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.

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.

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!

Understanding TRID in Real Estate

If you’re in the middle of purchasing a home, there’s a good chance you’ve heard a couple of words thrown around that might seem new to you – TRID being one of them.

Essentially, TRID is a rule designed with consumers in mind; real estate, while exciting, can be a little puzzling when you throw in contractual documents and legal jargon. But with TRID, these things should be clearer to understand, and consumers should be given a longer period of time to read through documents before signing at the closing table.

So, what exactly is TRID?

TRID is the TILA/RESPA Integrated Disclosure Rule – and yes, it is an acronym out of acronyms. TILA is the Truth in Lending Act, and RESPA is the Real Estate Settlement Procedures Act.

This rule requires easier consumer disclosures for clients to read and to help the borrower determine whether they would like to move forward with the transaction. TRID also involves making sure that the Closing Disclosure is given early – at least three business days prior to the closing date. This way, if the consumers have any questions or concerns, the lender and / or real estate agent can help with any additional information.

Although TRID might sound like a scary legal issue, it’s actually one that benefits the consumer; because lenders are required to provide the disclosure agreement before closing, it helps empower sellers and buyers to understand the entire home buying process.

Check out Alliance’s Client Resource Guide to see the full breakdown of what the TRID rule looks like on a calendar.

Real Estate Tip of the Week: How to Work with Investors

Have you worked with real estate investors?

If not, then you probably should consider it.

Real estate investors usually buy and sell multiple properties within a short period of time – which would mean you could become their go-to agent when they’re looking to jump back into the market.

But what do you need to do to set yourself apart from other real estate agents and impress this potential inventor client?

Vocabulary

Investors won’t be like your “regular” clients. They’ll want to talk about things like ROI, cap rates, 1031 exchanges, cash-on-cash returns, and net present value. You’ll want to have a deeper understanding of “real estate math” when talking to these gurus.

Goals and Priorities

An investor client might already have tasks in mind for what they’d like you to do. They don’t necessarily want to be wooed with how you’d pitch properties to a traditional buyer or seller – so do away with the talk of existing paint or new backsplash colors and get down to the nitty gritty.

Are they needing to repaint rooms? Update the kitchen or bathrooms? They’ll want to know how much things will cost. Are they wanting to fix and flip? What is their overall goal here?

You’ll also want to know what their overall timeline is with properties. Are they looking at a long-term hold, or are they needing a quick sell before purchasing another one?

Research

Don’t forget – you’re the professional! Your talents and insight as a local market expert will be something of incredible value to the investor. Be familiar with the hottest neighborhoods, areas that are up-and-coming, and where the best schools and newest jobs are located.

Resources

As an agent, you probably know referrals who would be great for your investor client. If an investor is looking for painters, a tax advisor, or an overall handyman, think about putting a list together for suggestions.

Working with a real estate investor won’t be the same as your couple looking to purchase their first ever home. You’ll want to be armed with the right knowledge – and hopefully, they’ll keep coming back to you.

Abracadabra: Pinpointing the Perfect Week for Home Sellers

If you could ask a real estate genie for anything, what would it be? Help with your mortgage? A pool in your backyard?

While Alliance Title might not be a real estate genie, we can still help with some expert-driven predictions on what might lie ahead in the real estate world.

Researchers have found that the best week to put a home on the market is March 31st to April 6th. They studied the 50 largest real estate markets in the nation over the past three years to determine this very specific week.

During this magical week, homes – on average – are listed for 6% more than at the beginning of the year. This equals to an extra $17,000. These homes listed not only accumulate 14% more views on realtor.com, but they also sell six days faster.

Because home prices tend to peak around June, this week might be the best time to face less competition and receive the best bang for your buck.

Real Estate Tip of the Week: Coaching on Persuasive Offer Letters

Sometimes placing an offer on your client’s dream home isn’t enough – they might be competing with other potential homeowners who are offering the same, if not more.

Instead of panicking and losing your cool – because, duh, you’re an amazing real estate agent – think about suggesting an offer letter for your client to write.

What is an offer letter?

This letter is written by the buyer and delivered to the seller. Essentially, it should help establish an emotional connection between seller and buyer – the buyer no longer becomes a “contractual party,” but instead, a person. A person with goals, dreams, and someone who will take great care of the home.

How to begin?

You’ll want to instruct your client on tailoring the letter to the seller and the home.

Connect – If your client writes about their connection to the home, how they felt when they walked through the front door, etc., it can give the seller a good idea as to how they’ll treat the house. Advise your client on why they want the house, not just how they want their offer accepted. What grabbed your buyer’s attention on the home? Compliment the home.

Use Emotion – Selling a home can be emotional! The sellers created life-long memories in this home, and they probably want to see someone move in that understands and appreciates the love of the house. Have your client explain their understanding of taking care of the home – maybe include special instances, like taking care of the already beautiful garden the previous homeowners took steady care of.

Write – Suggest your client write this letter by hand. It gives the letter a more personal touch than an email or printed letter, and it shows that your client is motivated and serious about their offer.

While these are just quick suggestions to share with your client, it can set your buyer’s offer above others. Selling a home means leaving behind memories – it can be hard for the seller to say goodbye. An offer letter might just help separate the pack of buyers and set your client above the rest.

The Three R’s of Owning a Home: Renovate, Remodel, Redesign

Being a homeowner means you’re the landlord of your own home – you fix anything that breaks AND you renovate anything that you believe needs to be updated.

A new survey conducted by LightStream found that 73% of homeowners plan to start remodeling this year, which is up 26% from last year. They also plan to spend more money on these projects as well – about 32% more than 2018.

The number one reason most are prepping for these renovations: personalization. The second runner up is to increase the value of their home. So it would seem most of these homeowners aren’t looking to sell anytime soon, but to actually create a space they love.

Which spaces are homeowners looking to renovate?

  • Outdoor spaces: 41%
  • Bathrooms: 37%
  • Kitchen: 31%
  • Home repair (windows, roof, etc.): 29%
  • Garage: 18%
  • Pool: 7%

And while 59% of homeowners stated they either plan to move out in more than 10 years – or never move – these renovations for personal taste make sense in the real estate world.

Real Estate Tip of the Week: Planning for Extra Costs

Ever heard of buyer’s remorse? We’ve all experienced it at some point in our lives – the sense of regret after having made a purchase. Maybe it was buying that car, that TV, or that really cute sundress you saw in the window.

Or, maybe it was the purchase of your new home. Ouch. That one might be harder to deal with.

If you’re a real estate agent, it would be in your best interest to help and guide your clients to fully understand all of the fees that are associated with owning a home, so your clients feel prepared and ready for the transaction.

According to a new survey from Bankrate, 63% of millennial homeowners – more than any other generation – expressed buyer’s remorse after the purchase of their homes. 20% of those with remorse were surprised by maintenance expenses and other costs corresponding to the transaction.  

While these fees will vary from person to person and state to state, it’s important to clarify the costs on the table so they don’t feel misled.

Inspection Fees

While these aren’t required, they are highly recommended in the industry. An average inspection may cost anywhere from $300 to $500. Inspections can help uncover any problems with the home and prevent more costly repairs in the future.  

Closing Costs

Financial experts recommend setting aside 2-5% of the purchase price for closing costs, and they must be available on closing day. This fee covers a variety of things, like notary services, title company search fees, attorney expenses, real estate transfer taxes, insurance premiums, and more. These will vary by state and property.

Maintenance Costs

It is recommended to put aside 1% of a home’s value per year for any unexpected maintenance expenses. For example, a $300,000 home would mean budgeting $3,000.

Moving Costs

While this might be the last thing on your client’s mind, moving adds up too. If they’re planning to hire a moving company or renting a truck, they’ll want to allocate this into their upcoming expenses. As a real estate agent, you’ll need to remind them to speak with their lender and bank to fully understand their financial planning. But, that doesn’t mean you can’t help guide them on some of the upcoming fees associated with purchasing a home.

Beauty isn’t Pain for These New Home Design Trends

What’s the new black?

The answer: a variety of colors for different features in your home.

While spring is rapidly approaching, it’s interesting to note some of the trends that are predicted to take off for interior design.

The end of February saw the 2019 International Builder Show and the Kitchen & Bath Industry show in Las Vegas – which presented plenty of unique and interesting new trends into the world of home décor.

Bathroom and Cabinets

While most bathrooms are neutral colors, presenters showcased vanities in grays, blues, greens, pinks, and off purples.

Kitchens, like bathrooms, usually stick with whites – but according to Nino Sitchinava, principal economist at Houzz, “moody colors” will be the new trend for this area of the home. Grays, navys, greens, and reds were presented on kitchen cabinets on the show floor.

Vinyl Flooring

This choice for flooring is quickly gaining popularity in plenty of home remodels. It comes in a variety of colors and textures and has a smooth-finished design. The water-resistant material was mostly presented in grays or whites throughout the show.

Small Features

Customizable hardware options will be the hot ticket item for 2019. Homeowners have the option to add different finishes to their stainless steel, matted white, or matted black refrigerator or stove by switching up the hardware with brushed bronze, stainless, or black handles. 

We’ll have to keep an eye on interior design trends to see which of these new designs will truly take off.