarily have the best bookkeeping, as someone tries to go purchase that property and they want to use some sort of traditional debt, well, generally banks want to see good books and maybe two years of tax returns from the seller. And if my books are scribbles on napkins and loose receipts, it becomes a product that’s a lot harder for a bank to finance. So the seller, if they actually want to move the product, a lot of times they understand, man, we have to offer seller financing if we want to widen the pool of people who are actually able to purchase our property. And that was the exact situation for us.
We found our property on, I think it was Crexi, it was listed for the entire world to see and we were able to negotiate seller financing through there. But that’s generally what I’ve seen. What about you Ash? Where are you finding or where have you found your seller finance deals?

Ashley:
Mine was mostly from just asking if the seller would be open to seller financing. So my first deal was direct with the seller and asking that. We sat down at a restaurant and talked over his properties. It was a portfolio he was selling and I had two offers. I had one that looked like if I had to go and get traditional bank financing and then I had one that looked like seller financing and I said, “Here are my two offers.” The offer with seller financing was higher than if I had to go and get bank financing. And I presented both to him and he said he would think about it and get back to me and then called me the next day and said he was going to do the seller financing. For the other bigger deal, the five unit that I did, this was on the MLS.
So it went through the agents asking if they were open to seller financing. This property had been on the market for a long time. It already fell through twice a buyer’s backing out on the deal. So this was definitely a motivated seller in this scenario. But there are some websites, like I think landwatch.com is one where you can actually select a filter that says owner financing. So owner financing, seller financing, same thing, just different wording. You can select a filter and it’ll actually filter through properties where the person selling has already said they will consider doing this. So that’s a great place to look if you absolutely want to do seller financing too.

Tony:
I’ve also seen actually there are a lot of Facebook group out there where folks are promoting here’s some seller finance deals. So obviously anytime you’re really hunting for deals in Facebook groups, there’s a lot of noise in there as well. So you got to really sift through the noise. But for a lot of folks that I know that tend to go seller financing, a lot of times they’re going after two things. Number one, expired listings on the MLS. So if something’s been listed for a while, it didn’t sell at whatever price they were maybe initially looking for, whatever the reason is, going back and targeting those expired listings or just direct mail where you’re looking at properties where there’s been one owner for 15, 20, 30, 40, 50 years and there’s a good likelihood that those properties have been paid off. But generally I’ve seen it works best going direct to seller.
We actually just interviewed Ash Reginald Calloway and he had this incredible story, but his first rental property was a commercial property and it was the landlord for the building that he was already renting for his wife’s daycare. And as he was paying his rent one month, just out of nowhere, he spur of the moment asked the landlord, “Hey, would you ever be willing to sell this thing?” And the landlord said yes and gave him a price right there. And in that moment, they basically went under contract on him buying the property. So maybe if you’re already renting a place, whether it be single family or commercial, maybe just asking the landlord like, “Hey, what would you let this place go for?” That could be a good strategy as well.

Ashley:
One thing that I like to do when I’m talking directly with the seller, this works best with this, is ask them if they’re open to seller financing. And if they say yes, great, you can talk more. If they say no, I always like to follow up with, okay, I was just wondering if your CPA or tax planner talked to you about the tax advantages of it. And then that just kind of leaves it open-ended and hopefully gets their wheels spinning and hopefully they go and talk to their financial advisor, their tax advisor who will tell them the benefits of them by doing seller financing instead of taking this lump sum of cash in one tax year and being taxed on it because it’s going to sound better coming from somebody they trust and already work with than somebody who’s trying to get a good deal on their property.
So I always drop that and see if it leaves some interest that they’d be open to doing that. And that has worked for me before. So that’s always an option for you there too, instead of just directly saying, “Will you do seller financing?” Kind of ask, “Are you open to it?” And then follow up with that kind of note on it. But Tony, let’s go into the pricing on a seller financing. Where do you even start compared to if you were going and getting a traditional bank loan on the property? And I think for me, I like to look at multiple options of doing seller financing is a huge benefit to me. It’s also a benefit in a way for tax strategies and things like that for the seller of the property. But they’re also not getting a ton of cash or a huge lump sum upfront like they would be if somebody else was going to get a mortgage.
So in my scenario, I’m usually willing to pay more if they are willing to do seller financing than I would if I had to go and get a bank mortgage because then I have to jump through all the hoops, so the time, the inconvenience, the inspections, all of that. Then also if I am having the interest rates that banks are charging and I can get a lower rate doing the seller financing, then that’s more of a benefit to me. So I weigh out the pros and cons and paying more doesn’t mean I’m paying more than what they’re asking. Paying more just means I’m going to probably be able to make my numbers work better by offering the seller financing so I can pay more. Think of COVID prices when interest rates were really, really low, people could pay a lot more because their payment would be less.
So kind of use that scenario when you’re gauging, but you want to run your numbers with both scenarios to make sure that you’re not overpaying just to get that seller financing.

Tony:
It was a very similar situation for me, Ash. I’m sure I took this advice from you, but when we did the seller financing on the motel, we did give them two options. Option one is, “Hey, if we have to go out here and get some expensive bridge debt, here’s a much, much lower price. Hey, and if you’re willing to seller finance, we can save on some of those costs. Here’s a higher price that’s closer to what you’re asking for.” And we went back and forth quite a bit on the numbers, but they eventually took the option of, “I’ll take the higher price at the seller financing.” And I can’t say that I know exactly what their motivations were, but I believe that part of their motivations were is that they liked the idea of consistent cash flow coming in on a monthly basis. They didn’t have to deal with the asset anymore, yet they were still benefiting on an ongoing basis from seller financing the deal.
So every rookie that’s listening, I would say offers something similar. If you want seller financing, make seller financing the more attractive offer and make, “Hey, if I got to go out and get normal debt, make that a much, much less attractive offer.” Now, the other terms that we can negotiate as we’re going through seller financing, obviously one is the price, but the other term is the rate. What are they charging you for the money that they’re giving you? And when we did our first seller finance deal, our rate was or is 7%. So it was a slightly higher rate, but because of the other terms, you were willing to accept that. And the other piece that we were able to negotiate is that the first, I believe it was three years, was interest only. So we knew we were going to spend a good chunk of time renovating this place, trying to get it back to today’s standards, and it was going to take us a little bit of time to get the whole thing operational and running at full speed.
So those three years of interest only meant that our mortgage payments were slightly reduced as well. So that freed up some more cash flow for us. So negotiating the rate is another one of those levers. So sometimes you can say, “Hey, I’ll give you a higher purchase price, but I want a lower interest rate.” Or you can say, “Hey, I’ll give you the higher purchase price, but I want to…” Those things can move in inverse of each other. And for you, it’s trying to understand what do you want to maximize for? Do you want a lower monthly payment? Do you want less cash out of pocket up front? And that’s how you can balance those two things together to make it make sense for both of you.

Ashley:
I once was trying to buy a property on market. So my agent went to the other agent and said she would like to do seller financing and it would be offering around, I think I said maybe 4% or whatever. And the agent laughed to my agent and said, “Well, that’s way below what the market interest rate is.” And so I said, “Exactly. That is the benefit of me being able to offer this purchase price, and that’s why you have no other offers.” I mean, I didn’t say this, but no other offers because no one is willing to pay that price when they can only go to the bank and get these rates and the deal doesn’t make sense. But if your seller really wants this purchase price, this is the way to make it happen. So I think there’s also, if you’re buying on MLS, it is harder to get it done, especially if agents aren’t familiar with seller financing and how it works and how to set it up, but also the fact that you are now playing telephone.
It’s going from you to your agent to their agent. So it’s very hard to communicate the benefits and make it sound like this wonderful thing for the seller to actually want to do it and to understand where you’re coming from by having all of those middlemen too. But I always shoot lower than what interest rates are because they’re most likely going to still be getting more than what they would if they just took that lump sum and put the money into a high yield savings account. They’re still getting more from me. And then I also think, okay, they could take that money, they could invest it, they could do other things, but especially if I’m working directly with the seller, I always try and find out what are they doing next? What are they actually going to do with this lump sum of money? And if they don’t immediately need it for anything, then this is a great tool.
Or maybe I can structure the down payment so that they’re at least getting what they need for that next thing and then I can still do the seller financing on the rest.

Tony:
On that note, Ash, let’s talk a little bit about the down payment because it’s one of the other terms that are important. Because this is seller financing, there is no set figure that the down payment has to be. And there are a lot of folks who go out there and get seller financing with nothing down, with zero down. There are some people who go out there and get seller financing for 1% down. I’ll tell you how it played out for us is that we put down about 20%, but the reason that we put down that much is because they needed to pay off the existing loan balance in order to be able to offer us the seller financing that we were looking for. So again, as we kind of weighed the pros and cons of going with them versus going with traditional financing, even though the down payments were about the same, the other terms we were able to negotiate ended up working in our favor.
So for us, we gave them a bigger down payment and they gave us a break on the price. Again, the interest only term for three years. The rate was reasonable given rates worth time. So we felt good about that plan. But again, I would start with zero, start with nothing and see what their response is to that. But that’s the benefit of seller finance, that there is no right or wrong answer. It’s whatever you and the seller agree to. So the other piece too, in terms of the terms that we can negotiate is the amortization period and the actual term of the loan. So the amortization period is how many years are we spreading out those payments? So a typical mortgage has an amortization period of 30 years or 15 years or sometimes every 20 years, but you hear a 30-year fixed mortgage, that means it’s being amortized over 30 years.
So what that typically does is the longer your amortization period, then the lower each monthly payment is. That’s when you think about 30-year loan, those payments are more affordable than a 15-year loan, which is why so many people go for the 30-year. So a longer amortization keeps your payment lower. It means you pay a little bit more interest upfront, a little bit more interest over the life of the loan, but the actual monthly payments themselves are generally lower. Now, you can set up a 30-year amortization period, but maybe the actual balloon payment, when the balance is due can happen sooner. So again, I’ll give you guys an example. For our seller finance note, we had, I believe, a 25-year amortization period, but we have a 10-year balloon period. So that means that at year 10, even though we still have 20 years left of amortization, the note is actually due and we have to either sell or refinance that property to then pay those sellers the balance of what’s due at that point in time.
So that was another reason that we liked the seller finance moves because it gave us a long enough window with these favorable terms to establish the property, really get the operations running, increase the value. So that way when we want to refinance, we’ve got almost a decade to try and figure that whole thing out and we’re not under the gun because the bridge debt, maybe you get two years or five years maybe even, but that can still sometimes be tight. But over the course of a decade, we presume that we find the right point during that decade to refinance and get out of the property or refinance and pay them back whether we keep the property or not. So just know amortization and when the actual loan comes due, those can be two different things.

Ashley:
And it can often be called the balloon payment where you are going to be paying the remainder balance of the loan or it could be a portion of the loan. So I set it up once before I structured it where the person actually in year two wanted $20,000, then in year three, another $20,000 lump payment. And then I think it was year six or something would actually be the big balloon payment to pay it off. So you can actually structure the balloon payments any way you want also that work for you and the seller, but this is where a lump sum will be paid sometime during that amortization period. And it could be all of it, it could be a portion of it at that time. So the next thing that you could consider in your loan, and I recommend trying not to have this, but if this is something that makes the seller feel better about the amount of money they’re going to make on the interest, you could implement a prepayment penalty stating that you will not pay off the loan during a certain amount of time.
And if you do, you will pay them a percentage of that balance that you are paying off. A lot of DSER loans have this now where if you repay the loan in year one, year two, maybe all the way up to within the first five years, you could be paying 2% of that loan balance you’re paying off 1%, 3%, 4%, 5%, whatever that is. So a prepayment penalty, obviously try to avoid it if you can, but if you know, like Tony said, he knows he’s going to hold this seller financing for a while, not a bad thing to then put in the prepayment penalty for at least two years if it’s going to help the seller feel better about the deal.

Tony:
The other piece to consider are taxes and insurance. On our seller finance deal, we are responsible for our own insurance and paying all of our property taxes. I would encourage you to set up that same way as well. That way you’re not relying on the seller who maybe doesn’t have as much of a vested interest anymore, that you’re the one who’s in control of getting all those things paid. Now, things like property taxes can get a little trickier if you’re doing a sub two deal. I guess you could just change the billing address to go to you, that way you’re the one who gets the bills and you’re paying them yourselves. But generally speaking, I want to be in control of taxes and insurance because those are two important things that we need, right? Because even if you’re seller financing and no one’s paying the property taxes, now you get a lien on the property and that creates more issues for you.

Ashley:
Yeah. And as the owner of the property, if you are taking over the deed when you’re doing the seller financing, then you are going to want to make sure the payments are being made. And as the lien holder, also for the seller, they may want to know too that the property taxes are being paid. So there are third party services that could set up basically an escrow account, just like you’d have at a bank where you can make the monthly payments to them and then they will pay out your property taxes and your insurance too, and then notify the seller of the property that those are being paid out. So that also could happen too, where you’re prepaying that account in full on closing and then you’re going to continue to make payments on it.

Tony:
Yeah. And that’s what a normal lender will require anyway as you’re paying those things up front because it helps them protect the asset. They want to make sure that the property’s properly insured on the exact day and time of closing.

Ashley:
Well, and too, if you don’t pay the property taxes, the county is going to come after you to take that property and then if they go and sell it at auction, the lien holder, the seller of that property, they may not get what they’re actually entitled to depending on what the property actually sells for. So being tax delinquent is not in the favor of the mortgage holder either.

Tony:
Now, what happens about late payments or what happens if you default on the loan? Just making sure that you have those things very clearly laid out in the note that you set up between you and your seller who’s financing the deal for you. You want to think about this as like any other mortgage because that’s basically what it is. For us, our entire transaction was recorded at the county. So even though we didn’t go to Bank of America, there’s still a lien against the property by the sellers. They have a note against the property where if we default, they have the ability to foreclose on the house or foreclose on the property and take it back from us. For the seller finance deals that you’ve done, Ash, do they have actual liens against the property?

Ashley:
Yes. I have done private money where it’s not the seller where there wasn’t actual liens, but for the actual seller finance deals, those, yes, were all liens on the property and filed that way. Now, another thing to be cautious of when doing this is what if the seller wants out early? We talked about what if you want out early by paying off the loan. If you have a prepayment penalty, you have to watch out for that. But what if the seller wants out and you have an agreement, so contractually you do not have to pay them if they want out of that agreement? Here’s a scenario for you. So my one friend had a purchase of their primary residence seller financing. They bought it from this person and they moved or whatever and he made his payments, never missed payment, was never late. Well, the property owner that he bought it from ended up passing away.
So then he started making payments to the wife who had survived him, making payments, making payments, making payments. Several years later, she also sadly passes away. Now, when that happens, their children and the adult children come to him and say, “We don’t want to do this. We want you to pay us the balance that you owe.” So he starts panicking because it is still a large lump sum of money and he doesn’t know where he is going to get it from. But I said to him, “You don’t have to. You have a contract, you have an agreement, and that carries forward.” So he ended up winning it that he did not have to pay them back that lump sum of money. It didn’t even end up going to court, just the lawyers talking. He has a contract, has an agreement. They inherited the agreement, not that they were entitled to be paid off directly.
So in that scenario, make sure in the contract you are reading, if there is some kind of clause, obviously there should be maybe a due on sale clause where if you do sell the property, they are paid off. But if you want it enticing for someone else to buy the property, you could put in there that it is assumable that you could transfer over this mortgage to someone else and what the criteria would be for that. But that’s also something to make sure the wording is in there, what happens if the seller does want out of this seller financing. And in my scenario, I want to say, no, there is no way out unless it’s agreed upon and negotiated where they just can’t tell me like, “Hey, you want to be paid back in six months. You have six months to pay it in full.”

Tony:
So those are all the different levers that you can pull as you’re negotiating seller financing and putting your terms together. And don’t just assume that the highest purchase price is always going to be the worst deal. Again, if I can get a higher purchase price, but a lower interest rate, five years interest only, $0 down, maybe this ends up becoming a great deal for me at a slightly higher purchase price. So the goal is how can you massage and adjust these numbers to find the combination that ends up working best for you?

Ashley:
Now, you’ve learned a lot about seller financing, hopefully during this. And with the age of AI, you can definitely have AI help you create and put together a seller financing agreement. Before you actually do that though, I would start with a letter of intent. So this is just your proposal of the terms before you go out and build a full on contract. So create the letter of intent, which is basically the property address, what the terms of the purchase would be as to you’re going to offer 225,000, $25,000 payment, 200,000 seller financing amortized over 15 years with a balloon in five years, and then four and a half percent interest rate with no prepayment penalty. Just a rough example. This letter is contingent on attorney approval, and then you both can sign it. Any other contingencies or things like that you’d want to put in there.
But I would start with a letter of intent. Then after that, you can go and create your contract. In this scenario, I would not have AI put the contract together. I would go to an attorney to actually do this. In New York State, you have to use attorneys for closing anyways. So an attorney is going to review your AI agreement or just say, “No, we’re using the agreement that I use and that I put together,” and then pass it back and forth between the attorneys to get signature from you and the seller. But definitely have an attorney overlook this agreement because a lot of people create lease agreements in AI and I think it’s a great, great tool, but a lease agreement is over $800 payment per month where this is over most likely a hundred thousand or more payment of purchasing a property. So I would definitely use an attorney in this scenario.

Tony:
Yeah. We definitely brought in attorneys for ours as well, someone who was specific to that state because we were buying in a state that we don’t live in. So we just wanted to make sure that we had an expert as we put all these things together. And the other piece too is on the back end, the servicing side of it as well, just making sure that you guys have like, “Hey, how are we going to make these payments to you? And what does that process look like and who’s tracking the loan balance and what does that look like?” So I believe we paid, I think it might have been the escrow company, a small fee for them to be the loan servicers to make sure that everything’s getting handled correctly. So you can do it however you want to. There are options out there to help handle that piece as well.
And then the next kind of really important step of this whole process is the other paperwork.
The other reason that an attorney becomes very valuable is to make sure that if you do this whole seller financing strategy, that you actually end up becoming the owner on paper of this deal. And one missed signature or some piece of paperwork filed incorrectly, and you give this big down payment and you start making all these payments, but you actually don’t own the property in the eyes of the city or the county. So just making sure that you get all those things done correctly. So what we did and how we set it up is we actually did transfer title. So my entity is the named owner of this property. And again, there’s a lien, so the sellers have a lien against the property to say, “Hey, we loaned Tony X number of dollars and here’s what he owes us. And hey, if Tony doesn’t pay, then we can foreclose in the property.” So the lien is recorded, the deed was updated to show myself or my entity is the owners, and that’s how we get a really clean paper trail to make sure that everything lines up with what we agreed to.

Ashley:
Well, thank you guys so much for joining us for this episode on seller financing. If you’re doing a seller financing deal, let us know in the comments on YouTube, but we’d love to hear about it. I’m Ashley Hayes Tony, and we’ll see you guys on the next episode.

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Where Will Robinhood Be in 3 Years?

Finance

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12 November 2026

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Robinhood (HOOD +4.00%) is an innovative fintech company that has soared over 920% in the past three years. However, its recent Q3 earnings disappointed — largely because its crypto trading transaction revenue dropped even more than Wall Street expected. So much so that Robinhood’s share price has fallen by over 20% in the past month, due to both its earnings miss and the recent turbulence in crypto and tech stock prices.

HOOD Robinhood Markets

$84.58+$3.25 (+4.00%)

NASDAQ · As of 4:00 PM ET 11/11/26

I think today’s price of around $83 could present a buying opportunity because Robinhood is so much more than a cryptocurrency stock. In the next three years, the way we invest, spend, and move money around could change dramatically, and Robinhood’s forward-thinking approach puts it at the forefront of this emerging financial world.

Image source: Getty Images.

Robinhood is more than a crypto trading platform

Robinhood’s low crypto trading revenue pressured the stock after its Q3 results. I can understand investors’ concerns, but fluctuating trading volumes are normal for crypto and for Robinhood, as the table shows. Crypto is still a relatively new asset class, and trading volumes will swing all too easily from wild exuberance to doom-laden stagnation.

Period	Total Revenue (million)	Transaction Revenue (millions)	Crypto Revenue (millions)	Crypto Revenue as a Percentage of Total Revenue
Q3 2026	$1,420	$867	$120	8.45%
Q2 2026	$1,310	$776	$100	7.63%
Q1 2026	$1,070	$623	$134	12.52%
Q4 2025	$1,280	$776	$221	17.27%
Q3 2025	$1,270	$730	$268	21.10%
Q2 2025	$989	$539	$160	16.18%
Q1 2025	$927	$583	$240	25.89%
Q4 2024	$1,010	$672	$222	21.98%
Q3 2024	$637	$319	$61	9.58%

Data source: Robinhood.

Looking back over the past few years, transaction revenue accounts for roughly 50% to 60% of total revenue. Crypto accounted for 8% to 25% of Robinhood’s revenue.

Sure, the drop in crypto revenue is disappointing, but the bigger story is that its Q3 transaction revenue increased 19% year over year to $867 million despite that decline. Its customer base continues to grow, and its diversification efforts are paying off.

I view Robinhood’s crypto trading in the same vein as its pioneering 0% commission on stock trading: It is one of many ways Robinhood is making investing accessible and meeting consumer demand. Interest in crypto has waned recently, but Robinhood is still collecting fees as investors trade more options, contracts, and equities on the platform.

Innovation is part of Robinhood’s DNA

Robinhood’s diversification means crypto is just one string to its fiddle. It also offers round-the-clock trading, AI agentic trading, prediction markets, options, and banking products. It launched its own blockchain in July, and usage has soared — in less than six months, it’s become a top-10 blockchain by ecosystem size and revenue.

Tokenized assets are one reason the chain has grown so quickly. Real-world asset tokenization is a way to record ownership of assets, including equities, on the blockchain. It makes trading easier and cheaper, and Robinhood is already a strong player in this space.

Looking ahead to 2029 and beyond, it is innovation rather than diversification that makes Robinhood interesting. The past three years have already seen huge changes in the financial and investment landscape, including the growth of automation and AI trading. While it’s hard to predict exactly what might emerge in the next few years, there’s a very good chance that Robinhood will be ahead of the pack.

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Mortgage Rates Back Under Pressure as Tech Stocks Bounce

Mortgage

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12 November 2026

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Mortgage Rates Back Under Pressure as Tech Stocks Bounce

The bond market is closed today for Veterans Day, but with tech stocks rallying, the pressure is back on mortgage rates.

Yesterday already did a fair amount of damage so a breather is probably welcomed here.

The 30-year fixed jumped about an eighth of a point on the day back to around 7.375% after falling to 7.125% last week.

We had been making progress toward a possible 6-handle, but then we got both a hot jobs report and a hot inflation report.

And with tech stocks hot again, another headwind has presented itself.

Tech Selloff No Longer a Tailwind for Mortgage Rates

While the bond market is shut, stocks are trading and the tech-heavy Nasdaq is rallying on the back of CoreWeave earnings.

The stock is up nearly 25% today thanks an earnings beat and a positive outlook.

While it’s just one stock, it was the poster child for the tech selloff that helped mortgage rates over the past month.

Now it seems to be doing the opposite, and if the bond market were open, we’d likely be seeing mortgage rates add to the damage from yesterday.

So I suppose be happy we’re getting a midweek break, but if this trend holds and the AI trade is back, mortgage rates could march right back to recent highs.

Ultimately, the stock selloff was the only thing working for mortgage rates lately.

The flight to safety was the difference maker that pushed 30-year fixed mortgage rates closer to the 6s than the 8s.

But if that proves short-lived and we see risk-on trade again through the end of the year, perhaps with a Santa Claus rally, mortgage rates could suffer.

[Use my mortgage rate calculator to see how different rates stack up payment and interest-wise.]

Why the Bellwether 10-Year Yield Jumped Back to 5%

As noted yesterday, a hot CPI report is what pushed 10-year bond yields back to 5%, and in the process mortgage rates.

Fed Governor Waller added fuel to the flames by saying a 0.3% core reading would make him inclined to support a half-point hike in December, and lo and behold, core came in at 0.3%.

Fed Governor Bowman then added that there’s still work to do on inflation, which didn’t help matters.

Of course, most still just expect a 25-basis point Fed rate hike next month, but the pressure is certainly back on to tame inflation.

Given 5% is a key threshold, it’s something to watch to see if it’s a line in the sand and yields move higher again after getting relief due to the AI trade unwinding.

Especially if AI stocks heat up again and finish the year strong, which is certainly possible.

We have to remember that we’ve now got hot labor, hot inflation, and now a hot stock market again.

If anything worse happens with the Iranian conflict, we’ll have everything stacked against lower rates.

Are Tech Stocks Bouncing Back Bad for Mortgage Rates?

This seems to be the core argument at the moment.

There’s always something the market fixates on, which is a moving target, but lately it’s been tech stocks, namely the AI trade.

Prior to this, mortgage rates were obsessed with Iran (and oil prices), before that labor, and before that inflation.

They still care about all those things, but it seems tech is top of mind, and as such it’s the main issue to watch right now.

With tech stocks rebounding, it means less money flows into bonds, which results in higher yields, all else equal.

And that means mortgage rates move higher as well.

If investors get comfortable with AI stocks again, the safe-haven trade could fade and bonds may have to work harder to attract buyers.

Of course, if tech stumbles, which is entirely possible, we could see the opposite play out.

Perhaps it’s going to be choppy from here on out since mortgage rates seem to be most concerned with the stock market, which historically bounces around a lot.

So buckle up.

(photo: romana klee)

Before creating this site, I worked as an account executive for a wholesale mortgage lender in Los Angeles. My hands-on experience in the early 2000s inspired me to begin writing about mortgages 20 years ago to help prospective (and existing) home buyers better navigate the home loan process. Follow me on X for hot takes.

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The Buyer Journey in the Age of AI

Business

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12 November 2026

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The Buyer Journey in the Age of AI written by John Jantsch read more at Duct Tape Marketing

Catch the Full Episode:

Overview

Think about the last time you hired a service you’d never bought before, like a bookkeeper, a lawyer or an ad agency. Chances are you asked Google, a chatbot or a friend long before you talked to a business. In this solo episode of the Duct Tape Marketing Podcast, John Jantsch explains how that habit has rewritten the buyer journey. AI tools now narrow real buying decisions down to a few finalists, and the businesses on that list never find out they were being considered.

Jantsch revisits the Marketing Hourglass, the seven-stage customer journey he created around 2008: Know, Like, Trust, Try, Buy, Repeat and Refer. He walks through how AI is changing each stage. He covers the move from ranking in search results to being cited in AI answers, why competent content no longer sets anyone apart, what trust looks like now that almost anything can be faked, and why Try is the stage most businesses never design on purpose.

The big idea is that the reviews, case studies and mentions your current customers leave behind are the signals AI uses to decide who gets recommended. That means Repeat and Refer now create demand back at the top of the hourglass. This episode is for small business owners, marketers and consultants who want to show up in AI search and get chosen, without chasing the latest technical hack.

About the Host

John Jantsch is the founder of Duct Tape Marketing and host of the Duct Tape Marketing Podcast. He has spent more than twenty-five years helping small businesses build marketing that works. He created the Marketing Hourglass, a customer journey model that carries past the sale into Repeat and Refer. He’s the author of several books, including Duct Tape Marketing, The Referral Engine and The Ultimate Marketing Engine.

Key Takeaways

AI tools now build short lists for real buying decisions. Neither the businesses on those lists nor the ones left off ever see it happen.
The Marketing Hourglass still has seven stages: Know, Like, Trust, Try, Buy, Repeat and Refer. The buyer walks them in a line, but the business has to run them as a loop.
The artifacts happy customers leave behind, such as reviews, case studies and social mentions, are the signals AI uses to recommend a business.
Ranking has given way to being cited. Most of those citations sit on pages you don’t own, like Reddit, LinkedIn, industry roundups, directories and other people’s podcasts.
A specific review like “they fixed our scheduling mess” tells a machine far more than “great service.” Describe your category in one plain sentence, and list your business name the same way everywhere.
Competent content is cheap now. The content that stands out shows your work (dead ends included), puts a real person on camera and takes a position a competitor would argue with.
Trust signals need to be hard to fake: reviews on platforms you don’t control, named clients, real team photos, published pricing and results with dates on them.
Put every claim, review and award in text on your website. AI tools have a hard time reading images and some JavaScript elements.
Try is the most common gap. Most businesses already have one by default, like a phone call, a form or a quote, but nobody designed it.
Ignoring Repeat and Refer costs you twice: you lose the business itself, and you lose the reviews and case studies that send new buyers your way. Skipping stages also invites price resistance.

Great Moments

[00:01] John asks where you started the last time you hired a service you’d never bought before
[00:26] The HVAC prompt experiment: three finalists in about ten seconds
[02:45] Why retention and referrals now feed AI short lists
[05:08] The move from ranking to being cited, and what actually gets a business named
[07:29] Why competent content no longer stands out, and what trust looks like when anything can be faked
[09:35] Putting claims in text, and why Try is the biggest gap
[11:46] Repeat and Refer, and why word of mouth is now indexable
[14:06] The best way to rank in AI, and how to find your biggest gap
[16:24] Why the hourglass is a practical mechanism for getting found

Memorable Quotes

“Being found and being chosen used to be two different jobs. They’re kind of just one job now.” – John Jantsch

“Competent content is very cheap. So competent is really not setting you apart anymore.” – Jantsch

“Everything that we’re doing in the bottom half of the hourglass is now actually creating demand in the top half.” – Jantsch

“You can move people through stages pretty quickly, but you cannot skip any of the stages.” – Jantsch

“Guiding customers all the way through the customer journey, past the sale to the point where they’ll say your name out loud, somewhere public, is now the practical mechanism by which anybody finds you.” – Jantsch

Resources

Duct Tape Marketing: https://ducttapemarketing.com/
Book a consultation: https://ducttapemarketing.com/consultation
Email John: john@ducttapemarketing.com

Duct Tape Transcript

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John Jantsch (00:01.622)

Hey, guess what? I’m going to talk about AI today. But before I get into that, I want to start somewhere else. I want to start with you, the human, as a buyer. Think about the last service you bought or hired, something you’ve never bought before, bookkeeper, lawyer, contractor, ad agency. Where did you actually start?

John Jantsch (00:26.456)

Hello and welcome to another episode of the Duct Tape Marketing Podcast. This is John Jantsch. No guest today. I’m going to do a solo show. I’m going to talk a little bit about how I think the buyer journey needs to be rethought in the age of AI. So back to my original question where did you start as a buyer when you decided you needed to buy something? My guess is some version of two things. You ask Google, maybe a chatbot.

Or yes, to friend, and then you went and checked online to see what was what. Now, here’s what that looks like from the other side. I ran a prompt the other day. I typed in something like I run a 40 person commercial HVAC company in Ohio. our marketing’s a mess. Who should I hire? And presto, three names came back in about 10 seconds. a real buying decision, not just awareness, but literally a real

Buying decision narrowed to just three finalists. And here’s the thing: not one of those companies got a visit, a form filled out, a signal really of any kind. A short list got made and nobody on it knows it happened, and nobody who got left off is ever going to know as well. Now, I’ve been saying for 25 years that the thing that’s changed the most about marketing is how people get to choose to become customers today.

And that line is held up through search, through social, through content, through I don’t know, reviews, and is holding up now. And I think this is probably the biggest version of it yet. Back around 2008 or so, I created something that I called the marketing hourglass. And for longtime listeners, you I have talked about this forever.

I again, I realized that the traditional marketing funnel, the idea that you get somebody to know you’re out there and maybe like your offer, and then a small number of those you kind of squeeze through that that little part of the funnel. And one of the things that that I’ve just constantly had challenges with was the fact that it kind of that was the place where people gave up on it. That was the end. And what I saw was keeping a customer.

John Jantsch (02:45.442)

Getting repeat business, getting referrals, having advocates out there that that want to talk about you was really where it got exciting. that’s where the momentum in business happened. And today, AI has has completely changed that. and what I mean by that is it’s always been important. That that idea of retention, getting more buyers, keeping them, getting more orders from the existing ones, getting referrals, that’s always been important.

But now the experience that your current customers are having and they’re leaving in reviews, you’re building case studies around them, you’re getting put on on somebody’s Facebook page talking about you, those are the signals that AI is actually using now to create that short list. In fact, if you if you do any of these searches on AI or or using AI tools or AI overviews that Google gives you, you’ll see that a lot of the sources

Are not actually the business’s website. The st the pr the only thing that the business actually controls. They’re coming from Reddit, they’re coming from expertise.com, they’re coming from industry sites, they’re coming from LinkedIn. and so consequently, many of the the things that actually get us on that short list are completely out of our control, but they are actually the things that are creating

The the the early stage in the marketing hourglass. So as a refresher, the marketing hourglass has seven stages. No like trust. That’s where people get to decide if they’re going to buy from you. try, buy, repeat, and refer. And those seven stages, you know, the buyer kind of runs in a straight line. I mean, or at least we we hope that they do. that we kind of move them along that path. and that every the every

Person that goes through the buy stage is then a potential for repeat and refer. And what’s happening now is the things, the the artifacts that people are leaving, based on the fact that they are a happy customer, are the things that are actually now looping back to try, or I’m sorry, to know. And so, in a lot of ways, our existing customers have become extremely important.

John Jantsch (05:08.906)

in informing the the and citing us and in and getting us mentioned in those ai searches. so the stages still exist but in many ways they’ve they’ve really changed. So no, you know how a buyer finds you. It used to be those 10 blue links, right? We we wanted to just get on page one and at least you know we had a shot there. Somebody would go through and they’d maybe click on three or four of the links.

But now the shift has really gone from ranking to being cited. And that and that’s frankly, that’s all the way into the answer that’s on your site. it’s gotta be everywhere else, too, in reviews, in roundups, in forum threads, other people’s podcasts, somebody else’s case study that that you’re named in. Being found and being chosen used to be two different jobs. They’re kind of just one job now.

you know, you think about the searches you’ve done looking for something, and all of a sudden you show up on that AI search or that AI overview. You might actually just get chosen from that based on or dependent upon what the search is for. So what actually gets a business named? I think this is the part that that has changed in a lot of ways, but it’s kind of funny because getting named by other people on pages you don’t own seems kind of weird, right?

Reviews with substance, reviews that are recent and specific, like about the work. You know, reviews like great service. I mean, this it’s just noise, right? But they fixed our scheduling mess. Now that’s a signal, a category that you can state in one plain sentence and saying it in the same way everywhere you appear. You know, we’ve always said that, having those those citations like in the

in the the the directory listings, having names all the same. I mean, AI uses those as well. if you’re if you’re listing your name four different ways, and believe it or not, I’ve definitely seen that, you are really running a risk of of AI skipping over you. So like. Now that’s always the stage that sometimes people had trouble with is like I don’t care if they like me, but but let’s just say about how they warm up to you. two years ago, a well written post

John Jantsch (07:29.262)

Proved that you knew something. But now it proves, I don’t know, that you have a subscription to AI. Competent content is very cheap. So competent is really not setting you apart anymore. What survives is the stuff only you could have said. Show your work, including maybe the parts that didn’t go so well, the dead ends. put a person in your business on camera because a voice and a face are the cheapest proof.

That something is human-made. I know there are going to be video fakes out there, but I think it’s pretty easy to tell if something’s an authentic video. So take a position that a competitor would argue with. I’ve watched businesses spend a year producing perfectly good content and go completely invisible because there was no reason for a person or a machine, quite frankly, to prefer their version of the content. Now, trust has always been, I think, in some in many ways, the most important.

element. but anything can be fake now. So I think buyers really doubt almost by default.

So you’ve got to actually be able to do things that rise above what can be faked. Reviews on platforms that you don’t control instead of just testimonials on your site. Named clients. I mean, a buyer could go call instead of trusted by hundreds of companies. Real faces, real names instead of polished team photography, or worse yet, stock photography. pricing needs to be published.

instead of pricing on request. I know a lot of people are still fighting that, but I think we’re in we’re in that that we’re in that window, I think. having results with a date on them, and and putting everything in text on your website. a lot of these JavaScript tools and a lot of the images that people take, you know, an image of of say a Google review and run it on their website. Well, the AI tools

John Jantsch (09:35.104)

aren’t very good at reading those. So make sure that anything that you’re claiming, even the awards and and things you’re being cited for, if you’re going to put them on your website, make sure that you are putting them in text on your website. So we’re up to try. how a buyer takes the first step. This has always been, it’s interesting. This has always been the hardest one for businesses. and I sort of knew this anecdotally, but we now have a

a tool that we use and people rank themselves on the you know where where they have gaps in the hourglass and by far and away the try is the biggest gap because I don’t think a lot of people think of what they do today as really a try. And in fact most businesses I think already have a try, but nobody really designed it. I mean f they leave it as a phone call or as a fill out a form or as get a quote and think of that as a a as a try. And and

Fact the matter, it is a try, but is it an effective one? Could you actually design one that that that actually could be built as an effective try? And what I mean by that is somebody could experience what it’s like to work with you. All right, bye. You know, today many businesses actually have a buyer. Once somebody actually schedules an appointment, they’ve probably

probably made a decision. I mean, you think about the amount of information that’s available to us before we ever have to schedule what we think of as a sales call. So a lot of folks show up actually have made a decision. So a proposal deck doesn’t need to actually help persuade them. In fact, I think in a lot of a lot of ways that’s going to cause some friction. a pricing page, friction, you know

The pr price should already be published, right? So the buy stage is actually just assuring them that they’ve made the right decision, helping helping them understand that you get what they do. So

John Jantsch (11:46.104)

The last two stages, repeat and refer. These are two stages that I have seen gone missing so often. so repeat retention, you know, obviously it’s so much easier, you know this, it’s so much easier to actually get somebody who already trusts you to buy more than it is to go out and get that, convince that new person that you’re right for them.

and yet so many people leave this one to chance. And here’s the reason that that’s going to be doubly costly. is that the right term? Doubly costly? I don’t know. But the point is, not only are you not getting that repeat business you deserve, you are actually not getting the review volume volume and the you know the recent case studies, you know, as signals which are then turning around and reinforming.

the AI tools and the AI overviews to actually send new people to you. and of course re referral is the exact same thing. I mean, we’ve all had experiences with somebody showing up and say, hey, Bill said you were the greatest. I did a little research online. It does seem like you’re a great fit. I mean, they’re not going to argue over price probably. The the the sales cycle is going to be much, much shorter. I mean we all know how valuable that is, but there again, we don’t

Do anything about it. It sort of happens accidentally. And that is actually going to cost us again doubly because word of mouth is now indexable. In other words, the search engines and the AI bots are actually finding what people are saying about you out there in all the places that people leave these artifacts. So, in many ways, we have to think of this now.

The customer journey, which our version is the marketing hourglass, we have to think about this as certainly a straight line that the customer walks in, but the business has to think of it as a loop. everything that we’re doing in the bottom half of the hourglass is now actually creating demand in the top half. So it’s always been important. It’s always been something that.

John Jantsch (14:06.77)

that that when I have worked with businesses over the years and shown them where they have gaps in these, they get it. but I think it’s become much more important. And I do think that is, you know, if you were gonna ask me the best way to rank an AI, it’s not some, it’s it’s not schema, it’s not an LLMS.txt file or some other hack. It’s doing the things that always made you rank to begin with. Those are still important.

But now adding a greater focus on all of these places that you don’t control and getting cited in PR, getting mentioned in communities, participating in your industry, participating in your community and focus on actually getting cited in those places is going to be extremely, extremely important.

If you’re going to go through those stages that I just described, no, like, trust, try, buy, repeat, and refer, where’s your biggest gap? Where do you realize, hey, we’re not doing anything that would actually move somebody here? And you know, if you try to skip steps, you want to go from no, like you run an ad, you know about us now, come by. You’re going to actually find

That you’re going to get more price resistance. it is you’re going to be compared against others. But when you can run people through stages of know, like, trust, and even try, all of a sudden they are so they are so convinced that you are the right solution, the price goes way down the list. So if nothing else, if you are competing today solely on price, then you absolutely

need to think about this idea of the marketing hourglass or of creating a full customer journey. Figure out your lowest score because you can move people through stages pretty quickly, but you cannot skip any of the stages. You know, a lot of people may think of this as a philosophy, you know, this idea of the marketing hourglass, but it isn’t a philosophy. It’s never really been a philosophy. And I think guiding

John Jantsch (16:24.622)

Customers all the way through the customer journey, past the sale to the point where they’ll say your name out loud, somewhere public, is now the practical mechanism by which anybody finds you, perhaps at all. Do that well enough. And the machines are going to notice too. All right, that’s all I have to share today. Thanks for tuning in. Love that you listen.

Hopefully we’ll run into you one of these days out there on the road.

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