Why lawsuits against agents are rising
Plus, good news about home sales
“Salty” advice we once heard
When we hit the ground running (and door-knocking) upon arriving in Los Angeles many years ago, we couldn’t wait to make our very first sale. And once we accomplished that, we couldn’t wait to close another deal… and another… and, well, you get the point!
Someone once told us that success can be like salt water – the more you drink, the thirstier you get. Now we’ve come to accept (reluctantly) that no matter how hard we work, or how much we sell, there will always be someone outworking us, outselling us, or attacking this business in a whole new way.
If you ever feel like you’re always working to keep up with this industry, trust us, we are there with you. But we think it’s good to stay thirsty for more! In fact, it’s what makes our work so exciting. There’s always more to do, learn, and discover about this business than just buying and selling.
With that, let’s all learn a little more together, and get on with today’s Blueprint!
- James and David
New homes sales trending upwards
New home sales increased in January thanks to declining mortgage rates and home prices. The HUD and U.S. Census Bureau estimated sales of newly built, single-family homes rose 7.2% month-to-month.
Here are the main takeaways:
New single-family home inventory fell in January, but remained elevated at a 7.9 month's supply (a 6-month supply is considered balanced).
The median new home sale price declined for the third-straight month to $427,500 after peaking in October at $496,800.
This is more data that proves transactions are happening! We’re not discounting inflation or interest rates fluctuating, but this just goes to show there’s confidence in the market. As agents, it’s our responsibility to be aware of the most relevant data and pass it along to our clients. This is a great tidbit to include in a cold call this week!
Lawsuits against agents on the rise
According to Zach Vollmer, Senior VP of real estate for Victor Insurance Managers, the number of lawsuits filed against real estate agents rose 9% between 2021 and 2022. He also said that it's common to see an increase in lawsuits against agents and brokers when home prices decline. Agents should expect the number of lawsuits to increase again in 2023.
Here are the most common types of lawsuits:
In a cooling market, the majority of lawsuits involve activating agents’ liability insurance policies, including nondisclosure and misrepresentation during the transaction.
In markets where foreclosures are high, more lawsuits involve wrongful evictions, property preservation, and short-sale transactions.
You hate to see this, but it happens. Obviously, various reasons lead to lawsuits, but sometimes it’s because the agent either didn’t follow the rules or didn’t know the rules. We always tell agents that it’s okay if you don’t know something – just ask somebody! Our clients value honesty, so admitting when you don’t know the answer is perfectly okay. It’s so important to remember: most of the time, we are dealing with a client’s most valuable asset – their life savings – so it’s absolutely vital that we do our jobs correctly.
The top 10 metros where homebuyers are relocating
Redfin reported that a record share of home searchers looked to relocate in January 2023. Despite the cooling market, mortgage rates remain near last fall's 20-year high, and home prices are still up from a year ago. This makes affordable metros attractive, especially for remote workers with the flexibility to relocate.
Here are the top 5 markets where homebuyers are moving, ranked by net inflow:
Miami, FL (7,200)
Sacramento, CA (6,200)
Las Vegas, NV (5,700)
Phoenix, AZ (5,500)
Tampa, FL (5,200)
And here are the top 5, ranked by net outflow:
San Francisco, CA (30,200)
Los Angeles, CA (20,100)
New York, NY (19,800)
Washington, DC (14,900)
Chicago, IL (7,900)
Relocation is still a big part of the national housing conversation and will be for a long time. This data can help you understand what buyers do and don’t want. Many buyers are getting tired of competing for space and overpaying for the amenities they can get elsewhere. Even if you don’t live in one of these markets, consider what your local market has in common with these growing markets. That might help you convince your next client to make a move.
The news that just missed the cut
🎧 Rise Above the Ranks
In this week’s Rise Above the Ranks podcast, we sat down with Grier Allen, CEO of Boomtown, for a special podcast webinar you won't want to miss! A lot of people don’t know this, but we had zero contacts when we moved here from the UK. This week, we’re sharing stories that got us to where we are today.
Here are three tips for succeeding in today’s market, as a new agent:
Get in front of fear. We’ve said it before – fear stands in the way of success and stops us from stepping outside our comfort zones. We share why agents have to get in front of fear, and how we pushed through our fears to close our first deal.
Build your pipeline. This business is all about the pipeline. The bigger your pipeline, the greater your chances of finding the right clients and closing deals. We dig into how new agents can build a strong pipeline.
Be consistent. When you reach out to clients through door-knocking, there’s going to be a lot of rejection. Remember that outreach is a numbers game, so don’t let rejection deter you from reaching out and generating leads! We share why agents have to be consistent with their outreach in order to level up their careers.
You ask, James and David answer!
We’ll be back next week with another answer to a real reader question. Submit yours here!
Just in Case
Keep the latest industry data in your back pocket with today’s mortgage rates:
Source: Rocket Mortgage
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That’s all for this edition of The Blueprint!
Thanks for reading, and we’ll see you back here Friday!
- James and David