TODAY S BUYER S REP A publication of the Real Estate Buyer s Agent Council, Inc. A wholly-owned subsidiary of the National Association of REALTORS April 2017 Volume XXVI Number 4 Getting it Right: Helping Buyers Pick a Neighborhood When buyers move into a house, they re also moving into an entire neighborhood. Hopefully they are just as happy about their new home as they are about their new community. Sometimes, however, buyers fall in love with a house and don t give adequate consideration to the surrounding area. As a buyer s representative, your job is to help buyer-clients make the best decisions in every aspect of their purchase. When it comes to neighborhoods, however, your role is tricky. You want to encourage clients to carefully consider their choice of neighborhood, but you also need to avoid sharing your own opinions or unwittingly violating Fair Housing laws. This issue of Today s Buyer s Rep provides a helpful framework for these conversations. Inside, you ll find advice about addressing the most common questions regarding neighborhoods, along with a companion handout (on page 7) to give your clients. When it comes to picking a neighborhood or any other aspect of buyer representation the bottom line is client satisfaction. If buyers aren t paying enough attention to important considerations, encourage them to slow down and make the best choices. Ultimately, this is your obligation as a buyer s representative. Ensuring client satisfaction is also the best way to earn a buyer s trust and to earn repeat and referral business. LOOK INSIDE... Aspiring Home Buyers Profi le page 3 Neighborhood Selection: 7 Important (and Sometimes Sensitive) Factors page 4 New Consumer One-Sheet: Neighborhood Considerations page 7
MEMBERSHIP UPDATE LAST CHANCE Plan Now WORTH QUOTING... A Don t buy the house; buy the neighborhood. - Russian Proverb to Attend the New and Exclusive RE:Up Event! to Register! Don t miss this opportunity to attend these popular REBAC courses, offered prior to the REALTORS Legislative Meetings & Trade Show in Washington, D.C.: Real Estate Investing: Build Wealth Representing Investors and Becoming One Yourself Military Relocation Professional (MRP) Certification Course Both courses will be held Tuesday, May 16, from 8:30am 5:00pm at the Washington Hilton. For additional details, or to register, please visit REBAC.net/courses/ conference-expo. The Real Estate Buyer s Agent Council (REBAC) and the Real Estate Business Institute (REBI) have partnered to provide a premier setting for our members to take their businesses to the next level with: High-level programming Valuable networking Business-building opportunities RE:Up is an intimate event limited to 300 attendees and only open to REALTORS who have earned the ABR and/or SRS designations. From top-notch general session speakers to smaller learning labs, you ll gain innovative ideas and fresh insights, while also making valuable networking connections. Don t miss this opportunity to RE:Up your business! To learn more and register for this inaugural event, visit www.re-up.realtor. Connect online with fellow ABR designees for news, tips, and referrals! @abrebac 2 TBR April 2017 REBAC.net N
Aspiring Home Buyers Profile Aspiring Home Buyers Profile February 2017 Consumers who are currently paying rent, or living rent-free with someone else, maintain strong aspirations for owning their own home, but face several challenges before reaching that goal. NAR s new Aspiring Home Buyers Profile sheds new light on both real and imaginary barriers confronting prospective homebuyers, including: Affordability pressures: Over half of non-owners indicated they couldn t afford to buy a home, making this the number one obstacle cited by respondents. Lack of entry-level inventory and price appreciation (especially in certain markets in the West) are also playing a role in affordability pressures. High student debt: For many non-owners, student debt is forcing them to delay home ownership. Among the 39 percent of surveyed non-owners who said they have student debt 1, 59 percent indicated they are not very or not at all comfortable taking on a mortgage. National Association of REALTORS Research Department Confusion about down payment requirements: The survey also revealed apparent misunderstandings among non-owners about minimum down payments. Even though other NAR surveys have shown that the median down payment for first-time buyers has been 6 percent for three straight years (and 14 percent for repeat buyers in three of the four past years), a whopping 87 percent of non-owners said a down payment of 10 percent or more is necessary. Key Takeaway: Confusion over actual down payment requirements may be contributing to non-owners lagging confidence. It s an excellent topic for buyer s reps to attempt to clear up with prospective buyers. The Aspiring Home Buyers Profile provides an in-depth examination of the consumer preferences of nonhomeowners. Attitudes toward homeownership, the American Dream, and housing affordability are compared and contrasted among non-owners based on age, household income, and location. View the Full Report To download a copy of the complete survey, visit www.nar.realtor/reports/aspiring-home-buyers-profile. 1 Participants in the Q2 2016 survey. TBR April 2017 3
Neighborhood Selection: 7 Important (and Sometimes Sensitive) Factors Buying a new home requires MANY decisions. When it comes to picking a neighborhood, however, buyers may be surprised to learn that it s their obligation to conduct their own due diligence. It s always best to explain your responsibilities in your initial buyer counseling session, says Rob Mehta, Broker Associate, with Coldwell Banker Burnet in Minneapolis, MN and owner of Rob Mehta+Partners, a real estate training and consulting company. That way, your buyers know what to expect and understand that there are certain things you aren t allowed to do for them. Tell your buyers that, as a licensed real estate professional and a member of the National Association of REALTORS, you must abide by a Code of Ethics that includes upholding Fair Housing laws. Explain that these laws were developed to prevent discrimination against certain protected classes and to make sure every buyer is given access to any property that satisfies their needs and preferences. To ensure buyers are making their own free decisions and aren t being steered, buyer s reps must decline to share their own opinions on some topics. However, you can and should offer resources that will help clients conduct their own research. Be frank with your buyers and explain where you CAN T help them, while also explaining everything you WILL be doing for them. By shaping expectations right up front, buyers will be much less likely to become frustrated when some of their questions are tossed back into their lap. Instead of thinking Aren t you being paid to answer this? they ll say, Oh yeah, this is one of those Fair Housing things, right? Common Topics When it comes to evaluating a neighborhood, most buyers questions fall into one of these seven categories. (Note: the new Consumer One-Sheet on page 7 lists these same topics and is a great companion handout for discussing your buyers neighborhood preferences and related Fair Housing issues.) 1. SCHOOLS Are the public schools well regarded? What are the private school options? A school district s reputation can have a strong impact on the desirability of certain neighborhoods, making this a top concern for many buyers, even if they don t have school-aged children. Smart buyers recognize that good schools can have a positive impact on their home s future resale value. The quality of local schools, however, is largely a matter of opinion and as a real estate professional, your opinions should remain private. Instead of inadvertently biasing your buyers, encourage them to investigate the schools using a variety of methods and reach their own conclusions. Tell them about major ranking sites (like greatschools.org and niche.com/k12) but also offer your best local sources for information on both public and private schools. Finally, suggest that visiting the schools and talking to other parents and/or the faculty and administration may offer subtle insights into a school s culture that won t be apparent in average test scores and other data. 4 TBR April 2017
Fair Housing Month 2. CRIME Will I feel safe in this neighborhood? Feeling safe is an extremely personal decision that depends on an individual s personality, opinions and life experiences. Your job is to help your buyer make that decision independently not to make it for them. Similar to school ratings, numerous websites compile data on different types of crime (theft, disorderly conduct, sex offenders, etc.) including crimereports.com and city-data.com/crime. Some of these sites offer unique features, like customized searches and special alerts. Make a point of staying updated on resources, including tools offered by your local law enforcement agencies, community newspapers, or online neighborhood groups (like nextdoor. com) so you can impress your buyers with the best and most reliable resources. 3. TRANSPORTATION How easy is it to get around? Is there convenient access to highways and public transit? Are there problems with traffic, lack of parking, etc.? In addition to helping your buyers access public transportation schedules, stay on top of major plans to modify infrastructure in your community, including new parking facilities, roads or plans to expand existing streets. Also, encourage your buyers to drive around the community at different times of the day, so they ll develop a personal sense of how well traffic flows and how easy or difficult it is to travel between different areas. April marks Fair Housing Month, a time to reaffirm the goal of helping all Americans achieve the dream of home ownership. Fair Housing laws make it illegal to discriminate in the sale, lease or rental of housing due to a person s race, color, sex, religion, national origin, familial status and/or physical and mental handicaps. In support of the Fair Housing Act, NAR offers numerous resources that can be displayed in your office or shared with clients. For more information, visit www.nar.realtor/programs/fair-housing-program. 4. DEMOGRAPHICS Who else lives here? Will I be able to develop friendships? Will I feel welcome? Of all the questions buyers may ask, these are the ones at greatest risk for crossing into Fair Housing territory. In most cases, buyers ask these questions for very benign reasons wondering, for example, if their young children will have neighborhood playmates. (The answer, however, involves not one, but two protected Fair Housing categories age and familial status.) In addition to Fair Housing laws, there are other good reasons for buyer s reps to refrain from discussing neighborhood demographics. Typically, agents are just trying to be helpful, explains Mehta. But they also run the risk of being TOO helpful and accidentally saying or doing something that gets them into hot water with their clients. It s fine for buyers to harbor their own preferences about where they want to live, based on who else already lives there. It s also fine if buyers personal preferences involve any of the classes protected by Fair Housing. Your job is to act upon their conclusions which geographic area do they prefer, as well as other objective constraints like price, floor plan, age of home, etc. Continued on page 6 TBR April 2017 5
Neighborhood Selection: 7 Important (and Sometimes Sensitive) Factors Continued from page 5 5. EATING AND SHOPPING What restaurants and stores are nearby? When moving into a new area, most buyers are eager to learn about their shopping and dining options. While these topics are usually fine, in terms of Fair Housing considerations, be prepared to share the best shopping guides and restaurant rating resources for your area. Yelp and TripAdvisor are among the most popular online guides, but you may also be aware of other local resources. 6. RECREATION Are there parks and other facilities for sports, entertainment, etc.? Similar to restaurants and shopping, nearby parks and recreational facilities are important features for potential homeowners. Your town s city hall, chamber of commerce, and/or a parks and recreation department are typically good sources for this information. Ideally, you ll want to compile links for all of these resources on your website. 7. HOUSE OF WORSHIP Regardless of my faith, will I be able to find a new house of worship? Since religion is one of the classes protected by the Fair Housing Act, buyer s reps should be cautious about answering questions about local churches, temples, mosques, etc. If a buyer asks a straightforward question that you can easily answer (like How many Catholic parishes serve this area? ), it s probably fine to respond. On the other hand, steer clear of answering questions like Do a lot of Catholics live here?, which are subjective in nature and potentially reflect a positive or negative bias. For Buyers: Don t Overlook Informal Research! Buyer s reps who are counseling clients on selecting a neighborhood need to stick to reliable and well-regarded information sources. Buyers, however, are completely free to ask and discuss anything they want with whoever they want. Sometimes this casual approach reveals important and interesting discoveries, simply by striking up conversations, including: Neighbors Want to get a better idea of who else lives on the block? Look for opportunities to catch other homeowners in their front yard or knock on their door. On a bus/train If you ll be using public transit, try taking a test drive that includes casual conversation with other commuters. Stores Grocery store clerks usually have a few minutes to chat while scanning your purchases. Small independent shop owners may have a particularly good pulse on the community. Waiting in line Instead of pulling out your smartphone, pose a couple friendly questions to other people waiting to order at a fast-food restaurant, in a checkout line, etc. Restaurants Try a few sit-down restaurants to find new favorite places to eat while also asking your server about the area. Coffee shops Other patrons may be happy to take a few minutes to chat about what they like most about the community. Schools Talk to other parents waiting for their kids at the end of the day or chat with a crossing guard. Library Ask the person at the reference desk about the community. In addition to sharing his/her personal perspectives, they may be able to point you to additional valuable resources. 6 TBR April 2017
Neighborhood Considerations Buying a home involves buying into an entire community. It s important to make sure your new neighborhood suits your needs and preferences every bit as much as the house you decide to purchase. After all, most houses can be modified, but neighborhoods can t. Your buyer s rep will be able to assist you in many important aspects of your purchase, like locating suitable properties, negotiating, and executing essential transaction details. Along the way, they ll be able to help answer your questions, with the exception of certain questions concerning neighborhoods. That s because real estate professionals are required to abide by Fair Housing laws, which prohibit housing discrimination. Further, neighborhood preferences are highly subjective and personal. As a buyer, YOU need to decide if a neighborhood feels right for you. Your buyer s rep can point you to excellent resources for background research, but it s up to you to interpret that information. When considering a neighborhood, here are some of the most important questions to ask yourself: 1. Schools Are the public schools well regarded? What are the private school options? 5. Eating and shopping What restaurants and stores are nearby? 2. Crime Will I feel safe in this neighborhood? 6. Recreation Are there parks and other facilities for sports, entertainment, etc.? 3. Transportation How easy is it to get around? Is there convenient access to highways and public transit? Are there problems with traffic, lack of parking, etc.? 7. House of worship Regardless of my faith, will I be able to find a new house of worship? 4. Demographics Who else lives here? Will I be able to develop friendships? Will I feel welcome? The Accredited Buyer s Representative (ABR ) designation is awarded by the Real Estate Buyer s Agent Council (REBAC), a subsidiary of the National Association of REALTORS (NAR). To learn more about REBAC and access various home buyer resources, please visit REBAC.net. TBR April 2017 7
Real Estate Buyer s Agent Council, Inc. 430 North Michigan Avenue Chicago, IL 60611 1-800-648-6224 REBAC@realtors.org TODAY S BUYER S REP April 2017 Volume XXVI Number 4 Are you an ABR All Star? Although the 2017 REBAC Hall of Fame inductions won t happen until November during the Networking and Awards Reception held at the REALTORS Conference & Expo in Chicago, it s not too early to begin considering nominees for this prestigious award. You can nominate any active member, including yourself, who holds either the ABR or ABRM SM designation, and who meets all other related criteria. The deadline for submitting nominations is July 15, 2017. To download a nomination form, visit REBAC.net/HOF. Please call 800-648-6224 with any questions.