Four Trends That Will Rock the Real Estate Industry in 2012

January 23, 2012 Leave a Comment

If there is one thing that I’ve learned in the real estate business over the years it’s that change is constant.  New tools, programs, regulations and innovators make this an industry that doesn’t stand still.

From computerization of Multiple Listing Service data to smart phones to mortgage preapprovals to digital signatures; innovation waits for no one.  You either embrace it or get out of the way.

So without further ado, here are my predictions for the upcoming year and some of the things that I believe will rock our industry (again):

1.  Listing Syndication and Internet Data Exchange (IDX) Will Come Under Fire

It has been commonplace over the last couple of years for companies and agents to syndicate their listings to as many real estate web sites as possible to increase the chance that their properties will get noticed by home buyers who will in turn contact an agent to buy a home.  Sounds like a plan – right?

Enter Edina Realty.  Edina is a mega broker with 60 real estate offices and over $5 billion in sales located in Minnesota, Wisconsin and North Dakota.  In late 2011, Edina stopped syndicating their listings to national websites.  Why would one of the top ten real estate companies in the US decide to shun syndication?  If you listen to them, there are three reasons: Read more of this post

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What Season Should I List My Home?

December 9, 2011 Leave a Comment

I love to visit the website Freakonomics.com and read posts about common events that we all believe and assume are factual but are actually myths that have never been examined to determine if they are true.  The authors of the blog (and books), Steven D. Levitt and Stephen J. Dubner are brilliant guys who do research on these common events to disprove the myths then present their findings in such a way that are both interesting and understandable.  (Check out this post on why ‘icing’ a kicker in the waning seconds of an NFL game accomplishes nothing and in fact may even have the exact opposite effect.)

While the following infographic didn’t come from Freakonomics, it has the same look and feel as one of their posts.  It comes from Redfin and shows facts that debunk the theory that, “Homes listed in the Spring sell best.”  The bottom line – - – if you want or need to sell your home, put it on the market now.

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US Won’t be Nation of Renters

November 24, 2011 1 Comment

I read an article last week from Carla Hill, M.A., who works as the Managing Editor at the online publication, Realty Times, that describes the advantages of homeownership.  Her points were well presented so I thought I would share them here – - -

According to the National Association of Realtors®, (NAR) the U.S. will not become a nation of renters.

Currently, over 65 percent of Americans are homeowners, a rate that has held since the 1960s.  It’s no wonder why most Americans seek out a home of their own.

Homeownership has both financial and social benefits.  According to the most recent data from the Federal Reserve Board, a homeowner’s net worth is 45.9 times that of a renter’s.

“We knew that homeowners, on average, accumulate more wealth than renters,” said Ken Johnson, editor, Journal of Housing Research at Florida International University.  Johnson spoke at the session and conducted the analysis with Eli Beracha.  “These findings indicate that homeownership is a self-imposed savings plan.  Not everyone should own a home, but from a financial perspective, people who are planning to stay in a property over the long term can benefit from buying.”

This is no wonder why.  Despite recent declines in home prices, historically prices do rise over the long-term.  This means an owner is paying towards an asset.  They are building equity.  A renter, on the other hand, is paying for a living space for that month.  It is not money invested. Read more of this post

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The Dawn of the New Normal

October 7, 2011 1 Comment

A brave new world is dawning

We’ve all heard the old adage, “The more things change, the more they stay the same.”  Well in real estate sales, you can take this cute little saying and bury it under a pile of dirt and lay an R.I.P placard on top of it.  Staying the same in this business is wishful thinking.

Consider the following five trends that are staring the average REALTOR® squarely in the face as we approach the end of 2011:

1.  Transaction Management – Never in the history of selling real estate has it become more important for the REALTOR® to stay closely involved in the transaction.  The days of writing the agreement and showing up at the settlement table to collect the commission are dead.  Between stringent inspections, mortgage approvals, title issues, appraisal valuations, complex documentation standards and increased buyer/seller expectations, agents need to hone their problem solving skills.  The most valuable sales professionals will be those that can manage this chaos.
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Dying on the Vine

October 6, 2011 2 Comments

It is more important than ever to select a real estate agent that not only knows what they’re doing, but also can guide a buyer and seller through the complexities of a real estate transaction.

A recent study by the National Association of REALTORS® hits home on this point.  In August of 2010, 9% of all purchase agreements for real estate never made it to the settlement table.  Now – fast forward one year – the percentage of contracts canceled has doubled!  That’s right; we now sit at 18%.  Not a pretty figure.

There are many reasons for the explosion of unfulfilled contracts: appraisal issues, increased scrutiny of borrowers by mortgage lenders, home inspection problems, complex contractual documentation and unrealistic expectations of both the buyer and the seller.

So if you are about to get involved with a real estate purchase or sale, do yourself a favor and secure the services of a competent, reliable real estate agent.  After all, you want to be one of the 82% that successfully ends up sitting at the settlement table.

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REALTORS® Property Resource – The Good, the Bad and the Ugly

August 28, 2011 3 Comments

The REALTORS® Property Resource (RPR) is finally here in the Greater Harrisburg area.  Late last week, the Central Penn Multiple Listing (CPML) service turned on the spigot and rich, property data started flowing to its members.  Not that anyone noticed.  In fact the unveiling of this powerhouse tool for REALTORS® has been one of the best kept secrets in the Mid-State.  Go figure!?!

In case you’re one of the majority of REALTORS® or consumers who is wondering what the heck is the RPR, all you have to do is go to their blog site to get an overview.  If you’re looking to make sense of how the RPR may impact the real estate industry, read one of my previous blog posts on the subject.  I’ve been on record for over a year saying that I think this endeavor by the National Association of REALTORS® will cause major upheaval in our business – mainly with how local Multiple Listing Services (MLS) will function in the future.

So now that it’s here, let’s look at the product from different viewpoints and perspectives – in other words – the Good, the Bad and the Ugly sides.

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Prudential Survey Shows Optimism Among Americans

July 26, 2011 1 Comment

Americans Believe in Real Estate

The majority of America’s potential homebuyers and sellers — 68 percent — believe that the real estate market and property values will recover in the next year or two, according to a new survey by Prudential Real Estate and Relocation Services, a Prudential Financial, Inc. company.  This exceeds the 47 percent of Americans who expected house prices would rise in a similar survey conducted in April 2010, underscoring a more bullish outlook for the real estate market today.  In addition, 86 percent of Americans believe real estate is a good investment despite the market volatility of the past few years.

The national survey reveals that six in 10 respondents are more interested in buying real estate (58%) and are optimistic about buying given the momentum of the economic recovery (59%).  It also shows that although the price of many Americans’ homes declined during the recession, 89 percent recognize they can also buy a new house at a lower price.

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What’s Up with Mortgage Points?

July 5, 2011 Leave a Comment

Image via Wikipedia

If William Shakespeare financed a home today he’d probably ask the question regarding mortgage points: “To pay or not to pay? That is the question.” Homebuyers direct the same question to their real estate agents. Here are some perspectives:

In its simplest definition, a point is an additional loan fee that is paid to the lender in exchange for a lower interest rate. It’s called “buying down,” and it allows you to reduce your rate for the life of the loan.

Let’s say you secured a mortgage loan for $150,000 without points, at 4.6% on a 30-year mortgage, your principal and interst payment would be $768.97 a month. If you paid two points ($3,000), the interest rate in this example may go down to 4.1% and the monthly payment would decrease to $724.80, a savings of $44.17 a month.

In this scenario, it would take you about eight years to recoup the money you paid up front, so if you are planning on staying in your home a while, this will save you money in the long-run.

Home buyers must answer some key questions to determine if paying points is a wise decision. Specifically: Read more of this post

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