How Housing is helping to Rebuild the Economy

Housing drives the economy in three ways:

Demand for Housing Will Drive Employment

Increased demand for housing will help stimulate new single-family and multifamily construction and boost home sales. We expect starts to hover just below one million over the second half of the year. This also helps other industries such as appliances, services, and furnishings.


Rising Prices = Increased Family Wealth = Increased Spending  

With housing being the biggest asset of most American households, rising house prices directly affect the balance sheet of homeowners. Home equity is the largest component of net wealth for many families. As wealth rises, households generally increase their consumption spending. They may even tap into their equity through a home-equity loan, using the proceeds for either consumption or investment spending. Some evidence that home equity lending has picked up was found in Freddie Mac’s Refinance Report for the second quarter, which saw $9.5 billion in home-equity cashed-out as part of a refinance, up from a year ago.   

Small Business Development is Funded through Home Equity 

Rising house prices will help the economic recovery by spurring small business formation, as a business owner’s home often serves as collateral for a start-up. 


As you can see from the graph, Massachusetts comes in fourth in the country for strong economic growth directly related to home sales. 
 



*Housing’s contribution to the economy, while muted in recent years, remains strong. What’s more, housing’s role in the economy will only expand as modest price growth and stronger sales volume boost agent incomes, new construction puts more workers back to work with expanding incomes, and stronger sales and rising prices result in robust follow-on spending.

Real Estate’s New Reality

The real estate industry has been going through a major transition for a number of years, yet many agents haven’t adjusted to these changes.   Not long ago, real estate agents were in the business of providing information.  The only value we thought we had was giving information, such as what’s for sale, what’s on the market, what’s the price of similar homes etc.   Back then, to protect our value, we locked away this information in MLS, and if you were in the business long enough, you may even remember the blue book of MLS!  This is how real estate has been done for over a hundred years!

            This is not how real estate is done now.  The information you used to be hired for, the information people turned to you for, is all over the Internet.  Anyone can access it.  Anyone can use it. 

            How does this change redefine the role of the real estate agent?  There is a large gap between information and the use of the information to get the best outcome.  Let’s take for instance a CMA, which essentially tells a consumer what houses used to sell for and are currently selling for now.  Can’t you just look up that information yourself online? However what good is that information without the ability to analyze what that information really means? 

The agents who don’t evolve into what the consumer now demands will not survive!

            Clients no longer need us for information regarding which homes are for sale.  They really want us to

·      Analyze the available information

·      Connect the dots and let them know if now is a good time to buy or the right time to sell

·      Take the time to explain their options – simply and effectively. 

           

People are yearning for expert advice. 

            An expert doesn’t mean you are going to give perfect advice, but you will give excellent advice.   You can’t give buyers or sellers perfect advice because you can’t know the future.  You can give excellent advice based on the information and situation at hand, guide them through the process and help them make the necessary changes along the way.

Give Excellent Advice

            In order to give excellent advice you need to make sure your knowledge inspire confidence and certainty and that your knowledge takes away the clients concerns.

Ask yourself these two questions, do I know what is truly happening in the market and do I know why it’s happening? You not only have to analyze the information well enough to understand it yourself, you also have to understand it so well that you can simply and effectively communicate it to buyers and sellers.  You shouldn’t be trying to convince someone to do something (that’s what salespeople do); instead, you should be helping them discover what their options are, explaining the pros and cons of each of those options, and then letting them make the decision that is best for them and their families. 

Technology Today

            Go Mobile.  The best times to educate the consumers are during the informal times such as a children’s athletic event, the supermarket or any other chance meeting.  The information that consumers want; how’s the market, should I wait to sell my house or is now the right time to buy?  Having that information on hand, such as on your smartphone or tablet and pull out graphs and charts and other visual information that helps explain what you want that person to understand.   The key to doing a better job at these pre-appointment appointments is becoming mobile with your real estate information and tools. 

For most families, buying or selling a home is the most important personal decision and possibly the largest financial decision they’ll ever make.  They are looking for a true professional to help them through this process.  Make sure they get one when you walk into their lives.

5 Demands to Make on Your Real Estate Agent

Are you thinking of selling your home? 
Are you dreading having to deal with strangers walking through the house? 
Are you concerned about getting the paperwork correct? 

Hiring a professional real estate agent can take away most of the challenges of selling. A great agent is always worth more than the commission they charge just like a great doctor or great accountant. You want to deal with one of the best agents in your marketplace. To do this, you must be able to distinguish the average agent from the great one.

1. Tell us the truth about the price

Too many agents just take the listing at any price and then try to the ‘work the seller’ for a price correction later. Demand that the agent prove to you that they have a belief in the price they are suggesting. Make them show you their plan to sell the house at that price – TWICE! Every house in today’s market must be sold two times – first to a buyer and then to the bank.

The second sale may be more difficult than the first. The residential appraisal process has gotten tougher. It has become more difficult to get the banks to agree on the contract price. A red flag should be raised if your agent is not discussing this with you at the time of the listing.

2. Understand the timetable with which my family is dealing

You will be moving your family to a new home. Whether the move revolves around the start of a new school year or the start of a new job, you will be trying to put the move to a plan. This can be very emotionally draining. Demand from your agent an appreciation for the timetables you are setting. I am not suggesting that your agent can pick the exact date for your move. You just want the agent to exert any influence they can.

3. Remove as many of the challenges as possible

It is imperative that your agent know how to handle the challenges that will arise. An agent’s ability to negotiate is critical in this market.

 Remember: If you have an agent who was weak negotiating with you on the parts of the listing contract that were most important to them (commission, length, etc.), don’t expect them to turn into Superman when they are negotiating for you with your buyer.

4. Help with the relocation

If you haven’t yet picked your new home, make sure the agent is capable and willing to help you. The coordination of the move is crucial. You don’t want to be without a roof over your head the night of the closing. Likewise, you don’t want to end up paying two housing expenses (whether it is rent or mortgage). You should, in most cases, be able to close on your current home and immediately move into your new residence.

5. Get the house SOLD!

There is a reason you are putting yourself and your family through the process of moving. You are moving on with your life in some way. The reason is important or you wouldn’t be dealing with the headaches and challenges that come along with selling. Do not allow your agent to forget these motivations. Constantly remind them that selling the house is why you hired them. Make sure that they don’t worry about your feelings more than they worry about your family. If they discover something needs to be done to attain your goal (i.e. price correction, repair, removing clutter), insist they have the courage to inform you.

Good agents know how to deliver good news. Great agents know how to deliver tough news. In today’s market, YOU NEED A GREAT AGENT!