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Real Estate Brokerage

The impact of the pandemic on your homebuyer clients

(BROKERAGE) While the pandemic has impacted many changes, you can reassure your clients that the homebuyer housing market is doing surprisingly well.

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For sale house reflects homebuyer growth.

This year, a great many things have been impacted by the pandemic: Company closures, setbacks, etc. The one thing that may actually be surviving well is the housing market. A news release put out by Down Payment Resource stated that 81% of homeownership programs have funds available for the eligible homebuyer. This organization assesses the market around the country and reports on the conditions it finds.

While they have noticed a small drop in those available programs, most of those dips turned out to be temporary and focused at the city and county levels. However, at the state level, these programs have remained open and have not needed to pause business during the pandemic. This has been contributed to a great deal of uncertainty about the world’s condition. This uncertainty does not seem to have affected the homebuyer market, though. Housing finance agencies have reported that they are doing as much or more business than they were at this time last year. The report recorded that, starting this past August, less than 2% of the DPAs had temporarily paused their programs due to the pandemic.

When analyzing the forbearance trends this year, DPA is reporting that the small increase at the beginning was just caution from consumers. Since then, they have slowed down and reports from the summer are showing an increase for the 8th week straight. The only dissenting comments are coming from CoreLogic, who states that delinquency rates are starting to rise.

The HPI reports an increase in the share of down payment and closing cost assistance programs. Upon analysis, all the numbers appear in the majority. The down payment or closing cost assistants’ programs come in at 78%. The only decrease they have recorded is in the first-time mortgages and the programs for Mortgage Credit Certificates (MCCs).

Overall, things are looking up for the market, at least by the numbers. However, you’ll still probably be facing some concerns from your clients around the volatile nature of the pandemic. This changing world is a scary place, but optimism remains.

Robert Raney is a geoscientist whose been writing and painting for years to get his creative fix in. While working on his thesis in theoretical planetary physics he was also creating fantastical worlds on paper for fun. He's an at home Texan Houstonite who currently works slinging drinks at a local LGBTQ+ bar in the gayborhood, when not fielding oil & gas jobs that have taken him around the world.

Real Estate Brokerage

Applying for a home? Robots and automation may decide your fate

(BROKERAGE) The next background check you have run may not be in the hands of another human being. Is this automation helpful or harmful?

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Man signing application may only be seen by automation

Leasing approval for your next apartment may not reside in the hands of a human being.

Automation has become an integral part of the decision process for landlords when it comes to deciding who to accept as tenants. Screening tools such as ScorePLUS from CoreLogic use a “statistical lease screening model” that calculates a score and determines a potential tenant’s overall risk. CrimCHECK, another product from CoreLogic, can be used by landlords to search a database of more than 80 million booking and incarceration records across 2,000 facilities. This type of software helps landlords and large apartment complexes streamline their processes and reduce manual reviews of leasing applications.

Housing advocates, however, view such automation as more of a problem than a solution. According to advocates when screening tools bypass human “judgment calls”, those decisions fail to take into account critical details and attempt to solve complex choices with a simple pass/fail algorithm. Eric Dunn, director of litigation at the National Housing Law Project, says that nuance is lost when landlords solely rely on automated screening tools and don’t always capture extenuating circumstances around a possible tenant’s record.

Large automated systems often have inaccuracies as well. Monica Webly, the deputy director of litigation at the Legal Action Center, has said that such checks are “notoriously” inaccurate. For example, a record might end up including information from someone with a similar name, leading to a denial in a renting application for a tenant.

“I’ve looked at more criminal records reports than I could count, and I would say that well over half the ones I’ve looked at had some kind of inaccuracy,” Dunns said.

Companies like CoreLogic have faced lawsuits over such inaccuracies. In 2015, a South Carolina man sued the company after he was flagged by a CoreLogic tool as a registered sex offender due to someone with a similar name. While the man was eventually able to resolve the issue, the process took weeks and cost him the apartment he was applying for as a result.

As automation increasingly becomes a part of our everyday lives, scenarios like the above will become more common. Although software like CoreLogic can help landlords process information faster and reduce human error, it comes with its own set of downsides. How to strike the right balance for things such as leasing applications, is the million-dollar question.

At least not all automation has such drawbacks.

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Real Estate Brokerage

7 red flags that could scare off potential home buyers

(BROKERAGE) While houses are selling quickly right now, there are some things that will almost definitely turn a home buyer off.

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Open home and kitchen that home buyers will be considering.

The process of buying a home is incredibly overwhelming – as is the process of selling a house. There are so many aspects that potential home buyers are investigating when they enter a spot that’s for sale.

Without realizing it, many sellers can be hurting their chances of selling by overlooking simple things. The Ascent recently determined seven things that scare away potential buyers. Let’s dive in.

We all know the market is hot right now and houses are selling like crazy, but there are certain things that just cannot be ignored.

  1. Listing an unrealistic price: Be realistic about what your house is worth and don’t be misleading. People can easily search the worth of the houses around yours and do some digging to find out if what you’re listing is representative of what the house is worth.
  2. Skipping the deep clean: This is never a good idea – especially this year. The cleanliness of your house is akin in the buyer’s mind to the overall upkeep and maintenance of the house. They assume that if you don’t clean, you don’t care.
  3. Personalization: Since you’re moving, try and pack up some of your family photos and leave up less “personal” items (or color choices) to better help the potential buyer envision themselves living there.
  4. Expecting payment for features that are high maintenance: Things like pools and hot tubs don’t always return their value. Many home buyers aren’t interested in keeping up with that maintenance and it’s unreasonable to charge them for the assumption that they’ll keep up with it.
  5. Believing “It’s okay if this doesn’t work”: If your shower head is broken, the A/C is messed up, or a ceiling is cracked, you should do all you can to replace or repair it before listing your house. If you can’t, don’t expect anyone to pay the full listing price.
  6. Being nose-blind: Like those Febreeze commercials tell us, it’s common that we go nose-blind to our surroundings simply because we’re so used to them (i.e. a smoker doesn’t notice their house or clothes smell like smoke). Go back and check off deep cleaning, and then ask someone you really trust to come in and tell you how the house smells to an outsider. Trust me, this will be one of the first things a buyer notices.
  7. Leaving pets home during showings: Due to the unpredictability with strangers – or the potential allergies the strangers may have – it’s best to make arrangements for your pets to be elsewhere during showings.

At the end of the day, you have to look at your house from an outsider’s perspective. Getting feedback and opinions from friends and family can help this process.

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Real Estate Brokerage

The best ways to handle stressed and stressful clients

(BROKERAGE NEWS) Moving can make even your calmest clients nightmare wackadoos. Here’s how to manage the stressed out moments to the best of your ability.

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A team of 3 researchers have published an interesting study on how customer service can be improved by recognizing a customer’s stress level before a connection with your business is made.

For example, a customer can often be anxious over using a particular service, i.e., a funeral home or a lawyer in connection with a divorce. By learning more about how your clients feel when they call your business, you can better manage the customer experience. This offers your business a more effective customer base of referrals and repeat business.

The researchers identified the following steps to manage stressed-out customers:

1. Find out how your customers are feeling when they need your service.

One reason so many breast cancer facilities are free-standing, away from the main hospital complex, is because women voiced their ideas to the healthcare team designing the facilities. Women wanted coordinated care under one roof, but felt like the hospital was not a calming environment. Use your empathy to walk in your customer’s shoes to change the experience.

2. Hire not only for skill, but attitude and personality.

Employees who love their job can’t be trained. The passion and enthusiasm, even for a high-stress career like a cancer nurse or funeral director, cannot be taught. Look to bring on team members who have empathy for your customers and understand that business is all about customer service. It’s far easier to teach someone the skills needed for a job than it is to teach them to be motivated to work.

3. Study your approach to the customer’s journey.

How does your business interact with the client? From the first link online or phone call, to the payment options, what is the customer’s experience? Do they come out more stressed, or less stressed than before? Address the high-stress interactions by providing information about your services. For example, when calling to view a listing, what can your customer expect?

4. Give the customer more control over the service.

Dealing with a mechanic who tells you that your engine is shot is highly stressful. Instead, learn to be more specific and talk to the customer in a language that can be understood by someone without technical knowledge. Make sure your customer has one point-of-contact throughout their experience. Have a plan B in place for when that individual is sick or goes on vacation. Empower your customers through today’s technology, maybe an app that tracks the sale. There’s no excuse today for poor customer service and information.

I would highly recommend that every real estate professional read the research from Harvard Business Review. Leonard L. Berry, Scott W. Davis, and Jody Wilmet packed so much information into their report that there’s no way I could cover it all here.

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