Q: When it comes to working with international clients, what are some of the most common myths that need to be set straight?
A: International business can seem like a daunting venture. Language, culture and differing business practices are potential complications that can make even a seasoned real estate professional hand a foreign client to another agent. But why give that client, and any residual referral business that might come with it, to someone else? Let’s set five of the top myths straight:
1. I need to speak another language.
Au contraire! English is widely accepted as the global language of business, so chances are your international clients will have some command of the English language. And in today’s increasingly global marketplace, there are resources and tools aplenty to help you communicate in nearly any language. For tips on how to overcome language obstacles, visit the NAR Global blog at theglobalview.blogs.realtor.org, and check out the post “You Don’t Have to Speak Another Language to be a Global Agent.”
2. I need to be a world traveler.
Stamps on a passport don’t automatically translate to international success. In fact, some of the most prosperous global professionals aren’t able to travel abroad more than once every year or two. So what do the jet-setters have in common with successful stateside agents? An Internet connection. Creating an online presence that provides unique, relevant and up-to-date information; accessibility via email, phone and video conferencing; and differentiating yourself with content and proven experience are key factors in attracting and keeping international clients. Past issues of Global Perspectives (available at realtor.org/global) provide practical tips for creating and executing an online marketing strategy through websites, blogs and social media.
3. International transactions are complicated and time-consuming; it’s not worth it.
No doubt, international transactions pose some unique challenges when compared to domestic transactions. But, in terms of whether it’s “worth it,” the numbers speak for themselves:
Last year, foreign buyers spent $149,000 more (mean purchase price) on homes in the U.S. than domestic (U.S.) buyers.
60 percent of foreign buyers paid in all cash, versus about a third of domestic (U.S.) buyers.
59 percent of international clients were from referrals.
For tips on overcoming common obstacles in international transactions (such as financing, immigration, tax and currency issues), view the recent blog posts, “7 Tips for Managing International Transactions” and “Overcome Global Barriers,” on The Global View.
4. International business doesn’t exist where I live.
Foreign buyers are purchasing in markets of all sizes, in all 50 U.S. states. NAR’s Local Market Assessment Case Studies (available at realtor.org/global/local-market-assessment-case-studies) profile U.S. states where global business is “unlikely,” and provide step-by-step instructions to help you find it where you live.
5. I don’t have an international network.
Past blogs from The Global View, such as “Build Your Global Team,” provide tips on finding international professionals in related fields, such as immigration attorneys, tax specialists and financing/lenders. As you establish this network and refer business to these contacts, they will refer business to you. Agent-to-agent networking is also a worthwhile venture. The Certified International Property Specialist (CIPS) designation provides a strong educational foundation, and immediately connects you with an elite network of about 2,500 real estate professionals around the world who turn to each other first when referring international business.
Posted on October 31st, 2014. Original content from Zillow's Real Estate Blog.
by Bob Vila
There’s a chill in the air — do you feel it? Rather than wait around for the mercury to plummet, take steps now to ensure that your home remains comfortable through the coldest months of the year.
Besides proper insulation and HVAC maintenance, I recommend taking a close look at your windows. Notorious for air leaks, windows can not only admit cold air, but also allow heated air to escape. There are many ways to seal such drafts — but first you’ve got to find them.
Locate the draft
Here’s a quick and easy method of testing the seal on your windows. First, walk through the house and close all the windows as tightly as possible. Next, light a candle. Hold the flame near each window, inches from the glass, slowly moving the candlestick around the seam between the window and its frame.
If, while your hand is still, the flame bends or flickers, then there’s probably an air leak. Mark the trouble spot with a sticky note so you can return to repair it later. Test every window in the house, marking each area where you suspect a draft.
For a more accurate diagnosis, hire a professional to perform an energy audit of your home. Though there’s a cost involved here, many local utility companies offer such services either for free or for a nominal fee. Check with the company that provides your electricity.
It’s certainly worth inquiring, since what professional energy auditors do is a lot more sophisticated than the candle method. They conduct thorough, room-by-room assessments — not only for window drafts, but also for any other instances of energy inefficiency.
Address the cause
Having pinpointed the locations of window drafts in your house, the next step is to seal them all up. There are several ways to get the job done. Some methods are inexpensive, temporary and manageable for do-it-yourselfers. Other more permanent options are quite expensive and best left to contractors. Choose the fix that best fits your needs and budget:
Weatherstripping. Easily affordable, with a price tag of only a few bucks per window, weatherstripping lends itself to easy DIY installation. Purchase the product in your chosen material — felt, foam, plastic or metal are readily available in hardware stores and home centers — and, after cutting the strips to size, use them to fill the gaps between a window sash and jamb.
Caulking. Indoors and out, caulk windows in two places: where the window meets the surrounding casing, and where the casing meets the surrounding wall (inside) or siding material (outside). Tubes of caulk are inexpensive and with a little practice, using them becomes easy. If you’ve caulked your windows in the past, that doesn’t mean you’re off the hook; caulk deteriorates over time. It may be to remove the old caulk and start over.
Draft snakes.Chances are that you’ve seen or even used a draft snake in the past. These are stuffed tubes, placed on a windowsill or under a door, as a modest measure of keeping out the cold and keeping in the warmth. Buy one at low cost or make your own for next to nothing. If you go the DIY route, you can use virtually any fabric, including such materials as extra towels or socks. Fill the middle with batting, rice, potpourri or anything similar you have on hand. Though decidedly makeshift, draft snakes work well in a pinch.
Insulation film.If you don’t plan to open and close the window, try sealing it under a layer of insulation film. Sold by the roll, insulation film either self-adheres or goes on with double-stick tape. Also available are special kits, which include plastic shrink film that, once heated with a hair dryer or other tool, creates an impermeable, airtight seal without visible wrinkles.
Replacement windows.The bad news: It can cost a small fortune to replace the windows in your home. The good news: Upon resale, the average homeowner recoups about 79 percent of what he invested in the replacement. This isn’t a simple case of out with the old, in with the new. Properly installed, today’s windows are much more energy efficient, minimizing drafts and creating an overall tighter seal. In fact, Energy Star-rated windows can lower your energy bills by 7 percent to 15 percent monthly.
Add a layer of protection
No matter the benefits of replacement windows, many people are either unable or unwilling to cover the initial expense. If you are looking for a less costly but nonetheless permanent solution to window drafts, consider storm windows. Some designs fit within the window on the interior; others cover the window from the outside. Any type can go a long way toward insulating and protecting the windows you currently have.
The truth is that to get a handle on window drafts, every layer helps. If you do nothing else to remedy the problem, why not at least hang curtains? You stand to gain not only greater comfort, but also real savings on your month-to-month heating bills. Don’t get left out in the cold!
When Edward and Frances Garfinkle bought the place 47 years ago, it wasn’t a mushroom at all. A traditional 2-story stucco, 4949 Allan Rd blended in with the rest of the block.
But like any growing family, the Garfinkles’ needs and tastes changed over time. They added kids to the mix and eventually needed an apartment for Edward’s mom.
“They wanted something unique — something absolutely one-of-a-kind,” said listing agent Donna Wartofsky of Long and Foster Real Estate.
So in 1974, they went for it. They doubled the size of their home and covered it in free-flowing, polyurethane foam.
The process, the Garfinkles explained, was much like an artist forming a sculpture out of clay. Each day, they’d stand back and tell the builders to bring it in here or stretch it a little more there. They never intended for it to look like a mushroom but over time, the name stuck.
Today, Bethesda’s Mushroom House is the talk of the town, but it isn’t the only home of its kind. The building material is used widely for insulation and roofs because of its flexibility and thermal quality. The Garfinkles call the house their “giant thermos bottle” because even with a 30-foot high ceiling, the house stays well insulated.
The unconventional shape also allows for creativity with how the interior space is used. Measuring 3,700 square feet, the inside is open yet filled with nooks and crannies. There’s a vast great room but also a lounging cave with a fireplace and a cozy cut-out in one of the bedroom walls.
With their kids grown up, the owners are now parting with the place. They’re hoping to attract an artistic buyer like themselves, someone who’s hoping to break out of the traditional, single-family box.
Posted on October 30th, 2014. Original content from Zillow's Real Estate Blog.
It’s been waiting for her. And Taylor Swift could dance to this New York City beat forevermore.
With the release of her fifth studio album, “1989,” this week, the singer is leaving her country roots behind and embracing life in the Big Apple. But Swift first said “Welcome to New York” this spring when she moved into Peter Jackson’s former penthouse. Reports of the purchase first surfaced in March, and now property records confirm the deal closed for $19.95 million.
Rolling Stone recently paid the country girl a visit to see how she’s settling into her Tribeca digs.
“There’s my piano,” she told the magazine. “Here’s my pool table that always has cat hair on it. …That’s a door that I walk into.”
It appears Swift is taking her own advice and “keeping the joke on me.” On a more serious note, though, she’s opening up her home to die-hard fans, known as “Swifties,” for secret jam sessions.
“Instructed to conceal their shrieks of excitement, they climbed the stairs to the top floor of a Tribeca building, where their suspicions were confirmed,” writes the New York Post about her recent night entertaining fans. “…Then, they headed across the hall and into Swift’s apartment — outfitted with a beautiful piano, books whimsically displayed in birdcages, a signed Oscar de la Renta sketch of Swift’s 2014 Met Gala gown and lots of Le Labo candles, personalized to read ‘Taybeca.’”
The home — previously owned by the bearded genius behind the “Lord of the Rings” movies — has 7 bedrooms, 5.5 bathrooms and a cool warehouse-loft feel with exposed brick and overhead beams. There’s also a smaller, 3-bedroom unit across the hall, which Swift reportedly purchased for her security detail.
In addition to media interviews and events with fans, Swift is trying to be the Global Welcome Ambassador for New York City. While some are skeptical, she’s trying to get into the things New Yorkers like to do — like watching the Knicks on NBA opening night. This Wednesday, she was spotted courtside along with Justin Bieber and Ben Stiller.
Time will tell whether Swift makes the Big Apple her permanent residence. From Nashville to Beverly Hills and Rhode Island, she’s been known to shake it off and keep cruising.
Posted on October 30th, 2014. Original content from Zillow's Real Estate Blog.
Six years after loose lending guidelines caused the worst financial crisis since the Great Depression, many still argue it’s too hard to get a mortgage in this country. The debate was framed well recently as USA Today squared off with the Mortgage Bankers Association (MBA), the country’s top housing finance advocate.
USA Today said that human discretion has been taken out of mortgage decision making at banks, and they rely too heavily on transferring loan risk to government-backed entities Fannie Mae and Freddie Mac. The paper printed a rebuttal from MBA head David Stevens saying lenders are running scared because unclear regulations and heavy-handed enforcement can put them out of business overnight for lending to imperfect borrowers.
Both make a similar point in different ways: Home lending got too tight post-crisis and is still too tight. But before we discuss how it’s loosening, let’s remember how we got here.
Brief history of the mortgage industry
The global financial crisis that began in August 2007 was set off by bad mortgage lending.
Until the 1980s, consumer banking held to a simple “savings and loan” model in which community bank reps knew their clients’ finances intimately and could make common sense loan approval decisions; and lenders funded home loans from deposits with modest home price increase expectations.
Then an innovation called loan securitization enabled community banks to sell pools of loans to Wall Street firms, who would create investment funds out of those mortgage pools. Instead of keeping loans on their books until more deposits could be raised to lend more, banks could unload loans in bulk to raise money to fund more loans.
This approach placed more emphasis on the originate-and-sell-your-loans model. Over time, this practice made it unclear whether the lending bank or a future investor was accountable for loan quality.
Two other trends also blurred accountability: a banking mergers and acquisitions wave changed community banking to global banking, and a deregulatory wave meant “savings and loan” banks became Wall Street trading firms that could package and sell their loans.
Further complications develop
Simultaneously, as the 1990s and 2000s progressed, home prices began an upward trajectory that — thanks to loose monetary policy, looser loan guidelines and unregulated mortgage securities trading — continued without interruption until home prices started falling in mid-2006. Banks lent more and transferred the risk elsewhere.
As such, loan standards virtually disappeared, and loans were being made to borrowers with poor credit, and no jobs, income or assets. When these loans started going bad and set off the crisis, accountability was hard to pin due to loans being sold and securitized.
A massive re-regulatory wave followed the 2008 crisis. By 2010, a new body of laws was created (called Dodd-Frank), and the laws have been implemented slowly each year since then. It’s now illegal to make loans without verifying a borrower’s income, assets and credit score, and it’s illegal for banks to sell loans without retaining some sort of accountability.
The new lending landscape
It took more than 20 years of loosening loan guidelines to spark a full-blown financial crisis. However, it’s only been four years since Dodd-Frank began the slow process of re-regulating, so it’s not yet fair to say that lending is too tight.
As lenders slowly get more comfortable with the new laws, it’s also important that you practice common sense.
A lender is there to serve you and do the home buying math for you. The math you most need to understand is your debt-to-income ratio. This is a number that tells you what percentage of your income is going to housing and other debts.
The debt side of your debt-to-income ratio only includes your full monthly housing obligations and items from your credit report such as car loans, student loans and credit cards. It doesn’t include costs like food, utilities, clothes and spending money. The income side of the ratio uses gross income, not take-home pay.
So while lenders sometimes will allow for a slightly higher debt-to-income ratio, you need to determine if you can really afford a home and still maintain your desired spending habits.
As for how loan guidelines are evolving, here are some highlights:
Low down payment options: Fannie/Freddie is currently working on an option for borrowers to put only 3 percent down on homes, with the loan maxing out at $417,000. And the Federal Housing Administration (FHA) still does 3.5 percent down. In both cases, mortgage insurance is required, and lenders can choose whether they layer more conservative requirements (for income, credit scores, etc.) on top of the Fannie/Freddie/FHA guidelines.
Low credit score options: The average credit score on loans Fannie/Freddie is buying today is about 740, but they will buy loans with credit scores as low as 620. Again, it’s up to the individual lender to decide whether they layer more stringent credit score requirements on top of Fannie/Freddie guidelines, so ask your lender.
Lower or inconsistent income options: If your debt-to-income ratio is slightly higher because you’ve had a gap in income, you’re self-employed or your income is heavy on bonuses or commissions, certain lenders might make exceptions on this. Find a retail bank lender that doesn’t sell its loans to Fannie, Freddie or other investors. It’ll be the most likely to make these exceptions, and will only make them if there are other compelling factors like strong credit scores, and money left over after you close.