Whether you’re trying to sell your home or looking for a home to buy, there is a great deal of misinformation out there. It’s important to learn the truth, because believing in one of these myths could force you to commit a costly mistake.
Sell Your Home for More Than it’s Worth
This is a common myth and it could actually hurt the sale of your home. Some people believe that setting an asking price above the home’s market value can help you sell your home for the price you really want. While it’s true that buyers try to negotiate the final price, trying to sell for too much can chase away potential buyers.
Buyers Do Better Without an Agent
The idea behind this myth is that the real estate agent’s fee will be spared. This is a false assumption. Real estate agents working for the buyer and seller share a percentage of the sale. In a case where the buyer isn’t working with an agent, the seller’s agent gets the full share.
Sellers Don’t Need a Real Estate Agent
While technically true, trying to sell your home won’t save you much money. The buyer will expect a discount from a seller working without an agent, so the money you save on the agent’s commission will be lost to the buyer. Additionally, you’ll have to be able to do everything an agent can do from listing the property online to handling the closing.
Sellers Should Remodel Their Kitchen and Bath
This is frequently recommended, but it may actually be bad advice. Buyers may have their own plans for the kitchen and bath, so putting in the work ahead of time could negatively impact a sale. Especially if they don’t share your tastes, they may prefer to look for a home that hasn’t been updated recently.
Sellers Can Expect to Earn Back What They Spend on Renovations
While it will be noticed, if the roof is in bad shape or the air conditioning doesn’t work, fixing these big ticket items won’t help you raise the value of your home. Buyers may feel it’s your responsibility to repair these things before putting the home on the market, so they usually won’t be willing to pay more for an updated home. However, if you don’t fix these things, you may actually lose value in your home.
There are more myths flourishing in the real estate industry, so always check to be sure something is true. If you don’t do enough research, you may find that it cost you money instead of helping you save. Always direct questions to a qualified and experienced real estate agent to avoid making devastating mistakes.
Renting Vs. Owning: What’s The Difference?
Many people are torn between the prospect of owning a home versus the carefree lifestyle of simply renting. The pros and cons of both renting and owning have been laid out below in a simple and concise manner.
Upfront Costs
When calculating the upfront cost of renting a home or an apartment, the figures are relatively affordable. Renting only requires a light contract with first and last months rent along with a security deposit in order to successfully obtain said property. Alternatively, homeownership tends to be very heavy in regards to upfront costs. When going through the process of purchasing a home, a person is usually required to pay a certain percentage of the mortgage immediately including any and all closing costs.
Fluctuating Monthly Expenses
One advantage of owning a home is that the monthly mortgage payment is set by the bank who issued the mortgage. Depending on the type of interest rate that was negotiated, the monthly mortgage payment can remain steady for many months depending on how housing costs rise and fall. Alternatively, when paying rent to a landlord, the rent can be increased at the whim of a landlord but only if they follow proper legal regulations regarding rent increases. If someone is renting without a contract, the renter is at the complete mercy of the landlord in regards to the monthly rental rate.
Repairs and Renovations
A homeowner is financially and physically responsible for all repairs to the home. The bright side to this is that they also have the freedom to redesign, redecorate, or renovate the home as much as they desire. A person who rents isn’t usually afforded the same privilege. Landlords may impose strict rules in the rental contract regarding changes to the home or apartment, preventing the renter from painting, remodeling, or redecorating. On the other hand, renters aren’t responsible for any repairs and can usually apply for replacement appliances and fixtures if covered by the rental agreement.
Relocating
When renting a home or an apartment, deciding to pick up and move to a different city or state is relatively simple. A person can sublet the remainder of their lease to a third party and skip town before their rental contract has expired. On the other hand, a homeowner doesn’t have that same luxury. A homeowner must first prepare their home to be sold and ensure it has enough equity to be marketable. This could take months or years to accomplish.
Choosing whether to become a homeowner versus remaining a renter really depends on the type of lifestyle you live and whether you prefer security or freedom.
How Tech May Impact the Real Estate Market Over the Next Year
Technology’s impact on the real estate industry is gradually starting to take hold. To stay competitive, many real estate professionals and companies are changing their business models or the way they do business. With technology rapidly changing consumer behavior, real estate professionals must adapt to the digital innovations that are beginning to define the sector. Here are some tech trends real estate professionals can expect to happen this year and beyond.
Machine Learning/AI
Real estate pros are constantly looking for ways to streamline their processes, and many in the industry are counting on machine learning and AI to improve efficiency. Many agents and brokers now use artificial intelligence to match properties to a homebuyer’s specific requests. Additionally, many companies are finding ways to use machine learning and AI to spot trends in housing markets. The goal would be to use data backed by facts instead of relying on a hunch to make home buying and selling decisions.
Chatbots
Artificial intelligence is what programmers and computer scientists use to process natural language in the form of chatbots. This technology is one of the fastest growing trends in the customer service industry, and the real estate market is certainly no exception. Companies are looking for ways to use AI and chatbots to automate engagement between agents and brokers. They also hope to use chatbots to transform lead generation in an effort to streamline their marketing efforts. Chatbots are proving themselves as an invaluable tool in answering customers’ simple queries about home availability and pricing.
Blockchain Technology
By now, many people are familiar with cryptocurrencies such as Bitcoin, but they may be unfamiliar with the technology that fuels cryptocurrencies. Known as blockchain, this technology is far more than a cryptocurrency payment gateway. Instead, it is a powerful decentralized database that could hold important records on virtually any property in the world. If real estate professionals implement the technology, it could provide a fraud-proof way to access far more data on homeowners and properties.
The real estate industry could see some dramatic changes in the way companies conduct business over the next several years due to the rapid rise of technology. However, many real estate experts agree that the industry is overdue for a tech shakeup. Although the future of real estate and technology is uncertain, companies will have to adapt as AI and machine learning continues to evolve.
Housing Markets Set To Explode!
According to a recent article, there are a number of states throughout the country that have a very high chance of experiencing continued rises in housing prices over the next year.
While some housing markets have cooled off due to a combination of state policies, slow or negative job growth and stagnant local economies, a few states are reaping the lion’s share of the increasing demand for national housing. In fact, the last few years have marked the first time since 2006 that the average housing prices across the country as a whole have set records. But these gains have been distributed unequally, and that trend is likely to continue. Here are three states where housing prices are likely to continue experiencing strong gains.
Nevada
Nevada isn’t just the gambling capital of the world; It’s also one of the states with the lowest overall tax rates and the most favorable laws towards business. These facts have continued to attract new residents in droves, driving the housing prices of the state up by a factor of nearly 3 since 2012. While buying a home or piece of commercial real estate is always a bit of a gamble, doing so in Nevada has been a bet that has paid off handsomely.
Texas
The Lone Star State has one of the fastest-growing economies not just in the United States but in the world. Cities like Houston and Austin have experienced growth in their respective populations that place them among the fastest-growing cities in the country. And the characteristic intrastate migrants that Texas has been receiving tend to be high-earning and highly educated. With some of the lowest taxes and one of the most pro-business environments of any U.S. state, Texas has seen a massive influx of tax refugees from states like Illinois, Connecticut and California.
Florida
At one time, Florida may have had the reputation of being the poor man’s California. Today, Florida is one of the most popular destinations for those fleeing the Golden State. With zero personal income tax, idyllic year-round weather and, perhaps, the easiest access to beachfront and water-based recreation of any state in the country, Florida continues to be a prime destination for retirees, business owners and just about anyone else who seeks fun and sun without the stifling taxes, regulation and congestion of California.
High-Priced Houses: The World’s Most Expensive Homes
While I certainly do enjoy discussing real estate development and the industry as a whole, I also enjoy taking some time to admire the homes and properties that are being provided to the market. Like most other people, I thoroughly enjoy looking at lavish houses with dozens of rooms, extravagant decorations and top-notch amenities. With that being said, I wanted to go through and highlight some of the most expensive and extravagant houses around the world.
Beverly House
Beverly Hills, California
$135 million
When most people think of extravagant houses, they picture Beverly Hills, with good reason. Boasting six flat acres of land, additional smaller homes, an expansive library, billiard room and family room with an outside terrace that can seat 400 people, this mansion has something for everybody. The mansion even features a nightclub, a wine cellar and a spa facility. With amenities like these, there’s no reason to ever leave your house. The house itself has become incredibly famous, most notably for being featured in The Godfather and The Bodyguard.
Villa Leopolda
Villefranche-sur-mer, France
$750 million
Not many people can say that their homes are built around royalty, but the owner of Villa Leopolda certainly can! Built by the Belgian King Leopold II in 1902, this absolutely magnificent mansion is truly a sight to behold. This 50-acre expansive building features a helipad, pool, outdoor kitchen a commercial greenhouse and more than a dozen bathrooms and bedrooms combined. Similar to the Beverly House, the Villa Leopolda has been featured in many movies, such as The Red Shoes and To Catch a Thief.
Tour Odéon Penthouse
Monte Carlo, Monaco
$400 million
How can a penthouse be worth $400 million dollars? Simple: it’s the greatest penthouse in the world. This 35,000-square-foot space sits atop of a 560-foot skyscraper (the second-tallest building in the Mediterranean) and provides a breathtaking 360-degree view of the area’s beautiful waters. While some prefer to stay on the ground, for anyone looking for a lavish high-rise apartment, look no further.
Real Estate Startups in 2018
2018 is finally in full swing. Regardless of your thoughts on last year, we must all move forward and look towards a bright and hopeful future. And, if you’re invested in the real estate industry, you may have some exciting trends to look forward to. As someone who is closely connected to real estate, I am incredibly excited to see some new companies and businesses that are looking to make some waves in the industry. Without further ado, here are some of this year’s most interesting real estate startups.
Dealpath
For any of you involved in commercial real estate investment, you may be tired of the tedious and mundane tasks associated with the job. Luckily, Dealpath is looking to make the process a bit easier. With Dealpath, development and acquisition teams can streamline their process by cutting down those pesky tasks and focusing on high-level strategy. Dealpath allows users to communicate easily, collaborate more efficiently and to keep track of deals and projects in real-time.
Flip
Where Airbnb focuses on providing users with the ability to house guest for short-term rentals, Flip does the complete opposite: long-term rentals. With Flip, landlords have a better deal of security on payments and renters have a bit more flexibility. Leases on Flip can range anywhere from a month to a year, but they typically begin at six months. The startup is currently works in the New York, San Francisco and Los Angeles markets and recently secured a $2.2 million seed round of investments.
Rentalutions
With short-term rental services such as Airbnb and FlipKey becoming more and more popular, we are in an era where anyone can be a “landlord.” This is a bit scary, considering the fact that being a landlord isn’t necessarily easy and that title comes with a great deal of responsibility. Rentalutions looks to solve this dilemma by providing the necessary tools and information to brand-new landlords in order to make their lives a bit easier and to make tenants feel a bit more comfortable and safe. Last year, the startup earned $2 million in funding and it looks to continue growing this year.
Real Estate Trends For 2018
It’s the dawn of a new year. 2018 is officially here, and we have a bright future to look forward to. Multiple industries have much to look forward to this year, and real estate is no exception. There’s plenty to celebrate and get excited about. With that being said, I wanted to highlight some of the most fascinating and impactful trends that real estate will likely experience this year.
The Millennial Mindset
Real estate agents are quickly learning that they must learn to work with a newer mindset: The Millennial Mindset. Millennials (those born anywhere from early 80s to late 90s) look at housing in a very different way than previous generations. Millennials are, for one, in debt. Several Millennials have a college degree, which is fantastic, however, that does mean that a great deal of Millennials are now in debt due to their student loans. They are incredibly price conscious. Millennials are also very open to communal/co-living situations. They understand that having more people in a home means less pressure on rent price. Millennials are also constantly invested in their digital devices. Real estate professionals are now learning that, in order to reach this new demographic, they must begin to utilize the tools that Millennials use. This means social media, emails, Internet, simplified websites and mobile apps.
Millennials are also very accustomed to living in a world where almost everything is available at the tap of a button. We can now hail a ride, order food, purchase clothing and goods and even handle our bank accounts from our mobile devices and computers in a few easy steps. Millennials see no reason why they shouldn’t be able to do the same with real estate. Having dedicated websites or mobile apps that allow potential home buyers to sell or buy a property is almost a must in today’s age; and if it isn’t yet, it’s getting there.
Short-Term Rentals
This is a growing trend with both Millennials as well as older generations. Short-term rental services, such as Airbnb or FlipKey allow users, and everyday, average citizens, become landlords. You can use your home as a hotel or bed and breakfast and profit! These stays tend to be very short, hence the term, “short-term rental.” As people look for cheaper ways to pay for housing, short-term rentals are the most lucrative market. If you haven’t looked into short-term rentals yet, make sure to do so. The industry has been growing for the last few years and shows no signs of slowing.
Are Millennials Buying Real Estate?
According to Spencer Rascoff, the CEO of Zillow Group, millennials buy real estate far more than people think that they do. In fact, millennials spent $500 billion in real estate in the last 12 months. However, millennials do approach buying real estate in different ways than previous generations.
Millennials often go straight to the Internet for information, and real estate information is no exception. More than any other generation, and more than ever before, millennials are finding both properties and agents online. The internet has made the process of buying a home or investing in real estate easier and more accessible than ever. Instead of investing loads of time in calling agency after agency and inspecting property after property, millennials do much of the home buying process from their computer or smartphone.
Millennials, more than any other generation, are borrowing money to spend on real estate. They often borrow money for down payments from friends and families. While this may not always be a reliable solution, it is oftentimes necessary in order for millennials to get their foot in the door. This is because millennials often have a hard time finding homes that they can afford on their own. This is the result of a variety of factors. Many millennials face student debt higher than in previous generations and find themselves working low paying jobs. Oftentimes, these jobs are not even in the fields that they dedicated time studying to work in. However, by borrowing money from those around them, they have a springboard from which they can jump into the housing market.
Millennials now make up a large part of the real estate market. Although they often face financial hardships greater than those of previous generations as a result of inflation and wage stagnation, they end up having similar views towards home ownership to those of the generations that came before them. While renting is a very popular method that opens up a gateway to home ownership for them, millennials also often take out loans to pay for their properties. While this can backfire (and often results in a lot of debt), the end result is more millennials buying up real estate.
Millennials may not always be putting themselves in positive situations by buying homes, but they often do anyway and now make up a large section of the real estate market.
Airbnb is Getting Into the Real Estate Industry
I recently wrote a blog that discussed the effect of Airbnb, the popular sharing economy service, on real estate. In that blog, I mentioned that Airbnb could prove to be a real threat to the real estate industry. The service is already disrupting the hospitality industry and has caused a bit of a stir in real estate, but its latest venture could drastically impact both industries.
According to a report from Fastcodesign.com, Airbnb is partnering up with a South Florida-based development company, Newgard Development Group, in order to construct an apartment building specifically designed for the sharing economy. Depending on the success of the building, Airbnb could roll out several more buildings throughout the country.
Dubbed “Niido,” the apartment building will exclusively host Airbnb rentals and feature 324 units. Niido is being constructed in Kissimmee, Florida.
Airbnb has been looking into making deals with apartment complexes for sometime, but has been limited by legal restrictions. By partnering with a development firm to build its own apartment buildings, the company can completely avoid those issues.
The Niido building is being specifically designed to accommodate the average sharing economy user. Niido will feature wide open common areas in the hopes that visiting travelers will interact and engage with each other; units will feature home offices that can easily transform into a spare bedroom; each unit will feature bathrooms and kitchens constructed of durable material that is also easy to clean; units will include small safes for travelers to store their personal belongings; each unit will work on a keyless entry system that only grants access during the duration of a visitor’s stay and tenants will be able to access both home-sharing and maintenance services through a single app. Newgard Development and Airbnb have truly pulled out all of the stops in order to provide a unique experience that will hopefully push the sharing economy industry forward.
With the Niido building, Airbnb hopes to create something of a small community. A portion of all standard Airbnb booking fees will go towards community projects, such as cooking and art classes. This will help to create a sense of community and offer a great experience and a better reason to stay in a Niido building.
Should Airbnb’s Niido building take off, the company could drastically encroach on the real estate industry. What are your thoughts? Do you want to see Airbnb make their own apartment complexes or would you rather they stick with what’s been working?
Where Will Amazon Build its New Headquarters?
Unless you’ve been living under a rock, you are familiar with Amazon. What once started out as a small, online book store has grown into the world’s largest online retailer and one of the world’s largest retailers, period. Currently, the company is headquartered in Seattle, Washington. However, the company is continuing its growth, and it is looking to build a secondary headquarters. And several cities across the nation are vying for the opportunity to become the newest headquarters for one of the world’s largest companies. Now, the question remains: where will Amazon call its second home?
Since Amazon announced its nationwide location hunt, multiple cities around the country have all flocked at Amazon’s door to bring the company, and the prospective 50,000 jobs that it entails, to their town. And Amazon has not been shy about what it wants from its new hometown. In an official statement from Amazon, the company announced that it will accept applications from cities while looking at six core factors: tech labor force, fiscal health, cost of living, college population, culture fit, and state tax rank.
At the moment, there seem to be a few cities that are prime contenders. These cities are: Dallas, Boston, Washington D.C., Atlanta, Chicago, Denver, New York, Nashville, Austin, Minneapolis, and even Newark. Surprisingly, another major contender on the list appears to be Seattle, Washington.
The e-commerce company has received at least 238 applications, many of which are from major metropolitan areas. Others are from much smaller areas, like Rockdale, Texas, whose population maxes out at 5,628.
Whichever city is chosen to house Amazon’s newest headquarters will likely be looking at some great benefits. Firstly, the building will cost several billion dollars to actually build, and, as previously mentioned, the new headquarters will create around 50,000 jobs, which is certain to stimulate the local economy. The lucky city will also become something of a tech haven overnight.
I am not only interested in seeing where Amazon decides to set up shop, but also how this decision ultimately affects the surrounding area. When a major corporation like Amazon builds a new campus, things are bound to change drastically; and not always for the better.
What are your thoughts? Where do you want to see Amazon build their second headquarters?