The Flip Flops Are Back: Real Estate Sees a Boom in House Flipping

This isn’t the year 2000, but with all the house flipping happening lately, you might find yourself a little confused as to what year it is.

CoreLogic released a new report that found consumers are back to the flipping business, but with a different tactic than they did during the housing boom.

Instead, short-term investors are adding more value to the property before reselling. CoreLogic explains, “We’ve seen growing signs that flippers are getting increasingly good at buying properties at a discount while the premium they’re selling for has remained mostly constant.”

The flipping rate in the U.S. was 10.9% of all home sales in the fourth quarter of 2018. The areas with the highest median returns on a flip rate were:

  • Detroit: 95.9%
  • Philadelphia: 92.8%
  • Pittsburg 75%
  • Cleveland: 70%
  • Akron, Ohio: 65.7%

CoreLogic will be focusing on what specific improvements were made on these properties, the costs of the work, and the net economic profits earned by flippers.

Dot the I’s and Cross the T’s: What are New Homeowners Not Doing?

Being a homeowner pros and cons list:

  • Pros: no more rent, build equity, paint and decorate how you want, and no neighbors above you!
  • Cons: it’s broken, you fix it.

A new survey from HomeServe USA found that 20% of homeowners do not have money put aside for an emergency home repair – and half of the respondents say they’ve had to complete an emergency project at some point in the past 12 months.

Financial experts agree that homeowners should save 1% of the home’s purchase price each year to cover ongoing home maintenance coasts. They also suggest having savings equal to at least 3-6 months of overall living expenses in an emergency fund.

While saving for a down payment is one battle, the next is making sure you’re able to fix any “uh-ohs” your dream home might experience.

Real Estate Tip of the Week: Working with Buyers on New-Home Construction

New-home construction has been the hot topic recently – and as a real estate agent, it’s crucial that you know the differences between selling a previously-owned home and one that is still being built.

Because builders will be represented by their own agent, buyers will need you to speak for them and look after their best interest.

Here are some quick tips when it comes to selling new construction:

Builder Contract

Real estate agents have the responsibility to fully understand the buyer’s rights and have them outlined in the contract. It might be a good idea to ask the builder’s sales contact to receive an extra copy of the legal documents. Look closely at deadlines that the buyer should be aware of.

Agents also need to talk with the builder to see exactly what will be included in the home. Let’s explain that further:

When your client toured the home, it was probably a model home. It was the high-end, tippy-top version of the “standard” home that will be offered. Touring the home with the builder, you should ask which options come with the home, which options are available, and which options are an additional cost.

Research

Speaking on the builder – it would be beneficial to actually know the builder. Each builder is different from the next; speak with past buyers and look for online reviews to get a better understanding of what they can offer.

Negotiate

This is a large part of your job, so it should come as no surprise that negotiating would be a major step in the new-home process. However, builders actually set a lot of the prices – some that you can’t necessarily debate. It’s important for you to explain this to your buyer. Builders are more likely to pay for closing costs or possibly offer design incentives before they drop prices.

Mortgages

Mortgage lenders are a bit more critical than normal when a buyer is purchasing an unfinished home. Because construction can take months before it’s completed, it poses as a risk; lenders usually can’t “lock in” an interest rate for more than 90 days in advance.

It’s important to know where the buyer is financially – so as to not waste time if the buyer cannot afford a mortgage if rates increase once the home is completed.

Helping sell new-home construction is exciting – but it should also be paired with patience and due diligence.

Millennials, Real Estate, and Outdoor Space – Oh My!

Wifi, Netflix, wine, and environmentally-friendly products.

If you advertise any of these, millennials will come.

While we do know a short list of products millennials go goo-goo-gaga over, one thing surprised us: having a lawn as the most important feature when renting or buying a home.

A recent poll done by the National Association of Landscape Professionals found that 82% of millennials cited lawns as their top pick when purchasing a home. Which might seem a bit shocking, considering the other stereotype millennials fall into is not wanting to engage in yard work.

But, the numbers prove us all wrong – millennials want the outdoor space. Here’s why:

  • 77% use their lawn space to relax at least once a week
  • 32% garden multiple times a week
  • 47% entertain in their yards at least once a month
  • 57% use their yards for recreation at least monthly

So millennials… like being outside??

While kitchen renovations can always be done at a later date, it looks like having a yard takes precedence when moving into a new home.

Balancing Inventory and Surging Prices in Real Estate

What goes up – is still going up.

Realtor.com®’s monthly housing trends report had a big headliner: the U.S. median home list price in March peaked at $300,000 for the first time ever. This also marks a price increase of 7% year over year.

Why is this happening, you might ask?

Many believe it’s due to the rise in inventory in the high-end market. Homes priced above $750,000 have continued to increase – up 11% year over year. This doesn’t help first-time homebuyers who are looking to enter the market.

Most first-time homebuyers are looking for homes priced at $200,000 or below (these are called entry-level homes) but this niche in the market has had a 9% decrease year over year, obviously making them harder to find and harder for people trying to purchase their first home.

Danielle Hale, realtor.com®’s chief economist, explains: “Heading into the spring, U.S. prices are expected to continue to rise and inventory is expected to continue to increase, but at a slower pace than we’ve seen in the last few months as fewer sellers want to contend with this year’s more challenging conditions.”

With 86% of first-time homebuyers being 28 years or younger, millennials are having to work hard at finding ways to purchase.

While it does seem promising that inventory is increasing – however slowly that might be – experts will have to keep an eye on the real estate market and hope entry-level homes begin increasing year over year.

Real Estate Tip of the Week: Communications Plan

Communication is key in any relationship – and when the relationship is between a real estate agent and a client, communication becomes even more vital.

To get the relationship off on the right foot, it’s important that you establish communication rules so your client understands your work, and you know what your clients wants.

How do you create one of these plans?

Method

Ask your client how they’d like to be reached – is it through phone, email, text, and/or social media? Communicating through whichever system they choose will help them become more receptive.

Frequency

Now that you’ve planned how they’d like to be reached, establish how often they’d like to hear from you. Should it be weekly, bi-weekly, monthly, or only when you have an important and urgent piece of information? Once you have this decided, both parties will have an understanding of how frequently they’ll be reached, so there isn’t any confusion left on the table.

Schedule

It’s important for your client to know what your work days look like. Let them know what days and hours you work – and if you have any “after work hours” – set a policy for what that looks like as well.

Calendar

Once you know their preferences, write out a specific time on the calendar when you’ll reach out to them and let them know. For example, if they said they would like to be reached weekly by phone, mark your calendar for every Thursday between 3pm and 5pm (or whichever day and time works for both of your schedules) and let them know that’s when they’ll be hearing from you.

Being a real estate agent means going above and beyond for your clients – and setting expectations for how you both will work wonders for your relationship.

These are Pawsitively the Best Cities for Dog Owners

Dogs are more than just pets – they’re family.

If you’re a dog parent, then you whole-heartedly agree with this phrase – and you try and provide the best possible care for your furry family member.

When it comes to where you live, your dog has become the number one priority. With three quarters of homebuyers passing up on the perfect home if it doesn’t meet their pets’ needs, location is definitely the top concern when choosing a home.

Luckily, Redfin and Rover joined forces to find exactly which cities were the best for dog owners.

They surveyed over 14,000 cities across the country to compile a list of the highest counts of walks, dog walkers and sitters, how often the keyword ‘dog’ appeared in online listing descriptions for sale, on whether properties were described as dog-friendly, and close to dog parks, etc.

Want to avoid a ruff life with your best furry friends? Check out Rover and Redfin’s findings for the top 20 cities for your furry doggies!

CityRover Rank% of ‘Dog’ Searches on ListingWalk ScoreTop Dog Breed
Seattle, WA12%73Labrador Retriever
Chicago, IL24%78Mixed Breed
Denver, CO24%61Labrador Retriever
Manhattan, NY44%89French Bulldog
Washington, DC51%77Mixed Breed
Portland, OR62%65Mixed Breed
Los Angeles, CA72%67Chihuahua
Brooklyn, NY84%89Pit Bill Mix
San Francisco, CA94%86Mixed Breed
San Diego, CA102%51Mixed Breed
Philadelphia, PA112%79Pit Bull Mix
Houston, TX 122%49Mixed Breed
Austin, TX133%40Mixed Breed
Arlington, VA143%37Mixed Breed
Minneapolis, MN151%69Labrador Retriever
Alexandria, VA163%60Mixed Breed
Dallas, TX172%46Labrador Retriever
Atlanta, GA185%49Mixed Breed
San Jose, CA192%51Labrador Retriever
Nashville, TN201%28Mixed Breed

We Might Be Afraid of the Dark, but Not of a Recession

“If you’re afraid to fail, then you’ll never succeed” – this might just be what many home shoppers are thinking when it comes to owning a home.

Although 70% of people believe America will enter a recession within the next three years, buyers remain optimistic that the real estate market won’t tumble as hard as it did back in 2008.

Home prices have increased by 49% since 2010, while the U.S. economy has grown by $3 trillion. America has seen steady economic growth and low unemployment rates for the past seven years, and according to realtor.com® Chief Economist Danielle Hale, “Historically, this type of growth hasn’t continued indefinitely, and U.S. home shoppers think it will come to an end sooner rather than later.”

In an ironic turn of events, Hale points to the nation’s low inventory levels as a way of protecting home prices in the next recession – whenever that happens.

The years leading towards the previous recession showed many consumers believing real estate was a luxury – this is a major disparity to the current feeling towards owning a home merely as a priority.

Heading into the spring market, experts will be watching to see how home values and appreciations fair.

Real Estate Tip of the Week: How to Garner Client Reviews

As many real estate agent’s know, implementing a review for each transaction you close is not only critical – but difficult.

For the real estate industry, reviews are a great way to separate yourself from the pack. With 84% of people trusting online reviews as much as they trust personal recommendations, it’s essential to step up your review game and show potential clients why you’re the real estate agent to pick.

Here are some simple tips to help establish a better review platform for your brand:

Establish Your Importance

When you start working with a new client, tell them what you plan on providing for them – essentially, an outstanding and smooth experience to help them achieve their real estate goals. Point out that you aim to earn their review throughout the transaction.

Wait Until the Transaction Is Completed

While you have already mentioned reviews – you haven’t technically asked them to write one yet. Wait until your business has been completed with your client before officially asking for feedback.

Using key words and phrases when you ask for their assessment, i.e., “It would be helpful to me if you write a review about me on [this site] and/or [this site],” doesn’t make it sound as forceful. And of course – everyone wants to be helpful.  

Send an Email After Closing

After the transaction has been completed, and you’ve mentioned a review in person, give your client a week or two before reaching out to them through email (if they haven’t submitted a review during that time). Moving can be a chaotic time, so giving them a moment to settle in is considerate.

Be genuine and sincere in asking how they’re settling in – then remind them about a review. Send a direct link to the page(s) you’d like them to leave a review on.

You might even think about including links to review pages within your email signature line. A quick “Happy with my service? Leave me a review on [site]” will remind clients about submitting feedback.

Bonus Tip: Acknowledge Their Review

While you should always respond to a review – especially if there are negative ones – the client might feel a little more special if you go above and beyond to send a thank you card for their review. These might help with your future referral network!

Facebook VS. HUD: Real Estate Discrimination

Fee-fi-fo-fum – a social media giant has got some explaining to do.

Back in November, Lisa Rice, president and CEO of the National Fair Housing Alliance (NFHA) released a statement saying, “housing discrimination is playing out in the form of hidden online calculations that companies can use to exclude certain populations from viewing residential real estate ads online”- and which major social media app was she referring to?

Facebook, of course.

The Department of Housing and Urban Development (HUD) recently announced that it is charging Facebook for violating the Fair Housing Act – they claim Facebook has been enabling landlords and home sellers to control who can receive real estate ads based on the user’s race, color, religion, sex, familial status, national origin, disability, and/or zip code.

HUD also claims that Facebook allowed advertisers to exclude neighborhoods from seeing specific real estate related advertisements.

Facebook has commented on the charge: “We’ve been working with them to address their concerns and have taken significant steps to prevent ads discrimination.” The spokesperson added that the company is “disappointed” in HUD’s decision.