Testing Yourself for Hidden Biases in an Age of Housing Inequality

This month, the National Association of Realtors released a 53-minute training video centered around addressing and overcoming hidden biases in the real estate industry. With a tenet of our mission statement being to “grow our student’s knowledge base,” we’re encouraging real estate professionals in Michigan and all over the country to learn about and assess themselves for hidden biases.

A hidden (or implicit) bias is when our brains automatically (and often unconsciously) associate stereotypes with particular groups of people - which can cause us to treat those people differently. Before you watch the training video, try taking an Implicit Bias test to learn what your unconscious attitudes are. Considering your own hidden biases is an uncomfortable process, but a necessary one. Research shows that “despite people’s best intentions and conscious awareness, some biases can persist.”

Some examples of hidden bias statements gathered from real estate agents are:

  • “I am going to show you some homes in ‘your kind of neighborhood.’ ”
  • You don’t want to live in that neighborhood, you can afford to live over here where you’ll feel more comfortable.”

If you can’t watch the entire course right now, here’s one key takeaway:

Bias Override is a way to make sure that your behavior aligns with your values. Integrating this into your real estate practice means:

  • Developing protocols for how to provide all clients with equal treatment
  • Learning how to manage your mindset so your interpersonal interactions with clients are respectful and successful
  • Creating scripts for how to navigate conversations about subjects such as schools to make sure you are conveying the same information to each client

It’s important to ensure that all of your clients can obtain the exact housing they desire. In Michigan, studies show that housing inequality is still prevalent despite 1968’s Fair Housing Act. A 2016 survey found that in Metro Detroit, black applicants were twice as likely to be denied a home loan as white applicants. In Lansing, black applicants fare even worse with a denial rate three times higher than whites.

This week, join in the fight for housing equality by setting aside some time to recognize your own hidden biases and start taking steps to change your way of thinking.

 


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Love Wins in Real Estate

The LGBTQ+ community across the nation celebrated as the U.S Supreme Court ruled that existing federal law forbids job discrimination on the basis of sexual orientation or transgender status. This is a major victory for advocates of gay rights. By formally recognizing LGBT individuals into federal anti-discrimination law, the Court effectively rejected the withholding of rights. The LGBTQ+ movement is determined to gain equality, and this ruling showcases the strides that have been made and the challenges we still face when it comes to discrimination in the U.S.

In a landmark 6-3 decision, the court ruled that employers can’t fire lesbian, gay, or transgender people simply for being who they are. The ruling says Title VII of the Civil Rights Act of 1964, which prohibits discrimination based on race, religion, national origin, and sex applies to discrimination based on sexual orientation and gender identity. The passing of this ruling and the many more to come will bring change to real estate and fair housing and allow real estate professionals to tap into a much broader demographic than ever before.

Members of the LGBTQ+ community will not have to cherry-pick which state they can live in to own a home and get fair mortgage rates. According to a poll from Iowa State University, same-sex couples were charged .02% to 0.2% more in interest rates, upfront fees, or both on their loans. While to the average eye it doesn’t seem like much, it can add up to hundreds or even thousands of dollars over a 30-year mortgage. That same report shows same-sex couples were 73% more likely to be denied a mortgage than straight couples with similar profiles. “It’s very sad that even in this day and age there’s still discrimination in the mortgage process after all the strides we’ve made," says Tim Hur, a previous diversity chair of the National Association of Realtors®. "Everyone should have the same opportunity to own a home. It doesn't matter if you're gay, lesbian, Asian, black, or Hispanic."

Modern communities are more diverse than ever so why the great divide? Lack of confidence may help explain why LGBTQ+ home ownership rates lag those of America overall. According to the survey, 54% of LGBTQ+ respondents owned homes, compared with the national home ownership rate of 63.8% (which is itself at the lowest point since 1993).

LGBTQ+ who rent, particularly Millennials, have their own concerns, however.

For a generation that many have been deemed “Generation Rent”, the survey said, of LGBT Millennials surveyed, 59% say they plan to have children in the future; having children being a potential motivator for purchasing a home. Housing discrimination is a whopping 73% of the survey's respondents’ strongest concerns, whether they wanted to buy or rent. Choosing where to live is the first step in the path to home ownership and immediately we see the importance of being in an accepting and welcoming community. As LGBTQ+ people move from renting to home buying, the right neighborhood remains vital. Unfortunately, the fear of discrimination also plays a massive role in the LGBTQ+ community with 46% of renters fearing it during their future home buying process.

“Recall that ‘We, the People’ were once white, property-owning men,” said Ruth Bader Ginsburg, U.S. Supreme Court Justice. “Native Americans were originally not part of ‘We, the People,’ nor were people held in human bondage, women, or newcomers to our shores. Today, ‘We, the People,’ has a marvelous diversity, wholly absent in the beginning.” We are the people. All of us. Together.

 

 


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Real Estate: Leading the Way to Economic Recovery

In the wake of a world wide pandemic and having to hit the restart button into the “new normal” we have found that the US economy is but a shadow of its former self. One bright spark in the universe of unknowns is the real estate industry. More and more U.S. states are re-opening for summer business. People will begin to go back to work and the financial landscape of the country will start to turn around.

The significant reasons why the housing market could be such a driving force is the impact it has on the local economy. Buying and selling a home goes far beyond personal growth and satisfaction, it supports our economy as a whole. According to a recent study by the National Association of Realtors (NAR), the average new home sale has a total economic impact of $88,416. Robert Dietz, Chief economist and senior VP for economics and housing policy of The National Association of Home Builders (NAHB) says: “Overall, the data lends evidence to the NAHB forecast that housing will be the leading sector in an eventual economic recovery.”

On a month to month basis a surge of delayed transactions can be processed as the country opens. Some people who would have, in the absence of the pandemic, closed in March, April and May are likely to close in June and July. Add to those closings the buyers who were likely to close in June or July, in the pandemic’s absence, and there is a surge above normal for summer months. According to experts, the economy will begin to recover in the second half of this year. In addition, CNBC notes: “Mortgage demand from home buyers shows unexpectedly strong and quick recovery…The quick recovery has surprised most forecasters.”

The most considerable challenge for real estate agents is not necessarily the market, but all the changes in how activities are conducted moving forward. The “new normal” for construction, remodeling and sales will result in many new or changed processes. Those who can quickly adjust, by reevaluating and tweaking procedures, will thrive. Those who are stuck with a “this is how I’ve always done it” mentality will find the “new normal” a difficult environment.

We are facing one of the greatest challenges of our lifetime rebuilding the American economy, and real estate and the housing market will play a monumental factor in how quickly we can jump-start our economy which may be sooner than we think.

 


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Getting and Keeping Real Estate Clients in 2020

Learning how to get and keep clients in real estate is a never-ending battle. With technology moving at lightening speed, getting and keeping your clients is tough! Understanding how to find qualified clients is more than just getting the phone to ring, it’s knowing how to keep it ringing consistently that will help your business grow.

 Follow Up is Everything

Most salespeople only reach out once or twice and then give up. Knowing your market, understanding your clients dreams and goals, and connecting them is hands down the most important characteristic in a salesperson. Following up, showing them that they are important, and a top priority will take time. Often it is a six-month, year or two-year long process of keeping in touch and providing them value. If you have amazing luck and someone calls you to set up their listing immediately, the rest of us are jealous! Typically it is a drawn out dance between the agent and the buyer/seller. Keeping track of where you are at with each client and every possible client can be exhausting. If you struggle to keep track adding a service to do that for you can save you hours of time. Customer Relationship Management (CRM) software is build to help you keep track of new and existing clients. Having a CRM that takes care of remembering who, what and when to send calls or emails so you don’t have to remember is a life saver that will pay for itself.

 Relationship Referrals

To get the highest closing ratio, relationship referrals are crucial. If you build strong relationships with current clients, they can expand your network like nothing else can. By using the referrals and relationships where trust has already been established, your business will gain momentum.

 Build a Personal Brand

Your personal brand is the overall impression that your audience gets from your social media posts, marketing, lead generation, and pretty much everything else you put out into the world as a real estate agent. Doing a personal brand audit and deciding on some branding basics will absolutely help you get clients. Come up with a logo, slogan, website, and general aesthetic that you can keep consistent across all your real estate marketing and social media channels. If you’re somewhat tech savvy or at least willing to learn,  a course on real estate social media marketing is a great way to up your skills. Plenty of agents are getting a decent ROI with Facebook and Instagram ads but another great way to get clients is to try to integrate your hobbies into your personal branding. The idea here is to appeal to your audience’s fun side by highlighting hobbies or interests you might have in common. For example, if you’re a baker, you might want to consider making a cute Instagram post with you baking at your new listing, or maybe go out and rate the local bakeries and post the videos on YouTube. Then you won’t just be another real estate agent. Clients who are also amazing in the kitchen will be far more likely to choose you over someone with similar skills who isn’t a baker. Of course, that other agent may have a culinary degree and volunteer at the soup kitchen, but their audience will never know. So, don’t be a secret agent when it comes to your hobbies and interests!

Educate with Insider Knowledge

Educate potential and existing clients. For potential clients, create a blog full of helpful hints and tricks to aide in their real estate search. For existing clients, point out a feature in an apartment or something about a building that a client wouldn’t know by looking at the listing online. People appreciate learning something from their real estate broker. Teaching someone something they didn’t previously know helps to build trust and a feeling for them that you are adding real value to the buying or selling experience.

Fake It Until You Make It

Luck can change your real estate career. We’ve all heard stories about agents who stumble their way into seven-figure listings their first week on the job. For the most part, those stories are true. But luck isn’t everything. Even if a local millionaire takes a liking to you, you still have to prove to them that the risk of hiring you is worth their time. If you are just starting out, you likely don’t have many accomplishments to point to so your personality is going to have to work overtime to seal the deal. Work on yourself and develop the confidence and knowledge that every good agent needs. Read everything you can about real estate and business and face your fears BEFORE you get lucky enough to book that listing presentation.

 

 


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What the USMCA Trade Agreement Means to Real Estate

Real Estate professionals across the U.S. are excited to finally see progress with the House approval of the USMCA. The USMCA (United States-Mexico-Canada Trade Agreement) will replace the current trade policy NAFTA (North American Free Trade Agreement). The House of Representatives passed the revised trade agreement after last month when for the first time, the Canadian, Mexican and U.S Realtor Associations expressed joint, public support for specific policy. The associations represent more than 1.5 million Realtors throughout North America.

Canada and Mexico are our two largest trading partners, millions of American jobs rely on goods and services that go back and forth between the three countries. President Trump said that this will be the most important trade deal ever made by the U.S.A. This deal will re-enforce cross-border investment opportunities for each of the respective real estate industries. It may not get mentioned often, but the trade that happens between these three countries has a large impact on the commercial real estate sector. The construction industry in Texas alone generates more than 400,000 jobs and $62.2 billion to the state's economy.

Expanding jobs means a growing need for more space—particularly, more industrial spaces. Industrial space in Mexico and Canada is growing exponentially. To put it simply, the USMCA eliminates unfair trade practices and is very good for our country’s workforce, which will lead to more consumer spending, including purchase of real estate with new home buyers. The updated USMCA will boost trade on everything from cars to dairy products. Tariff agreements make Mexico an ideal place for manufacturers and auto parts makers to set up shop. It will also offer worker protections and labor fairness and lead to bigger paychecks. These tariffs, combined with other factors like the labor and materials cost and close location, make Mexico a less expensive option than anywhere else in the world.

The U.S. housing market is struggling with an inventory shortage that has depressed sales in nearly all 50 states. The so-called “months supply” number that measures how long it would take to sell off the existing stock of homes fell to 3.7 in November, according to the National Association of Realtors. Most economists consider a six-month supply to be a balanced market. The U.S.-Mexico-Canada Agreement will help to ease the nation’s housing shortage by stabilizing the prices of materials used in construction, according to the National Association of Home Builders.

 


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Millennial Home Buyers: What They Really Want

Millennials love analyzing and making very informed decisions about everything in their life, given the Internet has made this process quite easy.

They have different expectations for their lives and look for uniqueness in all aspects. The majority of real estate markets nowadays consist of a large number of millennial home buyers. In 2018, Millennials were responsible for 1/3 of all home purchases. Millennials will continue to drive the market, especially as they become more financially stable.

It’s important to understand what features home buyers are looking for in a home and to know how to make sure those features are being showcased, especially when targeting Millennial home buyers. Here are the top 4 selling points Millennials are looking for in their home. 

  1. Walkable location and accessible amenities
    • Proximity to work and play options are high priorities to this group. Contrary to popular belief though, Millennials are targeting suburban communities with a short drive to a big city for social interaction. 
  1. Move-In-Ready, Single Family Homes
    • Millennials are eager to swap their rental apartments for single family homes. Homes that require little maintenance appeal to this market so that they may spend weekends relaxing instead of completing repairs & maintenance. 
  1. Energy Efficiency & Technology:
    • Millennial home buyers want to have complete control over their systems. This generation will pay more for automated or voice-activated devices like HVAC systems and appliances. 
  1. Fancy Outdoor Space:
    • Weekend entertainment is especially important to this generation. As such, must-haves include fenced-in backyards, patio areas and outdoor cooking areas. Millennial buyers want to create a relaxing outdoor retreat. 

It is important to understand what Millennial buyers, those born between approximately 1980-1995, want in their next home. Location, community amenities and energy - efficient features all factor into their buying decisions. Since they make up such a large portion of today's potential home buyers, it’s vital you understand the above things they are looking for when shopping for home. Homeowners and real estate agents who understand these things and who know how to highlight them greatly improve their chances of a quick and profitable sale.

Real Estate’s American Dream

The American dream. Owning your own home is the largest transaction an average American will make in their lifetime. Conventionally, as a salesperson or broker, you are the catalyst to make that dream a reality. Showing homes, placing offers, negotiating and eventually making the deal. Customarily you work on commission which incentivizes you to get the buyer into the highest transaction you can. To the untrained eye that customary 3% commission doesn’t look like much but as an agent you know that it can add up to thousands or tens of thousands. In 2018 $80 billion dollars were paid in real estate commissions.  This is where the traditional real estate market exists and where current events seek to shake the ancestral market.

Now, more than ever, social media marketing is crucial to reach those customers. Networking, blogging, creating relationships online will all make or break your business. When you have real estate brokerages that are setting new precedence online by allowing more time for focusing on the customer - whether it’s for the buy or the sale. They offer a do-it-yourself approach, such as providing title services, and securing the best mortgage, ultimately offering the buyer an all in one experience. How can you compete? Get online. Start with a social media marketing course like ours and learn how to open doors to new customers and keep your legacy clients coming back. The lessons in this course will take you through the development phase of your social media presence, and on to a place where you are confidently creating online content that represents you in the best light possible. Aligning yourself with your buyer or seller and maintaining a virtual presence will keep your business and reputation attractive to clients. Using Social Media effectively as a real estate professional takes a certain amount of finesse, but if done correctly, can be a major catalyst for advancing your career.


 

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Predicting the Real Estate Market in 2019

2018 was a fickle year in Real Estate. The year started with sky-high home prices, historically low mortgage rates and a definitive upper hand for sellers. In recent months though, home price growth has wavered, rates have risen to their highest point in nearly eight years, and favor has started to shift from seller to buyer. 2019 predictions are showing that we are moving from an incredibly hot real estate market to a more normalized one. Housing inventory looks to rise back up to 2017 levels, and price growth, while likely still positive, will be the lowest we’ve seen since 2014 or possibly even 2011.

Investors and house-flippers will back away from the cooling market and sellers will have to adjust their price expectations as buyers grapple with rising mortgage rates and already-high home prices. A still-growing economy and increased access to credit will support more home buyer demand, but higher interest rates will make home-buying more expensive, so it’s hard to say whether home sales will stay down or rebound next year.

In 2019, homebuyers will enjoy more inventory and less competition from speculators and house-flippers, which will lead to more people enjoying the benefits of homeownership. It will cost more to borrow, but more people will have access to credit for home-buying. This will motivate lenders to expand their customer base to low-income borrowers and first-time homebuyers. But of course, lenders will charge more for these loans–both to cover the risk of lending to borrowers with less-than-perfect credit and to cover their own costs of borrowing.

Homebuilders will be more cautious about building during a cooling market and focus on building starter homes that are easier to sell than luxury homes. Fewer homes will be built, but more builders will focus on starter homes. Higher labor costs will limit the number of homes built, but, higher wages will increase the demand for starter-homes among working-class Americans. Rates (perhaps three times) in 2019 will increase and push the average 30-year fixed mortgage rate up to about 5.5 percent by the end of the new year.

All in all, housing is set for a slow-down next year, but that’s not necessarily a bad thing.

The medium and long-term prospects for housing are good because demographics are going to continue to support demand. With a slower price appreciation, incomes have an opportunity to catch up. With slower sales, inventory has an opportunity to normalize. A slowdown in 2019 creates a healthier housing market going forward.

https://www.redfin.com/blog/2018/12/redfins-2019-housing-market-predictions.html


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Artificial Intelligence Opportunities in Real Estate

Real Estate, along with every other industry, has advanced from using Artificial Intelligence to improve and support healthier lifestyles for people. In commercial real estate, health-focused principles are more than just trends. They are the beginning of the industry’s promising future. From 2008 to 2017, the number of tech-oriented real estate startups have exploded from a mere 176 to over 1,200 companies. The areas in Real Estate that can really use artificial intelligence to offer healthy solutions are safety, data-driven comfort, and sustainability.

Artificial intelligence in the safety sector of commercial real estate has made a big impact. It provides, for example, better security for those that occupy these spaces. AI and machine learning use anything from voice commands to facial recognition to improve accessibility, security, and infrastructure stability after construction. Eventually, developers will be implementing robots to assist with inspection and repairing damage without utilizing human workers, making it safer for everyone.

Real Estate companies have realized the usefulness of AI data and sensor technology to provide higher comfort and more efficient spaces for consumers. Buildings can become personalized for monitoring, home safety and even senior care. For example, motion sensors can track the tenant’s daily movements so it can then adjust door locks, faucets, electronic devices and monitor optimal temperatures for each tenant. Even though these are simple solutions consumers will enjoy focusing on bigger things while your home adjusts to your comfort.

In Manhattan AI has been implemented in commercial structures already, one such project is the Empire State Building. It currently collects data to identify the buildings energy efficiency so adjustments can be made to keep this historical monument standing and useful for as long as possible. It’s not just HVAC systems and lighting controls that AI can help with. It can also identify roof and insulation issues during construction and water usage patterns which can then be used to identify the best materials to use during construction to offer energy efficient resolutions.

In time, Artificial Intelligence can provide the Real Estate market even more opportunities to make a sale by offering a safe haven with technology both inside and outside of the home.


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Why Would A Hospital Get Into The Real Estate Business?

A 2008 initiative by the Nationwide Children’s Hospital, located in Southern Orchards Columbus, began investing in neighborhood homes with a program called Healthy Neighborhoods Healthy Families (HNHF). In partnership with city and community groups, they are helping residents renovate vacant homes for resale, building affordable housing, and offering grants to homeowners to fund home renovations.

Increasing evidence points to a correlation between living in areas of concentrated poverty and health. The doctors at Nationwide Children’s Hospital, like Dr. Kelly Kelleher, saw this first-hand. “Houses that are falling apart, plumbing problems, mold, rat infestations, and violence. You see 26 kids a day, and maybe two-thirds of them are in these desperate straits. The impact on kids goes beyond toxic living conditions like mold and lead,” says Kelleher. The stress of living with violence, racial segregation, and other unstable living conditions leads to what researchers call “the neighborhood effect.”

The hospital is treating “the neighborhood as a patient.” They hope that by providing children with safe and stable housing, they can help prevent many health conditions through physical and socio-economic environments. According to NPR Illinois, “the hospital-led partnership built 58 affordable housing units, renovated 71 homes, built 15 new homes, and gave out 149 home improvement grants between 2008 and 2018. With additional grants, it also built a 58-unit housing development combined with office space.”

New changes in Medicaid reimbursement serve as a motivation to invest in community projects like housing. The fee-for-service model where hospitals are reimbursed for each procedure is losing popularity. A newer trend of states funding health organizations with a lump sum of money to help manage someone in a population helps investment in preventative care. One example of preventative care being a healthy place to live.

Some positive metrics of the neighborhood are the dramatic reduction of murders and that high school graduation rates have risen. Nationwide Children’s Hospital and Dr. Kelleher are also studying metrics on the number of emergency room visits, inpatient days, and the various types of problems that children present at the hospital. But it may take more time to show signs of improvement.


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