Category: Residential Real Estate


REALTORS® across the country are lobbying for a long-term extension and reform of the National Flood Insurance Program, which is set to expire at the end of July.

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Source: Why realtors want reform for National Flood Insurance Program

 

GentryMoving1st Home Mortgage

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So you think you want to sell your house; “NOW is the Time To Sell” the headlines claim.  Where do you start? What do you do first?  The FIRST thing ALL prospective sellers should do is to find an experienced, credible, Full Time, REALTOR®.  Why Full Time? The sale/purchase of a house is usually the largest financial transaction of a person’s life.  There is a significant amount of money involved, and even more potential liability if something is over-looked, forgotten, or omitted during the transaction.  This is true for EVERY transaction.  If the REALTOR® is “part time”, working only on weekends, or summers, is the amount of potential liability reduced?  Does the part-timer only need to know some of the regulations, only use some of the most current forms, and only comply with some of the laws? No, No, and No.  None of these factors are static, and in fact, changes occur on a regular basis as our culture, the economy, methodologies, and technologies evolve and advance.  Will the part-timer take time away from the “real-job” to keep up on the aforementioned items? Hmm   As a Full Time REALTOR®, it is a big commitment for me to keep up on everything while still providing my Clients with top notch service.

Additionally, Market Knowledge is important.  Market Knowledge is not just what houses are selling for in a given geographic area, but it is also what buyers are looking for, what they want in a home. This is not something that can be researched on MLS.  If I am not aware of what the market is doing, what buyers want in a home, I may have to invest more time before my client can consummate a transaction. Which may have the unintended consequence of a missed opportunity.  The Seller may not find the best buyer, the Buyer may miss “the perfect house.”

The first reason it is important to consult a Full Time, experienced REALTOR® as soon as you are thinking about selling your house is that he/she will advise you what you need to do to prepare your house for sale.  Whether it is de-cluttering, or updating the interior, minor yard work, or major landscaping on the exterior.

GentryMoving

If a MAJOR de-cluttering is necessary you may want to put some of your belongings in storage and Gentry Moving & Storage is highly recommended.  Accept the guidance of the Full Timer.

The second reason is that appropriate pricing is also necessary.  Houses that are priced to the market sell the quickest and sometimes sell for over asking price.  Would you feel more comfortable accepting the suggested listing price from someone who supports themselves and their family by selling houses, or from someone who does it in their “spare time”?  Does this mean that Part-Timers shouldn’t be in the business? NO.  However, if they are, they should probably have a mentor, or team-leader, who could review, or provide guidance for the benefit of the Consumer. Rely on the market knowledge of the Full Timer.

The third reason is marketing your home.  There are many ways to market houses and houses at different price points, in different neighborhoods, with different demographics, may need to be marketed a little differently.  Dos it make sense to use aerial photography so show a property from 200′ above if there is a cemetery nearby? No. It may if it has a large nicely landscaped yard,  that would add value to the house because it highlights something that adds value

The fourth reason is an experienced REALTOR® will be able to explain how the transaction will proceed. What the Seller should expect from Listing, to Offer negotiation, to Inspection, to Walk-through, and finally Closing.  At which time it is highly recommended that the Seller use the services of an experienced real estate lawyer like Resnick and Caffrey.

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Many things have been said about the millennial generation (Born 1981-1996) over the years.  The negative generalizations that are frequently applied to this generation in the media are “entitled,” “narcissistic” and “lazy.” (Incidentally, they are tired of being blamed for just about everything.)  However, there are some facts worth considering

 

In 1992                                                            In 2018

Average Home Cost:

$80,626                                                            >$265,000

Average Student Debt:

$5,200                                                               >$35,000

Average Family Income (after taxes)

$59,000                                                              $86,419

Fixed Mortgage Rate:

9.71%                                                                  4.65%

 

Today the average home costs 300% more, student debt averages almost 700% more but family income is only 46% greater than in 1992.  The good news is that the average fixed rate mortgage is about half what it was in 1992.  Unfortunately, the average millennial, due to high student debt, has a credit score of 625  (per NerdWallet) so they may not qualify for the lowest mortgage rates available. A Millennial today is worth 21% less than his 1983 counterpart while the net worth of a 60 year old is twice what it was in 1983.  So young folks are getting poorer while older folks are getting richer.  Is it any wonder that New Home Creation by this generation after graduating from post-secondary educational institutions has been delayed 2-3 years? The Quick Answer is “No”.   These are the contributing factors that support the statistics that show millennials are worse off than their parents.

GOOD NEWS: This generation is not willing to engage in profligate spending like some preceding generations.  They are more likely to move back home to save money to pay down student debt.  Contrary to messages on late-night comedy shows, they do not want  to move back home into their parents’ basement to play video games.  In fact, my personal experience with Millennials is that they are not likely to purchase a home for a price as high as their mortgage pre-approval will allow.  Other generations frequently spend every dollar that their pre-approval will permit.  It is not uncommon for millennial buyers to have a mortgage pre-approval for an amount that is 10-20% greater than what they actually want to spend.  Why? these buyers witnessed first hand when friends, neighbors, or family members were unemployed, and/or under-employed, and had to Short Sale their homes, or worse, experience a foreclosure.  That experience is still very fresh in their memory, so they are willing to take the steps necessary to lessen the chance that they will have such a traumatic experience.

Can anything be done to mitigate this situation? Possibly.  The National Association of REALTORS®  has a Federal Policy Position that would provide tax relief to student debt holders and employers who assist their employees’ student loan debt burdens.  In addition, the National Association of REALTORS® supports policies that provide tax relief to those borrowers with forgiven student debt.  We need to convey to our political representatives in Washington DC that there are things that can be done to address the student debt issue…if we work together.

Not all is “gloom and doom”.  This is the most educated generation, and the most tech-savy generation, in history.  As the economy rebounds real wages will increase, and due to their fiscal discipline, these consumers will be well-positioned to save money at a rate that has not been seen “in generations” 😉

The millennial generation is fantastic for the housing industry because their shear  numbers indicate that demand for homes will not abate for years.  So all of my REALTOR® colleagues across the country can rest assured that the demographics favor a sustained positive environment for home sales.  For everyone else this is also good news because when the housing market is strong the economy is not likely to falter.

Finally, the northeastern part of the country is experiencing seasonal weather. For two consecutive days the sun has shone and it’s great to feel the warm rays on my skin.  This warm weather also harkens the season for home-selling; the busiest time of year for REALTORS.  Lawns become greener, tree buds appear, and hopefully all those yard projects were completed if you were thinking about putting your home on the market.  

It definitely is a seller’s market, so NOW is the time to call a REALTOR to take the final steps to put your house on the market. In the event that you haven’t done anything, don’t despair, there are some simple things you can do to “put your best foot forward.” 

  1. CURB APPEAL should be at the top of your list because the first thing that people will see when they look at an online listing is typically a picture of the front of your house.  Make your house “Pop” with a nice green lawn (you can always fertilize it yourself) straight edges along walkways, the driveway, and curbs. Trim shrubs so they are not overgrown. Scrape peeling paint and touch it up with a matching color. 
  2. AIR QUALITY is something that may seem trivial but if it is not fresh it will leave a lasting, negative, impression.  If there are smokers in your house, lingering pet odors (especially urine), mold/mildew odors, dampness odors, or other smells, get rid of them! You don’t want your house to be remembered for a bad smell; and don’t try to “cover them up” with fragrances or scented candles because buyers and their REALTORS can “smell right through” those tricks. 
  3. PAINT- chipping and peeling paint is noticeable and easily rectified. You can attempt it yourself or hire a pro.  It shouldn’t take long and won’t cost much.
  4. CLEANLINESS is also super important. Dirty windows, dusty sills, dust-bunnies on the floor, are things by which you don’t want to be remembered. If you don’t have time, hire someone to do it for you because it will be worth it.

If you have any questions about preparing your home for sale email me at JosephLuca@remax.net

April 11 marks the 50th anniversary of the signing of the federal Fair Housing Act. Why is the commemoration a top priority for the National Association of REALTORS®?
The right to own property, and to own a home, is the foundation of our business.

NAR has taken an active role in promoting, and educating REALTORS® about, equal housing opportunity for 50 years.


The Fair Housing Act prohibits discrimination based on race, color, national origin, religion, sex, familial status, or disability.
NAR incorporates all of those requirements, as well as equal opportunity on the basis of sexual orientation and gender identity, into our REALTORS® Code of Ethics, because it makes our association, our industry, and our country stronger.

FAIR Housing Commemoration

 

NAR’s commemoration of the Fair Housing Act is vital because it highlights how far we’ve come in promoting equal housing opportunity—both as a society and as an association—and, more importantly, that our work is on-going.
When Title VIII of the Civil Rights Act was passed in 1968, many in organized real estate had a far different view of fair housing. The new era of openness and equality in the sale or rental of housing clashed with hardwired beliefs at that time; and many believed that fair housing law posed a threat to individual property rights.

President Lyndon Johnson, as he signed the Fair Housing Act on April 11, 1968, famously declared that the right to fair housing “is now a part of the American way of life.”
That right also became every REALTOR®’s responsibility. For all the progress made to raise awareness and end discriminatory practices, as specified in the law and the REALTORS® Code of Ethics, the challenges for the industry and society persist. Fifty years later, REALTORS® commitment to upholding the principles of fair housing remains a top priority.

Despite all of the strides that have been made in Fair Housing, we must learn from the past. Housing is not a special interest; it is a human right. NAR and the RI Association of REALTORS® is committed to safeguarding this right.

Our vigilance must continue so that future generations may also enjoy the benefits of Fair Housing.

Some areas of concern include:

1. How to avoid Steering claims in the age of big data;
2. How emotional support animals like therapy dogs are finding their way into fair housing law;
3. Illegal discrimination based on familial status.
While we may not be able to predict the adversity of our society, or the challenges of the market place, in the future, we must always work together as a nation, and as REALTOR® professionals, to protect the right of Fair Housing for ALL who live here in the greatest country on earth.

As was widely expected, The Federal Reserve raised interest rates, and indicated that they will continue to do so throughout the year.  This actually indicates that things are good in our economy… a positive sign that consumers are spending money, and prices are being pushed upward by the forces of supply and demand.  Interest rates are like a “brake system” on a train, when things start moving too fast apply the brakes, to slow the train down.  Likewise, when the economy starts to “move too fast”, prices are getting pushed higher (Inflation) so a slight increase in interest rates will temper, or slow down, these price increases.  Inflation, like our debt, diet, and data, needs to be managed so it  doesn’t become a problem.  Which was why The Fed repeatedly lowered interest rates during the depths of The Great Recession – to spur economic activity (buying stuff.)

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What will this mean for me?  If you have a 30 year mortgage of $250,000, at a fixed interest rate of 5%, the monthly payment (not including taxes and insurances) would be about $1,342. A rate increase to 5.25% would raise your monthly payment by about $35.  Most consumers spend more than that on coffee every month.  Will that be detrimental for some consumers? Probably.  However, rising incomes, should mitigate that affect.  The US unemployment rate is 4.1%, and Full Employment is considered to be about 5%.  Many economists believe that this dynamic pushes wages higher so (theoretically) more people should be able to afford the extra $35/month.

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If you are considering Selling your house, you should act sooner and not later. Inventory is tight, so there is not much competition at this time; but more people may list their homes for sale increasing the competition. You best option is to contact a Full Time, Experienced, REALTOR® to get the answers to your questions for your situation.  Feel free to call me, Joe Luca at 401-580-9797.  All questions are welcomed and answers are free and without obligation.

GentryMoving

REALTOR® Colleagues and Consumers alike have had questions and comments since the RI Statewide Multiple Listing Service (MLS) introduced the “Coming Soon” status on the MLS. First of all, for the Consumer, a “Coming Soon” status is nt an Active Listing, it is considered to be “Off Market”; which means the house CANNOT be shown by the Listing Agent. This is probably fine if you are not ready to show your house because you need to de-clutter, make repairs, or take care of other “last minute” items…as long as it is completed in less than 30 days, because the listing will automatically switch to Active and will have to be shown to Buyers. A Coming Soon listing is NOT an opportunity for the Listing Agent to show the home to Buyers without other REALTORS® haveing the opportunity for their Buyers to see the house. If the Listing Agent attempts to do this, he or she is doing the Seller a disservice because other Buyers will not have an opportunity to make a potentially higher offer on the house. If this happens to you, or someone you know, call the local Board of REALTORS® because it is a violation of MLS rules and the REALTOR® Code of Ethics.

The REALTOR® Code of Ethics is the demarcation line between individuals buying and selling their own real estate, licensees selling the real estate of others (who are required to only abide by the law,) and REALTORS®. We are held to a higher standard of conduct. We “police” our members for the protection of the consumers and other members.

REALTORS® demand a higher level of business conduct and professionalism from our members, and we are always striving to provide better service for the consumer. Full time REALTORS® treat the job as the profession it is by continually taking classes and attending webinars in addition to the required Continuing Education classes mandated by the state licensing body.

If you are interested in a Coming Soon listing feel free to give ma a call at 401-580-9797.

 

Much has been written, spoken, debated, and lamented, about the lack of housing inventory in states from the Northeast, to the Midwest, to the West Coast.  There are myriad reasons and explanations for why, and most of them are probably accurate to some degree.  Many may even help alleviate the pressure on the market to stem the reduction in housing sales.  However, most of these ideas would take time.  While the Free Market is efficient in the long run… it is not necessarily so in the short run. It certainly is not responding quickly to the needs of first time home buyers in the market today.

When I was installed as President of the Rhode Island Association of REALTORS, I called upon my colleagues to Engage, and Inspire others to Engage, in order to remain relevant and productive in our current and ever-changing economy. Now is the time for us to Engage. Politically Engage .  This is also the time we should Inspire others, including consumers, to Engage.  We must inform our legislators and municipal officials that our economy needs to be unbridled by the regulatory restraints that are preventing First Time Home Buyers from participating in the American Dream of Home Ownership.  We have witnessed our national economy quickly rebound, with consecutive fiscal quarters of 3%+ growth, after the federal government eliminated numerous regulations which were restricting economic activity.  Why can that not be done at the state and municipal level so that builders can build houses that lower income families can afford?  Why should “the little guy”, who is too frequently an immigrant, not be able to buy a home because there is nothing available, or nothing is affordable?  This should be not be acceptable in the United States of America.  We must Engage with our legislators and municipal officials, to convince them that it is essential and vital that those at the lower income levels not be precluded from participating in the American Dream of Home Ownership.

As Architects of The American Dream, REALTORS® protect Private Property Rights.  The National Association of REALTORS® is against any obstacles to home ownership:

  • Unnecessary fees to buy a home,
  • Restrictive regulations/policies that infringe on the home-buying process,
  • Restrictive underwriting policies that may “freeze out” some from buying a home,
  • Increasing regulations and fees for consumers to retain ownership,
  • Anything else that may infringe or impede on the home sale process.

REALTORS® need to Engage, and lead the way for consumers to Engage, with the political process. Why shouldn’t everyone that qualifies for a mortgage be able to buy a home?  Why shouldn’t they participate in the American Dream of Home Ownership?  REALTORS® can make it happen so we should make it a reality.  If you want to Engage but don’t know how, email me at JosephLuca@remax.net.

The short answer is: “You Don’t Know What You Don’t Know”

For the purposes of this discussion, when I refer to a REALTOR®, I am referring to a full-time, experienced REALTOR®, who averages at least 11 closings per year. For what it is worth, over 70% of RI REALTORS® do less than 5 transactions per year, which is why you should seek out an experienced full-time, REALTOR® to handle, what for most of us, is the largest financial transaction of our lives.

In essence, sellers are potentially exposing themselves to liabilities that may be unnecessary.  Either as it relates to disclosure of information, utilizing correct forms to expedite the transaction, and the general practice know-how that protects buyers and sellers from liability. Experienced full-time REALTORS® guide and control their client’s transaction so purchases and sales happen on schedule, and the buyer and seller can easily transition to the next stage of their life.  Additionally, REALTORS® know the market; we know houses, and we know sellers and buyers.  It’s our job.  Those of us that take our job seriously are continually learning, studying, reading and taking classes, so that we are aware of new regulations, financial instruments, and mortgage programs that best serve our clients.

As a full time REALTOR®, I make it my job to be aware of the latest financial incentives from housing authorities, tax incentive programs, mortgage programs from various lenders, and the latest guidelines from the government backed loan products (FHA and VA.) Being current on these programs gives me the tools to work with a full spectrum of clients, being able to assess their needs and help them best maximize goals.

REALTOR® Associations frequently change forms to accommodate the needs of members and consumers, so it is also part of my job to be aware of these changes and use the latest forms.  These forms frequently have time triggers with deadlines which, if missed, could cost the buyer or seller A LOT of money.  I take classes, attend webinars, and go to conferences to remain sharp and have the best skills, training, and tools for the benefit of my clients. I’m proud of this because it makes me extremely qualified to assist them with what I’ll mention again is likely the biggest financial investment of their lives.  This requires a large time-commitment and a significant amount of mental “focus.”  Most, if not all, of my top-producing colleagues approach their job in the same professional manner.

If a part-time REALTOR® has a “real” or “full-time” job, where would he/she find the time to do this?   I say this not to throw anyone under the bus.  I am not disparaging any REALTOR®; I am simply asking the aforementioned question.

These are just some things to think about as you consider hiring /working with a REALTORS®. I hope this post has giving you some food for thought, and I would love to discuss any of this with you and how it relates to your personal real estate needs and objectives. I look forward to hearing from you!

BUT WILL IT LAST?

According to the CNBC All-America Economic Survey, for the first time in at least 11 years, more than half of all survey respondents rated the economy as Good or Excellent.  Forty-one percent believe the economy will improve in 2018, and forty-two percent approve of President Trump’s job performance.  This poll was conducted by a Democratic firm and pollster, Hart Research – so this is not a firm with an agenda to make the economy and the president look “good”.

What is also interesting is that this poll was conducted December 10-13, during the tug-of-war debate about tax reform; so there is a certain amount of “uncertainty” that may have suppressed these numbers.  It is also worth noting that there has been a significant “talk” on the business-news channels that there are going to be two or three Fed rate-hikes in 2018.  This, one would think, should provide reason to be doubtful about the prospects of a strong economy.  However, the respondents to this poll by a Democratic pollster have feelings that are contrary to that presumption.  Why is that? What does it mean? (If anything.)

Our economy is good, or bad, because we believe it is.  So, what are some things that would contribute to our believing the economy is good/going to improve if:

  • There are multiple negative-news headlines,
  • Alleged lack of certainty in our economic prospects,
  • There aren’t enough positive-news headlines reported by the “Main Stream Media” (if you believe Fox News.)

Well, I submit to you that perhaps, people are making more money, becoming more gainfully employed, and more people are making more money.  According to the Bureau of Labor Statistics, civilian worker compensation was up 2.5%, year over year, in the third quarter of 2017.  In the nonfarm business sector Output was up 4.1%, and hourly compensation was up 2.7%, in the third quarter of 2017. Nonfarm payroll employment was up 228,000 in November 2017. The unemployment rate has been trending downward and is at the lowest rate in 17 years – even in the wake of several hurricanes.   This has probably contributed to the fact that the Average FICO score is up to 700 from a recent low of 688 in 2005.  As consumers earn more money they pay more bills in a timely manner.

This economic data can be viewed against positive birth-rate trends.  The age range that has the largest number of home buyers is 30 to 34 years old.  If we look at the birth rates from 30 years ago we can see that the trend increased for several years. From 3.82 million in 1987 to 3.91 million, to 4.02 million, to 4.17 million before starting a downward trend.  This would indicate that there will be an increasing number of home-buyers in that demographic for several more years before leveling off and then declining.

A statistic that could be viewed as a negative is the fact that housing inventory is very tight across the country.  So in the absence of new construction (still at a 50 year low) we will continue to have a limited supply of product to sell.

So what does all of the above have to do with real estate and housing?  It bodes well for the housing industry and positively for property values.  In the coming years we are going to experience increasing demand, a sense of economic-optimism, increasing wages, an improved consumer-credit profile, and presumably higher employment.  So to extrapolate; there will be more buyers, with a better credit profile, earning more money from more jobs, chasing a limited supply of product (housing inventory).  Economics 101 taught me that a greater demand with a limited supply will drive prices up; and this is supported by empirical data.  THAT is good news for consumers looking to buy, those looking to sell, and the REALTORS® that consumers will work with to receive maximum value from the largest financial transaction of their life.

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