Posts Tagged ‘home buying’

A cut-out house in the midst of spring flowers with an oversized hand holding a for sale sign

Get a Jump on the Spring Selling Season

Unless you’re a spring chicken, most real estate and title insurance professionals know that as the weather begins to heat up a bit, so does the market. But seizing on business opportunities during this time is not something that happens by accident. Instead, it requires thoughtful, well-executed marketing strategies. Here’s how you can ensure you’re ready for action now that spring has sprung.

Hope Springs eternal

Starting a new marketing campaign is always an exciting and even hopeful time, especially during the spring selling season. Time and time again, the turning of the seasons brings increased buyer demand, as house hunters and sellers look to make a change and start fresh. Agencies that get proactive about their marketing can capture greater market share and solidify their position as the go-to-resource. It all starts by taking a good, hard look at your current marketing programs and making improvements where necessary.

Spring into action

Nearly everyone has heard the expression “look before you leap,” but it merits repeating whenever contemplating a marketing overhaul. Reviewing your previous marketing activities and taking stock of what has (or hasn’t) worked in the past is an essential first step before embarking on a new campaign.

To do this correctly, spring into action and go channel-by-channel. Assess whether your current strategies have brought you closer to your goals. If you started a social media feed to bring people to your agency’s website, dig into Google Analytics and review acquisition numbers. If your drip emails are intended to promote your offers, inspect click-through rates to determine if they’ve moved the needle.  

Apply the principle across the entirety of your marketing output. Only by understanding the historic results of your marketing can you plan for future success.

Spring is in the air

When spring is in the air, put the season at the heart of your marketing and freshen up your copy. Begin with your most important digital asset: your website. Consider rewriting important sections of your site to emphasize the concepts of rebirth. Intertwine these ideas with the real estate market and communicate how your company can keep buyers and sellers safe as they embark on this new beginning. If you can, consider offering a spring-themed promotion. You may also want to create an entire landing page that can act as a hub for your spring campaign and which includes a clear, compelling call-to-action.

Build thematic, impactful campaigns

Once your website has been polished and freshened up, turn your attention to the channels you want to use to promote your products or services. The best part about spring is how well it lends itself to content and social media marketing. Here are a few examples of marketing actions you can take to raise awareness and convey your value:

  • “Spring cleaning”: Build an educational campaign to get people thinking about how they can ensure a smooth buying or selling process. Instruct aspiring buyers and real estate agents to keep an eye out for anything that may mar title. Frame your copy around the concept of “spring cleaning.” Emphasize how important it is to have all paperwork organized and accounted for prior to proceeding with a transaction.
  • Hit the road: Spring often brings an up-tick in in-person real estate events, which are prime opportunities for title agents to hit the road and network. Doing this can potentially lead to greater brand visibility and leads, but only if you’ve prepared ahead of time by doing things like practicing your agency’s elevator pitch.
  • Out with the old in with the new: Leverage the beginning of spring by timing the release of any new products or services you may be unrolling. Doing so dovetails perfectly with the season’s focus on renewal.
  • Expand your social media: Let’s face it: Title insurance isn’t exactly known for its visual qualities. The spring selling season, however, offers plentiful opportunities to change that. Push as much visual content as you can during this time. Even doing small things like profiling your employees or asking your followers to share their favorite spring memories is a great way to grab eyeballs during a time of increased demand.

Let’s welcome the return of spring

As winter reaches its last legs, what exactly “springs” to your mind? For real estate and title insurance professionals, spring is all about the sales. Carefully reviewing your marketing and leveraging the spirit of the season can help you capture new business and success throughout the year. In short, April showers may bring May flowers, but it can also bring a windfall of increased opportunity and profitability to your firm.

Group of gen z looking at their phones

Marketing to Aspiring Millennial and Gen Z Homeowners

Younger generations are increasingly striving for homeownership. Here’s how you can reach them!

Millennials and Gen Z are entering the housing market in greater numbers, and it’s a big opportunity for agents who know how to respond. Successfully courting these younger homebuyers starts by shifting your marketing mindset and adopting new tools and strategies in the process.

Many millennials were slow to enter the homeownership game, although not for lack of trying, and not due to eating too much avocado toast as a young Australian millionaire famously suggested in 2017. Having come of age during the financial crisis of 2007-2008, home ownership amongst this generational demographic has often lagged behind its predecessors, with educational debt being cited as one of the biggest contributing factors. 

In recent years, however, the picture has changed, with nearly 62% of 40-year-olds now owning their own home. Right behind them is Gen Z, with data showing that 30% of 25-year-olds are homeowners, which is 3% higher than their Gen X parents when they were the same age.[i]

The implications for those in the real estate community are obvious. To connect with and convert this demographic, you need to reevaluate your marketing programs. By taking intentional steps to promote your services through channels these younger generations use, you can be better positioned for business success both today and tomorrow. 

Social media

Let’s begin by focusing on social media. Although we have covered social in a variety of other blog posts, it merits repeating here. Why? Because it remains an incredibly important channel for younger individuals. Over 1 in 4 millennials use social media to find products and services, and nearly half use different social platforms to conduct research.[ii] By developing your presence on these channels, and by interweaving multi-media attributes like short-form video, you can make a larger impact and grow your brand awareness. 

Mobile-friendliness 

These days, having a mobile-friendly online presence is a must, especially if you are trying to reach millennials and Gen Z. Research shows that over 96% of internet users ages 16-64 own a smartphone[iii] and well over 50% of people use these devices to access websites.[iv] 

What does this mean for title agencies? Just put yourself in the mindset of a consumer! Let’s say title agency #1 has a website that looks great on your device while title agency #2 does not, which one would you think is going to take care of your needs while closing on a new home? I would suspect you know the answer, and that should tell you everything you need to know about why a mobile website matters. 

Online reviews

If there is one thing you need to know about younger generations like millennials and Gen Z it is that they grew up doing a lot of comparative analysis via review sites like Yelp, Google, Foursquare, etc. Take some time to establish a presence across these review sites and stay active by responding to user comments and complaints. The benefits of doing so are two-fold: Not only will you become more visible to younger users who are using the sites, but you will also showcase that you are a responsive, reliable company committed to customer satisfaction. 

Partnerships 

Even in a heavily digitized economy like ours, good old word-of-mouth marketing still can’t be beaten. One of the best ways to build this positive buzz is by developing relationships with real estate agents who help guide customers through the home-buying process. 

As anyone who has been involved in real estate for a while knows, this is an industry that is forever changing. The rise of millennials and Gen Z home buyers is just one recent development. By getting digitally savvy and making an honest effort to create positive word-of-mouth, you can capitalize on this opportunity and capture more of their business. 

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[i] The Race to Homeownership: Gen Z Tracking Ahead of Their Parents’ Generation, Millennials Tracking Behind (redfin.com)
[ii] Here’s Why Millennials Use Social Media – Marketing Charts
[iii] Mobile marketing statistics compilation | Smart Insights
[iv] Internet Traffic from Mobile Devices (June 2023) (explodingtopics.com)

Businessman stretching an elastic expander wearing Virtual Reality glasses

Understanding the Benefits of an Enhanced Owner’s Title Policy

For every type of insurance that you purchase, there are a variety of different coverages offered. For instance, if you buy homeowner’s insurance you may want to add extra coverage if you have valuable paintings or jewelry that may not be covered by the basic policy amounts.

The same is true for title insurance.

The standard Owner’s Title Insurance Policy affords basic protections against many title defects such as fraud, forgery, or matters in the public record. For example, the policy includes coverage for recorded liens, real property taxes, or legal documents within the transaction that were executed under an invalid or expired power of attorney.

The title agent’s intent is to research thoroughly the ownership rights of the property, as well as any judgments or liens that may exist that could affect your rights to the property. Then the agent clears or cures those issues to ensure that you have free and clear title to the property when you purchase it.

Although your title agent is diligent in searching out the facts about your property that are in the public record, not everything about your property is “of record.” Therefore, a standard title policy includes exceptions to coverage for certain matters that may be undiscoverable.

An Enhanced Owner’s Policy adds 22 new covered risks that are excepted in the standard policy. The enhanced policy is typically available to purchasers of an owner-occupied one-to-four family residence wherein each insured is a “Natural Person.” The term “Natural Person” is defined under the conditions of the title policy. With the enhanced policy, the policy insures against certain future activities and matters that would not be discoverable by the title agent’s search of the land records.

Coverage under an enhanced policy continues to be subject to the title policy’s conditions, exclusions and exceptions unless it is stated differently in the covered risk itself.

Let’s take a look at the additional coverage offered with an Enhanced Owner’s Policy.

Inflation Coverage

One of the most important benefits of an Enhanced Owner’s Policy is inflation coverage. The amount of insurance automatically increases by 10% of the policy amount each year for the first five years, up to 150% of the amount insured for your home. This occurs, without payment of any additional premium, to cover increases in the value of the insured property.

Building Permit Violation

When you purchase a home, you may not be aware that the former owner failed to obtain a legal permit from the proper government office to put in a swimming pool, add a wing to the house or construct an additional dwelling unit (ADU).

An enhanced policy protects you if you are forced to remove or remedy your existing home, or any part of it (other than boundary walls or fences) because any portion was built by a previous owner without obtaining a building permit. This coverage is subject to a deductible amount and a maximum dollar limit of liability, as shown in Schedule A of the title policy.

Covenants, Conditions and Restrictions

Covenants, Conditions & Restrictions (CC&Rs) list the rights and obligations of a homeowners’ association (HOA). This could include your maintenance obligations, property-use restrictions, assessments and insurance obligations, among others.

Without your knowledge, these CC&Rs may have been violated prior to your ownership, resulting in a financial obligation to the HOA or loss of title. An enhanced policy covers you if you are forced to correct or remedy the existing violation or if the title is lost or taken because of any covenant, condition or restriction, which occurred before you acquired your title, even if the covenant, condition or restriction is excepted in the policy.

Encroachment

If any structures on your new property are encroaching onto your neighbor’s property, for instance if the garage is built partially on the neighboring property, the enhanced policy provides coverage in the event you are forced to remove those structures due to the encroachment. If the encroaching structures are boundary walls or fences, this coverage is subject to a deductible amount and a maximum dollar limit of liability, as shown in Schedule A of the policy.

In addition, the policy provides coverage in the event your neighbor builds any structures, after the policy date, that encroaches onto your land (other than boundary walls and fences).

Enhanced Access

An enhanced policy insures you have actual pedestrian and vehicular access to your property.  

Map and Address Inconsistencies

If a map is attached to your policy, the enhanced policy provides coverage if the map does not show the correct location of the land, according to the public records.

Taxes

Sometimes a taxing authority may assess supplemental real estate taxes not previously assessed against the land but covering a period prior to your purchase. This could be due to new construction or a change of ownership that occurred before the policy date. An enhanced policy would cover this liability as well.

Zoning

If a previous owner added structures to the property that violate zoning laws, an enhanced policy provides coverage to you if you are forced to remove or remedy your existing structures, or any part of them, due to those violations. If you are required to remedy existing structures, the amount of insurance is subject to a deductible amount and maximum dollar limit of liability, as shown in Schedule A of the title policy.

In addition, you are insured if it is determined your property cannot be used as a single-family residence because it violates existing zoning laws or zoning regulations.

Final Word

Property ownership is often more complicated than we know, especially if you are purchasing property in an unusual situation, where property has been recently subdivided or where there has been recent construction. If you have any questions or concerns, it may be advisable to enlist the help of a real estate attorney to review all aspects of your purchase. We also invite you to contact a local title insurance agent to learn how the Enhanced Owner’s Title Policy can provide you additional protection for your homeownership rights.

Man standing between 2 houses looking up at stormy, dark sky with 2023 in the clouds

Economic And Real Estate Outlook Cloudy, But Not Stormy

Forecasters Remain Cautious Given Inflation, Interest Rate Uncertainty

The real estate market has cooled over the past quarter, as buyers face mounting economic pressure from inflation, bloated housing prices, and escalating interest rates. But the question in most forecasters’ minds is what will happen in 2023 with inflation and interest rate projections in – as yet – unknowable territory.

Although experts are all over the map when it comes to predicting interest rates – projections for 2023 are currently ranging from 5% to 9% – everyone agrees that it largely depends on the Consumer Price Index and the Federal Reserve’s interest rate decisions that result from that data.

Economic predictions are often based on “the way it happened in the past,” but economic fundamentals are rarely exactly the same mix as in the past. Such is the case today, where economic fundamentals are largely stable and housing inventory remains tight – a promising recipe for a decent, albeit softer, purchase market in 2023.

Rodney Anderson, Executive Vice President, National Agency Manager with Alliant National, noted on a recent October Research webinar that while we are currently experiencing a slowdown in the market, it’s difficult to say what portion of that is seasonal and how much is interest rate-related.

“We’ve had a sellers’ market for a long time, and now, we are returning to equilibrium,” he said. “But if you look at the number of houses on the market, we are still in a sellers’ market, with a lot of regions experiencing only a 3-months’ supply, so there is continued support for prices to remain fairly stable.”

Although there remain a lot of unknowns, many economic forecasters retain a sense of cautious optimism based on what we do know, while lenders and real estate professionals are facing the reality of lower sales and originations in 2023.

Key Factors: CPI and FOMC

The Federal Reserve’s battle against inflation remains one of the key factors in the overall economic outlook for next year, as well as the outlook for the real estate markets, since with each incremental rise in the interest rates, a new segment of buyers will be priced out of the market.

The Federal Reserve has maintained a hard line with regard to inflation, and Federal Reserve Chairman Jerome Powell did not soften his tone during his Dec. 14 presentation following the December meeting of the FOMC, where he announced the Fed would be raising the interest rate another half percent.

“Price stability is the responsibility of the Federal Reserve and serves as the bedrock of our economy,” Powell said at the outset of his speech. “Without price stability, the economy does not work for anyone and without price stability we will not achieve a sustained period of strong labor market conditions that benefit all.”

In addition, Powell said he anticipated that “ongoing increases would be appropriate in order to attain a stance of market stability that is sufficiently restrictive to return inflation to 2% over time.”

One positive indicator in December was the Consumer Price Index, which showed inflation had slowed to 7.1%. While that stat was encouraging, Powell said it was not enough to deter further interest rate hikes.

“It will take substantially more evidence to provide confidence that inflation is on a sustained downward path,” he said.

With the target federal funds rate range now at 4.25-4.5% and Powell suggesting further hikes, it is now anticipated that the federal funds rate could rise to 5.5% in 2023, adding some further deterioration to the pool of potential buyers.

Federal Reserve reports stable economic activity

The Federal Reserve’s Nov. 30 release reported economic activity was flat or up slightly across most of the districts, a sign that the economy continues to hold its own despite the known headwinds of inflation, high interest rates and global issues.

Reports across sectors were uneven. Not surprisingly, lending, home sales, apartment leasing and construction all exhibited slowing trends while improving inventory in the auto industry has resulted in an increase in sales in some districts. In addition, spending was up in travel and tourism, and as well as in restaurants and hospitality. Manufacturing was also up slightly on average.

Employment numbers remain steady

Total nonfarm payroll employment increased by 263,000 in November, and the unemployment rate was unchanged at 3.7%, according to the Dec. 2 release from the U.S. Bureau of Labor Statistics. Notable job gains occurred in leisure and hospitality, health care, and government. Employment declined in retail trade and in transportation and warehousing.

Consumer confidence concerns were largely allayed by record Black Friday and Cyber Monday spending. Although inflation has taken its toll on consumers, low unemployment has kept spending steady across many sectors, including mortgage and rent payments, a factor that is keeping foreclosures contained.

Employment is also a major factor in keeping foreclosures down, and while labor demand is weakening, according to the Federal Reserve, businesses are expressing a reluctance to lay off due to hiring difficulties. Most importantly, most districts reported a fairly positive outlook, pointing to stable or slowing employment growth and at least modest further wage growth moving forward.

Real estate and lending projections

While the economy overall appears to be stable, the real estate market continues to decelerate.

According to the National Association Realtors (NAR) Nov. 30 report, pending home sales slid for the fifth consecutive month in October, falling 4.6%. Three of four U.S. regions recorded month-over-month decreases, and all four regions recorded year-over-year declines in transactions.

While there are always seasonal declines in the fall, the year-over-year number was more dramatic, with pending transactions down 37%.

“October was a difficult month for home buyers as they faced 20-year-high mortgage rates,” said NAR Chief Economist Lawrence Yun. “The West region, in particular, suffered from the combination of high interest rates and expensive home prices. Only the Midwest squeaked out a gain.”

On the upside, Yun was hopeful that the upcoming months will see buyers returning to the market if mortgage rates moderate, as they have in the past few weeks.

Taking a hard look at the numbers, Freddie Mac, in its most recent analysis, noted that home sales have fallen to a forecasted 5.4 million units at a seasonally adjusted annual rate in the third quarter of 2022 from 7 million earlier this year. The GSE forecasts that home sales activity will bottom at around 5 million units at the end of 2023.

“We expect house prices to decline modestly, but the downside risks are elevated,” Freddie Mac noted. “As the labor market cools off, housing demand will remain weak in 2023, potentially resulting in declines in prices next year. However, home price forecast uncertainty is wide due to interest rate volatility and the potential of a recession on the horizon.”

Freddie Mac predictions include:

  • Overall originations are expected to hit $2.6 trillion in 2022 and slow to $1.9 trillion in 2023
  • Mortgage originations will end the year at $1.9 trillion and slow to $1.6 trillion
  • Refinance originations slowed to $747 billion and will deteriorate to $310 billion in 2023

The Wild Card: Consumer confidence

Data can certainly tell us a lot, but at the end of the day, consumer experience and assessments can impact the long-range reality, and consumer confidence is decreasing, according to the Conference Board Consumer Confidence Index.

While not dramatic, the index backtracked to 100.2 from 102.2 in October. In addition, consumers assessment of the current conditions decreased to 137.4 from 138.7 last month, and consumers’ short-term outlook declined to 75.4 from 77.9.  

Consumer confidence can keep the economy and the real estate market moving forward, while hubris can take us into unsustainable territory, as we learned in 2008. A little reality check may not be a bad thing as we all continue to keep tabs on the data and plan for a softer market in 2023.

Q4 Economic Snapshot: Interest Rates, Inflation Weigh On Housing Market

An abnormally hot real estate market fed by low interest rates and the unexpected burst of buying during the COVID-inspired escape from the city may be finally cooling down in response to rising interest rates, inflation and a skittish Wall Street.

While real estate is taking a direct hit from rising interest rates, inflation is also reducing potential homebuyers’ buying power, especially in the low to mid-range properties. But there are a few upsides that could help us weather the storm.

The team at Alliant National has compiled information on the data points that will most impact the real estate market in Q4.

Inflation and Supply Chain

Two of the biggest challenges in 2022 are likely to persist through the end of the year and into 2023, inflation and supply chain disruptions. Additionally, the war in Ukraine has resulted in Russian energy supplies being cut off to Europe and economic pressures triggering inflation, the rise in interest rates, and potential recessionary trends are creating a confluence of uncertainty.

Concerning current economic trends, the September edition of the Federal Reserve’s Beige Book, indicated that economic activity was unchanged, since their July report, with five Districts reporting slight to modest growth in activity and five others reporting slight to modest softening. However, the report also noted that the outlook for future economic growth remained generally weak, with districts noting expectations for further softening of demand over the next six to 12 months.

Market Fundamentals Remain Steady

Despite deteriorating conditions for some home buyers, steady employment numbers should keep real estate moving through the end of 2022. Although the number of buyers competing for each property has decreased in the last few months, homes are still turning over relatively quickly and, in most regions, are sold at the asking price or more.

Continued tight inventory is expected to keep most markets competitive through the final quarter.

While there is no doubt that the real estate market is likely to continue to slow, especially if the Federal Reserve follows through on yet another rate hike, economists remain watchful of other indicators that could bode well for softening the impact.

According to Fannie Mae’s most recent release, GDP is projected to grow 1.3% in the third quarter of this year, followed by 0.7% growth in the fourth quarter.

However, most economists agree that consumers have been far more unpredictable in recent years and better than predicted GDP growth in Q4 could mitigate some of the other headwinds.

Home equity, another positive indicator for the housing market, has increased dramatically over the past decade. The value of homeowner equity in the United States increased from approximately $8.77 trillion in 2010 to approximately $21.1 trillion in 2020, according to TransUnion. CoreLogic reported recently that homeowners gained another $3.6 trillion from 2021 to 2022 as home values continued to escalate, providing some solid financial strength to help homeowners weather a potential downturn.

First-Time Homebuyer Numbers Dropping

During an October Research webinar in September, Selma Hepp, Executive, Research & Insights Interim Lead of the Office of the Chief Economist for CoreLogic noted that the real estate market is experiencing its biggest hit from first-time homebuyers, who are increasingly squeezed out of the market by the trifecta of higher prices, higher interest rates and inflation that is pricing them out of the market.

In spite of that reality, first-time homebuyers, though making up a smaller percentage of homebuyers in recent months, did bump up their participation in August.

Part of that continued interest could be that many buyers are still finding buying more appealing than renting in markets where rents have escalated faster than monthly mortgage payments in recent years. That reality combined with increasing wages in some sectors is helping offset the trifecta.

Strong Employment Outlook Encouraging

U.S. employment numbers have remained strong through the summer, with the economy adding 293,000 jobs In June, 526,000 in July, 315,000 in August, and 263,000 in September, in spite of recession concerns that predicted otherwise. There are 2.0 job openings for every unemployed person, so the demand for labor is strong and should remain so through Q4, though job openings appeared to be on the decline in October.

In mid-September, the Q4 ManpowerGroup Employment Outlook Survey (NYSE: MAN) indicated that the global labor market was likely to remain strong with steady hiring expected to continue through the remainder of 2022. 

ManpowerGroup Chairman and CEO Jonas Prising reported the need for technology talent along with the growth of employment opportunities in finance, banking, and insurance are keeping the labor market strong, especially in the U.S. This along with the fact that the U.S. labor force participation grew to 62.4% in August bodes well for the real estate market as we finish out 2022.

While employment remains strong, the Conference Board Economic Forecast for the U.S. Economy, released on Sept. 14, forecasts 2023 GDP growth will slow to 0.3% year-over-year.

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