Millennials are getting the brunt of the blame for killing many industries that were supported by previous generations but, as it turns out, the real estate industry is alive and well. Understanding what millennials are looking for in a potential home is imperative if you want to succeed as a real estate professional, as more millennials are starting to search for their first home. Taking certain actions can give you an edge in attracting the millennial market.
Highlight the Flexibility of Open Spaces
If millennials are one thing, it's indecisive. They've grown up with the idea that they can go anywhere and do anything. The trouble is that they want it all and can be fickle about where to settle. They may enter the home-buying market several times before they seal the deal. What if there's a career change? Are kids in the future or not? Maybe the contract job (and the regular income) will dry up. To close the deal with a millennial buyer, you have to show off, for example, how the spare room can be used either as an office or as a nursery. It can even be used to generate income by renting it out on space-sharing apps or to a regular renter.
Sell the Potential of Genuine Fixer-Uppers
Saddled with debt and settled in lower-paying jobs, most millennials can't afford much more than a small, basic house. They understand that there is a potential value in a bigger home in questionable condition, though. Armed with confidence and education (and home-flipping reruns on TV), they are often open to investing in fixer-uppers. In a market where another agent is a text message away from a skeptical millennial, don't lose the trust of a potential buyer by trying to sell a lemon.
The New York Department of Financial Services (DFS) adopted two new regulations for the title insurance industry that clarify rules for marketing expenses and address affiliated business arrangements.
The first final regulation clarifies rules about marketing expenses including meals and entertainment, and ancillary fees that title agents or title insurers may charge the insured at closing. The second final regulation requires title insurance companies or agents that generate a portion of their business from affiliates to function separately and independently from any affiliate and be open for business from other sources.
The New York State Land Title Association provided input to DFS as it created the new regulations, but said “regrettably, the end product does not serve the people of New York State, despite its good intentions.”
“In fact, we believe these regulations will have major fallout for the title insurance industry, and therefore, consumers, other real estate professionals, and the real estate industry as a whole,” the NYSLTA reported in a release. “We believe the new regulations will force small, local title insurance companies to close, costing jobs and making the market ripe for take-over by multi-state conglomerates, thereby reducing the options available to consumers.”
The coming year 2018 is expected to be the year of new-home sales, according to Freddie Mac's recently released monthly Outlook for September 2017. Roughly 1.33 million housing starts are forecasted for next year, and new-home sales, together with existing-home sales, are projected to rise 2 percent.
"The economic environment remains favorable for housing and mortgage markets," says Sean Becketti, chief economist at Freddie Mac. "For several years, we have had moderate economic growth of about 2 percent a year, solid job gains and low mortgage interest rates. We forecast those conditions to persist into next year."
More groundbreaking will soften home prices, though prices are set, still, to rise 4.9 percent, the Outlook shows.
Banker confidence in primary performance indicators for the industry continues to skew slightly negative according to results from our Q3 2017 Bank Executive Business Outlook Survey. This quarter’s survey further shows changes to the Banker Confidence IndexSM, now at 48.1, a half-point improvement from last quarter (47.6). While bankers’ outlook for the future may be improving, the Index nevertheless falls below the key threshold of 50 for the second quarter in a row, a first since the survey’s inception 11 quarters ago. (Charted on a scale of 0-100, a score over 50 can be read as expansionary. A result below 50 can be read as contractionary.)
This cautionary outlook is a consistent theme throughout the survey and may represent ongoing frustration with political events in Washington, DC, or a fear that the spate of recent economic news may indicate a highpoint. On the other hand, it may be that bankers do not believe that economic conditions are as strong in their industry as in other sectors of the economy. Fewer than half (49.1%) of respondents saw economic conditions improve for their institutions over the past year. And even fewer (44.7%) expect to see improvements over the next 12 months.
Certain components of the tax reform plan, developed and issued in a framework by six Republicans from the House, Senate and Trump Administration, could harm homeownership, the real estate industry warns. Both the doubling of the standard deduction and the elimination of local and state deductions effectively challenge or erase incentives for homeowners, and inhibit, potentially, the homeownership rate.
"We have always said that tax reform—a worthy endeavor—should first do no harm to homeowners," said Bill Brown, president of the National Association of REALTORS® (NAR), in a statement. "The tax framework released by the 'Big Six' [on Wednesday] missed that goal."
The fate of the mortgage interest deduction remains uncertain. The Administration communicated an intent to "protect" homeownership in its initial proposal and again on Wednesday, but without more information, it left open the possibility for changes to the provision. Critics of the deduction maintain it helps only wealthy homeowners; NAR offered up evidence to the contrary in a recent testimony, reporting 7 million taxpayers took advantage of the deduction in 2015.
The risk of fraud in mortgage applications increased 16.9 percent in the second quarter compared to the second quarter of 2016, according to CoreLogic’s latest Mortgage Fraud Report.
The analysis found that during the second quarter of 2017, an estimated 13,404 mortgage applications, or 0.82 percent of all mortgage applications, contained indications of fraud, as compared with the reported 12,718, or 0.70 percent in the second quarter of 2016. The CoreLogic Mortgage Fraud Report analyzes the collective level of loan application fraud risk the mortgage industry is experiencing each quarter.
The report says that the continued shift to a purchase market is a key factor in the rise in application fraud risk due to stronger motivations and increased opportunities to commit mortgage origination fraud. A second factor leading to the fraud risk was a 48 percent increase in the share of loans originated through wholesale channels, the report found. According to CoreLogic, wholesale applications have shown a higher risk level than retail channels.
“This past year we saw a relatively large increase in the CoreLogic National Mortgage Application Fraud Index,” said Bridget Berg, principal, Fraud Solutions for CoreLogic. “If the factors that influenced the increase continue, including a shift to purchase transactions and growing wholesale channel origination activity, it is likely that mortgage application fraud risk will continue to rise as well. Fraud on cash-out refinance transactions and home equity loans may become more of a factor in the coming years as home values and equity rise.”
Thanks to Facebook, a real estate professional can now target past visitors to his or her site by presenting them with ads on social media.
"Dynamic Ads for Real Estate" helps agents promote relevant listings to those who matter most—Facebook and Instagram users who have previously searched for properties on a specific agent or company website.
This latest project by the social media dominator is very akin to the kind of system that Amazon has perfected: the online retail giant promotes products related to what a customer has already purchased or searched for. For the real estate industry, Facebook's program could facilitate lead conversion, and help keep branding front and center to those who may already be considering reaching out for more real estate information.
There is a new trend regarding municipal fees being assessed against vacant properties during foreclosure. On July 14, 2014, N.J.S.A. 46:10B-51 was amended to allow municipalities to enact local ordinances that impose penalties on mortgage lenders who fail to remedy municipal ordinance violations on vacant or abandoned property during a foreclosure action.
In addition, the amended law allows municipalities to use public funds to abate a nuisance or correct a violation on residential property for which the lender was given notice. The municipality can place a lien on the property if these funds are not paid back.
Several municipalities in New Jersey have either proposed or are considering proposing local ordinances in accordance with N.J.S.A 46:10B-51 to enforce penalties against lenders. Accordingly, if a property has gone through foreclosure, the municipality should be contacted to inquire about any vacant property fees. Some vendors are now including notes regarding vacant property fees as part of their tax search products.
Any fees associated with public funds being used to resolve a violation can become a lien on the property and must be resolved.
For those with their toes in real estate's ever-changing technology pool, virtual reality house tours are likely not a new concept. These stimulating virtual tours allow off-scene buyers to view homes from the inside before requesting a listing appointment, which can save REALTORS® valuable time and energy. No longer do agents need to scramble to show homes that aren't a fit for their buyer—the buyer knows the inside of the home before they actually enter it. With VR on the cutting edge of today's tech tools, these tours allow agents to shine as a competent professional on the forefront of their field; however, with the high price tag attached to most VR tech tools, creating virtual tours for every listing is not a possibility for most real estate professionals.
Real estate technology company InsideMaps hopes to change that by giving every agent the tools to capture their own HDR photos, 360-degree walk-through tours and videos.
Using a suite of tools, InsideMaps allows agents to create interactive virtual tours, 3D models, floor plans and HDR property photos. And unlike competitors that require agents to purchase thousands of dollars' worth of equipment, InsideMaps helps their clients create virtual content using the tools they already have: their iPhones.
Today, digital technology is driving more of the loan transaction away from paper to online. The industry is realizing that it’s time to get the paper out of our systems and manual processes. Paper documents take more time to process, require more people to validate, and key information from and follow-up efforts to track down missing pages, signatures, or total file loss.
For example, delivering a correct closing disclosure (CD) to the borrower three days before closing highlights just how difficult it is to get everything right and on time in a paper world.
Ensuring proof of compliance on confirming something like receipt of delivery is next to impossible in a paper world. Taking the mortgage process fully electronic will be the only way to ultimately ensure a totally verifiable, auditable compliant process.
Beyond the improvements gained by eliminating the paper process, digital collaboration during the loan transaction promises a better consumer experience from the start. For lenders, the increase in operational efficiencies and consistency are measurable. Overall, a digital process ensures greater data and document integrity, compliance and control.
Digitizing the mortgage process has the potential to greatly improve both productivity and the customer experience. Lenders who incorporate a digital workflow gain efficiency, better satisfy borrower expectations for collaboration and communication, and ultimately capture more market share.