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Will Technology Change the Role of Real Estate Agent?

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Technology has impacted the way people find homes, research neighborhoods, and compare prices; in essence, buyers are able to get much of the initial legwork done by sitting at their computer or scrolling on their smart phone.  Nevertheless, when it comes to actually buying a home, about 90% of buyers still use a hired real estate agent to help them with the actual offer and contract negotiations according to a report released by the National Association of Realtors.

In an article published by Forbes, its noted that “… buyers and sellers can get to the “one yard line” without much help. But deals rarely get done unless an agent is acting as middleman.”  Real estate agents, without a doubt, add value with their professional expertise and negotiating experience.  However, the sticking point for many is the large piece of the sale that the agents get for their commission.  In many cases, the seller pays a total of 6%, with the buying and selling agent getting 3% each. 

The concept of direct sales, hasn’t yet taken over the real estate market and certainly hasn’t made real estate agents obsolete; in fact, realtors may skip showing homes whose sellers aren’t willing to pay the 3% commission.  Yet, technologically based real estate companies are still searching for ways to compete with the current real estate agent.

Case in point, companies such as Opendoor, you simply “type your address into Opendoor’s website, submit a few photos, and it will make you an offer within a couple of days. No open houses, negotiation, or waiting months for the buyer to come up with the money. In fact, the average closing time from the first offer is less than 20 days,”  according to the article written by Stephen McBride. Some experts believe this type of business could change the way people buy and sell houses and the agent’s role in the transaction.

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Could the First Week Of Fall be the Best Time to Buy a House?

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Buyers often wonder which the time of year it is best to purchase a home.  Many know that the spring market is when many homes come on the market and buyers begin looking in order to purchase homes before the start of the next school year.  However, as far as deciding when to buy a home based on getting the best deal, it turn out that the time is now! 

In an article published by Forbes, the week of September 22-28 has been identified, by Realtor.com as the “best week of the year to buy a house”.  In the analysis, it was found that the number of listings increase by more than 6% on average this week and the home on the market are just over 2% more affordable as price cuts close around 6% trend this week of the year. 

Overall, buyers will see less competition this week as the summer has come to a close and a number of buyers have exited the market for the year. Nationally, the competition is down by a quarter, with some local areas seeing a decrease in buyers close to 40%. 

Sellers can look forward to some positive news regarding this first week of fall, “…buyers have a more serious mindset and they are focused on making a purchase before the end of the year.”  Perhaps this unlikely time of the year to buy a home will be a win-win for sellers wanting to close the deal before the end of the year as well.

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Do People Still Use Real Estate Agents?

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Technology seems to be the heart of the real estate market.  It begs the question, do house hunters and owners selling their house still feel that they need to use a real estate agent?  Based on a recent housing consumer study completed by Harris Insights, the answer is a resounding yes.

In fact, the percentage of home buyers or sellers who used a real estate agent in a recent transaction has increased 5 percentage points from the last study three years ago and up 9 percentage points since 2001.

Many might assume that the older population of buyers and sellers are the most likely to use a real estate agent for their transaction.  After all, Gen Xers and Millennials are tech savvy and more accustomed to navigating the virtual world.  However, according to an article published by Housing Wire, “91% of those ages 18 to 34 used real estate agents in their transaction. That number is slightly higher among Gen Xers, or those ages 35 to 44 years old, at 94%…Actually, it’s the older generations that are cutting real estate agents out of the picture as just 81% of those ages 55 and older reported using a real estate agent in their transaction.”

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Could 2018 Be The Right Time to Sell Your Home?

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If you have been waiting for the right time to sell your home, there are many reasons experts are saying that the time has come.  In an article written by Devon Thorsby, published by U.S. News and World Report, the reasons that 2018 might prove to be a good time to sell a home are listed.

First and foremost, the past few years of low inventory of homes for sale has left prospective home buyers more than ready to scoop up the perfect house.  Their frustration with available homes has led many house hunters to begin their search earlier than normal with the hopes of purchasing a home before other buyers make their offer.

Additionally, interest rates are still relatively low.  They have been slowly creeping up and are expected increase to 5 percent in 2019.  Many home buyers are motivated to purchase a home sooner rather than later in order to secure a lower interest rate.

Thorsby details additional rationale for putting that “For Sale” sign up this year.  Read the entire article here.

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How Is Student Debt Affecting Real Estate Trends?

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Student debt is a thorn in the side of many college students years after they receive their diploma.  The rising cost of tuition and debates as to whether students should be responsible for paying for their college education have been hot topics for several years.   According to an article published by Bloomberg, written by Chris Bryant, “In the U.S., where aggregate student debt has surged 170 percent in a decade, recent graduates owe $34,000 on average. About 5 percent owe more than $100,000. “

This may not seem like an issue that older generations would be worried about.  Their student loans have long been paid off, they may have even helped finance their children’s college education, leaving them debt free from college loans.  However, as the article points out, this mounting debt is a factor in some negative economic trends that affect many, even older generations.

Because the generation of millennials will be dedicating funds to pay their student loans off, with salaries that have not rebounded from the 2008 recession, their focus will not be on purchasing a home.  They are struggling to set money aside for a down payment.  Missed loan payments for student loans can affect credit scores, making mortgages harder to come by.    As baby boomers look to downsize homes in retirement, it might be difficult to find buyer from the next generation who can afford to purchase it.

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Why Aren’t Homeowners Choosing to Sell?

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FotoFlexer_PhotoAccording to the latest home sales data, it’s a great time to sell a home.  Home prices have been increasing at a steady pace, there is very low inventory which means less competition for sellers and homes are selling, on average, in around 51 days or less in the fastest-selling markets.

Yet, the National Association of Realtors (NAR) is reporting a 3.2 percent decrease in existing home sales in July 2016.  According to Lawrence Yun, NAR’s chief economist, “Realtors are reporting diminished buyer traffic because of the scarce number of affordable homes on the market, and the lack of supply is stifling the efforts of many prospective buyers attempting to purchase while mortgage rates hover at historical lows,”.  This begs the question, why aren’t many home owners trying to sell their homes?

In an article published by The Washington Post By Ilyce Glink and Samuel J. Tamkin, five reasons have been identified:

  1. Homeowners still need the space in their current home to accommodate older and younger generations moving in.
  2. Babyboomers, who have yet to retire, still want to live close to their jobs.
  3. Living in their current home is still less expensive than moving to a new, even smaller, home.
  4. Some homeowners still owe more than their house is worth, or have such little equity, they are “functionally underwater” after factoring in the cost of selling and moving.
  5. Home owners simply have not found another home that they would like to purchase and, therefore, have no incentive to sell.

Read the entire article.

 

 

Photo Credit:  Collwyn Cleveland

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