The mortgage process is integral to housing, but a new survey from Zillow finds many consumers are quite lost regarding the details of the process.

U.S. consumers may not be quite as smart regarding the residential mortgage process as many agents would like, according to a new survey from Zillow.

According to the website’s latest Mortgage IQ survey, consumers are incorrect about major aspects of the lending process a third of the time, though that may not be an entirely bad thing as far as agents are concerned.

What’s YOUR Mortgage IQ?

Some of the more notable results from Zillow’s survey included:

• Thirty-four percent of first-time homebuyers are unaware of the fact that there are home loans available that require down payments of 5 percent or less. Whether that means those homebuyers have never heard of the FHA or not, we’re not sure, but Zillow’s own Mortgage Marketplace reported that in the last two years, there has been a stunning 570 percent increase in loan requests with down payments between 3.5 and 5 percent, and the Obama administration’s Housing Scorecard continues to report a disproportionate market share for FHA mortgages.
• Consumers are also unaware of the fact that they can shop for mortgages: 26 percent of those surveyed said they thought they were obligated to close their loan with the lender that pre-approved them, and 24 percent thought the best available rates and fees would always be through the bank they do business with.
• Finally, 34 percent of respondents thought that all lenders are required, by law, to charge the same fees for their credit reports and appraisals.

Is There an Agent in the House?

On first blush, those results may seem horribly demoralizing, considering that so many consumers are so off on some of the mortgage processes’ most important qualities; however, there is one encouraging nugget that emerges from such information: it reinforces the need that so many have for an experienced real estate professional!

Therefore, you’ll want to make sure that you are abreast of the latest developments in the mortgage markets, so that you can provide reliable information about the lending process to your clients. Along with reading high-quality news sites, such as the excellent Calculated Risk and, of course, Chicago Agent magazine, you’ll also want to maintain close relations with a preferred lender. As we constantly highlight in our Ask a Lender series, a preferred lender can be invaluable in educating clients on current mortgage trends, and having such connections will undoubtedly reflect well on you as an agent.

How Smart are Your Clients on the Mortgage Process? was originally published on Chicago Agent Magazine - For the well-informed real estate professional, the leading source for news and perspective for real estate professionals in the Chicagoland area.

Rents for Downtown Chicago apartments hit a new high in 2013′s first quarter, though market trends suggest that such highs are only temporary.

Rents in Chicago’s downtown market outdid themselves again in 2013′s first quarter, with the price per square foot for the area’s top-tier, or Class A, buildings rising more than 5 percent from last year.

As Crain’s explained in a recent story on the increases, though, such record numbers could be temporary with thousands of new rental units set to hit the marketplace in 2013 and 2014.

Downtown Chicago Rental Market – Flying High…For Now

For the time being, though, landlords are living the dream in the downtown Chicago rental market:

• Price per square foot in Class A buildings rose 1.9 percent from 2012′s fourth quarter to 2013′s first quarter, hitting $2.63 a square foot. Since bottoming in 2009, downtown rents for Class A units are now up 26 percent.
• Rent increases, though, are not restricted to Class A buildings. Class B rentals rose even more aggressively from quarter-to-quarter, jumping 6.9 percent to $2.32 a square foot.

However, such increases are temporary. Though analysts anticipate rents to rise another 4 to 5 percent over the next year, developers are planning on unleashing a huge supply of rental units into the greater downtown rental markets. According to Crain’s, seven high-rises with 2,895 units will hit the market in 2013 alone, and another 2,330 will arrive in 2014. And beyond those immediate developments, Appraisal Research calculates that 26 additional developments are underway in the greater downtown area (including the eagerly anticipated Wolf Point), which will add another 6,292 units.

So in short, though lagging supply has allowed landlords to raise rents the last couple years, the shoe may be on the other foot come early 2014, with landlords competing for tenants with lower rents.

But could supply rise too quickly? As Crain’s pointed out, more than 5,200 rental units will hit the market over the next two years; however, according to Appraisal Research, the absorption rate for rentals in Chicago has averaged just 1,540 units per year since 2009, which would lead to a surplus of roughly 2,000 units.

Suffice to say, we could be looking at a much different downtown rental market, come 2015!

Downtown Apartment Rents Hit Record High was originally published on Chicago Agent Magazine - For the well-informed real estate professional, the leading source for news and perspective for real estate professionals in the Chicagoland area.

Taylor Lindstrom has been appointed managing broker.

Michael Pierson and Chris Eigel, principals of the prestigious Chicago-area real estate firm Prudential Rubloff Properties, have appointed Taylor Lindstrom to the position of managing broker of the firm’s Winnetka office located at 850 Green Bay Road.

Prudential Rubloff Appoints Taylor Lindstrom Managing Broker of Winnetka Office was originally published on Chicago Agent Magazine - For the well-informed real estate professional, the leading source for news and perspective for real estate professionals in the Chicagoland area.

Frank Denovi of Coldwell Banker Residential Brokerage

Frank DeNovi, a sales associate with Coldwell Banker Residential Brokerage, has been installed on the board of directors for The National Association of Hispanic Real Estate Professionals Chicago Chapter. The installation dinner was held on May 16, 2013 at The Clubhouse restaurant in Oak Brook, where members gathered to honor the new directors and network with local business leaders.

“I am proud to be a part of an organization with a strong mission that I truly believe in and aligns with my personal and professional goals,” said DeNovi. “NAHREP provides real estate professionals with the education and resources necessary to empower and properly guide the Latino community of buyers and sellers. Ultimately, the purpose is to help families achieve the American dream of homeownership.”

DeNovi is a long time Chicagoland resident with more than 27 years of real estate experience specializing in loss mitigation, asset management, short sales and the sale of REO properties. He is one of Coldwell Banker Residential Brokerage’s top producing Brokers, ranking No. 2 for the company in units sold and in the top 1 percent for NRT Internationally in 2012. DeNovi has also been recognized by the Wall Street Journal and Lore Magazine as one of the top 400 agents in the nation for the past several years.

“It was important to me to get involved in a larger initiative that gives back to the community,” said DeNovi. “I hope that by serving on the Board of Directors I can make an impact on the Hispanic community and be a mentor for other real estate professionals when servicing clients with multi-cultural distinctions.”

DeNovi is the first Coldwell Banker agent to serve on the Board of Directors for the Chicago Chapter of NAHREP.

Frank Denovi of Coldwell Banker Residential Brokerage Installed on NAHREP Board was originally published on Chicago Agent Magazine - For the well-informed real estate professional, the leading source for news and perspective for real estate professionals in the Chicagoland area.

Point2 Joins with MLS Industry Heavyweights for Major Event

Midwest Real Estate Data (MRED), Chicagoland’s multiple listing service (MLS), has announced that Point2 is sponsoring and attending MREDpalooza as a ZAP! level Sponsor.

Point2 provides real estate marketing and lead management software to brokers and agents in North and South America, Europe, Asia, Australia and Africa, as well as listing data aggregation and syndication solutions to real estate multiple listing services in the United States, and Boards and Associations across Canada. Point2’s solutions also include the consumer real estate listings portal, Point2 Homes, in addition to property management software for small to medium size organizations managing up to 1000 units.

Real Estate Digital (RED), another Zap! level sponsor, will be unveiling its line of MRED SelectSites, state-of-the-art agent and broker websites, at MREDpalooza. RED is a leading provider of integrated technology, media and data solutions to real estate franchisors, brokerages, agents, MLSs and Realtor® associations.

In addition to having booths at MREDpalooza, both Point2 and RED will be demonstrating and explaining their full lines of products throughout the day in their own private training rooms.

“Point2 is excited to be participating in MREDpalooza,” said Saul Klein, Industry Principal of Point2. “MRED is recognized as an industry leader and the quality of their programs always exceed expectations. You’ll kick yourself if you miss this one.”

“We are thrilled to be part of MREDpalooza this year, which promises to be Chicago’s tech event of the year,” said John Hensley, Chief Product & Technology Officer of Real Estate Digital (RED). “There’s no better place to launch the MRED SelectSites web platform than at this premier event!”

Market Leader has also joined the MREDpalooza sponsorship lineup. Market Leader is a real estate software company providing a full suite of solutions from lead generation to customer relationship management.

“Not to sound too over the top, but we have been astounded by the reaction of the real estate industry to MREDpalooza,” said MRED CEO Russ Bergeron. “Clearly vendors and MRED customers alike see MREDpalooza for the wonderful opportunity it is, and we’re looking forward to seeing everybody at the Stephens Convention Center in Rosemont on June 18th.”

MRED has a few sponsorship and exhibiting opportunities left, and encourages anybody interested to get in touch as soon as possible. All MREDpalooza participants will enjoy significant interaction with thousands of MRED’s customers.

All Indications “Point” to MREDpalooza Being a Great Success was originally published on Chicago Agent Magazine - For the well-informed real estate professional, the leading source for news and perspective for real estate professionals in the Chicagoland area.

Housing is putting up its best numbers in some time, but we can’t ignore some of its potential hurdles as the market changes.

Nearly every media outlet imaginable has jumped on the housing-recovery bandwagon, reporting on the numerous signs that housing has awoken from its long, painful slumber. Heck, even the Wall Street Journal, that most notoriously fickle of observers, has declared housing to be in recovery!

Yet, there remain outliers to housing’s success story that add smidgens of nuance to the recovery narrative; of course, we do not intend on being the Negative Nancy and raining on everybody’s housing parade, but we think it only fair to point out the four areas of the greater economy that could pose hurdles for the housing market in the coming months.

1. Rising Interest Rates – Interest rates are at historic lows, and they’ve fallen so dramatically that owning is now cheaper than renting in nearly every major metropolitan marketplace. Yet, it’s a certainty that rates will increase, and it would be foolish for any of us to become too comfortable with such low rates, because they are, you know, historic! And though rising rates will not necessarily derail the housing recovery, it’s worth factoring in what impact they could have.

2. Slow Employment Growth – Though the economy has been doing much better in recent months (it’s 165,000 new jobs in April was a particularly good sign), it’s still a far way off from a full recovery, and economists expect it will take five years of similar job growth for the economy to return to pre-recession levels of unemployment – and without a solid base of jobs, fewer Americans will be able to make home purchases.

3. The Changing Mortgage Landscape – According to recent readings, the U.S. government backs roughly 97 percent(!) of new mortgages via the FHA, Fannie Mae and Freddie Mac, but that overwhelming percentage will almost certainly change early next year when the FHFA, the entity that regulates Fannie and Freddie, adopts the qualified mortgage standards from the Consumer Financial Protection Bureau, a move that is expected to raise mortgage standards substantially. It remains to be seen whether private lenders will step up and fill that void, or whether lending will fall as a result of the regulations.

4. The Burden of Student Debt – Finally, there is the escalating burden of student debt. Totaling $1 trillion and now surpassing housing debt, student debt has become such a problem that, for the first time in years, consumers without student debt obligations are receiving mortgages at a greater rate than consumers with student debt. Typically, borrowers with student debt were considered a safer bet for banks, given that their academic degrees granted them higher-paying jobs, but the situation today – where the delinquency rate for student borrowers exceeds 30 percent – has reversed that scenario.

Agents, are you concerned? Will these hurdles play out in time? Comment below!

4 Hurdles for the Housing Recovery was originally published on Chicago Agent Magazine - For the well-informed real estate professional, the leading source for news and perspective for real estate professionals in the Chicagoland area.

Sean M. Carpenter, the director of training and education of Ohio NRT companies for Coldwell Banker, gave a presentation to Coldwell Banker Residential Brokerage agents at the Ronald McDonald House on May 15. Titled “The Realtor’s Toolbox,” the presentation included more than 22 tools, tips and techniques for real estate agents on how they can build their real estate business.

Coldwell Banker/Sean Carpenter Training – 5.15.13 was originally published on Chicago Agent Magazine - For the well-informed real estate professional, the leading source for news and perspective for real estate professionals in the Chicagoland area.

The housing market cannot truly recover without a healthy mortgage market, but new research from LPS shines an optimistic light on the topic.

Homes sales are up, inventory has stabilized, and by many accounts, new construction it putting up its best numbers in the post-boom housing market. And now, the latest study by Lender Processing Services (LPS) has shown that slowly and gradually, we can add another notch to the housing recovery belt: a healthy mortgage market.

Most notably, LPS found that only 0.84 percent of new loans are considered “problem loans,” meaning, seriously delinquent loans that were current six months ago. That’s the lowest level for problem loans since 2007, and the problem-loan rate is now nearing the pre-boom levels of 0.55 percent.

True, the mortgage markets are not fully recovered, what with a 6.59 percent delinquency rate (the historical average is more around 3 percent); however, there was much to like in LPS’ Mortgage Monitor, which studied more than 40 million residential mortgage loans through the month of March. Herb Blecher, LPS’ Applied Analytics senior vice president, said equity has shown particular improvement.

“The overall equity trend has been a very positive one,” Blecher said. “LPS’ latest data shows that the share of loans with LTVs greater than 100 percent has fallen 41 percent from a year ago.”

But of course, LPS’ Mortgage Monitor contained many other stats, the most important of which are collected in our infographic below:

Less Than 1 Percent of Today’s Mortgages are Bad was originally published on Chicago Agent Magazine - For the well-informed real estate professional, the leading source for news and perspective for real estate professionals in the Chicagoland area.

Are you where you belong? Do you have the necessary tools to succeed? Craig Witt addresses those questions in his latest blog.

Please allow me to ask you a question: why do you work where you do? Really, what significant detail or one thing can you say attracted you to and makes you stay where you are? You see, everyone has stuff to some degree…tools, training, technology or some value-add component that keeps you welded in to your office. The question is always, do I feel like I belong here and is it getting the most and the best out of me.

As I tour around the North Central Division of the United States visiting our EXIT Realty offices and speaking at events, I try to ask the agents and brokers I encounter this simple question: why would I work for you or your office? What is it that you really like about where you work, and what would make it better? By asking these effective questions, it gives me a better idea of what is important to them, and how we can better service our own agents.

Broker/owner responses are often interesting as to what they perceive is important to their agents. In a time where Wall Street money is gobbling up real estate companies, acquiring long-time independents, and becoming these mega franchises, service and support are more important than ever. Owners and agents typically don’t mind paying a royalty if they are getting great service and support. In my travels, however, that is not always the case. It is our job as a franchise brand to provide a value proposition to our associates that is better than everyone else. Underpromise and overdeliver in every way so they never have to question the commitment of the company to the asset, the agent.

When I joined EXIT Realty back in 2004, I was taught that the agents are the most important asset in a real estate company. I could not agree more; without agents there is no brokerage and therefore no real estate company. If this is the general consensus, then what can we do to make agents more productive? What can we do to empower our agents to help be part of building our company because they believe it is the best place to work? How do we give them a voice so they can be heard and feel like their opinion matters? When you stop listening to your people, they stop listening to you.

As we cruise through the second quarter of 2013 and business continues to improve, always take time to ensure you are getting your return on investment. Take time to invest in yourself and really utilize the tools, training and technology your company offers you. If you are an owner, participate and pass down the information to your agents to keep them informed and current. Hold them to a higher standard and help them become better through education; the goal is to provide an environment where agents and owners love to work and can be productive.

Have a great month!

Craig Witt is the president of the North Central Division of EXIT Realty Corp., which includes Iowa, Missouri, Wisconsin, Illinois, Michigan, Indiana and Ohio.

Why Would I Work for You? was originally published on Chicago Agent Magazine - For the well-informed real estate professional, the leading source for news and perspective for real estate professionals in the Chicagoland area.

Sales for ultra-luxury homes in Chicago were down in the first quarter.

The sales of ultra-luxury homes in Chicago were down in the first quarter, according to Chicago Metro Area Real Estate. Only five homes in the three million  dollars or more category were sold in Q1, which is down from the 29 units sold in 2008.

This slump was in contrast to all luxury home sales in Chicago,  which experienced overall growth of 29.7 percent. Other notable statistics are:

• 130 ultra-luxury homes were for sale in the first quarter, versus 145 the previous year
• Chicago ultra-luxury homes for sale dropped by 10.3 percent
• The number of all Chicago luxury homes for sale dropped by 23 percent
• Pending Chicago ultra-luxury sales rose by 33.3 percent,
• Days on the market for Chicago ultra-luxury homes increased by 79.8 percent.

National Luxury Sales: 

But according to Redfin, the national outlook for luxury ($1 million or more) real estate in 2013 Q1 has been very good, reaching a six-year high, increasing by 34 percent, with the market as a whole rising only five percent. According to Redfin, 249 luxury homes in the $1 million range have been sold in Chicago in the first quarter, and, according to Chicago Metro Area Real Estate, 33 ultra-luxury homes in the three million dollar range have already been sold or are pending sale in Chicago so far in the second quarter.

Sales time for ultra-luxury homes is typically much longer than the average days for all Chicago real estate because of the small market. In the first quarter, the average time on the market for an ultra-luxury home was 547 days, and for all Chicago homes, it was 119 days.

Ultra-Luxury Sales Down in Chicago Amid Nationwide Six-Year High was originally published on Chicago Agent Magazine - For the well-informed real estate professional, the leading source for news and perspective for real estate professionals in the Chicagoland area.