Helping Home Buyers in a Seller’s Market

A seller’s market meant that current inventory is less than the number of buyers in the real estate market. For buyers, that means more than one person may be interested in a single listing. Unfortunately, this means your buyers may end up heart broken. Someone may out bid them and if they have already fallen in love with the home it will be even harder. It’s important to prepare your clients for reality versus expectations as they begin their hunt for the home of their dreams- or as close to their dreams as possible.

In a sellers’ market a buyer must change their home buying strategy to have success when many homes will have multiple offers. Time is of the essence. Multiple offers happen with more regularity in a sellers' market than a buyer's market. That's because by its very nature a seller's market is defined in part by low inventory and lots of home buyers. A beautiful home that is priced well can attract more than one offer. Remember, your client might not be the only buyer.

Preparing the Home Buying Offer in a Seller's Market

  • Price. Price is not always the most important factor. But do not offer less than list price. Realize you may need to offer more than the amount the seller is asking.
  • Earnest Money Deposit. A larger earnest money deposit might look very attractive to a seller. Your client is going to pay it anyway at closing.
  • Don't Request Favors. This is not the time to ask the seller to give you the refrigerator or washer and dryer, or part with fixtures, or paint the front door.
  • Delay Buyer PossessionIf it is customary for the seller to move at closing, give the seller a few extra days to move. Another buyer probably won't think of this maneuver, and the seller will look more kindly upon an offer that lets them move at leisure.
  • Submit Preapproval and Proof of Funds Documentation. If your preapproval letter is from an out-of-area broker or lender, get a local preapproval instead. Mortgage pre-approval goes further than prequalification because you submit all the required paperwork up front. The bank then verifies the amount you can afford to pay for your next home. It takes the guesswork out of your home search and shows sellers you can back your offer up with real money.

Be Upfront About All Expenses

In the world of real estate, referrals and repeat business drive an agent’s success over time. Make an effort to present a clear picture of all the expenses a home buyer has after purchasing a home. Go over how much property taxes and mortgage insurance are and how they’re added into the overall payment. Explain the average utilities on that home and the cost of maintenance. Having this information presented clearly allows buyers to choose a house they can truly afford, even when all the little extras are added in.

Don’t Let Impatience Wreck Their Budget

Patience can be hard to come by when you feel pressure to beat buyers to the punch. But try not to get so carried away you forget the financial goals you’re working toward. Remember, it is recommended keeping your clients mortgage payment to no more than 25% of their monthly take-home pay on a 15-year fixed-rate mortgage.

Stress the Value of Improvements

While a turnkey home is attractive to homebuyers because they can move in and not worry about doing a single thing, it isn’t always realistic for buyers on a budget. If their budget doesn’t align with their wants and needs, stress the value of buying lower and making some improvements on their own. Buyers can expect a 70 percent return on investment from improvements to the exterior of the home, such as new siding. This not only gives them something to take pride in but can also help them financially down the road.

Jump on That Seller's Market Showing

Don't let your buyer wait until the weekend to view a home in a seller's market. By the weekend, that home could be sold. Try to be one of the first showings. Sellers usually don't enjoy having buyers come through their homes at all hours of the day, so most would like to see their home sold quickly. If you write a good offer, a fast offer and a clean offer, your client’s chances of acceptance are far better than those of a buyer who is unprepared.

It’s hard to leave emotions out of the home-buying process. After all, your clients purchase a place where they’ll live out their days, raise families and have gatherings of friends and those they love. It’s an emotional decision in many ways. However, if your buyers approach purchasing a home from the emotional side of things, they won’t be as likely to make smart business decisions. Do your best to guide them toward smart choices that will protect them financially, but at the end of the day, remember that you also must deliver a house they’ll love. When you balance those two competing needs, you’ll win both as a real estate agent and as a person.

 


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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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A Home for the Holidays

Nothing says holidays like having your family gathered in your home while you celebrate what’s important. Around this time each year, many homeowners decide to wait until after the holidays to list their houses. Similarly, others who already have their homes on the market remove their listings until the spring. Many sellers believe spring is the best time to put their home on the market because buyer demand traditionally increases at that time of year. What they don’t know is if every homeowner believes the same thing, everyone will list and buy at the same time and therefore encounter far more competition. According to NAR, the sweet spot for selling is November through January. Here are the top reasons why listing your clients house now (or keeping it on the market) may be the best choice they can make.

5 great reasons to tell your clients not to wait:

  1. Buyers at this time of year are serious. Purchasers who are looking for homes during the holidays are serious buyers and are ready to buy now. At this time of year, purchasers who are serious about buying a home will be in the marketplace. Your client and their family will not be bothered and inconvenienced by mere lookers. The lookers are at the mall or online doing their holiday shopping.
  2. The stage is set. Homes show better when decorated for the holidays. There is something about lights, bulbs and ornaments that make you want to cozy up and stay awhile.
  3. Prices are at a sweet spot. Over the past few months we’ve seen the supply of homes for sale decreasing year-over-year. Prices are projected to appreciate by 4.8% over the next year according to Corelogic. If your clients are moving to a higher priced home, it will wind up costing them more in both down payment and mortgage payment if they wait.
  4. The desire to own a home doesn’t stop during the holidays. Buyers who were unable to find their dream homes during the busy spring and summer months are still searching, and your client's home may be the answer. According to NAR, the median days on the market for a listing was only 33 days last month!
  5. Competition is low. The supply of listings increases substantially after the holidays. Also, in many parts of the country, new construction will continue to surge and reach new heights in 2020, which will lessen the demand for their house next year. Temperatures aren’t the only thing that heats up in the spring – so do listings! In 2018, listings increased from December to May. Don’t wait for these listings and the competition that comes with them to come to the market before your clients decide to list their house.

Freddie MacFannie Mae, and the Mortgage Bankers Association all believe homes sales will increase steadily over the next year. Real estate is impacted by the economy (and the consumer’s belief in the strength of the economy). The fact that most economic experts are calling for the recovery to continue through 2020 means the housing market will also remain strong for the foreseeable future. If you have a homeowner who has considered selling their house recently, let them know that now may be the best time to put it on the market.

 


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Tips and Tricks to Pass your Real Estate Exam

If you are like me, deciding to get your real estate license is a big deal. You’ve spent time looking for the best exam prep course for the best price and now you’re signed up to take your exam. You’ve circled the date on your calendar and the pre-test jitters are setting in. You have questions like “how much should I study? and "what should I study?” Every state's exam may be slightly different but the test taking skills you will need are universal. Here are some of the best exam taking tips to help you pass your exam.

Obviously the most important factor in passing the real estate exam is knowing the material. However, don't lose sight of the goal: passing the test! Learning is great but you can't use what you've learned if you don't pass.

  1. Start by only answering the easy questions. Read the entire exam and only answer the questions you absolutely know the answer to. This will give you a sense of progress and your subconscious will begin thinking about the questions you skipped. When you’ve got a timed test, there’s always the concern that you’ll get hung up in a section and not be able to finish the test. Don’t be one of those people--unanswered questions are marked wrong. Wouldn’t it be a shame if the last three questions on the test were easy ones— guaranteed points for you--but you wound up just having to fill in a random answer on them because you didn’t have time to actually read and think about them? By skipping through the questions you don’t know the answers to and focusing first on the questions you do know the answers to, you’re assuring yourself that you get time to answer the questions you are most likely to get right.
  2.  If you don't know it, wait. Skip questions if you don't know the answer--don't waste time on questions you don't know. For example, if math is difficult for you, skip the math problems until after you finish the rest of the exam. Occasionally, the answer to an earlier question will be revealed in a later question. It is not uncommon on the real estate license exam to have questions that relate to one another, like using the same purchase or sale scenario. These hidden answers are another reason why reading all the way through the exam once at the beginning is a great idea.
  3. Don't second guess yourself. As a general rule, once you've answered a test question, don't change your answer even if you're unsure of the answer you selected. It has been statistically proven that you are much more likely to change an answer from correct to incorrect. An easy way to get tripped up on the real estate licensing exam is to misinterpret an answer choice, thanks to complicated wording. Deceptive language is fair game on tests like this, so double-negatives, unrelated conclusions, or red herrings (especially in the math portion of the test) are common. Do your best to puzzle it out, but ultimately move on without answering if you estimate having to spend more than a minute thinking about the correct answer.
  4. There is no penalty for guessing. Once you have gone through the exam at least twice, time may be running short and now would be a good time to start guessing. The worst that can happen when you guess on a question is that you don’t get any point. The best thing that can happen though, is that you have a one in four shot at getting a point. Unanswered questions are marked wrong, and it is far better to take a chance on a wrong answer than eliminate any possibility of getting the correct answer. That being said, you can increase your odds by trying to make an educated guess--there is likely at least one answer that is obviously wrong, so don't guess blindly: read the question and answers first and choose the most likely answer.
  5. Don't compete with other applicants. You're given plenty of time to complete the exam and you should use as much of it as you need. Don't worry if other examinees finish before you do, most likely they are taking a completely different exam. All types of exams are given in one room. You may be sitting next to a plumber taking his exam or a beautician completing hers. If by chance, there is more than one real estate hopeful, remember that many students who finish quickly… fail.

Real estate licensing exams are pass/fail, there is no extra credit for a perfect score. If you’re like me, the allure of a perfect score on a test is hard to ignore, but in the case of the real estate licensing exam, we must. Remember, your goal is to answer the number of questions correctly that will get you a passing score. Use all your best energy to get to the passing threshold—anything beyond that doesn’t matter.

Bonus Tip: do as many practice real estate exam questions as you can. The test is multiple choice and you will perform MUCH better if you've been doing practice tests that mimic the exam. Use a trusted service like ours to prepare for the actual real estate exam.

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Falling in Love with Your Open Houses this Autumn

The beginning of autumn is like a breath of fresh air--a bit of relief from the offensive summer heat is more than welcome at this time of year. Real estate professionals can capitalize on buyers' eagerness to enjoy fall by bringing the best of the season into their open houses. By using the weather to your advantage and creating some seasonal charm, your open houses will be a hit!

Potential home buyers are likely to purchase a home before the holiday season gets in full swing--this means they will be more serious and ready to make an offer as soon as they find the right fit.  Here are some tips to planning a sensational autumn open house.

Up the Curb Appeal

Set the tone the second interested buyers walk up with a festive fall wreath and doormat. It’s an easy way to add color and style to the front entry, which is great for curb appeal. A doormat invites people in and can add a touch of personality. Bonus: the doormat can also help keep the floors clean.

Focus on Lighting

Lighting can be just as important during an open house as it is in your real estate photographs. Make sure any exterior lighting is working properly and utilize a mix of lamps and ceiling lights to create the perfect ambiance. Don’t go overboard with scented candles or similar items--some viewers may be allergic to the smell. To play it safe, look into electric candles or other lighting sources that can make your property glow without upsetting potential buyers.

Serve Seasonal Refreshments

Providing refreshments for an open house is an excellent, low cost way to incorporate fall touches into your open house. Think about pairing warm cookies with FAQ sheets on the neighborhood or hot cocoa next to a printed floor plan. This personal touch, while small, can make a big impact. Potential buyers will feel comfortable in the space and leave with all the information they need.

Add Autumn-Inspired Elements to the Decor

Continue the autumn theme throughout the house by adding touches of seasonal decor: fall-colored throw blankets and pillows on the couch, a pumpkin cookie jar and apple-cinnamon potpourri in the guest bathroom.

Open Up the Windows

Now is the best time of year when you can open the windows and let the crisp, clean air inside. If you have a fantastic view or outdoor living space, opening the doors and windows can also call attention to the features.

Hosting a memorable fall open house will rely on your ability to make potential buyers feel at home in the space. Create a cozy atmosphere by relying on little fall touches. Keep the inside of the property warm and incorporate subtle fall decor. To make the house even cozier, you can leave out a few fall activities for kids like coloring pages or word puzzles. Between the activities, the warmer temperatures, and any other fall touches, potential buyers will fall in love with the property.

 


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Two Real Estate Firms in Hot Water in Hawaii

 

The U.S. Environmental Protection Agency (EPA) has settled with both Century 21 Homefinders of Hawaii in Hilo, and Coldwell Banker Island Properties of Kahuhui, Maui for violating the federal Toxic Substances Control Act (TSCA). Collectively the companies have agreed to pay more than $26,000 in penalties for failing to provide proper lead-based paint disclosure to buyers and renters of homes built before 1978 in Maui and the Big Island.

The companies were cited under the TSCA’s lead-based paint disclosure rule, which applies to housing built before the residential use of lead-based paint was banned in 1978. The rule requires sellers and lessors of pre-1978 homes to provide prospective home buyers and tenants with a federal brochure about lead-based paint, any information known about lead-based paint in the home, and a warning statement about the potential dangers of lead-based paint. Buyers also have the option to inspect pre-1978 homes before becoming obligated to make a purchase. With this knowledge, potential home buyers and tenants can make informed decisions about whether to buy or rent a specific residence.

Century 21 Homefinders of Hawaii has agreed to pay a $6,962 penalty to settle alleged disclosure violations. Coldwell Banker Island Properties paid a $19,344 penalty in an earlier settlement. Both real estate companies have certified that they are presently in compliance.

High levels of lead in blood can cause permanent damage to the nervous system and widespread health problems, according to the EPA, including reduced intelligence and attention span, hearing loss, stunted growth, reading and learning problems, and behavioral difficulties. Young children with developing nervous systems are most vulnerable. “Reducing childhood lead exposure and addressing associated health impacts is a top priority for the EPA,” said EPA Pacific Southwest Regional Administrator Mike Stoker in a news release. “These settlements protect Hawaii communities by ensuring that lead paint rules and regulations are followed.”

Click here to learn more about the Disclosure Rule.

 


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Tidying Up: The Importance of “Staging” for Home Sale

First impressions matter! One of the hardest challenges sellers face when listing their home is de-cluttering. Whether your client is moving up to a larger home, downsizing, or moving in with family, an open house is a great way to get your clients house noticed. Before scheduling your photographer to take photos of the listing, help your client commit to tidying up. Encourage them to sort through items and pack up all sentimental items now to keep them safe during the open house and to make moving that much easier!

Look through the buyer’s eyes as much as possible and tell it exactly as it is and not just what your seller wants to hear. Keep your target buyers in mind. Your next step should be to do a walk through with your seller and jot down any problem areas. You definitely don’t want to start preparing for an open house by making updates willy-nilly.  Depending on your client’s budget and time frame, create a list, putting top-priority issues that are sure to turn off buyers, first. Remember, today’s buyers are looking for move in ready properties. Below you will find the results of The National Association of Realtors Annual Profile of Home Staging. Notice all the benefits of having the home staged to truly benefit your principal.

As the big day for the open house approaches don’t forget to put on the finishing touches. The home should be in tip-top condition and ready for potential buyers. Here are a few last-minute details to really make the home shine:

  • Set out vases of fresh-cut flowers.They'll make the home smell nice and add a splash of color.
  • Let in the light.Buyers want a bright, open house, not a dark and dreary cave. Turn on all the lights and open all the curtains.
  • Adjust the temperature.Keep the home comfortable -- not too cold or too hot.
  • Serve food and drinks.A cold glass of lemonade in the summer or some warm, freshly baked cookies in the winter will encourage buyers to stick around longer, giving them more time to check out the home.
  • Have your client leave!They are probably proud of how fantastic the house looks, but they shouldn’t stick around to point this out to buyers. The last thing you want to do is make potential buyers feel uncomfortable. Tell them to spend the day out and about and let the perfectly prepped home sell itself!

 


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Fannie & Freddie Experience More Delays

Nearly 3 years ago mortgage financing giants Frannie Mae and Freddie Mac announced that changes were coming on the standard mortgage application. These were to be the first changes made to the application in 20 years. As the process moved forward, the new Uniform Residential Loan Application was supposed to make its debut February 1, 2020. The government – sponsored enterprises decided additional changes were needed and extended the time frame for it’s mandatory use.

“The redesigned URLA is the result of extensive collaboration with industry stakeholders,” said Andrew Bon Salle, Fannie Mae executive vice president of single-family business.

“We are proud to be a part of this effort that enables lenders to better serve their customers by providing ease and clarity to borrowers during the loan origination process,” Bon Salle said.

The Federal Housing Finance Agency has requested more changes to the URLA form. At issue are questions relating to language preference, home ownership education and housing counseling. These questions have been moved to a voluntary form instead of being addressed on the main application. After revisiting these changes, additional changes are now being revised as well, including:

Redesigned format: Improved navigation and organization that will support accurate data collection and better efficiency for a more consumer-friendly experience.

New and updated fields: Capture loan application details that reflect today’s mortgage lending business and support both the GSEs’ and government requirements.

Clearer instructions: Simplified terminology enables borrowers to complete the loan application with less help from the lender.

Revised government monitoring information: Incorporates the revised Home Mortgage Disclosure Act demographic questions.

Spanish informational version: Will be available soon.

The new timeline for use is still unspecified as the changes will be assessed yet again to see what the impact will be to everyone involved. The timeline and new implementation dates will be released as soon as they are available until which time the new form is available, continuing the use of the current form is required.

 


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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.

Social Media Success for Real Estate Professionals

Now more than ever, social media marketing is essential to promoting yourself as a real estate professional. Gone are the days when home buyers would open a newspaper to look for properties for sale or look up names of real estate agents in a phone book.

Therefore, it is imperative for any real estate agent to use social media in marketing their businesses and listings. And while any realtor can open a Facebook or Instagram account, it's not always as clear how to use social media as a tool to send the right message to the right people at the right time. In our course Social Media Marketing for Real Estate Professionals you will find valuable need to know information to make yourself and your business a social media success! Here are 3 steps to get maximum exposure for your brand and properties online.

1. Use Different Platforms

Remember all platforms are different and the voice and message should match that. The top 3 social media markets are Instagram, Facebook and Twitter. Of course, there are many more, but don’t spread yourself to thin trying to market on every platform.

Post photos on Instagram to generate leads.

Instagram is widely considered the perfect social media platform for realtors. There are more than 700 million users on Instagram, who reportedly press the "like" button on images about 4.2 billion times per day.

  • You get engagement by doing polls on insta-stories (very effective) and asking a question in the last line of the caption. Getting users to engage on your account is one of the best ways to grow and connect with your audience.

Without a doubt, Facebook is the king of social media.

With more than 2 billion users worldwide, it is easy to understand why the brainchild of Mark Zuckerberg is the first thing that comes to mind when one hears "social media."

  • Use the 80/20 rule with updates: 80% of posts ought to be customer-centric while 20% should be about the business. It also helps the cause of agents to post about happenings in and around their communities like local charity events, school-related activities or even gas prices (especially when they're low)

 Tweet to promote listings.

The volume of tweets will greatly boost a realtor’s exposure. The more tweets a real estate agent sends out, the more leads can be generated. In addition to sharing listings, there are other types of content or pieces of information worth tweeting, like advice on moving as well as tips for staging and upgrading homes.

  • Hashtags are also very important, as people use them to search for a particular topic on Twitter. Agents should use hashtags like the geographic area they operate in, recent events or keywords that their target market may be searching.

2. Use more videos and photos

Just like many others, it’s tough to turn the camera on yourself….but you have to get over it! The reality is that no one cares that your video isn’t professional grade all the time, your hair isn’t perfect or that you stumble over your words occasionally. Being yourself is the key. People will respect your effort and want to do business with you if you are authentic. Establishing that you are likable, good at your job, and can be trusted are the keys to winning!

  • Sharing images and video clips on your social media platforms can also greatly enhance the engagement level of real estate agents online.

3. Measure social media metrics.

Finally, real estate agents should identify and track their social media metrics to gain a better understanding of which strategies are working and which should be replaced or tweaked.

    • Metrics like the number of "likes" per share, number of followers and level of engagement can guide real estate agents toward what they ought to do with their social media campaigns. Facebook Audience Insights will tell you which kind of posts generate interest, and which kind lead to unfollows.

 


 

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