Honest marketing proposals get listings

5 basic expectations sellers and agents should agree on

BY ALISHA ALWAY BRAATZ, FRIDAY, NOVEMBER 16, 2012.

Inman News®

Agreement image via Shutterstock.

Journey back with me to those first few months after becoming a bona fide real estate agent: You had a desk full of brand-new file folders, a shiny name badge, and a go-get'em attitude that just wouldn't quit!

If you were anything like me, you'd also invested in a full-grain leather briefcase and some hoity-toity shoes, too. Fake it till you make it, right? Right!

Until the new excitement wears off and you find yourself shrinking in the back row of the office meeting and thinking please don't call on me!

How to buy a home like it's a car

Questions to ask before signing on the bottom line

BY ALISHA ALWAY BRAATZ, WEDNESDAY, AUGUST 22, 2012 Inman News®

Gary Whitton / Shutterstock.com

Everyone who knows me knows how much I love cars. I told my roommates in college that I would be driving a '69 Camaro by the time I was 30 -- a really hot one with a great sound system.

I bettered that. I married a man with classic cars. Besides the fact that he's my best friend, I must say, it was a great car decision. Why? I've got the best of both worlds.

During the work week I drive a very conservative four-door sedan. And then, in my free time I do burn-outs in the '63 Impala.

This is a very good compromise because if something goes wrong with my muscle car I must choose one of the three following options: call Husband, call Dad, call AAA. I don't even know where the oil pan is, and I don't care to find out.

Leading Houston brokerage signs with Better Homes and Gardens Real Estate | Gary Greene Realtors is brand's fifth Texas affiliate

BY INMAN NEWS, TUESDAY, JUNE 26, 2012 Inman News®

Houston skyline image via Shutterstock.

Editor's note: A previous version of this story contained erroneous information about the number of brokerages that affiliated with Better Homes and Gardens Real Estate in 2009, 2010, and 2011. The story has also been updated to correct that Sherry Chris joined Realogy Corp. in 2006 as COO of Coldwell Banker Real Estate LLC, not CEO.

A leading Houston brokerage is dropping its affiliation with Prudential Real Estate Services and will operate as a Better Homes and Gardens Real Estate franchisee.

With more than 850 agents operating out of 20 offices, Gary Greene Realtors was among the top 60 U.S. brokerages last year, racking up $1.58 billion in sales volume and 6,509 transaction sides, according to data compiled by Real Trends. Since 2007, the company claims to have closed more transactions than any other brokerage in the Houston market.

Real estate recovery is a long way from market bottom Commentary: Don't confuse housing improvement with strength

BY LOU BARNES, FRIDAY, APRIL 13, 2012 Inman News®

Floating house image via Shutterstock.

Another week in these odd times, public policy and theoretical economics completely dominating markets.

Federal Reserve leadership -- Vice Chairwoman Janet Yellen and New York Fed President William C. Dudley -- gave same-day speeches that clarified the following:

1. The do-nothing, hawkish regional-Fed presidents' club is alone in its treehouse. 2. If anything, the Fed has not done enough since 2009. 3. The Fed's commitment to ease through 2014 is more likely to be longer than shorter.

The Fed takes cover under its congressional mandate, saying "unemployment is too high," which is true. But the greatest danger lies overseas: Industrial production in the European Union had the worst month in two years; China's economy is slowing faster than expected; and Japan is ... who knows. The Fed cannot risk a U.S. stall now.

Bonds already had the hint: The March spurt in rates fizzled out last week. Stocks got the "more easing" message, too: a midweek rally pulling the stock market out of an incipient trench.

There is some perversity in this stock market response. The Fed would be this easy only if badly worried about domestic and global risks, and a risky economy is unfriendly to stocks. Yet stocks still responded happily to the Fed's promise of action. It's nice to know somebody still has faith in the Fed.

New domestic data tentatively confirmed the weakness in March payrolls. Weekly claims for unemployment insurance have risen from a sustained stretch -- sub-350,000 to 367,000, and then to 380,000 -- in the last two weeks. In the short term that's not big, but it's also not good.

The National Federation of Independent Business' small-business survey in March unwound months of gains, following the pattern of the 2011 spring swoon.

Housing. Kick any Wall Streeter today, and he'll say, "Housing has bottomed. Hit me for something else."

What would the turn look like, if really under way? My own backyard has turned in just the last 60 days.

The Front Range of Colorado never had a housing bubble: We danced with the "Technology Fairy" from 1999-2001, and afterward built too many houses, and made too many stupid loans, but all of that was over by 2004 when we led the nation in foreclosures.

That was a long time ago. We have the sixth-lowest level of mortgage delinquency of any state in the U.S. Our rental vacancy rate spiked to 12 percent, now below 5 percent for the first time since 1999 (it's close to zero in Boulder, Colo.).

Rents are moving up quickly. State population in the last dozen years has risen from 4.1 million to 5 million, and we're short of land to build (you could drop Rhode Island in here and never find it, but we are maniacs for "open space" reservations). Building permits have been off 85 percent since 2007. Unemployment is down to 7 percent-ish. Our listed inventory of homes has evaporated by 40 percent since last year. Buyers have lost their fear; the only problem is in finding something to show them.

Does your local market look like that? Mr. Housing has bottomed? Eh?

As perfect as our setup, are prices rising? In rich, government- and tech-payrolled, land-starved Boulder County, Colo., yes. At last. Enough to unlock sellers? Um … later.

Two philosophers have remarked incisively on speed. Stephen Hawking: "Time is what keeps everything from happening at once."

Then, Satchel Paige's description of "Cool Papa" Bell: "He was so fast he could flip off the light switch and be in bed before the room got dark. One time he hit a line drive right past my ear. I turned around and saw the ball hit his ass just as he slid into second."

Housing is the polar opposite of Cool Papa Bell.

Here in Colorado, the 1980s were tougher than this patch, and in Boulder we had all the same, lovely conditions as above by the spring of 1990, and the first, timid price increases in nine years.

It then took 18 months for prices to begin to rise on the far side of town. "Bottom" is one thing, "better" is another, and "recovery" something else entirely.

The Mortgage Guaranty Insurance Corp.'s (MGIC) newest guide to its underwriters described 73 metro areas this way: 26 of them "stable," 25 "soft," 22 "weak", and not a single one "strong."

Even if bottoming, and if surviving the release of held-back foreclosures, it will be a long time before recovery takes the brake off the economy, and puts heat on the Fed.

Source: National Federal of Independent Business (NFIB).

Agents: Are you an IRS audit target?

Real Estate Tax Talk

BY STEPHEN FISHMAN, FRIDAY, MARCH 30, 2012.

Inman News®

Every year, the Internal Revenue Service releases detailed statistics about who got audited the previous year.

The stats for 2011, covering 2010 returns — have recently come out and they paint an unpleasant picture for many real estate professionals — particularly the successful ones.

The percentage of business and nonbusiness returns that got audited in 2011 is shown in the following chart:

IRS Audit Rates (2010)

	Audit Rate
Sole proprietors
Income under $25,000	1.3%
$25,000 to $100,000	2.9%
$100,000 to $200,000	4.3%
$200,000 and more	3.8%
Partnerships	0.4%
S corporations	0.4%
C corporations
Assets under $250,000	0.9%
$250,000 to $1 million	1.6%
$1 million to $5 million	1.9%
$5 million to $10 million	2.6%
Nonbusiness Returns
Under $25,000	1.2%
$25,000 to $50,000	0.7%
$50,000 to $75,000	0.8%
$75,000 to $100,000	0.8%
$100,000 to $200,000	1.0%
$200,000 to $500,000	2.7%
$500,000 to $1 million	5.4%

This chart shows that in 2010, 4.3 percent of sole proprietors earning $100,000 to $200,000 were audited. Not even corporations with assets worth between $5 million and $10 million were audited as often.

Moreover, only 1 percent of taxpayers who did not file a Schedule C form, but earned $100,000 to $200,000, were audited. Thus, self-employed taxpayers were four times as likely to be audited as employees earning the same amount.

In fact, employees earning as much as $500,000 were less likely to be audited than self-employed taxpayers earning as little as $100,000.

These statistics undoubtedly reflect the IRS’s belief that sole proprietors habitually underreport their income, take deductions to which they are not entitled, or otherwise cheat on their taxes.

Employees have less opportunity to cheat because their income tax is withheld by their employers and income reported directly to the IRS by them.

Unfortunately, most real estate professionals fall into the high-audit category: They are self-employed businesspeople who file Schedule C. The lesson these numbers teach is that you need to take the IRS seriously.

This doesn’t mean that you shouldn’t take all the deductions you’re legally entitled to take, but you should understand the rules and be able to back up the deductions you do take with proper records.

If you’re really worried about getting audited, think about forming a business entity to operate your real estate business. This could be a pass-through entity, such as a limited liability company taxed as a partnership or an S corporation.

Such entities don’t pay taxes themselves, but do file returns with the IRS. Both have extremely low audit rates: only 0.4 percent of such entities were audited in 2011. Regular C corporations also have relatively low audit rates.

Real estate professionals optimistic about home values

From AOL Real Estate

BY INMAN NEWS, MONDAY, APRIL 2, 2012.

Editor's note: The following item is republished with permission of AOL Real Estate. See the original article: Home Value Survey Sees Sharp Rise in Realtor Optimism. By Teke Wiggan

With signs that a real estate recovery may be kicking into gear, a new survey shows a sharp increase in optimism among real estate professionals about the direction of home values.

A survey conducted by home valuation website HomeGain found that the number of real estate professionals who expect home values to increase has more than doubled over just one quarter. Thirty-seven percent of respondents surveyed so far in 2012 said they anticipate that home values will rise in the next six months, up from 15 percent in the fourth quarter of 2011.

"The trend has been staying the same or decreasing. And here it flipped for the first time," HomeGain General Manager Louis Cammarosano told AOL Real Estate.

He added that since HomeGain began administering the survey in the second quarter of 2009, the percentage of respondents who have expressed a bullish outlook on the market has never risen above 25 percent, and, for much of the time, has sputtered around 15 percent.

The spike in optimism about home values follows recent reports that corroborate the view that the housing market is stabilizing. Home sales are trending upward and homebuilders are reportedly more optimistic than they've been in many years. Home prices continue to fall, but a number of industry observers say that price direction isn't necessarily the most important bellwether of a recovery.

Budge Huskey, president and chief operating officer of Coldwell Banker Real Estate, says he sees confidence among real estate agents that he hasn't observed since the housing meltdown. "What is consistently being represented out there today is that there is a sense of optimism in the real estate business that has not been seen in the last five to six years," he told AOL Real Estate.

While cautioning that real estate agents "tend to always be optimists," Huskey stressed that "this time it's based on what we believe to be some clear trends."

Prominent among the hopeful signs, Huskey says, is the state of the housing inventory, which had fallen to 2.3 million homes, or approximately a six-month supply of for-sale homes, as of January. That's the lowest level of inventory since March 2005, according to the National Association of Realtors, which released the statistic.

Meanwhile, total home sales have risen by 13 percent in the last six months, according to Capital Economics. And while construction of new homes dropped marginally in February, they still were at the second-highest level since October 2008, the National Association of Homebuilders says.

A last sign, much ballyhooed by industry optimists, is the state of homebuilders' confidence: The National Association of Home Builders sentiment indexreached 28 in February and remained at that level in March. Not since 2007 have homebuilders expressed such confidence in the housing industry.

Despite sprouting green shoots in the market, home prices continue to slide, and even when they do eventually trend upward, many economists say, the increase will be gradual.

That fact has led some industry observers to call for a rethinking of what actually constitutes a housing recovery, and to avoid treating price movement as the all-important indicator of a recover.

Capital Economics, for instance, recently revealed that even though prices declined last year (around 4 percent according to various estimates) and mortgage rates are finally ticking up, the economic analysis firm still believes that the real estate market is making inroads.

But CoreLogic senior economist Sam Khater advises against buying too much into the hype. "I would be cautious about folks getting too optimistic," he says.

The 1.6 million homes that are in a state of foreclosure are about to hit the market at a faster pace in the wake of an agreement reached between the government and major mortgage servicers over acceptable foreclosure practices, Khater says. That'll drive down prices, he says, as banks begin to push through foreclosures that they previously halted during negotiations of the $25 billion settlement reached last month.

"There's going to be a really long tail to this," he cautions. Still, Khater says that rising sales and the fact that fewer homes are flowing into the "shadow inventory" -- homes in a state of foreclosure -- are positive signs for the real estate market.

Huskey says the next healthy housing era will be a more "traditional market" that will stand in stark contrast to what he calls the "steroid years," when prices rose at an unsustainable pace.

As CNNMoney recently put it, "If you're waiting for home prices to go up, then you're missing signs the troubled housing market has finally turned around."

Real estate professionals also stress that a housing recovery should not be judged from a bird's-eye view, since market conditions vary dramatically from state to state and city to city. In states walloped by the real estate market collapse, real estate agents are significantly more optimistic that home prices will rise in the next six months.

Eighty percent of Arizona real estate agents and homeowners, 75 percent of Nevada agents and homeowners and 51 percent of Florida agents and homeowners told HomeGain that they believe home values will rise in the next six months. The optimism in Florida dovetails with dramatic price gains recently reported by Realtor.com.

The online marketplace reports that out of the 10 metropolitan areas that saw the highest price increases in their database in February of 2012, seven were in Florida. Miami median home prices increased by 26.19 percent, the listing service says.

Meanwhile, in states that weathered the housing crisis relatively well, a much higher percentage of real estate agents and homeowners believe that prices will drop. In Connecticut, 60 percent of agents surveyed said that they thought prices would continue to fall.

Sales of second homes soar to highest level since 2005

Investment-home sales, nearly half in cash, jump 64.5%

BY INMAN NEWS, FRIDAY, MARCH 30, 2012.

Inman News®

Sales of second homes, which include vacation and investment homes, soared in 2011 to their highest market share since the height of the housing boom, according to an annual report from the National Association of Realtors.

NAR’s 2012 Investment and Vacation Home Buyers Survey includes 2,241 responses from U.S. households who bought either new or existing homes in 2011. The association conducted the survey in March 2012 and controlled for age and income.

Investors lead the surge in second-home sales. Sales of investment homes climbed 64.5 percent in 2011, to 1.23 million, from 749,000 the year before, the report said. At the same time, sales of vacation homes increased 7 percent to 502,000, compared to 469,000 in 2010.

Combined, second-home sales accounted for 38 percent of all home sales last year (27 percent investment homes, 11 percent vacation homes), up from 27 percent in 2010 (17 percent investment homes, 10 percent vacation homes). That's the highest share since 2005, when second-home sales made up 40 percent of sales overall.

Meanwhile, owner-occupied home sales fell 15.5 percent year over year in 2011, to 2.78 million, the report said.

"During the past year investors have been swooping into the market to take advantage of bargain home prices," said Lawrence Yun, NAR's chief economist, in a statement.

"Rising rental income easily beat cash sitting in banks as an added inducement. In addition, 41 percent of investment buyers purchased more than one property."

Second-home buyers weren't hesitant to use cash, Yun added. About four out of 10 vacation-home buyers paid in cash last year, while roughly half of investment buyers did. Of those who did finance their purchase, the median down payment was 27 percent, the report said.

Investors paid somewhat more for their purchases in 2011 than in 2010, though vacation-home buyers paid less. The median price for an investment home last year rose 6.4 percent to $100,000 last year, while the median price for a vacation home fell 19.1 percent to $121,300. Distressed properties accounted for half of investment-home sales, 39 percent of vacation-home sales, and 29 percent of primary-home sales.

Primary-home buyers paid a median $167,700 for their purchase in 2011, down 5.1 percent from the year before.

Investors and vacation-home buyers tended to be older and more affluent than primary-home buyers. While the latter had a median age of 39 and earned a median household income of $72,400, the typical investment-home buyer was 50 years old and earned a median household income of $86,100 and the typical vacation-home buyer was also 50 years old with a median income of $88,600.

Investors planned to hold the property for a median five years and generally bought a home that was a median 25 miles from their primary residence. In an indication of flipping activity, 5 percent of homes purchased by investment buyers in 2011 have been resold, up from 2 percent in 2010, the report said. Investors typically bought in suburban areas.

Vacation-home buyers planned to hold the property for a median 10 years and purchased a property that was a median 305 miles away. Vacation-home buyers typically bought in rural or suburban areas.

As in the 2010 survey, the South accounted for the biggest share of second home purchases in 2011, followed by the West.

Region of Home Purchase	Primary Residences	Vacation Properties	Investment Properties
Northeast	20%	15%	15%
Midwest	23%	12%	17%
South	35%	42%	44%
West	22%	30%	23%
Outside the U.S.	0%	1%	0%

Source: NAR

Also as in the 2010 survey, second-home buyers, especially investors, were slightly more ethnically diverse than primary-home buyers. Among primary-home buyers, 82 percent were white, 8 percent were Asian, 7 percent were black, 5 percent were Hispanic, and 1 percent were "other."

Among buyers of investment properties, 76 percent were white, 13 percent were Asian, 8 percent were black, 6 percent were Hispanic, and 1 percent were "other."

Roughly half of second-home buyers purchased through a real estate agent or broker. Second-home buyers were somewhat more likely than primary-home buyers to buy through a foreclosure or trustee sale or directly from an owner the buyer knew.

Purchase Method	Primary Residences	Vacation Properties	Investment Properties
Through a real estate agent or broker	69%	55%	48%
Foreclosure or trustee sale	5%	14%	17%
Directly from owner whom the buyer knew	9%	16%	17%
Directly from owner whom the buyer didn’t know	5%	8%	7%
Directly from builder or builder’s agent	9%	3%	5%
Other	3%	5%	6%

Source: NAR

Although the report released today is based on responses from U.S. addresses, according to a separate, monthly survey (the Realtors Confidence Index), international purchases accounted for about 3 percent of transactions in 2011, "which would be in addition to today’s findings," NAR spokesman Walter Molony told Inman News.