Posts Tagged as For Buyers

Foreclosed on Buyers are Re-entering the Market

2018 Will Be All About Buyers Reentering the Buying Market After a Foreclosure

They may have lost their house to foreclosure, but they didn’t lose the desire to own their own home. Between 2006 and 2014, approximately 12.8 million homes entered the foreclosure process; almost 30 percent of all households with a mortgage. Of those, 9.3 million borrowers went through foreclosure, short sold their home, or received a deed in lieu, according to the National Association of Realtors.

Referred to as “boomerang buyers,” this segment of the housing market understands much of the home buying process and likely will be more reasonable about their next purchase decision than many first-time buyers.

Why boomerang buyers will drive 2018 real estate trends

The wave of foreclosures peaked in 2010. Almost 2 million borrowers who had their credit damaged by foreclosure have now passed the seven-year waiting period. According to Fannie Mae’s Waiting Periods and Re-establishing Credit standards, millions of boomerang buyers are capable of buying another home. Borrowers who are able to document extenuating circumstances can reduce their wait time to as little as three years.

The housing market has been slow to recover in large part because boomerang buyers have been slow to buy another home. Not all of those who lost a home during the housing market collapse will buy again. Many would like to but aren’t sure about their capability to obtain another mortgage.

Marketing to boomerang buyers

Establish yourself as the Realtor who understands them and their circumstances. Utilize testimonials to show you can help them again realize their dream of homeownership. There have always been boomerang buyers, but never a pool of potential boomerang buyers this large.

Speak directly to them in your newsletter and on your social media channels. You know they once owned a home and are now renting. Talk up the benefits of owning a home over renting and offer information on available loan programs. Those who still desire to own a home will contact you.

What is Compass and Why Is It In the News?

What Will a Trump Presidency Look Like for Real Estate?

In his next 4 years as president, Donald Trump could have a major impact on real estate selling across the U.S. Licensed real estate brokers and agents nationwide are looking to Trump and how his time in office could change their industry.
What are some possible outcomes of the Trump presidency?
Trump has centered his platform around deregulation to further the recovery of the financial market, and there are a host of changes that could be made that would affect real estate sales…
• Lower premiums.
While Trump hasn’t articulated much on his housing platform, he has expressed interest in boosting home ownership and cutting fees for Fannie Mae and Freddie Mac. Lowering premiums for FHA loans could offer the boost consumers need to make owning a home an affordable reality.
• Potential reforms.
Fannie and Freddie could also be on the chopping block for cutbacks, alongside such programs as the Low Income Housing Tax Credit and Section 8 housing vouchers.
• Loosening lending regulations.
Trump, alongside the Republican party, have been vocal about changing banking regulations, including significantly altering the Consumer Financial Protection Bureau (CFPB) and the Dodd-Frank Act’s regulations on lenders to replace it with something else that would allow for easier securement of home loans.
• Preservation of mortgage interest tax deductions.
Trump explicitly stated his desire to preserve mortgage interest deduction in a tax plan he shared last year. However, his current plan has yet to detail this issue.
• Construction deregulation.
In Trump’s August meeting with the National Association of Home Builders, he pointed to over regulation in the industry, with some 25% of costs to build a home tied to regulations, and announcing his desire to get that down to 2%. This alone could greatly lower the costs of real estate selling and home ownership.
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Promote Yourself by Video to Increase Exposure and Sales

Will Opendoor Revolutionize Real Estate Buying?

A new, Phoenix-based real estate tech start-up is making its mark in real estate trends for 2016. Making “instant offers,” Opendoor is snapping up homes in a matter of days, then turning around to flip the properties for profit.

How does it work?
Opendoor touts its simplification of the home selling process, leaving behind the repeated cleanings, showings, and strangers traipsing through your home with a typical sale. But their biggest advantage is time savings. Fill out a fast, free survey listing the unique facets of your home, and Opendoor will send you a competitive offer based on this and a comparative market analysis. If you accept, they confirm with a free home inspection, then you choose your move-out date, anywhere from 3-60 days following contract. Opendoor even arranges escrow.

What do customers think?
Opendoor’s website is packed with positive customer reviews, including an AAA “A-rating” and an impressive 4.1 of 5 stars in Google reviews.

Is it making any money?
According to Wall Street Journal, the company made $80 million in October in a third funding round led by Access Industries owner and billionaire Len Blavatnik. Valued by the investor at roughly $580 million, as of mid-December, Opendoor had purchased and sold more than 200 homes at an estimated profit of between $10,000-15,000 per home. This includes the approximately 9% in fees earned from sellers, less the costs of reselling the home.

Where is it opening its doors to home sellers?
After a successful launch in Phoenix, Opendoor is now live in its second market: Dallas, with plans to expand as its funds allow. Will the company move beyond real estate trends for 2016 in their quest to take-on additional markets? Only time will tell.

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What Does the Average Home Buyer Look Like?

Tips for Buyer’s Agents to Countering Over the Asking Price Sales

Sellers coming back with over-asking price counteroffers typically create a lot of drama. Though it may come to a surprise to many buyers, there are many reasons a seller may decline a full price offer. Do you have the right real estate buying tips to help your buyers navigate these shark infested waters?

Take a bite out of emotion
Buyers, who become emotionally attached, picturing themselves in homes, need to be brought back to some rationality, specifically:

  • The MLS doesn’t guarantee prices like an area superstore, it’s a listing service for the industry, holding participants to certain standards, and protecting commissions.
  • The owner, not the agency, makes the decision on final sales price.
  • You do not know, nor do they have to disclose, the financial situation of the seller.
  • The owner may not have ‘changed their mind’ or thought they could get more following full price offers. Homes are often listed, underpriced, at 5-10% to generate over-asking price offers.
  • The seller may have another offer, or be unhappy with the terms.
  • The property may be recently listed, generating high-interest.

Must buyers accept?
No. In this awkward situation, created by the seller, they can…

  • Walk away.
  • Choose to put the offer in a back-up position.
  • Decide if it’s still an awesome deal.
  • Make a strong case for your offer (or counter-offer) with comparative market analysis data.

Life preserver
In future situations, heed these real estate buying tips for agents to prevent such antics. As the old saying about flies and honey: Making a positive impression on the listing agent and seller can work wonders, as can including financing pre-approval with offers – and a brief letter (The Jones enjoyed viewing your beautiful home and look forward to living in it with their 3 kids…).

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Our Secrets: Tips You'd Love to Share with Sellers

5 Good Reasons to Use a Real Estate Agent

Unless you are a realtor or retired agent, it’s not a smart idea and may cost you in real dollars. Here are 5 good reasons to use a real estate agent.

As the real estate industry continues to move online, and as buyers and sellers have increasingly easy access to real estate data and information, more and more buyers and sellers may decide to go it alone, without the help of a real estate professional. But unless you are a realtor or a retired agent, it’s not generally a smart idea and may cost the home seller in real dollars. Here are 5 good reasons to use a real estate agent. Drumroll, please …

Split the check. Really, the major reason people choose to buy and sell homes without a professional comes down to money. They want to save on commission. But what if buyer AND seller are playing this game? The sale price of a home takes an agent’s commission into account. Comps on houses in your area are made on houses that overwhelmingly are sold by agent. But if they buyer is also going agent-free, they’ll likely offer down, because they know the agent’s fee isn’t necessary. Buyer and seller can’t collect the unpaid commission. Someone’s going to lose.

Don’t you already have a full time job? Selling or buying property can be extremely time intensive. There is a lot of research to begin, home viewing, deal making, negotiating, etc. Whether you work outside the home or not, unlike a professional realtor, I can bet you aren’t working the real estate circuit 40+ hours a week. A qualified agent has access to properties and agents you don’t, can track down and vet houses that meet your specifications, schedule appointments and play phone tag on your behalf. Selling without an agent is even more time consuming and a lot less fun. You have to solicit all the calls from potential buyers, someone weed out the looky-loos, answer questions, show viewers through your home, prep and stage, and more. What happens if the home doesn’t sell in a timely fashion? It starts to get a bad rep. Not worth it.

Did you captain the debate team in high school? Negotiating is tricky business. Sellers often have a lot of personal attachment and can’t see things outside of that bias. Buyers may not feel confident about speaking up when they see a potential issue. Or they may feel overly confident and do damage when they simply want to criticize what they see as hideous decorating techniques. Agents can represent your interests, leaving the parties with emotional involvement right out of the thick of things. Deals have gone dead over insults, real or imagined. Let your agent play the bad cop, if necessary. Let them schmooze, too.

It’s a trust thing. Your agent, if working under a conventional, full-service commission agreement, is bound by law to work in your best interests. Now that doesn’t mean all agents are created equal and all are equally trustworthy. But it does mean that you have recourse if something goes wrong. Your agent is responsible to his broker or professional association and to the state in which he is licensed. What’s more, your agent probably got your business based on referral. And he or she will count on you to do the same. This is further incentive, beyond the legal obligation, to put your needs first when it comes to buying or selling a home. On the other hand, if you buy from a FSBO and you’re without an agent, you have two people working for their own interests, with much less holding them to honesty and accountability. Hiring a lawyer later is much more expensive than securing a real estate agent at the start.

Sign on the dotted line. Speaking of lawyers, you may need one if you choose not to use an agent or broker. Contracts are vital, and they aren’t always easy to understand. What if you fail to make financing one of the conditions of the sale, for instance, and then find you aren’t approved for the mortgage? The seller could sue you, could keep your deposit, and could derail your home buying dream. Using an agent ensures you have someone on your side well versed in real estate contracts who can look out for any red flags or potential pit falls and make sure you have everything you need secured and in writing from the get-go.

Real estate isn’t a simple business. Do yourself a favor and rely on a professional. Happy house hunting and selling!

Agents, please feel free to send this on to your clients or share it on your own blogs and social media (with proper credit). And let me know any other reasons you suggest home buyers and sellers use a real estate professional!