Why You Should Live in Your Home Until It Sells

Last updated on October 23rd, 2019

A new study from Redfin proved what we probably all assumed was the case; vacant homes sell for less than those filled with stuff.

There’s something slightly unappetizing about a vacant home, whether it’s the emptiness of it all, or the desperation knowing someone is losing money each month it sits on the market.

Homes are also simply more exposed when there aren’t area rugs, couches, tables, and beds covering up minor (or major) defects.

Vacant Homes Sell for Less and Take Longer to Sell

  • Empty homes sold for 3.6% less than occupied ones in 2018
  • That’s about $11,000 less on average
  • They also took an extra six days to sell
  • So you may want to stick around (or at least make it appear that way)

As suspected, vacant homes often sit on the market longer than their occupied counterparts and fetch lower prices.

On average, such properties spent an additional six days on the market and went for $11,306 less when they finally did sell.

This is according to a survey of homes listed and sold in 2018, conducted by real estate brokerage (and mortgage lender and iBuyer) Redfin.

The biggest discounts were seen in Omaha, Nebraska and Greenville, South Carolina, where vacant properties sold for 7.2% less than occupied homes on average, a haircut of about $15,000.

Similar discounts were seen in El Paso, Texas, where the average vacant home sold for 6.6% less, or roughly $10,000, compared with occupied homes.

Discounts were smaller in more in-demand metros, including San Jose (just 0.9% less), Las Vegas (-1.5%), and Orange County (-2.3%).

[Why You Should Buy a Home Next to Trader Joe’s or Whole Foods]

How Many Homes Sales Are Vacant Properties?

  • Over a third of home sales in 2018 were vacant properties
  • But share of unoccupied homes varied widely by region
  • 67% of sold homes in El Paso, TX were unoccupied
  • While just 13% were empty in Kansas City, MO

Interestingly, Redfin found that 35.5% of all properties that sold in 2018 were empty at the time of sale.

That’s a lot more than I expected it to be. The share must have been really high during the housing crisis a few years back.

But this varied tremendously from one metro to the next.

For example, 67% of homes in El Paso, Texas were empty when they were listed for sale, whereas only 13% of Kansas City, Missouri homes were unoccupied.

There were a lot of empty homes in Arizona too, with both Tucson (54%) and Phoenix (50%) having large shares of vacant home sales.

Similar numbers were seen in Austin, TX (52%), Tacoma, WA (51%), and Las Vegas, NV (49%).

Meanwhile, empty homes were more of a rarity in Fort Lauderdale, FL (14%), Hampton Roads, VA (17%), and Greenville, SC (20%).

[Homes Next to Starbucks Are Worth More]

Make the Home Look Lived In, But Have Good Taste

  • Not all occupied homes are created equal
  • A poorly decorated home could actually hurt its chances
  • Expect to do some cleaning/renovating/staging if you sell your home
  • Many real estate agents now provide some of these services

While vacant homes mostly sold for less than the occupied ones, results may vary based on how the house itself looks and how it’s decorated.

Redfin agent Billie Jean Hemerson notes that a home seller’s furnishings can have a big impact on sale price.

If the home isn’t empty, but all the furniture looks like it’s from 1980 (in a bad way), or there’s lots of clutter, it’s probably going to do more harm than good.

Conversely, if the home seller has good taste that fits with what today’s home buyer is looking for, it could result in a price increase and perhaps a bidding war.

So just having an occupied home isn’t enough. There’s a good chance you’ll need to put some work into it if and when you list.

Fortunately, many real estate agents these days include some level of home staging in their listing package.

And Redfin themselves offer a so-called “concierge service” for a 2% listing fee (instead of 1%) that includes cleaning, staging, and a custom home improvement plan.

The company also recently partnered with a virtual staging company called roOomy to help decorate vacant properties, ideally so they sell for more in a shorter period of time.

Ultimately, when a home buyer checks out your property, they’ll want to get a sense of what it will be like when they live there.

If it’s empty, or poorly decorated, some prospective home buyers may not be able to look beyond that, even if the home itself is just fine.

Of course, if you’re a savvy home buyer with an eye for design, you might be able to snag a discount on a home that needs just a little bit of TLC to get back to its prime.

As a buyer, you should take note of the fact that vacant properties often sell for less, and use it as a negotiating tool.

While the staged homes will undoubtedly look more appealing, there’s a good chance they’ll sell at the higher end of the market.

And all those beautiful furnishings will be gone once it’s time for you to move in…

Read more: 12 home selling tips for 2019

Source: thetruthaboutmortgage.com

Homie Highlight: Adrienne Allen

Title: Broker

As Broker, Adrienne sets the standard for excellence for our Homie agents in serving the homeowners and new buyers of Southern Nevada.

Adrienne’s Background

Adrienne has 20 years of real estate experience under her belt. She started as a real estate office receptionist right out of high school and was soon promoted to office manager. Adrienne went back to college, juggling life as a mom while pursuing a degree in Business Management.

After witnessing the energy and excitement buyers and sellers brought to the real estate transaction, she landed her real estate license in New Mexico in 2004 where she later launched her first real estate brokerage. In 2009, she and her family relocated to Las Vegas for her husband’s job where she launched her second real estate brokerage serving the Vegas community. Adrienne is dedicated to real estate and plans to spend the rest of her entrepreneurial career in the industry.

“There’s no other career that has a different day-to-day every day. Not a day that goes by that I have not learned something new in 20 years,” Adrienne shared excitedly.

Why Homie?

Adrienne knew the real estate industry was rapidly changing and that the business would soon catch up to the technology available. As a real estate agent, Adrienne often wondered, “Why are agents still being paid so much? We throw the property on the market, do marketing, and serve the buyers that come.”

She knew there was a better way and actively monitored the progress of real estate tech disruptors across the country. “When I saw Homie announce their arrival in Nevada and that they would charge a flat-fee for the seller, it made so much more sense so I reached out to join the team.”

Although the Las Vegas office has only been open for two months, Adrienne is excited to bring more efficiency to the Las Vegas real estate industry. “A top-performing traditional real estate agent can do 50-60 deals per year. With Homie, our agents are able to do 100 deals per year because so much time is being saved in each step of the process using technology.”

Adrienne is excited to meet you and welcome you to the Homie family. “I love working with our Homies which includes our growing team of agents and clients,” Adrienne said. “I talk with them everyday and look forward to serving more of the Las Vegas community

Join the Disruption

If you want a career you love, want to help change the lives of others, and want to join a company in disrupting the real estate industry, check out careers at Homie!

Want to learn more about what Homie real estate agents do for their clients? Click here.

Read more Homie Highlights

Homie Highlight: Destiny Thomas
Homie Highlight: Julie Grimes
Homie Highlight: Sam Lindros
Homie Highlight: Michael Herrera

Source: homie.com

RedfinNow Temporarily Halts Offers as Housing Market Takes Turn for the Worse

Posted on March 18th, 2020

We’re now getting our first indication of how the coronavirus may affect the once booming housing market, thanks to a blog post from Redfin boss Glenn Kelman.

It’s not good news, as indicated by the title of this post.

RedfinNow Hits the Brakes

  • The real estate brokerage is no longer buying homes for cash
  • Unclear how long they will pause their iBuyer business
  • Doesn’t bode well for housing market sentiment
  • But understandable given the uncertainty surrounding coronavirus

First and foremost, the company’s iBuyer unit RedfinNow is halting offers it makes on homes, per a separate 8-K filing.

On the surface, the company isn’t interested in buying your home for cash anymore, at least not at the moment.

This doesn’t necessarily mean they think the housing market is going to tank, but it does seem to signal some uncertainty on their part.

So that’s a little bit unsettling, though perfectly understandable for a large, publicly-traded business to disclose that material event.

By the way, Redfin stock has fallen from around $33 per share a month ago to just over $10 today.

It fell nearly 25% on Wednesday as the coronavirus continues to ravage the economy.

The company did not indicate when they’d relaunch RedfinNow, but for now, it appears to be on hold.

Home Buying Demand Has Taken a Hit from Coronavirus

  • Home buying demand was up roughly 27% in both January and February compared to last year
  • Last week year-over-year growth fell to just 1%
  • And in the past few days it has turned negative
  • Probably a taste of what’s to come as social distancing and self-quarantines take effect

Now onto that post from Redfin CEO Glenn Kelman. He opens by stating that “home-buying demand took a big hit.”

By that, he means year-over-year growth dropped from nearly 27% in January and February to just 1% growth over the past week.

And in the past three days, there has been a contraction in home buyer demand.

In other words, the spring housing boom we were all waiting for, spurred on by those new all-time mortgage rates, is toast.

In short, we’re all basically quarantined in our own homes or apartments, so virtually nobody is even thinking about touring someone else’s house.

However, while Kelman said most open houses have been canceled, including all of Redfin’s own open houses, some real estate agents are still out there trying.

He mentioned one showing in Hoboken, New Jersey, where Redfin agent Noah Goldberg said six groups of potential buyers were being staggered like a Disneyland ride.

Goldberg added that his activity was down by half now that the coronavirus is here in the United States, and not just some far away land.

Home Purchases Are Still Closing, But…

  • Some Redfin agents say it’s business as usual
  • But home purchases just days from funding will probably still go through
  • Need to worry about homes that just went pending and new listings
  • Might see fallout as outbreak worsens, and there may be disruptions as ancillary services close

That pessimism aside, a Redfin manager out of Jacksonville, FL said it was “business as usual,” with closings taking place all week.

Of course, those who are near the finish line probably have a much smaller likelihood of pulling out versus those just under contract, or those who have yet to find a home.

Meanwhile, a Washington D.C.-based listing agent said two of three listings that hit the market just last week were already pending.

Sadly, last week is a lot different than THIS week. So my expectation is for a lot of these positive outcomes to change pretty rapidly.

Some of those offers may also fall out of escrow depending on how bad things get.

Kelman added that the number of listings activated on the MLS over the past week was still up 0.5% year-over-year.

Once again, a caveat. Most of these listings debuted before the weekend, and a lot has changed in just a few days this week.

He was surprised to see an increase in new listings in some of the cities hardest-hit by the coronavirus, with volume up 9% YoY in Seattle and 6% in the Bay Area.

There have also been rumors that with courthouses closed, sales wouldn’t be able to be recorded. But Kelman notes that most counties nationwide support electronic recordings.

Redfin Has Stopped Buying Ads

  • Company halted both mass-media advertising and digital ad buys
  • Will continue to advertise on behalf of their home sellers
  • Appears they are uncertain about direction of the housing market
  • If everyday Americans feel the same way it could be a rough year for the real estate industry

In one final ominous sign for the housing market, Kelman said his company has stopped purchasing advertising to promote its brokerage.

The only ads they’re buying are custom digital campaigns they create for each listing customer, so they’re still supporting their home sellers.

Redfin ceased the purchase of mass-media advertising on March 9th, and halted digital ad buys a week later.

In other words, they don’t sound very bullish on the housing market right now. However, they might just be taking a wait-and-see approach to see how everything pans out, instead of throwing caution to the wind.

Unfortunately, if prospective home buyers do the same thing, it’s going to be awfully hard to sell a home right now.

The silver lining, if there is one, is that mortgage lenders can better manage their refinance pipeline instead of worrying about home purchase applications.

And maybe that will allow them to finally lower mortgage rates again once volume slows.

Source: thetruthaboutmortgage.com

Real Estate Delistings Increase 148% From a Year Ago as COVID-19 Impact Grows

Posted on April 2nd, 2020

Housing supply was bad before the coronavirus epidemic reared its ugly head, and now it has gotten even worse, per new data from real estate brokerage Redfin.

Homes Flying Off the Market

delist

  • 28,140 homes were taken off the market before selling in the past week
  • That represents a 148% year-over-year increase in delistings
  • Even worse in cities of Chicago, Los Angeles, and Philadelphia
  • Some cities not yet impacted as stay at home orders finally go into effect this Friday

The company noted that home delistings, where home sellers pull their properties off the market, increased 148% during the week of March 29th, compared to a year earlier.

And during that seven-day period, nearly 4% of active listings were taken off the market, which is roughly twice the typical rate.

It was even worse in the cities of Chicago, Los Angeles, and Philadelphia, where 6% of listings were pulled.

All of those hard-hit cities have a shelter in place mandate, so it’s clearly not the best time to sell a home.

Conversely, Atlanta only saw 2% of active homes delisted, which might be related to their lack of stay at home orders until this Friday.

Once implemented, the delisting trend will likely catch up to homes in Georgia as well.

New Real Estate Listings Have Also Declined

  • Just 58,366 new for-sale listings nationwide last week
  • Down 33% from the same week in 2019
  • Comes as traditional spring home buying season kicks into gear
  • Detroit and Philadelphia saw worst of it with new listings in both cities down 63%

New listings are also taking a hit, with home sellers reluctant to get the ball rolling, for obvious reasons.

There were just 58,366 new listings during the week of March 29th, a big 33% decline from the same week in 2019.

And it seemed to hit just as the traditional spring home buying season was beginning to heat up. Talk about bad timing.

Detroit and Philadelphia saw the worst impact, with new listings in both cities down 63% year-over-year last week.

Similar declines were seen in Chicago (-47%), Dallas (-36%), and Los Angeles (-49%), and it happened across all home price levels.

Inventory Down and So Are Prices…

home price drop

  • Usually we see prices go up when supply goes down
  • At the moment both supply and list prices are falling in tandem
  • Median list price fell from $330k two weeks ago $309k
  • Will likely continue to drop as prospective buyers put purchases on hold

Now here’s the scary part. Usually when inventory, or supply goes down, prices go up. That’s not the case in this unique pandemic-impacted real estate market.

Redfin has also seen the median list price fall after steadily rising moving into spring.

It was as high as $330,000 two weeks ago, but has since fallen to $309,000, a $21,000 decline. And it’s a sign prices will continue to fall, either via price cuts or lowball offers, or perhaps both.

Meanwhile, pending home sales plummeted 42% from the same period a year earlier, with the biggest declines seen in Dallas (-66%), Atlanta (-57%), and Detroit (-55%).

Similar losses were seen in Los Angeles (-49%), Chicago (-45%), Philadelphia (-42%), Phoenix (-38%), and Denver (-35%).

Those stories you heard last week that real estate agents were still closing homes probably reflected the time lag related to the epidemic, and the relatively long escrow period that likely began well before things took a turn.

But now that most states are in a veritable lockdown, we’re going to see the true impact of coronavirus on the housing market.

To make matters worse, a lot of prospective home buyers are likely going to lose interest in buying a home this year, even if things improve health-wise.

And those that are still interested might fall out simply because they no longer qualify for a mortgage, due to unemployment, loss of income, loss of assets, and so on.

The question is how bad will it get, and when will things turn around?

Read more: CARES Act grants 12 months mortgage forbearance to homeowners.

About the Author: Colin Robertson

Before creating this blog, Colin worked as an account executive for a wholesale mortgage lender in Los Angeles. He has been writing passionately about mortgages for nearly 15 years.

Source: thetruthaboutmortgage.com

Stimulus Checks Barely Make Dent in Mortgage

The so-called “coronavirus checks” have begun to hit Americans’ bank accounts this week, providing relief to those whose income has been curtailed or completely cut.

It might be especially helpful to those who need to pay rent or make a monthly mortgage payment, the latter of which can be pushed back as late as the 15th of the month in most cases.

But just how far can the stimulus check go toward covering a rent or mortgage payment? Well, that totally depends on where you live.

Those with an adjusted gross income of up to $75,000 get the full $1,200 offered by the government.

It’s even higher ($2,400) for married couples making $150,000 or less, and potentially much higher for married couples or heads of household with young dependents.

Stimulus Checks Go Further on Rent than the Mortgage

  • 77% of American renters could cover a month’s housing expenses with $1,200 check
  • 47% of homeowners could pay their mortgage with the same check
  • Share of homeowners who could make housing payment significantly higher in Indy (66%)
  • Check would do very little to pay mortgage for most San Jose, CA homeowners (6%)

First off, 77% of renters could cover one month’s worth of housing expenses with a $1,200 check, versus just 47% of homeowners, per a new analysis by real estate brokerage Redfin.

The median monthly rent in the U.S. is $1,058 – it’s as low as $804 in Cleveland, Ohio, and as high as $2,283 in San Jose, California.

As such, about 93% of renters in Cleveland could cover the rent with their stimulus check and still have money left over, while just 22% of San Jose renters would be able to foot the entire bill.

With regard to homeowners, the median monthly mortgage payment is $1,566 – it’s as low as $1,254 in Indianapolis, and as high as $3,371 in San Jose, CA.

That $1,200 would cover the mortgage plus basic utilities for 66% of Indy homeowners, but a mere six percent for San Jose homeowners.

Where the Stimulus Checks Go Far

mortgage stimulus check

As you can see, Indy homeowners can mostly cover their mortgages (and basic utility bills) with a $1,200 stimulus check.

The same goes for homeowners in Louisville, KY, Birmingham, AL, Memphis, TN, and Buffalo, NY.

Of course, a mortgage is just one of the many monthly expenses a homeowner must cover, and doesn’t account for things like grocery bills or unexpected home maintenance.

It’s also unclear what basic utilities are covered here – heating and water bills can get pretty expensive.

And what about property taxes and homeowners insurance? A true mortgage payment covers PITI.

Where the Stimulus Checks Barely Make a Dent

little stimulus

Then we have the opposite end of the spectrum, where $1,200 would do basically nothing for homeowners in the Bay Area, NYC, LA, San Diego, and Boston.

And that’s assuming these homeowners would actually receive a check, since it maxes out pretty quickly and folks in those expensive areas might make a lot more than the average American.

If they did get the $1,200, it’d cover most or all of the mortgage for anywhere from 6% to 14% of homeowners.

In other words, it wouldn’t go very far for many, and again, we have to factor in things like grocery bills, all utilities, and other debts like credit card bills and potentially student loans that aren’t on hold.

Ultimately, the stimulus checks aren’t going to provide total relief, though they might allow renters and homeowners to pay some bills or purchase essentials.

Should You Use Your Stimulus Check to Pay the Mortgage?

  • For most the stimulus checks won’t cover a full mortgage payment
  • Those in need of assistance might be better off requesting forbearance
  • And setting aside the stimulus funds for the eventual payback of forbearance
  • This illustrates why it’s important to have cash reserves when buying a home

When you take out a mortgage, you are typically required to document asset reserves. The idea is that you have some money set aside to cover mortgage payments should your income evaporate.

So a mortgage lender might ask that you have anywhere from two to 12 months of reserves as a cushion in case things go awry.

However, many home loans don’t require any reserves, which one could call risky. While that’s debatable, it’s times like these that support the argument that reserves are good.

Unfortunately, many Americans barely have enough funds to cover the down payment and closing costs, so asking for reserves on top of that can stop home purchases in their tracks.

Anyway, my tangent about reserves has a point. It might be wise to set aside any stimulus money as reserves, and opt for mortgage forbearance via the CARES Act if the check won’t cover the housing payment and you need financial assistance.

That way once the forbearance period ends, you’ll have some cash reserves to cover the shortfall from the forbearance.

This might be in the form of a repayment plan where you pay a little extra each month for a period of time to cover the missed amounts.

Read more: How is mortgage forbearance repaid?

Source: thetruthaboutmortgage.com

How to Find a Mentor for Real Estate Investing

How to find a mentorMany people feel they need a mentor to succeed as a real estate investor. The truth is a mentor can be a massive help, but I don’t think it is absolutely necessary to be successful. Many people have become successful real estate investors without a direct mentor. Finding a great mentor can be time-consuming and expensive as many will charge tens of thousands of dollars! If you can find a mentor to help you that is great, but don’t give up or spend all of your time looking for the mentor instead of learning about real estate.

I have been a successful real estate investor and agent. I have flipped almost 200 houses (199 as of right now, own 175,000 square feet of rentals properties and I own a real estate brokerage. I have also written 9 books, have a successful YouTube channel and Instagram page (100k subscribers). A lot of people want me to be their mentor. While I love helping people I simply cannot mentor everyone who asks because I have an active business and a family. I have set up some programs to help people who want mentorship and they don’t cost tens of thousands of dollars!

What is a mentor and why do you need one?

Some think a mentor should be a guide who helps when needed, while others want a mentor to do all the work for them. There are also those, who think a mentor will tell them exactly what to do at all times, and when they don’t get that, they give up. I found that most people I tried to help, wanted someone else to do the heavy lifting, and when they found out much work they would have to do, they gave up. When looking for a great mentor, you cannot be focussed on what that mentor can do for you, but what you can do for the mentor. Successful people are usually busy, and their time is very valuable. If you can provide value to a mentor, they may be willing to help you out, but don’t expect someone to help you for free, just because you are “highly motivated”.

A mentor is defined as: “an experienced and trusted adviser”. There are a couple of very important points to take from this definition.

Who should be a mentor?

To be a mentor you need to have experience in the field the mentee wants to learn about. The level of experience needed can vary, based on what the mentee wants to learn and how involved the mentor is. A successful mentor may only know one thing really well, but all they teach is that one thing. Other mentors, may know ten different techniques, and teach all ten based on what the mentee needs help with. As someone looking for a mentor, you need to make sure the mentor you are looking for has experience in what you need help with. The more specific, the better. If you simply want to be “successful in real estate”, that will make it very hard for anyone to help you.

But if you know you want to be a wholesaler, or a house flipper, or a real estate agent that will help you find a mentor in that area of expertise. I think it is vitally important to find a mentor who is actively doing what you want to do and did not quit 10 years ago or never was an investor at all. The world is full of fakes, so make sure the person you are trusting actually did what you want to do.

What is an advisor?

The second part of the definition of a mentor mentions an adviser. An adviser is someone who gives advice and helps people. In my mind, an adviser does not teach someone how to do everything. They offer advice in certain situations when it is needed. If someone is looking to learn an entire trade from scratch, they would want to be part of an apprenticeship. An apprentice is:

“A person who works for another in order to learn a trade.”

Don’t think a mentor hoping they will personally teach you everything you need to know to be successful. I have people who want to shadow me or work for me for free so that I teach them to be exactly like me. The problem is they cannot even tell me what skills they have and they have no idea what they like to do. They want to be rich and that is all. If you are not willing to put the work in to find out what you want, it will be tough to ever find a mentor.

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Do the rich need mentors?

Many of the wealthiest people in the world, spend thousands and thousands of dollars on coaches and mentors. The wealthiest people also are at a point where they need very specialized training and have to pay a lot of money to work with the best trainers in the world. I am not against paying for an expensive mentor if you have the financial means to do it.

Unfortunately, the real estate investing world is full of people trying to convince novices to spend $30,000 on real estate training. They have no qualms with asking people to borrow the money, refinance their homes, or even get credit cards to pay for it. These programs draw in people who don’t know what they want except they want to be rich.

The rich use mentors to help them become the best in the world at certain tasks to careers that they already know a lot about. You do not need a $30,000 coaching program if you are just starting out and trying to find your way in life. If you are just starting out you may not be ready for a mentor but someone to help educate you.

How do you decide if you need a mentor?

If you want to invest in real estate or even be a real estate agent, a mentor or education can help you succeed much faster. There are many choices for a potential mentor and it is not easy to decide who to use. If you are a real estate agent, you should be able to find a good mentor. When you choose a broker to work with, make sure you pick one who offers the most training and can act as a mentor. Too many agents choose the broker based on how many fees they charge, instead of the training offered. If you cannot find an awesome broker to work with, there are many training programs for real estate agents to help them succeed.

When you get into real estate investing, it gets much more confusing. There are programs, mentors, and systems for flipping, rentals, wholesaling, notes, tax liens, and more. Before you choose a mentor, you need to figure out what area of real estate investing you want to be in. Learn as much as you can about the different ways to invest.

My blog has a ton of articles on real estate investing and real estate agents. if you want to dig deep I have written 9 books as well on a variety of subjects. Books are a great way to learn what you want to do before you seek out a mentor.

Many people do not like to read so you can also check out my Youtube channel that has a ton of information as well.

https://www.youtube.com/channel/UCOTPdegeURsMXpwWgnAx_Ow/

Can I help you decide how to be better in real estate?

Along with my books and other resources, I have an Insider program that allows people to ask me direct questions every week. It also has a monthly newsletter, podcast, advanced calculators, and a contest that allows people to win prizes for completing real estate-related activities that will help them succeed.

If you talk to a lender, visit a potential deal, or get pre-qualified or attend an REIA meeting, you earn points. The winners of the contest get access to my advanced coaching programs, autographed books, and other prizes.

I wish I could answer every email or direct message I receive, but it is simply impossible based on how many people ask for my help. The Insider program is one way to get that help directly from me and we are offering one month free for a limited time.

Learn more about the InvestFourMore Insider

How do you find a real estate mentor?

Once you know what field you want to be in, how do you actually find someone with experience in that field? If you are reading this article, you have already found one source of information, blogs, and websites. You have to be very careful who you listen too. There are many great websites with a lot of really good information, and there are many websites that are simply sales funnels to real estate training programs. There are also many people on forums who pretend to be experts, who have no idea what they are doing. When you see advertisements for free books or free courses, you can be assured they are going to try to sell you a course at some point. Not all courses are bad or a waste of money, but find out as much as you can about the teacher of that course, and make sure they are the person you want to learn from.

I would be careful when the mentor or course makes huge promises, and won’t give you any information until you buy. If you hear an advertisement on the radio for a free seminar, you can be sure they will be trying to sell you a $30,000 course at that seminar or very soon after it.

There is also the option of finding a local mentor, which is usually the best route. However, local mentors may not want to teach you, because they would be creating competition for themselves. A local mentor may be willing to have coffee or go to lunch once in a while, but most don’t have the time to teach someone everything they know.

There are many people willing to be mentors to new investors, but they will want to be paid in return. The courses you see online or advertised on the radio, may not even include training from the person who is promoting it.

If you need or want a mentor, they are out there but make sure you pick the right person if you choose to pay for training. There are ways to find a mentor without paying for it, but that is not easy either. it usually involves working or being an intern for someone, but you better know how you can help that investor and not depend on them to tell you how to live your life.

Do you need to pay for a real estate mentor?

If you want a mentor, but don’t want to take the time to research different investing techniques or provide value to the mentor, you can pay for it. There is no shortage of real estate investing programs and they will all gladly take your money. You also might be able to find a mentor to help you for free, but it won’t be easy.

I have people email me all the time asking what they can do for me, to get my help for free. I cannot answer that question.

  • I have no idea what your skills are or what you are good at
  • I have no time to find a job for someone to do
  • I have no idea who you are and if you are reliable
  • Being “super motivated” is not a skill

Almost everyone who wants my help is super motivated, that means nothing to me. Almost everyone thinks they are super motivated and most people are at some point in their life. The problem is, they may only be super motivated for about 5 minutes. If you want someone to help you for free, you have to be able to offer them a service in return, not just be motivated.

You must remember that successful investors are usually very busy, they have many connections and a lot people who want their help. If you go to an investor and tell them you need a mentor, are super motivated and will be willing to work, you won’t get very far. Super successful investors hear that story all the time, have no time to come up with a job, and then train someone to do that job.

You need to offer the mentor value. What kind of service can you offer someone? That depends on what skills you have. Are you good at computers, marketing, sales, writing, or something else that you could help that investor with? Once you identify what skills you have, figure out what job you could do to make the investors life easier. Finally, figure out what a good trade is for the time you will be spending, versus the time the investor or mentor will be spending helping you. Remember, the mentor who want to learn from is much more valuable than you are, and the tradeoff will not always be even.

I have offered to give my programs away for free to people who offered me a service that was specific and helpful to me, without much thinking needed on my part. Sometimes it has worked out and other times it has not. Many times the person keeps their side of the bargain for a week or two and then quits, never to be heard from again .

You can use this technique with local or long-distance mentors. Remember to do as much research on your end as you possibly can before reaching out to someone.

One of the most frustrating things for me, is getting an email from someone who wants a mentor. They have no idea how they want to make money in real estate, they have no idea where to start, they have not done any research, they just know they want to do something in real estate. They want me to hold their hand and tell them exactly what to do, every step of the way. On top of all that, they want me to call them to discuss it.

Here is one more tip for finding a mentor, contact them the way they want to be contacted. If someone asks to be emailed, email them. If someone asks to be called, call them.

What if you want me to be your mentor?

I have many coaching programs for investors or agents. I created cheaper programs and books for people who are just getting started and I have programs with coaching calls and email as well. You can find everything in my store here:

InvestFourMore Shop

My most advanced coaching is The Complete Blueprint for Successful Real Estate Investing, which comes with monthly calls and unlimited email coaching from me as well as a lot of guides and videos. It is focussed on rentals and flips as I am not a wholesaler and I do not teach wholesaling. If you are interested in the Blueprint shoot us an email and we can let you know if there are any current specials.

Source: investfourmore.com

Home Prices vs. COVID-19: Will They Go Up or Down?

Posted on May 7th, 2020

It’s time to take a look at how COVID-19 could impact home prices given the massive disruption to the local, state, national, and global economy.

On the one hand, inflation is expected due to all the government spending, which could lead to a price increase since real estate often acts as an inflation hedge.

Conversely, if tons of borrowers lose their homes due to unemployment, we could see properties flood the market. And when combined with fewer eligible buyers, it could lead to a supply glut.

Consider the Lack of Housing Supply and Mortgage Quality

  • The housing market has three great things working in its favor right now
  • Housing supply is low enough even if buyer demand wavers during this uncertain time
  • The quality of today’s mortgages is excellent any many homeowners have lots of equity
  • Mortgage rates are at record lows, which further increases home buyer appetite

First, let’s compare today’s housing market to the one in 2006. They really couldn’t be any different, both from an inventory standpoint and from a mortgage perspective.

Simply put, back then there were way too many homes being built, and not enough demand to meet that supply.

At the same time, banks and lenders were doling out home loans to anyone with a pulse, knowing they could quickly bundle the underlying mortgages and sell them to Wall Street shortly after origination.

Taken together, it was a recipe for disaster. Homeowners had massive mortgages they couldn’t truly afford that were often set to adjust higher just months after they took them out.

They also had no skin in the game, aka home equity, so there wasn’t much incentive to stick around and try in vain to keep a sinking ship afloat.

Today, Americans are sitting on the most home equity in history, and very little of it is being tapped thanks to tighter underwriting guidelines that have only become more restrictive since COVID-19 reared its ugly head.

Meanwhile, there’s an inventory shortage that has likely only worsened as fewer existing homeowners list their properties, and mortgage rates are at record lows.

In short, homeowners today have tons of equity and historically cheap mortgages, and home buyers have fewer properties to choose from and ridiculously low mortgage rates at their disposal.

The Great Unknown Ahead

  • Ultimately nobody knows what the future holds or how we recover post-coronavirus
  • 1 in 5 Americans have already filed for first-time unemployment benefits since mid-March
  • That will likely worsen over time and lead to increased mortgage forbearance requests
  • The big question – is this income hit temporary for most homeowners or permanent?

Now it’s wonderful that today’s mortgages are mostly pristine, and that homeowners have tons of equity to serve as a cushion if forced to sell.

But we’re living in a very fluid and strange environment at the moment that could change in no time at all.

For example, one in five Americans have filed for unemployment since mid-March, and that’s likely only going to get worse.

So even if many of these homeowners had super affordable mortgages, a lack of income and the inability to tap their equity could put them at risk quickly.

To counter that we’ve got the mortgage forbearance offered via the CARES Act, which is great for struggling homeowners but only lasts for 12 months.

What happens after that? At best, if they simply have to resume making normal payments, there’s a decent chance not everyone will be re-employed and able to do so.

The world has changed and may not go back to “normal,” and thus not everyone will have the realistic ability to return to making monthly mortgage payments.

Even if they’re offered a loan modification to lower their payment, it still might not be enough if they can’t find work.

The same goes for investment properties such as those offered by Airbnb and other short-term vacation companies, or kiddie condos owned by parents in college towns, which might remain vacant.

If this is the case, we could see a flood of new properties hit the market similar to what we saw back in 2008, 2009, etc.

That’s where these two very different housing markets could begin to intersect. The good news is we didn’t have a supply glut before COVID-19 came around.

Back in 2006, we had a massive oversupply that was further exacerbated by a financial bubble, so it was a one-two punch.

Additionally, one could argue that both homeowners and lenders were to blame for what happened back then.

Sure, lenders offered high-risk products, but borrowers happily pulled out billions in cash out along the way to spend on who knows what.

Today, you can’t really blame a homeowner who is unable to make their mortgage payment due to the coronavirus epidemic.

And it’d look really bad to foreclose on this type of homeowner, which could limit the damage and keep inventory tight.

But here’s the thing – no one can sit here today and say they know what’s going to happen with COVID-19. And data models can’t forecast properly in this environment.

So really anything right now is a guess.

What Are We Seeing So Far in the Housing Market?

homebuyer demand

  • Home sellers mostly haven’t budged on listing prices
  • Prospective sellers are ready to go once stay-at-home orders are lifted
  • Amenities like big yards and home offices are becoming more important to buyers
  • Home buying demand is recovering and listing prices are up from a year ago

Everyone seems to want to call this event temporary – a moment in time that will magically fix itself once the economy opens up.

I don’t subscribe to that, as much as I wish it were true. You can’t simply erase what’s happened the past several months, nor what lies ahead in the aftermath.

Speaking of, are we even “after” yet, or is this still in the early innings. While that too can be debated all day long, again no one really knows.

But we can look at early impact to get some sort of a clue.

The MBA reported that seasonally adjusted home purchase applications increased 6% from a week earlier, with even bigger gains seen in California and New York.

The ever-cheerful National Association of Realtors reported that home sellers have not lowered their listing prices as a result of COVID-19.

In the latest week, 73% of Realtors said their clients did not reduce listing prices to attract home buyers.

That’s been pretty steady for the past few weeks since NAR began reporting on it.

Additionally, they said today that 77% of prospective sellers “are preparing to sell their homes following the end of stay-at-home orders.”

In other words, once this blows over it’s going to be real estate business as usual, sans discount!

Interestingly, buyer needs might have changed – they now want a big backyard to play in and grow their own food, along with a home office and possibly a home gym too.

The less is more thing may no longer be a hot trend, nor is urban living possibly as popular. The Burbs are back!

Over at Redfin, it’s also good news with nearly 53,000 homes hitting the market during the week ending April 24th, compared to just over 48,000 for the week ended April 13th.

Additionally, pending home sales have increased from less than 31,000 to more than 32,500 during those same periods.

Despite the rise in new listings, there were less than 700,000 homes for sale in Redfin markets nationwide, the lowest amount the real estate brokerage has seen during the past five years.

That might explain why the median listing price was $308,000 for the week ending April 24th, up 1% compared to the same period last year.

Home buyer demand has also begun to climb back after taking a hit in March, a sign potential buyers are unfazed and ready to move forward.

A Home Price Projection from Zillow

Zillow scenarios

  • Company sees home prices falling just 2-3% by the end of 2020
  • With a recovery in home prices throughout 2021
  • Their pessimistic model sees a 3-4% decline in prices and no recovery in 2021
  • Home sales are expected to fall 50-60% in all their models before rebounding at varying speeds

Now let’s take a look at a projection from Zillow, the creator of the Zestimate that should know a thing or two about home prices.

They have forecast a mere 2-3% drop in home prices through the end of 2020, which will be followed by a recovery in prices throughout 2021.

That means a small drop this year that is recovered next year could mean no material change for home prices due to COVID-19.

So they appear to be on the “this is temporary” wagon. Prior to the coronavirus outbreak, home prices were expected to rise 3.3% on average in 2020, and 2.7% in 2021, per the Zillow Home Price Expectations Survey, which includes a panel of more than 100 economists and experts.

But again, their “proprietary macroeconomic and housing data” might not be well-equipped to take into account a pandemic.

They have three different scenarios for home prices, including an optimistic, medium, and pessimistic outlook.

At best, they drop only 1-2% this year, at worse they fall 3-4% and “remain depressed through 2021.”

In all cases, home sales are expected to take a big hit of 50-60%, though when they recover varies.

That might hurt real estate agents and mortgage lenders if mortgage refinance volume begins to waver.

The good news, despite all the horrible news, is that homeowners are a lot better off today than they were in 2006, which means more of them should be able to get through this crisis without losing their home.

And that should bode well for home prices.

Source: thetruthaboutmortgage.com

COVID-19 Is Pushing Home Buyers to Move Sooner

Sometimes you need a little push to get things going, especially when it’s a big something like purchasing a home.

Well, it turns out a pandemic can be that driving force, as evidenced by a new survey from real estate brokerage company Redfin.

The company said 25% of the 1,000 home buyers it polled are moving (or moving sooner than planned) due to COVID-19.

COVID-19 Induced Low Mortgage Rates Are Getting Buyers Off the Fence

changing plans

In terms of what’s getting people moving, literally, it’s the record low mortgage rates currently on offer.

Thanks in part to COVID-19, mortgage rates have hit new record lows eight different times this year (so far and it’s only August), as economic uncertainty often has a positive effect on interest rates.

Some 55% of respondents cited the “low mortgage rates” as reason to change or speed up their plans.

The second biggest factor (52%) was “spending more time at home,” something I think we’ve all done a lot of lately.

When you’re home all the time, you have more time to think, and more time to complain about your surroundings too.

Third was the work from home angle (40%), which is changing living preferences for prospective home buyers.

It tends to mean buying more house so a home office can be designated in one of the bedrooms.

It also means moving out of the city to the more spacious and affordable suburbs.

Home Buyer Preferences Aren’t What They Used to Be

home buyer preferences

While 25% of respondents said COVID-19 hasn’t changed their plans or preferences, a home office and outdoor space are now at the top of the list for many prospective home buyers.

Additionally, there’s a desire for a bigger yard, a pool and/or hot tub, a designated learning space for children, and a bigger home in general.

In other words, a lot of today’s home buyers expect to be holed up in their properties for a while, and are planning accordingly.

Others said they delayed their plans to move, or want a less expensive home, perhaps due to uncertainty regarding income or employment.

Still, despite a surge in unemployment and a very shaky economy, real estate appears to be firing on all cylinders.

Per Redfin, pending home sales were up 12% year-over-year during the four weeks ending July 26th, while the median sale price was up 11%, the largest increase since 2014.

Additionally, more than half of Redfin offers involved a bidding war for the third consecutive month in July.

Anecdotally, I know of two families offhand that have sold or are in the process of selling their homes during the pandemic.

Interestingly, both families had lived in their homes for many years and thought of them as forever-homes. Amazing what a pandemic will do, eh?

One is upgrading to a larger home to account for the wife now working from home.

And the other is moving out of the city and into the suburbs, both for more space and to get out of the less-desirable urban center, something they thought they’d never do.

It’s basically an about-face from the trend we saw before COVID-19 hit – everyone and their mother (literally) wanted to live in a city center, walk to bars and restaurants, live with less space, etc.

That’s all changed very quickly, as folks realize it’s nice to have some breathing room when you spend most, if not all, of your time in one place.

Both homes went pending in about a week, at high asking prices, which tells you how much demand there is right now for residential real estate.

Whether it will last remains to be seen, but at the moment it seems to be all systems go.

About the Author: Colin Robertson

Before creating this blog, Colin worked as an account executive for a wholesale mortgage lender in Los Angeles. He has been writing passionately about mortgages for nearly 15 years.

Source: thetruthaboutmortgage.com

340: Jason Stockwell: How To Win More Real Estate Listings

Jason Stockwell is a cut above the rest in the real estate brokerage business. He leads Team Stockwell which is a proactive real estate solutions organization. His team builds relationships to understand clients’ goals & objectives in real estate. Customer Service is at the core of his business. With over 70 years of combined Real Estate experience, Jason’s team believe they can truly provide the best customer experience to every client they work with. His team represents over 250 clients each year and each one is as important as the last. 

Join us as Jason shares his mindset and a glance at his journey to becoming a Real Estate Rockstar by providing the best customer service to every client he works with.

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@properties plucks Detroit shop as first franchisee

Chicago’s @properties announced its first franchise location Tuesday – the Detroit shop formerly known as Alexander Real Estate.

Alexander, now rebranded as @properties, is a four-year-old firm with 45 agents and $120 million in 2020 sales volume that has so far focused on downtown Detroit.  

Snapping up Alexander is part of a “national expansion plan,” said Chris Lim, president of growth at @Properties, with the Windy City brokerage eying a “half-dozen” franchise announcements in the coming year.

Co-founded by Thad Wong and Michael Golden in 2000, @Properties is the biggest real estate brokerage in Chicago and 10th largest shop in the nation with $10.8 billion in 2019 sales, according to RealTrends.

For years, Wong and Golden strictly focused on the Chicagoland area. But in 2018, a private equity firm, Charlottesville, Virginia-based Quad-C Management, took a stake in the company.


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Since then, @Properties bought an undisclosed stake in Charlottesville brokerage Nest Realty as well as Atlanta’s Ansley Real Estate, headed by Bonneau Ansley.

Wong and Golden announced in September that they were shopping for franchise partners, and that they would charge a $35,000 franchise fee, plus a monthly tech fee of $50 per agent, and collect 6 percent of the franchisee’s revenue.

In exchange, @Properties is offering its marketing department, their proprietary technology @platform, and potential financial assistance in a firm’s expansion.

Eric Walstrom, principal broker of the previously named Alexander, said that his brokerage is now positioned to expand into Detroit suburbs like Grosse Pointe, and eventually Ann Arbor.

Given today’s real estate market, Walstrom said, it was inevitable Alexander would join forces with a larger shop.

“With VC and outside money coming into the space, we started looking for opportunities for partnerships,” Walstrom said.

“I literally met with absolutely everybody,” Walstrom added, stating he found @properties’ marketing and technology superior.

Few real estate brokerages in 2021 say their technology is anything less than second to none. Walstrom said @properties sold him because they have a comprehensive in-house platform, which he believed made their technology more adaptable than brokerages that acquire a customer relationship management system.

Source: housingwire.com