Tag archive for "Property Finance Trends" | Blog.PropertiesOnline.com

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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Which States Have the Highest and Lowest Closing Costs?

After would-be buyers scrounge up a down payment, secure financing, and negotiate a winning offer, many are left with sticker shock following the announcement of closing costs, a not-so-tiny detail amongst real estate trends of ever-climbing costs in property purchases.

All things being equal – closing costs are not
Overall, closing costs tend to run between 3% and 6% of purchase price. However given the cost of home appraisals, credit reports, attorney and numerous other fees, not to mention highly-variable title and homeowner’s insurance, buyers can find hundreds of dollars in difference between lenders – so regardless of state, it pays to shop around.

What states stick-it to home buyers the most?
Given a $200,000 home, a 20% down payment, and excellent credit, let’s take a look at real estate trends involving closing cost quotes from these top-5 notoriously expensive states…

• Hawaii
The highest average closing costs in the nation at $2,655. (Which in reality is infinitely more painful, as the island-state’s median listing price is in the $510,000 range.)

• New York
An average $2,560 in closing costs. (Average median home price $720,000 – yowsa!)

• North Carolina
Averaging $2,409 in closing costs. (Average median home price $144,600. Whew.)

• Delaware
Averaging $ 2,358 in closing costs. (Average median home price, $211,700. Not too shabby.)

• South Carolina
Averaging $2,322 in closing costs. (Average median home price, $139,500. A bargain!)

A helping hand
Keeping an ear out (or researching) lenders in your area (and online) with the lowest closing costs to pass on to buyers is in your best interest. Help them understand what costs include, so last minute budget-busters don’t sink sales. Also help them understand that in this market, it’s unlikely closing costs will be covered by sellers, who often have many other interested buyers.

Don’t let the latest real estate trends put a squeeze on your sales. Find the help you need to stay on top, only with Properties Online.

PART 1: Brokerage Alliances – What’s In It for You?

Brokerage alliances are among the top real estate trends touted by those heading major firms as a way to generate both buyer and seller leads, resulting in lucrative property sales. But what’s the real situation?

How they work:
Two different models for brokerage alliances exist, including…

Auction house models
- Sotheby’s
  Sold in 2004 to real estate services brand Realogy Holdings, the company pays Sotheby’s 9.5% of net royalties received from franchisees, or a minimum of $2 million a year, as part of a 100-year licensing agreement. Today, Realogy owns 43 Sotheby’s offices, and more than 780 franchises, which sold $70 billion worth of real estate (earning Sotheby’s $7.2 million in fees) in 2014.
- Christie’s
  Christie’s International’s real estate brokerage network is wholly-owned by the auction house. Local brokerages, a network of 138 firms in exclusive areas such as New York City, the Hamptons, and Palm Beach, pay a fee to be the exclusive affiliate in their market, as well as additional fees for such things as listing-specific advertising. Brokerages sign 1-3 year contracts to use the Christie’s name and tap into its referral and marketing network. Combined sales within the network earns between $100-125 billion each year. Clients can advertise in Christie’s brochures and the lobby at Rockefeller Center, and earn a standard 35% commission by referring clients to another Christie’s affiliate in the network.

Strategic alliances
Unlike auction house alliances, strategic alliances seek to better court foreign buyers, particularly in the luxury market, on the upsurge in the U.S. market in recent years. In order to draw global attention to domestic listings, allied firms often share marketing costs, jointly promote properties, and swap leads.

Is it worth it?
Learn more about this business model and the latest in real estate trends in the next installment of, “Brokerage Alliances – What’s in it for You,” only at Properties Online.