Category Archives: Marketing

New Home Sales Miss As Mortgage Rate Collapse Fails To Bring Buyers Back

Despite yesterday’s disappointing existing home sales print, new home sales were expected to spike (after dropping for two straight months), and did – thanks to a large downward revision in May.

New Home Sales were 646k SAAR in June – missing expectations of 658k. However this 7.0% MoM jump was bigger than expected thanks to the 8.2% revised plunge in May.

May new-home sales were revised down to 604,000 from 626,000; March and April purchases were also revised lower.

Year-over-year, new home sales rebounded…

Purchases of new homes jumped in the West by the most since August 2010, while sales also rose in the South. Sales in the Midwest slumped to 56,000 last month, the slowest pace since September 2015.

The supply of homes at the current sales rate declined to 6.3 months from 6.7 months in May.

The median sales price was little changed from a year earlier at $310,400.

Despite a collapse in mortgage rates, new home sales refuse to accelerate…

Time for a Fed rate-cut then… because that has helped housing, right? Oh wait…

Source: ZeroHedge

How To Discover Who Is Visiting Your Real Estate IDX Website

You cannot find out individual visitors to your site, but you can use some freely available software, such as Google Analytics, to find out how many visitors come to your site, when they are most likely to browse, and their preferred content.

In traditional brick and mortar real estate, you want to know everyone who walks through your office door. You want to greet them personally, gather their contact information, and learn how you can help them. Online real estate is a bit different. Because you cannot talk to them face to face, you need to use software tools to “get to know” your website visitors.

The easiest and most widely used is Google Analytics. Launched in 2005, Google Analytics is now used on more than 50 million sites around the web. The software works by adding tracking code to your website. This code registers activity on your site and sends it to Google where it is aggregated and presented in the Google Analytics reports page.

Google Analytics and similar software can help you understand the type of content that is most popular on your site and the type of visitors it attracts. This can help you develop more targeted content and generate more leads.

To set up Google Analytics, you will need to have a Google account. Then, you will use a plugin to install the tracking code on your website. Once it starts gathering data, you will be able to view and analyze your website traffic by logging into the Google Analytics reports portal.

Step 1: Log into Google Analytics

If you don’t have a Google account already you should create one.

Step 2: Provide Website Information

On the New Account page, you should select Website.  Then, provide a name for you account and website, as well as, your website url and your time zone.

Step 3: Copy Tracking ID

Your Google Analytics account is now ready. Google will provide a tracking code. You should keep a copy of this because in the next steps you will be adding it to your website.

Step 4: Connect Your Site and Google Analytics Account

There are several plugins available to connect your website and Analytics account. Choose the one that best fits your web platform and analytics needs. Then, install it and follow the prompts to authenticate your account.

Google Analytics is now running on your site and the software will begin collecting information about your website visitors. To see the reports, you should log into your Google Analytics page. Here are some key panels in your Google Analytics reports. The best users regularly monitor these panels and make adjustments on their site to maximize lead generation.

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Audience

The audience panel shows you the number of users on your site over the last week with breakdowns for language, web browser, desktop/mobile, and new visitor/returning visitor. You can use this information to adjust your content schedule to post new content when your traffic is highest.

Demographics

The demographics panel provides breakdowns by age and gender, including the share of your website visitors each category represents over time. You can use this information to get a better sense of your typical website visitors and tailor content to them.

Location

The location panel provides the home country of your website visitors. This can be particularly useful if you are seeking to attract international buyers. The panel also session duration and the number of pages viewed per session for each country.

Pages

The pages panel allows you to call information about a page or pages with specific content. Simply type in a search term, and the panel will return page views, entrances, and bounce rate for all the pages on your site containing that term in the url.

Source: by Morgan Taylor | Active Rain

The Fall Of Facebook Has Only Just Begun

Their platform is broken and neither human nor machine can fix it.

Even after losing roughly a third of its market cap, it still may prove one of the great shorts of all time.

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(ZeroHedge) “There’s no mental health support. The employee suicide rate is extremely high,” one of the directors of the documentary, “The Cleaners” told CBS News last May. The film is an investigative look at the life of Facebook moderators in the Philippines. Throughout his 2018 apology tour, Mark Zuckerberg regularly referenced the staff of moderators the company had hired as one of two key solutions — along with AI — to the platform’s content evils. What he failed to disclose is that the majority of that army is subcontractors employed in the developing world.

For as long as ten hours a day, viewing as many as 25,000 images or videos per day, these low-paid workers are buried in the world’s horrors — hate speech, child pornography, rape, murder, torture, beheadings, and on and on. They are not experts in the subject matter or region they police. They rely on “guidelines” provided by Facebook — “dozens of unorganized PowerPoint presentations and Excel spreadsheets with bureaucratic titles like ‘Western Balkans Hate Orgs and Figures’ and ‘Credible Violence: Implementation standards’,” as The New York Times reported last fall. The rules are not even written in the languages the moderators speak, so many rely on Google Translate. As a recent op-ed by John Naughton in The Guardian declares bluntly in its headline, “Facebook’s burnt-out moderators are proof that it is broken.”

As we noted in last week’s issue, 41 of the 53 analysts tracked by Bloomberg currently list Facebook as a buy, with “the average price target… $187, which implies upside of nearly 36%.” That optimism springs from a basic assumption: the company’s monopolistic data dominance means it can continue extracting more from advertisers even if controversy after controversy continues to sap its user growth. Given the depth and intractability of Facebook’s problems, this is at best short-sighted.

The platform’s content ecosystem is too poisoned for human or machine moderators to cleanse. Users are fleeing in droves, especially in the company’s most valuable markets. Ad buyers are already shifting dollars to competitors’ platforms. Governments are stepping up to dramatically hinder Facebook’s data-collection capabilities, with Germany just this week banning third-party data sharing. The company is under investigation by the FTC, the Justice Department, the SEC, the FBI, and several government agencies in Europe. It has been accused by the U.N. of playing a “determining role” in Myanmar’s genocide. An executive exodus is underway at the company. And we believe, sooner or later, Facebook’s board will see no option but to remove Sheryl Sandberg and Mark Zuckerberg.

The market is drastically underestimating the peril the company is in. In the very short term, the user backlash may simply hinder its revenue growth. In the longer-term, however, the institutionalized failure to see and respond to the platform’s downsides may render Facebook the Digital Age’s Enron — a canonized example of how greed and corruption can fell even the mightiest.

According to data recently released by Statcounter, Facebook’s global social media market share dropped from 75.5% in December 2017 to 66.3% in December 2018. The biggest drop was in the U.S., from 76% to 52%. As Cowen survey results released this week suggest, these engagement declines will continue to depress the company’s earnings. Surveying 50 senior U.S. ad buyers controlling a combined $14 billion in digital ad budgets in 2018, 18% said they were decreasing their spend on Facebook. As a result, Cowen estimates the Facebook platform will lose 3% of its market share.

No doubt Facebook’s struggles are not just about the headline scandals. For years, one innovation priority after another has fallen flat, from VR to its video push to its laggard position in the digital-assistant race. The company’s most significant “innovation” success of the past few years was copying the innovation of a competitor — pilfering Snapchat’s ephemerality for its “moments” feature.

However, it’s the scandals that have most crippled the company’s brand and revealed the cultural rot trickling down from its senior ranks. Consider just the most-sensational revelations that emerged in 4Q18:

  • Oct. 17: The Verge reports that Facebook knew about inaccuracies in the video viewership metrics that it provided to advertisers and brands for more than a year. “The inflated video views led both advertisers and media companies to bet too much on Facebook video.”
  • Nov. 14: The New York Times publishes an investigative report that reveals Facebook hired a conservative PR firm to smear competitors and minimize the company’s role in Russia’s 2016 election meddling.
  • Dec. 5: British lawmakers release 250 pages of internal Facebook emails that show that, “the company’s executives were ruthless and unsparing in their ambition to collect more data from users, extract concessions from developers and stamp out possible competitors,” as The New York Times reported.
  • Dec. 14: Facebook reveals that a bug allowed third-party app developers to access photos people may not have shared publicly, with as many as 6.8 million users potentially affected.
  • Dec. 17: Two Senate reports reveal the shocking extent of Russia’s efforts on social media platforms during the 2016 election, including the fact thatInstagram was their biggest tool for misinformation.
  • Dec. 18: The New York Times reports that Facebook gave the world’s largest technology companies far more intrusive access to user data than previously disclosed, including the Russian search firm Yandex.
  • Dec. 20: TechCrunch reports that, “WhatsApp chat groups are being used to spread illegal child pornography, cloaked by the app’s end-to-end encryption.”
  • Dec. 27: The New York Times obtains 1,400 pages of Facebook’s moderation guidelines and discovers an indecipherable mess of confusing language, bias, and obvious errors.

Scandal after scandal, the portrait of the company is the same: Ruthlessly and blindly obsessed with growth. Overwhelmed by that growth and unwilling to take necessary steps to compensate. Willing to lie and obfuscate until the truth becomes inescapable. And all the time excusing real-world consequences and clear violations of user and client trust because of the cultish belief that global interconnectedness is an absolute good, and therefore, Facebook is absolutely good.

The scale of Facebook’s global responsibility is staggering. As Naughton writes for The Guardian:

Facebook currently has 2.27bn monthly active users worldwide. Every 60 seconds, 510,000 comments are posted, 293,000 statuses are updated and 136,000 photos are uploaded to the platform. Instagram, which allows users to edit and share photos as well as videos and is owned by Facebook, has more than 1bn monthly active users. WhatsApp, the encrypted messaging service that is also owned by Facebook, now has 1.5bn monthly active users, more than half of whom use it several times a day.

Relying on tens of thousands of moderators to anesthetize the digital commons is both inadequate, and based on the reported working conditions, unethical and exploitative. AI is not the solution either, as we explored in WILTW April 12, 2018. According to Wired, Facebook has claimed that 96% of the adult and nude images users try to upload are now automatically detected and taken down by AI. That sounds like a success until you consider that that error rate means 1.3 million such images made it to the public in the third quarter of 2018 alone (30.8 million were taken down).

In fact, the company has acknowledged that views with nudity or sexual content have nearly doubled in the 12 months ending in September. And detecting nudity is a far easier task for a rules-based algorithm than deciding the difference between real and fake news, between hate speech and satire, or between pornography and art.

Facebook has economically and culturally empowered hundreds of millions of people around the world. It cannot be blamed for every destabilized government, war, or murder in every region it operates. However, more and more, it’s clear that one profit-driven platform that connects all of the world’s people to all of the world’s information — the vision Zuckerberg has long had for his invention — is a terminally-flawed idea. It leads to too much power in the hands of too few. It allows bad actors to centralize their bad actions. And it is incompatible with a world that values privacy, ownership, and truth.

Governments are waking up to this problem. So is the public. And no doubt, so are competitive innovators looking to expand or introduce alternatives. Collectively, they will chip away at Facebook’s power and profitability. Given the company’s leaders still appear blinded by and irrevocably attached to their business model and ideals, we doubt they can stave off the onslaught coming.

Source: ZeroHedge

“Things Are Getting Worse”: Mall Owners Hand Over The Keys To Lenders Before They Even Default

For years, traditional malls around the United States have been in a state of partial or full collapse thanks to “the Amazon effect”: deteriorating conditions, bankrupt or cash-bleeding tenants, with some even transforming into homeless shelters as the retail industry “evolves”. 

In other words, as Bloomberg writes, “things are getting worse for malls across America.” So much worse, in fact, that their owners are simply walking away early from struggling properties, a trend that has sparked fears of material losses among mortgage bond investors.

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Investors in and lenders to malls across America are bracing for the fallout from the disappearance of the brick and mortar sub-sector of the industry. With the recent bankruptcy of retail giant Sears, mall operators are continuing to see accelerating defaults in the wake of numerous other retail bankruptcies from stores like Bon-Ton, Wet Seal and RadioShack, and many others, resulting in abrupt declines in rental and lease payments.

And amid the ongoing collapse in what was once a staple source of shopping and entertainment for “middle America”, many mall owners are simply turning over the keys to lenders even before their lease is over, according to Bloomberg. That puts the loan servicing companies in a position to either try to run the properties themselves or turn around and sell them. If they can’t make the debt payments, the new owners of the commercial mortgage backed securities in turn end up facing the consequences themselves.

While much of the noise surrounding the “big mall short” which dominated the 2017 airwaves has faded, the number of mall loans issued since the financial crisis that identified as “highest risk” has almost tripled to 29 this year. And the consequences are becoming painfully visible. The Washington Prime Group REIT last month simply gave up on two malls in Kansas where the loans had either defaulted or were close to default. This month, Pennsylvania REIT announced that it left a mall in Wilkes-Barre that also had a loan ready for default. The PA REIT is considering abandoning another mall in Wisconsin for the same reason.

Ben Easterlin, head of commercial lending at Atlanta-based Angel Oak Companies, told Bloomberg that many small town malls are no longer being included in CMBS packages. “It’s easier to value a mall in L.A. than it is in Sheboygan,” he said. “We talk about these malls all day long. We have not seen any of these malls in a CMBS lately and don’t expect to, frankly.

Meanwhile, even though the delinquency rate right in the commercial mortgage backed securities market is at post-crisis lows now, the pain will likely take a couple of years to show up due to maturities that won’t occur for several years.

Adding to the pain, stores leaving these malls often cause a waterfall effect because of co-tenancy clauses that are included in many small mall leases. These clauses mean that if there aren’t enough tenants in a mall at a given time, other tenants have the option to leave. So when a “major” anchor-store company – like Sears – closes a bunch of stores, it can triggers clauses releasing other stores from their contractual leases, further hitting the mall and its creditors.

Still, not all investors see this as Armageddon.

The Galleria at Pittsburgh Mills was seen as an investment opportunity by New York-based Namdar Realty Group and Mason Asset Management, who bought the property for $11.35 million earlier this year after it was once valued at $190 million in 2006, before it was packaged into a commercial mortgage backed securities pool.

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Steve Plenge, managing principal of Pacific Retail, is another optimist who sees today’s climate as opportunistic. His firm has taken over at least two malls that have been returned to lenders after defaults. He told Bloomberg: “we think this sector, the servicing business, will get bigger for us. There will be more defaults, more foreclosures.”

We agree. In fact, at the beginning of October we noted that mall vacancies had hit 7 year highs. And, according to a WSJ report, the average rent for malls in the third-quarter fell 0.3% to $43.25 a square foot. This is down from $43.36 in the second quarter and is the first time this number has fallen sequentially since 2011, according to research firm Reis, Inc.

At the same time, vacancy rates are on the ascent, rising to 9.1% in the third quarter from 8.6% in the second quarter, and the highest they’ve been since the third quarter of 2011, when these rates hit 9.4%. 

Barbara Denham, senior economist with Reis, told the Journal: “The retail sector is still correcting”. And, as long as ever more people continue to migrate to online retailers (or buying less stuff in general), it will be for years.

Source: ZeroHedge

New York Judge Rules Consumer Financial Protection Bureau An Unconstitutional Construct…

The CFPB was constructed by Elizabeth Warren and her progressive ideologues as an extra-constitutional government agency.  This was entirely by design.

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The CFPB had two primary, albeit unspoken, functions.  First, it was structured as a holding center for fines and assessments against any financial organizations opposed by progressives.  Second, it was a distribution hub for the received funds to be transferred to political allies and groups supportive of progressive causes.

To pull off this scheme Elizabeth Warren et al ensured it was structured to allow no congressional oversight; however, it was also structured to have no executive branch oversight – and the funding mechanism for the CFPB budget was directly through the federal reserve.  The lack of any legislative or executive branch oversight made the entire scheme unconstitutional according to an earlier court decision.

The CFPB defenders then appealed the decision to a select appellate court in Washington DC to continue the construct.  The Warren crew won the appeal; but today, in an unrelated jurisdictional ruling a New York judge affirmed the minority opinion setting up a possible supreme court pathway to get a final decision.

NEW YORK (AP) – The U.S. government’s beleaguered consumer finance watchdog agency is unconstitutionally structured, a judge said Thursday as she disqualified the agency from serving as a plaintiff in a lawsuit.

U.S. District Judge Loretta A. Preska in Manhattan reached the conclusion about the Consumer Financial Protection Bureau in a written decision.

Her ruling related to a lawsuit brought against companies loaning money to former National Football League players awaiting payouts from the settlement of a concussion-related lawsuit and to individuals slated to receive money for injuries sustained when they helped in the World Trade Center site cleanup after the Sept. 11, 2001, terrorist attacks.

She let claims brought by the New York State attorney general proceed, but dismissed those that were brought by the CPFB, saying it “lacks authority to bring this enforcement action because its composition violates the Constitution’s separation of powers.”

In ruling, Preska sided with three judges who dissented from the six-judge majority in a January ruling by the U.S. Court of Appeals in Washington. The majority found that the agency director’s power is not excessive and that the president should not have freer rein to fire that person.  (read more)

CFPB Interim Director Mick Mulvaney has already said the CFPB needs to be disassembled.

Taking the agency down is perfectly ok with the Trump administration.

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CFPB Ruled Unconstitutional Again – National Real Estate Post

By Sundance | The Conservative Tree House

It’s Over For Tech Start-ups

It’s over for tech start-ups — just look at today’s earnings reports

  • Blue Apron and Snap had disappointing earnings reports on Thursday.
  • Both companies have been targeted by one of the Big Five — Blue Apron by Amazon, Snap by Facebook.
  • Start-ups and investors should look to the margins, or prepare to face the tech giants.

Two newly public tech companies reported earnings on Thursday, and both were ugly for their investors.

Meal-kit preparer Blue Apron missed earnings expectations by a wide margin in its first earnings report since going public in late June. It reported a 47 cent per share loss instead of the expected 30 cent loss, blaming high customer acquisition costs and staffing a new distribution plant in New Jersey.

The stock dropped 17 percent and is now trading at about half its IPO price.

In its second earnings report as a public company, Snap disappointed Wall Street with its user growth numbers for the second consecutive time and fell short on earnings.

The stock dropped about 17 percent after hours. It’s now off about 33 percent from its IPO price.

Blue Apron and Snap have a lot in common. They’re consumer focused. They have devoted followers. They’re losing money hand over fist.

And both were targeted directly and aggressively by two of tech’s biggest companies.

Between the time Blue Apron filed for its intial public offering, on June 1, and when it went public, on June 28, Amazon announced that it was buying Whole Foods. The speculation that Amazon would use the purchase to improve its home delivery service sent demand for Blue Apron’s IPO down, and the company slashed its IPO range from $15-$17 down to $10-$11.

Then, reports emerged that Amazon had already launched a meal kit, which was on sale in Seattle.

In the case of Snap, it was Facebook. Mark Zuckerberg and company had been fighting to blunt Snap’s growth ever since its co-founder, Evan Spiegel, rejected his buyout offer in 2013. It began to see progress with the launch of Instagram Stories in August 2016, which duplicated Snapchat’s own Stories feature. Over the next year, it gradually copied nearly every major Snapchat feature in its own products.

Less than a year after launch, Instagram Stories has 250 million daily users and is growing at a rate of around 50 million every three months. Snap has 173 million and grew only 7 million during the quarter.

The experiences of these companies are discouraging for start-up investors and founders who dream of someday creating an Amazon or Facebook of their own.

The five big tech companies — Alphabet (Google), Apple, Amazon, Facebook, and Microsoft — have attained unprecedented wealth and power, with trillions of dollars in combined market value and tens of billions of dollars in free cash flow.

They also need to satisfy Wall Street’s appetite for growth, which means they have to get new customers or earn more money from existing customers, quarter after quarter, year after year. One way to do that is to expand into new markets.

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They’ll gladly outspend their smaller competitors on product development and hiring while undercutting them on price.

That doesn’t mean curtains for Blue Apron or Snap. Both companies could come up with a leapfrog innovation that catapults them (for a while). Young nimble companies overtake older and slower companies all the time — that’s how the Big Five started. Microsoft disrupted IBM. Google and Apple disrupted Microsoft. And so on.

But companies and tech investors need to be wise about the risks of betting on upstarts that are going up against these giants.

If you hope to make money through online advertising, you’ll be challenging Google and Facebook. If you’re doing anything in e-commerce, logistics or delivery, you’ll run into Amazon. In cloud computing, get ready to see Amazon, Microsoft and Google. If you’re building hardware, Apple likely stands in the way.

It might be better to focus on the niches that the Big Five don’t yet dominate. Their health-care efforts are still in early stages, and none is playing heavily in financial tech, drones or robotics. Microsoft’s power in enterprise software is blunted to some degree by other old giants like IBM, Oracle and SAP, plus newer players like Salesforce.

It’s always been hard to build a successful start-up. With the increasing dominance of the Big Five, it’s harder than ever.

By Matt Rosoff | CNBC

 

Can Short Term Rental Income Hurt Your Mortgage Refinance Application?

One of the most significant financial trends to sweep the country is more of a hit with homeowners than refinance mortgage lenders.

Logically, it sure seems as though a loan application which shows extra income through short-term room rentals would be a winner, something that would greatly please mortgage lenders.

The catch is that it’s not a sure thing, and in some cases, room rentals could actually be a negative.

New Trend Creates Uncertainty

Across the country, a number of electronic platforms now allow those with extra space to provide short-term housing.

National services such as Airbnb, Flipkey, HomeAway and VRBO are at the heart of this new business, one which takes an idle asset – that unused mother-in-law suite or extra bedroom – and puts it to use.

The result is that many homeowners are now getting cash for their quarters, money that can help with monthly bills and even mortgage payments.

At first, short-term home rentals seem like a win-win business proposition: the homeowner earns income while the traveler gets space for a few days, space that might be a lot cheaper than standard-issue hotel rooms.

The catch is that although the cash earned from short-term rentals is real, it may not automatically count on a mortgage application.

Home Rentals And Your Refinance Mortgage

For a very long time, there has been a business which offers short-term rentals — the hotel industry. Like most industries, it has not been shy about seeking legal protections for its products and services.

Check the local rules for virtually all jurisdictions, and you will find laws on the books which prohibit unlicensed short-term rentals or leases of fewer than 30 days.

These laws are largely unenforced, but that is changing. According to the New York Post, on October 21, 2016, New York Governor Cuomo signed a bill that would impose fines of up to $7,500 against hosts who posted short-term rentals. A California couple who had already paid $2,081 for their room found themselves with nowhere to stay when another resident reported their host to the authorities.

Rental Income: Is It Reported?

For lenders, the new surge in short-term rentals raises a number of issues. The money is nice, and congratulations on that, but whether such funds can be counted in a refinance home loan application is uncertain. Here’s why:

First, the lender will want to see that the rental income has been reported on tax returns. If income is not reported, it doesn’t usually count.

Note that if you report short-term rental income, it may not be taxable, depending on how many nights the property was rented. See a tax professional for details.

Is It Legal?

Second, if the income is reported, was it legally obtained? Here we get back to those sticky local rules that ban short-term rentals.

Lenders like to see income that’s ongoing, because mortgages tend to be lengthy obligations lasting 15 or 30 years.

If cash is coming from unlicensed room rentals, there is the possibility that the money might be cut off at any moment by an irate neighbor who reports the matter to local authorities.

Is It Your Primary Residence?

Third, is the property a residence? Mortgage lenders generally are in the business of financing homes with one-to-four units, and the best refinance rates go to those being used as primary residences.

New York state found that six percent of the units it studied captured almost 40 percent of the private short-term rental income.

In other words, some properties did a lot of short term rentals, a volume which will make lenders wonder whether the property is a comfy residence or an unlicensed hotel.

It’s not just lenders who will have such questions. The property will have to be appraised and that’s where problems are likely to arise.

Home, Sweet Boarding House?

Francois (Frank) K. Gregoire, an appraiser based in St. Petersburg and a nationally-recognized valuation authority, notes that “a room rental situation, depending on the number of rooms, may shift the use of the property from single or multifamily to a business use, such as a hotel or rooming house.

“If there are more than four units, the property is outside the one to four units certified residential appraisers are permitted to appraise, and outside the one to four unit limitation for loan purchase by Fannie and Freddie.”

The Future Of Short-Term Rentals

While the current situation is muddled and puzzled, there’s a very great likelihood that short-term home rentals will be increasingly legitimatized.

In the same way that Uber has disrupted the traditional cab industry, the odds are that the same thing will happen with short-term rentals. The reason is that the private rental rules now on the books were passed when no one cared and are largely unenforced.

Now, the landscape has changed. A very large number of homeowners want to be in the short-term rental business, or are at least disinclined to report their neighbors.

The police surely don’t want to break into homes in search of paying guests, and state and local lawmakers really want homeowner votes.

Be Careful Out There

For the moment, homeowners with an interest in earning a few extra dollars from short-term home rentals should get advice and counsel from a local real estate attorney before signing up guests.

In addition, speak with your insurance broker to assure that you have adequate coverage. Some policies allow short-term rentals, some do not, and there are differing definitions regarding what is or is not an allowable short-term rental.

By Peter Miller | The Mortgage Reports

USA Today Reports Existing Home Sales Hit 9-Year High In June

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Bolstered by first-time home buyers, existing-home sales rose for the fourth straight month in June, reaching a nine-year high.

Sales of existing single-family homes, townhomes, condominiums and co-ops increased 1.1% to a seasonally adjusted annual rate of 5.57 million, up from May’s downwardly revised 5.51 million, the National Association of Realtors said Thursday. The June pace was the strongest since 2007.

First-time buyers made up 33% of those transactions, the biggest share in four years. That eased concerns that a shortage of affordable houses has been pushing entry-level buyers out of the market.

The median existing-home price also reached a new high as it surged 4.8% to $247,700 from a year ago, above the former peak of $238,900 in May.

June’s sales exceeded the highest forecast of economists polled by Bloomberg, 5.56 million.

Healthy job gains, record-high stock prices and near-record low mortgage rates stoked June’s positive showings, said Lawrence Yun, chief economist at the National Association of Realtors.

“The modest bump in June sales to first-time buyers can be attributed to mortgage rates near all-time lows and perhaps a hopeful indication that more affordable, lower-priced homes are beginning to make their way onto the market,” he said. “The odds of closing on a home are definitely higher right now for first-time buyers living in metro areas with tamer price growth and greater entry-level supply — particularly areas in the Midwest and parts of the South.”

The Midwest has the lowest median existing-home price among all regions, $199,900, followed by the South, at $217,400. The median price in the West climbed 7.2% from a year ago to $350,800.

Total available existing homes for sale dipped 0.9% to 2.12 million, now 5.8% below a year ago.

“Seasonally adjusted, the month’s supply of homes in June 2016 was the lowest since June 2005, indicating that inventory problems still plague home buyers,” said Ralph McLaughlin, Trulia’s chief economist.

by Athena Cao | USA Today

Housing Outlook Stays Bright as Economic Forecast Darkens

https://s15-us2.ixquick.com/cgi-bin/serveimage?url=http%3A%2F%2Ftse2.mm.bing.net%2Fth%3Fid%3DOIP.Mf342a65e68fd4985cfa3eea28c893ef5o2%26pid%3D15.1%26f%3D1&sp=7609356586dc7c65d508e60aab322f03While the outlook for overall economic growth is darkening, the housing market is expected to keep up its momentum in 2016, according to Freddie Mac’s April 2016 Economic Outlook released on Friday.

Freddie Mac revised downward its forecast for Q1 GDP growth from 1.8 percent down to 1.1 percent. The “advance” estimate for GDP growth in the first quarter will be released by the Bureau of Economic Analysis (BEA) on Thursday, April 28. The GDP grew at an annual rate of just 0.6 percent in the first quarter of 2015 but then shot up to 3.9 percent for Q2; for the third and fourth quarter, the real GDP grew at rates of 2.0 percent and 1.4 percent, respectively.

The first quarter for the last few years has been punctuated by slow economic growth. While some of this can be attributed to seasonality, Ten-X (then Auction.com) Chief Economist Peter Muoio said that last year’s dismal GDP showing in the first quarter could be attributed to the brutal winter which slowed economic activity, labor disagreements at a bunch of the West Coast ports that really slowed the flow of cargo in Q1, and low oil prices (though this was partially offset by lower gas prices which put more money in consumers’ pockets).

“We’ve revised down our forecast for economic growth to reflect the recent data for the first quarter, but our outlook for the balance of the year remains modestly optimistic for the economy,” Freddie Mac Chief Economist Sean Becketti said. “However, we maintain our positive view on housing. In fact, the declines in long-term interest rates that accompanied much of the recent news should increase mortgage market activity, particularly refinance.”

On the positive side, Freddie Mac expects the unemployment rate will fall back below 5 percent for 2016 and 2017 (last month it ticked back up to 5.0 percent after hovering at 4.9 percent for a couple of months). Reduced slack in the labor market will push wage gains above inflation, although the gains are expected to be only modest, according to Freddie Mac.

While the economic forecast for Q1 has grown darker, the forecast looks bright for housing in 2016, however.

“We expect housing to be an engine of growth,” Freddie Mac stated in the report. “Construction activity will pick up as we enter the spring and summer months, and rising home values will bolster consumers and help support renewed confidence in the remaining months of this year.”

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Low mortgage rates have boosted refinance activity in the housing market during Q1. The 30-year fixed mortgage rate averaged 3.7 percent for the first quarter, which drove an increase for the 1-4 single-family originations estimate for 2016 up by $50 billion up to $1.7 billion. Rates are expected to bump up, however, and average 4 percent over the full year of 2016, according to Freddie Mac. House prices are expected to appreciate by 4.8 percent over 2016 and 3.5 percent for 2017; homeowner equity is expected to rise as a result of the home price appreciation, which could mean more refinance opportunities.

The low mortgage rates combined with solid job growth are expected to make 2016 the strongest year for home sales since the pre-crisis year of 2006 despite the persistently tight inventory of for-sale homes, according to Freddie Mac.

“Sales were slow in the first quarter, but trends in mortgage purchase applications remain robust and we expect home sales to accelerate throughout the second quarter of 2016 as we approach peak home buying season,” Freddie Mac said.

Click here to view the entire Freddie Mac Economic Outlook for April 2016.

by Brian Honea | DS News

Leadership Lessons From One Dancing Guy

If you’ve learned a lot about leadership and making a movement, then let’s watch a movement happen, start to finish, in under 3 minutes, and dissect some lessons:

A leader needs the guts to stand alone and look ridiculous. But what he’s doing is so simple, it’s almost instructional. This is key. You must be easy to follow!

Now comes the first follower with a crucial role: he publicly shows everyone how to follow. Notice the leader embraces him as an equal, so it’s not about the leader anymore – it’s about them, plural. Notice he’s calling to his friends to join in.

It takes guts to be a first follower! You stand out and brave ridicule, yourself. Being a first follower is an under-appreciated form of leadership. The first follower transforms a lone nut into a leader. If the leader is the flint, the first follower is the spark that makes the fire.

The second follower is a turning point: it’s proof the first has done well. Now it’s not a lone nut, and it’s not two nuts. Three is a crowd and a crowd is news.

A movement must be public. Make sure outsiders see more than just the leader. Everyone needs to see the followers, because new followers emulate followers – not the leader.

Now here come two more, then three more. Now we’ve got momentum. This is the tipping point! Now we’ve got a movement!

As more people jump in, it’s no longer risky. If they were on the fence before, there’s no reason not to join now. They won’t be ridiculed, they won’t stand out, and they will be part of the in-crowd, if they hurry. Over the next minute you’ll see the rest who prefer to be part of the crowd, because eventually they’d be ridiculed for not joining.

And ladies and gentlemen that is how a movement is made! Let’s recap what we learned:

If you are a version of the shirtless dancing guy, all alone, remember the importance of nurturing your first few followers as equals, making everything clearly about the movement, not you.

Be public. Be easy to follow!

But the biggest lesson here – did you catch it?

Leadership is over-glorified.

Yes it started with the shirtless guy, and he’ll get all the credit, but you saw what really happened:

It was the first follower that transformed a lone nut into a leader.

There is no movement without the first follower.

We’re told we all need to be leaders, but that would be really ineffective.

The best way to make a movement, if you really care, is to courageously follow and show others how to follow.

When you find a lone nut doing something great, have the guts to be the first person to stand up and join in.

by Derek Sivers

‘Most Expensive’ Mansion Listing In U.S., Palazzo di Amore Cut Price By $46 Million

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Despite the $46-million price cut, the 53,000-square-foot Beverly Hills home is still asking a top-of-the-charts $149 million. (Marc Angeles | Inset: Tribune Publishing)

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Hobbiton is a Real Place in New Zealand

https://twistedsifter.files.wordpress.com/2015/03/hobbiton-movie-set-tour-new-zealand-13.jpgsource: Twisted Sifter

When Peter Jackson spotted the Alexander Farm during an aerial search of the North Island for the best possible locations to film The Lord of The Rings film trilogy, he immediately thought it was perfect for Hobbiton.

Site construction started in March 1999 and filming commenced in December that year, continuing for three months. The set was rebuilt in 2011 for the feature films “The Hobbit: An Unexpected Journey”, “The Hobbit: The Desolation of Smaug”, and “The Hobbit: There and Back Again”.

It is now a permanent attraction complete with hobbit holes, gardens, bridge, Mill and The Green Dragon Inn.

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Matamata, home of the Hobbiton Movie Set, is a small agricultural town in the heart of the Waikato region, nestled at the base of the Kaimai ranges. It is about a 2 hour drive from Auckland and you can also find other nearby places and estimated travel times below:

From Hamilton: A 45-minute drive.
From Rotorua: A 45-minute drive.
From Taupo: One-and-a-half-hour drive.
From Tauranga: 45-minute drive.
From Waitomo: One-and-a-half-hour drive.

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Thirty-seven hobbit holes were originally created with untreated timber, ply and polystyrene. After the 2011 rebuild, there are now 44 unique hobbit holes, the Green Dragon Pub, Mill, double arched bridge and the famous Party Tree.

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The Alexanders moved to the 1250 acre (500 hectare) property, in 1978. Since then it has been farmed as a traditional New Zealand sheep and beef farm. It is still farmed the same today and is run by the brothers and their father.
 
The property runs approximately 13,000 sheep and 300 Angus beef cattle hence the major sources of income are mutton, wool and beef. The brothers shear all the sheep on the property themselves, approximately every eight months. [source]

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How To Avoid Fake Vacation Rentals

The home-sharing economy is heating up. Inevitably, more and more of us have been getting fleeced on fake vacation rentals.

Vacation planning often begins with excitement, optimism and nowadays the Internet. The online search leads far into a world of glossy photos, descriptive blurbs and, of course, countless promises of customer satisfaction. Even if you’re not inclined to rent a stranger’s house, you may find that for the most popular destinations, traditional hotels are booked or inadequate. So renting a vacation home is a natural alternative. According to the Vacation Rental Managers Association, 24 percent of leisure travelers report having stayed in a vacation home, up from around 11 percent in 2008.

Before the Internet, the search for a private vacation rental was slow and impractical. It involved trading a lot of phone calls, mailing printed packages and coordinating to solve all kinds of problems. Hoteliers like Marriott, Hilton and Hyatt Hotels built empires based on the wealthy traveler’s desire for luxury and reticence to deal with this process.

Then along came online portals like VRBO, Airbnb and Craigslist. All of a sudden, we’re in the mood to share.

For the most part, the rise of all of this house sharing has been positive. Sophisticated channels like Airbnb and HomeAway try especially hard to protect renters by providing secure payment, user comments and star ratings. But even they are not immune from deceit.

Vacation rental scams come in many different forms. Some Web portals are run by technologists with no connection to the actual real estate. Through smart search engine optimization, these sites attract users, and then sell the lead to the true agent, who offsets the cost with higher rent.

Sure, it looks like the perfect spot for a vacation. But will it be there when you arrive?

The worst rip-offs seduce would-be vacationers with fabulous pictures of fictitious properties. Once the renter is hooked, the phony landlord collects an up-front “security deposit” and runs for the hills. Victims are left unaware they’ve been cheated until weeks later, when they show up at the address with their luggage in hand.

Other variations on the scam are only slightly less fraudulent. Some fakes use the bait-and-switch method by showing unavailable properties, only to divert the renter to another, less desirable spot. Other tricksters may double-book a property, then send whichever vacationer arrives last to a second-rate backup, along with sincere apologies.

You’re too sharp to be ensnared in any of these scams, right? Real estate is my business, so I used to believe the same thing. Then I tried renting a vacation home in Aspen, Colorado, for a summer holiday.

I found many remarkable online listings — only to discover after contacting their presumed representatives that the properties were always booked. After many failed tries and long phone calls I realized I was being conned. I stopped browsing and hired a high-quality local real estate broker to show me real listings.

My experience could have been worse — some friends from Germany were recently snared here in Miami. Fortunately, they insisted on withholding their security deposit from their seemingly delightful contact until after completing a property inspection. Still, she pressured these visitors to wire funds — right up to the time they were driving to the property after their long flight. Having stood their ground, they arrived at the home, which appeared exactly as it did online. Unfortunately, it was occupied by its unsuspecting owner — who had no intention to rent. Of course, my friends never again succeeded in connecting with their agent and had to scramble to locate a hotel room.

Why aren’t authorities cracking down? Perhaps because the dollar figures involved in each case simply aren’t enough to justify an intercontinental examination. The victims, by definition, don’t live anywhere near the jurisdiction of the reported crime. Most often, the crooks don’t either.

So how do you protect yourself? Here’s a list of 10 ways to combat this scam:

  1. Don’t be fooled by photography. In particular, be wary of the nicest-looking, most Photoshopped property photos. Ask the owner for additional photos — an honest lessor will always have them. Or ask your agent to use technology like FaceTime or Skype to show you the property live. At the very least, use Google GOOG -0.11% Earth and Google’s Street View feature to confirm that the property you’re renting actually exists at the address advertised. You can also use those Google tools to get an unvarnished look at the property’s exterior.
  2. Be careful of the cheapest properties. If prices seem too good to be true, they probably are. If you don’t have a feel for what a reasonable price is in an area, get one. Scammers often go after people who aren’t that savvy. And drive a hard bargain — not just to get a better deal, but also to detect odd behavior from the other party.
  3. Never pay with cash. The preferred methods of payment among criminals are cash and cash-transfer services like MoneyGram and Western Union WU 0%. Use a credit card instead — Visa, MasterCard and American Express will all allow you to recover money you lose to fraud. Reputable sites like Airbnb will hold your security funds in escrow. They play middleman, making sure you’ve put the funds in place before you get keys. (Some portals offer insurance against fraud — but it’s expensive and may not cover much; read the policy closely.)
  4. Use a trusted local agent. Yes, you should expect to pay them. But they can show you bona fide listings or go look at the properties that you’ve seen on the Internet for you. Be sure to check their license.
  5. Confirm legitimacy. For ownership and all documents, confirm that the owner’s name on the lease is the same as the one shown on public property appraiser records. Then have a lawyer review the lease, just like you would a full-year agreement.
  6. Read the comments. The feedback from previous renters that appears on sites like Airbnb and VRBO is invaluable. And in some cases, you’re even allowed to pose questions to other users.
  7. Trust your instincts. If you apply some skepticism to the process, you’re more likely to see red flags. You’re also more likely to catch suspicious behavior. My Germans looked back after their experience and realized their phony realty agent had exhibited all kinds of weird tics. They were so excited about their trip to Miami that they failed to pick up on them.
  8. Take your time. No need to rush. For long vacations, consider going ahead of time to check out the property, or not renting a house for the first week — stay at a hotel for a few nights. It will give you an opportunity to see the property you’re renting in person before turning over your security deposit.
  9. Be a regular. If you rent a home you like, stick with it. You’ll develop a relationship with the owner if you go back to the same place year in, year out — and avoid the risk of being scammed on a new property. If you’re traveling to a new place, try to find a friend who lives there and will give you honest feedback on potential rentals, good neighborhoods, etc.
  10. Beware group think. If you’re vacationing with a half-dozen other people, everybody tends to figure that somebody else is paying attention to the details and making sure the group isn’t getting ripped off. Then, when the amazing six-bedroom place you all rented together is nowhere to be found and your security deposit evaporates, everybody’s pointing fingers.

Six Bullet Proof Ways To Get Listings Without Cold Calling

Does anyone actually like cold calling?  I’m definitely not a natural cold caller.  And I’m assuming there are a fair number of you out there who would rather generate listings through other methods.  So, I’m focusing on providing the best tactics for you get more listings, listing leads, and ultimately more money all without you having to do cold calling.

by Easy Agent Pro

1) Target Divorcees

targeting divorcee for real estate listings

This is a slightly taboo topic but presents a great opportunity for agents looking for listings.  Did you know that most judges mandate that couples sell their current property?  This is part of the reason for the huge number of divorcees that list their homes each year!

Over 31% of people going through a divorce will list their home within 6 months of filing for their divorce.  This gives you a huge opportunity!  Not only can you list their property, but you can garner two buyers from the transaction.

If 31% of people going through a divorce end up selling their home and there are 1.2 million divorces in the United States a year, that means over 300,000 people list their home within 6 months of filing.

That’s a lot of transactions in a very short period of time! And a list of VERY motivated sellers.

There is very little competition for being the divorce listings expert! You can easily setup Facebook ads like this that target these home sellers:

get home listings without cold calling

And then use landing pages to collect their contact information:

This method will make you the divorce listings expert in no time! You should even place a section on your website or blog about this topic to start collecting leads.

2) Inherited Homes

inherited homes for real estate listings

Did you know that over 1 million people inherit a home every year?  That’s an amazing opportunity for agents!

Think about it, would you want to move into a home that you recently inherited?  Probably not. It might not be in the right location. Maybe it needs too many repairs.  A huge majority of these new homeowners end up selling the property.

You need to target these people! And here’s how:

1) You’ll first want to find an online search for all the local cases in your county.  This is typically held on a “county clerk’s” website. And you are looking for cases in regards to “inheritance.” A simple Google search will do the trick:

get listings without cold calling

Then, you’ll have access to search public data and records.  You should be able to secure the name of the former property owner. At this point, you head over to YellowPages and click “Search People.”  Enter the person’s name into the form:

get listings

You should be able to find the address of the property that was recently inherited.  Now, simply prospect away!

Another tactic for attracting sellers of inherited properties is through Real Estate Farming.  You can learn how to farm in real estate with SEO here.

3) Send Letters To FSBO

get real estate listings fsbo

Do you mail FSBO’s?  I’m sure a lot of you answered yes to that question.  But how many of you have a pre-thought out series of mailers that you send once every 4-7 days?  The percentage of realtors that follow up with their mailer is very small.  In fact, over 65% of sales people never follow up with a marketing idea.

That’s bad.  It takes between 5 and 12 points of contact for someone to be interested in doing business with you.  You have to nurture these people along and get them warm to the idea of doing business with you.  One way of doing this is sending FSBO’s a series of mailers.  How many pain points does the typical prospecting session for FSBO’s contain? It’s usually 3-7 different pain points!  You can think of 5 different things you’d like to explain to a FSBO, write them out in letter format, and then mail them to the home owner.

The marketing costs for this are incredibly low!  Maybe 5 stamps, a Real Estate Logo, and some paper?  The thing with FSBO’s is that they’ve probably been burned by a realtor before.  So, you’re instantly standing out from the crowd by being the most persistent person out there.

I can’t stress enough the value of following up with your marketing actions.  This is the key to experiencing great success in real estate.

4) Vacant Homes

vacant homes for real estate listings

The US Census Bureau shows that there were 104 million vacant homes at the end of the 1st quarter in 2014.  By the end of the second quarter, there were only 93.2 million vacant homes.  By the end of the third quarter, 96.1 vacant homes. And by the end of the fourth quarter, 94.5 vacant homes.

That’s a lot of transactions taking place!

If I were a realtor, I’d hire an admin or local college student to help prospect vacant homes.  You can pay them hourly or work out a commission based arrangement for finding properties.  This way, you save your time while still being the first realtor to find the vacant properties!  Once you find them, it’s just a matter of time before the previous homeowner wants to sell.

You can use your local county clerk’s website to prospect for homes that might be vacant.

5) Look Into Property Taxes

property taxes for real estate listings

Speaking of the county clerk’s website again, you can research homes that are behind in paying their property taxes while you are there!  These houses give you an enormous opportunity! Did you know that over 23% of homes that are sold in any given year have some type of back tax to pay?

The fact that this many sellers are behind on property taxes is a critical determining factor in finding motivated sellers!  You can prospect for these buyers in several ways.

1) Launch a niche SEO Campaign for keywords related to property taxes and selling your home.  Look at this:

low seo competition

2) Start advertising online: Google Adwords and Facebook ads are very expensive if you target: Dallas Homes For Sale.  But if you’re targeting “Sell A Home Quickly In Dallas Due To Taxes” there is a lot less competition!

3) Mail Individuals You Find On The Clerk’s Website: You can create a series of mailers you send to people who are behind on their taxes!

6) Partner With Small Local Banks Or Small Builders

get real estate listings

Finally, you aren’t in this battle alone!  Small local banks, builders, mortgage providers, plumbers, electricians, marriage counselors, dentists, etc., etc., etc. are all looking for business just like you.  They are entrepreneurs looking to grow their businesses.  And most of them probably wouldn’t mind a realtor giving them referrals.  Why not start with the YellowPages and find a business in each major category to be your recommended provider?

Now, this won’t help you if you just spend 1 hour once talking with that person.  Be sure to put them into your CRM, and follow up with them every month.  Maybe even get coffee with them once a month.  Figure out concrete ways for the two of you to work together! Incorporate this spirit of working together into your entire real estate brand and real estate slogans.

 

Low Mortgage Rates Are Killing the Real Estate Industry

Source: Wolf Street

“Mortgage Rates need to go up. There it is. They do. These rates are killing the industry. The DC Real Estate Market is the Poster Child for why interest rates need to go up.”

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Since the beginning of this year, I have lost two clients to the decision to rent for another year. I have written 11 contracts for would-be home buyers, and I have only been able to secure two of those contracts. I promise this is not because I’m a horrible agent. It is because I have a conscience, and I don’t let clients do stupid things on my watch.

The bidding wars are insane and when the going gets tough, I advise people to take their money and keep looking. I realize that steering people away from buying houses and wishing rates would go up makes me the anti-Agent, but flying with the pack is overrated.

It is profoundly problematic for interest rates to stay so low for this long. The primary reason is that it shifts demand and supply into different time frames instead of letting the economy adjust and self-correct.

Buyers live in “today,” and if they think rates will go up, they panic. If rates tick up an eighth of a point, they feel robbed and cheated. They lament the fact that they didn’t get the house they bid on last week. Then, a few days pass, and rates drop back down, and they kick up their feet and start singing again. They run back out to see more houses. Feeling the looming threat of a rate increase again, they scramble to buy something – anything, just to lock in the low rate. Operating solely out of fear of a rate hike, they become desperate. They make the mistake of overpaying.

We see it every single day, but it bears repeating: low rates encourage desperate buyers to bid prices up, sometimes to an unrealistic number. The demand of the future is effectively robbed because next year’s home buyer is buying now.

That desperate buyer out there? They are not the only one. There are plenty of others, competing for homes and driving prices up, all in the name of interest rates and not necessarily because of real need. Many of these buyers will get homes that need work, are imperfect, are not in desirable areas, because it was all they could get, and they wanted to lock in while the rates were low.

Instead of a balanced market where these less than desirable homes sell for lower prices, the low rates make even the duds look better. Two more problems stem from this scenario.

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First, these homes will still be duds in several years unless the location magically improves or the owner renovates to make the home more desirable. When markets are more balanced, buyers aren’t interested in these homes if they can get one in a better area or better condition for a similar price.

Second, many of the homes purchased today would be on the market again in 5-10 years due to normal changes in people’s lives that require them to sell. If prices stabilize or even slide when this looming rate hike hits, anyone who overpaid will be faced with three options: sell for a loss (which many won’t do), stay, or rent the house to someone else. So now the supply for the future is compromised too.

Many of today’s home sellers have locked in or refinanced at low rates and can make money if they rent. They can move on to another house and let their current one become an investment. And look at that! They don’t even have to refinance to loan-to-value ratios of 75% that are required of investors.

If they recently refinanced while this was their primary home, they can have a much higher loan-to-value ratio than if they were to purchase the same house at the same price but strictly as an investment. Why sell? Seems like a home run to just rent it, which many do, so they can take some monthly cash flow with them and move on. So there’s another house that will not be on the market for sale this spring.

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There are also cases where people need or want to move, but are priced out of buying anything else. I recently had a chat with someone who asked my advice on this issue. Because of a schooling situation with their child, they were considering moving from Maryland to Virginia for several years, then moving back and wanted to know what they could sell their house for. I asked why they would sell it, given the costs of selling, moving, buying, selling again, and moving back. They wisely noted, “Yes, and in 3 years, we probably couldn’t afford our neighborhood again since we really couldn’t afford to buy again right now.”

I stopped them from four needless transactions and advised them to rent their home out and rent a place to live so they could come back to their home when they were ready. Well, there’s another four transactions that won’t be happening in the next decade. And I’m not sorry.

After this weekend of house tours, I’ll be writing 5 contracts for 2 different clients with the hopes that they each walk away with a house. Crossing my fingers. And I’ve told both of these clients as well as all my others: things are looking too unstable for the near future and not to plan on selling in the next 10 years. They need to buy the best house they can get for the best deal possible, not be afraid to walk away from overpriced homes, and not get into a bidding war. If they can commit to that, they stand a chance of making a decent investment.

By Melissa Terzis, Realtor, City Chic Real Estate, Washington, DC

Tenants Benefit When Rent Payment Data Are Factored Into Credit Scores

by Kenneth R. Harney | LA Times

It’s the great credit divide in American housing: If you buy a home and pay your mortgage on time regularly, your credit score typically benefits. If you rent an apartment and pay the landlord on time every month, you get no boost to your score. Since most landlords aren’t set up or approved to report rent payments to the national credit bureaus, their tenants’ credit scores often suffer as a direct result.

All this has huge implications for renters who hope one day to buy a house. To qualify for a mortgage, they’ll need good credit scores. Young, first-time buyers are especially vulnerable — they often have “thin” credit files with few accounts and would greatly benefit by having their rent histories included in credit reports and factored into their scores. Without a major positive such as rent payments in their files, a missed payment on a credit card or auto loan could have significant negative effects on their credit scores.

You probably know folks like these — sons, daughters, neighbors, friends. Or you may be one of the casualties of the system yourself, a renter with a perfect payment history that creditors will never see when they pull your credit. Think of it this way and the great divide gets intensely personal.

But here’s some good news: Growing numbers of landlords are now reporting rent payments to the bureaus with the help of high-tech intermediaries who set up electronic rent-collection systems for tenants.

One of these, RentTrack, says it already has coverage in thousands of rental buildings nationwide, with a total of 100,000-plus apartment units, and expects to be reporting rent payments for more than 1 million tenants within the year. Two others, ClearNow Inc. and PayYourRent, also report to one of the national bureaus, Experian, which includes the data in consumer credit files. RentTrack reports to Experian and TransUnion.

Why does this matter? Two new studies illustrate what can happen when on-time rent payments are factored into consumers’ credit reports and scores. RentTrack examined a sample of the tenants in its database and found that 100% of renters who previously were rated as “unscoreable” — there wasn’t enough information in their credit files to evaluate — became scoreable once they had two months to six months of rental payments reported to the credit bureaus.

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Tenants who had scores below 650 at the start of the sampling gained an average of 29 points with the inclusion of positive monthly payment data. Overall, residents in all score brackets saw an average gain of 9 points. The scores were computed using the VantageScore model, which competes with FICO scores and uses a similar 300 to 850 scoring scale, with high scores indicating low risk of nonpayment.

Experian, the first major credit bureau to begin integrating rental payment records into credit files, also completed a major study recently. Using a sample of 20,000 tenants who live in government-subsidized apartment buildings, Experian found that 100% of unscoreable tenants became scoreable, and that 97% of them had scores in the “prime” (average 688) and “non-prime” (average 649) categories. Among tenants who had scores before the start of the research, fully 75% saw increases after the addition of positive rental information, typically 11 points or higher.

Think about what these two studies are really saying: Tenants often would score higher — sometimes significantly higher — if rent payments were reported to the national credit bureaus. Many deserve higher credit scores but don’t get them.

Matt Briggs, chief executive and founder of RentTrack, says for many tenants, their steady rent payments “may be the only major positive thing in their credit report,” so including them can be crucial when lenders pull their scores.

Justin Yung, vice president of ClearNow, told me that “for most [tenants] the rent is the largest payment they make per month and yet it doesn’t appear on their credit report” unless their landlord has signed up with one of the electronic payment firms.

Is this something difficult or complicated? Not really. You, your landlord or property manager can go to one of the three companies’ websites (RentTrack.com, ClearNow.com and PayYourRent.com), check out the procedures and request coverage. Costs to tenants are either minimal or zero, and the benefits to the landlord of having tenants pay rents electronically appear to be attractive.

Everybody benefits. So why not?

kenharney@earthlink.net Distributed by Washington Post Writers Group. Copyright © 2015, Los Angeles Times

Dreaming Big: Americans Still Yearning for Larger Homes

by Ralph McLaughlin | Trulia

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43% of adults would prefer homes bigger than where they currently live, but attitudes differ by age. Baby boomers would prefer to upsize rather than downsize by only a small margin, while the gap among millennials is much wider, with GenXers falling in between. Would-be downsizers outnumber upsizers only among households living in the largest homes.

Last year, we found that Baby Boomers were especially unlikely to live in multi-unit housing. At the same time, we noted that the share of seniors living in multi-unit housing rather than single-family homes has been shrinking for decades. These findings got us thinking about how the generations vary in house-size preference. So we surveyed over 2000 people at the end of last year to figure out if boomers have different house-size preferences than their younger counterparts. And that led us to ask: What size homes do Americans really want?

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Most Americans are not living in the size home they want

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As a whole, Americans are living in a world of mismatch – only 40% of our respondents said they are living in the size home that’s ideal. Furthermore, over 43% answered that the size of their ideal residence is somewhat or much larger than their current digs. Only 16% told us that their ideal residence is smaller than their existing home. However, these overall figures mask what is going on within different generations.

It’s natural to think that baby boomers are the generation most likely to downsize.  After all, their nests are emptying and they may move when they retire.  As it turns out though, more boomers would prefer to live in a larger home than a smaller one: 21% said their ideal residence is smaller than their current home, while 26% wanted a larger home – a 5-percentage-point difference. Clearly, boomers don’t feel a massive yearn to downsize. On the contrary, just over half (53%) said they’re already living in their ideally sized home. Nonetheless, members of this generation are more likely to want to downsize than millennials and GenXers.

In fact, those younger generations want some elbow room. First, the millennials. They’re looking to move on up by a big margin: just over 60% told us their ideal residence is larger than where they live now – the largest proportion among the generations in our sample. By contrast, only a little over 13% of millennials said they’d rather have a smaller home than their existing one – which is also the smallest among the generations in our sample. The results are clear: millennials are much more likely to want to upsize than downsize.

The next generation up the ladder, the GenXers, are hitting their peak earning years and many in this group may be in a position to trade up. Many aren’t living in their ideally sized home. Just 38% said where they live now is dream sized. Nearly a majority (48%) said their dream home is larger, while only 14% of GenXers would rather have a smaller home.  This is the generation that bore the brunt of the foreclosure crisis. So, some of this mismatch could be because a significant number of GenXers lost homes during the housing bust and may now be living in smaller-than-desired quarters. But a much more probable reason is that many GenXers are in their peak child-rearing years. With kids bouncing off the walls, the place may be feeling a tad crowded.

Even the groups that seem ripe for downsizing don’t want smaller homes

Of course, age doesn’t tell the whole story about why people might want to downsize. It could be that certain kinds of households, – such as those without children, and living in the suburbs or in affordable areas – might be more likely to live in larger homes than they need. But our survey shows that households in these categories are about twice as likely to want a larger than a smaller home. For those with kids especially, the desire to upsize is strong: 39% preferred a larger home versus 18% who liked a smaller home.  For those living in the suburbs, the disparity is even greater – 42% to 16%. And even among those living in the most affordable zip codes, where ideally-sized homes might be within the budgets of households, 40% of our respondents preferred larger homes versus 20% who said smaller.

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Are all households more likely to upsize than downsize?

At this point you might be asking, “Are there any types of households that want to downsize?” The answer is yes. But only one kind of household falls into this category – those living in homes larger than 3,200 square feet.  Of this group, 26% wanted to downsize versus 25% that wanted to upsize – a slight difference. But, when we looked overall at survey responses based on the size of current residence, households wanting a larger home kicked up as current home size went down. We can see this clearly when we divide households into six groups based on the size of the home they’re living in now. Among households living in 2,600-3,200 square foot homes, 37% prefer a larger home versus 16% a smaller home; in 2,000–2,600 square foot homes, its 34% to 18%; 38% to 18% in 1,400–2,000 square foot homes; 55% to 13% in 800–1,400 square foot homes; and 66% to 13% in homes less than 800 square feet. This makes intuitive sense.  Those living in the biggest homes are most likely to have gotten a home larger than their ideal size. And those in the smallest homes are probably the ones feeling most squeezed.

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The responses to our survey show significantly more demand for larger homes than for smaller ones. But the reality, of course, is that households must make tradeoffs between things like accessibility, amenities, and affordability when choosing what size homes to get. The “ideal” sized home for most Americans may be larger than where they’re living now. But that spacious dream home may not be practical.  As result, the mismatch between what Americans say they want and what best suits their circumstances may persist.

Increasing Rent Costs Present a Challenge to Aspiring Homeowners

https://i0.wp.com/dsnews.com/wp-content/uploads/sites/25/2013/12/rising-arrows-two.jpgby Tory Barringer

Fast-rising rents have made it difficult for many Americans to save up a down payment for a home purchase—and experts say that problem is unlikely to go away any time soon.

Late last year, real estate firm Zillow reported that renters living in the United States paid a cumulative $441 billion in rents throughout 2014, a nearly 5 percent annual increase spurred by rising numbers of renters and climbing prices. Last month, the company said that its own Rent Index increased 3.3 percent year-over-year, accelerating from 2013 even as home price growth slows down.

Results from a more recent survey conducted by Zillow and Pulsenomics suggest that rent prices will continue to be a problem for the aspiring homeowner for years to come.

Out of more than 100 real estate experts surveyed, 51 percent said they expect rental affordability won’t improve for at least another two years, Zillow reported Friday. Another 33 percent were a little more optimistic, calling for a deceleration in rental price increases sometime in the next one to two years.

Only five percent said they expect affordability conditions to improve for renters within the next year.

Despite the challenge that rising rents presents to home ownership throughout the country, more than half—52 percent of respondents—said the market should be allowed to correct the problem on its own, without government intervention.

“Solving the rental affordability crisis in this country will require a lot of innovative thinking and hard work, and that has to start at the local level, not the federal level,” said Zillow’s chief economist, Stan Humphries. “Housing markets in general and rental dynamics in particular are uniquely local and demand local, market-driven policies. Uncle Sam can certainly do a lot, but I worry we’ve become too accustomed to automatically seeking federal assistance for housing issues big and small, instead of trusting markets to correct themselves and without waiting to see the impact of decisions made at a broader local level.”

On the topic of government involvement in housing matters: The survey also asked respondents about last month’s reduction in annual mortgage insurance premiums for loans backed by the Federal Housing Administration (FHA). The Obama administration has projected that the cuts will help as many as 250,000 new homeowners make their first purchase.

The panelists were lukewarm on the change: While two-thirds of those with an opinion said they think the changes could be “somewhat effective in making homeownership more accessible and affordable,” just less than half said the new initiatives are unwise and potentially risky to taxpayers.

Finally, the survey polled panelists on their predictions for U.S. home values this year. As a whole, the group predicted values will rise 4.4 percent in 2015 to a median value of $187,040, with projections ranging from a low of 3.1 percent to a high of 5.5 percent.

“During the past year, expectations for annual home value appreciation over the long run have remained flat, despite lower mortgage rates,” said Terry Loebs, founder of Pulsenomics. “Regarding the near-term outlook, there is a clear consensus among the experts that the positive momentum in U.S. home prices will continue to slow this year.”

On average, panelists said they expect median home values will pass their precession peak ($196,400) by May 2017.

Inaccurate Zillow ‘Zestimates’ A Source Of Conflict Over Home Prices

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By Kenneth R. Harney

When “CBS This Morning” co-host Norah O’Donnell asked the chief executive of Zillow recently about the accuracy of the website’s automated property value estimates — known as Zestimates — she touched on one of the most sensitive perception gaps in American real estate.

Zillow is the most popular online real estate information site, with 73 million unique visitors in December. Along with active listings of properties for sale, it also provides information on houses that are not on the market. You can enter the address or general location in a database of millions of homes and probably pull up key information — square footage, lot size, number of bedrooms and baths, photos, taxes — plus a Zestimate.

Shoppers, sellers and buyers routinely quote Zestimates to realty agents — and to one another — as gauges of market value. If a house for sale has a Zestimate of $350,000, a buyer might challenge the sellers’ list price of $425,000. Or a seller might demand to know from potential listing brokers why they say a property should sell for just $595,000 when Zillow has it at $685,000.

Disparities like these are daily occurrences and, in the words of one realty agent who posted on the industry blog ActiveRain, they are “the bane of my existence.” Consumers often take Zestimates “as gospel,” said Tim Freund, an agent with Dilbeck Real Estate in Westlake Village. If either the buyer or the seller won’t budge off Zillow’s estimated value, he told me, “that will kill a deal.”

Back to the question posed by O’Donnell: Are Zestimates accurate? And if they’re off the mark, how far off? Zillow CEO Spencer Rascoff answered that they’re “a good starting point” but that nationwide Zestimates have a “median error rate” of about 8%.

Whoa. That sounds high. On a $500,000 house, that would be a $40,000 disparity — a lot of money on the table — and could create problems. But here’s something Rascoff was not asked about: Localized median error rates on Zestimates sometimes far exceed the national median, which raises the odds that sellers and buyers will have conflicts over pricing. Though it’s not prominently featured on the website, at the bottom of Zillow’s home page in small type is the word “Zestimates.” This section provides helpful background information along with valuation error rates by state and county — some of which are stunners.

For example, in New York County — Manhattan — the median valuation error rate is 19.9%. In Brooklyn, it’s 12.9%. In Somerset County, Md., the rate is an astounding 42%. In some rural counties in California, error rates range as high as 26%. In San Francisco it’s 11.6%. With a median home value of $1,000,800 in San Francisco, according to Zillow estimates as of December, a median error rate at this level translates into a price disparity of $116,093.

Some real estate agents have done their own studies of accuracy levels of Zillow in their local markets.

Last July, Robert Earl, an agent with Choice Homes Team in the Charlottesville, Va., area, examined selling prices and Zestimates of all 21 homes sold that month in the nearby community of Lake Monticello. On 17 sales Zillow overestimated values, including two houses that sold for 61% below the Zestimate.

In Carlsbad, Calif., Jeff Dowler, an agent with Solutions Real Estate, did a similar analysis on sales in two ZIP Codes. He found that Zestimates came in below the selling price 70% of the time, with disparities ranging as high as $70,000. In 25% of the sales, Zestimates were higher than the contract price. In 95% of the cases, he said, “Zestimates were wrong. That does not inspire a lot of confidence, at least not for me.” In a second ZIP Code, Dowler found that 100% of Zestimates were inaccurate and that disparities were as large as $190,000.

So what do you do now that you’ve got the scoop on Zestimate accuracy? Most important, take Rascoff’s advice: Look at them as no more than starting points in pricing discussions with the real authorities on local real estate values — experienced agents and appraisers. Zestimates are hardly gospel — often far from it.

kenharney@earthlink.net Distributed by Washington Post Writers Group.

Millennials Are Finally Entering The Home Buying Market

First-time buyers Kellen and Ben Goldsmith are shown in their new town home, which they purchased for $620,000 in Seattle’s Eastlake neighborhood. (Ken Lambert / Tribune News Service.  Authored by Kenneth R. Harney

Call them the prodigal millennials: Statistical measures and anecdotal reports suggest that young couples and singles in their late 20s and early 30s have begun making a belated entry into the home-buying market, pushed by mortgage rates in the mid-3% range, government efforts to ease credit requirements and deep frustrations at having to pay rising rents without creating equity.

Listen to Kathleen Hart, who just bought a condo unit with her husband, Devin Wall, that looks out on the Columbia River in Wenatchee, Wash.: “We were just tired of renting, tired of sharing with roommates and not having a place of our own. Finally the numbers added up.”

Erin Beasley and her fiance closed on a condo in the Capitol Hill area of Washington, D.C., in January. “With the way rents kept on going,” she said, “we realized it was time” after five years as tenants. “With renting, at some point you get really tired of it — you want to own, be able to make changes” that suit you, not some landlord.

Hart and Beasley are part of the leading edge of the massive millennial demographic bulge that has been missing in action on home buying since the end of the Great Recession. Instead of representing the 38% to 40% of purchases that real estate industry economists say would have been expected for first-timers, they’ve lagged behind in market share, sometimes by as much as 10 percentage points. But new signs are emerging that hint that maybe the conditions finally are right for them to shop and buy:

• Redfin, a national real estate brokerage, said that first-time buyers accounted for 57% of home tours conducted by its agents mid-month — the highest rate in recent years. Home-purchase education class requests, typically dominated by first-timers, jumped 27% in January over a year earlier. “I think it is significant,” Redfin chief economist Nela Richardson said. “They are sticking a toe in the water.”

• The Campbell/Inside Mortgage Finance HousingPulse Tracking Survey, which monthly polls 2,000 realty agents nationwide, reported that first-time buyer activity has started to increase much earlier than is typical seasonally. First-timers accounted for 36.3% of home purchases in December, according to the survey.

• Anecdotal reports from realty brokers around the country also point to exceptional activity in the last few weeks. Gary Kassan, an agent with Pinnacle Estate Properties in the Los Angeles area, says nearly half of his current clients are first-time buyers. Martha Floyd, an agent with McEnearney Associates Inc. Realtors in McLean, Va., said she is working with “an unusually high” number of young, first-time buyers. “I think there are green shoots here,” she said, especially in contrast with a year ago.

Assuming these early impressions could point to a trend, what’s driving the action? The decline in interest rates, high rents and sheer pent-up demand play major roles.

But there are other factors that could be at work. In the last few weeks, key sources of financing for entry-level buyers — the Federal Housing Administration and giant investors Fannie Mae and Freddie Mac — have announced consumer-friendly improvements to their rules. The FHA cut its punitively high upfront mortgage insurance premiums and Fannie and Freddie reduced minimum down payments to 3% from 5%.

Price increases on homes also have moderated in many areas, improving affordability. Plus many younger buyers have discovered the wide spectrum of special financing assistance programs open to them through state and local housing agencies.

Hart and her husband made use of one of the Washington State Housing Finance Commission’s buyer assistance programs, which provides second-mortgage loans with zero interest rates to help with down payments and closing costs. Dozens of state agencies across the country offer help for first-timers, often with generous qualifying income limits.

Bottom line: Nobody knows yet whether or how long the uptick in first-time buyer activity will last, but there’s no question that market conditions are encouraging. It just might be the right time.

kenharney@earthlink.net Distributed by Washington Post Writers Group. Copyright © 2015, LA Times

Avoid these common sales presentation mistakes

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by Rosalie Berg

A sales presentation can make or break your business. You can spend days or weeks preparing for a sales pitch, but if it’s done incorrectly, it will fall on deaf ears. Here are five mistakes to avoid making at all costs:

1. Quickly dive into your speech

This might be one of the worst standard practices in business: salespeople start their meeting with introductions, proceed with a company overview and then dive into their sales pitch. By doing so, they’ve missed a huge opportunity to get to know the prospect. Instead, it’s best to start with an open discussion, and end with a presentation — not the other way around.

The focus of a sales meeting should be on getting to know the prospect, their challenges and their goals. Only after asking a lot of questions and understanding the prospect should a salesperson talk about what they are selling.

2. Make a lackluster first impression

It seems like most companies expect their salespeople to be talented writers and artists, too. These poor salespeople go to see prospects armed with decks that are dull and unimpressive. From there, it’s an uphill battle to win over the prospect. Why skimp on this very important detail? A great artist can create a killer presentation deck sure to wow every prospect you face. In fact, of all the marketing materials we create or edit, few are as critical as the sales deck.

3. Focus on canned features and benefits

Most salespeople think that talking about how great their company, product or service is will help them sell. But it won’t. Prospects don’t buy products or services. They invest in answers to their problems. If you can show them how your product solves their challenges better than anyone else, you’ll have a sale.

4. Give lengthy slide presentations

Some confuse Power Point slides with brochures. This is not the place for a dissertation. Today’s business executives are far too busy for long presentations. They want to get the key reasons why they should be interested and how much it will cost them.

5. Talk, talk, talk

Yes, this is a presentation, but it need not be a monologue. Ask your prospect questions and get their commentary during your presentation. Not only will it show your prospects you take interest in their thoughts, but it will help you tailor the presentation to their needs and keep them engaged.

Above all, don’t underestimate the huge importance of a sharp looking sales deck. Work with a talented writer and artist to help you create it. Once you’ve nailed it, you’ll be able to customize it and impress prospects for months ahead.