Why the new NAR data is a great sign
Plus, three common legal issues to avoid
Hone in on what you love
People always ask us to name the qualities that make a successful agent. We’ve come to learn that no two agents are the same. We can try to model ourselves after the biggest and best names in our business, but we have to remember that everyone has their own unique perspective and enters the industry for a variety of reasons.
When we meet new agents, we tell them to think about what works for them. Some people want to work with families. Some agents want to network with developers, while others want to focus only on selling homes. And some people want to chase every income angle that our industry has to offer.
We tell everyone – if you really want to be successful, find your niche and play to your strengths.
This is not a one-size-fits-all industry. You have to find your passion and chase it. Once you do that, all your success grows exponentially. It’s unreal what you can accomplish when you hone in on what you really love in this industry.
Now before we get out there, let’s all hone in on a brand-new edition of The Blueprint!
- James and David
Pending home sales surged in January
NAR's monthly index for January showed an 8.1% jump in pending home sales since December. This is the second consecutive month in which pending home sales have increased, and it marks the highest jump in sales since June 2020.
Here are the report's key takeaways:
All four U.S. regions had monthly gains in pending home sales, while the number of transactions dropped YoY.
The West region led the pack with a 10.1% gain, while having the largest drop (29.3%) in pending home sales YoY.
NAR expects the economy to continue improving over the next two years, with the 30-year fixed mortgage rate dropping to an average of 6.1% in 2023 and 5.4% in 2024.
This is a headline that matters. For us, the NAR has the most accurate data when it comes to our industry. This report shows that buyers and sellers are more comfortable with the economic climate and understand that we aren’t headed anywhere near the 2008 recession. Use this info as motivation to remind yourself that there are opportunities out there to make money. Don't be deterred by the "what ifs" about the future.
December saw slower home price growth
The latest S&P CoreLogic Case-Shiller Index showed home price growth continued to fall in December, marking the sixth consecutive month of price declines for 2022. Home price growth fell in all 20 cities surveyed, with a median decline of 1.1%. This is due to high mortgage rates and lower buyer demand.
The highest home price appreciation was in the Southeast, with Miami, Tampa, and Atlanta reporting the greatest price gains. San Francisco and Seattle posted the sharpest declines in price growth.
As home price growth slows, use this news and reach out to your buyers. Let them know that prices are cooling and deals can happen. Be a major expert on your local market, know which homes were listed and then pulled off the market, and re-engage those sellers and their teams. We are here to create opportunities, and this is one that agents can definitely take advantage of right now.
Rent price growth slows
January saw single-digit rent growth for the sixth consecutive month. Rents for 0-2 bedroom properties increased 2.9% YoY, with larger rental units reporting lower growth rates than studios. Less expensive markets saw faster price growth and lower vacancy rates, raising affordability concerns.
Here are the specifics:
The median rent continues to drop, down by $3 from last month and down $122 from its peak
The median rent for 1-bedroom units was $1,609, down by $11 compared to last month and down $70 from the peak.
The median rent for studio units was $1,417, down by $15 compared to last month and down $56 from the peak.
Great! As rental prices decline, potential first-time homebuyers will be able to save more. We're here for as many people to purchase homes as possible, and although some people might see a cooling rental market as a negative, we think it's great. We need more millennials to continue to save to enter the market. As the older generations sell and downsize, this is an opportunity for you to get those new homebuyers into their first home and make their dreams come true!
The news that just missed the cut
This $75M Arizona mansion will have crazy amenities
Amazon to let employees use stock to buy homes
Millennial agents turned this old high school into 31 apartments
HBO’s “The Last of Us” could of used this home
Advice from James and David to win the day
As agents, navigating the legal aspect of real estate is an incredibly important part of the service we provide to our clients. Real estate laws and policies are complex and can vary by state, so it's important to stay up to date on local guidelines. Our friends at BAM shared some great tips on how agents can avoid costly legal mistakes.
Here are three common legal issues that all agents need to avoid:
Breach of contract. This one is common but easy to avoid! Basically, if an agent signs a contract promising to do something for a client and fails to deliver, the client can sue. Have a lawyer look over your contract language, and avoid making promises that aren't a guarantee. We always say to underpromise and overdeliver!
Misrepresentation and false advertising. This is the number one reason agents get sued, so make sure any information put out about listings is 100% truthful. As agents, we're asking clients to trust us with major financial decisions. Misrepresenting listings can damage your credibility and reputation.
Data security. We deal with clients' personal information in every transaction, so it's absolutely crucial that agents take steps to safeguard this data. Store sensitive information securely to prevent hackers and identity fraud, and if client data is compromised, let them know right away!
Want to learn more about avoiding legal issues as an agent? Click to read the article.
Just in Case
Keep the latest industry data in your back pocket with today’s mortgage rates:
Source: Rocket Mortgage
That’s it for this edition of The Blueprint!
Thanks for reading, and we’ll see you back here on Tuesday!
- James and David