TREC 3-Day Rule Update

At the TREC Commission meeting on November 13th, the Texas Association of Realtors, along with concerned real estate professionals around the state, sent in letters to express concerns about the proposed three-day requirement for delivery of earnest money (Paragraph 5). In the revised standard TREC contracts, the proposed language currently reads, “Within 3 days after the Effective Date, Buyer must deposit $___ as earnest money with __, as escrow agent, at __(address).” Critics argued against the ambiguity of the language, pointing out that weekends and federal holidays could easily make this deadline impossible for some buyers. Vicki Fullerton, 2017 TAR Chairman, pointed out the flaw: “First, the Association echoes the concerns expressed by several of the Commissioners at the August 7th meeting, chiefly that the three-day time period may be problematic in some transactions. For instance, if the contract is executed on the Friday evening before Labor Day and the title company is closed, despite the buyer’s intention to perform, the seller may be able to terminate because of a mere oversight.” Most of the letter-writers agreed, some in stronger terms than others, but most agreed that there should be some distinction between calendar days and business days.

The Commission took notice, and the TREC Broker Lawyer Committee added a sentence to clarify Paragraph 5. Below is the current version up for comment. In black text is the original language that will remain; in blue text is the new proposed language; in red is the old language to be removed, and in green is the most recent addition to address concerns about the three-day requirement.

One realtor submitted a letter to the Commission pointing out that “it is the case that many title companies now employ systems which allow earnest money to be deposited electronically, but these are not universal.” Independence Title was one of the first title companies in Texas to accept earnest money electronically through Zoccam, a game-changing app that processes earnest money simply by using the camera on your phone. We’ve been offering electronic earnest money delivery since mid-2016, and more and more agents have been taking advantage of the convenience it offers. Using Zoccam, agents can send earnest money and contracts from anywhere, and they receive immediate email notifications letting them know the earnest money was delivered. And since the data is encrypted from capture to delivery, there is no financial information or check image left on the smartphone, so you can feel completely secure while using it.

So what’s next? For now, nothing is changing. The Commission moved that the staff was authorized to withdraw the current proposal for all amendments, revise the language again, and submit for re-proposal.  To see all the proposed amendments, the minutes of the last TREC Commission meeting can be found here (click on Meeting Materials part 2 on the right to download and see amendments starting on page 113.) January 12th, the Broker Lawyer Committee will meet again and discuss this issue; afterwards, they’ll publish a new version in the Texas Register for public comment. Currently, there’s no scheduled date for publication or deadline for comments, but we’ll keep you posted on new developments. In the meantime, TREC wants to hear from you, so feel free to submit comments and suggestions on this issue or any of the proposed amendments to general.counsel@trec.texas.gov.

 

You’re Killing Me, Sales!

By Cassandra Majors

Whether or not you were the right age to see the cult classic coming-of-age movie The Sandlot, you’ve probably had this iconic line thrown at you whenever an 80s or 90s kid is annoyed with you: “You’re killing me, Smalls!” The most important plot-driver in the film is a lack of baseballs. Baseballs are the most precious resource to the ragtag sandlot team, and once they’re gone and the team can’t play, there’s nothing to do but hunt for more.

The Sandlot has been on my mind lately because I’ve had a similar exclamation on my mind, as I’m sure many of you have, too: “You’re killing me, sales!” We’ve all noticed that the market is slowing, but is it just a blip on the radar, or a concerning trend? Though I can’t see into the future, there are some reasons to plan for an adjustment in the market.

Let me be clear: I’m not talking about a bubble bursting or the economy crashing (the U.S. economy is doing well overall by most accounts). Home prices are still appreciating at a very healthy pace, but when housing inventory and affordability are both as low as they’ve been for as long as they’ve been, the number of sales is bound to slow. Take a look at the major Texas metros in these graphs sourced from Texas A&M’s Real Estate Center data: Austin, Dallas, Houston, and San Antonio. You can see the exact same phenomenon in each metro—average and median prices reached all-time highs in 2017 and are still going up, but both sales and sales volume are clearly beginning to flatten or decline. It’s good news for homeowners in that their equity will continue to increase, but could present a challenge for those of us in real estate that benefit from higher numbers of transactions. And this is consistent with what’s happening in the nation: long periods of low inventory are raising home prices and leaving buyers with fewer affordable choices, especially considering that over the last ten years, wages have grown less than half as much as prices have increased. Last week, The Wall Street Journal reported that U.S. homeowners’ mobility rate is at a 30-year low, meaning homeowners are staying in their homes much longer before selling than they used to.

Keep in mind, even where inventory is starting to go up, it’s not necessarily a good sign—Austin’s recent increase in inventory and days-on-market, for example, seem to be symptoms of pricing that is too high for most buyers actively looking for homes. Increasing inventory itself doesn’t help unless more of that inventory is affordable for the average buyer.

Why do I suspect that this is a trend and not a blip? Here’s a non-comprehensive list of all the factors nationwide that may be contributing to the home-sale slowdown:

New Home Building Still Lags Far Behind Demand: A fantastic study by Trulia showed that the greatest contributor to low inventory nationwide is that there simply aren’t enough new homes being built. Homebuilding stagnated during the Great Recession for obvious reasons, and as much as it has picked up since the recovery, it’s very difficult to make up for that much lost time. And as any developer can tell you, it’s much more difficult than it used to be to garner loans for large-scale developments, further slowing down new housing starts.

Investors Now Command a Much Larger Chunk of Housing, and They’re Not Selling: The mortgage crisis and recession meant that many homes had to be put up for sale or foreclosed, creating an ideal opportunity for investors to grab up inventory. Though some flipped the properties, many more kept them to create rental income. Almost one in four single-family homes are now owned by investors, and as demand for rental housing skyrockets all over the country, the investors have every incentive to hang onto their assets.

Fewer Millennials Are Able to Afford Homes: Millennials are becoming the largest age group in the real estate market, but they face many obstacles in saving to buy their first homes, including stagnant wages, much higher college debt than past generations, and rising rents. Many spend such a high percentage of their incomes on rental housing that they find it difficult to save for a down payment to buy a house. Millennial demographics also affect their home-buying decisions, as many more young adults are waiting later to get married and have children, which are typical motivators to buy a home. And in growing urban regions of Texas, rapidly increasing property taxes definitely aren’t helping those struggling to afford monthly payments.

Negative Equity is Declining, But Still a Major Problem for Many: Don’t forget that the shadow of the Great Recession still looms over millions of homeowners even a decade later. Nearly one in five homeowners still have less than 20% equity in their homes, so even if they wanted to move, after factoring in down payments, closings costs, and moving costs, they would end up breaking even or paying more for the same amount of equity. But at least there’s good news here for our state as Texas has the highest percentage of positive equity in the country.

Past Low-Interest Rates and Currently Rising Interest Rates Are Both Limiting Buyers: Though interest rates have risen slowly and only recently at that, they are rising and will continue to do so. This means even as potential first-time homebuyers try to save for a down payment and home costs, interest rates will keep moving the goal post farther down the field as they decrease buying power. For every 1% interest rate increase, a buyer’s purchasing power decreases by 9-11%. But then consider the other side for current homeowners who bought in the last decade—interest rates have been historically low for so long that everyone who bought at a low rate will also be deterred from buying a new home with a new mortgage that will cost them significantly more in interest. The more interest rates go up, the harder it might become for those who bought at low rates to justify trading up to another home and sacrificing equity in the process.

Low Inventory Becomes a Self-Fulfilling Prophecy: One of the hazards of low housing inventory is how it eventually begins to reinforce itself. If I bought a starter home years ago with plans to upgrade in the future and I now have the means to do so, I’m suddenly too fearful that I won’t be able to find another house and just decide to stay put. This isn’t just a theory for me personally—I actually own a small condo that I bought at a good price and thought I’d eventually upgrade and put my condo on the market, but now after seeing what’s (not) available on the market, I’ll be sitting tight for the foreseeable future. I’ve become one of my own statistics! The gap between a starter home price and an upgrade home is widening all the time, which sinks turnover rates.

Far Fewer Workers Are Moving for Work: Many more homes used to change hands as workers migrated to other cities and states to take a new position or at least land in a better job market. Marketplace offers an excellent analysis you should read of what might explain this, so I won’t repeat all of their conclusions here, but some of the causes may include:

  • Job switching overall is in decline (not just for jobs that require a move).
  • More families have both spouses and/or parents working than they did in the past, meaning both must be able to find commensurate jobs in the new place, making the decision to move much more complex.
  • Workers are more worried that jobs aren’t long-term or stable enough to risk moving a household for them.
  • Cities with higher incomes also have increasingly higher costs of living that may negate the benefits of moving there for a better-paying job.

Vacation Rentals Snatch Inventory from the Market: The soaring popularity of vacation rentals from companies like Airbnb, HomeAway, and VRBO are also buckling the knees of an already weakened inventory. The economics are very easy to understand: say I own a three-bedroom house in central Austin that market forces tell me I can rent for $2,500 a month, but then I realize I can rent it out for $250/night on Airbnb. I only need to book ten nights a month to make the same profit, and I can probably book more than that because the house is in a great location in a vibrant, booming city that attracts endless visitors. I have no leases to fuss with, no costs to find good tenants or evict bad ones, and no turnover losses when tenants leave. Why wouldn’t I choose a short-term rental? As these homes disappear from the buying and renting markets, costs for renters and buyers in those neighborhoods can go up. One of the hot topics in the controversial CodeNext zoning plan for Austin is whether the city should make it easier to build Accessory Dwelling Units on existing properties to add inventory and ease affordability by boosting housing density. But what if more of these ADUs are built and most owners simply rent them out on Airbnb instead of adding them to the available housing stock? Especially for a smaller building like an ADU, I doubt the economics would favor long-term rentals over vacation rentals.

Seniors Want to “Age in Place”: The U.S. has a growing senior population (Baby Boomers are expected to make up 20% of the total population by 2030) and it looks like they’ll be yelling “Get off my lawn!” at potential home buyers for years to come. A recent survey by Realtor.com found that 85% of Baby Boomers have no plans to sell their homes in the next year. Life expectancies continue to increase, and those with health problems that used to force them into assisted living centers and nursing homes now have many more home-care options that allow them to stay comfortably in their own homes. More elderly Americans than ever before want to stay in their own homes, so many of those homes, that might have entered the market in days past may now stay out of inventory for longer.

So what can we as real estate professionals do? Here are a few positive things to keep in mind:

  •  You’re in the right state! Texas is attracting more and more employers, its metros are exploding in population, and the state is creating more jobs than any other. DFW alone is creating 8,000-12,000 jobs a month, for example. Good jobs for skilled workers will mean an increase in home-buying in the long term. This means even if sales continue to be lower for the foreseeable future, we’re in a better place to weather the decline.
  •  The U.S. economy is doing very well and wages are finally starting to rise after stagnating for many years, which will hopefully increase affordability for many more buyers.
  •  American homebuilders are enthusiastically ramping up for the next few years, and many major cities are starting to realize and address that their zoning laws are hindering desperately needed urban development for large multi-family projects.

Spoiler alert! In the end, The Sandlot team uses all their combined brainpower to defeat the evil Beast (which turns out to be just an old grumpy dog) guarding a treasure trove of baseballs, and they have enough to play for years. There’s no doubt that Texas will triumph in the same way—there may be more competition for a fewer number of sales for a while, but our state’s economy will help us defeat this Beast. In the meantime, my strong recommendation for 2018 is to up your game: be creative in finding buyers and borrowers, make wise pricing decisions for listings, and keep your eye on the ball.

Cassandra Majors has been a market analyst and data guru in the Austin real estate industry for over a decade.

 

The Economic Impact of Hurricane Harvey

By Mark Sprague and Cassandra Majors

Hurricane Harvey devastated Houston and the Texas coast, and we’re only beginning to imagine the full economic impact for the region in the years of recovery ahead. 2017’s hurricane season is only the 17th deadliest since the death tolls were first tracked in the year 1900, but it’s already on track to become the worst in terms of damage (highest estimate is now $200 billion). How will Houston recover, and what are the likely short and long-term effects on the region’s economy?

The Damage

  • Out of 660,000 apartment units in Houston, 100,000 units were flooded. A lack of rental housing availability may push renters out of the area or drive up prices for those who stay.
  • ABC News reports: “According to the latest numbers by DPS, 273,276 homes were damaged during the storm. Another 15,528 were destroyed.” The full extent of the damage will likely be even higher, however.
  • CoStar reports that “as much as 600 million square feet of commercial real estate space in the Houston metropolitan area, or 38% of Houston’s total gross leasable area, may have been impacted by the recent floods.” It’s too soon to tell if this will affect companies’ decisions to open locations in Houston and the coastal region, but it very well may.
  • Nearly 25% of U.S. oil capacity was affected due to 20 coastal refineries closing. CNN reports on the impact to the energy industry: “Five oil refineries remain shuttered as of Monday, according to S&P Global Platts, an energy research firm. Ten more are partially shut down as they attempt to recover from historic flooding. All told, about 2.4 million barrels of daily refining capacity in Texas is offline because of Harvey, Platts estimates. That is about 13% of the country’s total ability to turn oil into gasoline, jet fuel and other products.” CNBC reported that there are 3 to 4 million fewer barrels of oil per day than before the hurricane.
  • Gas prices spiked at first after the flooding and some areas around Texas saw panic-induced gas shortages, but now prices seem to have leveled out nationwide and consumers are less nervous about supply.

Real Estate Investment and Economic Impact

Reuters reports that investors in the Houston area are chomping at the bit to buy up damaged inventory, fix it up, and sell at a profit. The article also points out that none of the previous hurricanes or flooding in Houston has stopped its growth, so there’s every reason to believe Houston will recover from Harvey and continue to boom. However, the author predicts that home prices and rents will rise with the decrease in inventory from damaged homes.
Community Impact interviewed Lawrence Dean, director of Metrostudy Houston, to learn more about what could happen to Houston businesses. Highlights from the interview:

  • Small businesses are in worse trouble than large ones, due to limited resources and lack of flood insurance, and many may not be able to return.
  • Home values for non-flooded areas have remained steady for now, but newly-built homes are expected to increase in price because of limited building materials.
  • Though Houston has been overbuilt for apartments, occupancy rates of apartment complexes have now skyrocketed quickly as displaced residents pour into them.

That last point is an important one. Many were expecting a large influx from Houston to other Texas Metros already, but so far it’s been very limited. Because Houston was overbuilt by 62,000 housing units, those units helped resolve housing needs for many residents that might otherwise have moved. Moving to another city is also a big lifestyle change, so it may be a few years before we see the impact of any outward migration due to Harvey. However, if more catastrophic floods occur in close proximity, that could be a tipping point for some Houston residents.

What Happens Next

It’s important to remember that these are mostly predictions, and it’s too soon to confirm them. As time passes, we’ll be able to see the big picture of how Harvey will impact the Houston area. In the meantime, the Greater Houston Partnership shared some predictions for the next year:

  • Repair/remodeling construction will explode over the next 12 months.
  • Labor and material costs could surge 18% to 25% in this time.
  • Apartment/housing vacancies will plummet in many Texas metros, though much of Houston’s housing needs will be addressed in the Houston metro itself. We may see a small amount of migration to other Texas metros over the next 12 to 36 months.
  • Home prices may fall significantly in hard-hit areas and flood-prone areas. Non-flood prone values will likely improve.
  • New home values will surge.
  • Other Texas metros will see a slight increase of values.
  • Flood and property insurance rates will escalate, potentially causing homeowners to reconsider home location.
  • Expect one month of significant job losses, followed by 1 to 6 months’ recovery of job creation.

The Houston area has been one of the fastest-growing metros in the country for many years, and Harris County is still the second-fastest growing county in the nation. The storms and floods Houston has weathered in recent years hasn’t affected its ability to attract new residents and businesses, and there’s no reason to believe that resilient Houstonians won’t make it through this one and continue to thrive. Though Hurricane Harvey may have dealt a serious blow to Houston and Texas coastal cities, we all know you can’t keep a Texan down for long.

Mark Sprague serves as State Director of Information Capital at Independence Title. He has over 35 years of experience in executive level management, sales, negotiating, finance, land development, operations, production, administration, and marketing.

Cassandra Majors has been a market analyst and data guru in the Austin real estate industry for over a decade.

[San Antonio] New Fall Education Menus!

As summer ends, we start getting excited about kids going back to school, leaves falling, pumpkin spice lattes, and most importantly, the new Independence Title Education Menu. Below are the new, exciting classes we now offer. If you’d like to order a printed copy of the menu or to schedule a class, please contact your ITC Business Development Representative.

  • Feeding Your CRM (1 HR CE) Utilizing a Customer Relationship Management (CRM) system should be an integral part of every Realtor’s business. Unfortunately, most don’t understand what a CRM can and cannot do for them. In this class, we will discuss the basics of CRM, the types of information you should gather for your CRM, and how to “feed” your CRM by forming a successful CRM process. This understanding will show how much potential repeat and referral business you can gain through consistent use of a CRM.
  • Getting the Most Out of RPR (1 HR CE) Are you looking for data to meet the demands of your clients? Have you heard of RPR? Learn how to use Realtors Property Resource (RPR) in your everyday business to access compelling property analytics, create captivating reports for your clients, perform both local and national property searches, utilize RPR’s unparalleled CMA tool, and much, much more!
  • Keeping Clients for Life (1 HR CE) Past clients are a real estate agent’s lifeline to generating a steady stream of repeat business and referrals. Do you know how to keep in touch without becoming a nuisance? Personalization may be the key to staying off your client’s “do not disturb” list. In this class, we will share ideas on how to personalize your follow-up by giving creative closing gifts, providing pertinent data post-closing, and so much more! Consistent application of these interactions will help you keep clients for life.
  • Perfecting Your Online Presence (1 HR CE) Have you ever Googled your business? Are you utilizing your Realtor.com account? Do you feel overwhelmed by the complexities of online real estate profiles? Have no fear— we found the answers for you! In this class, you will learn how to complete important details across a variety of platforms, which can increase views and profile traffic. This class will also provide a detailed overview on profile syndication, a feature that allows for data sharing across platforms to get the most out of your profiles.
  • Smart Homes for Smart Agents (1 HR CE) We live in a world where you can do almost anything from your phone: lock your front door, adjust your thermostat, turn off the lights, etc. Smart home technology is reshaping the way homes operate and is influencing the real estate industry. These devices are changing the way Realtors stage homes, hold open houses, set sales prices, and so much more. In this class, you will learn about smart home products so you can communicate with your clients about unique features these products have to offer, whether your clients are buying or selling a home.
  • Speak Easy (2 HRS CE) Speak Easy reviews the basics of delivering an effective presentation before a group of people: audience and purpose, organizational structure, use of verbals/non-verbals, overcoming stage fright, and more. Through instruction and in-class practice, members of the real estate community will learn to “command their audience,” whether at a listing appointment, speaking at a seminar for the general public, or standing before their peers. The ability to speak effectively in public can provide instant credibility.
  • Zeroing in on zipForm Plus (1 HR CE) zipForm Plus has become one of the most utilized platforms in real estate because of its ease in streamlining the transaction process. In this course, we will cover the recent changes to the program and walk you through a transaction from start to finish. You will learn how to create a transaction, add and edit documents, link your preferred e-signature solution to send contracts for signing, and stay on top of every task with zipForm Plus’ new interactive dashboard. Whether you are a new or advanced user, you will walk away from this class with new information you can use in every transaction

[DFW] New Fall Education Menus!

As summer ends, we start getting excited about kids going back to school, leaves falling, pumpkin spice lattes, and most importantly, the new Independence Title Education Menu. Below are the new, exciting classes we now offer. If you’d like to order a printed copy of the menu or to schedule a class, please contact your ITC Business Development Representative.

  • Feeding Your CRM (1 HR CE) Utilizing a Customer Relationship Management (CRM) system should be an integral part of every Realtor’s business. Unfortunately, most don’t understand what a CRM can and cannot do for them. In this class, we will discuss the basics of CRM, the types of information you should gather for your CRM, and how to “feed” your CRM by forming a successful CRM process. This understanding will show how much potential repeat and referral business you can gain through consistent use of a CRM.
  • Getting the Most Out of RPR (1 HR CE) Are you looking for data to meet the demands of your clients? Have you heard of RPR? Learn how to use Realtors Property Resource (RPR) in your everyday business to access compelling property analytics, create captivating reports for your clients, perform both local and national property searches, utilize RPR’s unparalleled CMA tool, and much, much more!
  • Keeping Clients for Life (1 HR CE) Past clients are a real estate agent’s lifeline to generating a steady stream of repeat business and referrals. Do you know how to keep in touch without becoming a nuisance? Personalization may be the key to staying off your client’s “do not disturb” list. In this class, we will share ideas on how to personalize your follow-up by giving creative closing gifts, providing pertinent data post-closing, and so much more! Consistent application of these interactions will help you keep clients for life.
  • Mobile Apps for Mobile Agents (1 hr CE) Grab your smartphone or tablet and join us for an hour of mobile real estate apps! In this class, we’ll go over five mobile apps that will take you from searching for listings all the way to depositing earnest money, all with your smartphone. You’ll walk away with tools to streamline your day-to-day operations while on the go!
  • Perfecting Your Online Presence (1 HR CE) Have you ever Googled your business? Are you utilizing your Realtor.com account? Do you feel overwhelmed by the complexities of online real estate profiles? Have no fear— we found the answers for you! In this class, you will learn how to complete important details across a variety of platforms, which can increase views and profile traffic. This class will also provide a detailed overview on profile syndication, a feature that allows for data sharing across platforms to get the most out of your profiles.
  • Smart Homes for Smart Agents (1 HR CE) We live in a world where you can do almost anything from your phone: lock your front door, adjust your thermostat, turn off the lights, etc. Smart home technology is reshaping the way homes operate and is influencing the real estate industry. These devices are changing the way Realtors stage homes, hold open houses, set sales prices, and so much more. In this class, you will learn about smart home products so you can communicate with your clients about unique features these products have to offer, whether your clients are buying or selling a home.
  • Tools for Target Marketing (1 HR CE) Have you ever wondered how to identify profitable neighborhoods to market to or how to calculate the turnover rate in an area? What if we told you the tools are at your fingertips? In this class, you will learn the answer to these questions as well as how to easily print mailing labels and utilize REiSource to find specific targets.
  • Zeroing in on zipForm Plus (1 HR CE) zipForm Plus has become one of the most utilized platforms in real estate because of its ease in streamlining the transaction process. In this course, we will cover the recent changes to the program and walk you through a transaction from start to finish. You will learn how to create a transaction, add and edit documents, link your preferred e-signature solution to send contracts for signing, and stay on top of every task with zipForm Plus’ new interactive dashboard. Whether you are a new or advanced user, you will walk away from this class with new information you can use in every transaction

[AUSTIN] New Fall Education Menus!

As summer ends, we start getting excited about kids going back to school, leaves falling, pumpkin spice lattes, and most importantly, the new Independence Title Education Menu. Below are the new, exciting classes we now offer. If you’d like to order a printed copy of the menu or to schedule a class, please contact your ITC Business Development Representative.

  • A Guide to zipForm Plus and DocuSign (1 HR CE) zipForm Plus and DocuSign are the most utilized platforms in real estate. In this course, we will cover the NEW zipForm Plus platform all the way through to launching and getting your documents signed in DocuSign. What you need to know from start to finish!
  • Feeding Your CRM (1 HR CE) Utilizing a Customer Relationship Management (CRM) system should be an integral part of every Realtor’s business. Unfortunately, most don’t understand what a CRM can and cannot do for them. In this class, we will discuss the basics of CRM, the types of information you should gather for your CRM, and how to “feed” your CRM by forming a successful CRM process. This understanding will show how much potential repeat and referral business you can gain through consistent use of a CRM.
  • Getting the Most Out of RPR (1 HR CE) Are you looking for data to meet the demands of your clients? Have you heard of RPR? Learn how to use Realtors Property Resource (RPR) in your everyday business to access compelling property analytics, create captivating reports for your clients, perform both local and national property searches, utilize RPR’s unparalleled CMA tool, and much, much more!
  • Keeping Clients for Life (1 HR CE)  Past clients are a real estate agent’s lifeline to generating a steady stream of repeat business and referrals. Do you know how to keep in touch without becoming a nuisance? Personalization may be the key to staying off your client’s “do not disturb” list. In this class, we will share ideas on how to personalize your follow-up by giving creative closing gifts, providing pertinent data post-closing, and so much more! Consistent application of these interactions will help you keep clients for life.
  • Perfecting Your Online Presence (1 HR CE) Have you ever Googled your business? Are you utilizing your Realtor.com account? Do you feel overwhelmed by the complexities of online real estate profiles? Have no fear— we found the answers for you! In this class, you will learn how to complete important details across a variety of platforms, which can increase views and profile traffic. This class will also provide a detailed overview on profile syndication, a feature that allows for data sharing across platforms to get the most out of your profiles.
  • Smart Homes for Smart Agents (1 HR CE) We live in a world where you can do almost anything from your phone: lock your front door, adjust your thermostat, turn off the lights, etc. Smart home technology is reshaping the way homes operate and is influencing the real estate industry. These devices are changing the way Realtors stage homes, hold open houses, set sales prices, and so much more. In this class, you will learn about smart home products so you can communicate with your clients about unique features these products have to offer, whether your clients are buying or selling a home.
  • Stats in a Flash |(2 HRS CE) Does the word “statistics” intimidate you? This class will take the fear out of statistics and will have you creating your own Stats in a Flash! We’ll define common terminology, show you where to locate statistics, teach you how to create your own, and demonstrate when to use statistics in your business. If you want to take your marketing to the next level, or if you just need data to support your negotiations, this class is for you!
  • Zeroing in on zipForm Plus (1 HR CE) zipForm Plus has become one of the most utilized platforms in real estate because of its ease in streamlining the transaction process. In this course, we will cover the recent changes to the program and walk you through a transaction from start to finish. You will learn how to create a transaction, add and edit documents, link your preferred e-signature solution to send contracts for signing, and stay on top of every task with zipForm Plus’ new interactive dashboard. Whether you are a new or advanced user, you will walk away from this class with new information you can use in every transaction

For an online copy of the new menu click!

Mommy, Where Do Buyers Come From?

By Cassandra Majors, Independence Title

Well, honey, you see…when two people love each other very, very much, sometimes the Home-Buying Stork brings them their very own bundle of joy…along with a huge chunk out of their savings, a Russian novel’s worth of legal disclosures, and 30 years of debt.

But how does the stork find them, Mommy?

Good question. Where are the buyers coming from these days? Or to ask the question more precisely: for home buyers in recent years, where were they BEFORE they bought their current homes? Renting an apartment? Leasing a house? Living with their parents? The Planet Krypton?

Luckily, the U.S. Census Bureau keeps track of this sort of thing for us, and not just every ten years. The American Housing Survey is conducted every two years and reports on a wide variety of housing and household characteristics, including “reasons for moving.” Dr. Paul Emrath, Vice President for Survey and Housing Policy Research for the National Association of Home Builders, has written an illuminating summary of the latest data from 2015 that has recently been made available to the public.

Highlights from the article:

• Over half of recent home buyers were former renters (52%), 20% were former owners, 19% are new households (moving from a home that someone else owned or rented), and 9% are unknown.
• For buyers of newer (built 2010+) homes however, 51% were former homeowners and tended to have the highest incomes out of the four groups (buyers of newer homes, buyers of older homes, renters of newer homes, renters of older homes).
• More than three out of every five recent movers stayed within a 50-mile radius of their former home.
• Buyers of newer homes are much more likely to say their new home is better than their previous home as compared to buyers of older homes (70% vs. 60%).

Click here to read the full article and fantastic graphs that show the different segments compared to one another. I also encourage you to take the time to learn to play with the Census Bureau’s many reports and datasets to find out almost anything you’d ever want to know about your area.

What does this all mean for our industry? If you’re a real estate agent, you’re still more likely to find buyers from the pool of current renters, but if you’re a builder, you may be equally as likely to find buyers from current homeowners as from current renters. Even for agents selling older homes, almost 40% of those buyers are likely to be current homeowners. Buyers trading up or making lateral housing moves are a larger share of the total market than they used to be. This might very well be a symptom of declining homeownership rates in the U.S., as 2016 saw the lowest national homeownership rate in 50 years (62.9%). If more renters must continue renting because they can’t afford a down payment or other costs of homeownership, a larger share of buyers will be current owners trading up. Thankfully, this trend seems to have bottomed out and now homeownership rates are inching back up over the last year (now at 63.7% as of July 2017).

• 46% of buyers will be increasing their housing costs by moving, and 24% will keep their costs about the same as before.
• Their primary reason for moving is likely to be that 1) they want a larger or better quality home (16% of those surveyed), 2) they want to form their own new household (15%), and 3) They want to live in a more desirable neighborhood (15%). Coming in fourth place, 10% of responders said they moved to be closer to family.
• Only one in five will likely be moving from more than 50 miles away from where they are now. The higher the income of the buyer, the more likely they are to move outside that 50-mile range.
• 5% will likely be immigrants or foreign investors
• Most will be moving from a house (53%), compared to 37% who will move from an apartment.
• Their ages are likely to fall in the 30-44 year range.

Of course, these are national statistics from one large survey, so we have to be careful about drawing too many sweeping conclusions. Still, both builders and agents can glean some general good tips on finding buyers:

• Target potential buyers living in houses, not just apartments—your future buyer is more likely to live in a house already.
• Don’t just focus on current renters or you risk neglecting a large pool of current homeowners looking to trade up in quality or location.
• Keep in mind that future buyers might not already be living on their own; many buyers are moving from a home owned or rented by another (usually family).
• Look for buyers in your own backyard—most buyers are staying relatively close to where they were before.

And now you know where buyers come from…or at least how the Home-Buying Stork finds them. Now go play outside, Mommy needs a nap.

Cassandra Majors has been a market analyst and data guru in the Austin real estate industry for over a decade.

 

Why the Question “When Will Austin’s Bubble Burst?” Just Won’t Seem to Die

by Cassandra Majors, Independence Title

Ever since the meteoric rise of Austin’s real estate market in the last two decades, I’ve heard the same question asked in many different ways, from many different people. It usually takes one of three forms:

1. Is Austin in a real estate bubble?
2. When will Austin’s real estate bubble finally burst?
3. The latest data shows [insert statistic here], which is not as good as before, so does this mean the bubble has finally burst?

If you don’t feel like reading much today, I’ll make the answers quick for you and leave the explanation for those of you with more time on your hands. Here are the answers:

1. No.
2. It’s not a bubble.
3. No.

For the rest of you still with me, let’s dive deeper. Why is Austin not in a bubble?

Wander with me down to Florida to understand what a real bubble looks like. Don’t be scared–we’re going to Florida in the 20s, not Florida today. In the early 1920’s, the Florida real estate market was the hottest in the country. From coast to coast, advertisements filled with sunny white-sand coasts beckoned eager investors to the Sunshine State. Land values skyrocketed with such force and velocity that buyers could often expect a bountiful return on their investments in a matter of weeks. One historian illustrates the fervor with this example: “In Miami Beach, lots near swank Lincoln Road that Realtors listed for less than $7,500 in June 1925 commanded a price of $35,000 42 days later.” Not that impressed? Putting this increase in a current perspective by adjusting for inflation, that example is the equivalent of buying a $100,000 lot in Austin in June this year and then selling it in August for $467,000. Wow! How could investors resist those kinds of returns?

For anything you own, be it a house, a car, a fidget spinner, or a horse, there are two ways to measure its value. The use value, which is what the object is worth for you to actually use, and the exchange value, which is what you can get for it if you sell it. I can use a horse or a fidget spinner for riding or spinning (respectively, let’s hope), so they both have a certain amount of use value for me. If I need that horse not just to ride for fun but also to help me for working my ranch, its use value for me goes up even more. If I sell the horse to my cowboy friend (I’ll throw in the fidget spinner for free), he pays me the exchange value price. If the horse market goes up or down but the horse stays healthy, the cowboy loses or gains exchange value, but doesn’t lose use value. He can still use the horse even if horse prices go down; he just won’t be able to sell it for as much.

Real estate is no different. I live in a home and it provides me with shelter, warmth, and Netflix. So long as it’s livable and I have a rock-solid Independence Title insurance policy, it will always have value for me, but its exchange value will go up and down depending on market forces. Real estate bubbles happen when the exchange value of properties in a certain area become completely unhinged from the use value. As they did in 1920s Florida, investors don’t buy properties to live in or to rent out for income, they buy them for the sole purpose of holding onto them for a relatively short period of time before selling them at a steep profit. This is the simplest explanation of what speculation means, and a speculative market is THE thing that inflates the dreaded bubble.
It’s not hard to see why speculation hurdles a market ever closer to disaster—without a concern for use value, prices inflate artificially as one investor sells to another who sells to another and so on. No one is thinking about what happens at the end, they just want to buy and sell as quickly as possible. Then one day, something bad happens—the economy tanks or a natural disaster hits the area, for example—and all of a sudden, prices take a spectacular nosedive overnight. If you’re the unlucky one who just bought, you’ve just lost the game of Real Estate Speculation Hot Potato. The music stopped and you’re the one holding the potato…and no one wants to eat the potato anymore.

In Florida, that’s exactly what happened. The state ran into supply issues from a dispute with the railroads, had a shipping disaster block off a major port, and experienced some bad weather that destroyed many properties. In a heartbeat, the entire market crashed, investors lost millions, and the state’s economy took years to recover. And this little microcosm is actually a great way to understand the stock market crash in 1929 that preceded the Great Depression—the stock market was going up so fast that investors just had to buy and hold stocks briefly before they could sell at a wildly inflated price. The value, profit, and long-term prospects of the companies didn’t matter much, so what investors were actually trading was the delusion that prices would keep going up forever. And you already know how that story ended. Whenever pure exchange value becomes the driving force of a market, a crash always looms ahead.

Now you might say I’m just reaching for the low-hanging fruit by finding the most obvious example of an out-of-control bubble. But I really want to reveal the conditions that lead to a bubble, no matter what the size or severity, and the Florida land boom is a great way to see those conditions and see if they apply to Austin today. What are the conditions that create a real estate bubble? They’re easy to identify, but often difficult to see in the moment:

• Rapidly appreciating home values
• Easy and generous credit for buyers
• “Irrational exuberance”
• Speculation

Let’s go down the list. Do we have…

Rapidly appreciating home values? Check! Uh oh! But let’s keep going.

Easy and generous credit for buyers? Not so much. As we learned in 2008, when it’s easy for unqualified buyers to borrow large amounts of money, it leads to a collapse of our market that many parts of the country and world are still reeling from even today. In the U.S., new regulations and lessons learned by financial institutions have made getting a loan much more difficult. Loans for large commercial and development projects are even more difficult to secure.

Irrational exuberance? This is a term originally used by Robert Shiller and referenced by Alan Greenspan during the dot-com bubble in the 90s, and it describes a market with so much activity and enthusiasm that it quickly becomes overvalued. In Austin, yes, we’ve had some exuberance, and now we’re seeing that glow slightly fade a bit as prices stabilize. On the whole, however, homes values are still appreciating nicely and our population is still booming, so our exuberance can’t really be described as irrational.

Speculation? Definitely not, and this is really the crux of the argument. Can you buy a house in Austin and sell it for a profit a few months later? A year later? In some cases, yes, but your returns are limited by significant closing and mortgage costs, higher property taxes, and all the costs associated with maintenance, improvement, and selling. Values have gone up a lot and quickly, but still very much within the reasonable bounds of supply and demand. Remember that speculation occurs when the use value and exchange value become unhinged from one another. People are moving here to live and work, and mostly buying homes for themselves and their families to use, not as an investment to sell quickly. Sure, you can buy a fixer-upper and flip it for a higher profit, but you’ve increased the use value of that home along with the exchange value. You didn’t just buy a dump and wait a few months to sell it for profit leaving it in the exact same condition. In the Florida land boom, many properties exchanged hands over and over with none of the investors ever having seen the property or even having been to Florida at all!

Will there be a day when we have a national economic downturn or a natural disaster and Austin real estate will suffer as prices drop? Yes, of course. But that is NOT a bubble bursting—it’s just an inevitable outcome of the economic cycles we’ll all have to live through in the course of our lives. Though there were (and still are) some pockets of speculation in our market, especially in the early days, it has always been a small percentage of the overall market. So long as people still want to live here and can find jobs, our housing market will always recover when the economy gets better. In an actual bubble, homes never truly regain their value, because their values were an illusion, completely disconnected from reality. In contrast, Austin’s reality has been a journey towards becoming an ever-more important, major American city with a great local and state economy, low unemployment, and booming industries. And people also just like to live here because central Texas is a wonderful place to be. So don’t fret about a bubble that doesn’t exist—Austin will continue to provide intrinsic use value for those of us lucky enough to call it home.

Cassandra Majors has been a market analyst and data guru in the Austin real estate industry for over a decade.

Let’s Zip Through the Changes to zipForm Plus

Have you noticed the “Try New Plus” button when you log into zipforms Plus?  They’ve made some changes and improvements to the platform.

What’s New in zipForm Plus?

Agent Dashboard: zipForm Plus has a new platform design! Not only does your homepage look different, but it feels different too. The dashboard is both interactive and responsive: it accesses real-time data on the progress of every transaction, and it makes zipForm Plus compatible with any device (computer, tablet, phone).  The dashboard also has some new widgets, like the “signature packets in progress” widget, and improved property and transaction type charts. Also, you can see what’s in the sales pipeline with the potential sales volume chart.

Data Integration: If you’re a Realtors Property Resource (RPR) user, we have good news! zipForm Plus’ integration with RPR simplifies property data entry. Start a transaction from inside of RPR to sync property information and save time.

 Transactions: Although the process for creating transactions remains the same, you’ll notice the biggest changes inside of each transaction.  Create a transaction from multiple places within zipForm Plus and enjoy the comprehensive transaction summary page. Here you’ll find easy to read property, listing, and purchase summaries.  You’ll also notice a brand new launch pad where you can easily add, share and sign documents. These functions also have a page of their own, accessible from your transaction summary page. Want some more good news? Completing information in the transaction parties launch pad auto-populates your buyer or seller’s information.

Share:  Remember the collaborate feature? It has a new name and new capabilities. Meet the “Share” tool, where you can privately or publicly share documents for viewing and filling.  Private share works like the old Collaborate feature—you can send clients viewer account setup emails so they can view and fill out forms, set viewer permissions, and create a stop sharing date. Public share allows an agent to easily send a link for viewing documents with no account setup required.

In our new class, Zeroing in on zipForm Plus,  we show you how to master these changes and maximize efficiency when using the platform.  If you are interested in scheduling a class with our Education Team, contact your ITC business development representative!

 

Proposed TREC Changes to Contract Require Earnest Money to Be Delivered in 3 Days

With a list of proposed TREC contract changes up for discussion, have you ever wondered how TREC decides when to change the promulgated forms? Typically, the forms are revised every other year following the Texas Legislative Session. TREC’s Broker Lawyer Committee meets first, and their proposed changes are discussed at the August TREC Commission meeting. If the commission approves the proposed changes, they are posted to the Texas Register and open for public comment – this is where we stand now.

If you are a Texas Realtor, now is your opportunity to have a voice in the process. The Broker-Lawyer Committee depends on your comments to assist them in their decisions regarding form additions and changes. This year there are several important changes to the contract forms and some new addendums for you to consider.

One of the most significant changes to the contract forms, including the One to Four Family Contract, is a requirement by TREC that the earnest money is deposited with the escrow agent within three days. Currently, the rule reads “The earnest money must be deposited by the close of business of the second working day after execution of the contract by the principals.” At the meeting on August 7th, one of TREC’s commissioners expressed concern that this change could be problematic since the new language refers to calendar days, not business days. Title companies are closed on weekends and national holidays. If you have a contract that is executed on a Thursday evening, the deadline for the earnest money deposit will be Sunday at midnight. That gives the Realtor one day on Friday to get the earnest money to the title company. This scenario is compounded when there’s a holiday adjacent to a weekend (e.g. Labor Day Monday) when title companies are likely to be closed for three calendar days in a row. This provision will likely require the most significant adjustments in day-to-day business practices of all the changes being considered.

Other notable changes under consideration include: creating separate receipt sections for the contract, earnest money and any additional earnest money; changes to the language regarding termination in paragraph 6D (One to Four Family); and changes to paragraph 20 (One to Four Family) regarding FIRPTA. The supporting documents for the August 7th TREC Commission meeting included marked-up versions of the contract forms, and they can be viewed HERE.

TREC is also considering adding two new addendums to its library of available forms. Realtors will probably be most excited about the Addendum Concerning the Right to Terminate due to Lender’s Appraisal. The other new addendum that may be added is the Addendum for Authorizing Hydrostatic Testing.

Independence Title offers a solution, should the 3-day rule earnest money deadline be approved. We are able to accept earnest money electronically through the Zoccam app using the camera on your or your buyer’s smart phone. If you need instructions on how to download and use Zoccam, you can find a step-by-step guide on our website. If you need further assistance, please do not hesitate to contact your Independence Title business development representative.

The Broker Lawyer Committee would like your feedback about these or other changes and additions under consideration. You may submit your comments and/or concerns via email to general.counsel@trec.texas.gov on or before Monday, September 25, 2017.

New Statistics Tools for Austin!

Does the word “statistics” intimidate you? Not only is it a hard word to say, but statistics themselves can often be confusing. As you know, in the world of real estate it’s important to differentiate yourself from the competition, and market statistics could very well be the factor that separates you from the rest. That’s why we at Independence Title are very excited to offer you two new statistics tools!

Our first tool is a new class called Stats in a Flash. In this class, we’ll take the dread out of statistics and have you creating your own custom stats in no time. We’ll define common terminology and show you where to locate statistics, how to create your own, and when to use them in your business. If you want to take your marketing to the next level, or if you just need data to support your negotiations, this class is for you!

The next tool is our new MLS Statistics module, now available for members of the Austin MLS. Our new stats feature a wealth of information on specific zip codes and MLS areas for Central Texas to both increase your expertise in your market and help you and your clients make better home-buying and home-selling decisions. You can find average and median prices, appreciation over time, months of inventory, days on market, sales and new listings by price range, and much, much more. This is a password-protected site (a requirement of our data license agreement with the board). Agents will get an updated password monthly from their business development rep.

You can use the menu to search by individual months or specific zip codes and MLS areas, or just click on “Full Reports” to view and/or download full monthly reports by zip code or MLS area. At the bottom of each PDF, there are buttons to quickly email, print, or download. (Because we may only offer these statistics to members of the Austin MLS, we are unable to provide a link to share on social media.) The full report by MLS area features heat maps showing the hottest areas by growing numbers of sales, median price appreciation, and inventory.

We’re so thrilled to be able to offer these resources to you! If you are interested in our class, Stats in a Flash, contact your Independence Title Business Development Rep or check out our Upcoming Events. And watch your email for a link and password to our new online stats module!

The State of the Austin Luxury Market

by Cassandra Majors, Independence Title

The Austin real estate market has exploded in recent years, and the luxury market has been no exception. In times of economic trouble, home sales plummet and our industry takes a major hit. However, the luxury home market is usually the last sector of housing to feel the effects of a downturn and the first to recover when things start improving. After years of booming population growth and rising home prices, how is the Austin luxury market doing now?

Defining Luxury

What do we mean when we say “luxury,” in terms of the real estate market? There’s no universal standard or checklist. If I could invent one, it would definitely require items like:
• 20-foot-high security wall with minor celebrities serving as armed guards
• Marble from the dismantled monuments of past monarchies
• Diamond-encrusted bidet (squirting Evian water only, of course)
• Enough square footage that you never have to see your own family

Unfortunately, I don’t get to invent the criteria for luxury real estate, so I’ll have to rely on the wisdom of the Institute for Luxury Home Marketing, founded in 2003 by one of my real estate heroes, Laurie Moore-Moore.  For the Institute’s members to be able to earn the prestigious Certified Luxury Home Marketing Specialist designation, they must show (among other things) that they sell in the top 10% pricing of their local market or above $500,000, whichever is greater. This makes a lot of sense—it “flattens” the country’s various markets by creating a standard threshold that allows us to compare them. A million-dollar home in Manhattan means something very different than a million-dollar home in Westlake, after all.

The Luxury Standard in Austin

Using the top 10% rule, here’s the minimum price a home in Austin would need to sell for over the last five years to be considered “luxury” by this standard.

Year Greater Austin* Austin Only**

*All areas covered by ABOR’s MLS

**Austin, Bee Cave, Lakeway, Rollingwood, The Hills, Volente, and West Lake Hills

How is the Luxury Market in Austin?

For this section, we’ll stick with Austin only in our figures since it’s hard to define a true luxury market using the entire greater Austin area.

The average days on market in 2012 for luxury homes was 83, which then fell to 71 in 2013 and 63 in 2014. Since then, however, they’ve taken significantly longer on average to sell. 2015 was 74 days on market (a 17% increase) and then up to 78 days in 2016 (a 5% increase). Here in 2017, things have gotten a little better and we’re down to 76 average days on market so far, but this statistic doesn’t carry a lot of weight. We haven’t had to go through the winter yet, which will probably drag the days on market back up. We won’t know for sure until next year, but for now, at least, it’s safe to say we’re no worse off than in 2016.

Why are luxury homes staying on the market longer in recent years? There are a variety of factors that may be playing into it. One obvious answer is the price increase—Austin has seen incredible increases in average and median sales prices year-over-year for the last five years. It’s often better to look at the median sales price increase in order to avoid the up-and-down swings that can come from averages, but even the median has increased at least 6% a year since 2012.

Year Median Price YOY Increase

Note: This summarizes for Austin Only as defined above, all price ranges.

As the upper 10% of the market moves higher and higher along with the rest of the market, fewer buyers are able to afford them and the homes sit on the market for longer. There has also been an increase in luxury inventory, which increases competition. 2016 saw on average about a 14% increase in luxury listings over 2015. Other factors can be theorized but not easily proven. Some possibilities include market saturation (the net migration of wealthy residents has slowed down somewhat), unrealistic expectations (sellers of luxury homes believe their homes will sell for more than they will or are willing to wait longer for a better offer), or buyers’ fear of an overvalued market (thinking that Austin may have topped out or is in a bubble and luxury buyers may not get a return on their investment). This list is by no means exhaustive.

We also have to account for the limitations of MLS data—many luxury homes are sold off-market (so-called “pocket listings”), often to protect the privacy of their sellers. My rough estimate is that somewhere around 5% of million-dollar homes sold since 2016 were sold outside of the MLS. That’s not an insignificant number, especially considering that pocket listings may be listed at above-average prices even by luxury standards.

The Million-Dollar Standard

Do you think the 10% standard is far too generous?  This section is for you.

Here I’ll compare nothing but million-dollar homes and we’ll widen the area to all of the greater Austin MLS. Though it makes apples-to-apples comparisons a bit more difficult (a million dollars today buys less home than it did in 2012), it does help show what’s happening at a certain level of luxury. By this standard, things are going very well for central Texas. Below is a chart showing how many $1,000,000+ homes have sold per year over the last five years. The redder column shows 2016’s total in the same range as 2017 so far (January – July) so you can see just how much these sales are up since last year.

That’s a 34% increase over 2016 so far this year, which is exceeded only by the incredible leap we had back in 2013 (a 51% increase in sales from 2012). For days on market, the story is the same as the top 10%–homes simply aren’t selling as quickly. 2014 was the fastest selling at an average of 87 days, then shot up to 100 days for 2015 and 2016, and is now at about 97 days for 2017 so far. However, this is still much better than the years 2008 – 2012 when the average days on market for million-dollar homes was almost always in the neighborhood of 135 days.

The average price of a million-dollar home has also increased since last year, meaning we’re seeing higher prices in general but also more $2,000,000 and above homes. We’ve already sold 108 2M+ homes just through July in 2017, compared to 116 of those sales in ALL of 2016, and we’re well on track to shatter the last record of 128 2M+ sales set in 2015. Move the threshold up to 3,000,000 and we’ve already had 37 sales, one ahead of the record of 36 3M+ sales set in 2015…and we’ve still got five months left to go.

Are luxury agents lowering their prices to get these homes to sell faster? The data says no, at least not very often. The close-to-list-price ratio for million-dollar homes has been hovering around 95% since 2013 and is currently up to 96% in 2017 so far, so most listings are getting close to what they asked for (always a sign of a robust market).

Conclusion

Austin’s luxury market is strong—prices keep going up, homes are selling for close to what they list for, and more mega-luxury homes are selling than ever before. The only caveat is homes are taking longer to sell, but for the patient luxury agent, the payday will still be just as good when their homes finally close.

Cassandra Majors has been a market analyst and data guru in the Austin real estate industry for over a decade.

What Is CodeNEXT?

Have you heard of CodeNEXT yet?  If not, this is a topic that could have an impact on the real estate market and you will want to gain knowledge on the topic.  CodeNEXT is the new City of Austin plan to update the current Land Development Code.  The land code consists of how a piece of land can be used, including what can be built, where it can be built and how improvements can or cannot be built in the city.  Mayor Steve Adler says “The CodeNEXT process will help us manage our explosive growth while preserving what makes Austin special. We have to act and need to begin now – and this map is where we start.”

The current Land Development Code was created in the 1980s and is somewhat difficult to decipher.  In 2009 Austinites began to rethink the current code and what works for our growing and ever changing city.   Since then the City of Austin has been working on proposing the new Land Development Code.  The CodeNEXT initial draft release happened on February 1, 2017.  The City is now in the process of several open house events and hopes to finalize CodeNEXT early 2018.

If you are interested in more information on CodeNEXT click here.

 

*Information for this post gathered from The City of Austin and The Austin Chronicle

Protect Your Money, and Your Dreams!

Are you dreaming of buying your first home? Or maybe you are dreaming of selling your current house so you can move to your dream home, or realize some other life goal? Look out, because there are well-organized criminals intent on making that dream impossible for you. They insinuate themselves into your real estate transaction and turn it upside down, often by means of a simple email. These people are cybercriminals committing wire fraud, a virtual mugging when you move your money in a real estate transaction by wire transfer.

Cybercriminals hack into email accounts and send false wiring instructions, and before you know it, your money is headed to the wrong bank, many times out of state and even in another country.

In an article from the Chicago Tribune, several scenarios of wire fraud are mentioned involving hundreds of thousands of consumer dollars. This article was written in March of 2016, and since then the attempts of wire fraud have increased exponentially. The perpetrators are becoming craftier and more sophisticated each day, able to mimic the tone and content of a legitimate communication between you and your Realtor, bank, or title company.

You may be asking yourself, “How do I protect my dream?” At Independence Title, we have initiated several procedures to protect against wire fraud. Our closing teams have been thoroughly trained on what to look for and how to guard against these egregious attempts to hijack real estate transactions. Here are some things that you can do to protect yourself:

Buyers Should Verify Wiring Instructions Via Phone: To ensure you have the correct wiring instructions when you are sending money to Independence Title, please call our branch office using the phone numbers found on our website: www.independencetitle.com. Do this every time you wire funds, even if emailed instructions seem to come from a well-known and trusted source.
Sellers Should Bring Wiring Instructions to The Closing: When we are sending money to you, please bring your wiring instructions to our office in person. If you decide to change your instructions from what you have first provided, expect us to request that you appear in person at our office to sign off on the change.
Buyers & Sellers Should Change Your Email Passwords Frequently: Increasing your email security is a great way to help prevent wire fraud. Please change your email passwords frequently and if your platform offers two-step authentication, be sure and take advantage of this security feature.

Again, when working with Independence Title on a real estate transaction, you’re protected by encrypted email systems and well-trained employees, but your best protection is to verify information about money transfers strictly by telephone, using a confirmed phone number, or in person. We look forward to working together with you to protect your money, your investment goals, and your dreams!

Utilizing the Stats Tab in Matrix

Do you love the monthly statistics Independence Title sends out but are constantly wishing you could have more narrow, specific statistics to use in your personal marketing?  Maybe you want to show a Seller the average list price compared to the average sales price specifically in his subdivision?  Or maybe you want to go even further and narrow down that statistic to his subdivision AND homes with a pool?!

A popular question the Independence Title Education Team gets is about generating customized statistics.  The most common thought is that agents don’t have access and they must get it from us.  Did you know you can run a very specific, targeted statistic right in your very own Matrix account?

Below, we’ve put together a quick video walking you through how to pull targeted stats in Matrix.  We’ve also listed out step by step instructions as well.  This is a great tool to utilize for listing appointments, newsletters, farming, etc.  Go ahead, get creative!  Want some help brainstorming?  Call your local business development rep, we love that kind of stuff!

Here are the step by step instructions on how to pull customized stats in Matrix:

  • Click the STATS tab at the top of your Matrix homepage
  • Select the CUSTOMIZE tab on the left
  • Select the time frame you want to view
  • Select the first statistic you would like
  • Optional:  Click on Advanced Options at the bottom
  • Select the optional secondary statistic you would like
  • Select how you want the statistics grouped (See screen shot below for example.)
  • In the middle of the page enter the criteria you are searching.  (You can add additional fields at the bottom to find anything (similar to a search on Matrix — OR you can do a map search and draw a polygon.  You would click on the bolded MAP SEARCH at the top of the search page. )
  • Hit GENERATE on the left once you’ve put in all your criteria
  • You can view by chart or data (tabs at the top right of the chart)
  • VOILA!

Introducing A New Member to the Education Team!

Spring is in full bloom here in Texas, as is the real estate market!  Our Education Team is busy educating Realtors on the most important information and topics in the industry.  The demand for our classes has prompted the expansion of our team.  We are excited to announce our new trainer, Kaitlyn Mandry, who be training in the DFW market.

Kaitlyn Mandry has a Master’s Degree in Human Resource Development. Her expertise in adult learning and curriculum development will help our education team continually improve their creation of engaging content for our clients. Kaitlyn is passionate about people and training facilitation, so her transition into the world of real estate was a natural fit.

New Document Upload in Matrix

lifetime (1)Do you have questions about the new Document Upload in Matrix??  You’re not alone! The good news is, the Education Team at Independence Title is here to help you with the New Transaction Desk System. The document upload portion of the program is the only piece that you are required to use so we want to make sure you are an expert on uploading your documents. We put together this short demonstration video below that should help answer your questions.  Keep in mind, we also have a 1hr. CE course titled Translating Transaction Desk if you want to go beyond the simple document upload.

 

3 Key Elements to the Over 65 Property Tax Exemption

Over 65 Property Tax Exemption (6)One of our favorite classes to present is Property Tax Chat. It’s not the most exhilarating topic on the Independence Title class menu. However, agents end up enjoying it and walk away with the valuable knowledge to add to their arsenal of information. In our class, the exemption that gets the most attention is the over 65 exemption.

There are three key elements to this exemption:
1. A reduction in value before the various rates are applied
2. Quarterly tax payments accepted
3. The Independent School District (ISD) tax amount is frozen

With the first element, the reduction in value will not affect the market value, only the taxable value. Also, keep in mind not all taxing entities will use the reduced value to calculate the taxes owed.

The second element is an option for the homeowner to make partial payments throughout the year. The flexibility of a payment plan can be helpful for seniors on a fixed budget.

The third element is where it gets a bit sticky but hang with me. The dollar figure you pay for the ISD portion of the tax bill at the time you turn 65, will be the annual amount due for the remainder of the time you own and occupy the property. That’s pretty straightforward, and it’s an incredible savings!

It gets tricky when the homeowner wants to transfer the exemption to another property. Let’s walk through a scenario. Let’s say your client is in their 70’s with the over 65 exemption in place on their current home. Now they want to live life to the fullest and buy their dream home. Once they purchase the new home and request a transfer of the exemption, the tax office will look at the percentage they’ve been saving on the school taxes to apply to the new home. Ok, are you saying to yourself, um what?! Let’s break down the math. The property that they sold had an ISD tax amount of $5000 without any exemptions, but when they turned 65 and placed the exemption on the property, the ISD taxes were only $2500 and froze at that amount. They’ve been saving 50 percent. Now let’s look at how that savings will affect the new home. The new homes ISD taxes are $8000 without any exemptions. Once the over 65 percentage gets transferred, they will only pay $4000, for the ISD portion of the taxes. Only the percentage is transferred not the dollar amount. Clear as mud? For more information on exemption and the tax cycle, talk with your business development representative about attending our Property Tax Chat class.

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Closing Costs….Who’s Responsible?

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Every agent knows the excitement of clients purchasing a new home or clients finally selling their house. Then your clients ask you “What am I responsible for paying for at my closing?”  It can be difficult to explain everything that goes into closing costs so we created a new marketing piece called “Closing Costs…Who’s Responsible?”  This piece helps show clients which party is responsible for the different closing costs.  Click here to view the piece and if you would like copies contact your Independence Title Business Development Representative.

New Classes for Abby Vasek!

abby-header-4Over the past year we at Independence Title have had the pleasure of working with Abby Vasek as an outside instructor. She is a delightful trainer that brings enthusiasm and joy into every class that she teaches. Recently Abby has been busy creating new classes to help teach Realtors more about the world of design. She has three brand new classes that are all worth 1 hour CE credit.

Effective Advertising Language for Listings | 1 HR CE | Course #31113
In this class you will learn to expand your knowledge, creativity and vocabulary real estate agents use to advertise their property listings. This interactive writing class will help you to not only hone in on marketing language but explore a communication style that allows each listing to get maximum exposure.

Styles of Architecture for Real Estate Agents | 1 HR CE | Course #31114
How fluent are you in architecture language? In this class you will learn about the many types and styles of architecture. There will be a major emphasis on architecture vocabulary so you can better describe the qualities of the homes you list. You will also gain the knowledge and confidence to speak with authority about building techniques, features and styles.

Styles of Design & Current Building Materials | 1 HR CE | Course #31112
The objective of this class is to help you improve your knowledge and vocabulary about current interior design styles and trends in building materials. This class will allow you to better showcase the homes you list and infuse value in areas of these listings by bringing attention to special design treatments or unique building materials. In this class you will gain the potential to elevate the level of language and service an agent can provide!

Contact your ITC Business Development Representative to book any of these classes with Abby!