Your New Buyer: The Landlord Parent

Your New Buyer: The Landlord Parent

Parents are increasingly helping their adult children financially purchase a home, finding themselves in a new role going from parent to landlord.

College graduates struggling to pay rent or save up for a down payment in high-cost metros are turning to their parents for help. Parents are buying up property and then renting it out to their children, often for an amount that’s well-below market value.

A graphic designer was paying $2,150 for a one-bedroom rental on the Upper East Side in New York City. Now, with his parents as landlords, he’s paying $1,021 a month on a one-bedroom apartment his parents purchased for him last year.

“I’m definitely living in a place that’s better than I could afford,” Brian Landisman told The New York Times. “At first, I might have been a little concerned. Anyone would be a little hesitant about making deals with family members, but nothing has changed at all, except that I live in a better place. … I think, psychologically, it’s better that I don’t pay my parents directly; I pay the managing agent. If I were paying them, it wouldn’t feel like my place.”

Contracts aren’t necessary for parent-to-child landlord arrangements, but some parents are formalizing the arrangement that way. In New York, a father has his daughter pay a monthly rent of $1,100 as well as quarterly taxes. He also required his daughter get a roommate who would pay $1,350.

“Over the last three or four years, we’ve been seeing more pied-à-terre purchases that involve parents buying a small unit as a home for a child with a first job in the city, and also as an investment,” Jonathan J. Miller, the president of the real estate appraisal firm Miller Samuel, told The New York Times. “They’re adding an asset to their portfolio that they hope will appreciate over time. Meanwhile, that asset is solving a housing problem for their children, and if the parents can defray costs along the way or make a little something, so much the better.”

Source: “My Parents, My Landlord,” The New York Times (Feb. 19, 2016)

When Retouching Listing Photos Goes Too Far

When Retouching Listing Photos Goes Too Far

An Australian real estate agent made headlines after recently posting photos of a home in Sydney under a blue sky backdrop and that was notably missing the giant water tower that hovers over the property.

The photos raised questions over how much is too much when retouching photos of properties for sale.

Con Economos, the principal agent of Ray White in Rockdale, New South Wales, told the Daily Mail Australia that the photo in question had not been altered. He said the photo was just “taken at an angle.” But some questioned how such an angle could be achieved, given the large size of the water tower directly behind it. The agency has been ordered to remove the photos by the Office of NSW Fair Trading after potential home buyers who saw the property complained that the photos were misleading, according to the Daily Mail’s report.

Omitting a major landmark or significant photoshopping is going too far, says Matt Liss, a Chicago real estate broker at Mark Allen Realty. That said, real estate professionals want to make sure photographs of a home do capture it from the best angles.

“You don’t want to show that you’re right next door to a gas station,” Liss told realtor.com®. A photo might stop at the edge of the home in that case.

Realtor.com® also notes that the absence of photos can help in these cases too. You don’t have to photograph the eyesores of a home. If the traits are significant enough, you could include notes attached to the listings.

“I don’t want to make anyone angry for driving out to a home without knowing what is around it,” says Dee Evans, a real estate professional at Ebby Halliday REALTORS® in Dallas. “That’s setting everybody up for a loss. … Try to present the house in the best way … without ever photoshopping anything.”

Source: “Sure, You Can Retouch Your Listing Photos – But How Much Is Too Much?” realtor.com® (Feb. 17, 2016) and “‘It’s Not Photoshopped, It’s Just the Angle,’” DailyMail.com (Feb. 15, 2016)

Remodels Can Cause Relationship Issues

Remodels Can Cause Relationship Issues

A new study from home design website Houzz find the stress of a remodeling project can cause couples to keep secrets from one another. The Remodeling & Relationships Survey found that 19 percent of the more than 1,500 survey respondents say they’ve made a significant design or purchase decision during the remodeling project without telling their partner, and 11 percent admit to withholding the cost of a purchase or service. What’s more, 7 percent say they added something in the remodel without telling their significant other first.

Forty-one percent say they found remodeling with their partner “frustrating,” 25 percent say it was “difficult,” and 12 percent describe it as “painful.” The most common responses for strain: agreeing on products, materials and finishes (34 percent); communicating with one another (30 percent); and style and design (29 percent).

After the remodel, 7 percent of couples said they thought they needed couples counseling, while another 7 percent questioned how they ended up with their partner in the first place. Five percent of respondents admitted to considering a breakup or divorce during the remodeling process.

To minimize the strain remodels can put on relationships, respondents suggested compromise was key (48 percent), followed by agreeing on goals prior to starting the project (38 percent), and making a realistic budget from the start of the project (26 percent). But tensions may be set to clash from the get-go, considering just 20 percent of couples say they have the same style as their partner.

Despite the relationship problems that remodeling projects can cause, 97 percent of respondents said the result was worth it in the end. The majority of couples reported feeling more comfortable, happier, and organized in their home because of the project. Also, nearly one-third of respondents said they spend more time together at the home because of the completed project. So remodels may not doom a relationship in the long run.

Source: Houzz

Pets Are the Best in Showings

Pets Are the Best in Showings

Are you doing what you can to market yourself as a pet-friendly agent? 65 percent of American households own a pet, and of those, 83 percent consider their pet to be a member of the family. These pet-popularity stats show why it’s important for real estate pros to know how to help buyers find a home that fits the needs of their entire family, Fido included.

When it comes to selling, the properties’ pet appeal can be a big selling point. Make sure to showcase pet-friendly home features and highlight if the property is near a dog park or businesses that are dog-friendly. Agents can also appeal to a pet-loving crowd by using animals in marketing videos and even in head shots, and by staging listings to include pet accessories. Animal-loving agents who want to carve a niche in this market can volunteer at animal rescue organizations and connect with prospects on social media platforms like the Pet Realty Network.

The rise in pet power recently inspired the National Association of REALTORS® to create an infographic with facts about pet ownership and tips on how owners can make a home pet-friendly. In conjunction with the 140th annual Westminster Kennel Club Dog Show, which aired Monday and ends tonight with the Best in Show judging, NAR’s social media accounts are encouraging followers to share photos of their dogs using the hashtag #RealtorDogs.

The social sharing campaign was created to have some fun and engage with their online followers by bonding over photos of their dogs. It’s already a hit with their online audience, garnering over 1,000 tweets and trending on Twitter for more than 12 hours.

If you missed out on all of the fun last night, feel free to participate tonight by following NAR on Twitter and Facebook and sharing a photo of your pooch using the hashtag #RealtorDogs.

Source: “Infographic: Make Your House a Dog House,” NAR Newsline Blog (Feb. 12, 2016)

How Low Will Mortgage Rates Go?

How Low Will Mortgage Rates Go?

For the sixth consecutive week, mortgage rates were on a downward spiral as the 30-year fixed-rate mortgage hovers near its 2015-low of 3.59 percent, Freddie Mac reports.

“The 30-year mortgage rate dropped another 7 basis points this week to 3.65 percent,” says Sean Becketti, Freddie Mac’s chief economist. “This week’s drop leaves the mortgage rate just 6 basis points above last year’s low of 3.59 percent. In a falling rate environment, mortgage rates often adjust more slowly than capital market rates, and the early-2016 flight-to-quality has run true to form. The 30-year mortgage rate has dropped 36 basis points since the start of the year, while the yield on the 10-year Treasury has dropped 59 basis points over the same period. If Treasury yields were to hold at current levels, mortgage rates might well sink a little further before stabilizing.”

Freddie Mac reports the following national averages with mortgage rates for the week ending Feb. 11:

• 30-year fixed-rate mortgages: averaged 3.65 percent, with an average 0.5 point, dropping from last week’s 3.72 percent average. Last year at this time, 30-year rates averaged 3.69 percent.
• 15-year fixed-rate mortgages: averaged 2.95 percent, with an average 0.5 point, falling from 3.01 percent last week. A year ago, 15-year rates averaged 2.99 percent.
• 5-year hybrid adjustable-rate mortgages: averaged 2.83 percent, with an average 0.4 point, dropping from last week’s 2.85 percent average. A year ago, 5-year ARMs averaged 2.97 percent.

Source: Freddie Mac

5 Dating Tips That Apply to Home Shopping

5 Dating Tips That Apply to Home Shopping

Are your home shoppers desperately trying to find “the one?” Finding the perfect housing match can be like finding the perfect mate. For some Americans, this year’s Valentine may come in the form of a home, filled with shiny new fixtures and a great first impression. But that search isn’t always easy.

In a recent article, realtor.com® highlights how home-shopping can feel a lot like dating.

1. You need to have trust.

Americans seem to think they have a better chance at finding love than finding the perfect home. Fifty-two percent of home buyers believe they will find their dream home compared to 73 percent of Americans who believe they will find true love. While competition in the housing market is intense right now, home buyers shouldn’t get disheartened.

2. Don’t take the first one you find.

Home buyers look at a median of 10 homes before making a purchase. In the search for love, a man will date, on average, six other people before choosing “the one,” while a woman typically dates five. Home buyers shouldn’t be discouraged if the first few homes don’t feel right to them. Sometimes it takes a few before finding the perfect match.

3. Try finding an online connection first.

Ninety-two percent of home buyers say they use the Internet during their housing search while 38 percent of single-Americans say they have used online or mobile dating services to find love. Does that make realtor.com® your Matchmaker.com? The majority of Americans surveyed about dating sites and mobile apps say that they find a better romantic match because of the wide range of potential partners they can access. Sounds like a good lesson for real estate too!

4. First impressions do matter.

Seventy-seven percent of home buyers say they’ll know immediately when they’ve found their ideal home; 52 percent of Americans believe in love at first sight when dating. Trust your hunch.

5. Regrets happen.

Eighty percent of home buyers have at least one major regret about their new home purchase; 72 percent of married women admit they’ve considered leaving their husbands at some point. Home owners typically had buyer’s remorse when buying a home that was too small or didn’t have enough storage space, choosing a home near unpleasant neighbors, and purchasing in a bad school district. At least with real estate, your always a for-sale sign away from moving on.

“The reality, of course, is that neither homes nor relationships are ever truly perfect,” realtor.com®’s article notes. “But if you really work at understanding what you want and what you need, and taking the time to assess a variety of options, you’re likely to find a pretty good fit. Maybe even one that will improve with time.”

Source: “Why Home Buying Is (or Isn’t) Like Dating,” realtor.com® (Feb. 8, 2016)