Deposit deadlines? There are some dangerous false interpretations making the rounds. Hopefully, your buyers won’t fall into the trap. The consequences can be severe if they rely on inaccurate interpretations.

ORLANDO, Fla. – It’s fascinating working on the Florida Realtors Legal Hotline. We hear all sorts of issues and see trends develop, one five-minute call at a time. Sometimes, these trends are positive. Sometimes, however, they are concerning.

One trend I’ve noticed lately is people who adamantly insist that the deadline for a buyer to make a deposit is always calculated using business days. Sometimes it’s the caller, and sometimes they’re quoting someone who claims to be an authority.

What’s the actual answer? It depends on the contract the buyer signed.

Florida Realtors/Florida Bar Residential Contract for Sale and Purchase (and the “AS IS” version)

This is the most popular form contract used in Florida, so we’ll spend the most time on this one. The most recent version dated October 2021 has some slight changes to the date-counting section, so you may want to review it if you haven’t already.

Section 18, Standard F begins with the simple sentence, “Calendar days, based on where the Property is located, shall be used in computing time period.” There is no mention of business days anywhere in the section. There is an automatic extension if a time period or date ends or occurs on a weekend or national legal public holiday (or a day when that holiday is observed).

Using the deposit deadline as an example, if the deposit is due on a weekday, that’s the deadline. Since we’re using calendar days, they end at 11:59 p.m. So, if the effective date is Monday, and the buyer has 3 days to make the deposit, it’s due no later than 11:59 p.m. on Thursday.

If the effective date is Wednesday, though, the third day after the effective date would be Saturday. Therefore, the deadline would be automatically extended to Monday. In the rare event that Monday is a national legal public holiday (or a day when that holiday is observed), then the deadline would end at 11:59 p.m. on Tuesday.

Here’s the clause in its entirety:

F. TIME: Time is of the essence in this Contract. Calendar days, based on where the Property is located, shall be used in computing time periods. Other than time for acceptance and Effective Date as set forth in Paragraph 3, any time periods provided for or dates specified in this Contract, whether preprinted, handwritten, typewritten or inserted herein, which shall end or occur on a Saturday, Sunday, national legal public holiday (as defined in 5 U.S.C. Sec. 6103(a)), or a day on which a national legal public holiday is observed because it fell on a Saturday or Sunday, shall extend to the next calendar day which is not a Saturday, Sunday, national legal public holiday, or a day on which a national legal public holiday is observed.

Could the caller be thinking of a different rule, like a license law deadline?

My hunch is that this is where the confusion originated since the following deadlines are always calculated using business days. If a sales associate receives any deposit, the associate must “deliver the same to the broker or employer no later than the end of the next business day following receipt of the item to be deposited.” F.A.C. 61J2-14.009.

Brokers, on the other hand, must “immediately” deliver any deposits to the appropriate destination. F.A.C. 61J2014.008 defines “immediately” as the end of the third business day following receipt of the item to be deposited. Note that the clock would begin the day after the broker OR associate (or possibly another employee) received the funds.

Remember, though, that the licensee obligations are to satisfy FREC rules and have nothing to do with the contract a buyer signed. As we saw, if the buyer is using a FR/BAR contract, their deadline will be calculated in calendar days.

There is a nuanced question: Once the buyer delivered a deposit to their broker or associate, is that fact good enough to claim the deposit has been made under the FR/BAR contract? While this could potentially be an argument, I wouldn’t count on it if I were a buyer. The FR/BAR contract provides the deposit has been “made payable and delivered to ‘Escrow Agent’ named below [by the deadline].” I would certainly want to make sure the actual Escrow Agent has the funds well in advance of the deadline.

What about other contracts?

There are numerous ways to calculate time in contracts. My personal favorite is to keep things simple when you can. Just pick a date and time. For example, “The Buyer’s Deposit must be made payable and delivered to Escrow Agent no later than 5:00 p.m. on March 21.”

If you look at the Florida Realtors Commercial Contract or Vacant Land Contract, these do not currently match the FR/BAR calculation. Both use business days for time periods of five days or less, but calendar days for periods of six days or more. Their clauses also include an automatic extension for time periods that end on Saturday, Sunday, or a national legal holiday. There’s one slight difference from the FR/BAR automatic extensions, though, since the deadline would end at 5:00 p.m. (not 11:59 p.m.).

Of course, other contracts can have all sorts of other ways to calculate deadlines and may even include different penalties for missing those deadlines than what you’re accustomed to seeing. Hopefully, you can see the importance of inviting a buyer or seller to carefully read any contract  to understand the rules they agree to when using that particular contract.

They can always retain the services of a real estate attorney to better understand all the terms and protect their interests. This is a particularly good idea when the stakes are high (large deposit), or if the party on the other side seems litigious or aggressive.

Joel Maxson is Associate General Counsel for Florida Realtors

Note: Advice deemed accurate on date of publication

© 2022 Florida Realtors®

Fla. has different types of property owners’ associations but they are governed by different laws. Sometimes the rules are the same; often they are not.

ORLANDO, Fla. – Many Florida properties are subject to various types of property owners’ associations. The main two types you’re likely familiar with are homeowners’ associations (HOAs) and condominium associations. While they’re both a type of property owner’s association, they’re not governed by the same laws. In fact, there are several major differences.

However, this article focuses on only one element within the different two statutes: The specific information that must be provided to the buyer. (It does not address developer disclosures, just non-developers, i.e. sellers.) It explains the information you need to gather, when you should get this information together and why it’s a good idea to start early!

Note: Legal Hotline calls often start out with the member referring to an HOA issue when they’re really referring to a condo association. It’s important to make sure you’re referring to the property type of association for the property. The laws are different, and calling the association by the wrong name can only lead to confusion.

Homeowners Associations (HOAs)

 As I noted earlier, there are differences between these two types of property owners’ associations. One of the biggest we hear about on Florida Realtors Legal Hotline centers on what information a buyer is entitled to receive if purchasing property in an HOA community.

Guess what? Purchasers of a property subject to an HOA aren’t entitled to receive the same things as a purchaser of property subject to a condo association. So let’s break down what a buyer should receive if purchasing property subject to a homeowners association.

Many callers assume that HOA buyers are entitled to all association documents. Unfortunately, current law doesn’t require a set list of items. Under HOA law, specifically Florida Statute 720.401, a buyer is entitled to what is called a “disclosure summary.” This summary provides various notices about the types of assessments the buyer may be subject to paying in the event the buyer purchases the property. There are blanks for the seller to complete with regards to assessments (i.e. monthly, annually), special assessments, and/or land use fees, if applicable.

Condominium associations

 Condo associations, however, do have a set list of documents that the buyer is entitled to receive at the seller’s expense. Pursuant to Florida Statute 718.503(2), “each prospective purchaser who has entered into a contract for the purchase of a condominium unit is entitled, at the seller’s expense, to a current copy of the declaration of condominium, articles of incorporation of the association, bylaws and rules of the association, financial information required by s. 718.111, and the document entitled “Frequently Asked Questions and Answers” required by s. 718.504.”

 Additionally, the prospective purchaser shall also be entitled to receive from the seller a copy of a governance form, which is available from the Division of Condominiums, Timeshares and Mobile Homes of the DBPR.

Things to note and best practices

 Notice I said above that this covers what buyer is entitled to receive, not what buyer may want to receive. The two Florida Realtors’ residential contracts have an HOA and condo rider/addendum that includes lines for additional information outside of that required by Chapter 718 and 720 of the Florida Statutes. The addendum includes, but is not limited to, applicable boat slip and parking spot info, as well as contact information for any management company for the association.

If you’re representing a buyer subject to some type of association oversight, it’s important to recognize the difference between the two statutes governing the types of property owners’ associations. Should a buyer want additional documents from the association, a buyer can certainly request this in his or her offer.

If you’re representing a buyer purchasing property subject to a condo association, stress the importance of reviewing the received documents carefully. A buyer will be subject to the condo association’s rules and regulations should they close on the property, and saying “I didn’t know that rule” likely won’t be a valid excuse if the information was in documents the buyer received before closing.

On the other hand, if you’re representing a seller of property subject to a property owner’s association, my advice is to start early. What do I mean? Don’t start gathering the information and documents your seller needs to give to the buyer once they’ve gone under contract. A savvy listing agent knows at the time they enter a listing agreement what documents/information needs to be gathered, and they’ll start the ball rolling then. Many associations have these documents available online and sellers have immediate access. Other associations may need additional time so, again, it’s best to start early and not wait to ask for the information.
Far too many calls to the Legal Hotline come from stressed agents, panicked that either their buyer hasn’t received any documents/information or their seller can’t get access to them in enough time. Don’t be in this position! At the risk of signing off in the same way I usually do, prepare in advance. Take potential issues off the table and get to closing as smoothly as possible.

Meredith Caruso is Associate General Counsel for Florida Realtors

Note: Advice deemed accurate on date of publication

© 2022 Florida Realtors®

NAR’s public statement on possible flood insurance changes backs mitigation and “2.0,” but it doesn’t back adopting or enforcing a real estate disclosure requirement.

WASHINGTON – Leslie Rouda Smith, president of the National Association of Realtors® (NAR), issued a public comment on the Federal Emergency Management Agency’s (FEMA) request-for-information notice entitled “Request for Information on the National Flood Insurance Program’s Floodplain Management Standards for Land Management and Use, and an Assessment of the Program’s Impact on Threatened and Endangered Species and Their Habitats.”

Smith thanked FEMA, and said that Realtors® support encouraging communities to adopt higher building standards to avoid future flood damage and costly retrofits. She says the current 100-year flood height standard doesn’t vary between coastal and non-coastal areas, saying “FEMA has demonstrated that these standards do not provide the same level of protection they did 50 years ago, and that the benefits of setting higher standards (e.g., one foot above the 100-year flood height) would exceed the additional cost of construction especially in coastal areas.”

Flood insurance programs NAR agrees with in the letter

1. Continuing to implement Risk Rating 2.0: Equity in Action to provide up-front the full cost of insuring each property.
2. Flood mapping by property rather than flood zone. The Technical Mapping Advisory Council has recommended property-specific mapping which has been successfully implemented by the state of North Carolina.
3. Expanding mapping to all of the U.S. and including areas at high risk due to urban, repeated and future flooding.

However, Realtors “would not support excluding states from the NFIP for not adopting or enforcing a real estate disclosure requirement,” adds Smith. “All 50 states already require the disclosure of known material adverse facts or conditions, including past flood damage, and many states have additional requirements related to flooding.” While the requirements vary by state, they’re “often established by a state agency, not the Legislature, or found in common law as interpreted by the courts.”

Smith says it’s unclear how a disclosure would work, asking how local governments would administer NFIP’s floodplain management regulations. Who would legally enforce standards governed by a separate state agency or court?

“Congress would also have to significantly expand FEMA’s resources, expertise, authority and personnel to oversee such requirements,” Smith says.

“NAR is not aware of any studies by FEMA or other entities showing that a NFIP disclosure requirement would enable communities to constrict or avoid the development of special flood hazard areas, assist in reducing flood damage, or otherwise improve land use and management pursuant to 42 USC Sec.4102,” says Smith. “Meanwhile, excluding states including Florida, New Jersey and South Carolina, which collectively represent more than 40% of NFIP’s policyholders, would be costly to both property owners and taxpayers.”

Smith recommended that FEMA itself disclose the full NFIP claims history of each property to buyers and renters, as well as owners, before real estate transactions are completed.

“This is critical additional information for consumers, and it could be achieved by issuing a routine use exception to the Federal Privacy Act,” Smith says.

© 2022 Florida Realtors®

A widow with no children and no will has a live-in boyfriend. If she dies, can he make a claim on the house as a domestic partner or even a dependent?

FORT LAUDERDALE, Fla. – Question: My widowed sister owns a house in Florida and has no children or will. She has had a live-in boyfriend for 20 years who does not contribute to household expenses. If something happened to her, could he make a claim on her property as a domestic partner or even as a dependent? The family is concerned. – Jeff

Answer: The answer varies depending on the state that someone lives in. In Florida, unmarried couples enjoy none of the rights and responsibilities of married people.

That said, many of those rights and obligations can be recreated in properly drafted contracts, such as co-tenancy agreements, and other rights can be established by proper estate planning.

It would be difficult for the boyfriend to make a valid claim to the property when she passes unless he was helping with the expenses or paid for improvements to the property. Nothing can stop him from making a claim to the property, but the law would be on your family’s side in the situation you describe.

In any event, your sister should have an estate plan prepared. Wills and other estate planning tools greatly benefit the people we leave behind. For example, your sister may want her boyfriend to have rights in the property that will not be realized without a will. Or she may specifically not want that.

Plus, trusts or life estate deeds can help avoid probate along with its expense and hassle.

You and your siblings should have a sit-down with your sister to discuss what she wants to happen with her property. Many people are nervous or superstitious about having an estate plan, but even if she does not want one, the family will know her wishes.

Because this area of law can vary widely in different situations and locations, speak with a local professional about your individual needs and concerns

Copyright © South Florida Sun Sentinel, Gary Singer. All rights reserved.

Blackstone, which invests in single-family homes and commercial property, had the “most remarkable results in our history on virtually every metric” in 4Q.

NEW YORK – Investment management company Blackstone reported that high returns in its real estate investments fueled record-setting fourth-quarter results.

“Blackstone reported the most remarkable results in our history on virtually every metric,” Stephen Schwarzman, co-founder and chief executive, said as the company released its earnings results this week. Officials said its $280 billion real estate business generated nearly half of its earnings last year.

Rental housing, logistics and life science offices comprise more than 70% of Blackstone’s equity portfolio, and rents in these sectors are growing at two to three times the rate of inflation, the company says. All three sectors saw rapid growth during the pandemic. E-commerce has driven a rush to logistics spaces and warehouses, and vacancies are becoming more difficult to find.

Blackstone also continues to make an aggressive push into rentals. It has focused on acquisitions of multifamily real estate investment trusts, affordable housing and rental buildings, The Real Deal reports. Recently, Blackstone reported it would acquire $1 billion worth of affordable single-family rentals, adding 4,000 homes to its portfolio over the next two years.

About 80 percent of the firm’s real estate portfolio is comprised of logistics and rental housing, which the company says it believes is more insulated from market and inflationary pressures with its shorter-term leases.

“Blackstone’s fourth-quarter results represented a remarkable finish to a record-breaking year,” Schwarzman said.

Blackstone nearly doubled its net income to $2.9 billion since the fourth quarter of 2020. Its real estate investment trust and its Core+ business accounted for the majority of those increases. Its real estate ventures appreciated by 12% and its Core+ segment by 7.2%.

Source: “Blackstone Reports ‘The Most Remarkable Results in Our History,” The Real Deal (Jan. 27, 2022); “Blackstone Seeks to Use Record War Chest to Capitalize on Tech Sell-Off,” Financial Times (Jan. 27, 2022); and “The Blackstone Group (BX) Q4 2021 Earnings Call Transcript,” The Motley Fool (Jan. 27, 2022)

© Copyright 2022 INFORMATION INC., Bethesda, MD (301) 215-4688

In 2020, the share of 25-34-year-old adults moving home hit numbers not seen since 1960 – almost one out of five (17.8%). In 2021, it was still 17%.

CHICAGO – As the COVID-19 pandemic continued, more young adults chose to move back home with their parents. In 2020, the share of young adults aged 25 to 34 living at home rose to the highest share recorded since 1960: 17.8%, the National Association of Realtors® (NAR) reports. That percentage fell slightly but remained high in 2021 at 17% – the second-highest share on record.

“Some young adults may have recently moved back home due to the flexibility of remote work trends and to avoid paying high rents,” writes Jessica Lautz, NAR’s vice president of demographics and behavioral insights, on the association’s blog. “Others may be at a family member’s home due to job losses or while virtually attaining higher education goals. Regardless of the reason, living with family may provide a benefit to potential first-time homebuyers.”

About half of young adults surveyed who became first-time homebuyers said they were making rent payments to family as they stayed at home.

However, other young adults have been able to live rent-free while they save for homeownership. Living at home could allow them to pay off their debts, improve their debt-to-income ratio and save for a down payment.

“While living at home may not be an ideal or even a long-term scenario for many families, if prospective first-time buyers can move home before purchasing, this might financially help them save to purchase a home,” Lautz says. “The added flexibility of living with family allows a buyer to better navigate the tight housing market.”

Source: “Young Adults Are Returning to Their Family’s Homes, But for How Long?” National Association of REALTORS® Economists’ Outlook blog (Jan. 26, 2022)

© Copyright 2022 INFORMATION INC., Bethesda, MD (301) 215-4688

Many nuevo-rich buyers made money working with Bitcoin or other cryptocurrency, and they’ve shown a strong fondness for investing profits in real estate.

NEW YORK – Newly made cryptocurrency millionaires and billionaires are showing a love for real estate, flooding the luxury market and driving some of the most expensive transactions over the past year.

Among notable recent blockbuster real estate deals, Brian Armstrong, the CEO of Coinbase, a U.S.-based cryptocurrency exchange, purchased a $133 million estate in Bel Air, Calif.; Ivan Soto-Wright, co-founder and CEO of Moonpay, a cryptocurrency payments infrastructure provider, purchased a waterfront Miami estate for about $38 million; and Olaf Carlson-Wee, CEO of Polychain Capital, a cryptocurrency-focused investment fund, purchased a mansion in Hollywood Hills for $28.5 million, The Wall Street Journal reports.

To expand the appeal of real estate within this group, developers are rushing to accept cryptocurrency payments for their high-end listings, and brokerages host cryptocurrency seminars to help agents draw in this group of investors.

For cryptocurrency owners, “It’s gotten to the point now where it’s like, ‘OK, so what do I do with all this?’” says Alex Sapir, a Miami developer. Sapir sold a $22.5 million apartment purchased with cryptocurrency last year. “You’re getting them in the early onset stages of their investment career.”

However, only a handful of luxury real estate transactions have been completed using cryptocurrency so far. In most cases, sellers transfer the cryptocurrency to U.S. dollars to close on the transaction. But some developers push for greater use in real estate, and PMG reportedly become the first real estate developer to accept pre-construction condo deposits in cryptocurrency.

Avi Dabir, vice president of business development at FTX US, says he believes cryptocurrency transactions will grow in real estate because they can be completed more efficiently than traditional transactions – and they aren’t at the mercy of delays that can occur when using a traditional banking system.

“If I want to send a wire transfer today using my traditional bank account, it’s got to be banking hours, I need to make sure I hit that wire cutoff time, and I can’t do it on the weekend,” he told The Wall Street Journal. “That’s not a problem with cryptocurrency. It’s open 24/7.”

Cryptocurrency value can be very volatile, however. Bitcoin traded for $68,990.90 in November 2021, a record high. As of Jan. 26, it was trading for about half that, at $38,000.

Source: “Crypto Kings Are the Real Estate Industry’s Newest Whales,” The Wall Street Journal (Jan. 27, 2022) [Log-in required.]

© Copyright 2022 INFORMATION INC., Bethesda, MD (301) 215-4688

Second-home mortgage-rate locks hit 5.7% early last year before dropping, then bouncing back to 5%. The top market? Fla.’s Sumter County with a 65% increase.

SAN FRANCISCO – The percentage of second-home mortgage-rate locks hit its highest recorded level in the first quarter (Q1), with the share of transactions reaching 5.7%, according to the Pacaso Second Home Market Report, a company focused on second-home sales. In the next two quarters, however, the percentage decreased to 4.6% (Q2) and 4.5% (Q3).

Second-home sales rebounded in the final quarter of 2021, though, reaching 5%.

Pacaso’s report looks at data on property use and mortgage rate locks in counties whose percentage of seasonal homes and median home values are at or above the top 20th percentile.

Pacaso CEO Austin Allison thinks people “stopped to take a beat” in the second quarter to see what a post-pandemic recovery would actually look like – notably whether they’d have to return to their offices. “But these last few months, many employers finally decided to make remote work more permanent,” she says. “This seems to have spurred renewed interest in second-home ownership.”

Florida counties top list of second-home markets

Most markets with large year-over-year increases in second-home mortgage-rate locks were located in the Southeast U.S. In Florida, Sumter County saw the largest national growth spurt with a 65% year-over-year increase.

“For the past year, we’ve been tracking up-and-coming second-home hot spots,” says Allison. “Sumter is a perfect example of the kinds of locations we call ‘vacation-destination-adjacent’ that have been catching our eye. If established second-home destinations are like Broadway, these emerging nearby destinations are like Off-Broadway.”

Florida’s St. John’s County also saw an increase in transactions, with second-home mortgage-rate locks up 9.7% year-over-year in Q4. One of the county’s notable cities is St. Augustine, known for being the nation’s oldest city, with historical landmarks and cobblestone streets that date back to the late 1500s.

Overall, Florida has seen “more significant development” than any other area, but it hasn’t seen the highest price increases. In 43 of the 50 counties Pacaso tracks, prices increased by double digits in 2020.

Mono County, California, which borders Yosemite National Park, topped the charts in terms of price growth, with a median purchase price of $790,000, up 83.7% year-to-year. On the flipside, Atlantic County, New Jersey – home to Atlantic City – saw the biggest 2020 price drop for second homes with a decline of 14%.

© 2022 Florida Realtors®

The end of forbearance programs and foreclosure moratoriums enticed more at-risk homeowners in lower-cost homes to sell and cash out their higher equity.

SEATTLE – Sales of the most affordable homes in the U.S. rose 11.3% year over year in the fourth quarter of 2021, according to a new report from Redfin. At the same time, the inventory of for-sale homes in that tier also rose, likely because the end of pandemic-driven mortgage forbearance and foreclosure moratorium policies encouraged more of these owners to sell.

“The market for homes at lower price points is booming for a few reasons. Not only is there demand from workers who are now earning higher wages, but investors, who have an appetite for lower-priced homes, are buying up properties at record rates,” says Redfin Chief Economist Daryl Fairweather. “With the end of both mortgage forbearance and the foreclosure moratorium, many homeowners who don’t have much cash in the bank are choosing to sell their homes to clear their mortgage debt, providing plenty of supply to meet the high demand.”

For luxury homes, a big year-over-year sales drop is partly due to a surge during the fourth quarter of 2020, when affluent Americans took advantage of low mortgage rates and remote work to buy high-end homes. Sales are also constrained by a lack of supply. Luxury sales remain elevated above pre-pandemic levels – up by nearly 27% from the last quarter of 2019 to the last quarter of 2021 – but the initial pandemic-driven frenzy for high-end homes has slowed.

According to the study, the number of luxury listings (median price of $1,038,200) in the fourth quarter of 2021 was down 16.3% year-to-year. However, the number of listings in the lowest tier of “most affordable” rose 18.6% (median $127,500).

While the number of listings in the “affordable” category dropped 1.9% (median $215,600), it’s still smaller than the listing drop of 10.8% for “mid-priced” homes ($310,000) and 14.7% for “expensive” homes (median $470,000).

Still, at 22 days, mid-priced homes spent less time on the market. The most affordable homes spent 28 days, affordable homes spent 24 days, expensive homes spent 26 days and luxury homes were on the market for 39 days.

“Some experts were worried the end of forbearance would cause a glut of housing supply and eventually lead to a housing-market crash, but there’s plenty of demand to snap up the inventory,” Fairweather says. “The fact that both supply and sales of the most affordable homes shot up at the end of 2021 is solid evidence of that.”

© 2022 Florida Realtors®

In 2014, Zillow used listing-agent photos for a new section, Zillow Digs. The fine covers continued photo use after the copyright owner sent a cease-and-desist letter.

SEATTLE – A federal judge this week ordered Seattle-based Zillow to pay nearly $2 million as the result of a copyright infringement case from an Illinois-based photography company.

The case stems from Zillow’s 2014 use of images on a home improvement section of its website, known at the time as Zillow Digs. The site allowed homeowners to price home renovations and included photos taken by VHT, a real estate photography company that licenses photos of homes for marketing purposes.

In a decision Wednesday, U.S. District Judge James Robart found “Zillow’s infringement of 388 of VHT’s images before July 10, 2014, was innocent, and that its infringement of 2,312 of VHT’s images after July 10, 2014, was not innocent.”

VHT sent Zillow a cease-and-desist letter on July 10, 2014. Robart ordered total damages of $1.93 million along with interest.

Zillow spokesperson Viet Shelton said Thursday, “We appreciate the court’s ruling and believe it to be an overall favorable decision on the matter.”

According to case records, VHT contacted Zillow after seeing its photos on the site and the two companies discussed a possible licensing agreement. Ultimately, Zillow decided to “go in another direction,” and VHT later sent the cease-and-desist letter. Zillow removed the photos in 2016.

Zillow accesses photos through agreements with real estate brokers and listing services and “reasonably believed” those providers had licensed the photos and Zillow could post them, according to Robart’s decision.

The case has wound its way through the courts since VHT sued in 2015. In 2017, a federal jury ordered Zillow to pay $8.3 million, but the court reversed a portion of that verdict and both sides appealed. The Ninth Circuit Court of Appeals later sided in part with Zillow and a portion of the case was returned to the lower court.

© 2022 The Seattle Times. Distributed by Tribune Content Agency, LLC.

Fourteen Realtors from across the state will enhance their leadership skills and learn more about Florida Realtors through a number of activities and sessions.

ORLANDO, Fla. – Florida Realtors recently selected 14 Realtor members to participate in its 16th annual Leadership Academy.

The Leadership Academy was established in 2008 to identify emerging Realtor leaders ready to get involved, make a difference and enhance their leadership skills. The goal of the Academy is to empower its participants to develop the skills needed to lead a committee, a Realtor association or a community activity.

“We look forward to an incredible year with the 2022 class,” says 2022 Leadership Committee Chairman Michele Bailey, president of the Emerald Coast Association of Realtors. “The training we’ve planned and relationships this class will build will impact them for years to come, and I’m thrilled to be part of their journey. My participation expanded my Realtor family beyond my local association, and I know the same will happen for these folks as they become the best class ever – 2022 edition.” She is a graduate of Florida Realtors’ 2019 Leadership Academy.

Lisa Hill, a 2020 Florida Realtors Leadership Academy graduate and member of the Orlando Regional Realtors Association, is vice-chair for this year’s committee.

Leadership Academy members will participate in group and independent study sessions, team-building and goal-setting exercises, plus discuss leadership techniques and communication skills enhancement.

The 2022 Leadership Academy participants include:

• Adelino “Eddie” Marcal, Flagler County Association of Realtors
• Rose Kemp, Orlando Regional Realtors Association
• Hafid Boujidi, Orlando Regional Realtors Association
• Carolina Conner, Pinellas Suncoast Association of Realtors
• Christie McSwain, Lakeland Association of Realtors
• Laurieanne Minoff, Broward, Palm Beaches & St. Lucie Realtors
• Robenson Juste, Realtors Association of Indian River County
• Danielle Fraser, St. Augustine & St. Johns County Board of Realtors
• Melissa Cruz, St. Augustine & St. Johns County Board of Realtors
• Tina Eloian, Greater Tampa Realtors
• Rose Street, Space Coast Association of Realtors
• Joseph Capelotti, Emerald Coast Association of Realtors
• Kara Wisely, Realtors Association of Lake & Sumter Counties
• Norkis Fernandez-Valdez, Osceola County Association of Realtors

© 2022 Florida Realtors®

Customer Relationship Management (CRM) software does many things, and the Real Estate Technology Institute thinks many brokers fail to take full advantage.

NEW YORK – Based on feedback he’s received from vendors, Craig Grant, founder and CEO of the Real Estate Technology Institute, estimates that few real estate professionals use more than 10% of the features provided by their customer relationship management (CRM) system.

He says today’s CRMs offer a number of tools to increase lead generation because they let agents track things such as the names of clients’ family members, pet names, birthdays, anniversaries and other types of information. CRM users can also customize messages based on clients’ interests, providing they enter that data.

The most robust CRMs have instant communication tools that forward incoming lead information. With that info in hand, agents or a team member can immediately respond using the CRM’s chat function with a text or a phone call.

Lead-routing systems allow users to track the speed of responses and conversion rates, helping brokers maximize profitability by sending leads to the agents most likely to convert them.

When agents conduct a transaction, CRMs can help them set up workflows to make sure nothing gets missed. They can designate who will meet inspectors, obtain required signatures on disclosure documents, review documents for compliance, and so on.

When selecting a CRM vendor, Grant says real estate professionals should determine whether their system can handle the number of leads they’re generating, as well as the number of team members they have.

Source: Inman (08/24/21) Ross, Bernice

© Copyright 2022 INFORMATION INC., Bethesda, MD (301) 215-4688

Rising home prices create greater risk for buyers. As a result, they’re less likely to forego inspections, appraisals and other contract contingencies.

CHICAGO – Home shoppers are showing less willingness to waive appraisals, home inspections or other contract contingencies during a home purchase compared to just a few months ago, according to the December 2021 Realtors® Confidence Index Survey from the National Association of Realtors® (NAR).

In December, 19% of buyers waived the inspection contract contingency, down from a peak of 27% in July 2021, NAR’s survey shows. For the appraisal contract contingency, 21% waived it compared to 29% over the same timeframe.

Buyers were also less willing to waive other contract contingencies, like a financial contingency (10%), a home sale contingency (8%) or a title contingency (1%).

“With home prices continuing to rise, buyers are making sure they are getting their money’s worth,” says Gay Cororaton, an NAR researcher.

The median existing-home sales price increased to $358,000 in December 2021, marking a jump of nearly 16% year over year, according to NAR’s data.

Another possible reason buyers are less willing to waive contingencies? Appraisals appear to be moving faster, Cororaton says. “With the onset of the pandemic, appraisal issues accounted for a higher fraction of contract settlement delays, from about 15% prior to the pandemic in January 2020 to a peak of 27% in July 2021,” she writes. In the past three months, appraisals comprised just 22% of contract settlement delays.

“The decline in buyers … waiving appraisal and inspection contingencies is a healthy trend,” Cororaton writes. “Buyers should pay for what a home is worth and be informed of potential issues that need to be addressed by the seller or anticipated by the buyer if the buyer wants to take the responsibility for addressing this issue at their own cost.”

Source: “December 2021 REALTORS® Confidence Index Survey: Fewer Buyers Waiving Appraisal, Inspection Contract Contingencies,” National Association of REALTORS® Economists’ Outlook blog (Jan. 24, 2022)

© Copyright 2022 INFORMATION INC., Bethesda, MD (301) 215-4688

Instagram provides a strong foundation for marketing, but only if prospective customers quickly understand who you are and what you can do for them.

NEW YORK – Using Instagram, real estate agents can develop an impactful personal brand and leverage a relationship-based marketing strategy.

The first step? Optimize the bio so that it appeals to local buyers and sellers. If someone comes across the profile, what the agent does should be obvious, along with where they work and how they can help. Many agents miss out on opportunity connections by not including those important aspects in their Instagram bios and profiles.

Agents also need an inviting profile image, strategic username and name. They should also have a list of the areas they serve and an upfront call to action.

These simple changes will brand agents locally and increase the chance that a prospective buyer or seller can find them.

To be the go-to local expert, agents should feature a mixture of targeted real estate and hyperlocal community content Instagram posts. Instead of just sharing homes for sale, generalized real estate tips or market updates, agents can go further by identifying the exact challenges buyers or sellers experience in the local market and creating content to help them. Doing this establishes agents’ credibility and builds trust while branding them as somebody to rely on.

Agents can also create educational or entertaining posts about what it’s like to live in their farm area and leverage trending features, such as Reels.

Source: Inman (10/11/21) Colby, Heather

© Copyright 2022 INFORMATION INC., Bethesda, MD (301) 215-4688

Rates on short-term credit, such as credit cards, will likely rise at the same pace as interest rates. But the link to long-term rates, such as mortgages, isn’t as clear.

WASHINGTON (AP) – Will mortgage rates go up? How about car loans? Credit cards? How about those nearly invisible rates on bank CDs – any chance of getting a few dollars more?

With the Federal Reserve signaling Wednesday that it will begin raising its benchmark interest rate as soon as March – and probably a few additional times this year – consumers and businesses will eventually feel it.

The Fed’s thinking is that with America’s job market essentially back to normal and inflation surging well beyond the central bank’s annual 2% target, now is the time to raise its benchmark rate from near zero.

The Fed had slashed its key rate after the pandemic recession erupted two years ago. The idea was to support the economy by encouraging borrowing and spending. But now, by making loans gradually costlier, the Fed hopes to stem the surging price increases that have been squeezing consumers and businesses.

Here are some questions on what this could mean for consumers and businesses.

I’m considering buying a house. Will mortgage rates go steadily higher?

Probably, but it’s hard to say. Mortgage rates don’t usually rise in tandem with the Fed’s rate increases. Sometimes they even move in the opposite direction. Long-term mortgages tend to track the rate on the 10-year Treasury, which, in turn, is influenced by a variety of factors. These include investors’ expectations for future inflation and global demand for U.S. Treasurys.

When inflation is expected to stay high, investors tend to sell Treasurys because the yields on those bonds tend to provide little to no return once you account for inflation. As that happens, the selling pressure on the bonds tends to force Treasurys to pay higher rates. Yields then rise in response. The result can be higher mortgage rates. But not always.

Does that mean home-loan rates won’t rise much anytime soon?

Not necessarily. Inflation is far exceeding the Fed’s 2% target. Fewer investors are buying Treasurys as a safe haven. And with numerous Fed rate hikes expected, the rate on the 10-year note could rise over time – and so, by extension, would mortgage rates.

It’s just hard to say when.

On the other hand, even when Treasury yields are comparatively low relative to inflation, as they are now, investors often still flock to them. That’s especially true at times of global turmoil. Nervous investors from around the world often pour money into Treasurys because they are regarded as ultra-safe. All that buying pressure tends to keep a lid on Treasury rates, which generally has the effect of keeping mortgage rates relatively low.

What about other kinds of loans?

For users of credit cards, home equity lines of credit and other variable-interest debt, rates would rise by roughly the same amount as the Fed hike. That’s because those rates are based in part on banks’ prime rate, which moves in tandem with the Fed.

Those who don’t qualify for such low-rate credit card offers might be stuck paying higher interest on their balances, because the rates on their cards would rise as the prime rate does.

The Fed’s rate hikes won’t necessarily raise auto loan rates. Car loans tend to be more sensitive to competition, which can slow the rate of increases.

Would I finally earn a better return on CDs and money market accounts?

Probably, though it would take time.

Savings, certificates of deposit and money market accounts don’t typically track the Fed’s changes. Instead, banks tend to capitalize on a higher-rate environment to try to thicken their profits. They do so by imposing higher rates on borrowers, without necessarily offering any juicer rates to savers.

The exception: Banks with high-yield savings accounts. These accounts are known for aggressively competing for depositors. The only catch is that they typically require significant deposits.

Copyright 2022 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed without permission.

The 30-year, fixed-rate mortgage changed little from last week’s 3.56%. While still historically low, any rise in rates may dampen demand later this year.

SILVER SPRING, Md. (AP) – Average long-term U.S. mortgage rates were essentially flat this week after jumping nearly a half percent the past two weeks as lenders anticipated the Federal Reserve’s announcement of pending rate increases.

The average rate on the 30-year loan ticked down to 3.55% from 3.56% last week, mortgage buyer Freddie Mac reported Thursday. It stood at 2.73% a year ago.

The average rate on 15-year, fixed-rate mortgages, popular among those refinancing their homes, edged up to 2.80% from 2.79% last week. One year ago, the rate was 2.2%.

Though they remain historically low, home loan rates have been rising to levels not seen since early 2020, when the coronavirus pandemic was breaking in the U.S.

On Wednesday, the Fed signaled that it would begin a series of interest rate hikes in March, reversing pandemic-era policies that have fueled hiring and growth but also adding to inflation levels not seen in some 40 years.

Earlier this month, the government reported that inflation spiked to 7% in December from a year earlier, the sharpest increase in four decades. In addition, the Labor Department reported that prices at the wholesale level surged by a record 9.7% last month from December 2020.

The Fed’s upcoming rate hike – or hikes – will make it more expensive to borrow for a home, car or business.

Also Thursday, the government reported that applications for unemployment benefits fell after three straight weeks of increases that economists blamed on the surging omicron variant of COVID-19.

The Commerce Department reported Thursday that the nation’s gross domestic product – its total output of goods and services – expanded 5.7% in 2021, the strongest calendar-year growth since a 7.2% surge in 1984. In the fourth quarter, the economy grew at an unexpectedly brisk 6.9% annual pace.

In addition to surging inflation, experts expect robust economic growth and the tight labor market to continue to push rates higher. Freddie Mac economists expect higher mortgage rates to bring a modest decline in purchasing demand ahead of the spring homebuying season.

Available housing has been sparse since long before the pandemic started, and rising prices are making it even harder for homebuyers to secure a new home.

Copyright 2022 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed without permission.

“Diminished housing supply offered consumers very few options,” says NAR’s chief economist. He predicts a 2.8% sales decline by the end of 2022.

WASHINGTON – Pending home sales fell in December for two straight months of declines, according to the National Association of Realtors®’ (NAR) monthly report. All four major U.S. regions that make up the full report posted month-over-month and year-over-year drops in contract activity.

The Pending Home Sales Index (PHSI) – a forward-looking indicator of home sales based on contract signings – fell 3.8% to 117.7 in December. Year-over-year, transactions decreased 6.9%. An index of 100 is equal to the level of contract activity in 2001.

“Pending home sales faded toward the end of 2021, as a diminished housing supply offered consumers very few options,” says Lawrence Yun, NAR’s chief economist. “Mortgage rates have climbed steadily the last several weeks, which unfortunately will ultimately push aside marginal buyers.”

Even with December’s slowdown in transactions, Yun says 2021 was an overall great period for housing in terms of sales and price appreciation.

Yun’s forecast calls for the 30-year fixed mortgage rate to jump to 3.9% by the fourth quarter, and existing-home sales will dip by 2.8% to 5.95 million units.

December marks the third straight month of increased new-home construction, and Yun expects housing inventory to keep improving and contribute to slower home price growth in 2022. He forecasts housing starts to rise to 1.65 million units and home prices to increase 5.1%.

“The combination of a more measured demand and rising supply will bring housing prices better in line with wage growth,” Yun says.

December pending home sales regional breakdown: Month-over-month, the Northeast PHSI fell 1.2% to 98.2 in December, a 10.5% decline from a year ago. In the Midwest, the index dropped 3.7% to 112.8 last month, down 1.2% from December 2020.

Pending home sales transactions in the South slid 1.8% to an index of 145.2 in December, down 3.9% from December 2020. The index in the West decreased 10.0% in December to 95.0, down 16.2% from a year prior.

© 2022 Florida Realtors®

Survey: 72% of consumers have used a Realtor, but the level of trust varies by generation: 80% of millennials plan to use one but only 71% of Gen Zs say the same.

OAKLAND, Calif. – It’s hard to know who to trust, which keeps demand for intermediaries – Realtors®, insurance advisors, etc. – high. However, the first consumer hurdle is to find an intermediary they also trust.

A new survey from Agentero, a digital insurance network, looked at public perception of individual intermediaries, including Realtors. Of those who said they’ve already used Realtor, insurance agent or financial services professional, more than three- quarters say they would use them again.

Overall, 72% of consumers have used a Realtor, 64% have worked with an insurance agent, and 40% have used a financial services professional. But even more people – especially younger consumers – plan to use these services in the future.

Overall, 80% of millennials and 71% of Gen Zs say they plan to use a Realtor in the future; 64% of millennials and 54% of Gen Zs plan to work with an insurance agent; and 60% of millennials and 57% of Gen Zs plan to seek out financial help in the future.

“Real estate, insurance and investments are all hands-on services, with a lot at stake,” says Luis Pino, CEO of Agentero. “The advice of the intermediaries is really critical to consumers making the right decisions. But it’s also something you need to experience to appreciate.”

Pino says consumers – especially millennials and Gen Zs – want a test drive when it comes to real estate, insurance and financial specialists.

The challenge for the intermediaries: How do you get more consumers to try your services?”

Who do you trust? Generational differences

Agents have to work to build trust and understand consumers. According to the survey, Gen Zs are more likely to question intermediaries’ motives. Overall, 37% of Gen Zs said they trust their Realtors about half the time, while 32% trust their insurance agents and 30% their financial professionals the same amount.

Older consumers are more likely to trust professionals. The results for insurance agents are the most striking – 79% of baby boomers, 67% of Gen X and 74% of millennials trust their agents usually or always as compared to just half of Gen Zs.

Trust in Realtors is similar: 72% of baby boomers and Gen X and 68% of millennials place confidence in their Realtors always or usually, compared to less than half (49%) of Gen Zs.

Financial professional results are split: 80% of baby boomers and 72% of Gen X trust their financial professionals, compared to 55% of millennials and Gen Zs.

Gen Zs says that they don’t always feel like they are heard by an intermediary. Just over half of respondents say their intermediaries usually or always understand their needs, which is true for all three industries. However, more than three-quarters of baby boomers and Gen X consumers say their intermediaries listen and understand them.

“Agents need to understand how to communicate with all customers and demonstrate value in every interaction,” says Pino. “This is especially true when it comes to Gen Zs. The survey highlights that more than half of the next generation of consumers say they plan to use agents in the future. Think about how much that number can grow once agents expand their ability to build trust and increase understanding.”

© 2022 Florida Realtors®

In the face of persistent inflation, the Fed announced Wed. it would soon raise interest rates. That’s likely to push all types of credit rates – including mortgages – higher.

WASHINGTON (AP) – The Federal Reserve signaled Wednesday that it plans to begin raising its benchmark interest rate as soon as March, a key step in reversing its pandemic-era low-rate policies that have fueled hiring and growth but also escalated inflation.

With high inflation squeezing consumers and businesses and unemployment falling steadily, the Fed also said it would phase out its monthly bond purchases, which have been intended to lower longer-term rates, in March.

The Fed’s actions are sure to make a wide range of borrowing – from mortgages and credit cards to auto loans and corporate credit – costlier over time. Those higher borrowing costs, in turn, could slow consumer spending and hiring. The gravest risk is that the Fed’s abandonment of low rates could trigger another recession.

The central bank’s latest policy statement follows dizzying gyrations in the stock market as investors have been gripped by fear and uncertainty over just how fast and far the Fed will go to reverse its low-rate policies, which have nurtured the economy and the markets for years. The broad S&P 500 index fell nearly 10% this month before rebounding slightly Wednesday.

High inflation has also become a serious political threat to President Joe Biden and congressional Democrats, with Republicans pointing to rising prices as one of their principal lines of attack as they look toward the November elections.

Yet Biden said last week that it was “appropriate” for Chair Jerome Powell to adjust the Fed’s policies. And congressional Republicans have endorsed Powell’s plans to raise rates, providing the Fed with rare bipartisan support for tightening credit.

A separate potential source of higher rates is the Fed’s plans for its bond holdings, which are at a record high of nearly $9 trillion. The bond purchases, which the Fed financed by creating money, have been intended to reduce longer-term interest rates to spur borrowing and spending. Many investors also saw the bond buying as helping fuel stock market gains by pouring cash into the financial system.

Earlier this month, minutes of the Fed’s December meeting revealed that the central bank was considering reducing its bond holdings by not replacing bonds that mature – a more aggressive step than merely ending its purchases. The impact from reducing the Fed’s bond stockpile isn’t well known. But the last time that the Fed raised rates and reduced its balance sheet simultaneously was in 2018. The S&P 500 stock index fell 20% in three months.

By not replacing some of its bond holdings, the Fed in effect reduces demand for Treasuries. This raises their yields and makes borrowing more expensive

Some analysts have said they aren’t sure how big the impact on interest rates will be or how much the Fed will rely on reducing its balance sheet to affect interest rates.

All of which means the Powell Fed faces a delicate and even risky balancing act. If the stock market is engulfed by more chaotic declines, economists say, the Fed might decide to delay some of its credit-tightening plans. Modest drops in share prices, though, won’t likely affect the Fed’s thinking.

Some economists have expressed concern that the Fed is already moving too late to combat high inflation. Others say they worry that the Fed may act too aggressively. They argue that numerous rate hikes could unnecessarily slow hiring. In this view, high prices mostly reflect snarled supply chains that the Fed’s rate hikes are powerless to cure.

This week’s Fed meeting comes against the backdrop of not only high inflation – consumer prices have surged 7% in the past year, the fastest pace in nearly four decades – but also an economy gripped by another wave of COVID-19 infections.

Powell has acknowledged that he failed to foresee the persistence of high inflation, having long expressed the belief that it would prove temporary. The inflation spike has broadened to areas beyond those that were affected by supply shortages – to apartment rents, for example – which suggests it could endure even after goods and parts flow more freely.

Copyright 2022 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed without permission.

Also: May condo unit owners request a list of fellow owners who are delinquent? And what are the rules for replacing carpets with hardwood floors?

NAPLES, Fla. – Question: I am running for the board of my condominium association. I heard that, if elected, I have to take a class about my responsibilities as a board member. Is this accurate? – J.W., Naples

Answer: The Condominium Act (Chapter 718, Florida Statutes), the Cooperative Act (Chapter 719, Florida Statutes), and the Homeowners Association Act (Chapter 720, Florida Statutes) all require that, within 90 days after being elected or appointed to the board of directors, each new director shall certify in writing to the secretary of the association that he or she has read the association’s bylaws, articles of incorporation, declaration of condominium (condominiums), declaration of covenants (HOAs), proprietary lease (cooperatives), and the association’s rules, regulations, and policies. Further, he or she will work to uphold the documents and policies to the best of his or her ability and that he or she will faithfully discharge his or her fiduciary duty to the association’s members.

I strongly recommend that all board members review their governing documents so that they are familiar with the board’s and the owners’ rights and responsibilities. That being said, after reviewing these documents, most board members are still left with questions on how to properly carry out their responsibilities.

Chapters 718, 719, and 720, Florida Statutes provide that, in the alternative to the written certification above, newly elected or appointed board members, within 90 days of election or appointment, may submit a certificate of having satisfactorily completed the educational curriculum administered by a division-approved education provider within one year before or 90 days after the date of election or appointment. Further, a certificate is valid for the uninterrupted tenure of the director on the board.

If a director does not comply with the requirements within the time periods provided, he/she shall be suspended from the board until he/she complies with the requirement. The board may temporarily fill the vacancy during the period of suspension.

I do want to reiterate that although these courses are provided as an alternative to the written certification that board members have reviewed their governing documents, I still strongly encourage board members to review the governing documents for their own associations so that they are aware regarding any specific provisions that apply to their own communities.

Question: My condominium association allows for owners to replace their carpeting with hard-surface flooring like tile, marble, wood, etc., but only after obtaining approval from the board of directors. The problem is that the board does not have a consistent policy regarding hard-surface flooring installations and some requirements are different from one request to another. Do you see an issue with this? – S.B., Naples

Answer: Yes, there are definitely issues with the fact that the association does not have a consistent policy regarding hard-surface flooring installations. Without these requirements, the association will likely run into selective enforcement claims from owners if the association requires certain installation parameters for one unit but not for another. Some associations will have different parameters for hard-surface flooring installations with regard to the flooring type.

I have no issues with either one of these approaches as long as they are consistently applied from one unit to another.

In my opinion, your board needs to consult with a professional in the hard-surface flooring industry to determine the appropriate sound-deadening material that needs to be installed before the hard-surface flooring installation. Then, it needs to set a consistent policy for the association so the owners are aware of what is required if they want to install hard-surface flooring.

Because this policy is considered a rule affecting the use of a unit, the board will need to mail or email (for those who have consented to receive notices electronically) and post the notice of the board meeting at least 14 continuous days prior to the board meeting. For more information regarding hard-surface flooring policies as well as rules regarding the use of a unit, your board should consult the association’s legal counsel.

Question: I’d like to see a copy of all the owners who are delinquent in payment of assessments in my homeowner’s association. Can I ask the association to provide me access to these accounts? – M.L., Bonita Springs

Answer: Yes, you can ask the association to provide you access to these accounts. The association is required to provide access within 10 business days of receipt of your request to review these records.

Please note that access to the records does not mean that the association is required to provide you with copies free of charge or to automatically email you these records. The association can require that you review the records within 45 miles of the community or within the county in which the association is located. Usually, the records review occurs at the association clubhouse or the management company’s corporate office. You are allowed to bring a camera or a scanner to make an electronic copy of the official records. However, if you would like photocopies, then the association may charge you up to $0.25 per page.

S. Kyla Thomson, Esq., is a partner of the Law Firm Goede, DeBoest & Cross. The information provided herein is for informational purposes only and should not be construed as legal advice. The publication of this article does not create an attorney-client relationship between the reader and Goede, DeBoest & Cross, or any of our attorneys.

© 2022 Journal Media Group

Buyers worried about rising interest rates and home prices pushed new-home sales to a 10-month high in Dec.

SILVER SPRING, Md. (AP) – Sales of new single family homes in December rose to their highest level in 10 months as buyers took advantage of lower prices in anticipation of higher interest rates.

The increase put the seasonally adjusted annual sales pace to 811,000 for the month, according to the Commerce Department, an 11.9% increase over November’s figure, which was revised down to 725,000 from 744,000.

The median price of a new home, the point where half the homes sold for more and half for less, fell to $377,700 last month, its lowest level since June (down from $416,100 in November), but it’s about 4% higher than December 2020.The average sales price was $457,300.

In the months following the pandemic outbreak in the spring of 2020, new home sales exploded as people sought out more space. Including December’s big increase, sales for 2021 fell 14% from the red-hot 2020.

New home sales rose in three of the four regions, with the Midwest leading the way with a whopping 56.4% increase. Sales rose 14.9% in the South and nominally in the West, offsetting a 15.6% decline in the Northeast.

Historically low mortgage rates have fed the demand for housing, even though rates are expected to rise as the Federal Reserve dials back its bond purchases to tamp down surging inflation. Mortgage buyer Freddie Mac says the average rate on long-term, 30-year mortgages in the U.S. has risen from just over 3% a month ago to 3.5% last week, the highest level since March 2020.

Just as the Fed is expected to announce its first rate hike since the pandemic began, the Mortgage Bankers Association reported Wednesday that for the week ending Jan. 21, mortgage applications fell 7.1% from the previous week with an even bigger downturn – about 13% – in the number of people seeking to refinance existing mortgages.

The National Association of Realtors reported last week that sales of previously occupied homes fell in December for the first time in four months as many would-be buyers bailed, frustrated by the lowest level of available houses in more than two decades.

Median prices for existing homes have also risen at a furious pace, jumping nearly 16% from a year ago to $358,000. Homes sold in an average of 19 days and the number of houses for sale slumped to just 910,000 in December, the fewest since records began in 1999. The lack of previously occupied homes has put additional pressure on homebuilders, who have amassed huge backlogs of orders to fill in 2022.

Copyright 2022 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed without permission.

Gathering leads isn’t the goal. It’s a step. To effectively convert leads into customers, agents should know how to identify the likeliest candidates.

NEW YORK – Real estate professionals sort through various sources to find leads, such as a Facebook or Instagram presence, hosting open houses, working with larger ad websites and through their circle of influence.

However, many agents become experts at gathering leads but not so great at converting them into customers, which should be their top priority.

Tom Toole, founder and team leader at Tom Toole Sales Group, says his team operates from a top prospect list that identifies people close to buying or selling a home, those who are ready to become clients, and the most promising prospects in the CRM (customer relationship management).

Agents should forecast where their next transaction will likely come from by building a basic spreadsheet that tracks such things as client names, timeframes in which they hope to buy or sell, the geographic location where they’re buying or selling, the price point, the agent’s potential commission upon closing, and the date of last contact with the client. Agents should set a goal to speak to each of these potential customers about every 7 to 10 days.

Next, agents should give each lead a score using a 1 to 10 scale, where 1 means they aren’t likely to convert and 10 means they’re very likely to make a real estate decision soon.

This field of prospects should be nurtured to ensure that when one drops out, several others remain. To flesh out this rated list, agents should ask questions to understand the situation surrounding their prospects and how motivated they are to transact, and then prioritize their activities accordingly.

Finally, agents should focus their time and attention on the high-scoring prospects first, such as by prioritizing weekend and evening appointments for them.

Source: Inman (01/24/22) Toole, Tom

© Copyright 2022 INFORMATION INC., Bethesda, MD (301) 215-4688

Saying it wants to save consumers billions, the consumer bureau issued a request for Americans’ junk-fee stories – iffy charges added to any financial product.

WASHINGTON, D.C. – The U.S. Consumer Financial Protection Bureau (CFPB) launched an initiative to, it says, “save households billions of dollars a year by reducing exploitative junk fees charged by banks and financial companies.”

“Many financial institutions obscure the true price of their services by luring customers with enticing offers and then charging excessive junk fees,” says CFPB Director Rohit Chopra. “By promoting competition and ridding the market of illegal practices, we hope to save Americans billions.”

According to CFPB, more companies are charging unexpected fees as a way to remain competitive. They advertise an interest rate or charge that seems competitive compared to other firms, only to add a fee later that consumers often don’t understand. As an example, CFPB notes some line-item fees such as “paperwork processing,” “service fees” and “resort fees” often fall into the junk-fee category.

It specifically called out bank fees, saying that in 2019, major credit card companies charged over $14 billion in punitive late fees, and bank revenue from overdraft and non-sufficient funds fees surpassed $15 billion.

For now, CFPB has asked consumers to send in their junk-fee stories, including any insight into mortgage fees. Its list also includes fees associated with bank, credit union, prepaid or credit card account, loans or payment transfers. It identifies junk fees as ones that:

• Were unexpected
• That seemed too high for the purported service
• Where it’s unclear why they were charged

CFPB says it also wants to hear from small business owners, non-profit organizations, legal aid attorneys, academics and researchers, state and local government officials, and financial institutions, including small banks and credit unions.

Once CFPB has the stories in hand, it says it will “craft rules, issue industry guidance, and focus supervision and enforcement resources” to “strengthen competition in consumer finance (and) reduce these kinds of junk fees.”

© 2022 Florida Realtors®

Home prices continue to rise and mortgage rates appear ready to follow. Some skittish buyers are jumping into the market now, fearful what could happen if they wait.

NEW YORK – After registering month-to-month gains of over 1% starting in September 2020 and reaching a high of 2% in July 2021, the increase in U.S. home prices appeared to slow down in the fall. But a rapid home value appreciation has reignited just ahead of the spring homebuying season, jumping from 1.2% in November to 1.4% in December, according to a new Zillow report.

Experts are blaming the return of big price gains on historically low levels of housing stock and a rush by buyers to beat a rise in mortgage rates.

Buyers in December had 19.5% fewer homes to choose from than a year earlier when inventory was already at a record low. And compared with December 2019, they found 40.5% fewer homes available for sale.

“It is a hint to us that perhaps the spring homebuying season is coming early,” says Alexandra Lee, an economist at Zillow. “We would usually expect the winter months to still be relatively slow. But with this re-acceleration and understanding just how hot the market has remained over the last year, the housing market is starting to heat up earlier than usual.”

Total housing inventory at the end of December amounted to 910,000 units, down 18% from November and down 14.2% from one year earlier (1.06 million), according to the National Association of Realtors.

The rise of the omicron variant of the coronavirus could be partially responsible, pushing homeowners to wait for infection rates to subside before listing, experts say. The uncertainty around long-term working arrangements could also play a part in keeping inventory low.

Home prices keep rising

A December survey conducted by Zillow found that 52% of workers reported that their employer had announced post-pandemic work arrangements – a lower share than was reported in June 2021. That is likely due to the rise of new coronavirus variants causing employers to push back in-person start dates.

The median existing-home price for all housing types in December reached $358,000, up 16% from December 2020 ($309,200), as prices rose in each region. This marks 118 straight months of year-over-year increases, the longest-running streak on record, according to the National Association of Realtors.

In 2021, existing-home sales totaled 6.12 million – an increase of 8.5% from the prior year and the highest annual level since 2006.

Properties typically remained on the market for 19 days in December, fewer than the 21 days in December 2020. Seventy-nine percent of homes sold in December remained on the market for less than a month.

Lawrence Yun, the National Association of Realtor’s chief economist, believes the expectation of rising mortgage rates could be forcing buyers to jump into action sooner than usual.

Mortgage rates hit their highest levels since March 2020. The 30-year-fixed rate reached 3.56% for this week, according to Freddie Mac.

“One can say that there are some people who want to jump in before the interest rates rise even more strongly,” he says. “We will get more inventory throughout the year but some of the buyers will be priced out because of higher interest rates.”

Copyright 2022, USATODAY.com, USA TODAY

It’s not too late for these owners to save by refinancing – but if not, they also won’t feel locked into their homes, afraid to sell because “my interest rate will go up if I do.”

NEW YORK – The number of owners who can save on their monthly mortgage payment by refinancing is down by more than half from the start of this year to 5.9 million, according to Black Knight data. Black Knight considers refinance candidates as 30-year mortgage holders who have a maximum 80% loan-to-value ratio, a credit score of 720 or higher, and a likelihood of reducing their current first lien by at least 0.75%.

The average 30-year fixed-rate mortgage has climbed about 50 basis points in the first weeks of the year. Still, even with recent mortgage rate increases aside, many of those 5.9 million borrowers could still see savings of $275 a month per borrower, according to Black Knight. More than 1 million of them could save at least $400 a month, and 661,000 borrowers could trim $500 or more from their monthly mortgage at current rates.

The remaining borrowers may have missed the opportunity to save by not refinancing when mortgage rates were below 3%. The number of refinance candidates has dropped significantly from about 11 million at the start of the year and is down by about 20 million in late 2020.

Mortgage applications to refinance a home are down by half from a year ago, the Mortgage Bankers Association reports. Nearly 18 million homeowners have refinanced over the last two years.

While many homeowners over the last two years have taken advantage to lower their mortgage payments, they’ve also quickly accumulated equity, in record amounts. A sharp increase in home prices has meant that, in the last year, homeowners have gained an average of $50,200 in equity, according to data from the National Association of Realtors®.

Still, rising mortgage rates can impact the inventory of for-sale homes. Owners with a historically low rate would have to take out a new mortgage if they decide to upgrade in a higher interest rate environment.

As a result, more homeowners could decide their best option is stay put – but that problem wouldn’t apply to the 5.9 million who never refinanced when the timing was optimal to do so.

Source: “More than 5 Million Borrowers Just Missed Their Chance to Save on a Mortgage Refinance,” CNBC (Jan. 21, 2022)

© Copyright 2022 INFORMATION INC., Bethesda, MD (301) 215-4688

A 4Q 2021 NAR commercial report finds metros from Jacksonville to Miami and Naples with “the strongest overall commercial real estate market conditions.”

NEW YORK – Out of 390 commercial markets studies in the U.S., Florida is home to nine of the top 15 areas with strong commercial real estate conditions, according to the fourth-quarter 2021 Commercial Real Estate Metro Market Reports from the National Association of Realtors® (NAR).”

The report looks at a range of commercial markets, including multifamily, office, industrial, retail and hotel property, and creates individual reports by state, with the Florida report also available online.

Top 15 U.S. commercial metros in 4Q 2021 (Population of at least 250,000)

• Charleston, South Carolina
• Durham, North Carolina
• Fort Myers, Florida
• Jacksonville, Florida
• Kennewick-Richland, Washington
• Miami, Florida
• Naples, Florida
• Nashville, Tennessee
• North Point-Bradenton-Sarasota, Florida
• Orlando, Florida
• Olympia, Washington
• Palm Beach, Florida
• Port St. Lucie, Florida
• Seattle, Washington
• Tampa, Florida

The reports include indicators of an area’s economic and demographic conditions (GDP growth, employment, unemployment, wage growth, domestic migration, population growth). They also include commercial market indicators on net absorption, vacancy rates, rent, deliveries, ongoing construction, inventory, total sales volume, transaction price and cap rates based on CoStar market data.

NAR says it created the Commercial Real Estate Market Conditions Index as a comparison tool to gauge one area’s overall conditions relative to national conditions.

The index is calculated as a ratio of the number of variables where one metro area’s condition is stronger compared to other metro areas across the nation. An index above 50 means market conditions are stronger than they are nationally, and an index below 50 means local market conditions are weaker.

© 2022 Florida Realtors®

Consumers’ current attitudes rose even as future expectations fell. Still, the gauge of people planning to buy a home within the next six months also went up.

BOSTON – After three consecutive months of increase, the Conference Board Consumer Confidence Index declined a bit in January.

The Index now stands at 113.8, down from 115.2 in December. The Present Situation Index – based on consumers’ assessment of current business and labor market conditions – improved to 148.2 from 144.8 last month. The Expectations Index – based on consumers’ short-term outlook for income, business and labor market conditions – declined to 90.8 from 95.4.

“Consumer confidence moderated in January, following gains in the final three months of 2021,” says Lynn Franco, senior director of economic indicators at The Conference Board. “The Present Situation Index improved, suggesting the economy entered the new year on solid footing. However, expectations about short-term growth prospects weakened, pointing to a likely moderation in growth during the first quarter of 2022.”

While future optimism faded, however, it didn’t seem to impact consumers’ desire for expensive items, including homes.

“The proportion of consumers planning to purchase homes, automobiles and major appliances over the next six months all increased,” says Franco. “Meanwhile, concerns about inflation declined for the second straight month but remain elevated after hitting a 13-year high in November 2021.”

According to Franco, pandemic concerns amid the omicron surge have also had an impact.

“Looking ahead, both confidence and consumer spending may continue to be challenged by rising prices and the ongoing pandemic,” Franco says.

Present situation

·      21.1% of consumers said business conditions were “good,” up from 19.4%

·      25.6% of consumers said business conditions were “bad,” down from 27.1%

·      55.1% of consumers said jobs were “plentiful,” down from 55.9%; still a historically strong reading

·      11.3% of consumers said jobs are “hard to get,” down from 11.7%

Expectations six months from now

·      23.8% of consumers expect business conditions to improve, down from 25.4%

·      19.0% expect business conditions to worsen, up from 18.6%

·      22.7% of consumers expect more jobs to be available in the months ahead, down from 24.2%

·      15.7% anticipate fewer jobs, up from 14.7%

·      16.7% of consumers expect their incomes to increase, down from 17.5%

·      12.4% expect their incomes to decrease, up from 11.2%

 Toluna conducts the monthly survey, based on an online sample, for The Conference Board. The cutoff date for the preliminary results was Jan. 19.

© 2022 Florida Realtors®

Nationwide, home prices rose 18.8% in Nov., and the S&P CoreLogic Case-Shiller index finds Tampa (up 29%) and Miami (up 26.6%) in 2 of the top 3 spots.

NEW YORK – One of the most-watched indicators of home prices, the S&P Dow Jones Indices (S&P DJI), found a slight slowdown in the national rate of home price increases – but less so in Florida. Two state metro areas, Tampa and Miami, ranked second and third for year-to-year price increases, with Phoenix topping the list.

“For the past several months, home prices have been rising at a very high – but decelerating – rate,” says Craig J. Lazzara, Managing Director at S&P DJI. “That trend continued in November 2021.”

Overall, the National Composite Index rose 18.8% year-to-year, but that rate is less than it was the month before (19.0%).

“Despite this deceleration, it’s important to remember that November’s 18.8% gain was the sixth-highest reading in the 34 years covered by our data,” says Lazzara. The top five months for price growth were the ones immediately preceding November.

Phoenix, Tampa and Miami reported the highest year-over-year gains among the 20-city index in November. Phoenix led the way with a 32.2% year-over-year price increase, followed by Tampa with a 29.0% increase and Miami with a 26.6% increase.

“Tampa and Miami continued in second and third place in November, narrowly edging out Las Vegas, Dallas and San Diego,” says Lazzara. “Prices were strongest in the South and Southeast (both up 25.0%), but every region continued to log impressive gains.”

Prices in 19 cities are at all-time highs, and Phoenix’s increase led all cities for the 30th consecutive month.

“We have previously suggested that the strength in the U.S. housing market is being driven in part by a change in locational preferences as households react to the COVID pandemic,” says Lazzara, but it’s too soon to gauge whether it’s a temporary change or one that might have occurred naturally over the next several years.

“In the short term, meanwhile, we should soon begin to see the impact of increasing mortgage rates on home prices,” Lazzara says.

© 2022 Florida Realtors®