Archive for category Trends

Health insurance and agents

Welcome back! Sorry about the January hiatus. It was a crazy month!

I read an interesting article about real estate agents and their lack of health insurance. Seeing as we are all independent contractors, we are not covered by our companies. When I owned my graphic design studio and worked as a freelance designer, I encountered the same thing. You had to belong to a professional organization (I joined the local Chamber of Commerce) to be able to obtain health insurance under their plan. Due to the fact that I have MS, I have to have insurance.”Nearly 30 percent of NAR members lack health insurance, and cost is the primary reason – 84 percent of REALTORS who do not have coverage say they can’t afford it.” (NAR)

I remember over 10 years ago, the membership to the Chamber was $300 a year + my health insurance. A pretty big nut for a single person who is supporting herself. If I had a family then . . . I can’t imagine.

This is a scary statistic in this day and age. I am fortunate to be able to fall under my husband’s plan, but for those agents who are unmarried or cannot use their spouse or partner’s plan, the cost of insurance is looming.

Around the beginning of the new year, I received a call from the pharmacy that sends my medication for my MS. It is a 1 time a month IV and it gets sent from a pharmacy in TN. They usually just call my Dr. but they called me and the woman, very nicely tells me, “Hi Keli. I was set to send up your meds and I see you terminated your insurance.” WHAT??? “No, there is a mistake. There was no termination. I don’t know what you are talking about,” I tell her.

“I’ll look into it and call you back,” she says. I figure, it is the new year, something is screwy. She calls back a few minutes later. “I looked into it and called your insurance company and your husband’s employer canceled the policy.” I sat there in stunned silence. The kicker? My husband is the employer! So I told her no way.

Anyway, long story short, the insurance company discontinued that policy and because there wasn’t an equivalent one to put us into, they canceled us. On top of everything, my brother in law’s wife had a c-section on Jan. 2 and they had canceled our insurance on January 1! She told me I could pay for my medication and get reimbursed. Uh, let me think about that. How about, NO? My meds are about $2500 a month.

Anyway, we got that straightened out finally, after almost 2 1/2 weeks. It turns out our new policy saves up quite a bit every year, but I blame the liason for the group my husband has his insurance thru. Why didn’t he tell us that the policy was discontinued or tell us of other alternatives? There is a serious breakdown in communication and I think that is common with insurance.

I would love to hear others’ stories.

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The housing market

“The housing market plunged deeper into despair last month, with sales of new homes plummeting to their lowest level in more than 12 years. The slump worsened even more than most analysts expected, heightening fears that the country might be thrust into a recession. New-home sales tumbled 9 percent in November from October to a seasonally adjusted annual sales pace of 647,000, the Commerce Department reported Friday. That was the worst sales pace since April 1995.”

This was from our paper, the Rochester Democrat and Chronicle from the end of December, stating the national trend. Not the best of news at our year end.

The Rochester market seems to have fared a little better than the nation. In November, while closings were down 10.5% from October, the median sale price was up .4% from October to November and stayed unchanged from 2006 comparisons ($115,000). This price nationwide is slighly higher at $210,200 but this is down 3.3% from last year. Although monthly closings were down and number of homes listed for sale was down 31.6%, some of the metropolitan areas of the nation are much worse. (stats from the Greater Rochester Association of Realtors, Inc.)

There seems to be some glimmer of hope, so all we can do it hope for the best.

Interestingly enough, in our paper on January 1, 2008 there is some new information. They state that the NAR (National Association of Realtors) reported that sales of existing home rose 0.4% in November from October. The pace of sales was still the 2nd slowest since 1999.

A dip in the mortgage rates in November for a 30-year mortgage may help home sales slightly. This small boost may be a sign of market stabilization, but keep in mind that earlier signs of a stable market have all been dashed.

The housing market had 5 years of record breaking activity, so this slump is particularly hard. The credit problems and sub-prime mess has added fuel to the fire. More would-be buyers are having trouble securing financing.

Representing a builder and having clients who are interested in existing homes, I have been seeing both sides of the coin. While existing home sales have sagged, we have been busy with new builds, especially the patio/empty-nester homes that we have been focusing on. We have seen a steady market and have not experienced the lag that existing homes have seen.

2008 brings new hope, new resolutions and hopefully a new housing market!

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Universal Design: how it can work for all of us.

It has taken many years, but housing designers have found a way to create barrier-free homes, and make then attractive. It’s called “Universal Design.” Homes that have universal design features look like other homes, but they can sometimes be better than other homes because they are much easier to use and to live in. Universal design is getting popular. They look appealing. People with disabilities don’t feel like they are settling for a house that was retro-fitted with things that are necessary for them. The homes were designed specifically to meet their needs, but still keeping in mind the aesthetics that people want. People who don’t have disabilities think that universal homes look just as a “regular” home does.

But Universal Design is not just for the disabled! The Baby Boomers are planning for their future: retirement, smaller homes, etc. Universal Design is for them too! While it may not be a concern now, that house that a 50-something couple just bought will be their retirement home, their home to grow older in, their home to be in for the rest of their lives. They are active and mobile now, but who knows fifteen years from now? A one-story, easy-to-use home with amenities like a first floor laundry and wider hallways are nice now, but could be a necessity down the road.

Features for Today

What makes a home “universal“? It’s simple. Here are some of the more common universal design features:

* No-step entry. No one needs to use stairs to get into a universal home or into the home’s main rooms.
* One-story living (ranch homes or two-story with first floor master suite). Places to eat, use the bathroom and sleep are all located on one level, which is barrier-free.
* Wide doorways. Doorways that are 32-36 inches wide let wheelchairs pass through. They also make it easy to move big things in and out of the house.
* Wide hallways. Hallways should be 36-42 inches wide. That way, everyone and everything moves more easily from room to room.
* Extra floor space, open spaces. Everyone feel less cramped. And people in wheelchairs have more space to turn. Repositioning load-bearing walls to create open areas.

Features for Comfort

Some universal design features just make good sense. Once you bring them into your home, you’ll wonder how you ever lived without them. For example:

* Floors and bathtubs with non-slip surfaces help everyone stay on their feet. They’re not just for people who are frail. The same goes for handrails on steps and grab bars in bathrooms.
* Thresholds that are flush with the floor make it easy for a wheelchair to get through a doorway. They also keep others from tripping.
* Good lighting helps people with poor vision. And it helps everyone else see better, too.
* Lever door handles and rocker light switches are great for people with poor hand strength. But others like them too. Try using these devices when your arms are full of packages. You’ll never go back to knobs or standard switches.

Features for Later

Universal design gives you great home feature you can enjoy now. It also helps you plan for the future. Take closets for example: when you build a closet, add some adjustable brackets. Later on, you can use those brackets to move clothing rods and shelves to a better height. This tiny investment helps a closet grow along with a child and it also means you can use the closet even if you start using a wheelchair. This kind of planning can help you make sure every part of your home will adapt to your changing needs.

(Excerpts taken from: http://www.aarp.org/families/home_design/universaldesign/a2004-03-23-whatis_univdesign.html)

Being married to a home builder, we are always looking at the “next” home. Our next home, ideally, will be built using many UD features. This is a must for us as I have MS. But that is not the only reason. We want to utilize UD to make living that much easier: A sprawling ranch. Wider doorways and stairs. No barrier shower. An area for a small elevator if it is to be a 2-story home. Wider areas between the sink and island in the kitchen. All of these things, plus many more make the home more “livable”, and not just for someone with a disability.

Fixing Hard-to-Use Homes

You may have your own ideas about universal design features that could help you. Take a good look around your home. Make a list of the things that bug you. Tired of bending to plug in the iron? Sick of stretching to reach your favorite platter? Can’t stand carrying laundry to the basement? Talk to some contractors to see if there are some UD options to help you.

For someone like me, I can definitely see the need for Universal Design. I have MS. I am still mobile, I still get around without the use of a wheelchair or even a cane. But I can see down the road how some of the features of UD may be beneficial for me. Wider doorways and staircases are necessary for a wheelchair, but they are also nice to have when carrying a laundry basket. So some of the features that are necessities for some are also a luxury for others.

From the MS Society Website:

“Universal Design enables everybody-not just people with disabilities-to navigate, manipulate, and appreciate our world. Non-slip flooring: It’s safer for all sorts of feet. Curb cuts make things easier whether you’re pushing a stroller or a wheelchair. Think of a grab bar in the shower. It’s seen by many as a “disabled” thing, but who wouldn’t want one when their eyes are full of shampoo?

Universal Design makes products, communications, and the built environment not only aesthetically pleasing but also more usable by more people-at little or no extra cost. There’s just one little problem: Universal Design is not exactly universal. Not yet. If it were, many special accommodations for people with disabilities would disappear. They wouldn’t be needed.

Thankfully, product and space designers, heeding the needs of people with disabilities as well as a population with an increasing number of older people, are slowly beginning to solve problems using the principles of Universal Design. New technologies augment their efforts. Examples slowly entering the marketplace include adjustable kitchen sinks and vehicles with more power assistance.” http://www.nationalmssociety.org/site/PageServer?pagename=HOM_LIB_imsoct04_universaldesign

Other Resources

Meet a Universal Design Architect
Because of a genetic disorder, Architect Karen L. Braitmayer uses a wheelchair. Her disability has shaped her career.

BabyBoomers and Universal Design
This article, published by Realty Times, suggests that demand from Baby Boomers is making Universal Design more popular.

Books

Find this book online at www.barnesandnoble.com:

The Accessible Home: Updating Your Home for Changing PhysicalNeeds, Bryan Trandem (Editor), Creative PublishingInternational, Inc., January 2003.

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Agent attitude, or lack thereof?

OK. I post this out of curiousity. I am interested to hear what others have to say on this topic.

This past weekend I was doing an open house on a new build (I represent the builder). A couple came in loved the house, and want to meet again to discuss building. I asked if they had an agent they were working with. They looked at each other and said, “Well, we have someone we have been working with, but he really hasn’t done much with us. He showed us a few pre-existing homes, but we couldn’t find anything we liked, so he gave us a list of ranches to go look at on our own. We have been driving around on our own for a few weeks. We decided to stop here and we love it! He is a friend, but to be honest, he has not done anything for us except give us a sheet of paper with a few addresses on it.”

I told them that they were still working with him, regardless if he was with them that day or not. One thing with being a builder’s rep, I am always very careful to immediately ask if potential buyers are working with anyone.  We get numerous people through open houses who are just driving through or live in the neighborhood, and I always clear the air with that question first. (When agents come through, I always have them register).

But let me give another example:

There is another realtor who came through one of our open houses a few months ago, to preview it for potential clients. He then proceeded to bring some clients to us who ended up building. We don’t require an agent to be present at all of the meetings pertaining to the building process, but they are welcome to attend. Most do not, knowing that we will be handling the details on our end, and we are fine with this. We keep them posted of pertinent dates, etc.  This agent was very interested and asked that if he couldn’t be there, could we fax him notes from the meetings. Just so he could stay informed on the progress and be there if his clients had any questions or concerns. They built a lovely home and their agent was fantastic to work with. Last week I got a call from this same agent and he had another couple he is bringing our way. They came through open house (with the agent) and they are also very interested in building.

The difference I am seeing: the complacent agent who just hands off a handful of pages printed off the MLS to his clients and they are on their own versus the hands-on agent who is there every step of the way. This is not the first time I have seen this. Is it because we are new builds and agents don’t feel the need to be there? Assuming that I can and will help their clients? Or is this a trend on existing homes as well?

I look forward to some insights on this.

HG

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Real Estate and Technology

I’ll admit it. I am a computer geek. From my days as a graphic designer, I always had to have the latest and greatest, the fastest and the slickest machine. And yes, I am a Mac lover. As designers, we all used Macs. I cannot switch over to the Dark Side and use a PC. I do when I have to, kicking and screaming all the way, but now that I am not doing much design anymore, I am definitely in the minority.

I attended a couple of great classes over the last few days. They were taught by the same woman, Amy Chorew. She was fantastic. We talked alot about the role that technology plays in real estate, and how under utilized it is by agents. The ironic part is our audience, our clients, they are using it at an ever-increasing rate.

These were some interesting stats that Amy shared with us from the 2006 National Association of REALTORS© Profile of Home Buyers and Sellers:

51% of first time buyers are between the ages of 25 & 34 years old
85% of buyers used a real estate professional
84% of first time buyers used the Internet to search for homes (compared to 79% of repeat buyers)
81% rated their real estate agent as very useful in the process
Median age of sellers: 46 years
Typical home is on the market for 6 weeks

These are some interesting numbers. It is good to hear that alot of buyers are using agents and realizing the importance of a good agent! But the Internet is a powerful tool and as agents, we need to grasp its potential.

With the age range of first time buyers between 25 and 34, this generation is what is driving the housing market. Generation X (and the fringe of Generation Y) is computer savvy, busy with jobs and families. They want to sit down at night after the kids are asleep and surf around and see what grabs them. They know how to find sites with homes and they know how to cull the information down to suit their needs. Don’t get me wrong, agents are still needed. We are necessary to point out some of the features, desirable and not-so-desirable of homes they may see on the Internet. I had a client and he and his fiancée were looking to buy. They were constantly sending me links to homes they found. One home they were particularly hot on and wanted to see it that day. I looked at the link and the first thing I noticed was it was septic. I immediately called my client and told him. He said, “Oh. I didn’t know what that meant on the website. We definitely don’t want to look at that one.”

We as agents definitely need to embrace the technology, but we also need to impress on our clients what we bring to the party as people, too.

HG

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Marketing: the good, the bad and the ugly

Marketing seems to be the buzz word nowadays. How to market this and that. Brand your product . . . Selling a home is no different–you are trying to put a product (a home) in the best light to appeal to a target audience (a buyer). The official definition of marketing is: “Means to make a communication about a product or service a purpose of which is to encourage recipients of the communication to purchase or use the product or service.” Sounds simple, doesn’t it? From my days in advertising, I lived by the rules of marketing. As a Realtor, you need to know about marketing as you are selling a product. But you also need to remember: you are marketing yourself. How else do you get clients?

Here are some basic rules to follow:

It’s a simple concept: if you close sales faster, you’ll ramp up your revenues, and then you won’t be spending as much time doing marketing or making sales calls. Turning a lead into a sale is the critical purpose of marketing. Real estate is no different than any other industry; basic marketing rules apply to everyone. Here are some of the most important basic rules of marketing:

• STAY IN TOUCH
First, be sure you are staying in touch with prospective clients on a frequent, consistent basis. This means following up with potential buyers and their agents, “What did your client think of my seller’s house? What did they like? Didn’t like? Do you have any other feedback that may help?” It also means keeping my seller abreast of what is happening in their home. I also keep them updated on the showings and the feedback.

• STAY AHEAD OF YOUR COMPETITION
The market is saturated with homes for sale. How do we make your home stand out from the other? What can we do to help you home catch the eye of a potential buyer? I wish the answer were an easy one, but the truth is, there is no cookie-cutter solution. Each home and each buyer is different. I would take a different approach on a home in a rural area than I would in the city. Not that one approach is better than the other, but the audience is different. A comprehensive marketing plan presented at the beginning is always useful. I tell my client exactly what my marketing plans are for the time that the house is listed: what ads I’ll run, what direct mail I’ll send and how their home will be presented on the MLS and on the Realty 3 website.

And what about you? How do you win the listing? You stand out from the crowd and you show that potential client how you can plan to service them and why your method is superior to someone else’s. How can you guarantee that you will sell their home and get them a fair price? How do you present yourself? Are you dressed well? Is your car neat and clean? Do you come across as a professional? It is a nice way to advertise to have your name and phone number on your car. But once is enough. Not on every door. Is your photo on your marketing materials up to date, or is it the same photo you had taken ten years ago? Your audience is going to see you in person, so why are you trying to fool them on your business card? Get a new photo.

• FOLLOW UP
Again, the follow up is crucial. How do I know that a potential buyer really liked my seller’s house, but didn’t like the resilient flooring in the kitchen, unless I follow up with a phone call? After calling the buyer’s agent to get feedback and she told me that was a big negative, I immediately called my client. They agreed to replace the flooring and I was able to call the buyer’s agent back and tell them this. That changed the whole deal!

• DON’T BE AFRAID TO ASK FOR HELP!
If you can afford it, hire someone to do your marketing and design for you. If you plan on doing any direct mail or an ad for the paper, please let a qualified graphic designer do it for you. You can find reasonable rates by calling around and asking what they would charge. Or if you want a personal website, don’t let your nephew do it. Hire it done. That is your image and how people will think of you. Nobody can sell you better than YOU. Just a reminder: you are a Realtor, NOT a designer. You DO NOT need a full page image of yourself. You DO NOT need some cheesy tag-line. Project the image your want others to see.

Case in point: FSBO are not an agent’s favorite thing. “Why would someone, untrained, think they could sell their own house? That is what I am trained to do! I have attended a lot of classes and have years of experience. Why don’t they understand that and let a trained professional sell their house?”

Graphic designers say the same thing about Realtors: “Why would someone, untrained, think they can design their own ad (logo, website, direct mail)? That is what I am trained to do! I have attended a lot of classes and have years of experience. Why don’t they understand that and let a trianed professional design their materials?

• SOME BAD SOME GOOD AND SOME UGLY:
An ad that is taken up by more of your photo than your contact info: BAD
A photo of you on your business card/in an ad that is more than two years old. You don’t want a client to ask “Are you the same person who is on your card?” (see above): BAD
Having an ad with a typo. (See above about hiring a designer) An ad that says “Let me sell your hoem!” isn’t going to win clients. Typos: BAD
Do not design your own website. Home-done website: BAD and UGLY
Keep your car neat and clean. You don’t want to throw the McDonald’s bag into the back seat right before your client gets into your car: BAD
Do not put your name, number, and photo on every spare inch of your car. Be tasteful, not gaudy. Car as a billboard: BAD and UGLY
Study a good marketing plan (you can find them online or in books): GOOD
Following a marketing plan: GOOD
Create an image for yourself and carry that through all of your materials: GOOD

Marketing isn’t hard, but it is a matter of being consistent. If you find it scary, take some classes and learn about marketing. It is the way to push yourself to the front of the pack!

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Subprime Lending, a Definition

Subprime loans seem to be the new buzz-word in real estate. We are hearing more and more about this new trend, and it is causing fear in financial institutions across the nation. Borrowers with bad credit are able to obtain a mortgage, and when the rates change, they are unable to make their payments, they go into default, and their property goes into forclosure.

Wikipedia definition of Subprime lending: , also called B-paper, near-prime, or second chance lending, is the practice of making loans to borrowers who do not qualify for the best market interest rates because of their deficient credit history. The term also refers to paper taken on property that cannot be sold on the primary market, including loans on certain types of investment properties and certain types of self-employed individuals. Subprime lending is risky for both lenders and borrowers due to the combination of high interest rates, poor credit history, and murky financial situations often associated with subprime applicants. A subprime loan is offered at a rate higher than A-paper loans due to the increased risk.

Subprime lending encompasses a variety of credit instruments, including subprime mortgages, subprime car loans, and subprime credit cards, among others. The term “subprime” refers to the credit status of the borrower (being less than ideal), not the interest rate on the loan itself.

Subprime lending is highly controversial. Opponents have alleged that the subprime lending companies engage in predatory lending practices such as deliberately lending to borrowers who could never meet the terms of their loans, thus leading to default, seizure of collateral, and foreclosure. Proponents of the subprime lending maintain that the practice extends credit to people who would otherwise not have access to the credit market.

The controversy surrounding subprime lending has expanded as the result of an ongoing lending and credit crisis both in the subprime industry and in the greater financial markets which began in the United States. This phenomenon has been described as a financial contagion which has led to a restriction on the availability of credit in world financial markets. Hundreds of thousands of borrowers have been forced to default and several major subprime lenders have filed for bankruptcy.

From the Forbes.com website: “The survey of 1,700 mortgage brokers sponsored by trade publication Inside Mortgage Finance comes as numerous lenders that catered to subprime borrowers with weak credit close down and lenders back away from riskier lending practices common in recent years. That has led to many borrowers being stuck without a loan as they prepare to settle.” Read the complete article on sub-prime loans: http://www.forbes.com/feeds/ap/2007/09/05/ap4086046.html

From the National Association of Realtors (9/7/08): Bush Announces FHA-Secure Plan to Assist Subprime Borrowers
On August 31, 2007, President Bush announced a new initiative called FHASecure, which will give the Federal Housing Administration (FHA) flexibility to help more families keep their homes in light of the decline of the subprime market and impending interest rate adjustments affecting numerous borrowers in both the subprime and Alt-A markets. The FHASecure program will help people who have not made all of their payments on time because of rising mortgage payments but who otherwise have good credit. NAR applauded President Bush’s statement of support for giving homeowners greater flexibility to refinance their loans through the FHA. At a white house conference call on the initiative, the administration specifically signaled out NAR for our timely support of the initiative. NAR has been advocating regulatory changes to the FHA program. On April 9, 2007, NAR sent a letter to Alphonso Jackson, Secretary of Housing and Urban Development, asking that FHA waive the requirement that a homeowner’s mortgage be current to refinance into an FHA loan product. NAR also supports legislation that would give FHA greater flexibility by increasing loan limits, eliminating the statutory 3 percent minimum cash down payment, allowing FHA flexibility to provide risk-based pricing, and revising the condominium program.

Subprime loans are increasing in volume and value, particularly in densely-populated states like California and New York. Nationwide, subprimes account for about 10% of all mortages. Share of mortgage loans in 2003 that are subprime:
Rhode Island

14%

California

13.3%

Nevada

12.9%

Florida

12.8%

Tennessee

12.6%

Texas

12.3%

Utah

12.2%

New York

11.5%

Oklahoma

11.2%

Maine

10.6%

Delaware

10.5%

Connecticut

10.2%

Mississippi

10.2%

Alabama

9.9%

Arizona

9.9%

Nation

9.9%

New Hampshire

9.6%

Missouri

9.5%

Ohio

9.5%

South Carolina

9.3%

Indiana

9.1%

North Carolina

9.1%

Louisiana

9.0%

Oregon

9.0%

Colorado

8.9%

Georgia

8.9%

Kentucky

8.9%

Hawaii

8.7%

Illinois

8.4%

Kansas

8.3%

Michigan

8.3%

Pennsylvania

8.2%

Maryland

8.1%

New Mexico

8.1%

Massachusetts

8.0%

Minnesota

8.0%

Nebraska

8.0%

New Jersey

7.9%

Idaho

7.7%

Washington

7.7%

Wyoming

7.5%

Iowa

7.2%

Virginia

7.2%

Montana

7.1%

West Virginia

6.6%

Arkansas

6.4%

South Dakota

5.3%

North Dakota

5.2%

Wisconsin

4.6%

Alaska

4.5%

District of Columbia

4.5%

Vermont

4.5%

Puerto Rico

2.8%

Source: Mortgage Bankers Association

Another good article regarding subprime lending is on USAToday.com: http://www.usatoday.com/money/perfi/housing/2004-12-07-subprime-day-2-usat_x.htm

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