Wire Scam Warnings as Spring Season Starts

Wire Scam Warnings as Spring Season Starts

As the spring home buying season begins to heat up, the real estate and title insurance industries are reminding home buyers about wire fraud scams increasingly targeting them to steal their down payment funds.

The National Association of REALTORS® has issued warnings to its members that hackers are trying to gain access to insecure email accounts and search inboxes for messages related to real estate transactions. The hackers then draft fake emails to buyers that appear to come from their real estate agent, title representative, or attorney, with instructions to wire down payment money to a fraudulent account. If the consumer sends the money, it usually becomes untraceable within minutes.

The American Land Title Association urged the Consumer Financial Protection Bureau in a letter last week to step up efforts to warn consumers about the growing threat of real estate wire fraud schemes. “Despite efforts by the title industry industry and others to educate consumers about the risk, home buyers continue to be targeted,” says ALTA CEO Michelle Korsmo. “With the spring homebuying season underway, it’s vital to continue raising awareness about these schemes. The Consumer Financial Protection Bureau should take this opportunity to protect consumers from criminals looking to steal their money.”

ALTA says a CFPB alert should provide tips on how consumers can better protect themselves and provide questions they should ask real estate professionals about procedures to protect their settlement money.

—Source — Melissa T., REALTOR® Magazine

Most Consumers Are Wrong About Home Insurance

Most Consumers Are Wrong About Home Insurance

Fifty-six percent of consumers recently surveyed believe that a standard homeowner’s policy covers flood damage. But they’re mistaken, and their assumption could be a costly mistake.

The survey by insuranceQuotes of about 1,000 consumers shows a lot of misunderstandings when it comes to home insurance and what’s covered and what’s not.

“Being misinformed about your home policy can be an extremely expensive mistake—especially when a few inches of water in a 1,000 square-foot home can easily cost over $10,000 in repairs,” says Laura Adams, senior insurance analyst at insuranceQuotes. “There are a number of widespread myths ranging from coverage for dog bites to items stolen from your car that frequently trip up policyholders.”

Consumers tend to overestimate the amount of coverage they have when it comes to flooding protection, according to the study. Further, 81 percent of survey respondents knew that valuables stolen from their home were covered under most standard homeowner’s policies, yet only 28 percent knew that renter’s insurance would cover valuables stolen from their cars.

“It’s critical for consumers to thoroughly explore their options and really understand the protections that are included or excluded with a standard renter’s or home insurance policy,” says Adams. “Don’t wait until right before a big storm is headed your way to get coverage because there may be a waiting period.”

Flood insurance is particularly a hot topic to address with clients lately. The National Association of REALTORS® has been warning its members about the threats to homeowners and property sales when the National Flood Insurance Program expires on Sept. 30. Policymakers in more than 22,000 communities nationwide rely on NFIP to protect them from flood risks, like torrential rain, swollen rivers and lakes, snow melt, failing infrastructure, and storm surges and hurricanes.

“When the NFIP expired in 2010, over 1,300 home sales were disrupted every day as a result,” NAR President William E. Brown recently said in a statement. “That’s over 40,000 every month. Flood insurance is required for a mortgage in the 100-year floodplain, but without access to the NFIP, buyers simply couldn’t get a mortgage or vital protection from the number one cause of loss of property and life, flooding.”

The National Association of REALTORS® is working with lawmakers to strengthen the program and also create a path for a private market to take hold ahead of the Sept. 30 expiration. Learn more: REALTORS® Warn of Doomsday if Flood Insurance Expires

―Source REALTOR® Magazine

New-Home Trend: Bigger Houses, Smaller Lots

New-Home Trend: Bigger Houses, Smaller Lots

New homes are getting larger, but their lot sizes are getting smaller. The median size of a new home increased from 1,938 square feet in 1990 to 2,300 square feet in 2016, but lot sizes during this same period decreased from 8,250 square feet to 6,970 square feet. That amounts to about a 16 percent decrease.

However, the trend hasn’t been consistent: Between 2006 and 2011, home buyers were showing demand for larger homes and larger lots. As home prices dropped during the housing crisis, greater affordability gave buyers opportunities to seek larger outdoor spaces. Today’s pullback in lot sizes come as builders look to cut costs.

“When home prices appreciate at a fast pace, the land value rises even faster, which, in turn, drives the cost of homes higher,” according to CoreLogic’s Insights blog. “In order to mitigate the high cost of the land value, home builders reduce the size of the lots to bring the cost of the new home down so they can price these homes at a reasonable level.”

Indeed, the data shows that sizable price gains on large homes between 2014 and 2016 put pressure on builders in the cost of acquiring and developing land. More builders responded by building larger homes but on smaller lots.

Source: “The More, the Merrier,” CoreLogic Insights Blog (April 5, 2017)

Why Sellers Are So Stressed in a Seller’s Market

Why Sellers Are So Stressed in a Seller’s Market

Home sellers say the greatest challenge for them this year is the lack of homes to choose from when it’s time for them to move, according to a new survey of more than 800 real estate professionals from Redfin.

“It’s a seller’s market, but the catch is, most sellers need to buy as well,” says Eileen Lorway, a Redfin real estate professional in the Boston area. “This is a conversation I have with many clients at our first meeting. We discuss options like ‘seller to find suitable housing’ contingencies for the sale contract, ‘purchase contingent on sale of current home’ options for the buy offer, rental options, stay-with-family options, and bridge loans. Sellers who are buying need to think outside the box a little bit. It’s not easy, but we often do end up closing on sale and purchase on the same day.”

Lorway also encourages more of her sellers lately to sell first, then buy. They will need to consider temporary housing options, but “then they will be able to take the time they need to find their dream house, know exactly what they’ll have to work with financially, and won’t end up adding unnecessary contingencies to offers, which will give them a better chance to get the home,” Lorway says.

Inventories of homes for sale have hit record lows in many parts of the country. Buyer demand, however, remains high. About fifty-seven percent of real estate professionals surveyed by Redfin say they have been involved in at least one instance of a home receiving 10 or more offers this year.

Source: “Lack of Homes for Sale Is a Problem for Sellers, Too,” Redfin (March 31, 2017)

Home Prices Blamed for Student Loan Defaults

Home Prices Blamed for Student Loan Defaults

The housing crisis may also have sparked the increase in student loan default rates, according to a working paper by the National Bureau of Economic Research.

The study says the drop in home prices during the Great Recession also coincided with a 24 to 32 percent rise in student loan default rates. Researchers looked at administrative student loan data along with ZIP code home price data for about 300,000 student loan borrowers in repayment during the recession.

Last year, more than 1 million federal student loan borrowers defaulted on their debt.

“The huge rise in student loan defaults is on everybody’s minds and the question is what’s the cause of this rise?” says Holger Mueller, one of the authors of the paper and a professor of finance at New York University’s Stern School of Business. “What we want to do is point to another very important source of default risk and that’s just the labor market.”

Researchers point to the impact falling home prices may have had on an area’s labor market. When the value of homes drop, homeowners tend to spend less. Local businesses then are often forced to keep workers’ pay stagnant or even lay them off. That ripple effect may have also contributed to the higher student loan default rates.

Source: “Why Lower Prices Lead to Higher Student Loan Default Rates,” MarketWatch (April 1, 2017)

Ways to Better Manage Your Social Media

Ways to Better Manage Your Social Media

When using social media, make sure you aren’t turning off potential customers with your behavior online. Forbes.com offers the following tips on behaviors to avoid on social media, including:

Being present on too many social media platforms: “Be careful not to create a social media behemoth you can’t control,” writes Forbes columnist Mike Templeman. “If you can’t maintain fresh, engaging content on all your social media channels, try backing off the ones that you’re having a hard time keeping up with.”

Worrying too much about your number of followers: Templeman notes that there is no advantage gained by having a high number of followers. “Spamming the web does not improve user engagement or ROI,” he notes.

Using too many hashtags: Sure, hashtags can help increase your visibility, but excessive use can quickly get #annoying.

Referring to your brand too much: Vary the type of content you post so you don’t become a one-trick pony. Retweet or repost content that you feel can add value to your followers, Templeman notes.

Posting too much: Do not post every couple of hours. Be consistent with your timing, but don’t overshare. Consider blogging once a week and posting one or two daily Facebook status updates, while more frequently updating Twitter, Templeman says.

Source: “8 Things to Avoid on Social Media and 6 Ways to Respond,” Forbes.com (March 31, 2017)