A class action lawsuit has been certified by a Maryland federal court against Home Point for alleged Real Estate Settlement Procedures Act violations stemming from a decade ago.
The suit claims Home Point acquired a company in 2015 that was already involved in a kickback arrangement with a title company, but these practices continued a few years after the company was purchased.
RESPA violations at first occurred between Maverick Funding Corporation and All Star Title, a now-defunct title and settlement services company, the suit says. Maverick purportedly referred residential mortgage loans to the title company in exchange for payments that were then laundered through third-party marketing companies, per the suit.
The arrangement, which went on from 2014 to 2016, resulted in Home Point receiving “thousands of dollars in kickbacks from All Star Title in exchange for assigning and referring 444 loans,” the suit claims. The certification was first reported on by Law360.
To fund the kickbacks, plaintiffs allege that the now defunct lender and All Star Title “charged Home Point borrowers fraudulent and unnecessarily increased charges for title and settlement services.”
Mr.Cooper, which acquired Home Point earlier this year, declined to comment.
The class action is represented by plaintiffs Sandra Moyer, Richard Martin, Terry Patterson, Jr., and Yvonne Matthews on behalf of similarly situated individuals.
The defendant in turn filed a motion questioning evidence the plaintiffs presented to the judge to be granted class certification.
The motion points out that the class action relies on certain email chains that “do not involve Home Point at all, but instead involve the relationships between All Star Title, Inc. (“All Star”) and two entirely different lenders.” This, in Home Point’s opinion, provides no foundation for class certification, nor does this amount to any kind of confession.
The lender also argues that the class relied on a previous RESPA case involving a bank and All Star Title – Brasko v. Howard Bank – for the certification, which ” involved different facts, different evidence, and a different lender” making it moot and not relevant in this case.
Specifically, the defendant argues the plaintiffs failed to show evidence of communication between Home Point and All Star, wherein in Brasko V. Howard Bank, there was proof.
RESPA violations and kickback schemes are under the watchful purview of the Consumer Financial Protection Bureau, which seems to have ratcheted up its enforcement efforts.
Most recently, Freedom Mortgage was accused of such practices and fined $1.75 million for allegedly providing illegal incentives to real estate brokers and agents, such as cash payments, paid subscription services, and catered parties, with the understanding purchase business would be sent its way in return.
After nearly 10 days of trial proceedings, Zillow is ready for its years-long legal battle with REX Real Estate to be over. On Wednesday, just nine days after the long-awaited trial’s September 18 start date, the real estate behemoth file a motion for judgment as a matter of law in the U.S. District Court in Seattle hearing the trial.
A judgement as a matter of the law is permissible if there is no legally sufficient basis for a reasonable jury to find for the nonmoving party (in this instance, REX) on that issue.
Originally filed by REX in March 2021, against Zillow and the National Association of Realtors, the lawsuit alleges that changes made to Zillow’s website “unfairly hides certain listings, shrinking their exposure and diminishing competition among real estate brokers.”
Two months prior, in January 2021, Zillow began moving homes out of its initial search results for sellers who chose not to use agents adhering to the NAR and local multiple listing service (MLS) practices, creating a two-tab design for agent listings and “other listings.”
In January 2022, NAR filed a countersuit claiming that REX uses false advertising and misleading claims to deceive consumers in violation of the Lanham Act, but the countersuit was dismissed in late April 2022.
In mid-May 2022, REX ceased its brokerage operations.
A little over a year later, in mid-June 2023, the three parties involved in the suit, all filed motions for summary judgment on at least some issues, if not the entire lawsuit.
While Judge Thomas Zilly dismissed REX’s antitrust claims against NAR and Zillow, he allowed the discount brokerage’s false advertising claim under the Lanham Act, and a claim for unfair or deceptive trade practices under Washington’s Consumer Protection Act (WCPA) to stand.
According to Zillow’s latest motion, since the start of the trial, REX has failed to produce sufficient evidence on either claim.
“The evidence REX promised would come at trial has not materialized, and the evidence introduced at trial falls short of what is required for multiple elements of these claims,” the motion reads. “Accordingly, REX’s claims should not be put to a jury, and the Court should enter judgment in Zillow’s favor as a matter of law under Federal Rule of Civil Procedure 50(a).”
In order to prove their Lanham Act claim, REX must identify particular statements made by Zillow and then show that they are false. According to earlier filings, REX highlighted Zillow’s tab labels separating types of listings as the statements it was challenging.
While Zillow acknowledged that the court determined that the tab labels are literally false, as REX employs agents who are realtor association members, “it has never has addressed whether the default status or two-tab display as a whole are false statements of fact,” which would be necessary to prove the Lanham Act claim.
“The non-communicative aspects of Zillow’s display—that merely divide listings and default one tab over the other—do not make any such claim,” the motion reads. “Indeed, design decisions that ‘limit [users’] access’ to materials are distinct from any ‘false statement.’”
In addition, for the Lanham Act to apply, the speech in question must be commercial speech, something Zillow claims the two-tab display is not.
“There is no evidence that Zillow intended to convey any particularized message with the default status or two-tab display or that the consumers who viewed these features took away any particular message,” the filing states. “Zillow is an ‘online database of information’ that provides ‘free, publicly available’ information that is ‘not transactional.’”
The motion also claims that “REX has not developed evidence that any aspect of Zillow’s two-tab display was meant to influence consumers to buy defendant’s goods or services,” and that there is “no evidence that a substantial part of Zillow’s audience was deceived by the default status or two-tab display.”
Finally, Zillow also states that that REX “has not even attempted to show injury flowing directly from the alleged deception caused by the distinct aspects of the two-tab display,” something that is necessary if REX hopes to be awarded damages.
“REX’s own fact witnesses did not offer any testimony supporting the notion that the labels, in particular, caused them harm,” the motion continues. “Moreover, the fact that there was an impact on for-sale-by-owner listings—listings that properly would be labeled as ‘Other listings’—shows it is not the labels that had this impact.”
Regarding the WCPA claim, Zillow states that all of the same reasons from the Lanham Act claim apply.
Zillow did not wish to comment and REX has not returned a request for comment.
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The procedure of looking for the ideal opulent apartment can frequently be intimidating. To locate the greatest luxury flats that suit your needs and tastes among the various possibilities accessible, you should have a plan in place. In this post, we’ll look at six tips that can make your rental property search more efficient, from picking a great location to using helpful online tools.
Utilize Online Resources: Expand Your Search
The days of only depending on newspaper classifieds or personal referrals are long gone. There are several online tools available nowadays that can help with your search for the ideal property. Specialized real estate websites can provide thorough listings with in-depth details on available residences. With the help of these sites, you can narrow down your search results depending on your preferences, such as price range, the number of bedrooms, available facilities, and location. Consider using online groups and social media sites as well, where people frequently post details on available flats. You can cast a broader net and improve your chances of discovering the best premium condo that satisfies your needs by using these resources.
Think Beyond the Listing: Network and Connect
The most incredible high-end homes occasionally could not even be on the list yet. You can find hidden treasures that haven’t hit the market by networking and establishing connections with local real estate brokers, property managers, and even current tenants. To broaden your network, go to open houses, check out neighborhood events, and talk to locals. Making contacts and remaining engaged in your apartment search may help you find unique chances that others have missed. Keep in mind that referrals from friends and family can frequently help you locate the best possible rentals that aren’t necessarily listed anyplace else.
The Power of Location: Finding an Excellent Home
When looking for the most amazing luxury apartment rentals, the location is one of the most important aspects to take into account. Your quality of life can be improved by a fantastic location, which offers comfort, accessibility, and a desirable area. Start by thinking about your daily requirements and lifestyle choices to identify the right place. Do you prefer a busy city environment or a quiet suburban setting? Make a list of the facilities and sights that are significant to you, such as closeness to your place of employment, retail establishments, dining options, parks, and cultural organizations. You may refine your search and uncover premium flats that are well-situated to suit your lifestyle by paying attention to these characteristics.
Schedule Multiple Viewings: Look Beyond the Surface
Making many viewing appointments is essential while looking for the ideal posh property. Don’t limit yourself to internet photo browsing or rely only on virtual tours. You can evaluate the apartment’s condition, design, and atmosphere by seeing it in person. Pay attention to specifics like the standard of the finishes, the amount of storage space, the amount of natural light, and the efficiency of the appliances. Make a note of any maintenance or repair concerns that require attention. You can make an informed decision and make sure you’re choosing the best upscale condo that meets your criteria by carefully inspecting the property during the viewing.
Be Prepared: Gather Your Documentation
Being ready can offer you an advantage while trying to land a high-end home. Many landlords and property managers demand that applicants present proof of their capacity to pay their rent and be reliable renters. Collect necessary papers such as credit reports, bank statements, references from past landlords, and proof of income to speed up the application process. You can prove your eligibility and improve your chances of getting the nicest flat before someone else does by having these documents on hand. All other factors, such as decor and personalization, can easily be taken care of later, as long as you come prepared.
Consider Long-Term Costs: Look Beyond the Rent
It’s crucial to take into account both the monthly rent and the property’s long-term costs while considering premium condos. Consider other charges like utility bills, parking fines, homeowner association dues, and any other pertinent expenses. Examine the amenities provided by the apartment building to see if they suit your needs. For instance, having an on-site gym can help you save money on external gym memberships if you enjoy exercise activities. You can choose the flat that delivers the best return on your investment by carefully weighing the long-term costs and advantages. Remember, you must take these factors into account in addition to the initial rent in order to make a wise financial decision.
Choosing an excellent luxury condo demands great thought and preparation. You can easily manage the apartment-hunting procedure by concentrating on the above-mentioned suggestions. Remember, you’ll be well-equipped to select the ideal home that meets your interests and improves your living experience if you have these six techniques in your toolbox.
Equal Housing Opportunity
Rental providers will not refuse to rent a rental unit to a person because the person will provide the rental payment, in whole or in part, through a voucher for rental housing assistance provided by the District or federal government.
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Finance broker license Residential mortgage lender license Real estate broker license <iframe width=”560″ height=”315″ src=”https://www.youtube.com/embed/x-xWkPo4ZEw?si=BFT1a3WxQGSuyFtv&start=3″ title=”YouTube video player” frameborder=”0″ allow=”accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share” allowfullscreen></iframe> Let’s look more closely at each, to give you a better idea of what you can expect. Finance broker license You are required to obtain this if you … [Read more…]
Federal agencies urged mortgage companies and banks to be more vigilant in reporting compromised real estate transactions to their local financial crime units and to do so in specific ways that would increase the likelihood of an investigation.
According to representatives from both the Federal Bureau of Investigation and the Secret Service during a panel discussion Monday, instances of wire fraud, home equity theft, investment scams and elderly-related fraud have ticked up, while the methods used by bad actors have become more nuanced.
“[The mortgage industry is a target-rich audience for fraudsters] and they are targeting title companies and real estate brokers by compromising business email accounts. We see a lot of that,” said Stavros Nikolakakos, supervisory special agent at the Secret Service at the Compliance and Risk Management conference hosted by the Mortgage Bankers Association in Washington D.C. Monday. “If you don’t have direct contact information of your local law enforcement, [you should definitely establish that relationship].”
A way for mortgage companies to help government agencies, such as the FBI and Secret Service, catch bad actors is by being mindful in how they fill out consumer complaints including the Internet Crime Complaint Center (IC3) form, which the bureau monitors and the Suspicious Activity Report (SAR) form.
“For those of you that enter SARS, I would strongly encourage you to not hold back in filling out this information, put your conclusion and the amount stolen at the very top,” Nikolakakos said. “When you have agents reviewing these SARS they only skim them. They cherry-pick because agents are looking for easy arrests and they’re trying to find the very best cases. “
Timothy Wu, Supervisory Special Agent, Financial Crimes Section, Money Laundering, Forfeiture, Bank Fraud Unit at the FBI, added that the volume of fraud complaints received can make someone’s “eyes start to glaze over.”
“Fraud in the mortgage space is not the same as in 2008 and our fraud portfolio is much smaller,” he added. “We are seeing HELOC fraud and application fraud — nothing new or ground breaking — but these practices have accelerated and gotten better.”
Cash attained by these criminal acts are usually transferred to Eastern Europe, West Africa or China by money mules, Nikolakakos added.
Statistics published by the FBI show that business email compromise scams related to real estate set a record for dollar losses in 2022. The 2,284 complaints received last year amounted to losses totaling $446.1 million, compared with $430.5 million in 2021.
Those targeted by fraudsters have about 72 hours to report the event to the government before it becomes harder to investigate.
In a separate panel addressing fraud mitigation, Steve Safavi, vice president of mortgage fraud at Mr. Cooper noted that one of the best ways to prevent wire fraud is to be mindful of emails received prior to closing and the domain that is being used.
“As busy as you are at the end of the month, trying to get something funded it can get by,” he said. “Best thing to do is for title companies to call the lender and verify the wiring instructions. Have them repeat the payoff statement to you instead of vice versa.”
As fraud risk has increased, companies in the financial services sector have turned to vendors to protect their transactions and infrastructure. For example, recently Tata Consultancy Services announced a partnership with FundingShield to the fintech’s wire fraud prevention solutions available to the IT consulting company’s clients.
Are laundromats profitable? Or, are laundromats a dying business? Learn how much laundromats make and if laundromats are a good investment.
Are laundromats profitable? Is buying a laundromat a good investment?
Ever wondered if owning a laundromat is as profitable as people say?
I’ve been seeing a lot of videos on social media lately talking about how much money laundromats make (seems like it’s a popular small business idea right now!). So, I wanted to do my own research and learn as much as I could on the topic of laundromat businesses to see why it’s trending so much.
Whether you are looking to make extra income or if you plan on opening several laundromat businesses, there are some things to think about before you get started.
In today’s article, we’re going to talk about:
How profitable a laundromat can be
The pros and cons of owning a laundromat
Why a laundromat may be a smart investment
Tips on how to find a laundromat to buy
And more.
Quick summary: Yes, laundromats can be a way to make money (and even passive income!) due to people needing to wash their clothes and low costs to run. However, the amount of money that you can make is based on factors such as location and maintenance costs (new machines can be expensive!). High-quality laundromats with lots of amenities are in, and the old days of dirty and hot laundromats are not.
Are Laundromats Profitable?
Is owning a laundromat a good investment? Is owning a laundromat a good way to make money?
According to the Coin Laundry Association, there are around 35,000 laundromat businesses in the United States and nearly 95% of laundromats succeed.
That is a pretty good success rate.
It’s important to understand that, like with any other business, laundromats require an investment of money—both initial and ongoing. You’ve got your rent, machines (you will need more expensive commercial laundry equipment), utilities, and insurance.
The good news is, your income would hopefully be higher than these costs, making you a profit at the end of the month. Some people are able to run a laundromat as their full-time income, and for others it may simply be one of their side hustles.
The amount of money that you can make from a laundromat depends on your management skills, the location of your business (the average laundromat user lives within 1 mile of the laundromat that they use, so you want to be close to your customers!), and more.
Related content:
Is a Laundromat A Smart Investment? Do Laundromats Make Money?
This is a hard question to answer, as everyone is different!
For some people, a laundromat can be a smart investment, for others it may not be. The good thing, though, is that you are reading this article so that you can figure out if owning a laundromat is for you or not.
Yes, many laundromats make money. On average, a laundromat can earn a profit of around 20% to 30%.
Note: Before making a decision, I highly recommend reaching out to a financial advisor before making any decisions.
Factors Impacting A Laundromat’s Net Income
There are numerous things that can impact how much money a laundromat can make such as:
Location– The location of a laundromat is important in how much money you can make. This is because a laundromat located in a populated area often makes more money than one in a less populated area. The reason is, that when there are more people, there are more people likely to use laundromats.
Competition– If there are other laundromat businesses nearby, this could impact your profit because you now have competition. This is because too much competition may mean that there are less customers coming to your business.
Demographics– The demographics of people living around the area of your laundromat are important. For example, laundromats tend to do better in areas with a lot of renters, college students, or households without a washing machine or dryer (of course).
We recently stopped to use a laundromat while we were traveling in our RV. One thing we noticed was that this laundromat had a ton of amenities. Now that I’m thinking about it, this laundromat business owner was smart. They knew what their potential customer needed. They opened a laundromat right next to a popular cross-country trail, and added great amenities such as snacks and even a pay-to-use shower. These factors helped this laundromat stand apart from its competition and probably led to more people using it because it was a one-stop shop.
Some laundromats can earn profits as high as 35% or more! These are usually high-volume operations in urban areas with lots of people living nearby and they tend to offer a wider range of services such as wash-and-fold or dry-cleaning.
Owning a laundromat can be a smart investment for some people because they can possibly have a stable flow of income.
However, you will want to keep in mind that success in this type of business still depends on careful planning, an understanding of your local market, and more. Not everyone will succeed, of course.
How To Find Laundromats For Sale
Jumping into the laundromat business begins with finding a laundromat business that is for sale, or starting your own business from the ground up.
If you are looking for a laundromat business that already exists and is for sale, here are some tips and strategies for locating a laundromat for sale.
Online platforms– Many websites list laundromat businesses for sale. Examples include BizBuySell and LoopNet. These platforms can be your first stop so that you can easily look at laundromat listings. I was able to find many laundromats for sale, ranging from around $100,000 to over $1,000,000. These sites will give you a lot of information too, such as the revenue, monthly rent that the laundromat pays, the year it was started, and some background on the business.
Broker assistance– There are commercial real estate brokers with experience in the industry that can be invaluable resources. These individuals often have connections and insights that you may not have as an individual buyer. You may want to search for commercial real estate brokers in your local area and see who can help you find a laundromat business for sale.
Local advertisements– Sometimes laundromats are listed for sale in your local newspaper. You can see if there is a business for sale section in your local paper to get started.
Important Things To Think About When Purchasing A Laundromat
When you come across a potential laundromat to buy, here are some things to think about:
Location– As mentioned in the earlier sections, the location of a laundromat plays a very important role in if the laundromat will be successful or not.
Condition of equipment– Commercial laundry machines are expensive. These are not the washer and dryers that you have in the home you live in. These are meant to take a lot of loads and be running nearly all the time. Due to this, you will want to inspect the machines thoroughly and, if possible, have a professional technician check them. This is because broken or old machines could result in costly repair or replacement costs.
Business finances– If you find a laundromat that you are interested in, then you should ask to see their financial records and carefully review them.
Lease agreement– Many laundromats do not own the building that they are doing business from. Due to this, you will want to look at the terms of the lease. A laundromat with a long-term lease allows for longer operations without the risk of eviction or a sudden rent increase.
Demographics and competition– As you read in an earlier section, knowing more about the demographics of the local area, as well as about your laundromat competition, is important too.
Remember to approach this process with patience. Investing in a profitable laundromat is a journey that requires careful planning, research, and due diligence.
Owning A Laundromat
Operating a laundromat is more than just collecting coins from machines. There are maintenance needs, customer concerns, and potential unexpected issues that you may come across.
Below, I take you through the typical day-to-day operations of a laundromat.
Day-to-Day Operations Of A Laundromat
Opening up– Regular, reliable hours are important in the laundromat industry. Therefore, opening up the store in the early morning is always a good idea as many people like to get their laundry done first thing. Plus, many of your customers will be repeat clients, so making sure that you open up at the same time each day is required.
Machine maintenance and cleanliness– When running a laundromat, you will need to check on the washers and dryers, perform required maintenance, and make sure that your business is clean. You will also want to make sure you are well-stocked with detergents and fabric softener.
Customer service– While the average laundromat only has 2 employees or less, you will want to have good customer service. After all, a happy customer is far more likely to return and recommend your services to others.
Financial management– Collecting payments and record-keeping is something that is done every single day.
Tips on Managing a Profitable Laundromat
Sell extra services– Successful laundromats tend to sell many more services other than just self-service laundry. Due to this, you may want to also try diversifying your income streams so that you can make more money from your laundromat. You can sell other services such as wash-and-fold services, dry-cleaning, dog washing stations, showers, or even have vending machines.
Maintain your machines– Regularly maintaining your washer and dryer machines minimizes downtime and expensive repair costs, so that your laundromat can run smoothly.
Promote your business– Word of mouth is so important in this type of business, but don’t shy away from using social media or local advertising to draw in potential customers.
Running a money-making laundromat is much more than keeping the machines running. It involves good customer service, finding more services to sell, and marketing your laundromat business.
Frequently Asked Questions About Laundromats
Here are common questions about owning a laundromat.
How much profit can you make from a laundromat? How much do laundromat business owners make?
The profits from laundromats vary depending on location, operation expenses, size of the laundromat, the amenities you sell, and more. The average laundromat business sees a profit margin of around 20% and 30%.
The national average income for self-serve laundromats ranges between $15,000 to $200,000 per year. As you can see, that is a wide range and that is because it just depends on so many different things.
What are the pros and cons of owning a laundromat?
Like with any business, there are positives and negatives. Owning a laundromat isn’t for everyone.
Owning a self-service laundromat can earn you money and can be a stable, low-risk investment with low operating costs. It can be a fairly passive income stream as well, as you don’t need many employees (the average laundromat has 2 or fewer employees). However, running a laundromat isn’t all easy, there are challenges such as high start-up costs, machines braking, and more.
The challenges of running a laundromat include that high-quality commercial laundry machines can be quite expensive and purchasing or leasing a location with enough space for machines and customers can be a significant portion of startup costs. Also, wear and tear is going to happen in a laundromat as machines get constant use, and the cost of repairing or replacing machines can add up.
Is owning a laundromat a smart investment? Is owning a laundromat worth it?
Owning a laundromat can be a smart investment, and it can be worth it for some people. But, it will cost you money.
It costs around $100,000 to $300,000 to start a laundromat. Starting or buying a laundromat can be high, but it can also earn you a steady income. But, that doesn’t mean that it’s a smart investment for everyone. There are many factors that go into running a successful laundromat.
How to find laundromats for sale?
You can find laundromats for sale through websites, commercial real estate agents, or business brokers. You can also network with existing laundromat owners or associations who can provide insights into potential sale opportunities.
Are laundromats a dying business?
The laundromat business has changed over the years, but they are still very much needed. People use laundry facilities all the time, including myself such as when I am traveling in my RV or boat. Everyone needs to wash their clothes.
There are ways to keep your business up to date, such as having a laundromat that accepts different methods (such as credit card and cash), having a drop-off service, and making your facility comfortable (such as with WI-FI, TV, beverages, etc.).
What are the key success factors for running a laundromat?
Successfully running a laundromat depends on many factors like the location, maintaining clean and well-functioning machines, providing good customer service, having amenities (such as air conditioning or head depending on the temperature, TVs, etc.), and more.
Are Laundromats Profitable? – Summary
I hope you enjoyed this article on whether buying a laundromat is a good investment or not.
Here’s a quick summary of what we learned above about this business venture:
Running a laundromat can be a way to make money, but it depends on many different factors.
Laundry businesses typically have low labor costs (they are fairly passive businesses with a lot amount of workers needed) and can be recession-proof.
Owning a laundromat does have cons and challenges, such as the fact that commercial laundry machines can be quite expensive if they need to be repaired or replaced.
There are many laundromats for sale and you can start your search online.
Running a successful laundromat business in today’s world will likely mean running a higher-quality business and selling amenities for additional fees.
In all, the profitability of owning a laundromat may make the challenges worth tackling. The average laundromat is changing and improving, and there can be room to make money with this small business.
So, what do you think? Are laundromats profitable? Are you interested in owning one?
Are you frustrated by the small selection of homes in your price range on real estate sites? Do most fall short of the “must haves” that you need?
The vast majority of the listings you see come from multiple listing services run by local Realtors. Only members of the MLS can place their properties on it, and that means it’s not a complete listing. There are other sources of affordable homes for sale if you are willing to look.
Many of these properties are in “as is” condition and may require some elbow grease and the services of professional contractors to get them in shape. These are costs you should figure into the purchase price before making an offer.
As a general rule, the hotter and more competitive the local market, the fewer affordable homes you will find, either on or off the MLS. Here are some sources that will help you find more affordable homes to consider:
Fannie Mae’s HomePath Program.
Fannie Mae created this program to offer foreclosed homes directly to home buyers who wish to make the home their primary residence. If you wish to put 3%-20% down, you must have a 660 or greater credit score needed for a mortgage.
The program is limited to first-time buyers who have not owned a home in the past three years, and buyers are required to graduate from Fannie’s home buyer education course, which is online. After graduation, you are eligible for closing cost assistance worth up to 3 percent of the purchase price. If you wish to put more than 20% down, standard guidelines may allow a lower credit score.
Fannie’s “First Look” policy makes newly listed properties available to individual home buyers for a 20-day period before investors can buy them. For more information, go to https://www.homepath.com/
Freddie Mac’s HomeSteps Program.
Freddie’s program is very similar to Fannie’s, with a few exceptions. Freddie Mac also features a first look program to give home buyers an advantage over investors and a mandatory online homeownership education program, without the assistance on closing costs. Freddie’s program, however, is not limited to first-time buyers. For more information, go to https://www.homesteps.com/
For Sale By Owner (FSBO) Sites.
When home prices rise steadily, as they have been lately, more owners choose to sell their homes without the help of a real estate agent who charges a commission. Some will use an agent who simply lists their homes on the MLS for a flat fee. They can also list their properties on a site dedicated to FSBO properties.
Last year, the median FSBO home sold for $35,000 less than the median home represented by a real estate professional.[1] Note that if you buy a FSBO, and you are working with a real estate agent, you will be asked to pay his or her fee. In transactions involving a seller’s agent, the brokerages on each side of the transaction typically divide the commission paid by the seller.
Some of the better know FSBO sites are Owners.com, FSBO.com, ForSalebyOwners.com, Byownermls.com. Zillow also lists FSBOs.
Cash-for-Homes Sites.
Companies like HomeVestors, which has more than 600 franchises, buy homes quickly for cash and rehabilitate them to sell to investors or homeowners. They sell homes on local MLSs through real estate brokers. However, it could be worth a call to local cash-for-homes companies to see if they have any properties or to find out names of brokers they use.
Short Sales and Foreclosure Resource (SFR).
The National Association of Realtors certifies Realtors who specialize in selling foreclosures and short sales. To qualify, they must obtain specialized training. To find an SFR-certified Realtor in your market, search the web for that designation. Have your real estate agent contact SFR Realtors to find out what they are listing and properties they are preparing to list. Ask they to notify you in advance on new listings that you might be interested in.
The Next Steps
When you find a home you’re interested in, be ready to move fast with a pre-approval letter from your lender, the name of a good home inspector you trust who’s readily available, and an offer that is attractive as you are willing to make it.
Investors scour these markets using expensive databases of foreclosures to find properties they can flip or convert to rentals. You may find you have to increase the geography of your search to increase the odds you will find a property that will work for you.
[1] National Association of Realtors Profile of Home Buyers and Sellers, 2015.
Anywhere Real Estate’s decision to settle two cases challenging the sales commission structure for residential agents could disrupt how home transactions are currently managed.
However, while this settlement is unilateral, it does not cover any of the other defendants in the two cases involved (Moehrl and Sitzer/Burnett), particularly the National Association of Realtors.
That could make it difficult to determine broader impacts, including on mortgage qualification and underwriting, of a potential shift in compensation source and amount regarding buyer real estate brokers.
Under current multiple listing service rules, the listing broker must offer compensation to the buyer’s representative as part of getting the property onto the system. Some have argued that making the buyer responsible for the fee would negatively affect what they are able to purchase.
Published reports give Anywhere’s settlement an $83.5 million value, but specifics are not yet available.
“The path to obtain final approval and implement the settlement is a long one, and Anywhere has taken the first important step toward a resolution that not only releases the company but also our affiliated agents and franchisees,” a company spokesperson said in a statement. “We believe the settlement will remove future uncertainty with respect to the upcoming trial, potential additional claims, and legal expense, enabling Anywhere to focus on and continue delivering what’s next for agents and franchisees.”
It could not comment any further given the ongoing legal matter and confidentiality agreements, the spokesperson said.
Indications are that Anywhere would make significant changes to how it handles compensation in transactions, but the lack of details makes it difficult for an assessment of the effects of those changes, a report from Thomas McJoynt-Griffith, Ryan Tomasello and Bose George of Keefe, Bruyette & Woods stated.
“We believe a shift toward optional cooperative compensation is a likely consideration as part of the settlement, at a minimum,” the KBW analysts said. “We note that this would technically put Anywhere’s practices at odds with NAR rules, but it is also unclear whether making cooperative compensation optional will actually change industry commissions in practice.”
During the Trump Administration, a settlement with NAR was reached but the U.S. Justice Department reneged on the deal following the election of Pres. Biden.
While settlement is always an option in cases like this, NAR’s commitment to defend itself remains unchanged and its compensation rule will survive the legal challenge, a statement from Mantill Williams, its vice president of communications said.
“The practice of the listing broker paying the buyer broker’s compensation saves sellers time and money by having so many buyer brokers participating in that local marketplace and thus creates a larger pool of buyers for sellers,” Williams said. “For buyers, these marketplaces save them the burden of extra costs at closing, enable them to receive professional representation and make homeownership possible for more people.”
In fact, Anywhere has argued that mandatory participation in the compensation scheme by seller brokers is not required to have “a well-functioning” home sales market, added BTIG analyst Soham Bhonsie.
Some MLS systems already allow for the selling broker to offer as little as $0 in commission to the buyer counterpart.
“Over time, sellers could decide to pay less to a buy-side agent which could lead to some comp compression (and potentially fewer showings), but the pace at which that could occur will be dictated by what brokers will allow to be charged at a local level as well,” Bhonsie said. “We think most brokers will continue to mandate a minimum compensation level for their agents to do business, which could in turn delay the impact to the buy-side agent.”
Taken to the next logical step, fewer showings are likely to translate into a lower number of sales, which in turn could potentially drive down mortgage origination volume.
The settlement of a third case was also unilateral, although it involved an MLS. At the time of the agreement in Nosalek v. MLS Property Information Network, one broker questioned whether NAR could survive the changes because of the amount of money at stake.
A new analysis from real estate information portal Trulia revealed that the overwhelming majority of real estate agents actually own homes as opposed to rent.
The company scoured Census data from 2007-2012 to come up with the homeownership rates, and found that 84.9% of real estate brokers and sales agents owned property.
That compares to just 70.1% for individuals in all other occupations combined.
Appraisers Own, Rarely Rent
Trulia also found that many other housing-related jobs had high levels of homeownership, with appraisers and assessors of real estate the most likely to own.
This group exhibited a homeownership of 87.9%, which was second only to “farmers, ranchers, and other agricultural managers.” And yes, that latter group tends to need to own land to run their respective businesses.
In the construction world, construction managers boasted an 82.9% homeownership rate while construction workers owned just 65.9% of the time. That’s a sizable gap for those barking orders and those actually hammering in the nails.
Finally, there are the architects, which had an ownership rate of 80.1%.
If you’re wondering why these individuals tend to own as opposed to rent, Trulia believes it’s a combination of believing in the importance of homeownership, along with knowing the ins and outs of the home buying process.
And it’s not just demographics. Trulia also took the time to determine what the homeownership rate would be based on the age, income, and location of these real estate workers, with occupation omitted.
They found that the actual rate of homeownership was always higher than the expected rate, meaning there is likely something tied to the occupation.
The Postman Isn’t Just Delivering Mail…
While these numbers are all higher than the average, there are other occupations that yield even higher homeownership rates.
Interestingly, postal service mail carriers are big time homeowners, seeing that their homeownership rate was a staggering 84%. Only farmers and ranchers beat them out.
Perhaps they get inside information when delivering all that mail…or just get an itch to buy, who knows? But their expected rate is only 79.4%.
Those that protect and serve also tend to own, with 83.6% of firefighters and 80.1% of police officers also homeowners, partially because of programs aimed at helping them purchase homes.
And those that look after the landscaping also own quite a bit of real estate, with the homeownership rate a whopping 75.3% for such workers.
Meanwhile, those looking after our appearance don’t seem to be looking into real estate. Just 63.3% of “miscellaneous personal appearance workers” owned real estate, though 69.1% of hairdressers, hairstylists, and cosmetologists were homeowners, perhaps because they’re typically self-employed.
Still, their expected rates of homeownership are significantly lower, so they’re still bucking the odds.
Chefs Less Likely to Own Homes Than Expected
Not every occupation had a higher homeownership than expected, based on demographics, income, and location.
For some reason, chefs and software developers were less likely to own than their profiles would suggest. Could be too much time spent in the kitchen or on the computer.
And that’s not all. Economists were also nearly two percent less likely to own a home than expected, perhaps because they overthink the whole thing.
Online real estate marketplace OpenDoor says it’s raising a whopping $325 million in financing, valuing the company at more than $2 billion.
The company said its valuation is a clear validation of its unique business model, which sees it compete with legacy real estate brokers by offering a two-sided marketplace that eliminates the hassle of buying and selling homes. Essentially what it does is buy homes sight unseen, does them up, and then sells them on for a profit. It’s basically an enormous house-flipping operation.
The model could soon be further validated, as Re/Code reports that it’s in talks with Japanese software giant SoftBank Group over another investment that could take place later this year. SoftBank typically invests hundreds of millions of dollars into the companies it backs, and it’s likely to do the same with Outdoor, Re/Code’s anonymous sources said.
With today’s funding, Outdoor is planning to expand to more than 50 cities, from the 10 markets it currently operates in. It plans to do this by 2020 at the latest, and will also increase its current workforce of 650 employees.
The latest round was led by General Atlantic with participation from home builder Lennar and also two smaller investors – Andreesen Horowitz and the 10100 fund which is led by former Uber CEO Travis Kalanick.
Mike Wheatley is the senior editor at Realty Biz News. Got a real estate related news article you wish to share, contact Mike at [email protected].