Spencer Rascoff on the Importance of Real Estate Agents

Zillow CEO Spencer Rascoff was recently interviewed by The Motley Fool, a multimedia financial services company, and asked for his thoughts about whether the Internet might replace the need for real estate agents.

In real estate technology discussions, the demise of travel agents is often cited as the future for real estate agents. Spencer points out that travel is a commoditized product that lends itself to direct purchase. The Internet has replaced the role of a travel agent; an intermediary isn’t necessary for people to buy a plane ticket.

“Real estate is totally different,” says Spencer. “The real estate transaction is complicated, it’s emotional, it’s expensive, it’s infrequent; all of these things lend themselves to the importance of an intermediary. There will always be a real estate agent in the transaction because, for most consumers, it’s just too important and too expensive and too infrequent and complex to screw up, so they need an agent.”

When pressed and asked, “You think, even looking out over decades, that the real estate agent still has a role?” Spencer responded, ”Definitely.”

To hear Spencer talk more about the importance of real estate agents, watch this short video:

https://www.youtube.com/watch?feature=player_embedded&v=4eTrV6iW47U

Ways to Avoid Costly Home Repairs - Gutters

Maintain your house now, so you can avoid big problems later

  Your house talks to you — and what is it saying? It's giving you early warning signs of potential trouble at its most vulnerable spots, and by paying attention you can prevent costly repairs down the road.

Gutters

Problems: Wet or flooded basements, foundation damage.

Trouble signs: Basement flooding, or water spilling over gutters during rainstorms or pooling around your home's foundations.

What you can do: Extend downspouts to direct water at least 10 feet away from your home's foundation. Replace dented downspouts. Clean gutters at least twice a year.

What it may cost: Twelve-foot vinyl downspouts cost $10-$15 each. For a cleaner look, dig trenches on a downward slope away from your house and install 4-inch PVC pipe ($17 per 10-foot sections) below grass, secured to downspouts with "offset adjuster" connectors ($2 each).
For $1 a foot, prevent future clogging with homeowner-installed gutter shield strips. Replacing faulty gutters or having gutter shield professionally installed can cost $1,500 to $3,000 for a medium-sized house. A professional gutter cleaning and inspection starts at about $60.

What you could save: Tens of thousands in foundation damage and thousands in repairs of finished basements.

Ways to Avoid Costly Home Repairs – Windows & Doors

Maintain your house now, so you can avoid big problems later on

 Your house talks to you — and what is it saying? It's giving you early warning signs of potential trouble at its most vulnerable spots, and by paying attention you can prevent costly repairs down the road.

Windows and Doors 

Problems: Water damage, higher heating and cooling costs, increased risk of burglary.

Trouble signs: Air drafts; loose or cracked caulk around windows and doors (interior and exterior); water stains near windows and doors; weak security of windows and doors.

What you can do: Remove damaged caulk and reapply silicone caulk around interior and exterior windows and doors. Install plastic insulation sheathing on old windows. Use window locks and install deadbolt locks on doors — one in three home burglaries results from unforced entry.

What it may cost: A $10 insulation kit is good for six windows. Deadbolt locks start at $20 and can be installed by a DIY-er in less than one hour. A locksmith charges $50 or more to install a deadbolt.

What you could save: Thousands in water damage or up to hundreds annually in wasted energy cost; your possessions not being pilfered. 

Ways to Avoid Costly Home Repairs - Exterior Walls & Trim

Maintain your house now, so you can avoid big problems later on

Your house talks to you — and what is it saying? It's giving you early warning signs of potential trouble at its most vulnerable spots, and by paying attention you can prevent costly repairs down the road.

Exterior Walls and Trim 

Problems: Water damage causing rot, insects and interior wall damage; mold or mildew, drafts.

Trouble signs: Cracked, blistered or peeling paint on walls and trim; cracks in stucco; loose or cracked caulk around windows and doors; foliage touching your home.

What you can do: Scrape, patch and repaint problem areas with a quality exterior paint. Apply silicone caulk where siding meets trim and the foundation. Trim foliage so it's at least 12 inches from your house. Scrub mildew or mold with equal parts of water and bleach.

What it may cost: A gallon of paint goes for about $25. Caulk runs about $6 per tube and bleach costs pennies per application.

What you could save: Thousands of dollars in water damage and possible hundreds per year from draft-caused energy waste.

Ways to Avoid Costly Home Repairs – Roof/Attic

Maintain your house now, so you can avoid big problems later!

 Your house talks to you — and what is it saying? It's giving you early warning signs of potential trouble at its most vulnerable spots, and by paying attention you can prevent costly repairs down the road.

Roof/Attic

Problems: Water leaking into your home can cause rot, insects, mold, mildew and electrical shorts.

Trouble signs: Curled, missing or broken shingles; bows or dips on roof; dampness or stains in attic or on ceilings and interior walls; broken masonry in and around fireplaces; green algae growth on attic ceiling.

What you can do: Inspect your roof and attic every six months and ensure flashing around chimneys is tight. Check caulking and sealants for peeling and leakage and look for cracking on collars around vents. Prevent algae and fungus on wood shakes and asphalt shingles with zinc control strips.

What it may cost: One to two hours of your time if you're comfortable on a ladder; a professional inspection and minor repairs might cost about $200.

What you could save: $5,000 or more for prematurely having to replace your roof and anywhere from hundreds to thousands of dollars to repair interior damage. 

Ways to Avoid Costly Home Repairs - Laundry Room

Maintain your house now, so you can avoid big problems later on

Problems: Interior water damage; energy waste; possible fire.

Trouble signs: Leaks from loose or burst washer hoses. Clogged dryer vent, resulting in towels needing two cycles.

What you can do: Use stainless steel washer hoses to prevent bursting. Replace plastic or foil dryer vents with aluminum ones. Clean dryer's lint tray before and after each use. Check and clean the machine vent twice a year.

What it may cost: Burst-proof washer hoses cost $20 per pair. Aluminum dryer vents are $10 to $20.

What you could save: Thousands of dollars repairing water damage from washer flooding. Premature replacement of a dryer and repair of damage of fires that can erupt from badly vented dryers.

Ways to Avoid Costly Home Repairs

Maintain your house now, so you can avoid big problems later on

Fireplace

Problems: Fire, carbon monoxide poisoning, high energy costs; water inside the fireplace.

Trouble signs: Smoking fireplace; odor when not used; sooty glass fronts; white, yellow or brown powder inside fireplace; missing or crumbling masonry (indoors or outdoors); cold feeling in room when fireplace isn't used.

What you can do: Smoke, odors or soot suggest build-up of "creosote" fire byproducts, or problems with venting or flue. Crumbling masonry and powder indicates moisture problems (often caused by chimney flashing); a closed or faulty damper causes cold rooms. Install carbon monoxide detectors near fireplaces and put in a chimney cap ($50-$150) to prevent water problems; repair cracks or missing mortar joints in masonry with a silicone sealant.

What it may cost: A professional chimney sweep and inspection costs $150 to $200 and is recommended annually for homeowners using a fireplace at least weekly. Masonry repairs or repointing start at about $200. A carbon monoxide detector costs $25 to $50. An energy-saving fireplace balloon (for when the fireplace is not in use) costs $50; fireplace glass doors or heat exchangers that push warm air into the room cost about $200.

What you could save: Your life; thousands of dollars to repair structural damage. Fireplace balloons, glass doors and heat exchangers reduce energy costs by at least 10 percent per year

Ways to Avoid Costly Home Repairs

Electrical System

Problems: Fire; electrocution.

Trouble signs: Flickering or dim lights (especially when portable appliances are used); circuit breakers that frequently trip; outlets that are hot to the touch.

What you can do: Ensure lightbulbs aren't loose and, if you're handy, replace two-pronged or hot outlets. Flip each circuit breaker at least once a year to prevent corrosion. If problems continue, call in a licensed electrician.

What it may cost: $2 per three-pronged outlet. $300 to $500 for an electrical inspection and basic repairs. Replacing a medium-sized home's faulty wiring typically costs $4,000 or more.

What you can save: Your life and home.

Ways to Avoid Costly Home Repairs - Bathrooms

Maintain your house now, so you can avoid big problems later on

Bathrooms

Problems: Interior water damage; mold; energy waste; electrical shock.

Trouble signs: Leaks, dripping faucets and running toilets; water pooling around faucet handles, inside vanities or around toilets; stains on ceilings below bathrooms; standard electrical outlets near sinks and bathtubs.

What you can do: Find hidden leaks by wrapping toilet paper around pipes and looking for wet spots. Tighten pipe connections and/or replace faulty pipes. Detect toilet leaks by placing food coloring in the tank. If coloring is in an unused bowl the next morning, the flapper needs replacing. Caulk around faucets, vanities, tub sides and base. Run exhaust fans or open windows during and after showering; Install Ground-Fault Circuit Interrupters (GFCI outlets) near sinks and baths for anti-shock protection.

What it costs: It takes about 15 minutes to inspect, tighten connections and apply caulk; if you're handy, you can replace a drain pipe for $10-$20. New faucets start at about $30. GFCIs cost $7 each; you need to shut off the power and open the plate to install it.

What you could save: A leaking faucet can waste 10,000 gallons of water a year. Repairing water damage or mold behind walls or under floors can easily cost $2,000 or more. GFCIs can prevent electrocution.

Ways to Avoid Costly Home Repair - Heating and Cooling Systems

HVAC (Heating and Cooling)

Problems: Reduction in performance; fire; water damage; higher energy costs; mold throughout the house.

Trouble signs: System cycles on and off frequently to keep to a thermostat setting and/or trips circuit breakers. Natural gas flames are yellow or orange rather than blue. Corrosion/rust spots or leakage from water heater.

What you can do: Replace air filters every one to three months to improve performance. Experts recommend that a water heater that's 12 or more years old should be replaced, partly due to the danger of bursting. Replace it earlier if you see corrosion or leaking. Consider a new HVAC system if repairing it is at least one-third the cost of replacement.

What it may cost: Air filters cost $2 to $15. $100-$200 for a professional inspection and cleaning of HVAC system.

What you can save: Energy waste, premature replacement of costly units, repair of flooding damage. Water heaters start at $350; forced-air furnaces cost $2,000 to $4,000, and central air conditioning units start at around $2,000. Clean filters can lower energy consumption by 5 to 15 percent.

NAHB: 2014 to be a Strong Year for Housing

Author: Paul Salfen April 7, 2014 

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The National Association of Home Builders (NAHB) delivered some good news Monday: 59 of the 350 metro markets have returned to or exceeded their last normal levels of economic and housing activity. In the NAHB/First American Leading Markets Index (LMI), the national average is running at 88 percent, with 11 metros gained year-over-year.
With the spring buying season in the housing market right around the corner and stronger employment numbers reported, confidence is gaining that economic recovery is right around the corner. Analysts and home builders alike agree that that this looks to be a very strong year for housing. A steady release of pent up demand from buyers seems imminent, so there is light at the end of the tunnel—and it’s not a train.
“I think the big news here is that regions outside of the energy states continue to gain ground,” said NAHB chief economist David Crowe. “It’s a promising sign to see areas like Los Angeles and San Jose joining the top ten largest MSAs [metropolitan statistical areas] showing a recovery. We still expect 2014 to be a strong year for housing and to aid in the overall economic recovery. The job market continues to mend and with that we will see a steady release of pent up demand of buyers.”
With the middle of the country experiencing an energy boom, places like Midland and Odessa, Texas, show that their markets have doubled in strength prior to the recession. Smaller metros like Bismarck and Grand Forks, North Dakota, and Casper, Wyoming, are currently at the top of the list.
In major metros, Baton Rouge, Louisiana, has topped the list, while Honolulu, Oklahoma City, Austin, Houston, San Jose, and Harrisburg have all shown great signs of recovery.
Overall, 28 perfect of metro areas had a rising score, and 83 percent have shown an improvement over last year’s results. This raised the nation’s index score—this time from 0.87 to 0.88.
NAHB’s index is based on 350 markets that are scored by their average permit, price, and employment levels for the last twelve months and dividing the annual average over the last period of normal growth, which mostly took place from 2000 to 2003 in homes and 2007 in employment.

Why should you use a Realtor when buying a home?

There is a lot of confusion and misinformation about how using a Realtor to buy a home works and how the Realtor who represents a Buyer gets paid. This explains exactly how it works and why you really should use a Realtor when buying a home.

The seller is actually the one who pays the Buyers Agent commission.  Here's how it usually works:  The listing agent will negotiate with the Sellers and agree on a percentage of the homes sale price as compensation.  For illustration purposes, let's use 6%.  The listing agent has an agreement with the Sellers for them to pay 6% in commission when the house sells. This is not all for the listing agent, however - this 6% pays both the listing agent and the buyer agent. Now when the listing agent lists the property, they state how much compensation the Buyers Agent receives in the listing.  The norm in this market for a traditional sale is 2.7%.  So the Seller is the one paying the Buyers Agent commission - the Buyer is not paying any commission.

So what does it cost a Buyer to use a Realtor to buy a home?  There is one fee from the Realtor's brokerage.  It's called a Broker Commission, Broker Admin Fee, Broker Fee, etc.  It covers the brokers investment in the transaction, which is basically the payroll for the administrative staff that go through and process the completed purchase agreements, etc.  The fee is usually between $350-$425 and is paid at closing, either on the settlement statement or separately to the agent.

That is all a Buyer is going to pay for using a Buyers Agent.  If you chose not to use a Buyers Agent and had a lawyer draw up your contract, you would most likely pay more than that $350-$425 you would pay to your agent's brokerage.

Other benefits?  Your Realtor will have access to more information than you will and they will know how to interpret it. A big portion of the listings and information on the internet are outdated, sold, expired, canceled or just wrong.  You could spend hours looking at homes, find a few that you love and then find out they sold months ago.  Your Realtor has access to the most up to date information, as well as other information that doesn't show up in the public view of listings. To start the search, your Realtor can get your criteria from you and set you up on an auto search that will search for homes matching your criteria and email you new listings as they come on.

Another benefit - Your Realtor will know the market.  Besides personal experience, they have tools to look up comparable active properties, pending sale properties, and recently sold properties. They can then give you a good idea of what to offer on the property.  They also have experience dealing with Banks, Lenders and other agents.  They know the process and are an advocate for you when dealing with Sellers and their agents. They write up the offer with you, present it and negotiate until you come to an agreement. If there is an issue after the acceptance of the purchase agreement, such as something that you found in the inspection and want repaired before closing, they negotiate that with the Sellers Agent and make sure it is taken care of. They can guide you through the process, recommend lenders, inspectors, title companies, handymen to do work after the sale, etc and make sure you are comfortable with every step.  They provide their expertise and explain the different aspects of the purchase agreement, such as the different contingencies. 

Remember, this is their full time job (in most cases).  They provide valuable expertise, advice, contacts and negotiation skills in a major transaction for you.  Having an agent gives you an edge and will make the process and transaction much easier and less stressful for you!

Don't Forget the Garage when Selling Your Home

It's common knowledge that selling a home for the best price possible requires careful preparation. The inside must appear clean and inviting, and the landscaping and exterior must be equally appealing. What many homeowners forget, however, is the need to ensure the garage looks fantastic as well. Some buyers consider it an important amenity when choosing a new home, so investing the time necessary to make sure your garage shines can be well worth the effort.

Remove as much 'stuff' as possible. When you gather items you no longer need from the rest of your home, tackle discards in the garage as well. Donate them to charity or hold a yard sale. Then take things you won't be using while your home is on the market (your lawn mower and bicycles in winter or your snow blower and shovels in summer, for example) and put them in storage to open up space.

Get everything up off the floor. If your garage does not already have them, add hooks and shelves. Heavy–duty hooks are perfect for large items like bicycles and sawhorses. Smaller hooks easily hold gardening and maintenance tools. And shelves are essential for the neat and tidy storage of other items.

Give the interior a thorough cleaning. Dust the walls and corners to eliminate all spider webs. Vacuum the floor to remove loose dirt and debris. If you have oil stains on the concrete, try removing them with paint thinner or liquid bleach.

Paint the garage door. If it's in good shape, a quick cleaning with soap and water may be all that's needed to spruce it up. If it's worn or scratched, a fresh coat of paint will make a big difference in its appearance.

Economic Outlook Positive for Spring Season

Author: Scott Morgan April 2, 2014 

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As it turns out, the entire U.S. economy has been suffering from seasonal affective disorder. According to the UCLA Anderson Forecast, the one-two punch of harsh winter weather in the East and a nagging drought in the West (namely California) stalled industries from real estate to factory production, putting a tight chokehold on the national economy.

However, according to its latest economic outlook report, released Wednesday, Anderson expects the national GDP to growth by roughly 3 percent now that warmer and wetter spring weather is on the way. Moreover, as the GDP rises, increased housing and business investments and consumer spending should keep that growth rate steady through 2016.

Accordingly, as the U.S. GDP grows, so should grow job opportunities and salaries. In March, Freddie Mac announced that it expects home sales to grow along with wages this year, despite a still-tough job market in most sectors. Mirroring UCLA's GDP predictions, Freddie is projecting a 3 percent rise in home sales and a 20 percent rise in new home construction in 2014, which the agency expects to level out to a 5 percent overall growth.

In the Wednesday report,  UCLA Anderson Forecast senior economist David Shulman stated: "We can visualize the economy creating between 200,000 and 250,000 jobs a month, with the unemployment rate dropping to 5.4 percent by late 2016. Total payroll employment will surpass the prior 2007 peak, but the economy will remain well below its pre-Great Recession growth path."

Shulman's words echo Freddie's, which stated last moth that construction and manufacturing jobs, though still struggling, are on a steady rise. Construction is roughly 80 percent of its 2007 peak and manufacturing at about 90 percent, according to Freddie.

Shulman also expects the core consumer price index to increase from 1.8 percent (its 2013 low) to 2.5 percent by 2016. This uptick in inflation, he said, should bring a corresponding‒‒and much welcomed‒‒ rise in salaries nationally, as much as 4 percent this year. This, of course, bolsters a recovering housing market as more money and more stable jobs generate more interest in homebuying among U.S. workers.

Shulman also said that the Federal Reserve's long experiments with zero-interest rates and quantitative easing are slowly waning. He expects that the monthly bond buying program, once at $85 billion and now at $55 billion, will essentially ground to a halt by September. "We forecast that the Federal Funds rate will rise, to use 'Fedspeak,' at a measured pace, reaching 3 percent by the end of 2016," Shulman said.

Specific to California, UCLA Anderson Forecast senior economist Jerry Nickelsburg that the state's lingering drought choked its four main economic engines‒‒agriculture, fisheries and the environment, households and industry‒‒but not beyond what Californians are long used to.

"Overall, the state is not likely to be greatly impacted," Nickelsburg said.  He expects the state's total employment to grow by more than 2 percent for the next three years.Share on facebookShare on twitterShare on google_plusone_shareShare on linkedinMore Sharing Service3

Home Prices Post Gains in February

Author: Colin Robins April 1, 2014

Share on facebookShare on twitteShare on google_plusone_shareShare on linkedinMore Sharing Services3CoreLogic released its Home Price Index (HPI) for February, which found that home prices increased by 12.2 percent from the previous year. The CoreLogic figure includes home prices of distressed sales, and represents 24 months of consecutive year-over-year increases in home prices nationally.

Home prices month-over-month also increased, posting a .8 percent gain compared to January, 2014. The monthly figure includes distressed sales.

14 states showed double-digit year-over-year growth in February. Colorado, Nebraska, North Dakota, Texas, and the District of Columbia all reached new home price highs, with 22 states at or within 10 percent of their price peaks.

"As the spring home-buying season kicks off, house price appreciation continues to be strong," said Dr. Mark Fleming, chief economist for CoreLogic. "Although prices should remain strong in the near term due to a short supply of homes on the market, price increases should moderate over the next year as home equity releases pent-up supply."

Without distressed sales, which consist of REO properties and short sales, the HPI revealed slightly lower gains.

Home prices excluding distressed sales increased 10.7 percent in February from the previous year, and .9 percent from the previous month. All 50 states and the District of Columbia showed year-over-year appreciation when excluding distressed sales, according to CoreLogic.

"February marks two straight years of year-over-year gains in national prices across the United States," said Anand Nallathambi, president and CEO of CoreLogic. "The consistent upward movement in home prices should ultimately prove to be an important stimulant for higher levels of sustained market activity and growth in the housing economy."

CoreLogic also announced a new forecast feature to its report, offering projections for upcoming months. The company projected prices to increase .5 percent in March.

Additionally, the home prices with distressed sales are estimated to increase 10.5 percent year-over-year from March, 2013 to March, 2014.

CoreLogic projects home prices excluding distressed sales will increase 9.3 percent in March year-over-year, and .4 percent month-over-month.

Including distressed sales, the five states with the highest home price appreciation were California (+19.8 percent), Nevada (+18.5 percent), Georgia (+14.2 percent), Oregon (+13.8 percent) and Michigan (+13.5 percent).

Excluding distressed sales, the five states with the highest home price appreciation were California (+15.9 percent), Nevada (+14.6 percent), Florida (+13.1 percent), Washington (+11.5 percent) and Hawaii (+11.5 percent).

Has the Housing Market Reached Bubble Status Again?

Author: Tory Barringer March 31, 2014 

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With year-over-year price increases continuing on a double-digit course despite recent slowdowns, the ever-present question has once again come to the fore for market commentators and analysts: Has the housing market reached bubble status once again?

The answer—at least, according to Trulia chief economist Jed Kolko—is both yes and no.

In the company’s latest quarterly Bubble Watch report, Kolko estimates national home prices are still around 5 percent undervalued when examining long-term fundamentals like historical prices, incomes, and rents. While ongoing improvements in prices have brought the market close to a tipping point, he notes that it’s far cry from the 39 percent overvaluation in the first quarter of 2006.

“Even though recent double-digit price gains look unsustainable, current national price levels are not cause for alarm,” Kolko said in a blog post. “Sharp price gains, like we’ve had in 2012 and 2013, are not the sign of a bubble unless price levels look high relative to fundamentals.”

Furthermore, “the slowdown in price gains make[s] it less likely that we’re heading for another bubble,” he added.

While the national market is still undervalued, conditions vary widely at the local level. According to Trulia, out of the 100 largest metro markets, home prices are overvalued in 19, including eight of the 11 largest California metros. The greatest danger is along the state’s southern coast, in markets like Orange County, Los Angeles, and Riverside-San Bernardino—which make up three of the five most overvalued markets in the country. (The two remaining slots go to Honolulu and Austin.)

While the number of overvalued housing markets is on the rise, Kolko again says historical perspective is needed: “In 2014 Q1, prices were overvalued in 19 of the 100 largest metros, which is the highest number since 2009 Q4; furthermore, prices were overvalued by more than 10 percent in 4 large metros, which is the highest number since 2008 Q4.

However, at the height of the bubble, all 100 were overvalued, and 91 were overvalued by more than 10 percent.”