Category: Selling a Home


What’s an iBuyer?

The real estate agent’s quick guide to everything iBuyer. And, no. iBuyers won’t be taking your job.

blue Home graphic surrounded by tech graphics

If you’ve been living under a rock, you probably haven’t heard the latest buzzword in the real estate industry: iBuyer. Even if you have heard about it, you may still have some questions or concerns.

What is an iBuyer? Is it the right choice for sellers? Are iBuyers taking over real estate agents’ jobs? I-Buy who?

No fear! We’ve gathered all the information you and other real estate agents need to know about iBuyers.

 

WHAT IS AN IBUYER, & HOW DOES IT WORK?

iBuyer services take a modern, technology-based approach to the real estate market and those looking to buy or sell homes. iBuyers use a strategy similar to companies like “We Buy Ugly Houses” by giving you the option to sell your home quickly for cash. However, unlike the “We Buy Ugly Houses” approach, iBuyers focus on homes in good condition. Typically, an iBuyer isn’t looking to flip a property or take on anything that needs extensive repairs.

To get started with iBuyer, a seller visits the website, plugs in the address of the home to be sold, and fills out a questionnaire about the property. Within 24 -48 hours, the seller receives an offer on the home. iBuyers base these offers on technology like the automated valuation model (AVM) to get the quickest “comps” for the property. From there, a seller can decide to move forward with the iBuyer and set a closing date.

 

PROS TO USING AN IBUYER

  1. Speed & Convenience

According to realtor.com data, the median home spends 58 days on the market. However, selling to an iBuyer can take only a handful of days (or longer if the seller prefers). This arrangement would be ideal for an out-of-state property inheritance or a sudden job change resulting in a quick change of living arrangements. It’s also perfect for sellers who just wish to have the control of the time frame. Let’s face it. Selling a home can be somewhat of an inconvenience. Between keeping your home tidy, having the listing agent come in to stage, and leaving at a moment’s notice for a showing, selling your home can become a hassle, and iBuyers can help decrease the time a seller has to deal with these stressors.

  1. Low Risk

When selling with an agent, there’s a certain level of uncertainty. Potential buyers could back out for different reasons, at which point the seller and listing agent are back at square one. When selling with an iBuyer, though, transactions almost never fall through. The only problem a seller may run into is getting a lower appraisal than expected, which may result in a lower offer from the iBuyer.

 

CONS TO USING AN IBUYER

  1. Lower Profits

While convenience is nice, a seller will pay for it. Typically, iBuyers charge a service or convenience fee that can range from 6-9.5% or more. In fact, one MarketWatch study of 26 home sales to iBuyers found that these sellers average around 11% less than owners who sell to a traditional buyer. Granted, traditional home sales have the 5-6% commission fee, but a recent study from Collateral Analytics found that home sellers will pay an average of between 13% and 15% more in fees to an iBuyer than they would to a traditional listing agent.

  1. Limited Availability

Currently, iBuyers are in select major markets only. And while iBuyers are expected to expand, they’re not something available to every home seller. There are some iBuyers that are even more selective than others about buying homes and the condition of each home.

 

HOW TO STAND OUT TO POTENTIAL SELLERS

  1. Show Your Value

For the home seller who’s on the fence about whether to use an iBuyer, you must show them the value of using a listing agent. If a potential seller wants to get as much value as they can for their property, remind them part of that value is the expertise you bring to the process. An iBuyer can’t put a price on the beautiful ocean view or the impeccable 19th-century hardwood floors of a home, but a listing agent can and knows how to use those unique and sometimes intangible selling points.

A great agent knows the amount of work that goes in to preparing comps, creating a marketing strategy, staging the home perfectly, communicating and negotiating with potential buyers, and so much more.  Communicating this value is key to putting yourself above an iBuyer.

  1. Educate the Seller

There is something about a listing agent who’s transparent and helpful to a seller that ensures agent security. Educating your seller and consumers will help them understand the value of each option and give them the opportunity to choose what is right for them. Not every seller will want to use an iBuyer and some won’t want to use a listing agent. Every seller is unique. However, giving consumers their options builds trust with them, and it’s another point on your scoreboard.

  1. Have the Right Tools

What good is all this information if you can’t physically show a real-world example based on their own situation. Our free FANAgent ONE app gives agents the opportunity to compare a potential seller’s net profits with a click of a button. With the iBuyer Comparison Calculator, agents can plug in the information and calculate an instant comparison to show their seller.

 

FINAL THOUGHTS

New technology and processes will always shake up any industry. iBuyers are simply one of these “shake ups.” As time passes, consumers will become more educated on the differences between iBuyers and traditional selling techniques, and not every seller will want to use an iBuyer.

Remember these words: DON’T PANIC.

iBuyers, such as Opendoor, Offerpad, Zillow Offers, and others, are expanding into major markets rather quickly. However, iBuyer transactions make up for a small percentage of real estate transactions. In 2018, 620k homes were sold to iBuyers, compared to 5.5 million homes sold without iBuyers. In fact, Rob Barber, CEO at ATTOM Data Solutions, a nationwide property database, predicts iBuyers will only account for about 15% of the real estate transactions in the long run.

 

So, don’t panic! There is still value and will always be value in a seller hiring a listing agent.

 

What’s one way you can communicate the value of using a listing agent today?


Florida Agency Network Partners with Notarize as the First Title Company to Utilize the Notarize Platform to conduct its own closings

Florida Agency Network (FAN), a conglomerate of independent title agencies, settlement service providers, and innovative technology companies within the State of Florida, announces a new partnership with Notarize to perform remote online notarization within the FAN title insurance offices. This partnership marks a historic shift in the title industry and how it handles the ever-changing needs of the consumer. FAN is the first title insurance operation in the nation that will leverage the Notarize platform to perform their own remote online notarized closings, using its own title agents and notary closers.

The partnership was announced on stage in front of 300 attendees representing 200 companies at Notarize’s conference, REWIRED, in Miami this week.

“Today, we couldn’t be more excited to announce that Florida Agency Network will be the first company to leverage what we’ve built at Notarize and perform their own closings on our platform,” said Notarize Founder and CEO Pat Kinsel. “The real estate industry is ultimately local, and we’ve heard from title companies and closing agents that they want to be able to use this technology to deliver a better closing experience. What the industry has been asking for over the last four years, today, is becoming a reality.”

Since meeting Pat Kinsel, CEO and Adam Pase, COO of Notarize, in June of 2017, Aaron M. Davis, CEO of Florida Agency Network, knew working together would evolve into a broader partnership over time. What started with achieving Florida’s first fully digital closing, expanded to a much larger-scale goal of overhauling Florida’s title insurance landscape for the better.

 “We completed the first online closing in the state of Florida in 2018 and have done hundreds with Notarize since,” said Davis. “By being the first partner to work with Notarize on a platform to help our title agents use this technology to perform their own closings, we’re changing the title industry and the way that our agents serve customers. We’ve seen first-hand the impact Notarize has had on the real estate industry, and we couldn’t be more excited to be a part of the next chapter.”

Backed by Notarize training, support, and technology, Florida Agency Network will work closely with Notarize on the development of a platform that both empowers its agents to close completely digitally, while still leveraging Notarize’s staff and notaries during off-hours, weekends, and for added assistance during heavier volume closing days.


Channel 10 Interviews CEO Aaron M. Davis on Zillow’s New SELL NOW Feature – Zillow Offers

Channel 10’s Courtney Robinson discusses the pros and cons of Zillow Offers and other iBuyer programs with Florida Agency Network’s CEO, Aaron M. Davis.

While iBuyer programs may offer convenience, it doesn’t equate to more money in your pocket. Consumers must be AWARE.

On Monday, October 21, Zillow launched “Zillow Offers” as a new way for consumers to sell their homes. The technology allows a consumer to go onto the APP, answer some questions about their home, and receive an instant cash offer.

But is it really the best way to sell a house?

10Investigates’ Courtney Robinson spoke to Joe Locicero, owner of 54 Realty and the Zillow agent for the Tampa Bay area. Robinson also had our very own Aaron Davis weigh in on what’s to come of future iBuyer technology.

“While it takes away stress and offers sellers convenience, there is a cost. On average, sellers pay a 7 percent fee. Traditional real estate agents charge between 5-6 percent,” Robinson advises.

To read the full story and learn the pros and cons, click HERE.

 

 

 

 


5 Safety Tips for Every Real Estate Agent

Picture of a woman being followed

As a real estate agent, leads never take a day off. September is Realtor Safety Month, and we want you to keep safety a priority when meeting with potential leads & clients. According to the National Association of REALTOR® 2018 Member Safety Report, 33% of real estate professionals experienced a situation that made them fear for their safety. Do not become complacent with your safety!

Here are 5 safety tips you can use this month, and beyond:

  1. Meet first in public. While real estate agents are becoming more and more mobile, it’s important to set your initial meeting somewhere public like your broker’s office where you can confirm their professionalism and introduce your potential customer to a few others in your office. If this isn’t available, meet somewhere with lots of activity like a coffee shop or restaurant, and ask for identification as part of your process with all new customers.
  2. Let the client lead the way. During a showing, allow your client to walk in front of you and guide you where they want to see. If you need to lead them to a feature or room, direct them where to go as they walk in front. When leaving open houses have a coworker meet you to check all rooms before locking up together.
  3. Let your smartphone be your safety net. Add your emergency contacts, coworkers and a few family members as favorites in your phone, giving you easier access to the dial them quick, in case of an emergency and research safety apps for further reassurance. Apps like Facebook Messenger, Share My Location, Google Maps and more can share your location with selected friends, while Lifeline Response and bSafe can contact emergency services silently, or even fake a phone call to get out of uncomfortable situations. Find what works for you and your business model.
  4. Keeping it old school. Before the advent of smart phones, the “buddy system” was used to help keep realtors safe. Work with at least one other agent closely to share plans for your day, contact information of new clients, and for hosting events like open houses. Joining networking groups is a great way to make these types of connections.
  5. Automobile maintenance. Be sure to keep up with your car’s maintenance and always keep at least a half a tank of gas. Some agents cover the bottom half of their gas gauge with a post-it note to remind them to fill up sooner. Keeping your car up and running will help prevent breakdowns in areas you might not know very well and get in practice of locking your doors every time you leave the car.

Above all else, trust your instincts! If something doesn’t feel right do not hesitate to cancel a showing, open house or meeting.

 

 


Swipe Right and Match with the Perfect Title Company

Tips on finding the right title insurance company for your real estate transaction.

It's a Match with Florida Agency Network

In a world full of left-swipe worthy businesses, it’s difficult to know which title insurance company to choose for your transaction. Before you swipe right and do business with the wrong title insurance company, here are some things to consider before you choose your perfect match in a title company.

 

Company Longevity

We see it time and time again, a title company seems to pop up overnight and is ready to do business. However, can you trust the work that is being done throughout your transaction? How do you know your private information is protected?

Find out how long the title insurance company has been doing business. A title insurance company that’s been in the industry for a longer period knows the ins and outs and can speak to common questions or issues that come up, with ease. A title insurance company’s longevity shows efficient and effective processes in place. And with experience comes stability and peace of mind for all those experiencing the closing process. That leads to the next point.

 

Company Accommodations

Life can get busy. Going out of your way to get to, or handle anything thing for your closing can become a hassle. Look for a title insurance company that has multiple locations or can accommodate you during the closing process. Do they offer mobile closing or mobile notary services to their clients? Do they offer e-closings or remote online notaries (RON)? These are just a few of the points you’ll want to discuss with your title insurance company.

 

Company Strength & Support

“A great captain is great only if he has a great team.”

Your title insurance company is only as good as the team they provide to their clients. Choosing a title insurance company with a large, experienced, and dedicated staff are the qualities you want in your closing team. It’s critical that your closing team has the correct licensing and educational background to get you through the entire closing process.

Don’t forget to inquire about the title insurances company’s support; Who do they underwrite with? What type of errors & omissions (E&O) policy do they carry? This may all sound foreign to you as a buyer or seller, but this information shows the strength of a title company when difficult situations arise.

 

Company Reputation

A title company with longevity and experience has built a reputation within the real estate industry. You should place your trust in a title company that is the leader in customer and employee satisfaction.

Ask your real estate professional about their experience(s) with the title insurance company. Don’t forget to do your online research. Read through online reviews on their social pages, Google and more. It’s common to have a problem here or there, but is there a trend your finding with each customer experience?

 

There are many points to consider when swiping right on your perfect title insurance company. Florida Agency Network brands not only can close your real estate transaction at any of the many locations throughout the State of Florida, but also close your transaction at any place convenient to you with mobile notaries, e-closing and remote online notarization (RON) partners, FAN brands have the large footprint you want to have on your side.

Our closing staff has many years of experience in title insurance and closings.  We also work with several underwriters which gives us the resources to close deals other title insurance companies cannot.


Do you have the POWER?

When and how a power of attorney for a spouse works in a real estate transaction.

 

Wooden figures hugging

Contrary to popular belief, a marriage license doesn’t necessarily give a spouse automatic power to make decisions on the other spouse’s behalf. While spouses may have rights to things like joint bank accounts and medical records, property rights can be restricted. To conduct a real estate transaction on behalf of a spouse or other person, an approved power of attorney is necessary.

 

 

WHAT IS A POWER OF ATTORNEY?

A power of attorney is a document which gives a person, called an “agent”, legal authority to act and make decisions on behalf of the spouse. The amount of power given to the agent can be limited, depending on what is agreed upon.

For real estate transactions, a power of attorney would need to specify the agent is authorized to make the specific decisions for the buyer or seller’s spouse.

 

WHY DO I NEED A POWER OF ATTORNEY?

Most real estate transactions will not need a power of attorney. However, if your spouse is unable to sign the mortgage or the deed or any other documents needed for various reasons, you will need to have an approved power of attorney.

If there is a power of attorney already created, it’s best to get that over to your title company and lender, if applicable, as soon as possible. That way, your closing team and lender has time to review and make sure the power of attorney is approved and ensuring your closing goes as smooth as possible.

 

WHAT ARE COSTS ASSOCIATED WITH A POWER OF ATTORNEY?

If you’re closing with any title brand in The Florida Agency Network and it involves the issuing of your title policy, there is no charges to you for drafting a specific power of attorney for the real estate transaction.

If you need a power of attorney drafted for other reasons or you’ve made arrangements directly with an attorney, there are possible charges for this. Fees may vary, based on the attorney or law office you and your spouse do business with.

 

Before starting your real estate transaction, where a power of attorney is needed, make sure the power of attorney is ready or there is a plan in place to get one drafted. Contact any of our offices for more information on how to get the processes started for your closing.


Darn that DODD-FRANK!

Cropped image of businesswoman writing on checklist

Just imagine, after years of struggling to complete college, your son, little Johnny has finally has his head on straight. He graduated, he’s worked for the family business for two years and is doing well. He met a nice girl and they have married.

He wants to buy a home. Unfortunately, Johnny has not always made the best decisions. His credit is not where it needs to be. Based on the fact that he is now making better decisions, you decide to loan Johnny the money to buy the home. The title company you’re working with will prepare a note and mortgage to secure your loan, what could be easier, right?

That Darn Dodd-Frank! Your loan is probably in violation of this Act. Based on this violation, your note and mortgage may not be enforceable.

Dodd-Frank is federal legislation that came about as a result of the real estate crisis of the last decade. The Act created the Consumer Financial Protection Bureau (“CFPB”) and other laws that regulate all consumer loan transactions.

One of the other laws is the Loan Originator Rule. In general terms, if the borrower will use the home for residential purposes (whether a primary residence, a second home or a vacation home) then the person arranging the loan is defined as a “loan originator.” A loan originator must have a mortgage originator’s or broker’s license. Pursuant to the Act, any person who offers and negotiates terms of a residential mortgage is deed to be a mortgage loan originator. Unfortunately, for mom and dad above, there are no exceptions for a person, who is not a Seller, to secure a mortgage with a residential property.

The Act does provide for certain exceptions. Namely, Seller financing, these exceptions are as follows:

One property exception: A Seller may extend credit, secured by a mortgage encumbering residential property and is not considered a loan originator if:

(a) they are a natural person, estate or trust;

(b) they provide financing for only one property in a 12 month period;

(c) they own the property securing the mortgage;

(d) they did not construct or act as the contractor for the construction of a residence on the property;

(e) repayment of the loan must not result in negative amortization;

(f) balloon payments are allowed, however the term of the balloon is not clear. Most practitioners believe that no shorter time period than 5 years should be used.

(g) while the Act does not prohibit adjustable rates, a fixed rate is suggested. The Act has restrictions, limitations and caps on rate charges.

(h) the seller is not required to investigate the buyer’s ability to repay the loan.

Three Property Exception: A Seller may extend credit, secured by a mortgage encumbering up to three residential properties and is not considered a loan originator if:

(a) they are a natural person, estate, trust or an entity;

(b) they provide financing for three properties or less in any twelve month period;

(c) they own the property securing the mortgage;

(d) they did not construct or act as the contractor for the construction of a residence on the property;

(e) the loan must be fully amortizing and there are no balloon payments or structures allowed;

(f) while the Act does not prohibit adjustable rates, a fixed rate is suggested. In this context, limits and caps are required’

(g) the Seller is required to make a reasonable investigation regarding the Buyer’s ability to repay the loan. Although formal documentation is not required, the investigation should be done in good faith and the results should be maintained.

While other exceptions exist, they are very complicated and are not practical for ordinary Seller financers.

Good news is Dodd-Frank does not apply to every loan. First, it only applies to residential loans. So, if you’re dealing with vacant land, commercial properties, rental properties or properties used solely for investment purposes, Dodd-Frank simply does not apply. Moreover, Dodd-Frank does not apply to non-residential buyers. So, if the buyer is a corporation, limited liability company or partnership etc., Dodd-Frank will not apply and the loan can be made without consideration to its restrictions.

So, now that we know that mom and dad have a problem trying to help little Johnny buy his home, what are we to do?

One solution would be for the mom and dad (the lender) to purchase the property from the underlying Seller first. Then mom and dad as the Seller could sell little Johnny the home and take back the note and mortgage under the one property exception. Yes, the transaction costs would increase, but the creative closers at the Florida Agency Network will work with you to keep these costs down.

Another solution would be for mom and dad to work through a mortgage broker. The mortgage broker will be required to comply with all of the various lending laws and regulations. While the broker will likely charge a fee for this service, it is another option that will allow the transaction to go forward.

How Can I Improve My Home’s Value?

Buyers generally seek the least expensive home in the best neighborhood they can handle. Like the guy in the video says, you want to present a home that fits in the neighborhood but doesn’t stand out too much.

For example if neighbors are all 4 bedrooms, 3 baths and 3000 square feet additions that make your home 5, 4, and 4000 will make yours harder to sell.

Improvements should make it show well and fit well in the neighborhood. Last-minute capital investments in large structural changes aren’t likely to pay off.

But cosmetic upgrades like paint and landscaping help a home “show” better and often do pay off.

Of course, all systems and appliances should work to get a top price. To make your home competitive and attract buyers and bids work with a professional real estate agent and start early.

How Is A Home Marketed?

As you’ll see in the video, every home and market is a unique situation. Good marketing plans are specific to both. But every plan will include: Preparation Pricing and Marketing Activities.

Preparation takes time – typically, months. Homes must be in “show” condition all repairs and upgrades complete and all photos and video completed before the home goes on the market.

Pricing, likewise, should be planned in advance. Your broker will advise on both the best price and the best TERMS things like closing costs and seller credits to balance sales speed with sales price. Once the home is on the market it will quickly be entered in the MLS and will show up in Internet searches by agents and buyers.

Your broker will advise other marketing activities including advertising, signage, showing and open house events so make the best of your situation. Their aim is to get negotiable offers, and then take the offer you accept through the closing process.

Which Square Footage Figure Should I Use?

Home size is one of the key figures used in comparisons.

But you may have different measurements to choose from,  as you’ll learn in this video, including builder, appraiser, tax records and possibly owner records.

Which one is right, and which one is best?

The official figure is the one in tax records – typically, the county.

Any other figure must be documented by a builder’s floor plan an appraisal or an official floor plan, prepared by a company for a fee.

If your house has been remodeled and you’re planning to sell you may want to confirm that the official record matches your actual house – and update if required.

Most lenders will require an appraisal which will verify the figures you used. So be accurate and keep records to make the most of your sale.