Tag Archives: Real Estate Training Institute

National Association of Realtors Disappointed with New Fair Housing Ruling

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On July 23, 2020, Department of Housing and Urban Development (HUD) Secretary Ben Carson announced that he would effectively end 2015’s Affirmatively Furthering Fair Housing (AFFH) rule.

The purpose of the AFFH ruling was to ensure communities complied with the 1968 Fair Housing Act. In order to get any HUD funding, local governments needed to track poverty and segregation in their communities by completing a 92-point questionnaire. Now, without AFFH, municipalities can declare they’re in compliance with fair housing rules themselves, and HUD will accept it based on their word.

Instead of making housing providers pass a sort-of fair housing exam (the 92-point questionnaire), responsibility largely lands on tennents to file complaints. In an official press release, HUD said they can still “terminate funding if it discovers, after investigation made pursuant to complaint or by its own volition, that a jurisdiction has not adhered to fair housing regulations” (emphasis added).

AFFH has been under attack since 2018, when HUD stopped strictly enforcing it. Since then, a 2019 National Fair Housing Alliance report found 31,202 complaints of housing discrimination in 2018, the highest number since the NFHA began collecting such data in 1995.

Concerning the ruling, the National Association of Realtors issued the following statement.

The National Association of Realtors is disappointed that HUD has taken this step, which significantly weakens the federal government’s commitment to the goals of the Fair Housing Act,” said NAR President Vince Malta, broker at Malta & Co., Inc., in San Francisco, CA. “The viability of our 1.4 million members depends on the free, transparent and efficient transfer of property in this country, and NAR maintains that a strong, affirmative fair housing rule is vital to advancing our nation’s progress toward thriving and inclusive communities. With the pandemic’s disproportionate impact on people of color reminding us of the costs of the failure to address barriers to housing opportunity, NAR remains committed to ensuring no American is unfairly denied this fundamental right in the future.”

Real Estate: Leading the Way to Economic Recovery

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In the wake of a world wide pandemic and having to hit the restart button into the “new normal” we have found that the US economy is but a shadow of its former self. One bright spark in the universe of unknowns is the real estate industry. More and more U.S. states are re-opening for summer business. People will begin to go back to work and the financial landscape of the country will start to turn around.

The significant reasons why the housing market could be such a driving force is the impact it has on the local economy. Buying and selling a home goes far beyond personal growth and satisfaction, it supports our economy as a whole. According to a recent study by the National Association of Realtors (NAR), the average new home sale has a total economic impact of $88,416. Robert Dietz, Chief economist and senior VP for economics and housing policy of The National Association of Home Builders (NAHB) says: “Overall, the data lends evidence to the NAHB forecast that housing will be the leading sector in an eventual economic recovery.”

On a month to month basis a surge of delayed transactions can be processed as the country opens. Some people who would have, in the absence of the pandemic, closed in March, April and May are likely to close in June and July. Add to those closings the buyers who were likely to close in June or July, in the pandemic’s absence, and there is a surge above normal for summer months. According to experts, the economy will begin to recover in the second half of this year. In addition, CNBC notes: “Mortgage demand from home buyers shows unexpectedly strong and quick recovery…The quick recovery has surprised most forecasters.”

The most considerable challenge for real estate agents is not necessarily the market, but all the changes in how activities are conducted moving forward. The “new normal” for construction, remodeling and sales will result in many new or changed processes. Those who can quickly adjust, by reevaluating and tweaking procedures, will thrive. Those who are stuck with a “this is how I’ve always done it” mentality will find the “new normal” a difficult environment.

We are facing one of the greatest challenges of our lifetime rebuilding the American economy, and real estate and the housing market will play a monumental factor in how quickly we can jump-start our economy which may be sooner than we think.

 

Uncertainty in the Real Estate Market

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Harry S. Truman once said “America was not built on fear. America was built on Courage, on Imagination, and Unbeatable Determination to do the job at hand.” That statement rings true for all of us once again. We all know, that the current situation makes it extremely difficult to project the future of the economy. Sam Khater, Chief Economist at Freddie Mac, says: “The uncertainty of the crisis means forecasts of economic activity are more unclear than usual.” Analysts normally look at economic data and compare it to previous slowdowns to create their projections. This situation, as we know, is anything but normal.

Analysts must incorporate data from three different sciences into their recovery equation:

  1. Business Science– How has the economy rebounded from similar slowdowns in the past?
  2. Health Science– When will COVID-19 be under control? Will there be another flareup of the virus this fall?
  3. Social Science– After businesses are fully operational, how long will it take American consumers to return to normal consumption patterns? (Ex: going to the movies, attending a sporting event, or flying).

The challenge of accurately combining the three sciences into a single projection has created uncertainty, and it has led to a wide range of opinions on the timing of the recovery. Quarterly growth contracted significantly in the world’s second-biggest economy – China – for the first time in 28 years, skyrocketing jobless numbers in the U.S., and warnings from OPEC that demand for oil will fall to a 30-year low, have many wondering if it really will be business as usual once the coronavirus pandemic is over. Sam Khater, Chief Economist at Freddie Mac still has hope stating, “We expect that most of the economic damage from the virus will be contained to the first half of the year. Going forward, we should see a recovery starting in the second half of 2020.”

Right now, the vast majority of economists and analysts believe a full recovery will take anywhere from 6-18 months. No one truly knows the exact timetable, but it will be coming.  A recent global poll shows that people have some serious doubts despite reassurances from many governments that we will see a quick recovery in the economy once the outbreak is under control. The majority of people in 10 out of the 15 countries surveyed say a quick economic recovery is unlikely once the lockdown from the pandemic is lifted, with this sentiment highest in hard-hit European countries.

The fear and uncertainty we feel right now are very real, and this is not going to be easy. We can, however, see strength in our current market through homeowner equity that has not been there in the past. That may be a bright spark to help us make it through. While some have expected more people to find themselves underwater, new research from Atom Data Solutions suggests U.S. homeowners are still four times more likely to be equity rich, than seriously underwater.

Many companies will be able to bounce back nicely. But yes, there will be some businesses that don’t survive the shutdowns. Other businesses might be operating at severely reduced capacity or will have taken on additional debt burdens and, therefore, won’t be able to bring back all of their prior workforces. Experts agree the pace of recovery, likely in the second half of the year, is uncertain because it depends on the extent of the damage in the first half such as the permanent loss of industry.

Bottom Line

“It is better to plan for the worst and be pleasantly surprised than to be caught unprepared.”

Get Ready for a New Year and New Career!

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How exciting! You’ve decided to take the leap and you are ready to start your new career in 2020. There are a million questions you must have. There are a few things you need to know to get started on the licensing process and start your journey to becoming a stellar real estate salesperson. The time it takes to go from nothing to fully licensed will depend largely on the state you’re trying to get licensed in. Although that may seem daunting imagine working for yourself in a flexible career where you can set your own schedule with annual earning potential of $100,000 or more. There are so many reasons to choose real estate as your career.

1. Know your Application Requirements

There are some legal requirements that all applicants must fulfill. These requirements will change slightly depending on the state you’re in, so make sure to double-check with your state’s licensing commission to make sure you know every requirement.

Generally, the legal requirements for real estate licensure are as follows:

  • Be 18 years of age or older
  • Be legally allowed to work in the United States
  • No pending criminal indictments against you
  • No criminal convictions for violent or home invasion-related offenses

The last two criteria, related to an applicant’s criminal background, are determined in most states on a case-by-case basis. A conviction doesn’t necessarily disqualify an applicant but trying to hide something in the application process almost certainly will.

2. Take a Pre-licensure Course

Nearly every state requires at least 30 hours of pre-licensure study before an applicant is eligible to sit for the state real estate licensing exam. There are two major reasons for this. First, real estate is a relatively complex business and in order to get started in the business, there’s a minimum knowledge base you’ll need to properly operate. As a real estate agent, you’ll be tasked with caring for the needs of your clients, a task that would be reckless to take on if you didn’t know the best ways to help them.

3. Pass Your State’s Real Estate Exam

Once you’ve completed your real estate pre-licensing course, you’re free to take the actual exam whenever you’d like, but we suggest you spend some time taking some practice exams. As many as you can find. Really. As MANY as you can find. Once you’ve completed your state’s pre-licensure requirements and prepped with some practice tests, it’s time to take your licensing exam. So what’s on the Real Estate License Exam?

Each state administers multiple versions of the test, and each state is different, it’s impossible to say exactly what you’ll see, but there are a few topics that real estate agents consistently see on the test.

  • Fair housing law: This topic is one that you’ll spend a good chunk of time on in your pre-licensing class, so pay attention. Knowing these facts is important if you want to adhere to state and federal guidelines on discrimination and equal housing opportunities, so the test will hammer them.
  • Basic contracts: Contracts are a critical component to using a real estate license, so the basic rules for contracts and negotiations appear regularly.
  • Real estate math: You won’t be asked to do anything more than arithmetic, but you’ll definitely be asked to do a lot of it. Understanding interest rates, percentages, and prorations will be put to the test in a number of questions.

4. Choose Your Brokerage

Once you’ve completed your pre-licensure requirements and passed your state exam, it’s time to start thinking about where you want to work. Even though you’ve demonstrated to the state that you have the knowledge required to practice real estate, you still need a brokerage to sponsor you. In order to buy and sell real estate, every real estate agent requires a broker to sponsor them. A broker is a real estate agent who has demonstrated that they not only have advanced knowledge of the industry, but that they also have a track record of success.

5. Register with the State You’re Practicing In

Once you’ve made a decision on a brokerage, the next step is to formalize your licensure with the state you’ll be operating in. It will involve submitting your personal and brokerage information and, in many states, completing forms for a basic background check. Real estate is a field that requires constant learning in order to maintain success. Find a mentor or a set of mentors who you can ask questions of, bounce ideas off of, and get advice from.

Finally, remember that this business is all about servicing our clients, not ourselves. When you accept your Realtor designation from the National Association of Realtors, you agree to always place your client’s fiduciary best interests over all others, including your own. If you are ever faced with a tough decision in a transaction, stop and ask yourself if your choices are in the best interest of your clients.

Tips and Tricks to Pass your Real Estate Exam

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If you are like me, deciding to get your real estate license is a big deal. You’ve spent time looking for the best exam prep course for the best price and now you’re signed up to take your exam. You’ve circled the date on your calendar and the pre-test jitters are setting in. You have questions like “how much should I study? and “what should I study?” Every state’s exam may be slightly different but the test taking skills you will need are universal. Here are some of the best exam taking tips to help you pass your exam.

Obviously the most important factor in passing the real estate exam is knowing the material. However, don’t lose sight of the goal: passing the test! Learning is great but you can’t use what you’ve learned if you don’t pass.

  1. Start by only answering the easy questions. Read the entire exam and only answer the questions you absolutely know the answer to. This will give you a sense of progress and your subconscious will begin thinking about the questions you skipped. When you’ve got a timed test, there’s always the concern that you’ll get hung up in a section and not be able to finish the test. Don’t be one of those people–unanswered questions are marked wrong. Wouldn’t it be a shame if the last three questions on the test were easy ones— guaranteed points for you–but you wound up just having to fill in a random answer on them because you didn’t have time to actually read and think about them? By skipping through the questions you don’t know the answers to and focusing first on the questions you do know the answers to, you’re assuring yourself that you get time to answer the questions you are most likely to get right.
  2.  If you don’t know it, wait. Skip questions if you don’t know the answer–don’t waste time on questions you don’t know. For example, if math is difficult for you, skip the math problems until after you finish the rest of the exam. Occasionally, the answer to an earlier question will be revealed in a later question. It is not uncommon on the real estate license exam to have questions that relate to one another, like using the same purchase or sale scenario. These hidden answers are another reason why reading all the way through the exam once at the beginning is a great idea.
  3. Don’t second guess yourself. As a general rule, once you’ve answered a test question, don’t change your answer even if you’re unsure of the answer you selected. It has been statistically proven that you are much more likely to change an answer from correct to incorrect. An easy way to get tripped up on the real estate licensing exam is to misinterpret an answer choice, thanks to complicated wording. Deceptive language is fair game on tests like this, so double-negatives, unrelated conclusions, or red herrings (especially in the math portion of the test) are common. Do your best to puzzle it out, but ultimately move on without answering if you estimate having to spend more than a minute thinking about the correct answer.
  4. There is no penalty for guessing. Once you have gone through the exam at least twice, time may be running short and now would be a good time to start guessing. The worst that can happen when you guess on a question is that you don’t get any point. The best thing that can happen though, is that you have a one in four shot at getting a point. Unanswered questions are marked wrong, and it is far better to take a chance on a wrong answer than eliminate any possibility of getting the correct answer. That being said, you can increase your odds by trying to make an educated guess–there is likely at least one answer that is obviously wrong, so don’t guess blindly: read the question and answers first and choose the most likely answer.
  5. Don’t compete with other applicants. You’re given plenty of time to complete the exam and you should use as much of it as you need. Don’t worry if other examinees finish before you do, most likely they are taking a completely different exam. All types of exams are given in one room. You may be sitting next to a plumber taking his exam or a beautician completing hers. If by chance, there is more than one real estate hopeful, remember that many students who finish quickly… fail.

Real estate licensing exams are pass/fail, there is no extra credit for a perfect score. If you’re like me, the allure of a perfect score on a test is hard to ignore, but in the case of the real estate licensing exam, we must. Remember, your goal is to answer the number of questions correctly that will get you a passing score. Use all your best energy to get to the passing threshold—anything beyond that doesn’t matter.

Bonus Tip: do as many practice real estate exam questions as you can. The test is multiple choice and you will perform MUCH better if you’ve been doing practice tests that mimic the exam. Use a trusted service like ours to prepare for the actual real estate exam.

Real Estate’s American Dream

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The American dream. Owning your own home is the largest transaction an average American will make in their lifetime. Conventionally, as a salesperson or broker, you are the catalyst to make that dream a reality. Showing homes, placing offers, negotiating and eventually making the deal. Customarily you work on commission which incentivizes you to get the buyer into the highest transaction you can. To the untrained eye that customary 3% commission doesn’t look like much but as an agent you know that it can add up to thousands or tens of thousands. In 2018 $80 billion dollars were paid in real estate commissions.  This is where the traditional real estate market exists and where current events seek to shake the ancestral market.

Now, more than ever, social media marketing is crucial to reach those customers. Networking, blogging, creating relationships online will all make or break your business. When you have real estate brokerages that are setting new precedence online by allowing more time for focusing on the customer – whether it’s for the buy or the sale. They offer a do-it-yourself approach, such as providing title services, and securing the best mortgage, ultimately offering the buyer an all in one experience. How can you compete? Get online. Start with a social media marketing course like ours and learn how to open doors to new customers and keep your legacy clients coming back. The lessons in this course will take you through the development phase of your social media presence, and on to a place where you are confidently creating online content that represents you in the best light possible. Aligning yourself with your buyer or seller and maintaining a virtual presence will keep your business and reputation attractive to clients. Using Social Media effectively as a real estate professional takes a certain amount of finesse, but if done correctly, can be a major catalyst for advancing your career.

 

Predicting the Real Estate Market in 2019

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2018 was a fickle year in Real Estate. The year started with sky-high home prices, historically low mortgage rates and a definitive upper hand for sellers. In recent months though, home price growth has wavered, rates have risen to their highest point in nearly eight years, and favor has started to shift from seller to buyer. 2019 predictions are showing that we are moving from an incredibly hot real estate market to a more normalized one. Housing inventory looks to rise back up to 2017 levels, and price growth, while likely still positive, will be the lowest we’ve seen since 2014 or possibly even 2011.

Investors and house-flippers will back away from the cooling market and sellers will have to adjust their price expectations as buyers grapple with rising mortgage rates and already-high home prices. A still-growing economy and increased access to credit will support more home buyer demand, but higher interest rates will make home-buying more expensive, so it’s hard to say whether home sales will stay down or rebound next year.

In 2019, homebuyers will enjoy more inventory and less competition from speculators and house-flippers, which will lead to more people enjoying the benefits of homeownership. It will cost more to borrow, but more people will have access to credit for home-buying. This will motivate lenders to expand their customer base to low-income borrowers and first-time homebuyers. But of course, lenders will charge more for these loans–both to cover the risk of lending to borrowers with less-than-perfect credit and to cover their own costs of borrowing.

Homebuilders will be more cautious about building during a cooling market and focus on building starter homes that are easier to sell than luxury homes. Fewer homes will be built, but more builders will focus on starter homes. Higher labor costs will limit the number of homes built, but, higher wages will increase the demand for starter-homes among working-class Americans. Rates (perhaps three times) in 2019 will increase and push the average 30-year fixed mortgage rate up to about 5.5 percent by the end of the new year.

All in all, housing is set for a slow-down next year, but that’s not necessarily a bad thing.

The medium and long-term prospects for housing are good because demographics are going to continue to support demand. With a slower price appreciation, incomes have an opportunity to catch up. With slower sales, inventory has an opportunity to normalize. A slowdown in 2019 creates a healthier housing market going forward.

https://www.redfin.com/blog/2018/12/redfins-2019-housing-market-predictions.html

Dress For Success

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What would you do to sell a home? Most real estate photo galleries are staged and they rarely feature people but some real estate agents are taking a unique approach by dressing up in costumes to help bring more views to their listings.

In 2016, an agent in Texas dressed up as a Panda and it helped her get 12 showings in the first two days. Another agent went prehistoric and donned a T-Rex costume,  and agents in Baltimore dressed up as Spiderman and a Unicorn to show off their listings.

Real estate agents trying unconventional marketing techniques is a smart way to get listings to stand out in the internet age. People like to go viral and are always looking for something new and refreshing online. In the past, real estate agents used different strategies during open house events like baking cookies to make a home smell good or playing music to cancel out traffic noises. Dressing in a costume is just another way to get buyers to pay attention and in the door.

Real Estate agents Christina Dudley and Michael Frank think the costumes are a great way to show some of Baltimore’s local flavor too. They plan on doing another stage photo shoot featuring another goofy character, but they understand it’s not for every house, agent, or seller.