Don’t Let Sellers Get Overconfident

A severe inventory shortage may be allowing your clients to believe selling their homes will be quick and easy. That can lead to sellers who believe that they can do less to prep their homes for the market and that buyers will still be willing to pay top dollar. But buyers are still fairly picky, and they will be quick to pass over an unsightly or outdated home.

Lawrence Yun, chief economist at the National Association of REALTORS®, says that many buyers are getting frustrated at the poor selection of properties that don’t fit their budget or their wish list. Eric Tyson, co-author of House Selling for Dummies, agrees: “No matter the market, people aren’t going to overpay for an ugly house.”

In many cases it falls to listing agents to help sellers understand the need to be realistic on the pricing of their homes. Most homeowners view their property value higher than appraisers’ opinions, according to the latest Quicken Loans’ National Home Price Perception Index. Homeowners, on average, believe their home is worth 1.55 percent more than appraisers do.

Sharon L. Ellsworth, a real estate broker and owner of a RE/MAX Realty office, says the front door can be important in boosting the appeal on a home that otherwise lacks it. “The front door is the focal point of the house,” Ellsworth says. “If it’s attractive, people will focus on this.” Repainting the front door or adding new polished brass hardware can also make a big difference, she says. Also, freshly pruned shrubs and new greenery can help add curb appeal.

Also for sellers who aren’t seeing enough interest, a “broker’s open house” may be a way to generate more lookers. Tyson says limiting access to real estate agents from the surrounding area can be an effective sales tool. “These kinds of open houses are incredibly important,” Tyson says. “That’s because the vast, vast majority of buyers still work with agents. And if agents come through the house and like it, they’re more likely to show it to their clients.”

Source: “6 Tips for Selling a Home That Isn’t Easy on the Eyes,” Kansas City Star/Insurancenewsnet.com

What Are You Worth Per Hour?

You know the old saying: “Time is money.” That’s especially true when it comes to determining how to value your time as a real estate professional on a per-hour basis. At a “normal” job, you trade your time for a paycheck based on a set hourly rate. Though you’re now paid on commission, it is possible to determine your hourly rate by dividing your total income by the number of hours worked.

It’s no secret that you’ll make more money selling more expensive homes, but even some daily business tasks are worth more per hour than others. Getting a sense for which tasks can be tied directly to additional sales allows you to allocate your time better and focus on money-generating activities such as prospecting, following up, and meeting with clients. By knowing you’re worth on an hourly basis now, you can make goals for what you’d like your time to be worth in the future. Then you can make your current income (or more) while working less. Here are some worthwhile lessons to take to heart as you assess your per-hour value.

First, Do the Math

To make a true apples-to-apples comparison, you’ll want to take your annual income (minus business expenses) and divide by the number of hours you’ve worked. Be honest with yourself: Time spent in the office browsing the internet or gossiping with co-workers does not count. If you’ve kept track of your time in your calendar, you can quickly determine the average number of hours you’ve worked each week and multiply that by the number of weeks you’ve worked this year. For example:

$100,000 (annual income) – $15,000 (business expenses) = $85,000
40 hours per week x 50 weeks worked = 2,000 hours

$85,000 / 2,000 hours = $42.50 per hour

Be sure to pay attention to the number of hours spent on each transaction. The average number of hours spent on listing and selling a home is around 16, whereas the average for representing buyers is 32.

Use Your Hourly Rate to Become More Efficient

Once you have a better understanding of your hourly rate, you can begin making business decisions and delegating responsibilities based on what’s most important. Some potential clients may be looking at cheaper homes or ones that are far away from your office. Consider referring those clients out; remember, you can still collect a referral fee. Determine which of your day-to-day duties are the most lucrative and work towards generating income. For instance, you may want to devote your hours to prospecting and meeting with clients, and task an assistant with drafting flyers and doing paperwork.

Learn to Delegate Busy Work

Delegating tasks can add meaningful time to your schedule, freeing up hours to do the things that generate income. Leave the busy work to an assistant or contract worker who you can outsource. Remember that understanding your hourly value helps you figure out where your time is best spent. Photography, website maintenance, and marketing design can easily be farmed out to people who are likely much better at it than you. Paying an outsourced or entry-level assistant a small portion of your hourly rate to manage time-consuming paperwork ultimately frees you up to do more of what really makes your business boom. You should be devoting the majority of your time on the expert-level activities that earn you the big bucks. An hourly rate assessment can quantify the duties that are worth taking on yourself or delegating to others.

Serious professionals never forget that time equals money, so don’t just guesstimate how much your waking hours are worth. Know for sure, and you’ll have the confidence and proven data to make savvier business decisions in the future.

Is Housing Affordability Actually Improving?

Growing incomes and low mortgage rates are helping to prop up housing affordability and offset rising home prices, according to the newly released National Association of Home Builders/Wells Fargo Housing Opportunity Index. A quarter-point drop in interest rates in the second quarter helped to make homes more affordable to more consumers. Between the beginning of April and the end of June, 59 percent of new and existing homes were affordable to families earning the U.S. median income of $68,000.

Read more: NAR’s Affordable Housing Index

The national median home price increased to $256,000 in the second quarter from $245,000 in the first quarter, according to the index. Average mortgage rates fell 25 basis points to 4.08 percent in the second quarter from 4.33 percent in the first quarter. “The job market continues to gain steam, and this is boosting housing demand,” says NAHB chief economist Robert Dietz. “Home prices will continue to rise as inventory remains tight. The NAHB expects the housing market will continue to make gradual gains in 2017.”

The most affordable major housing market in the country in the second quarter was Youngstown-Warren-Boardman, Ohio-Pa., which has kept its title as most affordable for the third consecutive quarter. There, 93.3 percent of all new and existing homes are affordable to families earning the area’s median income of $54,600. Rounding out the top five most affordable major markets are Syracuse, N.Y.; Dayton, Ohio; Buffalo-Cheektowaga-Niagara Falls, N.Y.; and Scranton-Wilkes Barre-Hazelton, Pa.

The nation’s most affordable smaller market is Kokomo, Ind., where 96.9 percent of homes in the second quarter were affordable to families earning the median income of $62,500. Other smaller markets that topped the list were Davenport-Moline-Rock Island, Iowa-Ill.; Glen Falls, N.Y.; Watertown-Fort Drum, N.Y.; and Monroe, Mich.

On the other hand, the nation’s least affordable major housing market, for the 19th consecutive quarter, was San Francisco-Redwood City-South San Francisco, Calif. Just 7.6 percent of homes in the second quarter were considered affordable to families earning the area’s median income of $113,100. All five of the least affordable small housing markets were in California. In Salinas, Calif., which topped the list, 12.4 percent of all new and existing homes were affordable to families earning the area’s median income of $63,100.

Source: National Association of Home Builders

2 Major Reasons Why Inventory is So Low

Inventory of available homes on the market is the lowest it’s been in two decades, but the reasons may surprise you. Two of the likely culprits are baby boomers and homeowners who are simply satisfied with their home, according to realtor.com®’s Housing Shortage Study.

Baby boomers are showing a desire to age in place in their current homes, and their refusal to sell is creating a clog in the market, according to the study. Eighty-five percent of baby boomers surveyed say they are not planning to sell their home in the next year. That means 33 million properties—many of which are urban condos or suburban single-family homes—will stay off the market. Many of those properties would be popular choices for millennials, a generation still largely waiting in the wings to break into homeownership.

“Boomers, indeed, hold the key to those homes the market desperately needs, both in the urban condo and the detached suburban home segment,” says realtor.com® chief economist Danielle Hale. “But with a strong economy and rising home prices, there’s really no reason for established homeowners to sell in the short term. Although downsizing might be on the minds of boomers, they face the same inventory shortages and price increases plaguing millennials.”

Furthermore, 63 percent of respondents to the survey indicate that their current home meets the needs of their family. They cite low interest rates (16 percent), recently purchasing their home (15 percent), and needing to make home improvements and low property taxes (each at 13 percent) as reasons not to sell. “Life events drive real estate transactions,” Hale says. “When the majority of homeowners feel their family’s needs are being met by their current home, there is nothing compelling to them to put their home on the market.”

There may be hope that more starter homes will hit the market soon. Possibly offsetting the low supply of starter homes, which is down 17 percent year over year, 60 percent of respondents to realtor.com®’s survey who did say they plan to sell in the next year are millennials who want to move to a larger home or one with nicer features.

“The housing shortage forced many first-time home buyers to consider smaller homes and condos as a way to literally get their foot in the door,” says Hale. “Our survey data reveals that we may see more of these homes hitting the market in the next year, but whether these owners actually list will depend on whether they can find another home.”

Source: realtor.com®

CFPB Amends Mortgage Disclosure Rule

On July 7, 2017, the Consumer Financial Protection Bureau (CFPB) released the final rule amending the “Know Before You Owe” (KBYO or TRID) mortgage disclosure rule. As advocated for by NAR, the final rule clarifies the ability to share the Closing Disclosure (CD) with third parties – a victory for real estate professionals nationwide.

As outlined in the 2016 proposed rule, the final rule highlights an existing exception within the Gramm-Leach-Bliley Act (GLBA) and implementing Regulation P that allows lenders to share the CD with third parties (sections 502(e)(1) and 509(7)(A)). The CFPB recognizes the CD as a “record of the transaction,” which is “informative to real estate agents and others representing both the consumer credit and real estate portions of residential real estate sales transactions.” The CFPB notes that CD sharing is permissible to the extent it is consistent with GLBA and Regulation P and is not barred by applicable State law.

The final rule will be effective 60 days from publication in the Federal Register. Stay tuned for further analysis on the final rule.

Read the CFPB Press Release
Read the Final Ruling
Read NAR’s Comment Letter to CFPB

The Tech That’s Essential to Your Business

Members of the 30 Under 30 class of 2017 reveal the tools they use to stay top of mind with clients while running efficient, well-organized businesses.

The amount of new technology available to real estate professionals is overwhelming. It’s easy to get caught up in the latest trend that promises to make conducting your business easier—only to find out it doesn’t work for you. Before you invest your time and hard-earned dollars into a new service or platform, learn what’s actually working for other successful real estate entrepreneurs. Here’s what REALTOR® Magazine’s 30 Under 30 class of 2017 find invaluable in their day-to-day client interactions and business management.

Tools to Integrate and Simplify

Elizabeth Stone is focused on streamlining the communications and transaction management needs for her team of four at RE/MAX Allegiance in Falls Church, Va. In addition to offering sales guidance, she’s also responsible for teaching her team the inner workings of the tools they adopt. “In this business, you have to keep track of so many moving pieces—multiple lead sources, communication history, properties shown, past sales volume—and having user-friendly tech tools is key to managing everything cohesively,” says Stone, a self-proclaimed “real estate nerd.”

She says her team’s most essential tools—besides their smartphones and iPads—are Google Drive, Wufoo Forms, and their CRM, Contactually. Other handy apps Stone likes to share are Homesnap and Rapportive (“and, secretly, Redfin, but don’t tell [anyone] I said that”).

Her team collaborates via Google Drive, which serves as the base of their operations. Stone integrates tools that support their existing structure, but she also keeps it simple. They use basic checklists for transactions and Google Sheets for tracking market stats, sales, and other data. They upload meeting notes, yearly forecasts, and internal comparisons of local condo buildings. “It’s a virtual repository for all our collective brain power,” she says.

Wufoo Forms helps Stone’s team develop surveys for buyers and sellers to gain insight into their needs and track trends. Rapportive, she says, is a nifty tool that integrates with Gmail to immediately find LinkedIn data from new email addresses. “This is incredibly helpful when communicating with new leads because we’re able to make an educated guess about their preferred communication style and commuting needs—not to mention the fact that it helps us confirm their identity for our own safety as a team of five women,” Stone says.

Homesnap is her go-to app; it plots information on current listings, recently sold properties, and homes under contract on a map. She also uses it to book showings on the fly. It’s her MLS stand-in when she wants a powerful mobile interface. “For agents, Homesnap also pulls past sales histories, so I can see which agents work predominantly with buyers versus sellers and which agents have high close-to-list price ratios,” Stone says.

Finding the CRM You’ll Use

Dominic Pettruzzelli is diligent about tracking his ROI and doesn’t spend money if he doesn’t have to. So his customer relationship management system, Boomtown, is the single most important tool in his business, he says. As the leader of a four-person team at Keller Williams Western Realty in Burlington, Wash., Pettruzzelli, e-PRO, GREEN, appreciates how the CRM helps them systematically stay in touch with clients and strengthen their most important relationships.

“In real estate, we tend to get bored with the basics and end up trying to complicate things,” Pettruzzelli says. “That typically leads to spending too much money on a product that doesn’t have a good ROI and failing to put time into something that is working.”

It took Stone’s team several attempts over the past six years to find the right CRM. The team’s structure presented difficulty: Rather than agents having their own clients, they work with customers together. It was hard to find a CRM that supported their business model. In the end, they settled on Contactually because it pulls information directly from Gmail, the platform they use the most. Contactually allows them to build customized campaigns for people at different stages of the buying or selling process, and it provides a level of automation that tells them “exactly who to contact and when to ensure our clients and sphere feel loved,” Stone says.

Ryan Glass, a sales associate with Gibson Sotheby’s International in Boston, uses Top Producer, which gives him an overview of the transactions he’s servicing, incoming revenue, his future pipeline, and all marketing activities. “It stores all my tasks, contacts, calendar, and captures leads directly from my website and realtor.com®,” Glass says. “The time saved on data entry is amazing.”

Wrangling the Numbers

Maggie Scarborough knows the appeal of new and shiny objects, but when it’s time to get things done, she’s a big proponent of a tool every REALTOR® has at his or her fingertips: the MLS. Scarborough, an agent with Burns & Ellis, REALTORS®, in Dover, Del., has become proficient at scrounging up data from her MLS and presenting the most pertinent information to clients in a way that makes sense to them. “I’m a crazy advocate for using the tools we already have,” she says. “It seems like every day, there’s someone trying to sell us a program [we don’t need].”

Scarborough would rather put her efforts into a tool she knows has value. “The data we have is incredible,” she says. “We all have access to it, but I don’t think a lot of [agents] have made use of it like I have.”

Market data isn’t the only set of numbers real estate pros need to track. Keeping a close eye on business financials is also crucial. Glass prefers QuickBooks from REALTOR Benefits® Program partner Intuit because it can link to all of his credit cards and bank accounts, automatically adding transactions and categorizing expenses. He has even added his accountant as a user so that she can view his expenses online and run reports.

Sarah Lyons, a sales associate with Century 21 Judge Fite Company in Springtown, Texas, recommends TaxBot for tracking mileage and expenditures. She can link to her bank account to keep tabs on her business expenses in one place. Plus, she can simply take a picture of a receipt at a restaurant and upload it for instant record-keeping.

Real Estate Among Friends

Facebook has been a vital tool for Melissa Shipley, SRES, SRS, a salesperson with Berkshire Hathaway HomeServices in Pittsburgh. It’s where she connects with friends, many of whom are starting to think about buying a house. In one case, a friend she hadn’t spoken to since fourth grade reached out to her on Facebook. Shipley believes she wouldn’t have made that connection if not for social networking.

But Shipley’s Facebook page isn’t just an advertising vehicle for her listings. It’s a resource about what’s happening in Pittsburgh that can be useful even to people who aren’t in the market to buy. She’ll share information about restaurant openings, upcoming events, or the best bars in town. “I really try to create value on my page,” she says. She also has some fun. One of the most popular features on her page is “Mantel Monday,” in which she shares a photo of a beautifully decorated fireplace mantel to start each week.

Melanie Stone, an associate broker with Coldwell Banker Residential Brokerage in Chicago, has developed a specific Instagram strategy, weaving humor into subtle real estate references. In a photo of football cookies she took on Super Bowl Sunday, the caption reads: “The only reason I care for Super Bowl Sunday is because it’s the start of the spring market.”

Tried and True Tech

Being around real estate his whole life, Ryan Gillen, a team leader at Irongate Inc., REALTORS®, in Dayton, Ohio, has been able to adapt to the fast-paced nature of real estate. “If you and your clients do not work as a team, they may just miss out on their dream home,” he says. He uses FaceTime on his iPhone to quickly show clients a listing and see if it fits their criteria before they visit in person.

Gillen and his team are constantly thinking mobile. “When a lead comes in through our online marketing, we instantly text the prospect,” he says. “Our team has found that texting them first then giving them a call gives us a great return rate.”

Another one of Gillen’s favorite technologies for prospecting is Handwrytten, which enables you to print letters in a font that looks like a handwritten note. You can also upload your email list to create custom-addressed envelopes. “When you see one of these envelopes, you can’t help but to open it. It looks like a wedding invitation,” he says.

Nathan Hansen, Pamela Dittmer McKuen, Maggie Sieger, and Graham Wood contributed to this article.

New Heating Tank Rule Takes Effect July 1

Vermont’s Aboveground Storage Tank (AST) rules regulate the design and installation of heating oil tanks. They also provide spill prevention and inspection requirements for both tank owners and fuel suppliers. A Vermont law passed in 2016 requires tanks to be removed during natural gas conversions. The Department of Environmental Conservation is also required to develop training and certification standards for oilheat tank inspections.

The new certification standards and procedures must be in place by July 1, 2017. By law, fuel tanks must be inspected every three years.

Financial assistance is available to assist low-income residents who may not have the financial resources to replace or upgrade tanks to meet the new requirements (see below).

RESOURCES

Vermont Fuel Dealers Association
Aboveground Storage Tank Regulations

Vermont Dept. of Environmental Conservation
Application for Financial Assistance

Aboveground Storage Tank Requirements

April is Fair Housing Month

Fair Housing is the right to equal opportunity in the rental, sale, and financing of housing under federal, state and local laws.

The Federal Fair Housing Act was part of the Civil Rights Act of 1968, making it illegal to discriminate on the basis of race, color, religion, national origin, and sex. In 1988, Congress added familial status and disability to the categories protected under that law. Vermont’s Fair Housing Act is similar to federal law with five additional protected categories: marital status, age, sexual orientation, gender identity, and receipt of public assistance.

Realtors® are the first defense and most effective promoters of Fair Housing. By practicing fairness and integrity, Realtors® strengthen the reality of the law.

April is Fair Housing Month, but Realtors® should promote Fair Housing every day!

Fair Housing Resources

VR Partners with Diamondback Bikes to Offer New Member Benefit

Vermont Realtors® has partnered with Diamondback and Raleigh Bikes to offer a new Corporate Wellness Program!

Corporate Program Perks
VR members and their family can take advantage of these Diamondback and Raleigh benefits:

Deep discounts – Up to 40% off retail
Exclusive pricing on the entire line of Diamondback and Raleigh products, from complete bikes to clothing, parts and accessories.

Free shipping
Free same-day shipping. Your bike will arrive 100% professionally assembled and will be delivered right to your door by one of Diamondback’s mobile mechanics. Depending on your location, you may be presented options at checkout to pickup your fully assembled bike at a local shop.

Easy hassle-free returns
If you’re not 100% satisfied with your purchase, you can return it for a refund, replacement, or exchange. Your hassle-free return includes free shipping.

Easy to shop
To get started, members are required to set up an online account. Get started by visiting:

Diamondback – https://dbcorp.diamondback.com
Raleigh – https://corp.raleighusa.com

Create an account with corporate code: VTREALTORS