Sharing is Caring: The Sharing Economy's Effects on Real Estate

Have you been paying attention to the new mode of travel, lodging, and interaction? We’ve been moving to a different way of doing things here in the good old USA, and that way is far more like what our kindergarten teachers used to tell us: sharing is indeed caring these days—and it’s saving people a lot of money.

sharing birds
From the Wikimedia Commons.

So much so, in fact, that it’s beginning to affect how people make major decisions. Do they buy a car for personal use or are they willing to use Lyft, a makeshift taxi service servicing some major cities (and attempting to roll out to more). Need a room for a few nights somewhere? AirBnb has you covered. And the income that people using these services earn (as well as the inexpensive alternative that they provide to traditional taxis and hotels) can affect what factors influence a decision on where to live.

Here’s a plausible scenario: Say there’s a very affordable house on the outskirts of a major city, just outside the range for someone to walk to work. For someone who’s espousing frugality in their efforts, this is a big concern. If Lyft is available for them, then that might tip the scales towards this home that normally they wouldn’t have considered.

Likewise, people may choose to buy a bigger home so that they can rent one of the rooms for a few days a month. The mere presence of these services mean that they’ll become considerations as they catch on.

While we’re not endorsing or detracting from the sharing economy, we’ll simply say this: there’s never been a better time to really get to deeply know your client base. While you might not be representing someone interested in Lyft (which is marketed more towards younger professionals looking to save money), AirBnb might be on their radar. Or Getaround, RelayRides, and more. These services are becoming very popular and might just change some markets—if you’re willing to make the connections and use them as selling points.


#WellnessWednesday: Home Showing Safety

Safety is often the least of our concern during our lives. We take for granted the security and safety protocols we follow without even thinking about it. We lock our doors at night and we lock our cars when we leave them in a lot. But do you think about the threats that might be lurking during your daily life—especially when you work in an embroiled industry like real estate has been during the recession?

safety_crowds

 

Agents everywhere work on the road, showing homes and doing the legwork necessary to find good homes for good people. Sometimes, though, the dangers can be very real.

There’s been an email going around recently that brings up the question of agent safety, so that’s why we’ve compiled some good tips on staying safe. We don’t want to see anyone get hurt!

Tip 1: Situational Awareness

Anyone who’s been in a disempowered situation is well aware of how this one works.  Whenever you’re anywhere public, be aware of what’s going on around you. Can you answer these questions?

  • Where’s the door?
    • It’s of the utmost importance that your exit is planned if something gets dangerous. Not moving—or freezing up because you don’t know where to go—can severely impact your safety.
  • Who’s behind you?
    • It’s a bit paranoid to sit with your back to a wall or other form of block between you and the public, but at least be aware of who’s around you. While most of the people you’ll meet are normal, law-abiding folks, knowledge of threats means easier avoidance.
  • Where’s the nearest group of people?
    • Groups of people in public are lifesavers. If you’re in a home or place where there aren’t many people, do you know how long it’d take to get to a place with people?

If you can answer those questions, you’re on the right track to stay safe. Be vigilant!

Tip 2: Stay in Contact

If you’re going to show a home at any point, be sure to get on your phone and let someone know where you’re going and when they can expect to reach you. If you’re worried about a particular client or situation, ask that they call you during/after when you’re supposed to be free to keep them in the loop. Knowing that you’re looked after can deter attackers and, if the worst should happen, helps improve response time to an emergency.

Tip 3: Fight or Flight?

If you’re in a situation where you’re going to have to choose between those two things, you should generally flee. Getting into an altercation might mean you’ll win, but the cost of fighting and possibly getting hurt is higher than if you ran. If you can’t run, then by all means, take measures to ensure your safety. But if you can get away, do so. “He (or she) who runs away lives to fight a another day,” they say—and we think they’re right.

Don’t worry too hard about the dangers—keeping a few small pointers in mind like these can improve your safety just by awareness. If you’re showing a listing to someone you don’t know or trust yet, please, exercise caution. No listing is worth your life or health.


#TechTipTuesday: How to Avoid a Scam (And How to Avoid Looking Like One)

Scams (and being identified as a scammer even if you aren’t) is one of the biggest fears of any business (and we’ve all seen the contents of our spam folders). But, while accepting large sums of cash from Nigerian princes is pretty easy to spot, how good are you at identifying more subtle scams?

nigerian prince scam

Phishing Scams

The biggest scam and internet threat out there today is the phishing scam. Phishing is a letter, fax, or email that claims to be someone from a bank or other money-handling institution looking to get your account credentials. Popular targets are large consumer banks like Bank of America. Most people think that they can identify their bank’s emails or website, but some of the phishing sites are scarily good at imitation. So much so that for each phishing blast that’s sent, 45% of people who opened the emails submitted their information.

It’s fairly simple to dodge this scam if you’re worried: always look at the address bar. If the address for a website isn’t right, it’s not the right place. Most financial institutions also sign their websites now; Internet Explorer, Firefox, Chrome, and Safari all show when these signatures are present, validate them with another authority, and display the company name. Pay attention to these and you shouldn’t fall victim.

Spam Email Scams

Spam isn’t exactly a scam, but it certainly scams you out of time and focus. Every email for a dubious substance or product takes time away from what you’re doing. But, it’s not just for prescription drugs. Spam can be any form of email that is unrequested.

And, this is one your business can fall into fairly easily. Marketing writing can be magical, well-developed, and a pleasure to read. But poor marketing writing can be misconstrued as scammy and spammy writing, which can lead to people disregarding your product or service. If you sound like an infomercial, stop—they’re already on to you. But, if you can write honestly and passionately about your service or product, you stand a chance of not being seen as spam or a scam.

Paying For Links

This isn’t technically a “scam,” but it’s gained a reputation for being a scammy-looking business practice—so much so that Google and other search engines actively penalize you for doing it if they find it. While linking out to people you know, trust, and like is important to your business’s website, paying for links are different.

Google (and most other search engines) purport to be looking for the most relevant information to a search. Part of their system is using how many links to a page it’s found to determine how useful it is. When people pay for links, they’re paying other people to link to them, thereby increasing their relevance (in theory).

In short, if you’d like to see your site disappear off Google and other search engines, go ahead and pay for them. But you’ll not see your page at the top of the Google page for much longer.

In short, the rule of thumb for avoiding being bitten by a scam is this: if it looks like you can avoid a lot of hard work and sacrifice for a low, low fee, don’t do it. If you can’t verify the identity of the web service, don’t do it. If your copy reads like Billy Mays wrote it, don’t do it.

We know that you’re class act professionals—be sure to make your business’s public appearance looks like one, too.

 


Florida Housing Market Improving Steadily

Great news for Florida’s housing market: listings, median prices, and speed of sale are all on the rise according to data from Florida Realtors.

housing market improves

The median prices are something to behold. According to the report from Florida Realtors, median prices for townhome, condo, and single-family homes all rose year-over-year—“for the 27th month in a row.” That’s simply astonishing and great news for anyone still concerned that we’re not in some form of recovery.

Additionally, the data notes a reduction in distressed sales and a corresponding interest by families looking to sell their home traditionally. Thanks to that reduction, the report notes that there is a 11.6 percent increase year-over-year in single-family home listings and a 4.2 percent increase in townhouse/condo listings. Supply and price are both going up—which is a good thing for anyone in the real estate industry and for the housing market in general.

However, it should be noted that while this is good news for our year-over-year gains in the housing market, we are still below the national median in sales price (our $165,000 versus the national $188,900). That’s not terrible, but it does show that the value hasn’t quite caught up—but with a 27 month streak of showing improvement, we’re catching up quite nicely. 

Florida Realtors states that, despite these other issues, sales are down for both single-family and townhouses/condos. Dr. John Tuccillo also notes that this is an image of a re-emerging normal market, noting that the weaker sales results in single-family homes and townhouses/condos are “solely the result of plummeting short sales,” meaning that more people are selling their homes for their value and helping stabilize the market.

And good for them, and for you. It’s nice to see us in recovery, gaining value in our real estate, and seeing some normalcy in what’s been a more chaotic world.

Thanks to DSNews and Florida Realtors for the info.


Good News: Millennials View Economy Positively

According to PulteGroup, Inc., Millennials and members of Generation Y are viewing the economy in a very positive light—one that might mean more home sales in the future. Often seen as a rent-forever generation, the polling done shows the exact opposite is true.

by Walt Handelsman regarding the economy

Thanks to a release by DSNews, we have some information for you regarding this improvement. The economy—still lagging a bit but recovering steadily—is starting to move again and Millennials are starting to get back to work, though not at the numbers that they’d like. This movement back to work in a slow trickle means that there will soon be more people looking for homes, which means an increase in real estate and title insurance (along with the rest of that industry). And that’s real good news for those real estate agents who’ve been suffering with a slowdown.

If you haven’t been paying too much attention to their crisis (which is understandable since we’ve all been suffering through it), the jobless rate has been almost double that of the American average of unemployment—according to Reuters, at 16% as of December. This, in part, might have contributed to the idea of Millennials not wanting to own. Well, that’s changing now that jobs are starting to open up for them, and with that their attitude towards the economy. Now, it seems, is the time to buy thanks to low mortgage rates and a good amount of available homes.

So, while you might be worried about the economy (as you should) and you might be concerned for your future (also understandable), remember that there is a light at the end of the tunnel—and we can finally see it as it’s approaching. And thank goodness, because it feels like it’s been far too long in this slump for all of us.

Thanks to Reuters and DSNews for the information.

 


Wells Fargo endorses ALTA Best Practices

Wells Fargo announced its support of the American Land Title Association’s (ALTA) Best Practices in its Settlement Agent Communications issued March 6. The lender said they are guidelines for sound business practices that should ideally already be in place for businesses providing title and closing services for its customers.

“In January, 2013 the American Land Title Association (ALTA) published its ‘Title Insurance and Settlement Company Best Practices.’ As stated in ALTA’s Best Practices Mission Statement, they are designed to help ‘illustrate to consumers and clients the industry’s professionalism and best practices to help ensure a positive and compliant real estate settlement experience.

“We understand that – for some — there will be transition time needed to enhance current practices and fully implement Best Practices,” the statement said. “If your company is not yet following the ALTA Best Practices – do you have a plan in place for adoption? If your company is not yet following the ALTA Best Practices – do you have written policies and procedures in place to document it and inspection processes to validate it?”

Michelle Korsmo, ALTA’s chief executive officer, said, “We appreciate the Wells Fargo leadership and recognition of the valuable partnership between settlement agents and mortgage lenders throughout the real estate closing process. Their endorsement of the America Land Title Association’s Title Insurance and Settlement Company Best Practices gives clear guidance to help ensure the protection of consumers during their real estate transaction. These industry standards are being implemented by title insurance and settlement companies around the country to help manage possible risk for consumers and mortgage lenders.”

Source: The Title Report

 For more info:

https://thetitlereport.com/TTR/Articles/ALTA-appreciative-of-Wells-Fargo-endorsement-60362.aspx

https://dsnews.com/wells-fargo-endorses-altas-best-practices-guidelines/

https://www.alta.org/bestpractices/


#TechTipTuesday: Use HDR For Better Photos

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Sometimes it can be a real pain to get a great photo of whatever we’re trying to get. (OK, maybe more than sometimes!) You’ll line up the shot, get everything in frame, and take the shot. The flash goes off, and everything in the room that you lined up in the frame so beautifully…ends up washed out and overexposed due to the bright flash. While the flash has a purpose, most modern smartphones (including the iPhone 4 and up and most Androids from that period forward) have a mode called High Dynamic Range, or HDR.

Photos are rapidly becoming one of our favorite communication media. Check Facebook and Twitter if you don’t believe me. They gather clicks and views (and they’re generally prettier to look at than black-and-white text). But if you’re washing out your photos with a flash or not taking photos because you’re dissatisfied with your photos, HDR might make a big difference to you.

That difference is made bigger if your industry requires great visuals—like real estate, for instance. The house needs to look the best it can, right? The difference between an intimate-looking dining room and a washed out one is in the HDR.

HDR comparison shot

In this article, writer Elia Locardi tells and shows the difference in a series of before/after comparisons of HDR shots and standard shots. (The most impressive improvement is depicted above, as well. Click the image for a full-size side-by-side.) HDR captures multiple shots of a subject, each allowing for a different amount of light into the camera. The software then blends the three shots to get the best lighting for each of the subjects in the frame The difference between HDR and standard photography is—almost literally—night and day. Shots that would normally need a flash to wash the scene in light suddenly become feasible without spending large amounts of cash on a specialized camera. In short, HDR is the best friend of amateur photographers and business folk everywhere who need photos for their business.

So, to reiterate: if your camera has an HDR function, be sure to try it out to see what happens. It might be the difference between a simple photograph and a work of art—or between lackluster response and the sale you were looking for.


Flood Insurance Update

The United States Senate has just passed “The Homeowner Flood Insurance Affordability Act” by a vote of 72-22 (both US Senator Nelson and Senator Rubio voted in favor of the bill. This is the bill the US House passed on March 4. This is incredible news for Florida REALTORS® and property owners. The bill will now be sent directly to President Obama for his signature!

* Reinstates Grandfathering – This bill permanently repeals Section 207 of the Biggert-Waters Act, meaning that grandfathering is reinstated. All post-FIRM properties built to code at the time of construction will have protection from rate spikes due to new mapping – for example, if you built to +2 Base Flood Elevation, you stay at +2, regardless of new maps. Also importantly, the grandfathering stays with the property, not the policy. 
* Caps Annual Rate Increases at 18% – This bill decreases FEMA’s authority to raise premiums. The bill prevents FEMA from increasing premiums within a single property class beyond a 15 percent average a year, with an individual cap of eighteen percent a year. Pre Biggert-Waters, the class average cap was 10%. Currently (Post Biggert-Waters), the class average cap is 20%. The bill also requires a 5% minimum annual increase on pre-FIRM primary residence policies that are not at full risk. The updated legislation also states that FEMA shall strive to minimize the number of policies with premium increases that exceed one percent of the total coverage of the policy (e.g., 1% of $250,000 = $2,500). 
* Refunds policyholders who purchased pre-FIRM homes after Biggert-Waters (7/6/12) and were subsequently charged higher rates 
* Permanently Removes the Sales Trigger – This bill removes the policy sales trigger, which allows a purchaser to take advantage of a phase in. The new purchaser is treated the same as the current property owner. 
* Allows for Annual Surcharges – This legislation applies an annual surcharge of $25 for primary residences and $250 for second homes and businesses, until subsidized policies reach full risk rates. All revenue from these assessments would be placed in the NFIP reserve fund, which was established to ensure funds are available for meeting the expected future obligations of the NFIP. 
* Funds the Affordability Study and Mandates Completion – This legislation funds the affordability study required by Biggert-Waters and mandates its completion in two years. 
* Includes the Home Improvement Threshold – This bill returns the “substantial improvement threshold” (i.e. renovations and remodeling) to the historic 50% of a structure’s fair market value level. Under Biggert-Waters, premium increases are triggered when the renovation investments meet 30% of the home’s value. 
* Additional provisions: This legislation includes several other provisions including preserving the basement exception, allowing for payments to be made in monthly installments, and reimbursing policy holders for successful map appeals.


From Trulia: Buying a Home 38% Cheaper Than Renting

According to Trulia, buying a home is 38% cheaper than renting a similarly sized home nationally. Here in Tampa Bay, that number jumps to 52%. While the assumption among the public is generally along these same lines, it’s nice to see some numerical confirmation of that assumption.

graph of prices
Screengrab from Trulia’s Heatmap

Additionally, Trulia breaks down their assumptions in their model in a wonderful act of transparency. From the article, their map averages use these criteria:

  1. Calculate the average rent and for-sale price for an identical set of properties. For this report we looked at all the homes listed on Trulia for sale and for rent from December 2013 through January 2014. We estimate prices and rents for similar homes in similar neighborhoods in order to get a direct apples-to-apples comparison. We are NOT just comparing the average rent and  price of homes on the market, which would be misleading since rental and for-sale properties are very different: most importantly, for-sale homes are roughly 50% bigger, on average, than rentals.
  2. Calculate the initial total monthly costs of owning and renting, including the mortgage payment and rent, as well as maintenance, insurance, and taxes.
  3. Calculate the future total monthly costs of owning and renting, taking into account price and rent appreciation, as well as inflation.
  4. Factor in one-time costs and proceeds, like closing costs, down payment, sales proceeds, and security deposits.
  5. Calculate the net present value to account for opportunity cost of money.

With all of these things taken into account, we think that Trulia got it right. Thanks again to Keeping Current Matters’s blog for pointing us to this.