When the day comes to purchase a home, there are bound to be many emotions – excited, nervous, even a bit stressed, but homeownership is an important investment for many different reasons.
Owning your own home is a way to build long-term wealth and financial security. Unlike other investments such as stocks or bonds, owning a home provides the benefits of both a place to live and a tangible asset that can appreciate in value over time. Unlike renting, where your money is not going toward building a future for yourself, homeownership allows you to invest in your future.
As a homeowner, you’ll have a sense of stability and control over how you want to customize and improve your living space. You can decorate your home to your taste without having to worry that the landlord may not approve of the changes (no matter how minor they may be).
When you own, it also provides the opportunity to build equity, which is the difference between the home’s value and the remaining mortgage balance.
As the mortgage loan is paid, not only are you reducing your amount of debt owed, you’ll be building that equity and increasing your ownership stake in the property.
To help you get an overall picture, we’ve broken down the benefits to homeownership below. Along with the more obvious reasons as to why owning a home has its advantages, there may be some that surprise you.
Building Equity:
As homeowners make mortgage payments, they build equity, which is a form of forced savings that can grow over time and provide a source of wealth.
Home equity can be a valuable asset homeowners can tap into if needed.Some of the more common reasons people may choose to use their home equity include home improvements, debt consolidation, education, and even emergency expenses.
Appreciation:
Historically, real estate has appreciated in value over time, providing homeowners with potential financial gains. When your property value is worth more than what you paid for, this can provide potential gains, either through selling for a profit or using the equity built up to obtain a loan or home equity line of credit.
It’s important to keep in mind, appreciation is not a guarantee as the value of real estate can also go down. In addition, appreciation can take time to occur.
Tax Benefits:
Homeowners can benefit from tax deductions for mortgage interest and property taxes, which can lower their taxable income and reduce the overall cost of homeownership. Having these types of deductions, especially during the early years when mortgage payments primarily go towards the interest.
Stability:
Homeownership provides a sense of stability and belonging to a community, as well as control over one’s living environment. Owning your own home allows you to customize it to your taste, both inside and out. Whether it’s repainting, planting a garden, installing a swimming pool, the decisions are up to you..
Owning a home can also give you a sense of security, knowing that you have a long-term place to live, should you choose. It allows you to put down roots in your community, becoming more invested in your neighborhood. From local schools, to small business, your ties to these types of establishments help give you a sense of belonging.
As a homeowner, you have the sense of freedom and independence that comes with having control over your living space and financial stability.
Forced Savings:
Paying a mortgage is a form of forced savings that can help homeowners build wealth over time. Each mortgage payment made goes toward principal and interest, which means that part of each payment goes towards building up equity in the home, which can serve as a form of savings.
In addition, making monthly mortgage payments allows homeowners to budget accordingly, creating good financial habits. This can help build a sense of financial responsibility and accountability.
Inflation Hedge:
Real estate can be considered an inflation hedge as property values tend to increase with inflation. Because real estate is something you can touch and see, when the cost of things go up like food, gas, etc. the value of real estate usually follows. This is because people still need a place to live since there is only so much land and housing available. When more people want to buy a home than there are available, the prices increase thus creating a sellers market.
Potential Rental Income:
One of the benefits to homeownership is the potential to earn income by renting out the property and earning passive income if you decide to move.This can help offset mortgage payments or provide additional income.
Keep in mind, there are several factors to consider when renting, including the rental market in your area, the costs associated with property management and maintenance, and the potential rental income that can be generated.
While renting out a property can provide a source of passive income, it’s important for homeowners to carefully consider the financial and practical aspects of becoming a landlord.
Pride of Ownership:
Owning a home can provide a sense of pride and accomplishment. For many people,owning their own home is a lifelong dream, and achieving that dream brings a feeling of accomplishment.
You’ve invested your time, energy, and resources into acquiring the property, and you can take pride in knowing that you’ve accomplished something significant.
Legacy:
When you own a home, you now have a tangible asset that provides stability and security for your family, both now and for future generations.
One of the most significant advantages to homeownership is the legacy it can provide for children, grandchildren, and beyond. Your home may also become a central location for gatherings with family and friends, and where traditions are passed down through generations..
Becoming a homeowner provides many benefits but there are certain factors to consider before making such a big financial commitment. Like most things, there are pros and cons and it’s important to carefully weigh those to determine if homeownership is right for you.
To flip or not to flip, that is the question. For some people, the idea of flipping a home (or homes) to turn a quick profit is exciting, while for others, the thought of long-term financial gain is a lot more attractive.
Flipping a house involves purchasing a property, renovating it, and then selling it for a profit. This strategy can be a quick way to make a large ROI (return on investment) but it also carries a certain level of risk.
On the other hand, buying a rental property can provide a steady stream of passive income, but requires a long-term commitment as well as the ability to handle the responsibilities of being a landlord.
Two very different real estate investment strategies, each with their own pros and cons. Which strategy is right for you? There is no right or wrong answer, it all depends on what fits your lifestyle and aligns with your financial goals.
The decision of which one to choose also depends on your risk tolerance and level of experience, two very important factors when deciding between flipping a house or renting it. Why? Because depending on which you choose will affect your ability to handle the risks and responsibilities that come along with each strategy.
If you are considering jumping into the world of real estate investing but are unsure which approach best fits, we’re breaking down each one so you can have a better understanding of the unique advantages and disadvantages associated with each.
Flipping Houses
This route can be a high-risk, high-reward strategy. It requires a significant amount of capital and a willingness to take on the financial risks associated with renovating and selling the property.
Something to keep in mind, flipping a house is not investing because while there is the opportunity to make a lot of money, you have to earn it (i.e renovations). Flipping a house takes a great deal of work and often a great deal of patience.
Regardless of whether you’re doing the renovations yourself, or contracting out the jobs, you’re still required to take an active role in making sure all of the work gets approved and completed correctly.You are spending both time and money when you flip a house.
Pros include:
Cons include:
Rental Properties
On the other hand, buying and renting out a property is generally considered a lower-risk investment strategy. It can provide a steady stream of passive income, but it also requires long-term commitment and the ability to handle the responsibilities of being a landlord. This includes finding and vetting tenants, dealing with repairs and maintenance, and handling evictions if necessary. An investor who has a lower risk tolerance, or who is less experienced in dealing with the responsibilities of being a landlord, may find this strategy more challenging.
Pros include:
Cons include:
Before deciding to rent or flip a home, it’s important to carefully evaluate all of the pros and cons, assess your tolerance for risk, your level of experience, which strategy you’re more comfortable with, and decide which strategy aligns best with your lifestyle and goals.
Once you’ve made the initial decision to start buying property to rehab, your homework officially begins.
In our previous blog, we discussed the basics, which included developing a plan and gathering all of the information needed to form the right team to turn your vision into a reality. Now it’s time to begin the property search.
Sounds fairly simple, but it’s actually a bit more detailed than you might think. A lot goes into the process. To help you get started, we’ve broken out below four main points to keep top of mind as you get started.
What Makes the Best Markets?
One of the most important decisions you’re going to be faced with is, where do you want to buy? When thinking about this question, consider the best places with desirable locations. There are great opportunities all over, you just need to know what you should be looking for.
Do you remember the common expression, location, location location? It is everything! Focus your search towards popular areas where there is a demand for the type of property you’re looking to rehab as well as an area with foreseeable growth. This is when a local real estate agent is going to prove to be an invaluable resource.
As you narrow down potential properties, keep an eye on similar listings in the area to see how long they’ve been on the market, current asking price, along with any price reductions. If it doesn’t look like many homes are selling in the location you’re looking in, it might be a good idea to consider a different area to make the deal more profitable for you.
Something else to think about is the material and personnel cost. What is it going to cost you personally to flip a house in your target market? In addition to the cost of just about everything going up, things cost even more in larger cities, like New York City, than they do in other places. The more robust the local economy is, the higher the average cost of things will be. On the flip side, the price of real estate will be higher in the more expensive markets.
You’ll also want to keep an eye out for a catalyst, something that affects the market. In smaller cities, things are different than they are in larger, more populated areas but there are catalysts regardless of size.
Things like crime rates, schools, and even new businesses, are all important factors to take into consideration when assessing what will bring value to a neighborhood. Look for the areas that are up and coming because by the time all the improvements and additions are made to a neighborhood, it’s likely too late to maximize your profit potential.
Local taxes are another factor to consider when looking at different areas since they can have an effect on the pricing and salability of a house. Higher real estate taxes can impact a potential buyer’s ability to afford the home. In addition, until you flip the property, you will be the one paying these taxes as well.
Choosing the Best Type of Investment Property
Are you looking to buy a single family home, or maybe something a bit larger, like a multi-family. Along with deciding on the type of home, you’ll need to be clear on whether you’re going to flip it, or possibly rent it. The best way to make this decision is to look at your financial goals; flipping a home brings a single score while renting will generate income over a long period of time.
How to Find Houses to Flip
After you’ve studied the market, narrowed down the area, and decided upon the type of property to invest in, it’s time to physically start the search. In our first post on flipping homes, we gently touched upon some of the ways in which to go about this.
In case you missed it, let’s review.
Get a real estate agent – Especially if you’re unfamiliar with the area, having a local real estate agent as part of your team is important. They know the best places to look, and can help weed out the properties that aren’t a match. Not to mention they are filled with knowledge and advice regarding the market as a whole.
Look for auctions – If you have the ability to pay cash, private auctions might be something to consider. Foreclosure auctions are often published by the county several weeks before they hit the auction block giving you the opportunity to check out the properties prior to their sale date. Keep in mind that it’s highly unlikely that you’ll be able to go inside the home, or even on the property itself.
While these types of opportunities can be good, they also carry risk. Most auctioneers require a 10% deposit of the purchase price put down at the time of the winning bid with the remainder to be paid within 30 days, otherwise you lose the deposit. This is why these types of deals work best for cash buyers. It’s difficult to finance auction purchases because lenders want appraisals and often a walk through before closing.
Digital Classifieds and Online Sites
Do you remember the days when you would open up the classifieds and look at property listings? These days all you have to do is turn on the computer, do a quick search, and sites like Zillow, Trulia, and Redfin (to name a few) will be able to provide hundreds of listings. Craigslist is another platform to search for property listings.
How to Choose a House to Flip
We’ve covered how to find a property, now let’s focus on how to choose the right one.
First, look at the location and conduct the same type of research your potential buyers will do. If a couple with young children are looking at the property, then the school district becomes important. If the area is predominantly filled with young, single people, the focu of importance changes slightly..
Things such as easy access to public transportation, shopping, restaurants, these are factors that weigh into a buyer’s decision as well. Look at the positive attributes as well as negative ones that could have an impact on your ability to flip the property.
The physical characteristics of a property is another area to focus on. You’re going to want to make the property stand out yet you will also want it to conform to what’s around it.
For instance, if the home is smaller in size compared to other homes in the immediate area, it might sell for less money, but if it’s a home that is much bigger in size compared to others in the area, then it might be viewed as too expensive for the neighborhood.
You also want to pay close attention to the home’s exterior. Buyers often fall in love with a property at the street, so before they even set foot inside to see all of the wonderful things you’ve done, they may have already formed an opinion. And for some, that drive by is all they need to make up their mind.
Purchasing, rehabbing, and selling a property is a lot of work, but with knowledge and the right team, it can be a profitable venture.
We’ve all seen the home renovation shows on networks like HGTV and thought to ourselves, that might be a good idea. The transformation of a house in shambles to a beautiful dream home is enough to make anyone consider the possibility. Granted some of the shows are geared towards personal home renovations, while others are renovating with the intent to flip.
If you’re new to the process, house flipping entails purchasing a real estate property, updating it to add value, and then selling it for a profit. Most home flips involve buying property at a less than average price, (either a fixer-upper or in foreclosure), rehabbing the property, and selling it for more than invested.
Shows like the Property Brothers, Flip or Flop, and Christina on the Coast, to name just a few, give the illusion that the process of flipping a home can be fairly simple – all you have to do is just buy a house, make a few cosmetic changes, and sell the property for a good profit. Unfortunately it’s not as easy breezy as television portrays.
What isn’t visible in that one hour is all of the behind the scenes happenings that get you to the finish line. Anyone who has ever had some type of home renovation done, knows it is not a quick and seamless process, there are always bumps along the way.
Ask anyone who has flipped a home and they will tell you the truth – the process isn’t as fun or as profitable as you see on screen. Television has the power to glamorize and home flips are no exception.
Flipping homes can be a lucrative way to earn good money in real estate but in order to be successful, you’ll need to be armed with a lot of knowledge, planning, patience, time, energy, and good judgement.
It’s important to not only understand the process but also the basics of what flipping a home entails. Most people find themselves juggling both their day job and home renovation which can be extremely time consuming, not to mention super stressful.
Before diving into your first home flip, there’s a lot to know and educating yourself is important. There are countless books and sites filled with information to help guide you in the process. We’ve broken down some of the basics:.
How to Get Started
First step is to develop a plan for your flip. What is your budget, how much do you want to spend on the purchase, and how much will be needed towards the renovations? When thinking about cost, keep in mind they include contractors and specialists along with the materials needed.
You’ll want to have a team in place to help you get started before the home search gets under way. Ensuring the people you want to work with are available and align with your budget before making a purchase is important.
The last thing you want is to find out after closing is that the cost of contractors is higher than expected, or availability is months away. A renovation takes time and the last thing you want to do is delay it even further because you didn’t assemble a team beforehand. Remember, time is of the essence. Every day you own the property it is costing you money.
Finding the Right House
When it comes time to find the home, there are a few different ways to go about your search. Consider working with a real estate agent, especially if you’re unfamiliar with the area. A good agent can provide insight into the market and possibly help you sell the home once the renovations are complete.
You want to find a home in a desirable location or one that is growing and promises a high resale value.
If you have the ability to pay cash, auctions are another place to look for good opportunities for a discounted price. Just keep in mind they can carry some risk so before going this route, read and understand exactly how they work.
Secure Financing
In the world of real estate, cash is king. An all cash deal means that by the time of closing, the buyer will have unconditional liquid assets sufficient to pay all of the costs associated with the purchase, including the sales price and closing costs. If you ask any seller they’ll tell you they prefer this method of getting paid over an offer from a buyer who needs to secure funding in order to purchase.
If you don’t have the funds to purchase outright, you’ll need to secure financing. There are different types of loans to explore which is why speaking to a mortgage broker ahead of time is a smart idea. If you have bad credit, options may be limited. If your credit is low, consider raising your score before starting the home search.
Legal Representation
Whether the deal is all cash or financed, there is always a lot of paperwork involved. It is important to seek out legal advice and have a real estate attorney look over all of the documents. Their job is to provide you with the best possible legal advice and will ensure all of the necessary steps are taken prior to closing.
The Bottom Line
At the end of the day, the most important piece of advice is be prepared. Seek out the help of experienced professionals and ensure you have a great team in place to help you achieve success.
Flipping homes can be a lucrative business and with the knowledge, skills, and motivation necessary it is possible to become successful.
Whether this is your first, second, or maybe even third home purchase, each experience likely feels like the first. Regardless of how many times you’ve actually done it, the home buying process creates an array of feelings and emotions.
From excited to scared and everything in-between, buying can be intimidating. That’s why it’s important you’re working with the right realtor who will be able to guide you through each step of the way.
The home buying process really begins before you even step foot into a home, and continues all the way up until the day of closing. There are numerous steps you’ll take with each stage which in turn creates a whole new set of questions. Keep in mind, nothing you ask is silly, if you are unsure about anything, speak up.
Buying a home is one of the largest purchases you’ll make in your life which is why it is important to feel as comfortable, and informed as possible. Part of your real estate agent’s job is to help make the experience as stress-free as they can.
We know things can get overwhelming with all of the information you need to know beforehand, so to help alleviate some of it, we’ve put together a list of common questions buyers ask to help you navigate the process a bit easier.
What’s the first step of the home-buying process?
Before you even get started in your search, it is important to have your mortgage pre-approval. Some agents will not begin working with potential clients if they don’t have an approval in hand.
Why is this piece of paper so important? Because it tells you, and your agent, just how much you can afford. There is no reason to look at properties that you are unable to afford. It’s not fair to you, your agent, or the seller, to waste time looking at properties out of your price range. Knowing how much money a lender will approve for a loan is an important first step.
How long does it take to buy a home?
Unfortunately, there is no definitive answer as this timeline varies greatly from person to person. On average, it can take anywhere from a few weeks to several months to find a home. It also depends on the timing, as well as the circumstances. Do you need to move ASAP, or is this your first home?
Once you find your home, it usually takes an additional 30-45 days to close after you’re in contract. Keep in mind this timeline can change for a variety of reasons.
How much do I have to pay my real estate agent to help me find a home?
Great news–nothing! The seller pays the realtor fee/commission on their end.
How much money do I need for a down payment?
The more you put down upfront, the less you will have to borrow from a lender. Generally, 20% of the purchase price is an ideal number for a few reasons. First, it lowers the monthly mortgage payments, avoids paying private mortgage insurance commonly referred to as PMI, improves the nature of your offer, and can help you lock in a better interest rate.
That’s not to say you must put down 20%. The minimum amount depends on the type of loan you are obtaining to finance the purchase. Lower down payment loans, like an FHA loan, requiring a minimum down payment of 3.5%, were designed to make homeownership possible for first-time buyers.
When it comes to the different types of loans available, this is where your mortgage broker steps in. It’s a conversation you should have even before the actual house hunting process begins. Knowing how much you can afford and the type of loans available are all part of the initial conversation you should be having when obtaining your pre-approval.
What additional fees are there besides the down payment?
Additional costs include the loan origination fee, which is not a single fee, but a set of lender-specific fees that are part of closing costs, as well as the closing cost itself. These are the fees paid at time of closing to complete the purchase. They may include the survey, underwriting fees, title search fees, documentation fees, legal fees, pre-paid property taxes, HOA, etc. Your mortgage broker will review these with you. While you do have these additional expenses, the down payment is usually the largest cost associated with buying a home.
Do I really need to work with a real estate agent when buying?
It is strongly recommended that you work with an agent for many reasons. First, they have your best interest. Their goal is to help find you a home that fits your needs, and they will advocate on your behalf when needed. Real estate agents are skilled negotiators, and have access to a network of different people you will need throughout the process. Plus, it doesn’t cost anything to work with one.
Can you recommend…..?
Whether you’re in need of a mortgage broker, appraiser, lawyer, moving company, or any other type of professional service associated with the home buying process, your real estate agent should be able to offer some recommendations. Mostly all real estate agents have a network of people they trust to provide the best possible service to their clients.
While every home is different, the steps, especially in the early stages of purchasing, are generally similar. The same holds true for the questions you are more than likely to have. Remember, don’t be afraid to ask, it is part of an agent’s job to provide you with the information needed in order to make the most informed decision.
In this digital world we live in, it’s difficult to grow your business without implementing some form of social media marketing. Harnessing the power of social media allows real estate agents to create a digital footprint and connect with their audience on a personal level.
Effective networking is all about building powerful connections, and the goal for agents is to become well-known within their respective communities as the go-to source for all things real estate.
From a marketing standpoint, social media platforms, whether it be Instagram, Facebook, LinkedIn, Youtube, should be a part of your business toolbox. Leveraging social media allows an instantaneous connection with the audience. It opens up your sphere of influence and referral base and allows you to connect with an unlimited number of people. That includes existing clients, potential new clients, and industry peers.
Social media should be the tool you use on a consistent basis to promote your business and build your reputation. Just like the housing market itself, which is competitive, so is the real estate business. Within any city, you’ll find hundreds of agents which is why it’s important to position yourself as an industry leader.
Maris Callahan, founder and CEO of Social Broker, a full-service content membership based platform that helps entrepreneurs build their brands and grow their business with social media strategies, knows firsthand the importance and power social media has for real estate agents.
“Social media is no longer optional in the real estate industry,” explains Callahan. “As a real estate agent, there is nothing more important than staying top of mind among your sphere of influence so that your clients, friends, and contacts remember that you’re in real estate before they even need you.”
Having worked in a real estate brokerage firm as the director of communications, Callahan saw the impact social media could have on individual real estate agents and small teams. Passionate about connecting through social media and recognizing a need for more education and resources in the real estate space, is one of the reasons she decided to launch a business that would help agents grow their business organically by using social media platforms more meaningfully to acquire new business.
Ask any agent and they’ll tell you, a good deal of their business comes from referrals. Reaching out to current and past clients is one way to get referrals while using social media to network is highly effective in generating new business. The more you market yourself, the better your chances are of being successful.
And while every agent should use this type of self-marketing, it is only as effective if you do it correctly. You want to keep your followers interested and engaged so that they will look forward to the next piece of information you share.
That also includes networking with professionals and peers within the industry. Following other real estate agent’s social media pages and engaging on posts allows you to see how they’re marketing their business, opens up the opportunity to ask questions, as well as gain additional knowledge about the business as a whole.
The use of social media in the real estate business is not new, and many agents have already been utilizing these platforms so standing out can be a challenge. Create a social media plan before you start randomly posting. Map out what you want to share and then look for a social media scheduling tool that will allow you to schedule your content in advance. There are many different ones available so do a little homework before getting started.
Next, decide on a realistic schedule. How often will you be able to post? Is it two, three, or even four days a week? Once you decide, stick with the pattern. Keep in mind, you can always increase the number of days you post content but you don’t want to decrease. As Callahan points out, “As with so many things, you’ll get out of social media what you put in.”
Now, think about your followers. Before you decide on what type of content you plan to share, ask yourself, is it useful to them? Not all of your posts should be listings. You want to be a resource to buyers and sellers in your local market and you can do so by sharing relevant information.
“Social media doesn’t work if you’re only posting your listings, or if you ‘ghost and post’ once a week,” says Callahan. “Social media is a long-term strategy that relies on consistency – posting regularly, having variety, posting different types of content, and a balance between business and personal content.”
A good rule of thumb is to follow the 80/20 rule. Eighty percent of your social media should contain something of interest to your client. Think of it as establishing yourself as an expert. The remaining 20% of your posts can be about your business.
So exactly what type of content should you be posting to garner the most engagement from your audience? Think of the following three pillars when creating something of value for your audience.
Educate – Answer popular questions potential buyers and sellers might have, share a quick tip or a customer review.
Entertain – Pose a fun question to your audience to try and get them engaged in the conversation, create a holiday -themed post, or share a meme that’s relevant to the real estate industry.
Inspire – Share an accomplishment or an inspirational quote, as well as give your audience a behind the scenes look at what you do.
To help get the creative juices flowing we’ve listed a few types of content you’ll want to start creating.
These types of posts are also conversation starters so be sure to follow up with any comments or messages you receive from followers on your posts. This kind of engagement can lead to a valuable connection with a buyer or seller.
We know that getting in the social media game can feel overwhelming. It’s a full-time job and as a real estate agent, chances are you don’t have the time to commit to social media. If that’s the case, don’t let it be the reason why you don’t have one.
If you lack the time or skills to create a polished and professional presence that’s where Callahan and her team come in. With three different membership plans to choose from, they assist real estate agents with the content and strategies needed to excel in the social media space. “If you follow our strategies, use our content and incorporate your personality into your social media presence, you will, over time, generate leads on social media,” says Callahan.
If you still haven’t fully committed to establishing yourself on social media, remember this, you are your best billboard!
At the beginning of every New Year, most people make resolutions that involve some form of change. Whether that be professionally or personally, it’s a chance to give ourselves a goal to start anew.
For anyone who has had their sights set on jumping into the real estate market then you know how crazy it’s been these past two years as the pandemic turned the home buying process completely upside down. It may be a New Year but is it a new market?
With mortgage rates hitting a historic low, coupled with an inventory shortage, the red-hot real estate market saw homes selling within hours of being listed, bidding wars ensuing, and sale prices closing over asking price.
When it comes to the real estate market, we know anything is possible, but housing experts predict that in this New Year, buyers will likely see similar trends to the last two years which included elevated prices, low-inventory, and fast turnaround.
Another contributing factor fueling home buyers were the extremely low interest rates which hovered near historic lows for an extended period of time, a result of the Federal Reserve buying mortgage backed securities to support the economy. But in 2022, the Fed plans to lessen those purchases to curb rising inflation. As a result, mortgage rates are expected to rise.
How much they will increase is not entirely clear, but economic predictions estimate the Fed may raise interest rates three times in 2022. This potential change will have an effect on the home buying process although the new policy isn’t likely to “hurt” buyers in the next few months. Regardless, it’s safe to say anyone looking to purchase are encouraged to act sooner rather than later.
While the buyers are out there, it’s the sellers who are slowing down a tad bit. When the pandemic started, the demand increased and pushed the home prices to an all-time high. And although we have rounded the corner when it comes to the pandemic, the 2022 housing market will likely continue to be costly, with home prices and rents remaining on the higher end of the spectrum.
Along with the demand for homes comes an increase in demand for rentals, especially as we head into the first quarter of 2022. The previous discounts that landlords had been giving out during the height of COVID are practically gone. As these concessions disappear, many renters are finding it difficult to afford their current apartments and will have to move.
As a result, there will be an increase in availability with inventory opening up. The demand for rentals in the neighborhoods chock-full of amenities will also be greater. The areas most desirable are the ones with shopping, restaurants, and nightlife, especially as these sectors have re-opened their doors and welcomed back their customers. For many people, these amenities are an important factor when it comes to deciding where to live. Being close to all of these things, as well as transportation, is a luxury many potential renters, and even buyers, seek out. Areas such as Dumbo, Fort Greene, Bushwick, Gowanus, and Red Hook, will be some of the more attractive places to live for these reasons.
Finding a place to call home, whether buying or renting, is never as easy as we hope it will be. The real estate market will always go through highs and lows, and this upcoming year is no exception. Keeping that in mind, here are a few things to consider for anyone planning to make a move in 2022.
Prices will remain high
According to economists at Realtor.com and Zillow, the competition isn’t likely to die down this year. Economic trends such as low inventory, elevated demand, and low mortgage rates will continue to give sellers leverage in the market.
Buyers will continue to see potential bidding wars, particularly when the market picks up in the spring and summer months. Although it’s hard to predict exactly what’s going to happen, Zillow predicts home values will rise by 11% in 2022. While not as high as in 2021, it’s still a substantial increase.
Increase in interest rates
With the likelihood of interest rates rising multiple times this coming year means mortgage rates are likely to increase as well. Home experts predict a 30-year fixed mortgage rate will reach 3.60% by the end of 2022 compared to the average of 3.30% as of now. The upside to an increase in mortgage rates is that buyers scooping up property for investment purposes may lessen, giving the people who buy homes to live in more of an advantage.
Inventory will remain low
The number of homes actively for sale fell to a record low at the end of last year, and the etnrance of new listings has been slow moving into 2022. Spring has generally been the time when the market picks up and while there are likely to be more listings come spring and into summer, there may not be enough to meet the demand. It will continue to be a strong sellers market.
Home buyers, be prepared
With the way the market is trending, it’s important for buyers to be on their A-game. That means doing research ahead of time, having the proper documents readily on hand, and being ready to act quickly. That includes making an offer almost immediately. For some buyers, purchasing out- of-state has them relying on photos and showings being done via computer and over zoom.
From the realtor side, agents not only have their eye out for new listings, but listings that are “coming soon” to the market. Knowing what a client wants and how much they’re willing to spend allows agents to hone in on the right properties. There’s no sense in taking potential buyers to properties that don’t meet their needs or are out of their price range when the market is this competitive.
And while the 2022 real-estate market may not reach the incredible heights it did in 2021, don’t expect it to slow down anytime soon. In the meantime, do what you need to be prepared for when the right home comes along and work closely with your real estate agent who can guide you through the entire process.
Technology has impacted as well as revolutionized the way in which we do business. Not only has it changed what we do and how we do it, it has brought about new and exciting ways for just about every industry, and real estate is no exception.
These days, no matter where you are, the majority of people you encounter can be seen with their heads down, looking at their smartphone or some other type of device. That’s because technology has given us access to information right at our fingertips and made it simple to perform just about every necessary task right online. From paying bills, shopping for clothes, food, even a home, it’s as easy as the click of a button.
Generally speaking, people spend about 7.6 hours online, with 1% of the time being spent browsing. Whether it’s surfing social media, checking email, watching videos, teaching yourself how to do something with the help of sites like Youtube, shopping online, or reading up on the latest news, a person’s attention is digitally focused.
When it comes to real estate, technology has proven to be a powerful tool for the industry. Brokers and agents continue to perform the most essential functions of the business, but with the help of technology, it has made certain areas faster, smoother, and much easier to navigate.
In essence, it’s changing the way in which real estate professionals do their job, to a degree. People still want a human connection with expertise in the field and that is something that will not change. The expert advice and knowledge provided cannot be replaced, only enhanced, by the use of technology.
With the use of the Internet, it has reshaped the way in which real estate is delivered to the consumer. Between the numerous websites, professional photography, and now virtual property tours, buying and selling a home looks a lot different than it did even 10+ years ago. These days, home buyers are tech-savvy and well-informed, they know exactly what they want, making it the job of the professional, regardless of the sector, to help deliver.
A few of the most obvious ways in which technology has been impacting the real estate sector include:
Transparency
Many websites that provide information to the consumer are free, allowing for the opportunity to educate oneself even before the process begins. These sites provide tools such as data, inventory, availability, and pricing for a potential buyer to browse through. Sly Symons, founder of the Syms company said it best, “An educated consumer is our best consumer.”
Marketing
With the aid of technology, marketing just about any type of product has become instantaneous. Broadcasting messages over multiple platforms allows professionals to reach a much wider audience than before. The visibility is not only easier to achieve but more cost-effective. With the use of technology, getting your product out to the marketplace can happen in mere seconds. The easier the platform to navigate, the quicker homes can be listed, which in turn allows potential homebuyers to find what they’re looking for faster. The end result is greater market activity and a pleasant experience for everyone involved.
Real-time data
Previously, much of the research and data comprised was focused on what happened in the past as opposed to what was happening in the current marketplace. With the use of technology, outdated data is no longer the case. Now, it’s never been easier to find out information such as pricing and availability in real-time.
Virtual Reality
One of the most important steps in the home buying process is the visual inspection of the property, both inside and out, along with the surrounding area. With the use of drone video, it’s possible to not only see the complete exterior of a home but the surrounding neighborhoods as well. Virtual reality (VR) is a relatively newer form of technology used in the real estate industry although there are agents who have already implemented it into their business.
Up until now, VR has been a great tool for buyers looking to relocate further away from their current location as well as for people who may be unable to view a property, such as an open house. But now, with the current climate of our country, the chances of VR being used to sell homes is even greater.
As we continue to move forward, virtual touring of a home right from a device will allow faster access to a property and the opportunity to narrow down selections. Instead of multiple in-person visits, clients can now scan through places without having to physically be there, making it possible to view numerous homes in a day and make decisions sooner than before.
Rich Schulhoff, CEO of the Brooklyn MLS, has also noticed an uptick in the number of listings being posted, which in turn results in using virtual tours. “People are also getting more creative with virtual tours,” says Schulhoff.
Social Media
The power of social media is strong and can be felt over a multitude of sectors. The days of buyers opening up a newspaper to look for a home or flipping through a phonebook for a sales agent are long gone. Instead, social media has become the place to go when it comes to finding just about anything you want, including a home, and are a great way for real estate professionals to grow their business. The ability to connect with others is instantaneous; whether it’s connecting with existing clients, potential new ones, or others in the industry, social media sites have made it possible to do so and are important tools to have in your real estate toolbox.
Facebook – With more than 2 billion users, creating a Facebook page can help attract an audience on a much larger scale than any marketing plan of yesterday could possibly ever do. Facebook posts should focus on both business and the consumer. Along with sharing your listings, share information that is focused on the home as well as the process. Everything from mortgages to DIY tips for decorating is helpful knowledge to an owner or a potential buyer. Share information on your borough or city; establishing yourself as a thought leader in your community is helpful in attracting new clients and followers.
Instagram – More than 700 million users can be found on this social media platform, making it another great resource for real estate professionals. Posting photos of available properties can help generate leads as well as showcase listings to available buyers. Another excellent way to engage potential buyers is by sharing short video clips of your listings. In addition, content you’ve published elsewhere can also be shared by providing a direct link in your bio. This is another great way to direct followers to any additional social media accounts you may have.
While there are a multitude of social media platforms and technologies available to real estate professionals, it’s important to remember that the tools are only effective if they are used correctly and consistently.
As technology continuously changes and reshapes the way in which we live, it’s imperative that businesses follow suit. Customers will find new and exciting ways to use it, that’s why it’s imperative to stay ahead of the curve in such a competitive market. If everyone else is moving forward and your business remains the same, then you’re actually falling behind. Change can be scary but embracing it will help take your business to new heights.
Since its inception in the late 1700s, women have been a part of the real estate industry, but it wasn’t until the 1840s that it was established as a legitimate business. In those early years, a woman’s role was much different than it is today; her duties consisted of filling office and clerical roles while her male counterparts were out selling. Fast forward 40 years later and women began moving, albeit slowly, into the roles of agents or brokers.
According to the National Association of Realtors (NAR), approximately 67% of all certified realtors are women. But that wasn’t always the case, especially during the first few decades of NAR’s existence. Founded in 1908, membership was 100% male but by 1910, the organization saw its first woman member, Corrine Simpson. Soon after others began to follow in her footsteps although they were still in the minority during the first few decades. One of the reasons for the low numbers was due to NAR’s membership being restricted to brokers only, while women, at that time were primarily sales agents.
It wasn’t until 1973, when NAR opened up their membership to include sales agents, that those numbers rose and continued to steadily increase. By 1978, the majority of NAR members were women and in 1996, four years after the organization saw its first female president, did women represent the majority of broker licenses for the first time.
The real estate industry itself has transformed substantially, and each year the percentage of women continues to grow, bringing with them innovation and change. While women are leading the charge when it comes to the residential real estate market, commercial real estate, an area that has long had a history of being dominated by men is still lagging behind. While top-level positions have been maintained by men, improvements are being made to change those statistics thanks to initiatives in place to help address disproportions and develop women’s leadership skills.
Katherine Pontone, a Board Member of Brooklyn MLS, has been in the business since 1982 and can attest to the indifferences that existed between women and men. “In the past, the women took a back seat, they weren’t leaders,” says Pontone. “As time progressed, women became more vocal and present; instead of being agents, women are becoming brokers and business owners.”
Well respected in her field, Pontone has held multiple leadership roles throughout her years in the business, but admits, it was rare to see that happen early on. “I was fortunate,” she says.
Life as a real estate agent offers excellent earning potential and one of the most flexible schedules. It has long been an option for women looking to earn additional income, pursue a change in career, as well as work in a field where they can set their own hours.
When it comes to successful women in real estate, Barbara Corcoran, Founder of The Corcoran Group and currently one of the Shark’s on ABC’s “Shark Tank,” and Dottie Herman, CEO of Douglas Elliman, one of the nation’s oldest and largest real estate brokerage firms, have made an indelible mark on the industry. Both Corcoran and Herman have proven just how successful women can be in a field that was at one time male-dominated.
When Corcoran first started her brokerage firm in 1973, the real estate business was still a “man’s world,” but that fact didn’t hold her back. Building The Corcoran Group from the ground up, she grew her business into a billion-dollar enterprise, and in 2001 sold it for $66 million dollars.
Herman, recognized by Forbes magazine as one of “America’s Richest Self-Made Women” has created her own success and laid down the road map for other aspiring businesswomen to follow.
As women continue to dominate the industry, Barbara LaBarca, Chairwoman of Brooklyn MLS, has seen a growth in the percentage of women in real estate over the last 15 years. “It has gone from a male-focused world to the majority now being women,” says LaBarca. “Here on the Brooklyn MLS board, the past two presidents have been women, one including myself.”
These days, more and more women are working together to empower, encourage, and support one another as they continue to move the needle forward in the real estate industry. With March being Woman’s History Month, it’s only fitting that we continue to support, and celebrate, the many accomplishments of our fellow females everywhere.
