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How Has the Pandemic Changed Buyer and Seller Behavior?

90% of Realtors say their local market is in recovery mode, and some are even hotter than they were pre-pandemic – but it’s sparked 7 noteworthy changes in customers.

CHICAGO – As the effects of the pandemic continue, nine in 10 Realtors® say their housing markets are in recovery mode, with many even saying their markets are hotter now than a year ago, according to recent member surveys from the National Association of Realtors.

“The delayed spring market is definitely occurring now in the summer months,” says Jessica Lautz, NAR’s vice president of demographics and behavioral insights. The housing market is seeing unprecedented monthly jumps in existing-home sales, and home price appreciation remains strong.

However, the pandemic has also changed some buyers’ and sellers’ behavior, and Lautz found seven notable changes culled from recent NAR research. She highlighted those findings at NAR’s “REvive! From Crisis” virtual conference:

  1. Buyers are in a rush. In 2019, buyers looked at an average of nine homes before making a home purchase. Now, they’re looking at three to four homes before initiating a contract. Homes are selling in an average of just 24 days, and more than a quarter of Realtors report greater urgency among buyers over recent weeks, particularly those making home purchases in rural areas.
  1. Wish lists shift. Home shoppers are changing some of their home-feature priorities, notably for home offices, according to NAR research, and many households want more than one. Homebuyers are also sizing up outdoor space and showing an increased desire for a pool or garden, or simply more space to enjoy the outdoors.
  1. Buyers less concerned about commutes. As remote work grows, 22% of about 2,300 Realtors surveyed by NAR say their buyers are less concerned about commute time when home shopping, and that freedom has allowed some to expand their searches beyond city centers to the suburbs and exurbs – which may also offer more affordable housing, according to one in four Realtors surveyed. “If workplaces keep changing and there’s this greater acceptance of remote working, this trend could stick around longer,” Lautz says. Also, second homes may be in greater demand. “If they can work from any place, we could see more buyers embrace second homes in rural areas,” Lautz says.
  1. An increase in multigenerational households. One in six Generation Xers and younger baby boomers purchased a multigenerational home pre-COVID. Lautz suggests that trend could increase as more generations, including aging parents and adult children, all come under the same roof during the pandemic.

    “Moving forward, that could mean your buyers will be looking for larger single-family homes,” Lautz says. “They also may want to make sure they have a sizable living space on the first level” for an aging parent. Also, recent surveys show a growing desire of buyers – particularly younger buyers – who want to live closer to their family. The top reasons to move before the pandemic were a new job, marriage or baby. But now most moves are being driven by young millennials – twenty-somethings – who want to be near their family or friends. “The family unit appears to be becoming more important, and I think COVID could increase this trend,” Lautz says.

  1. Pets could drive purchase decisions. The pandemic sparked a surge in households that want a pet, and NAR surveys have found that pets can influence when and where people buy, with 43% of households willing to move to better accommodate their pet. “We see consumers actually want to buy a property because of a pet, and then they may want a fenced-in yard and extra space for their animals,” Lautz says.
  1. A wave of first-time buyers? Consumers may show more commitment to their home than long-term relationships. In the 1980s, 75% of first-time buyers were married. In 2019, that dropped to 53%. Young adults are waiting longer to get married. Meanwhile, unmarried couples are buying homes at the highest levels ever recorded by NAR: 17%.

    NAR research has found a rise in roommates pooling their incomes to purchase a home together. It’s only 4% of purchases now, but Lautz says that’s the highest share NAR has ever recorded. In 2019, first-time buyers comprised 33% of the housing market, still a low number by historical standards.

    “But there could be an uptick, particularly in affordable places further out,” Lautz says. “If young professionals become less tied to a metro area for work – in metros where it can be difficult to afford a property – they may increase their purchases.”

  1. Housing tenure could fall. Homeowners have been staying in the same home longer than they have in past – an average of 10 years – which is longer than the traditional six-year average, and Americans aren’t moving longer distances like they did in the 1980s. But since cities issued stay-at-home restrictions during the pandemic, consumers may start to question whether their current home fits their current needs.

    “Interest rates are at all-time lows; [consumers] may want to move and find a home where they can work from and the kids can too, and they want more yard space to relax,” Lautz notes. “This change in homeowner tenure could be one we see coming soon.”

© 2020 National Association of Realtors® (NAR)

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Fewer Homeowners Relying on Mortgage Forbearance

The percentage of homeowners with a temporary mortgage-payment hold decreased for Fannie- and Freddie-owned loans but increased for homeowners with FHA and VA loans.

NEW YORK – Many homeowners were offered an easy-to-use mortgage forbearance option under federal pandemic rules. In most cases, they were allowed to stop paying their monthly mortgage until they were back on their feet after the COVID-19 first began to spread.

Some experts have predicted a surge of foreclosures based, in part, on the number of homeowners who opted for forbearance, but that depends on how many of those owners start making monthly payments again as their forbearance period ends. To find the answer to that, the Mortgage Bankers Association (MBA) has conducted a weekly Forbearance and Call Volume Survey.

In the latest survey from July 26, MBA found that the percentage of all mortgages in forbearance has dropped for eight weeks in a row, with 7.67% in forbearance last week compared to 7.74% the week before. According to MBA’s estimate, 3.8 million homeowners are in forbearance plans.

However, MBA found a difference when comparing mortgages owned by government enterprises (GSEs) – largely Fannie Mae and Freddie Mac – compared to loans under Ginnie Mae, which backs FHA and VA loans. Overall, the percentage of homeowners in forbearance under Fannie and Freddie has gone down, while the percentage under VA and FHA programs has gone up.

“The share of Fannie Mae and Freddie Mac loans in forbearance dropped for the eighth week in a row to 5.41% – an 8-basis-point improvement,” MBA says in the study. But “Ginnie Mae loans in forbearance increased by 1 basis point to 10.28%.”

Forbearance in portfolio loans and private-label securities (PLS) – mortgages that don’t fall under Fannie, Freddie, FHA or VA – decreased 16 basis points to 10.37%. The percentage of loans in forbearance for depository servicers dropped to 7.95%, while the percentage of loans in forbearance for independent mortgage bank (IMB) servicers decreased to 7.81%.

“The share of loans in forbearance declined, but we are now seeing a notable pattern developing over the past two weeks,” says Mike Fratantoni, MBA’s senior vice president and chief economist. “The forbearance share is decreasing for GSE (Fannie Mae and Freddie Mac) loans but has slightly increased for Ginnie Mae (FHA and VA) loans.”

Fratantoni says a cooler job market and increased layoffs may be the reason, and “the economic rebound may be losing some steam because of the rising COVID-19 cases throughout the country. It is therefore not surprising to see this situation first impact the Ginnie Mae segment of the market.”

MBA’s report includes 75% of the first-mortgage servicing market (37.3 million loans).

© 2020 Florida Realtors®

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Northerners Sick of Lock-Down Drive S. Fla. Rental Boost

Many residents of high-rise, high-density cities seem to see Fla. as their best alternative. A Miami-Dade broker says out-of-towners’ interest is up 25% year-to-year.

MIAMI – The South Florida rental market is experiencing extremely strong demand – largely from residents in other states.

Despite Florida’s own struggles to rein in the growth in coronavirus cases and related shutdowns, it continues to draw people looking for a respite from the risks of dense urban living.

“They are showing up in droves,” says Berkshire Hathaway HomeServices EWM Realty broker Christoper Zoller, who reported a 25% increase of out-of-towners looking to rent in Miami-Dade compared to last year. “They are fleeing high density, high-rise locations. They are learning to work from home, or they can work from common spaces.”

According to Valeria Rodriguez, a real estate advisor for the Atlas Team that operates under Compass, the work-from-home movement has given people more freedom to choose where they want to live. This fuels demand for rentals and properties in the Miami area, which offers desirable weather and good school districts, among other benefits.

Rodriguez says many renters migrating from other states use rentals as a stopgap while they look for something to buy.

Even though Miami-Dade County currently bans short-term rentals, it hasn’t stopped inquiries about them, adds Cervera Real Estate managing partner Alicia Cervera Lamadrid. She says rentals are a great way for agents to get a foot in the door with clients who will eventually become buyers.

Source: Miami Agent Magazine (07/13/2020) Hemmersmeier, Sean

© Copyright 2020 INFORMATION INC., Bethesda, MD (301) 215-4688

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SBA To Open PPP Loan Forgiveness Portal On Aug. 10

Some funds under the Paycheck Protection Program (PPP) are forgivable if business owners followed PPP rules. Starting Aug. 10, the banks who loaned PPP funds can ask SBA to forgive the money, though borrowers must complete and submit a Loan Forgiveness Application.

CINCINNATI, Ohio – Late last week, the Small Business Administration (SBA) issued a procedural notice (Notice) to lenders announcing the SBA will begin accepting Paycheck Protection Program (PPP) loan forgiveness applications on Aug. 10.

Lenders will be able to access the necessary platform, borrowers cannot. Borrowers must provide completed loan forgiveness applications to their respective lenders. Within the Notice, the SBA provides an outline of expectations for each lender.

Lender requirements

Lenders are required to review the loan forgiveness application, make a forgiveness recommendation to the SBA, and submit the forgiveness application package and forgiveness determination to the SBA within 60 days of receiving a completed loan forgiveness application from the borrower. Borrowers should expect all communication related to loan forgiveness applications to go through their respective lenders. The SBA will alert the lender in the event it undertakes a review of any loan and, in turn, the lender shall notify the borrower within five business days.

Borrower requirements

It is vital for borrowers to submit complete, accurate, and well organized loan forgiveness applications to ensure a timely response. If not, questions and delays may arise that result in unnecessary scrutiny by a lender or the SBA. In accordance with previously issued PPP guidance, the SBA reiterated that it is the responsibility of the borrower to provide an “accurate calculation of the loan forgiveness amount … and lenders may rely on borrower representations.” The SBA also emphasized it has the discretion to review any PPP loan, of any size, at any time.

Forgiveness process summary

PPP borrowers should anticipate the following to occur within 150 days after submitting a complete loan forgiveness application:

  • Borrower will submit the loan forgiveness application (SBA Form 3508, 3508EZ, or lender equivalent) to its lender
  • Lender will confirm receipt of borrower’s certifications and all documentation submitted to aid in verifying payroll and eligible non-payroll costs
  • Lender will confirm borrower’s loan forgiveness calculations and verify eligible expenses by reviewing the supporting documentation
  • If an omission or error is identified by a lender regarding borrower’s calculations, or lack of supporting documents, the lender must work with the borrower to remedy the matter. A borrower will not receive forgiveness without providing acceptable supporting documentation
  • Lender must complete its review of the application and issue a loan forgiveness decision to the SBA, along with the required documents, no later than 60 days after receipt of a complete application. Lenders have the following choices when issuing a loan forgiveness decision:
    • Approval in whole
    • Approval in part
    • Denial
    • Denial with prejudice pending SBA review of the loan
  • The lender will then issue its decision to the SBA and, if the decision was an approval, lender will request payment of the loan from the SBA concurrently
  • Once the lender submits the loan forgiveness package to the SBA, it has 90 days to conduct its own review of the loan or loan application and remit the appropriate loan forgiveness amount to the lender, plus any interest accrued through the date of its purchase of the loan, if the loan is deemed eligible for loan forgiveness in whole or in part. Borrowers should note that the SBA will deduct Economic Injury Disaster Loans (EIDL) advance amounts from the loan forgiveness amount remitted to the lender
  • Once the SBA’s decision and funds are remitted to the lender, it is the lender’s responsibility to notify the borrower. In the event the forgiveness amount paid by the SBA to the lender is less than the amount in the loan forgiveness decision issued by the lender to the SBA, the lender must also notify the borrower of the adjusted amount. Borrowers should note that any remaining balance due on the loan must be repaid by the borrower.

If a lender denies a borrower’s loan forgiveness application in full, the lender must still provide its decision to the SBA along with the loan forgiveness application package and its rationale for denying loan forgiveness. A borrower may appeal a loan forgiveness determination by the SBA, and there will be more information to come regarding that process in the weeks ahead.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

© Mondaq Ltd, 2020, Marcus S. Harris, Taft Stettinius & Hollister, 1800 Firstar Tower, 425 Walnut Street, Cincinnati, Ohio

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Fed Change Shows Long-Term Commitment to Low Interest Rates

The Federal Reserve often raises interest rates to keep inflation below 2%, but now says it will ignore inflation and keep rates low even if the percentage moves higher.

NEW YORK – The Federal Reserve is preparing to effectively abandon its strategy of pre-emptively lifting interest rates to head off higher inflation – a practice it has followed for more than three decades.

Instead, Fed officials say they’ll take a more relaxed view. Going forward, they’ll allow inflation to run higher than 2% at times to make up for past episodes when inflation ran below the 2% target.

In making the announcement, the Fed is essentially telling markets that it won’t raise interest rates for a long time.

While rate-watchers already understood the Fed’s stance, a change in interest-rate policy shows that the Fed is serious about keeping rates low for the long term, says Steven Blitz, chief U.S. economist at research firm TS Lombard. “It is a change at this point without meaning. It’s just words.”

Source: Wall Street Journal (08/02/20) Timiraos, Nick

© Copyright 2020 INFORMATION INC., Bethesda, MD (301) 215-4688

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July Fla. Consumer Confidence Down a Bit as Virus Expands

After two months of growth, the consumer sentiment index for Fla. dropped 2 points in July, from June’s 82.5 to 80.5 – but overall U.S. sentiment dropped more.

TALLAHASSEE, Fla. – After two months of modest increases, Florida consumer sentiment dropped 2 points in July to 80.5 from a revised figure of 82.5 in June. However, Floridians’ attitudes held steadier than the national as a whole: National consumer sentiment fell 5.6 points.

“The decline in July comes as no surprise as the record number of cases and deaths attributed to the coronavirus in Florida have reduced consumer activity and slowed the pace of the economic recovery,” says Hector H. Sandoval, director of the Economic Analysis Program at UF’s Bureau of Economic and Business Research.

Among the five components that make up the index, one increased and four decreased.

Current outlook: Floridians’ opinions about current economic conditions were mixed. Views of personal financial situations now compared with a year ago increased 2.6 points from 70.8 to 73.4, but those views are divided across sociodemographic groups. Women, people 60 and older, and people with annual incomes under $50,000 expressed less favorable views, while men, people younger than 60, and people with annual incomes of $50,000 or more expressed favorable views.

In contrast, opinions as to whether this is a good time to buy a big-ticket household item, such as an appliance, decreased 1.8 points from 76.3 to 74.5. The downward trends were largely shared by all Floridians with the exception of those age 60 and older, whose reading showed a positive change.

Future expectations: The three components corresponding to Floridians’ expectations about economic conditions a year from now also largely declined in July. Expectations of personal finances 12 months from now fell less than a point, from 95.5 to 94.9. However, these opinions are divided as well with women, those younger than 60 and those with income under $50,000 reporting less-favorable views.

Expectations about overall U.S. economic conditions over the next year dropped 4.6 points, to 74.7 from June’s 79.3 to 74.7. The outlook for U.S. economic conditions over the next five years decreased 5.4 points, from 90.6 to 85.2. The latter two downward readings were shared by all Floridians.

“While responses to each component of the index were split by demographic groups, women and those with income under $50,000 consistently reported less favorable views across all five questions of the index,” Sandoval says.

Sandoval thinks most of the pessimism in July’s index occurred because Floridians think an economic recovery will take longer than they once did.

“Most of the pessimism comes from the overall expectations about the outlook of U.S. economic conditions in the short- and long-run,” he says. “With an economy largely depending on tourism and a lack of steady flow of tourists, the labor market is poised for a long recovery.”

Unemployment remains a big unknown that will impact a recovery.

“Since mid-March, the state has processed over three-million jobless claims,” Sandoval says. “Currently, an important share of the labor force is receiving unemployment benefits and new applications for benefits have continued to pile up in July. Over the last weeks, it has been unclear whether additional payments from the federal program are coming, thus further increasing the uncertainty and pessimism among Floridians.

Sandoval predicts additional future declines “as Floridians must cope with both the pandemic and the hurricane season, which can further delay the recovery efforts.”

© 2020 Florida Realtors®

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Google, ADT Partnering on Home Security Products

Homeowners turning to Fla.-based ADT for home security will be offered Google Nest’s smart-home technology starting sometime next year.

NEW YORK – Google is pairing its Nest smart home technology with ADT and buying a stake in the home security company.

Google’s Nest hardware will be integrated at ADT, which does system installations and monitoring.

ADT plans to begin offering Google devices to its customers starting this year. Shares of the company, based in Boca Raton, Florida, spiked 85% before the opening bell Monday.

Google will invest $450 million in ADT in exchange for newly created Class B shares that come with no votes in company elections, appointments, or removal of directors. It’s stake amounts to about 6.6% of the company.

Both companies will commit an additional $150 million, subject to the achievement of certain milestones, to be used for co-marketing, product development, technology and employee training to advance the partnership.

Copyright 2020 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed without permission.

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Latest Scam Comes in the Mail: Seed Packages

Fla. Agriculture Commissioner Nikki Fried issued a warning last week: If you get seeds in the mail that you didn’t order, don’t open them – or plant them.

TALLAHASSEE, Fla. – More than 600 Floridians reported seeds showing up in the mail – seeds they did not order or know anything about. The U.S. Department of Agriculture calls it a “brushing” scam.

Florida Agriculture Commissioner Nikki Fried last week raised concerns about unsolicited packages of seeds bearing Chinese characters and the name China Post. The Department of Agriculture and Consumer Services asks Floridians to report the “suspicious seed packages,” which might be labeled as jewelry or something else.

The USDA’s Animal and Plant Health Inspection Service says the packages appear to be part of a ploy to draw false customer reviews and boost online sales. The federal agency is also testing the seeds to evaluate their content and determine if they pose a risk to agriculture or the environment.

The state Department of Agriculture and Consumer Services by at least 631 Floridians reported receiving seeds as of last Tuesday. The state agency told people not to open the packages or throw the seeds away. Instead, the packages should be put in a sealable plastic bag and reported to the state’s Division of Plant Industry, Fried’s office said.

“Plant seeds from unknown sources may introduce dangerous pathogens, diseases or invasive species into Florida, putting agriculture and our state’s plant, animal, and human health at risk,” Fried said in a media release.

Similar packages have been reported in Virginia, Kansas, Washington, Oklahoma, Louisiana and Utah.

Source: News Service of Florida

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RE Q&A: Why Do I Need Two Title Insurance Policies?

A homebuyer is being charged for two title policies – one for the lender and one for the owner. An owner’s policy is usually optional, but it’s a good idea to have one.

FORT LAUDERDALE, Fla. – Question: We are closing on a new home shortly and just received our lender’s estimate of the closing costs. It is charging us for both an owner’s title insurance policy and another one for the lender. Is this normal, or should we insist that the lender pays for its title policy? – Bruce

Answer: Title insurance protects your ownership of your home while homeowners insurance covers damage to your house.

You will only pay for a title insurance policy once, and it remains valid as long as you own your home. Title insurance covers claims against your ownership in your property due to problems in its “chain of title” or the series of historical ownership records for your home. Issues such as fraud, mis-indexed or defective deeds, undisclosed heirs, forgeries, and unpaid liens damaging your ownership are covered. If one of these issues occurs, the title insurer will either write a check or hire a legal team to fix the problem.

There are two main types of title insurance policies, one covering the homeowner and the other covering the loan. Because many of the problems covered by title insurance are difficult to find by ordinary means, almost all mortgage lenders will require their borrowers to purchase a lender’s policy when getting a loan. Just like the appraisal and other loan costs, the borrower pays for this policy.

While owner’s title policies are technically optional, it would be a mistake not to purchase the coverage.

Title insurance is relatively inexpensive, considering it covers the entire purchase price of your new home for as long as you own it. Also, when you purchase an owner’s policy, you can buy the required lender’s policy at a massive discount since much of the coverage overlaps.

Some people question why they need an owner’s title policy if their lender is already getting one. They believe that if the insurance company has to fix the ownership issue for the lender anyway, their policy is unnecessary.

This is not the case because, for example, if they own their home for a decade and pay down their mortgage before the title claim turns up, the insurance company could decide to pay the remaining loan balance leaving the unprotected homeowner to fix the issue themselves or risk losing all of their equity in the home.

About the writer: Gary M. Singer is a Florida attorney and board-certified as an expert in real estate law by the Florida Bar. He practices real estate, business litigation and contract law from his office in Sunrise, Fla. He is the chairman of the Real Estate Section of the Broward County Bar Association and is a co-host of the weekly radio show Legal News and Review. He frequently consults on general real estate matters and trends in Florida with various companies across the nation.

© 2020 Sun Sentinel (Fort Lauderdale, Fla.). Distributed by Tribune Content Agency, LLC.

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Visually Accessible Websites Help with ADA Compliance

8% of web users need accessibility options, and brokers who have inaccessible websites run the risk of being sued as lawsuits continue in the state. But what does ‘accessible’ mean? A Florida Realtors video offers advice on the legal and technological requirements.

ORLANDO, Fla. – Under the Americans with Disabilities Act (ADA) – which turns 30 this week – Realtors have a duty to make sure every American has an equal ability to access and use their website. An accessible website is not only the right thing to do, it’s also important for those who wish to avoid lawsuits alleging violations of ADA rules. In Florida, those lawsuits continue to be filed.

But what does accessible mean?

Eric Stegemann, CEO of Tribus, a custom brokerage platform vendor, told HousingWire that about 8% of the U.S. population relies on an “accessibility setting” when they visit websites. Accessibility settings offer a range of options for various disabilities, but one example is a robotic voice that reads the content of a webpage for users who cannot clearly see the writing. However, the range of disabilities is much broader than visitors who are sight impaired.

“The reason why accessibility isn’t just about what you consider blind people or handicapped is that it can also be your grandma or grandpa,” Stegemann said recently to HousingWire. “They can’t easily read small text on a website. What it comes down to is that you need to make sure your website is working for all of these different folks because you’re essentially turning off close to 10% of your potential business if you don’t.”

Stegemann says brokers should educate themselves on “what it means to be accessible.”

Florida Realtors worked with Promet Source to create a video, ADA Website Compliance: A Webinar for Realtors, that guides members through the legal aspects of ADA website requirements, and what must should be done to make a website ADA compliant.

One challenge with ADA compliance focuses on changing technology – and if browser and computer technology changes, ADA compliant features must often be updated too. In addition, a fully compliant ADA feature on one web browser, such as Safari, might be glitchy or unworkable on another browser, such as Firefox.

Source: “Q&A: Why It’s Important to Make Real Estate Websites Accessible to All,” HousingWire; and Information Inc.

© 2020 Florida Realtors®

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Self-Employed Landlords Working Harder for Home Loans

Some investment-home owners want to refinance at a lower rate, but unemployed renter numbers are scaring lenders. The result: More questions, paperwork and stress.

PASADENA, Calif. – All Fullerton residents Scott and Tina Foley, longtime clients of mine, wanted to do was refinance a rental property. They did it before. Easy, right?

After an exhausting process, they thought they were finally at the mortgage funding finish line when one more phone call came. One more question. The loan funder asked if Tina was currently employed at their jointly owned construction company.

“Why would you ask?” the Foleys incredulously asked.

“Oh, let me look,” said the funder. “You got stuck with Detail Debbie (as your underwriter).”

Throughout the process, each answer just seemed to trigger more questions. Document this. Defend that. Notate and prove where the tenant rents were received on the bank statements. Get written CPA explanations about the business tax returns. And on and on it went.

“I was so stressed out I was ready to explode,” Tina said.

What was this all about? Why are mortgage loan originators, loan processors and underwriters digging deeper than normal, demanding more documentation, especially from self-employed borrowers and landlords?

Catastrophic economic fallout from COVID-19, that’s why. For all the righteous and responsible reasons, nobody but nobody in the lending policy world, nor the mortgage manufacturing business, wants to see a mortgage made today that is going to end up in default shortly thereafter.

For better or worse, jobs and company viability can be hanging in the balance, especially for vulnerable industries.

Like it or not, one way to figure out if a business is operating at a profitable level, currently viable and reasonably sustainable in the face of continuing COVID-19 economic damage is to put the screws to it. That is, go detective.

Your underwriter will consider the profit-and-loss statement against the cash flow of several recent months of business bank statements. Do your numbers seem to fit? The lender will ask to review recent billing invoices you’ve sent to your customers. It might call or Google your business and look at the website. Are you there? Are you operating?

Now let’s consider rental income scrutiny.

Plenty of tenants are paying their rent. Plenty can’t pay because they’ve lost their jobs and don’t have the money. Some others refuse to pay because they are taking advantage of the eviction moratorium and their landlords.

How can any underwriter in his or her right mind just assume anything about current rental income – particularly regarding qualifying income? He wants a paper trail to verify the rents you are currently receiving.

Underwriters get their new guidance and mandates from the likes of their internal underwriting policymakers (portfolio lenders), Fannie Mae, Freddie Mac, Veterans Affairs, Federal Housing Administration. If something is missing in the file, the mortgage may not be saleable to Fannie Mae, for example. And worse, big misses also could mean employment termination. Fannie Mae posted 139 COVID-19 FAQs. That’s 27 pages!

Even W-2 wage earners will be examined more closely.

If you are contemplating a refinance or purchase loan, consider the following:

  • Have an honest conversation with your mortgage loan originator about the depth of the information you will likely need to gather as your unique situation requires. Are you up to the challenge?
  • Confide in your mortgage loan originator about worries you in the credit decision process. The originator may be able to ease your angst, offer you alternative ways to document and defend or tell you right up front, this won’t fly, so don’t apply.
  • Have some empathy. There are not enough mortgage industry workers to handle the crushing amount of loan volume. Underwriters and everyone else are just exhausted by these stress-filled, long days. Consider your vocal posture before you pick up the phone to ask a question.

© 2020 Pasadena Star-News. All rights reserved. Reproduced with the permission of Media NewsGroup, Inc. by NewsBank, Inc. Jeff Lazerson is a mortgage broker and adjunct professor at Saddleback College.

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You Can Make Sure a Home is Age-Friendly

Out of 28.5M U.S. homes with an older adult, 1 in 4 presents some type of problem for the older resident. Older homebuyers should consider this – but most don’t.

NEW YORK – Many homes in the U.S. are not what you describe as age-friendly.

Case in point: Of the 28.5 million households with an older adult, more than one-quarter (28%) reported difficulty using some aspect of the home, according to a U.S. Census Bureau report.

Given that the demand for homes with aging-accessible features will rise as baby boomers age and the size of the older population grows, now might be a good time to assess your home.

“The need for aging-accessible homes is one of both health and economics, as fall-related injuries impose costly tolls on older people,” the report stated. “Coupled with the growing size of the older population, it is necessary to consider how the functional design of homes may affect older people’s ability to live safely and comfortably.”

So, can you age in place? Sandra Timmermann, a nationally recognized gerontologist and the founder of the MetLife Mature Market Institute, offered some guidelines:

Will the physical features of your home be a help or hindrance as your age?

Many people older than 50 live in older homes that were designed for younger families that don’t meet current Americans with Disabilities Act (ADA) standards, says Timmerman. “Upstairs bedrooms, stairs at the entryway, and narrow hallways could be an issue later if you develop mobility issues,” she says.

What to do? Check zoning in your neighborhood and consider building a bedroom and full bath on the ground floor before the need arises. Also, do some simple fixes such as installing grab bars in bathrooms and adding walk-in showers, and updating for easy outdoor access.

According to the Census Bureau, the most common unmet need in households with older adults who reported serious difficulty walking is a lack of handrails or grab bars for support.

Is your home hard to take care of?

Older homes require regular maintenance. “As we age, doing some of the things we used to do to keep the house in good shape gets more difficult,” says Timmerman. “For retirees on a fixed income, cost is a consideration, too.”

What to do? Consider whether the cost of maintaining your home – such as new roofs, lawn upkeep, tree trimming, and ongoing repairs –will impact your retirement budget.

“While unmet housing needs pose challenges for older adults, they are especially problematic because they are overrepresented among older households that are poor and economically disadvantaged,” the Census Bureau report stated. “This is a population with relatively few resources for home renovations or for relocating to a new home with better aging-accessible features.”

Is your community “age-friendly”?

In addition to assessing the physical characteristics of your house, Timmerman recommends checking whether the community where you live is suitable for growing old.

Questions to think about: If you can no longer drive, is alternate transportation available? Are you close to a good hospital and medical care? Will you feel safe in your home, especially if your spouse dies and you are by yourself?

AARP maintains a list of all age-friendly states and communities as well as a tool to determine how age-friendly/livable your community is. There are seven states, one territory and 466 communities nationwide deemed age-friendly by AARP. The Stanford Longevity Center, in cooperation with the Mature Market Institute, also developed indicators for livable communities.

According to Timmerman, there are also some innovative community-based programs that support older persons at home. Look into whether there is a “village,” a membership-based group designed to help people age in place, in your community. There are 250 such communities in the United States. Also, check whether a local long-term care facility offers continuing care at home, a plan that guarantees home care and links to social services.

What will happen if you need long-term care?

The COVID-19 pandemic has caused many retirees to place an even higher value on aging in place rather than in an institution, says Timmerman. “However, care at home can be very expensive and it is often difficult to find suitable home health aides,” she says.

The national average hourly cost for home care is about $23 per hour. As you do your retirement planning, Timmerman recommends factoring in the cost of care, how you can blend family care with paid care, and considering the purchase of long-term care insurance. Genworth, an insurance company, tracks yearly the cost of care by zip code.

Another option down the road might be to tap home equity through a reverse mortgage to cover home care expenses, says Timmerman.

Do you want to be near your adult children?

Though retirees value their independence, being near a family member can provide emotional and practical support if you should become frail or develop health conditions. “It also might make it easier for your children to have you close by,” says Timmerman. “If this is important, consider having a conversation with your adult children about suitable housing while you are healthy.”

Is it time to move to a more “age-friendly” home?

Rather than retrofit your current home, it may be smart to move to a new one with less maintenance, lower expenses, more access to amenities and health care, and increased opportunities for social interaction, she says.

Look into other options while you are healthy such as 55-plus retirement communities, continuing care retirement communities, or what are often called life-care communities where you move into independent housing first, but are guaranteed care along the aging continuum, says Timmerman.

Other resources: The National Institute on Aging has a section devoted to aging in place; see Aging in Place: Growing Older at Home.

Copyright 2020, USATODAY.com, USA TODAY, Robert Powell is the editor of TheStreet’s Retirement Daily and contributes regularly to USA TODAY.

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Will New Facebook Video App Be Your Next Tool?

Would short interactive video clips set to music help you sell a house – or yourself? Facebook debuts its Instagram Reels this week – an attempt to compete with TikTok.

NEW YORK – Get ready for another social media site: In early August, Facebook will launch its own version of TikTok known as Instagram Reels. The video platform allows users to create interactive short clips set to music.

Most Realtors® use social media apps daily to communicate with clients, with the top social media outlets for professional use Facebook, LinkedIn and Instagram, according to the National Association of Realtors’ (NAR) 2020 Member Profile. Real estate pros say it’s worth their time because they get some business and inquiries from the mediums.

They can now add another social media site to the growing list. Instagram Reels seems to be similar to TikTok, which has its highest audience among teens and young adults. It’s currently being piloted in France, Germany, Brazil and India and expected to be available in the U.S. in early August, according to Facebook.

“The community in our test countries has shown so much creativity in short-form video, and we’ve heard from creators and people around the world that they’re eager to get started as well,” a Facebook spokesperson told media about the upcoming launch of Reels.

The Instagram Reels app will have several video editing features, such as countdown timers and tools to adjust the video’s speed and playback. Users will be able to create and post 15-second videos set to music or other audio, similar to TikTok. It will also connect to Instagram and allow users to share videos to their Stories or on their profiles.

Facebook is quickening its launch as TikTok continues to face increased scrutiny. India recently banned the app in June, and the Trump administration has hinted at a similar ban, citing reasons related to national security and the TikTok’s ties to China.

Snapchat has also reportedly been testing navigation similar to TikTok for its public video content, as have YouTube and smaller platforms.

Source: “Watch Out, TikTok: Facebook Launching Rival Video Editing App Called Instagram Reels,” USA Today (July 19, 2020) and “Instagram Confirms Its TikTok Rival, Reels, Will Launch in the U.S. in Early August,” Tech Crunch (July 26, 2020)

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55-Plus Market: Builder Confidence Surges in Second Quarter

The index measuring attitudes about 55-plus communities jumped 27 points to 65, according to NAHB. The index has now returned to pre-pandemic levels.

WASHINGTON – Builder confidence in the single-family 55-plus housing market bounced back in the second quarter, jumping 27 points to 65, according to the National Association of Home Builders’ (NAHB) 55+ Housing Market Index (HMI).

The 55+ HMI measures two segments of the 55-plus housing market: single-family homes and multifamily condominiums. Each segment measures builder sentiment based on a survey that asks if current sales, prospective buyer traffic and anticipated six-month sales for that market are good, fair or poor (high, average or low for traffic).

“Low supply of existing homes and low interest rates are key factors in helping the 55-plus housing market bounce-back to where it was at the beginning of the year,” says Harry Miller III, chairman of NAHB’s 55+ Housing Industry Council.

All three index components that make up the 55-plus single-family HMI posted gains in the second quarter:

  • present sales increased 24 points to 72
  • expected sales for the next six months surged 36 points to 70
  • traffic of prospective buyers rose 28 points to 46

The 55-plus multifamily condo HMI increased 18 points to 47, and all three index components that make it up also increased:

  • present sales rose 14 points to 50
  • expected sales for the next six months increased 25 points to 52
  • traffic of prospective buyers rose 25 points to 39

All four components of the 55-plus multifamily rental market also rose in the second quarter:

  • present production increased 9 points to 56
  • expected future production rose 12 points to 54
  • present demand for existing units increased 11 points to 61
  • future expected demand posted a 15-point gain to 64

“Like the broader housing market, we are seeing the 55-plus housing market return to pre-pandemic levels,” says NAHB Chief Economist Robert Dietz. “However, challenges such as rising lumber costs and availability of skilled labor will limit a more robust recovery.”

© 2020 Florida Realtors®

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The Top Three Coronavirus Real Estate Myths?

A bad time to sell? Well, no. It may not seem like it to those outside the real estate industry, but buyer demand continues to outstrip seller supply. And many people are stuck in the last recession, expecting home prices to drop – but that won’t happen anytime soon.

CHICAGO – Some Americans think that high unemployment rates and news about the recession naturally lead to weakness in the housing market. But they’re wrong.

Homebuyers who enter the market may be in for a surprise, and homeowners may be missing out on top listing opportunities if they believe some common myths. Consider these two recent housing report headlines based from the National Association of Realtors®:

  • Contract Signings Make a ‘Remarkable’ Move
  • Existing-Home Sales Surge to Record Pace in June

Realtor.com listed current COVID-19-related myths:

Myth #1: It’s a bad time to sell a home

Homeowners may be skittish with unemployment so high and a pandemic raging on. How could it possibly be a good time to sell?

In reality, many buyers frantically want a place to call home, but many homeowners are choosing not to sell. New-home listings plunged 14% in early July compared to a year earlier, and total for-sale housing inventory is 32% year-to-year, according to realtor.com’s Weekly Housing Trends report for July 11.

“Given the pandemic and uncertainty it’s caused, the general sentiment [among some owners] is that now is not a good time to sell your home,” says Danielle Hale, realtor.com’s chief economist. “Yet so far, the data suggests the opposite – that buyers outnumber sellers in the housing market, which means it’s better to be a seller than a buyer.”

Homebuyers eager to purchase are creating bidding wars as they compete for limited inventory.

“Multiple offers could be fairly common over the next few months,” says Lawrence Yun, NAR’s chief economist.

Myth #2: Home prices are dropping

This myth could be a remnant of the last recession over a decade ago, but home prices are actually rising. During the first quarter of 2020, the national median price for single-family homes increased 7.7% to $274,600. “We’re seeing home prices (currently) grow faster than pre-COVID-19,” Hale says. “In fact, they are on pace with the home price growth we saw this time last year.”

Record low mortgage rates boost buying power, Yun adds, “and when combined with a lack of supply will result in higher and higher home prices.”

Myth #3: Everyone is rushing to the suburbs

Urban centers pose more challenges for social distancing during a pandemic than less densely populated areas, and there’s generally a higher interest in the suburbs right now. In May, the number of views on properties in suburban ZIP codes rose 13% – nearly double the views that listings in urban areas received, according to realtor.com research.

“We have seen homebuying demand recover faster in the suburbs and rural areas than urban areas,” Hale says. “There’s also evidence of home shoppers in cities hit early and hard by COVID-19, such as New York and Philadelphia, seeking homes in nearby smaller communities at a higher pace, like the Poconos.”

But not everyone is leaving the city. This myth may be partially centered on the wealthy, who can afford to move, but it’s not easy for everyone to pick up and move.

“This pandemic, although bad, will eventually pass,” says Karl Jacob, CEO of LoanSnap. “And when it does, are people really going to stop wanting to be in a city? I just don’t think that’s the case. Even though you can get delivery from GrubHub every night, it doesn’t mean you’re never going to want to go out to a restaurant; and if you have to drive 30 minutes to a restaurant versus being able to walk around the corner, that’s a different lifestyle.”

Source: “5 Coronavirus Real Estate Myths Everyone Thinks Are True – Debunked,” realtor.com® (July 30, 2020)

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Fair Housing: HUD Charges Landlord Over Rent Payment Timing

Previous owners allowed a disabled tenant to pay his rent after a disability check arrived, but a new owner refused. HUD calls it a “reasonable accommodation.”

WASHINGTON – According to a charge filed by the Department of Housing and Urban Development (HUD) against a Georgia landlord, a “reasonable accommodation” under the Fair Housing Act doesn’t have to be some kind of building modification. In this case it referenced only the timing of a rent payment.

HUD charged Tzadik Georgia Portfolio, LLC, and Tzadik Management Group, LLC, housing providers operating in Albany, Georgia, with discrimination. HUD alleges that the companies refused to grant a tenant with disabilities a reasonable accommodation request.

In the Georgia case, the tenant moved into the property on Jan. 31, 2008, and signed a lease that allowed the property manager to charge a penalty if rent wasn’t paid by the fifth day of the month. However, the tenant has a disability that prevents him from working, and a monthly disability check is his only source of income, so he verbally asked the original owner if he could pay his rent late without penalty – immediately after his disability check arrived – and that owner agreed.

The building was later sold, and then next owner also honored the original verbal agreement.

After a third property sale in April 2018, however, the new owner allegedly balked at the late-payment arrangement, and the tenant was charged a $100 penalty in June. The tenant explained the agreement he made with the earlier owners, but the new owner said there wasn’t anything in the files, though it waived the fee that month as a courtesy.

In July, however, the new owner added the late-payment fee and by August 6, the tenant received a notice to quit, according to HUD, saying he would be evicted if he did not pay August’s rent plus $200 in late fees. The situation continued to escalate until HUD became involved.

“HUD is committed to ensuring that individuals with disabilities are protected under the Fair Housing Act,” says HUD Principal Deputy General Counsel Michael Williams. “Providing reasonable accommodations is an essential part of a housing provider’s legal obligation to make housing available to persons with disabilities.”

HUD’s charge will be heard by a United States Administrative Law Judge. If the judge finds that discrimination has occurred, he or she may award damages to the complainant for harm caused by the discrimination. The judge may also order injunctive relief and other equitable relief, payment of attorney’s fees and fines to “vindicate the public interest.”

© 2020 Florida Realtors®

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RE Investment Trusts Were Prepared for a Recession

REITs – which trade like stocks that invest in real estate – learned lessons and were preparing for a new recession. As a result, they avoided the worst of the downturn.

NEW YORK – REIT (real estate investment trusts) management teams have been saying that they learned some important lessons from the global financial crisis that pushed them to shore up financial strategies and improve liquidity. Those lessons are being put to work amid mounting financial pressures emerging in the wake of COVID-19. A REIT invests in real estate but ownership is traded similar to stock trades.

“The best time to make strategic moves is before a crisis, not during it,” says Todd Kellenberger, REIT client portfolio manager at Principal Global Investors. “Many REITs took those lessons from the last downturn and made a strategic decision this cycle to strengthen balance sheets by reducing leverage, extending and staggering maturities, and ensuring that they have the liquidity and cash on hand to be opportunistic or weather the next storm.”

The listed REIT market certainly entered the economic disruption caused by the pandemic on stronger financial footing compared to the eve of the great financial crisis. The majority of companies have delevered with leverage ratios at the end of 2019 at or near their lowest level in more than two decades, and analysts tend to agree that most companies are relatively well prepared for a recession. REITs have also improved liquidity by expanding revolving credit facilities and increasing the use of unsecured debt.

At the same time, REITs are bolstered by last year’s record $109.36 billion raised in equity and debt from public capital markets, nearly double the $55.63 raised in 2018. Between 2009 and 2019, REITs raised $440 billion in equity capital.

“In most cases, we do not see a deterioration in this discipline and expect most REITs will benefit from solid balance sheets and robust liquidity near-term,” says Chris Wimmer, vice president, real estate at DBRS Morningstar. “That said, some sectors, such as lodging and discretionary retail, are feeling the economic brunt of the pandemic more than others. We view these property types as the more likely to exhaust liquidity in the near term,” he adds.

Although REITs are leaning on lessons learned in the 2008-2009 recession, management teams have been forced to adapt strategies to a highly fluid situation with a myriad of unique challenges.

“The arc of history is that the past always rhymes, it doesn’t repeat,” says Michael Knott, U.S. head of REIT research at Green Street Advisors. The last recession was a financial crisis, while the current situation is a double whammy of a public health and economic crisis. “So, it is not balance sheets and liquidity being directly under fire, it is the durability of the cash flow promised by leases,” he says. “We’ve seen unprecedented government actions and the closing down of society that is pressuring the basic concept of a lease contract and the durability of cashflows that normally provides.”

Focus on preserving liquidity

The pandemic swept through global economies with amazing speed, triggering business closures and a spike in unemployment that put REIT cash flows in jeopardy. REITs responded quickly by taking steps to maintain liquidity in order to sustain operations in a highly uncertain and still volatile climate.

Across the board, REITs have suspended earnings guidance for the rest of the year, followed by moves to tap lines of credit, suspend or reduce dividends, halt share buyback plans, reduce executive compensation, and delay cap-ex and development projects.

“In general, the collective memory of the downturn in 2008 and 2009 is still pretty fresh. So, you have seen some pretty aggressive steps being taken in terms of preserving liquidity and maximizing flexibility,” Knott says.

Specifically, companies have initiated massive drawdowns on lines of credit with some staggering numbers in some cases, notably in the lodging sector. REITs also moved quickly to make changes to their dividend payouts.

Park Hotels and Resorts Inc. (NYSE: PK) said it would suspend dividend payments following the payment of its first quarter 2020 dividend. Macerich (NYSE: MAC), meanwhile, was one of the first REITs to cut its dividend. The company announced March 16th that it would not only reduce its dividend by one-third, but also pay a majority of the remaining dividend in stock.

In response to efforts by Nareit (National Association of Real Estate Investment Trusts) to help REITs conserve capital, the Treasury Department and the Internal Revenue Service said May 4 that public REITs could use up to 90% stock to satisfy their distribution requirements through 2020.

Another strategic move has been extending lines of credit where possible. For example, Simon Property Group, Inc. (NYSE: SPG) expanded its line by $2 billion and extended it three years by pushing it out to 2025. “That is not as sensational of a headline as someone drawing down their entire line of credit, but it is a very good liquidity-preserving move,” Knott says.

For its part, Camden Property Trust (NYSE: CPT) further strengthened its liquidity position with the issuance of a 10-year, $750 million senior unsecured note. That deal represented the REIT’s largest ever bond issuance, as well as its lowest ever coupon on a bond. The deal also helped to reopen the bond market, notes Alex Jessett, CFO at Camden.

“We are very hopeful that the rest of our REIT brethren will take advantage of that, because we believe that the stronger we are as an industry, the more beneficial it is for each of us individually,” he says.

As of mid-May, Camden was sitting on about $1.5 billion in liquidity, including almost $600 million of cash and cash equivalents and no outstanding amount under its $900 million senior unsecured credit facility. Camden doesn’t have any debt maturities until 2022, when it has $100 million in January and $350 million in December.

In addition, the REIT put a temporary delay on a planned development in Plantation, Florida, where only minor site work had been completed. It made sense to temporarily delay that project out of an abundance sense of caution and with the hope that the REIT may be able to obtain some additional pricing power in construction costs in the coming months that could be beneficial, Jessett says.

REITs adopt defensive strategies

REITs across the board have moved into a more conservative “just in case” mode of cash preservation. That was especially the case at the early onset of the coronavirus in the U.S. in late February and early March, amid panic on Wall Street that was fueling uncertainty on how financial markets might hold up during the pandemic.

For those that had lines of credit, it was better to draw on that cash, because they weren’t sure if they would have the ability to do so later if they waited, Kellenberger notes. “Since then, we have seen tremendous amount of backstop from a fiscal and monetary standpoint, really ensuring that there is ample liquidity in the broader financial markets,” he says. Nonetheless, REITs have continued to execute on different strategies ranging from upsizing lines of credit to putting a freeze on new hiring.

“We run our business very conservatively and felt that it was prudent to enhance our cash position during this time of uncertainty,” says Sumit Roy, president and CEO of Realty Income Corp. (NYSE: O).

The company had raised approximately $730 million in equity in late February at favorable pricing. In addition, the REIT has taken a number of steps, including borrowing an additional $1.2 billion under its revolving credit facility and pricing a 10-year, $600 million bond issuance that put its total liquidity position at $2.9 billion as of mid-May.

“As we modeled our capital needs into the next year, we overlaid fairly draconian downside scenarios and determined it was in the best interest of our shareholders to prepare for the worst and then some, and to build our cash reserves as an insurance policy,” Roy says.

Those measures give Realty Income financial flexibility to cover potential liquidity needs in the near-term without having to rely on what could be an increasingly volatile capital markets environment, Roy notes.

One move the REIT has not made is reducing its monthly dividend, which it views as an integral part of the firm’s brand as the “monthly dividend company.” “While we do not anticipate any changes to our dividend strategy going forward, this is another financial lever available to us, although we continue to view the dividend as sacrosanct,” Roy says.

Lodging, retail bear the brunt

REITs across the board face challenges ahead with the Federal Reserve’s economic forecasts for 2020 predicting a contraction in GDP of 6.5% and an unemployment rate of 9.3%. However, the impact will be very different across property sectors and geographic regions.

Hospitality and retail cash flows have been hit hardest by the business shutdown and tenant requests for rent relief. In addition, some geographic markets have been more severely impacted by others. Additionally, economies that rely more heavily on tourism and convention business, such as Las Vegas, Orlando and San Francisco, face a tougher recovery ahead, even as businesses begin to reopen.

Lodging REITs have had to respond quickly to a freefall in occupancies and revenues. Park Hotels and Resorts, for example, moved aggressively by drawing down its entire $1.3 billion line of credit as it has more leverage on its balance sheet than its peers due to a prior MandA deal, Knott notes.

Host Hotels and Resorts, Inc. (NYSE: HST) also drew down its entire $1.5 billion line of credit and is sitting on almost $3 billion in cash, Knott says. That shows how both ends of the spectrum are taking similar steps, which points to the severity of the situation related to diminished cash flow and deep challenges facing the hotel sector, he says.

“For retail and hotels, we expect near-term cash flows to be impacted meaningfully,” Kellenberger adds. That being said, most companies have been able to draw on lines of credit or revolvers or rely on cash on hand that will allow them to go through a cash burn for an extended period of time. Other sectors that are experiencing very little rent defaults or deferrals are in a stronger cash flow position and would be able to weather a downturn or recession for an even longer period, he adds.

Many REITs in the lodging, gaming, and retail sectors have reduced or suspended dividends. “That makes sense. Those companies won’t be rewarded right now if they continue to pay cash out when they are likely to have so little coming in the door,” Kellenberger says.

Poised for opportunities

It remains to be seen how deep and how long the COVID-19-related financial crisis may last, and it is unlikely that REITs will escape the current economic challenges unscathed. Management teams will still need to operate carefully, keep close tabs on their portfolios, and execute careful strategies to deal with the impacts of the pandemic.

However, strong balance sheets will buy REITs more time in being able to weather the storm, and for some, the ability to access “dry powder” puts them in a good position to capitalize on opportunities that may arise to add value for shareholders.

“When we went out and made a conscious decision to have one of the best balance sheets in the REIT industry, it certainly wasn’t so we could congratulate ourselves on an achievement. It was because we recognized that those REITs that had the best balance sheets were the ones that were going to produce over the long period the best shareholder return,” Camden’s Jessett says. “Very strong REITs have the ability to take advantage of opportunities when others are sitting on the sidelines. So, we certainly will be looking to take advantage of opportunities out there.”

A silver lining

Camden isn’t the only REIT on the lookout for expansion opportunities. During recent video interviews with Nareit, several REIT CEOs expressed confidence that they would be in a position to expand their businesses in the wake of the coronavirus crisis.

Ramin Kamfar, chairman and CEO of Bluerock Residential Growth REIT, Inc. (NYSE American: BRG) said the REIT is fortunate to have a “significant amount” of cash and access to capital. The REIT has already signed up one post-COVID deal and is looking at additional opportunities. “We think there’s going to be plenty of opportunities to take advantage of as we go through this downturn,” he said

Agree Realty Corp. (NYSE: ADC) increased its acquisition guidance for the year to $700-800 million at the end of April from $600-700 million. Joey Agree, president and CEO, said “we’re seeing a lot of opportunities given the dislocation we see in the market today.”

Lou Haddad, president and CEO of Armada Hoffler Properties, Inc. (NYSE: AHH), noted that this is the fifth recession the REIT has weathered. The company’s response to the crisis has been to work with tenants, conserve cash, and get ready to outperform its peers once the crisis clears. “We want to be ready to take advantage of what should be a lot of opportunities in the market come the latter part of this year and 2021,” Haddad said.

Kimco Realty Corp. (NYSE: KIM) CEO Conor Flynn said the REIT is “well-positioned” to take advantage of market dislocation, noting that the Kimco has prepared for a downturn by transforming its portfolio and prioritizing liquidity. “This time around we’re in a position to be opportunistic, recognizing that we do think there’s going to be some dislocation both from the private side and from potentially the public side,” Flynn said.

© 2020 States News Service

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The 9 Rules a Tenant Is Most Likely to Break

What goes on behind closed doors? 1 in 4 tenants makes holes in the wall, mainly from nails – and 13% secretly replace damaged furnishings, fixtures and fittings.

NEW YORK – Landlords know that not every tenant is perfect, but a study attempted to uncover which rules they break the most. On the upside, they found that the most common offenses focus on decorating and aren’t too serious.

The top offense? One in four tenants make holes in walls – often from nails. It’s most common among renters aged 25 to 34, according to the tenant survey conducted by iProperty Management.

Also, one in five renters (19%) say they’ve completely redecorated a property without their landlord’s permission.

Interior decor aside, tenants have many times hidden pets from their landlord, though more men than women committed this infraction: 16% of male renters confessed to it compared to only 10% of females, the survey found.

In addition, not all renters submit maintenance requests and wait for their landlord to do repairs. Many take matters into their own hands, which sometimes costs them a notable amount of money. Renters surveyed said they’ve spent an average of $480 on maintenance and improvements – requests usually covered by the landlord. Men tend to spend more, an average of $528, or about $100 more than women.

Broken down by age, renters aged 35 to 44 invested an average of $586 in the maintenance and improvement of their rental, more than any other age group. The fixer-uppers say they’ve paid to replace old fixtures, while 61% spent money on interior-decoration maintenance and 52% spent money on maintaining their garden.

Overall, 28% of renters think there are too many rules for tenants, and 16% believe those rules are too strict. In addition, 33% of renters believe tenancy rules make their property feel like less of a home.

Rules most often broken by tenants

  1. Making holes in walls: 25%
  2. Redecorating: 19%
  3. Secretly replacing damaged furnishings, fixtures and fittings: 13%
  4. Keeping a pet: 12%
  5. Making a late rent payment: 10%
  6. Smoking indoors: 7%
  7. Changing locks: 6%
  8. Subletting a room or the whole property (long or short term): 5%
  9. Removing or disabling fire or carbon monoxide alarms: 4%

Source: “The Secret Lives of Tenants,” iProperty Management (2020)

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Fed Has Dim Outlook As Virus Squeezes Economy

Federal Chair Powell said the ongoing pandemic threatens a modest rebound in early summer, and that the Fed will keep interest rates near zero well into the future.

WASHINGTON (AP) – Federal Reserve Chair Jerome Powell warned Wednesday that the viral epidemic is endangering the modest economic recovery that followed a collapse in hiring and spending this spring. As a result, he said, the Fed plans to keep interest rates pinned near zero well into the future.

That faltering economy, pressured by a resurgence of the virus, has heightened the need for Congress to continue providing significant financial aid, Powell said. Members of the House and Senate are negotiating a new package but are nowhere near agreement. Senate Republicans and the White House are proposing a plan that would provide less help for unemployed Americans than they are now receiving.

Speaking at a virtual news conference after a two-day Fed meeting ended, Powell said the economy had rebounded after nearly all states lifted their broad business shutdown measures in May. But since then, he noted, as new confirmed cases have soared, measures of spending and hiring have slipped or plateaued at low levels.

“Now that the cases have spiked again, the early data … suggest that there is a slower pace of growth at least for now,” he said. “We don’t know how deep or for how long it will be.”

The economic stumble, amid the worsened viral outbreak, underscores the connection between the virus and the economy’s ability to sustain any recovery, the chairman said. This point was also highlighted in the Fed’s statement, which added a new sentence: “The path of the economy will depend significantly on the course of the virus.”

That observation was an acknowledgement that uncertainty about when the health crisis might be solved has complicated the Fed’s ability to set interest rate policy.

It’s also a point that Powell has made, in one way or another, for months as most states have succeeded only fitfully in controlling the virus and the ability of businesses to stay open. And it suggested that Powell and the Fed envision a prolonged recovery that will depend in large part on how well the U.S. can contain the pandemic.

“A full recovery is unlikely until people are confident that it is safe to re-engage in a broad range of activities,” Powell said.

In the meantime, he said, “We are committed to using our full range of tools to support the economy. We will continue to use these powers until we are confident we are solidly on the road to recovery.”

Yet despite its concerns, the Fed announced no new policies. It said it will also continue to buy billions of dollars in Treasury and mortgage bonds each month, which are intended to inject cash into financial markets and spur borrowing and spending.

William English, a finance professor at Yale School of Management and former top Fed official, said that Powell stressed that he wanted to see more comprehensive data, such as next week’s July jobs report, before taking further steps.

“He acknowledged the softer high frequency data but didn’t put a huge weight on it,” he said. “He took the weight off that by emphasizing the uncertainty.”

Powell also said that Congress had helped spur the modest economic recovery that occurred in May and June, when spending at retail stores and restaurants surged and employers added 7.5 million jobs. Still, that amounted to just one-third of the jobs lost in March and April.

“In a broad sense, it’s been well spent,” Powell said of the $2 trillion package Congress approved in March. That legislation provided $600 in jobless benefits a week and set up a small business lending program.

“It’s kept people in their homes, it’s kept businesses in business.”

Yet “there will be a need for more support from us, and from fiscal policy,” Powell said, referring to Congressional tax and spending powers.

Congress is in the early stages of negotiating an economic relief package that might extend several key support programs, such as the expiring $600-a-week unemployment benefit. That benefit will likely be reduced in any final legislation.

With the two parties far apart, the federal jobless benefit will likely lapse for at least several weeks for about 30 million people who are unemployed. That would likely slow consumer spending and weaken the economy.

Economists say the Fed has time to consider its next policy moves because short- and long-term rates remain historically ultra-low and aren’t restraining economic growth. Home sales have picked up after falling sharply in the spring. The housing rebound has been fueled by the lowest loan rates on record, with the average 30-year mortgage dipping below 3% this month for the first time in 50 years.

Still, with the economy struggling just to grow, small businesses across the country in serious danger and unemployment very high at 11.1%, the pressure is likely to increase on the Fed to take further steps. Few investors expect the Fed to hike interest rates for years to come. After its previous meeting last month, the Fed signaled that it expected to keep its key short-term rate near zero at least through 2022.

The Fed’s overall message that it would keep rates low indefinitely with the economy in a severe downturn was widely expected by investors, and reaction in financial markets was muted. Stocks maintained their gains, and Treasury yields held steady.

Most analysts say they think the Fed’s next move will be to provide more specific guidance about the conditions it would need to see before raising its benchmark short-term interest rate from zero.

Economists call such an approach “forward guidance,” and the Fed used it extensively after the 2008-2009 recession. Some Fed watchers expect no rate increase until 2024 at the earliest given the bleak outlook for the economy and expectations of continued ultra-low inflation. But by providing more certainty for investors about when a rate hike may occur, forward guidance can help keep longer-term rates lower than they might otherwise be.

Copyright 2020 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed without permission. AP Economics Writer Martin Crutsinger contributed to this report.

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Five Ways Brokers Can Support Struggling Team Members

People react differently to a stumbling economy and pandemic shutdown, but brokers can take steps to help their at-risk agents avoid burnout and stay involved.

SAN FRANCISO – People react differently to a stumbling economy and pandemic shutdown, but brokers can take steps to help their at-risk agents avoid burnout and stay involved.

For one, they should actively check in with each agent, such as through weekly calls, even when nothing is wrong. Even if someone says they’re fine, you can know they’re struggling by watching brokerage metrics, such as when an agent doesn’t log into the company CRM for an extended period of time.

By checking the transaction management platform, brokers can see who created transaction rooms and started to fill out paperwork and who did not.

These red flags suggest someone is disengaging from the company or with real estate in general. When red flags are detected, the broker or team leader should try to have a face-to-face conversation with this person – with proper pandemic precautions – and give them their full attention. In some cases, the leader may be able to offer guidance and assistance. In other cases, the situation may be out of anyone’s control.

It might not help to push an agent to stay in real estate when they need to feed their family and bring home a reliable paycheck. Brokers should accept that not all agents will make it, and the industry drop-out rate is very high.

Source: Inman (07/16/20) Ramus, Erica

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The Return of McMansions? They Answer Pandemic Buyers’ Needs

Locked-in city buyers want more space in their new home, so a large McMansion is appealing and, to city dwellers, the small lot isn’t much of a deterrent.

NEW YORK – As the pandemic compels people to spend more time indoors, experts say home buyers are increasingly searching for larger spaces with so-called McMansions apparently back in fashion, says Sonia Hirt, dean of the University of Georgia College of Environment and Design.

“The suburban home that was so stereotypical and boring suddenly proved itself to have benefits we’ve completely forgotten about,” Hirt says.

A recent report by the National Association of Realtors® found that the median size of an existing home was 2,060 square feet prior to the coronavirus pandemic. For new homes, however, the median size was 2,291 feet, according to the National Association of Home Builders. Architects say they expect those medians to increase in the next year.

“It’s being driven by people looking for the right combination of functionality and price,” says Ken Perlman, managing principal at John Burns Real Estate Consulting. Families want more room to accommodate adult relatives who might have moved in due to the pandemic. College students and young adults also opted to move back home due to stay-at-home measures and the economic situation.

“We’re going to see another bump in multigenerational living,” says Donna Butts, executive director of Generations United. “By combining resources, they can afford a bigger house or a more comfortable lifestyle.”

Source: Realty Biz News (07/27/2020) Wheatley, Mike

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Mortgage Rates Head Below 3% for Second Time

The average 30-year, fixed-rate mortgage averaged 2.99% this week, according to Freddie Mac – only a tick above its all-time low of 2.98% set two weeks ago.

WASHINGTON (AP) – U.S. average rates on long-term mortgages declined this week, remaining near historic lows as the key 30-year loan slipped back below 3%.

Mortgage buyer Freddie Mac reported Thursday that the average rate on the 30-year home loan eased to 2.99% from 3.01% last week. The benchmark rate hasn’t fallen below the 3% mark for 50 years. By contrast, the rate averaged 3.75% a year ago.

The average rate on the 15-year fixed-rate mortgage fell to 2.51% from 2.54% last week.

Homebuying demand continues as one of few bright spots in the economy, with the recovery stagnating and economic indicators pointing to slow growth and possible persistent high unemployment, Freddie Mac said. The government reported Thursday that the economy shrank at an alarming 33% annual rate in the April-June quarter, when the coronavirus outbreak shut down businesses and threw tens of millions out of work. It was the steepest drop in the gross domestic product in records dating to 1947.

As the virus surged in the South and West in recent weeks, many states halted plans to reopen businesses and millions of consumers have delayed any return to traveling, shopping and other normal economic activity. In yet more evidence of deepening economic pain, the government reported that more than 1.4 million laid-off Americans applied for unemployment benefits last week.

Copyright 2020 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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Jumbo Mortgages No Longer the Cheapest Rate in Town

A jumbo mortgage – one that’s larger than Fannie Mae or Freddie Mac will later buy – presents a higher risk to lenders. Before the pandemic, banks considered these buyers more reliable and their rates were low, but the market now favors lower-loan borrowers.

NEW YORK – According to Bankrate.com, the average rate on a 30-year jumbo mortgage hit 3.77% in mid-July – more than 0.4 percentage points above the average rate on smaller, conforming loans.

That’s a switch from convention vs. non-conventional (jumbo) mortgage rates before the pandemic hit. From mid-2015 until this spring, jumbo rates were consistently lower than, or equal to, the rates on conforming loans.

In recent years, banks have favored jumbo mortgages for their relatively low risk level, since jumbo borrowers tend to be wealthier. In March, however, the Federal Reserve agreed to buy an essentially unlimited amount of mortgage-backed securities.

“The loans that get made are those that have a ready buyer for them,” says Greg McBride, chief financial analyst at Bankrate.com. “Government-backed loans are really the only game in town.” If a lender knows that Fannie Mae or Freddie Mac will buy a conventional loan, it represents less risk. If they must keep that loan or find a non-government buyer, it represents higher risk.

In addition, jumbo loans aren’t entitled to forbearance under the CARES Act, which allows homeowners to request up to 12 months of postponed mortgage payments. However, private lenders may offer some type of forbearance option of their own.

As a result, the share of jumbo loans in forbearance stood at 10.2% in mid-July – higher than the 7.8% rate among all mortgages, according to Black Knight Inc. Some banks might be quick to grant relief on jumbo loans since they’re often holding those loans rather than selling them to investors, which leaves the banks more exposed if the loans go bad.

Lenders have been raising credit standards for all sorts of loans since the coronavirus hit, ensuring that only the upper echelon of potential buyers could access jumbo credit. Applications for loans of at least $625,000 filed in May were down about 5% from the same time last year, according to the Mortgage Bankers Association.

Beyond the influence of the pandemic, though, jumbo-loan originations were already fluctuating. They reached $80 billion in the first quarter of 2020 – down about 22% from late 2019 but up 25% from the same time last year, said Inside Mortgage Finance.

Source: Wall Street Journal (07/27/20) McCaffery, Orla

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Negotiating repairs with an AS IS contract

A home is inspected. The buyer wants the seller to make some repairs even though it’s an AS IS contract. The seller isn’t obligated to do repairs – in fact, the seller isn’t obligated to respond to the request at all. So what do you say when a buyer asks, “What do we do now?”

ORLANDO, Fla. – One of the most popular contracts Florida Realtors has available for members is the Florida Realtors/Florida Bar “AS IS” Residential Contract for Sale and Purchase (“FR/Bar AS IS”). As the name implies, the seller listed the property “as is,” which means the seller has no obligation to make repairs.

However, many Florida Realtors Legal Hotline calls involve a buyer requesting repairs from a seller after the inspection results come in during the inspection period. While nothing prevents parties from renegotiating the terms of an existing contract, it’s important to understand the nuances and risks in doing so in order to facilitate a smooth transaction.

It’s imperative to recognize this: There is no obligation on the seller’s part to make any repairs, nor to even respond to a request for repairs.

As a buyer’s agent, it’s important to communicate this upfront with buyers because you want to have a plan in place if the seller says “no” or simply doesn’t respond. The buyer has a strong right of cancellation during the inspection period, but once that period expires, that’s it. There may be other contingencies within the contract, but the time to cancel for any reason within the buyer’s sole discretion is gone.

In some cases, a buyer hasn’t heard back from the seller, the end of his inspection period is fast approaching, and he isn’t sure what to do. In this case, your buyer must make a decision: Either stay in the deal and potentially take the property “as is” without the requested repairs or cancel before the inspection period ends.

What if a seller agrees to make repairs?

Assuming the seller does agree to a buyer’s repair request, their agreement should be written into the contract under the additional terms or as an addendum to the contract.

While it seems easy enough to jot something down, Realtors should understand the importance of the language used in this repair agreement – and they should also understand the potential liability they’re taking on if they take it upon themselves to draft this addendum.

Is the seller agreeing to fix an electrical problem? Great. But simply stating that the seller will do so is not adequately covering the parties. Far too often, calls to the Legal Hotline involve questions about the way in which the seller completed those agreed-upon repairs. But most of the time, the language used in the repair addendum didn’t address any repair standards or say what would happen if the seller didn’t make the repair at all or did it inadequately by the buyer’s standards.

The Florida Realtors contracts that obligate sellers to make repairs contain additional language regarding repair standards as well as when the repairs should be made. This language isn’t in the FR/Bar AS IS contract.

An addendum that involves many repairs, of varying degrees, likely should be drafted by an attorney to ensure appropriate language is used to protect the buyer and seller.

As stated in articles before, the language in the Florida Realtors contracts varies, and what may be in one isn’t necessarily contained in the other. Recognizing your limitations in assisting your buyer or seller is a good way to avoid running into problems later.

Meredith Caruso is Associate General Counsel for Florida Realtors

© 2020 Florida Realtors

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Dear Anne: Too Many Rules Now for an Offer of Compensation

It used to be simple, but the offer-of-compensation rules now vary depending on whether someone is a member of your MLS and/or association; whether they’re a Thompson broker; whether they’re part of MLS Advantage. And how does MLS of Choice factor into offers?

ORLANDO, Fla. – Dear Anne: I have been in real estate for a long time and it used to be a lot less complicated than it is now. All you had to do is belong to the MLS – that was it. Now it’s different story, and, quite frankly, there is confusion among the rank-and-file on how compensation works and we need answers.

Here is my laundry list of concerns I need you to address. What if…

  • They’re a member of your MLS but not your association
  • They’re a member of your MLS but no association
  • They’re a member of your MLS but an association that isn’t part of MLS Advantage
  • They’re not a member of your MLS but are a member of an association that’s part of MLS Advantage
  • They’re a Thompson broker
  • The broker is a member of the MLS but, due to MLS of Choice, the agent is not

I hope you can clear this up for all our sakes. – We Need Answers

Dear We Need Answers: Well, it looks like I have my work cut out for me. I am the first to admit times have changed and NAR’s MLS policy can be challenging. The best way to tackle this is to address each of your bullet points individually.

Warning: There is a lot of information to cover, so brace yourself for MLS policy overload.

They’re a member of your MLS but not your association

Under NAR’s Board of Choice policy, MLS participatory rights shall be available to any Realtor® (principal) or any firm comprised of Realtors irrespective of where they hold primary (or for that matter secondary) membership, subject only to their agreement to abide by any MLS rules and regulations, arbitrate disputes and pay MLS fees.

For example: If Participant Patti is a member of the Sunset Board, by virtue of being a Realtor member in another board, Patti can join the Sunset Board’s MLS. She does not have to join the board to access the MLS. If Patti is a participant in your MLS, she can offer and accept offers of compensation just like any other user. The fact that she does not hold board membership has no bearing on the unconditional offer of compensation afforded to all participants in the MLS.

They’re a member of your MLS but no association/Thompson Broker

These two subjects are one in the same, so I’m combining them. In Florida, Georgia and Alabama, local Realtor-operated MLSs must allow non-members (affectionately nicknamed Thompson Brokers) access to core MLS services: active listing information and offers of compensation.

For example, Broker Bob is not a member of a local board anywhere, and if he wants to join the MLS, he can. He can offer and accept offers of compensation. He must follow the MLS rules, pay fees, adhere to a standard of conduct, be willing to accept discipline and must submit to arbitration involving commission disputes. It is mandatory for Realtors to arbitrate with non-members who participate in the MLS.

They’re a member of your MLS but an association that isn’t part of MLS Advantage/They’re not a member of your MLS but are a member of an MLS Advantage association

Since these two focus on MLS Advantage, I believe one explanation will suffice. If your association participates in Florida Realtors MLS Advantage Service, the offer of compensation extends to you if you are the procuring cause.

If your association does not a participate in this program, the offer of compensation through MLS Advantage does not extend to you.

Take a look at Article 3 and its sidekick, Standard of Practice 3-1, because it could play a part in whether you get paid or not.

Article 3
REALTORS® shall cooperate with other brokers except when cooperation is not in the client’s best interest. The obligation to cooperate does not include the obligation to share commissions, fees, or to otherwise compensate another broker.

Standard of Practice 3-1
REALTORS®, acting as exclusive agents or brokers of sellers/ landlords, establish the terms and conditions of offers to cooperate. Unless expressly indicated in offers to cooperate, cooperating brokers may not assume that the offer of cooperation includes an offer of compensation. Terms of compensation, if any, shall be ascertained by cooperating brokers before beginning efforts to accept the offer of cooperation.

In a nutshell, if your association does not participate in MLS Advantage or you do not participate in the listing broker’s MLS, it’s important to understand that under Article 3, the listing broker must cooperate with other brokers (member or non-member alike as long as it is in their seller’s best interest). The obligation to cooperate does not include the obligation to pay a commission.

It is the cooperating broker’s R-E-S-P-O-N-S-I-B-I-L-I-T-Y to find out if he or she is going to be compensated by the listing broker, especially if the offer of compensation is not extended through participation in the MLS or MLS Advantage.

If you’re coming into the transaction as a “lone wolf” with no ties to the listing broker through the MLS or MLS Advantage, the offer of compensation, if any, may not be the same as the offer stated in the MLS – it may be different or it may be nothing. If you do reach a compensation agreement, it’s a good idea to get it in writing.

A broker is a member of the MLS but, due to MLS of Choice, the agent is not

Finally, the last one. In 2017, NAR changed Policy Statements 7.42 and 7.43. “MLS of Choice” went into effect July 1, 2018, to give agents a choice in subscribing to any MLS in which their broker participates – but they must choose one or one will be chosen for them.

The question is: Can the broker participant be denied compensation if his agent is a subscriber in another MLS?

I believe the best response to this issue comes directly from NAR’s FAQ on MLS of Choice:

26. Do the offers of compensation expressed in the MLS apply to licensees who receive a waiver of MLS subscription fees?
The offers of compensation in the MLS are between the principal brokers of the firm, and not the licensees affiliated with the MLS Participant. The principal broker can rely on the actions of his or her affiliated licensees to claim entitlement to compensation through procuring cause. That remains unchanged for licensees who receive a waiver of subscription fees. Waived licensees are precluded from using the MLS as the source of any property information, and licensees who violate the terms of the waiver can be subject to sanctions in accordance with the waiver agreement and/or MLS rules.

To learn more about MLS of Choice, visit NAR’s website.

Unfortunately, some folks are under the impression they’re automatically entitled to compensation because they are a licensee or hold Realtor membership. Most of us know this is not how it works. A good rule of thumb is to always ask yourself: Is there a verbal offer? An offer in writing? Does the listing appear in the MLS or MLS Advantage? If there isn’t, you may end up working for free.

Anne Cockayne is Director of Local Association Services for Florida Realtors

© 2020 Florida Realtors®

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Photo Copyright Lawsuits: Agents Keep Getting Sued

You need a photo of a Gulf sunset to sell a beachfront condo. A title company you often use has a perfect photo on its website and surely wouldn’t mind if you use it – so you do. It seems innocent, but the actual photo owners are going after agents claiming copyright infringement.  

ORLANDO, Fla. – You take your own listing photos, but sometimes a webpage or flyer would pop more if you could add a single photo of a Florida beach at sunrise or a palm tree backed by a rainbow. Since you don’t like to rise before 8 a.m. and the forecast doesn’t call for rain, you do a quick Google search, find the exact picture you have in mind and use it. After all, when it comes to marketing Florida’s sunny properties, there are a million photos online, and many even look similar.

Who owns the pictures?

The problem for real estate professionals is that someone, many times a company, owns every single online image.

A bigger problem is a fundamental misunderstanding that an image readily obtainable on the internet is available for use by anyone – this isn’t true. “I found it on the internet” doesn’t mean “I have permission to use it.” In fact, this problem has become so widespread that companies are enforcing their rights, demanding that real estate professionals, among others, pay for illegally using their photos in marketing.

Cease and desist

A large and growing number of Realtors® have received demand letters from photo licensing companies, such as Getty Images, citing their illegal use of an image on their website – but a large percentage of the time, the violation is a mistake and members did not know they were doing anything wrong.

Copyright law is not kind, however, and ignorance of the law is no excuse. Violating the law may carry hefty statutory and civil penalties. Claiming that your website was developed by a third-party vendor who selected photos is also no excuse. If you own the website, you’re liable for the violation. Your website developer may share culpability, but regardless of who selected your site’s images, you may be liable.

Protection tips

How do you protect yourself and your business to ensure that you’re not violating someone’s copyright? First, audit your website and identify all the images you’re displaying. Where did they come from, and how do you know you have permission to use them? If you cannot confidently answer these questions, remove them until you receive confirmation of permission.

What if you already have a demand letter stating that you violated someone’s copyright? Consider consulting an attorney and double-check the image in question. Is it owned by the company demanding payment? If it is, remove it. Then make a business decision and see if you can negotiate a lower fine. Do not ignore such a letter; usually the amount demanded will increase over time.

IDX webpage images

What if a copyrighted image is on your IDX webpage? You didn’t put it there – how can you be liable?

There is a process you can institute to protect yourself from violations within your IDX feed – a “safe harbor provision” under the Digital Millennium Copyright Act (DMCA). This safe harbor provides that you, as the “service provider and/or website provider,” can take five steps to protect yourself if republishing images.

Website operator safe harbor provisions

  • Does not have actual knowledge of the infringing content
  • Is not aware of facts or circumstances from which infringement is apparent
  • Does not receive a financial benefit directly attributable to the infringing activity
  • Acts expeditiously to remove the infringing content when notified
  • Has provided a means for receiving notice of the infringing content, registered a person with the U.S. Copyright Office as the designated agent for notices about infringement, and put the agent’s name, address, phone number and email address on the website

Many agents have their own websites, and their brokers also need to ensure that each individual website is registered with the U.S. Copyright Office as well.

“The statute requires each website to register a person or entity that will receive notice of alleged infringement, referred to as a ‘DMCA /Service Provider agent,’” says Katie Johnson, general counsel and chief member experience officer of the National Association of Realtors. “The Copyright Office form is set up such that one person or entity can be the agent for multiple websites by specifically listing each website on the registration form. Therefore, to be fully compliant with the statute, you must list each of the websites for which you want to act as DMCA agent.”

The first line of defense to avoid photo copyright infringement? Take your own pictures or hire someone to take pictures for you. (If you sign a photographer contract, make sure you understand your obligations and limitations.)

If you use online images, pay the licensing fees to ensure that you comply with the law. If you work with a web developer, consider inserting language into your service agreement that indemnifies you in the event the developer provides an image that infringes on someone’s copyright.

Finally, images are not the only items that are copyrighted: writings, drawings, music, printed material and videos are also a source of risk. When using these materials, follow the same steps to protect yourself.

Your terms of use

Your website should clearly state what someone who suspects a copyright violation should do.
Here is the language that the National Association of Realtors® (NAR) uses (NAR says you’re free to update it with your specific information and use it on your site):

If you believe that your intellectual property rights have been violated by [brokerage name] or by a third party who has uploaded Content on our Site, please provide the following information to the [brokerage name]-designated copyright agent listed below:

a. A description of the copyrighted work or other intellectual property that you claim has been infringed;
b. A description of where the material that you claim is infringing is located on the Site;
c. An address, a telephone number, and an e-mail address where [brokerage name] can contact you and, if different, an email address where the alleged infringing party, if not [brokerage name], can contact you;
d. A statement that you have a good-faith belief that the use is not authorized by the copyright or other intellectual property rights owner, by its agent, or by law;
e. A statement by you under penalty of perjury that the information in your notice is accurate and that you are the copyright or intellectual property owner or are authorized to act on the owner’s behalf;
f. Your electronic or physical signature.

[Brokerage name] may request additional information before removing any infringing material. [Brokerage name] may provide the alleged infringing party with your email address so that that person can respond to your allegations.

[Brokerage name] has registered a designated agent with the Copyright Office pursuant to 17 U.S.C. 512(c). If you believe your copyright material is being used on this Site without permission, please notify the designated agent at:

[Brokerage’s Designated Agent name, address and contact information].

You can read Florida Realtors’ terms of use by clicking the link at the bottom of each webpage.

Where can you get photos?

A number of websites offer quality photos for use once you purchase a licensing agreement. Here are a few examples:

Meredith Caruso is Associate General Counsel for Florida Realtors

© 2020 Florida Realtors®

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NAR Backs White House Move to Change Environmental Policy

National policy oversees U.S. environmental permits, and NAR praised a move to ease restrictions on infrastructure projects, calling it a “win for real estate.”

WASHINGTON – For the first time in more than 40 years, the National Environmental Policy Act (NEPA) will be updated and modernized – a win for real estate, according to the National Association of REALTORS® (NAR).

The change is an attempt to accelerate NEPA environmental reviews and ensure that the U.S. can complete infrastructure projects more efficiently and affordably.

President Donald Trump and the Council on Environmental Quality announced a final rule last week. NEPA laws have often been blamed for blocking and delaying infrastructure projects, and NAR hopes the new regulations help simplify and accelerate the environmental review process for projects, including the nation’s roads and bridges.

“While uncertainty will continue to define the coming months, any action policymakers can take to inject some stability and confidence into our markets is welcomed with open arms by America’s 1.4 million Realtors,” says Vince Malta, NAR’s president. “Since NEPA was last updated four decades ago, the real estate industry has seen countless infrastructure modernization projects paralyzed by arbitrary delays and unreasonable cost increases – barriers which today are felt more heavily because of the COVID-19 pandemic. … NAR applauds the White House’s continued efforts to balance much-needed environmental protections with economic development in America.”

NAR also commended the Trump administration for its commitment to other deregulation reforms, including its work to eliminate barriers to affordable housing.

“With our nation’s economy absorbing a shock unlike any felt in nearly a century … Realtors applaud a comprehensive review of all federal regulations that could further inhibit job creation and prosperity,” Malta says. “As housing affordability continues to plague U.S. markets in spite of economic turmoil, NAR remains supportive of reforms that will eliminate unnecessary regulations, ease inventory constraints and help more people achieve the American dream of homeownership.”

The White House says that 16 pieces of deregulation legislation would soon be signed by Trump.

Source: National Association of Realtors®

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What Do Realtors Want in Congress’s Next Relief Package?

While lawmakers almost universally agree on more relief, they largely disagree on how to spend the money. To present the Realtor perspective, NAR sent a letter to House and Senate leaders. It emphasized a need for housing security, market stability, business aid and more.

WASHINGTON – While lawmakers almost universally agree on more relief, they largely disagree on how to spend the money. To present the Realtor perspective, the National Association of Realtors® (NAR) sent a letter to House and Senate leaders, Speaker Pelosi, Republican Leader McConnell, Leader Schumer and Leader McCarthy.

The letter focused on four broad categories: housing security, market stability, business aid and community durability:

Housing security

  1. Extend federal stimulus measures. The number of mortgages in forbearance is declining, which NAR calls evidence that “federal stimulus provisions such as individual direct payments, small business relief programs and expanded unemployment assistance have helped many Americans.” It asks Congress to extend these measures.
  1. NAR continues to support provisions that allow Fannie Mae, Freddie Mac, FHA, VA and USDA Rural Housing to offer forbearance to mortgage holders, plus any additional efforts that “offer homeowners income flexibility.”
  1. More help for renter households, though NAR suggests that emergency rental assistance programs pay money directly to housing providers.
  1. NAR wants “notice to vacate” CARES Act language clarified to renters financially impacted by COVID-19 – a current requirement for housing providers seeking relief.
  1. More money for housing counseling programs targeted at homeowners who used forbearance options to delay mortgage payments.

Market stability

  1. Clarify CARES Act impact on credit scores – specifically what it allows and prohibits for homeowners in forbearance. NAR says the goal is to make sure homeowners in forbearance remain creditworthy, noting that “anecdotal evidence indicates that lenders and servicers are inconsistently marking homeowners who receive or inquire about forbearance options.”
  1. Maintain access to affordable credit. NAR wants Congress to make sure lenders aren’t “raising costs for consumers seeking credit due to forbearance policies that put a financial strain on the mortgage industry.” Generally, NAR wants Congress to take steps that maintain mortgage market liquidity.
  1. More time to comment on new and proposed regulations. NAR says a nation struggling during a pandemic is overwhelmed and needs more time to prepare for major regulator overhauls.

Business permanency

  1. Create narrowly tailored liability protections, so “good faith efforts to restart businesses are not in vain.” NAR says litigation and the associated legal costs “could devastate businesses fighting to keep their doors open.” It also wants the liability protections extended to independent contractors.
  1. Forgive all Small Business Administration Loans under $150,000 – specifically the Economic Injury Disaster Loans (EIDL) and the Paycheck Protection Program (PPP) – should qualify for automatic forgiveness. NAR says this change would “provide significant relief for the smallest PPP borrowers.”
  1. Continue programs that help businesses during the pandemic and add flexibility. “Expediting forgiveness for those struggling to understand the requirements and also expanding eligibility to 501(c)(6) organizations are simple ways to enhance PPP access for more Americans,” NAR says in the letter. It also says small business shouldn’t face any significant tax liabilities.
  1. Expand unemployment to independent contractors who have only partially returned to full work. While including independent contractors – a common status for most Realtors – was welcome in the first round of aid, NAR says some members have returned to work but at a diminished level. A partial-aid unemployment option would give them much-needed support.
  1. Extend unemployment assistance measures, such as the Federal Pandemic Unemployment Compensation (FPUC). That, or other return-to-work bonuses, could offer workers (including independent contractors) a continued ability to meet their mortgage and rent obligations.
  1. Make changes to the Federal Reserve Main Street Lending Program. Calling the current program “attractive but unattainable,” NAR dislikes the current decreased loan size of $250,000 and calls the minimum employee threshold “unreasonably high.” It encourages the Federal Reserve to make the Main Street Program more accessible to more businesses, including a push to get more banks to participate.
  1. Offer more access to federal loan programs for commercial real estate. “Commercial lending has decreased significantly and commercial tenants are exiting rental agreements at extraordinary rates,” NAR says in the letter. It “urges Congress to provide additional support … through access to funds to keep workers on payroll and meet their business expenses, and prioritizing extending and enhancing loan programs to reinforce commercial business stability.”
  1. Enact nationwide remote notarizations. NAR wants a separate bill – the “Securing and Enabling Commerce Using Remote and Electronic Notarization Act of 2020” (S. 3533, H.R. 6364, the SECURE Act) – passed too.

Community durability

  1. Aid to local and state governments. NAR says this will “empower targeted community responses,” to promote public safety, and also will protect homeowners if governments feel pressured to pay for their pandemic mitigation efforts by raising property taxes to make up for deficits.
  1. Extensive broadband access. Calling broadband “especially problematic in rural areas,” NAR asks Congress to invest resources in expanding the “connectivity needs of millions of Americans in rural areas and the communities that support them.”

NAR posted a copy of the letter to Congress on its website.

© 2020 Florida Realtors®

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RE Investing: Where to Put Money in an Unpredictable World?

A sponsor is like an orchestra conductor for real estate projects and investors, and success today requires an ability to adapt to changing real estate landscapes.

NEW YORK – One question that real estate investors often ponder is, what does it mean to be a good sponsor? At first glance, it seems that a good sponsor is one who can identify profitable projects and complete these projects in a way that is mutually beneficial to both themselves and their investors.

But this answer, while true, is similar to saying that ‘good food’ is what makes a good meal – if a firm wants to put itself in a position where it can successfully complete profitable projects, it will need to have some guiding virtues to help push itself forward.

There are countless virtues investors in a syndicate want to see including experience, track record, integrity, compatibility, forward-thinking and connectedness. But perhaps more importantly than anything else, a successful sponsor will need to have the ability to adapt to an ever-changing real estate landscape. This is something that was especially apparent in 2008, amidst an almost unprecedented change in the real estate market, and the need for adaptability has also proven itself to be unrelenting amidst the entirety of the COVID-19 outbreak.

As harsh as Darwin’s “adapt or die” philosophy might sound, it is a reality that directly affects firms involved in seemingly every speculative market in existence.

As we are quickly beginning to discover, the market for office space – at least during a pandemic – has proven itself to generate even more uncertainty than the housing market and many other property markets. After all, the need for housing – of some kind – is as old as human civilization itself, whereas the need for office space is something that can fluctuate, depending on the state of the economy and the state of society as a whole.

For example, as a consequence of the unexpected COVID-19 outbreak, workers around the world shifted their work from an office setting to a home setting. Even as some people have begun returning to work, many have discovered that they prefer working from home and that they can do their job just as well (and in some cases, better) from home as they could in their old office.

Suppose that even 12% of former office workers do not return to their original place of employment as this study by Gensler suggests. Even with this rather conservative assumption, this still represents an apparent 12% shift in long-term demand for office space and is not something that can easily be ignored. This sudden challenge, once again, is something that is calling for office owners to think on their feet and quickly adapt.

Changing markets, changing strategies

As some office owners are quickly discovering, succeeding in the current climate requires firms to modify their value proposition. For example, rather than focusing on the uncertain future demand for office space – as inflexible firms might be tempted to do – a firm that is willing to think outside the box and focus proactively on the positives is much more likely to be successful.

For example, shifting to office settings where each employee might require more individual space (as COVID-19 has demanded), and by addressing concerns that tenants have head-on by creating safer and better sanitized office settings, are all ways that firms can get ahead and benefit themselves, their tenants and their investors while their competitors sit stationary and indecisive.

One example of a firm that has experienced this sort of success has been Feldman Equities, an office owner with more than 4 million sq. ft. under management in Tampa, Florida, and who is a GowerCrowd client. Until the pandemic took hold, Feldman’s competitive edge was to focus on creating more office settings by blending work and life into a single location with amenities such as food courts, communal “chill zones” with Wi-Fi, bright well-lit lobbies and expansive gyms; now they focus on safety and hygiene.

By seeing opportunity in the wake of chaos, Feldman has accelerated their efforts to capture market share from other operators in the market. While it may be true that there could be a decline of 12% in demand as that percentage of workers stays at home post COVID-19, or that that may be counterbalanced by the demand for more space per person in offices as a result of the pandemic, what Feldman understands is that a competitive advantage can be gained from the uncertainty.

Spending hundreds of thousands of dollars portfolio wide, Feldman has installed UV light and ionization systems to sanitize the heating, ventilation and air conditioning systems within his buildings. They have installed sanitization stations throughout buildings and provide face masks at no charge to tenants.

“My M.O. has always been that when we go into recessions, we have to outdo our competitions and take market share,” Larry told me in a recent strategy call. “With everybody in panic mode, this is our chance to take market share. A lot of people go into fear and apathy in a situation like this.”

If this year has taught us one thing, it is that all markets have become unavoidably uncertain. But rather than fleeing from risk, it is crucial that we develop an ability and the virtues needed to embrace it. Adaptability, by nature, is a universal virtue because no matter what might happen, those who are adaptable will be able to rise to the occasion. While there are few constants in this world of ours, perhaps paradoxically, the need to adapt to change will always remain at the forefront.

© 2020 Penton Media, National Real Estate Investor. Adam Gower, Ph.D., is an authority in content marketing and online communications for the real estate industry.

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Effective Ads Include a Strong Call-to-Action

You need leads to stay in business, and some of those leads should come from ads. While the ad content and design must be compelling, a call-to-action seals the deal.

NEW YORK – Real estate agents need leads to remain in business, so it’s important to effectively write ads with compelling calls to action to generate more leads.

A call-to-action must motivate a reader to make contact, and it does that by including something their target audience finds worthwhile.

They could offer a free market report, ebook, newsletter, webinar or something else of value to get readers to share their contact information. The offer should be available for a limited time, and readers should understand that the free offer will help them and improve their lives.

It’s also important for their message to be straightforward, given people’s busy lives and short attention spans. There should be no doubt what the reader is expected to do next, using language like, “Act now to get a free market report.”

Some agents even offer monthly home buyer classes, sharing useful information and establishing a rapport with attendees. An in-person event, properly staged to achieve social distancing during the pandemic, makes it more likely that these contacts will become clients when they’re ready to buy.

Among other things, agents should tailor their message to the platform they’re posting on, such as punchy statements and fast updates on Twitter, and video tours on YouTube. Ads should also speak to the demographic they want to reach.

In addition, ads should include a link to their agency contact page to make communication easy; ensure the ad copy, design, and on-page placement are strategically combined to attract attention without annoying people; and craft several calls to action since not all customers will consider a single type of call-to-action appealing.

Source: Better Homes and Gardens Real Estate Blog (01/23/2019)

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