Speaking of Real Estate
With safety issues still top of mind for real estate professionals across the country since the tragic death of Arkansas agent Beverly Carter in September, we’ve received tons of emails from readers who speak heroically about their own harrowing tales of facing danger in the field. But one in particular touched our hearts: Celeste Barr, GRI, ABR, an agent with Keller Williams Success Realty in Barrington, Ill., wrote to us in response to our blog post about Carter, and she told us of an attack she luckily escaped back in 1991. Barr spoke of the shame she felt as a result of her attack and her long journey to self-empowerment in the years following. She has an important message for all REALTORS® who aim to be safer on the job.
Here’s her full letter:
Back when I was a newer agent in 1991 — I had only been in the business for two year — I, too, was attacked. A “buyer” attacked me in the basement of a home. I got away. I was one of the lucky ones.
For years, I felt ashamed, and, at the time, I didn’t tell anyone what happened. I thought I had done something wrong that gave him permission to do what he did. But I didn’t. I thought I should have seen this coming and that I was to blame. I didn’t, and I wasn’t. I finally shared my story with a family member and learned it wasn’t my fault. The “buyer” was going to find someone to attack, whether it was me or someone else.
If I were to give any advice to anyone in our community of REALTORS®, it would be to listen to your gut more. We’re all so eager to get the next deal; we’re not listening. Even as our gut is screaming, we think it won’t be us.
If a buyer is giving you more attention than is comfortable to you, assume there is a reason. Plan ahead and have a way out, even if all you have is a lame excuse to leave. You really need to keep a safe zone between you and the client. Have a way out! Keep an open door for YOU!
Being physically attacked creates a myriad of emotions, just like a death does. In my experience, anger has been one of the hardest feelings to overcome — anger at myself for being so stupid and vulnerable. It’s not a rational emotion, but it is real. It allows me now to be prepared before I meet with the public and speak with authority, and to not be a victim.
Do you know what consumers want from a real estate agent? Sure, you might have a pretty good idea — but why not take it from them?
Mike Reff, broker-associate at Madison & Company Properties in Denver, wanted his team, The Knoll Team, to hear directly from consumers about what their needs are. They were already producing a Web video series, so they decided to hit the streets with their camera and microphone, and ask people point blank: What do you want from your agent?
“We always want to find out as much as we can from the public, our customers,” Reff says of his team. “We felt that the only way to strive to provide the best possible service as real estate professionals is just to ask the public what they want. So that’s what we did.”
Once he was out there doing man-on-the-street interviews, Reff says he was surprised by the variety of answers he got from consumers on the question of what they want from their agents. “It just really goes to show that no two clients are the same,” he adds. “Everyone has their own unique expectations and desires for what they want from a practitioner. We expected the standard ‘good communication, looking out for our best interest,’ but I think we were pleased to see some people touch on the relationship aspect.
“The biggest takeaway for anyone who watches the video is really to know your customers,” Reff says. “Know what they want. There is no standard that will work across the board. As real estate professionals, we have to adapt to our clients’ needs.”
Check out the video below.
News Corp’s announced acquisition of Move Inc., which operates NAR’s consumer-facing website, realtor.com®, is about making listings and other REALTOR®-focused content easily accessible via the 500 million consumer page views that the media company generates every month, Move CEO Steve Berkowitz says in an interview with REALTOR® Magazine.
News Corp owns some of the most well-known business publications in the United States, including The Wall Street Journal and MarketWatch, and the consumers who access this content are a prime target for real estate brands, says Berkowitz. “Those customers, we know, are most likely the right audience for real estate brands to reach,” he says.
Berkowitz says the acquisition is about “opportunity and innovation and creativity,” and he contrasted that with another recent merger, which he said was about cost-cutting. Berkowitz didn’t identify the other merger, but two other national listing sites, Zillow and Trulia, announced merger plans a month ago. The News Corp acquisition, he says, is “not a deal that’s focused on cost-cutting, as the other deal is. It’s not about taking the same consumers and just selling them with one sales rep. This is about introducing new audiences to the brand on both sides.”
Berkowitz says his focus remains on increasing the value of realtor.com® to members. Among other Move improvements is a new and more robust profile page, which is in beta testing. REALTORS® can use it across online platforms, including their social media accounts, and in conjunction with the new .REALTOR domain when that takes effect.
What won’t change, he says, is the core agreement with NAR, under which REALTORS® remain at the center of the transaction. That goal is also “supported by News Corp,” Berkowitz says. “There’s a change-of-control clause that sits in the operating agreement [with NAR], and [the association] worked very closely with News Corp to make sure that the goals of News Corp [and of NAR] are aligned.”
The deal must be reviewed by the federal government under what’s known as a Hart Scott Rodino anti-trust filing, and Berkowitz says he expects no issues to arise there.
REALTOR® Magazine interviewed Berkowitz on Wednesday, one day after the announced acquisition. The $950 million acquisition is expected to be completed by the end of 2014 and is expected to turbo-charge the momentum that’s been taking place at Move since July 2013, when NAR altered its operating agreement with the company to improve its ability to compete. We asked Berkowitz to talk about how the acquisition will affect realtor.com® and REALTORS®.
Read the full interview:
REALTOR® Magazine: Will consumers see changes to realtor.com as a result of the acquisition?
Steve Berkowitz: The clear answer is yes. Consumers are really happy with what they’re seeing on realtor.com®, and they’ll be happier as we work together with News Corp. Consumers will continue to see the tremendous improvements in the user experience we’ve been making, both on the Web and in mobile. And they’ll see us accelerate the release of new user-experience features.
RM: How will the change in ownership affect REALTORS®?
SB: It’s going to be very additive to what realtor.com® has been doing. Members should see this as a one-plus-one-equals-five outcome. We’re going to work with News Corp to allow REALTOR® listings to be placed in front of the huge audience of media consumers that sits on The Wall Street Journal network [which News Corp owns]. And those customers, we know, are most likely the right audience for real estate brands to reach. Our whole “Accuracy Matters” advertising campaign is not a campaign just geared to making consumers come to realtor.com®. It’s about making consumers understand that REALTORS® are all about accuracy. So, with the combination with News Corp, consumers are going to continue to build a better trust of the REALTOR® brand. That benefits every single REALTOR® member, because it means consumers could build that relationship sooner in their house-hunting endeavors.
RM: How will the acquisition help realtor.com® become more competitive with other national listing sites?
SB: News Corp has a very robust media platform. They have over 500 million monthly page views across their network, and we’re going to be able to access that audience with realtor.com® information. So, what I think you’re going to see here is, the realtor.com® site itself will continue to become more competitive, as we find more ways to bring some of the content over from all these media sites, whether it be MarketWatch or The Wall Street Journal or Dow Jones. They’re just a great editorial content machine, and we can enrich the experience on realtor.com®. They also can enrich their consumer experiences by allowing consumers to access listings wherever they like through Realtor.com®. So it really is a strong deal that’s focused on opportunity and innovation and creativity. It’s not a deal that’s focused on cost-cutting, as the other [Zillow-Trulia] deal is. It’s not about taking the same consumers and just selling them with one sales rep. This is about introducing new audiences to the brand on both sides. We get to introduce our audience to some of the News Corp brands, and they get a chance to educate their consumers on the value of REALTORS® and the REALTOR® brand.
RM: Will realtor.com® pricing change?
SB: There are no plans for us to change any of our business practices. However, we are always looking at new and better ways to add value to members. So our investment in our profile pages, our investment in putting the listing agent on all listings, which includes a free transfer over to their profile page — these are ways we continue to offer the best value exchange for members, who allow us to use their content, with permission, and to do the things they want us to do. In addition, the mobile presence that we can offer REALTORS® is really important. Even the new profile system and page, which we’re beta testing, is mobile-enabled. So we’re just going to continue to deliver lots of benefits to REALTOR® members as we do today: free tools, both through realtor.com® and some of our other businesses.
RM: Will this acquisition require regulatory approval?
SB: Yes, this has to go through the normal Hart Scott Rodino [anti-trust] filing. We don’t anticipate anything, because one of the huge advantages to the membership and to the industry is that the News Corp media business is a business that does not overlap with what we do at realtor.com®. It actually enhances what we do.
RM: Does the core agreement with NAR remain in place?
SB: Yes. Not only does the goal of keeping the REALTOR® in the center of the transaction not change but it’s supported by News Corp. There’s a change-of-control clause that sits in the operating agreement [with NAR], and [the association] worked very closely with News Corp to make sure that the goals of News Corp, and what they see as the role of the REALTOR® in the transaction, and what NAR sees as the role of the REALTOR® in the transaction are aligned. And if you listen to the last part of [News Corp Chief Executive] Robert Thompson’s investor call yesterday morning, you’ll hear his support for NAR and the excitement about working with the No. 1 trade organization in the world in real estate. I can’t speak for the NAR Leadership Team, but I believe they see this as a real opportunity to build the REALTOR® brand with a company that understands the importance of the role of the REALTOR® in the transaction.
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The day Beverly Carter disappeared after meeting a supposed prospective buyer at a vacant home in rural Scott, Ark., will be remembered by REALTORS® around the nation as a horrible one — a day when the real estate industry lost a star in its constellation.
But Susan Vaught chooses to remember what was good about that day — a day full of joy for Carter, 49, who was expecting to have one of her grandchildren visit for the weekend. It was around 3:30 p.m. Thursday, just hours before Carter’s fateful showing, when she and Vaught, whose offices were side-by-side at brokerage Crye-Leike’s North Little Rock branch, were talking about family.
Get the resources you need to stay safe on the job at REALTOR.org.
“She was talking about how excited she was,” recalls Vaught, executive broker of Carter’s Crye-Leike office. “Her grandchildren were the highlight of her life. … It was a happy day. [Carter] had won $100 at an open house raffle — it was just a good day.”
Later that evening, Carter went missing and didn’t show for two other appointments she had scheduled. A massive search involving hundreds of volunteers ensued for four days, only to end in tragedy Tuesday morning when Carter’s body was found in a shallow grave in a rural area outside Little Rock. Arron Lewis, 33, a suspect in Carter’s death, reportedly admitted to police that he kidnapped Carter from the home she was showing him on Thursday. However, he did not admit to killing her and pleaded not guilty to capital murder charges in court. He told reporters that Carter was targeted because she was a “rich broker” and a “woman who worked alone.” If he is found guilty in Carter’s death, Lewis faces the death penalty.
“We have a very empty feeling in our hearts,” Vaught says of Carter’s colleagues, friends, and family. “We carry with us her memory, her love, everything she was to us.”
A Love for Real Estate
Vaught remembers Carter as one of the most highly skilled real estate professionals she had ever known. Carter came to the business 10 years ago, delving into it as a means to move on from the death of one of her three sons, who was killed in a car accident one year prior.
“Real estate was the avenue for her to get busy,” Vaught says. “But her faith as a Christian woman was her rock.”
Carter quickly became a top producer in her office, Vaught adds, calling her “the epitome of a REALTOR®.”
“She was very caring and very, very professional in dealing with every client, every colleague, every affiliate,” Vaught says. “This is a job that she loved — it wasn’t work to her. When she got to know a client, they really knew her. It was a lasting relationship that carried on for years. It was forever.”
She became very successful in real estate and was known as “the one to beat” in the office, Vaught says. “We all idolized her. Her secret was that warm, friendly person that she was.”
Despite the circumstances surrounding the end of her life, Carter took the safety of agents seriously, Vaught says. She remembers a sales meeting years ago where Carter told everyone, “Never, ever, ever get in a prospective client’s vehicle.”
“Safety is the No. 1 thing in our office, and we are always looking out for each other,” Vaught says. “Whatever happened to [Carter], it wasn’t because she wasn’t being careful.”
‘A Smile for Everyone’
John Cohen, a former neighbor of Carter’s, knew her for 24 years, and she was the first to welcome him to the neighborhood when he moved to the small town of Sardis, Ark. (Carter’s family has since moved.) He remembers parties in their front yard where they would talk about their children.
“Beverly was an angel on earth,” Cohen says. “She always had kind words for everybody and a smile for everyone. … The only way we’ve been able to cope with this is to know that she’s not in any pain anymore and she’s with her son now.
“The way that she treated her children — those boys grew up to be great young men,” Cohen continues. “She was always doting on those boys.”
Though Cohen says he didn’t know much about her professional life, he says that it was clear her personality was the key to her success in real estate.
“You automatically wanted to trust her, and you knew she wanted to do the best for you,” Cohen says. He adds that he never knew Carter to be weary or afraid of any circumstances she faced in the field. “I never knew her to be scared of anything. She trusted everybody. I guess she never really thought there was evil in people.”
Death Not in Vain
Carter’s death has sparked a nationwide debate among real estate professionals about how to be safer on the job. Several commenters on a REALTOR® Magazine story about Carter relayed concerns about current practices and even told of their own personal cautionary tales.
“After reading this news, I understand what happened to me at an open house this past Saturday,” writes Maribell Cruz, an agent with Watson Realty Corp in Kissimmee, Fla. “I went to the second floor to close the windows and forgot to lock the front door. I hear somebody calling, and when I start going downstairs, I see this guy blocking my pathway at the end of the stairs. I got so scared, and he started saying, ‘Why do you leave your stuff on top of the counter alone with the door open? Do you know that you can be kidnapped? Do you have a firearm with you?’ And then he said, ‘You are lucky. I am just a home inspector who wants to leave you my information.’ He was giving me a lesson.”
The news of Carter’s death prompted Jeff Keehfuss, SRS, broker-owner of Montrose Real Estate Group in Montrose, Colo., to rewrite his firm’s safety procedures.
“When this all happened, I spent my morning updating the policy,” he says. “We had a sort of boilerplate policy that said, you know, be careful, notify someone else about where you’re going — it was pretty standard language that would be in most people’s policies. But after the Beverly Carter case, we realized that we had to be much more specific in the language.”
His new policy instructs all agents to conduct the first in-person meeting with a prospective client in the office, where agents should make copies of the clients’ photo IDs and document the make, model, and license plate numbers of their cars. The policy also directs agents to use their own vehicles when going out on showings and to call the office when arriving and leaving listings using certain safety code phrases. For example, saying “I am having a problem getting in the house” would be the code phrase to indicate to office personnel that they should call authorities.
“We need to be overly cautious to start out,” Keehfuss says. “Everybody’s going to have to change the way they do things. We can all do right by Beverly by playing it safer when we’re on the job.”
Vaught says her and Carter’s local board, the North Pulaski Board of REALTORS®, is drawing up new safety procedures for members in light of Carter’s death. The Arkansas Association of REALTORS® also says on its website that it will be implementing statewide safety procedures in the coming weeks.
“It’s got to be a big, loud voice so that never, ever, ever will Beverly Carter have died in vain,” Vaught says. “We won’t be Pop-Tarts anymore. Practitioners need to do things more from an ‘on-my-schedule’ kind of way, and John Q. Public is just going to have to understand that.
“We want to carry the torch on for Beverly. She was a landmark.”
Given that 61 percent of Americans consume coffee daily, the neighborhood coffee shop may be a strong selling point — as long as it’s not one of those chains.
Today is National Coffee Day, and for anyone who values a morning jolt from a cup of (authentic) Joe, these cities are the best places to get the day started. Real estate brokerage Redfin teamed up with Foursquare to round up the 10 Best Cities for Coffee Snobs, which have the most indie coffee shops per capita in the country, according to Foursquare data. Redfin defines indie coffee shops as those with fewer than 10 retail locations.
The findings excluded the presence of coffee chains such as Starbucks and Dunkin’ Donuts, because, let’s be real, the world doesn’t need anymore of those. Below are the top 10 cities along with their most popular independently owned coffee shops, the ZIP codes with the highest concentration of shops, and the median home price in those ZIP codes, according to the Redfin study.
Highest-rated indie coffee shop: Milstead & Co.
ZIP code with the most indie coffee shops: 98103
Median home price in 98103: $480,000
“Seattle is definitely a city of coffee snobs. It’s just part of the culture. People here value authenticity, even when it comes to the ingredients of their lattes. They want the artisan, hand-crafted experience.” — Ben Hitchins, Redfin broker
- Portland, Ore.
Highest-rated indie coffee shop: Stumptown Coffee Roasters
ZIP code with the most indie coffee shops: 97214
Median home price in 97214: $428,500
“People in Portland really do care about eating local, and that feeling extends to coffee shops, especially in southeast Portland, which is considered the fun and funky area. Stumptown is one of the largest roasters in Portland. If you go to an independent coffee shop and they don’t roast their own beans, there’s a good chance they’re using Stumptown.” — Wayne Olson, Redfin agent
- Boulder, Colo.
Highest-rated indie coffee shop: Boxcar Coffee Roasters
ZIP code with the most indie coffee shops: 80302
Media home price in 80302: $599,000
“It doesn’t surprise me that Boulder made the list. It seems like every street has its own coffee shop here, and people are very knowledgeable about the different kinds of beans and roasts. There’s even a bike tour that stops at coffee roasters along the way.” — Paul Stone, Redfin agent
- San Francisco
Highest-rated indie coffee shop: Blue Bottle Coffee
ZIP code with the most indie coffee shops: 94103
Median home price in 94103: 810,000
“San Francisco residents love their coffee, and many are self-proclaimed coffee snobs. Perhaps it’s an effect of the startup culture, but people in San Francisco definitely prefer small independent coffee shops. It’s widely known that Blue Bottle is one of the best coffee shops in the area, and Philz is another trendy spot for grabbing a good brew in SOMA (South of the Market).” — Davis Pemstein, Redfin agent
Highest-rated indie coffee shop: Crema Coffee House
ZIP code with the most indie coffee shops: 80202
Median home price in 80202: 400,000
“In Denver, it’s all about the atmosphere, not just the beverage. People like to go where there’s great décor, music, and food. I often meet clients at local coffee shops because they have a very casual and relaxing ambiance. There’s one local shop that I go to all the time; they know my name there and ask me how my day is going. I often see familiar faces — it’s like ‘Cheers,’ where everybody knows your name.” — Karla Kirkpatrick Adams, Redfin agent
It seems like we’ve gotten Millennials all wrong.
For one, they were expected to be a generation of entrepreneurs — but in this economic tumult, they’ve traded in “meaningful work” for a 9-to-5 desk job and a steady (or as steady as possible) paycheck. That’s according to a joint study by Millennial Branding, a research firm focused on Generation Y behaviors, and Randstad, the country’s third-largest human resources and staffing firm. What they found in the study of 1,000 individuals across 10 countries is that Millennials are leaning toward stability in their personal and professional lives over creativity.
Where we thought Millennials would revolutionize the way people operate, it turns out that the moves they make in life have largely been far less of a radical departure from previous generations. The way they choose to work is no different — and the commercial real estate sector should take notice.
Coldwell Banker Commercial Affiliates recently surveyed the working habits and preferences of Millennials, Gen Xers, and baby boomers, and they found that Millennials are far more open to different working arrangements, some of which might have seemed pass.
Where Millennials Want to Work
- Commuting: Perhaps most surprising is that Millennials are more willing to endure the longest commutes to work: They indicate a willingness to commute an average of 51 minutes, whereas Gen Xers don’t want to travel more than 36 minutes — and no more than 31 minutes for boomers, the CBCA survey shows. Interestingly, this may speak to a reversal in what was thought to be a lasting trend: Instead of staying in the city, young folks might prefer the suburbs.
- Work from home: Another unexpected facet of Millennials’ work lives is that more of them prefer to go into an office than any other generation. Seventy-seven percent of Gen Xers and 71 percent of boomers would rather work from home, but only 67 percent of Millennials say the same, according to the survey.
- Office layout: Millennials’ preferences for type of office space, though, diverge a bit from other generations. Fifty-five percent of Millennials prefer an open-floor-plan office — one not carved up with cubicles and private offices — compared to 41 percent of Gen Xers and boomers. Still, 72 percent of survey respondents overall say their top choice would be to work in a private office, as opposed to a cubicle, open desk, or shared office.
“Where and how people work is changing,” says CBCA President and Chief Operating Officer Fred Schmidt. “The Millennial generation and shifting economy are a big part of that. It’s important for commercial real estate professionals to understand these trends and be able to provide solutions for today’s evolving marketplace.”
How Millennials Want to Work
Schmidt says that it’s clear Millennials are far more flexible with their work environments than people might have expected. “Millennials are going to drive demand for years to come,” he adds. “Employers should make note of where and how people want to work in order to create an environment that will help recruit and maintain a productive workforce. What we need to keep top of mind is that office space should be adaptable and flexible, allowing for both open spaces and private areas.”
Something else Millennials are surprisingly flexible about: technology.
- Meetings: Despite growing up in the digital age, more Millennials lean toward in-person business meetings than other generations. Seventy-seven percent of Millennials say face-to-face meetings are important versus 67 percent of Gen Xers and 71 percent of boomers, according to the CBCA survey.
- Shared workspaces: Young professionals are also more adaptable to shared workspace. Fifty-nine percent of Millennials say they would be comfortable sharing their workspace with someone else, but only 46 percent of Gen Xers and 49 percent of boomers say the same.
- Work devices: This is where there’s no shocker. Millennials by and large are comfortable working on devices other than desktop computers. Sixty-three percent say they’re just as comfortable working on mobile devices, such as phones, tablets, or laptops versus 54 percent of Gen Xers. But here is something surprising: Nearly half — 48 percent — of boomers say they would be fine working from mobile devices.
What commercial practitioners can learn from this — what we all can learn — is that Millennials don’t fit neatly into a box. While we might have expected the Millennial generation to be these digital pioneers forging ahead in a high-tech world — and some are — there are still some creature comforts they find appropriate in the workforce. For them, the value-added in office space isn’t this or that, one thing or another. It’s flexible.
News that FHA will eliminate a prepayment penalty starting next year has been widely reported. It’s a move NAR has been seeking for some time because it will relieve borrowers of a financial hit that’s entirely out of their control and also bring the agency’s policies in line with other federal agencies that backstop mortgages. Perhaps most importantly, it will align the agency’s policies with the qualified mortgage rule (QRM), which defines what the federal government considers a safe home mortgage loan.
What’s being eliminated is an interest-rate charge. For FHA borrowers that pay off their mortgage before the end of the month, the lender is allowed to charge to the borrower the interest rate costs on the loan from the day the loan is retired until the last day of the month. So, if a borrower paid off the loan on Sept. 10, the penalty would be 20 days of interest payments. That can be hundreds of dollars. Once the change takes effect, on Jan. 21, 2015, lenders will no longer be able to apply that interest charge to the borrower.
NAR continues to work with FHA on other matters. A big point right now is getting some improvement in FHA’s policies on condominium financing. It’s too difficult for many condo projects to get the stamp of approval that’s needed for people who want to buy a unit in the project to get FHA financing.
In any case, you can learn more about what NAR is doing on FHA and in other legislative, regulatory, and legal areas in the latest video in The Voice for Real Estate news series.
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You might have heard of a North Carolina firecracker named Leigh Brown, broker-owner of RE/MAX Executive Realty in Concord, N.C. Now hear her loud and clear.
When Brown joined REALTOR® Magazine earlier this year as its guest editor for the March/April edition, she lit a fire under all of us. She wrote an inspiring — if not somewhat controversial — commentary piece challenging real estate practitioners to drop the polite business front and get real with clients by being their true selves. Don’t watch your language, she said. Be your most outrageously authentic self, and clients will flock to you in appreciation for being who you are.
Well, Brown’s at it again — being outrageously authentic, that is. She posted a laugh-out-loud video on her Facebook page this week showing just how real she can be. The video, titled “Sh*t Leigh Brown Says,” promises not just to have you rolling on the floor but to give you an idea of how being honest to a fault can sometimes help you in your business. Check out the video below.
There’s a good chance the people you’re helping to buy a home will have a limited understanding of their credit score and whether they need to do anything with it before they enter the market. To help you advise your customers on the matter, we sat down with Neekia McCoy, vice president for consumer lending at REALTORS® Federal Credit Union, a division of Northwest Federal Credit Union, for some ideas.
One helpful tip is about how your customers can strengthen their score. If they have a revolving line of credit, they should make sure the unpaid balance isn’t more than 50 percent of their credit limit. If it is, getting that balance below 50 percent is a way they can see some improvement in their score quickly, McCoy says.
Another tip: If your customers are carrying a balance on a closed line of credit, that balance is hurting their credit rating, so they should try to get that balance paid off as quickly and responsibly as they can.
McCoy says the average credit score is 680. Borrowers with that score have a history of paying off their debts on time, as agreed. The range is 300 to 850, with 850 being a perfect score.
Given the importance credit scores play in borrowers’ financial plans, it makes sense for them to check the credit report available from each of the three credit reporting organizations—Equifax, Experian, and TransUnion—once a year to make sure they’re accurate. McCoy recommends checking each of the reports at least once a year and taking steps to get them corrected if an inaccuracy is found. You can suggest your customers go to annualcreditreport.com for a free check. REALTORS® Federal Credit Union has a link to the site on its website, realtorsfcu.org. Fortunately, it’s free to check each of your credit reports once a year by law.
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I don’t know about you, but I was a pretty poor college student. I lived in the dorms my freshman year, with about three feet of space between my bed and my roommate’s bed (both of which hugged either end of our tiny room). When I moved off campus my sophomore year, it was to a rickety old two-story house where I lived on the top floor with two roommates, and three others inhabited the bottom floor. The toilets clogged every week, the water pressure was awful, the gas stove never worked (but I did have the biggest bedroom — score!). My share of the rent was somewhere around $400 a month (this was in Columbia, Mo., back in the early 2000s), which I paid for by working part-time at a Barnes & Noble Café.
But many college kids today don’t have to live like I did. Now, they’re spending their ever-important college years in their very own home — paid for by mom and dad.
A recent Coldwell Banker survey spotted a new trend on college campuses where parents are buying condos, townhomes, and single-family residences for their children to live in while they attend school. Forty percent of Coldwell Banker agents report that these types of transactions have been on the rise in their areas, with some saying that their buyers are purchasing properties for kids as young as 14 years old.
OK, I admit I’m a little jealous. My mom loved me — but not that much. These parents aren’t just spoiling their snooty kids, though. They’re actually making a sound investment.
“Middle- and upper-income families are buying homes [for their college-age children] to save money on rent, and they are anticipating moderate appreciation of values while their children are in school,” says J. Parrish, GRI, who is CEO of Coldwell Banker M.M. Parrish in Gainesville, Fla., home of the University of Florida. “There is upward pressure on rental prices, and buying is often less expensive than leasing if you have cash or can qualify for financing. Parents let their children choose roommates, who pay rent to help offset the cost of ownership.”
Most often, these buyers are looking for homes for their kids with multiple bedrooms and bathrooms near campuses so they can rent extra space to other college students. But they also want the property to be suitable for themselves one day.
“We’ve seen a lot of international buyers and affluent buyers who are thinking of downsizing in the future, so they purchase a home or unit for their child to use now and will eventually move into it themselves once the child is out of school,” says Ed Feijo, a sales associate with Coldwell Banker Residential Brokerage in Cambridge, Mass. Cambridge is home of two of the most prestigious colleges in the nation: Harvard and MIT.
“These buyers are thinking of long-term investments,” adds Feijo, who says he’s seen a 10 percent increase in the market share for these types of buyers in the last five years. “The style and price of the homes they purchase vary, depending on their budget. We’re seeing them purchase one-bed condos close to the schools to more upscale properties to eventually transition into themselves after the children leave.”
But they are sometimes vacation homes for the parents, too. “Many parents also want the benefit of a place to stay while visiting their children and attending football games,” says Nancy Massey, ABR, an agent with Coldwell Banker Townside, REALTORS®, in Blacksburg, Va. (home of the Virginia Tech Hokies). “They want a clean, quiet, comfortable place not just for their children but for themselves.”
Still, other buyers are thinking of these properties as true investment opportunities. They’re buying for their kids, but they’re planning to make money off the property once their kids graduate and move out. Several real estate practitioners say that a good chunk of the parents buying homes for their children are paying in cash and plan to rent the places out for the long-term.
“Many of the parents have never purchased an investment property before, and this will be the only one they own, typically,” says Cherry Ruffino, GRI, a broker with Coldwell Banker United, REALTORS®, in College Station, Texas (Texas A&M University). She says that about 30 percent of her business this year has come from parents buying homes for their college kids. “Some of the properties will cycle back into the market after the student graduates, but many [parents] keep them as investment properties to rent to future students.”
Feijo agreed, saying that most of his clients are “holding the properties for long-term investment purposes.”
Because college towns tend to be “sound real estate markets,” it makes sense for parents with the financial means to invest in property there, says Budge Huskey, president and CEO of Coldwell Banker.
“When you have the presence of a major college or university, you often see a quality health care system, stable job market, and a constant flow of people moving in and out,” Huskey says. “More parents are recognizing this as a smart real estate opportunity. Rental housing is often tight and may not meet parental expectations. In addition, as rental rates are rising dramatically, some view this strategy as a way to lock into a predictable housing-expense budget.”
Togetherness was clearly the watchword for NAR’s 2014 Leadership Summit.
Every August, incoming state and local REALTOR® association presidents from around the country and their association staff executives get together in Chicago to address major industry challenges.
At this year’s summit, Aug. 18-19, NAR President-elect Chris Polychron set the tone with his opening remarks, forcefully asserting REALTORS®’ role as the first point of contact in a real estate transaction. Polychron garnered huge applause while repeatedly asking the audience of 1,500, “Are you with me?” Later, audience members participated in a collaborative songwriting project, creating a song with the lyrics, “We have the knowledge. We are your voice. I’m a REALTOR®, your No. 1 choice.” The following day, a panel of top industry executives echoed Polychron’s sentiments, reminding the audience that the cooperative model built by REALTORS® is the envy of the world.
Polychron emphasized the critical importance of protecting the integrity of listing information online, and asked for the help of the board presidents, MLS professionals, and association executives to take on the challenges of the day.
“We are in this together. We are the group who can get this job done,” he told the crowd assembled at the Sheraton Hotel and Towers on the banks of the Chicago River. “There is no ivory tower. We can’t afford to have any distance between our national leadership and state and local leadership.”
At Tuesday’s industry panel, moderator Stefan Swanepoel asked real estate executives Ron Peltier, Alex Perriello, Helen Hanna Casey, and Hugh Kelly to offer a frank look from the top. The executives said work was needed both to reduce industry fractionalization—and to change media perceptions.
On the latter point, Peltier was particularly vociferous. “Why is every question about what’s going on in the real estate business talking about what Zillow and Trulia are doing?” asked Peltier, chairman and CEO of HomeServices of America Inc. “They’re not in the real estate business!”
Alex Perriello, president and CEO of Realogy Franchise Group, directed brokers in the audience to take the technological bull by the horns. While many complain about the way their listings look on third-party sites, he said, they often don’t do enough to differentiate their own site to optimize the presentation of listings.
“Why not have a hundred more photos, and a video tour? It’s a great opportunity,” Perriello said.
Perriello added that differentiation should also extend to the franchise level. He says that real estate associates and companies considering a partnership with Realogy are often encouraged by many the tools the franchise provides.
“They have to feel better off with us than without us, [and] the value proposition continues to change with technology,” Perriello said. “Once you get everyone on a common platform, innovation becomes a lot easier.”
Talk of a common platform quickly segued into a discussion of how many MLSs each of the large brokers had to join—and each of the panelists, at some point in the discussion, expressed support for MLS consolidation.
“It certainly makes sense for MLSs to start consolidating,” Peltier said. He suggested several smaller MLSs from the same region could partner to create “a consumer site that does not pick winners and losers,” referring potential clients back to the listing broker’s site.
Perriello caused a stir in the audience when he suggested that MLS consolidation should happen “through acquisition,” with larger MLSs taking over smaller ones that aren’t able to adapt.
“It is an exit strategy for some of them,” he said. “People won’t voluntarily say, ‘Well I think we’ll just close up shop.’”
Perriello reminded brokers that they can leverage a history of cooperation that real estate professionals in other countries can only dream of.
“The majority of brokers around the world do not have the benefits of MLS,” he said. “Competitors don’t even talk to each other much less cooperate with each other.”
Hugh Kelly, CRE, chair of NAR affiliate the Counselors of Real Estate, encouraged attendees to think deeply about how they can help energize human capital in their organizations. “Data is not knowledge… [and] what REALTORS® have to contribute is knowledge,” he said. “At its root, real estate is a people business…. We need to think about how we can most effectively organize intellectual capital.”
Brokers can benefit immensely in the knowledge department through greater association involvement, said Casey, president of Howard Hanna Real Estate Services. As the chair of the 2014 Large Firm Involvement Advisory Board, Casey said she’s able to tap into industry news well ahead of her colleagues.
“It amazes me continually when my local board sends me something I knew about two months ago,” Casey said. “All of us benefit from the committees we’ve served on… There should be a system where we share this.”
“It’s a very great power we all have together,” Casey added. “We have to be supportive of each other.”
For its part, the audience was equally tuned in to both the need for change and the ability to partner up to accomplish it. During the panel, Swanepoel asked audience members to text their responses to two survey questions. Seventy-one percent of the respondents agreed that “REALTOR® associations and MLS organizations are at a tipping point,” and 86 percent voted in favor of the idea that “the people in this room, by working together, can make a difference.”