Thursday, May 6, 2021

Lisa Gray

Lisa Gray
Lisa is an accomplished marketer with years of expertise in direct response marketing, digital marketing, data analytics and business development working with both B2C and B2B.

Real or Fake News?

It’s all over the news – the government is harming homeowners and real estate by wanting to do away with the mortgage interest deduction (MID). From major real estate portals to the National Association of Realtors’ website, hand wringing rules the day.

Is it fake news, the truth or are the reports somewhere in between?

A little history

Before 1986, all interest on all loans (even credit card bills), regardless of purpose, was tax deductible. The Tax Reform Act of 1986 (TRA86) did away with all of those deductions, with the exception of mortgage interest.

Interestingly, the TRA86 was touted very much the same way today’s tax reform efforts are – as a way to simplify the tax code and do away with tax loopholes.

To itemize or not to itemize

To take advantage of the MID, a taxpayer must itemize deductions. For itemizing to make sense, his or her deductions must exceed the standard deduction. These deductions include the MID as well as charitable contributions, medical expenses, property taxes, state and local income taxes and others.

Now, if you itemize deductions you know that it isn’t as cut and dried as it seems. The charitable contribution deduction, for instance, carries a cap. And, filers can deduct only the amount of medical expenses that exceed 10 percent of their adjusted gross income (7.5 percent if the filer or spouse is 65 or older).

This restriction allows only 19 percent of taxpayers who itemize to claim the medical expense deduction, according to Matthew Frankel at

It is very difficult for the average middle class American to come up with enough in itemized deductions to beat the standard deduction. In fact, only about 30 percent of taxpayers itemize deductions.

The reality

Here are the stats:

  • About two-thirds of American households own their home.
  • Only one-fourth of homeowners claim the MID.
  • The average tax savings for households with income between $40,000 and $75,000 is just $152 a year. That’s $12.66 a month,” according to Anthony Randazzo, director of economic research at the Reason Foundation.
  • Households with earnings of more than $100,000 derive nearly 90 percent of the MID’s benefits.
  • “In 2015, the federal government spent $71 billion on the MID,” according to Derek Thompson with The Atlantic. He also calls the MID a “moral indictment of the tax code,” and the $71 billion dollars it costs this country “a public-housing policy for the rich.”
But … it incentivizes home ownership, right?

“Economists don’t agree on much, but they do agree on this: the interest deduction doesn’t do a thing for homeownership rates,” suggests Roger Lowenstein at the New York Times.

Remember Jonathan Gruber, the Obamacare architect? He co-authored a National Bureau of Economic Research study earlier this year that found “The mortgage deduction has a precisely estimated zero effect on homeownership.”

“One reason for this is the way the MID is structured. As mentioned earlier, a taxpayer must itemize deductions to take advantage of the MID. It is primarily the wealthy who have enough deductions that make sense to itemize.”

“The value of the deduction increases with the individual’s income tax rate so that higher income taxpayers receive more benefit than lower- and middle-income taxpayers,” according to Tim Manni at

Manni goes on to say that the MID encourages Americans who can afford to, to buy larger, more expensive homes, “rather than to encourage significant homeownership at low- and middle-income levels.”

Even without economists’ word for it, knowing the statistics on who actually uses the MID, common sense tells us that homeownership rates and home prices aren’t going to plummet if homeowners can’t deduct mortgage interest on their taxes.

What the MID actually does

“The MID benefits far fewer Americans than politicians and the media are letting on and, in fact, it drives up tax rates for the rest of us,” insists the National Review’s Robert VerBruggen.

Others argue that the MID subsidizes wealthy households and the money saved by doing away with it will help fund tax reform that benefits the middle class.

Whichever side you fall on over this issue, it’s important to understand the facts. Only then can you intelligently answer your clients’ questions.

Need our assistance? We would love to help you! Call our support team a 866.405.3638. 

Average More Transactions Every Year

The difference between always chasing commissions, or having a reliable referral base to count on, depends on your investment in a sphere of influence.

Want to build a business that is strong, sustainable and competitive, and that you can sell when you’re ready to retire?

Start by creating your SOI.

It’s easier than you think – and will help you get on track to average more transactions every year.

Think about this, if you had 250 people in a database you consistently stay in touch with and develop a relationship with, who will they call when they have a real estate question, need or referral?


If just 10% of your database sold or referred to you every year, what would that mean for your income?

Building a database doesn’t have to be hard.

It just needs to be a consistent part of your weekly business habits.

Not having a sphere of influence is hands-down, the single biggest obstacle to agent success.

It will keep you in the endless cycle of always chasing new business, without the benefit of ever gaining any traction.

And think about this, statistically, 1 in every 12 people in your SOI will either do business with you or refer business to you each year.

Not bad odds. Is this worth your time now?

Related: Four Strategies For a Stronger Sphere of Influence

Time to Create Your List.

Begin with the following names (including email, address, phone):

Family, spouse’s family, extended family, neighbors, past customers

best friends, close friends, children’s friends parents, church congregation

Children’s teachers, coaches, principal

Family dentist, doctors, optometrists, business coleagues

Employees/owners of retail establishments and restaurants you frequent

PTA board at your children’s school, Sunday school teacher

Manicurist, facialist, hair dresser, dry cleaner

Auto maintenance/repair shop, tire shop, mailman

Once you have compiled your list – Take Action

Start a touch marketing campaign every 21-35 days. 

Send our done-for-you newsletters every month. They’re designed to be eye-catching, informational, and are filled with direct response offers that get results.

Or consider a series of postcards such as holidayrecipe postcards, customer appreciation cards, or listing inventory cards that will keep you top of mind until you have the opportunity to see or speak to them.

Even if your list is small, don’t wait to start your marketing.

Momentum doesn’t just happen. But over time you can build something powerful.

The 20 year value of a client is roughly $49,647.

With that number in mind – how many people do you plan to put in your book of business?

Need our assistance? We would love to help you! Call our support team a 866.405.3638.