When Selling a Smart Home, Don’t Look Stupid

When Selling a Smart Home, Don’t Look Stupid

In more home showings today, you may need to show off a home’s high-tech features, including the ability to control lights, thermostats, and a home’s appliances from a smartphone, tablet, or central hub in the home. Smart home technology has grown drastically in recent years as the tech gets easier to use and more affordable. That has put real estate professionals at the forefront of showing off the tech behind how a home can operate smarter.

On Wednesday at CES 2016, the consumer electronics trade show taking place in Las Vegas this week, Coldwell Banker Real Estate sponsored a session — “Selling Smarter: Real Estate and The Smart Home” — that featured both leading smart home companies such as Nest and Lutron and industry experts who highlighted how “smart” has become the next big trend in real estate.

As smart home tech catches on more rapidly, some agents are increasingly talking up the selling points of smart home features in their MLS listing descriptions and taking the time to highlight the features during home tours. Some agents are even exploring staging a home with portable devices to show how buyers can make a home smarter and more connected.

After all, it’s what a growing number of buyers say they want. The Coldwell Banker Smart Home Marketplace Survey, released this week, shows many home owners would be willing to pay extra to “smart stage” their home. Of more than 4,000 Americans polled, more than half of home owners — 54 percent — say they would purchase or install smart home products if they were selling their home and knew that doing so would make it sell faster. What’s more, 65 percent of those home owners said they would be willing to pay $1,500 or more to add such products.

The products drawing the most attention to smart home technology, according to survey respondents, are centered on security (such as locks and alarm systems), temperature controls (thermostats and fans), lighting systems, and safety (including fire and carbon monoxide detectors and night lights).

Early expectations were that the smart home would become more mainstream by 2020 or later. But the smart home is here now and abundant products are available to make homes more connected than ever, said Sean Blankenship, CMO of Coldwell Banker Real Estate at Wednesday’s session. The technology has become easier to operate, more connected to other tech devices, and more affordable, panelists said. Coldwell Banker Real Estate is cosponsoring the CES 2016 Smart Home Marketplace, which nearly doubled in size from last year.

“The Jetsons are here,” said Michael Smith, vice president of sales at Lutron Electronics, a leader in smart home lighting controls. “They are your next-door neighbors now.”

The technology is expected to continue to increase in popularity as more devices such as those from Nest, Amazon’s Echo, and Lowe’s Iris, among others, join a growing number of partnerships that are expected to broaden the connections that can be made at home.

As for agents, those who fail to keep up with the Jetsons may find themselves missing an important value differentiator in presenting a home.

For example, Danny Hertzberg, a sales associate with Coldwell Banker Real Estate in Miami Beach, Fla., said he’s been to a listing appointment where the selling agent didn’t even know how to turn on the home’s lights because she was not familiar with the smart home technology.

“Smart home technology has become an aspect of differentiation,” Hertzberg said. “It’s one way to stand out when competing against similar properties. … It’s important for agents to understand the technology because your clients most likely do. It’s your job to add value and to be able to explain how the smart home could make buyers’ lives easier.”

—By REALTOR® Magazine

Character Limit on Tweets to Expand

Character Limit on Tweets to Expand

Twitter users are accustomed to the 140-character limit. But it looks likely that they won’t have to boil down their thoughts to pithy phrases much longer. Yes, the social media platform is considering expanding their character limit. A lot.

Twitter says they plan to release a new feature that would allow users to write longer tweets at the end of the first quarter. There is talk that the new character limit will be a whopping 10,000. Get ready for the Twitter novella.

Both the launch date and the character limit might change as Twitter considers how the design of this expansion might look. Previous changes that allowed for more content or bigger pictures reduced user engagement in the past. To counter that, tweets may continue to display just 140 characters, but end with a place to click for expanded and longer content. This would keep timelines neat while allowing for longer posts. Twitter is also working to contain the possibilities this offers to spammers, with a much larger area to tag other users.

Source: “Twitter Considering 10,000-Character Limit for Tweets,” re/code (Jan. 5, 2016).

The ‘Missing Link’ in Housing

The ‘Missing Link’ in Housing

For years, first-time home buyers have made up around 40 percent of all buyers. However, since the recession, this percentage has been shrinking. In 2015, they made up just under 30 percent of the market share, according to the National Association of REALTORS®.

The decrease of first-time home buyers will have broad economic implications, housing analysts say. Without first-time home buyers, an entire cycle of home ownership is stalled. Current home owners are usually unable to sell their homes and move up. And without move-up transactions, many older people can’t sell and downsize for retirement.

“In terms of the real-estate recovery, the missing link is first-time home buyers,” says Rob Chrane, founder and CEO of Down Payment Resource. “They’ve been at record lows. Part of it is legitimate reasons. Part of it is just ignorance.”

It’s not that millennials don’t show an interest in home ownership: according to a survey conducted by Fannie Mae, 56 percent of respondents between the ages of 18 and 34 plan to buy a home next time they move.

But housing analysts say that the real estate industry has an important part in bringing them into home ownership by driving home the financial benefits and teaching them about ways to make home ownership possible.

“Ignorance about the process, concern about the economic outlook, and some skepticism about ownership are all hobbling the return of first-timers,” according to a recent article by MarketWatch.

Only 23 percent from Fannie Mae’s survey said they were familiar with low-down payment programs, such as those offered by the Federal Housing Administration. Consumers believed on average that they need 16 percent for a down payment in order to qualify for a mortgage, according to the survey. Lower-educated and lower-income consumers, renters, African-Americans, and seniors were more likely to assume they needed a higher down payment to qualify for a mortgage.

But in reality, homes can be purchased with as little as a 3 percent down payment. Rules enacted in 2015 that decreased the amount of mortgage insurance borrowers must pay on FHA loans and Fannie Mae and Freddie Mac lowering down payment minimums may have boosted first-time participation slightly, say housing analysts.

Chrane urges the real estate industry to educate would-be buyers on the possibilities to home ownership.

“There are more options out there than they realize, and they really need to look into them before they give up,” says Chrane.

Source: “Why First-Time Home Buyers Are Staying on the Sidelines,” MarketWatch (Dec. 31, 2015)

CFPB Moves to Calm Fears Over Minor Closing Errors

CFPB Moves to Calm Fears Over Minor Closing Errors

Just before the close of 2015, the Consumer Financial Protection Bureau told bankers that they won’t be held liable for most minor errors in loan processing and paperwork under new mortgage disclosure rules, known as the “Know Before You Owe” rule or TRID.

The new rule took effect Oct. 3, 2015, and it has been blamed for causing longer closings due to concerns over minor clerical errors in Closing Disclosures. The rule requires lenders to provide borrowers with a new combined Closing Disclosure that lists all the charges, fees, and line items three days prior to closing.

Richard Cordray, CFPB’s director, issued a letter to the Mortgage Bankers Association on Dec. 29 that said small paperwork errors and typos in key sections of the new disclosure rules would not likely lead to lender lawsuits or regulatory punishments from federal agencies that buy the loans.

“We believe that the risk of private liability to investors is negligible for good-faith formatting errors and the like,” Cordray wrote to MBA. “We recognize that a certain level of minor errors in the early days of implementation is to be expected.”

Average closing times on loans have grown since TRID took effect, by as many as five days. The delay in closings has also led some borrowers having to pay more in loan lock fees to hold interest rates until closings.

The National Association of REALTORS® recently reported that sales of existing homes dipped significantly by more than 10 percent in November – the slowest in 19 months – due mostly to the new regulations that have been lengthening closing times. The average closing time rose to 41 days in November, up from 36 days. NAR’s REALTOR® Confidence Index showed that 47 percent of real estate professionals reported in November that they were seeing longer closing times from a year ago

The new clarification from CFPB may prompt lenders to proceed more confidently.

“Needless to say, we think this is a very positive development,” Pete Mills, a senior vice president at the MBA, said about CFPB’s recent clarification to lenders.

Source: “CFPB Gives Mortgage Lenders a Christmas Present,” MarketWatch (Dec. 31, 2015)

REALTORS®’ Top Concerns Heading into 2016

REALTORS®’ Top Concerns Heading into 2016

An improving job market, still-low interest rates, and recent measures to make credit more accessible are all offering help to the housing market’s recovery, but several challenges prompting closing delays remain.

The latest REALTORS® Confidence Index conducted in November reveals some of the top concerns on real estate professionals’ minds. The survey is based on more than 2,500 responses from members about local market conditions.

Here are some of the most common concerns that REALTORS® raised in the latest survey:

1. New mortgage disclosure rules: The implementation of the TILA/RESPA Integrated Disclosure (TRID) regulations on Oct. 3 has been delaying closings and having an impact on sales, according to members. About 47 percent of respondents reported longer closing times compared to a year ago, up from 37 percent in the October 2015 survey.  It typically took another 40 days to close a sale, up from 35 days in July 2015.

2. Condo financing: REALTORS® continued to report difficulty in obtaining financing for condominium unit purchases because many condominiums are not FHA or GSE eligible.

3. Tight inventories: A smaller number of homes for sale across the country are limiting choices for buyers and pushing prices up, decreasing housing affordability. REALTORS® particularly reported low inventory of properties in the lower price range and for those that are move-in ready.

4. Tight credit: Stringent credit standards continue to affect sales, particularly for first-time home buyers who are still struggling to qualify for financing, according to the REALTORS® surveyed. “Credit profiles that fail to meet tighter underwriting standards are conditions that continue to work against first-time home buyers,” according to the report.

5. Appraisal issues: “Late” and “low” appraisal valuations was also cited by REALTORS® as being problematic in transactions.

Source: National Association of REALTORS®