Arizona agent Barbara Guy leads House of Refuge, a transitional housing facility, to get more people off the street and into a home.

When Barbara Guy was growing up in Phoenix, her grandparents owned a motel in a poor neighborhood. Most of the motel’s guests were long-term residents. “That was affordable housing,” says Guy, SRES, a sales associate with ProSmart Realty in Gilbert, Ariz. “Most of the people who lived there were sharecroppers or laborers. It was a melting pot: elderly, Filipino, Hispanic, Arab.”

Sometimes, the residents wouldn’t be able to pay monthly rent. So, Guy’s grandmother would accept fresh produce in lieu of money—and then, she’d chop it all up and cook a feast for everyone at the motel to enjoy. That memory still motivates Guy in her efforts to help her community today. “That’s my ‘why,’” she says. “This is why I serve.”

Since 2019, Guy has played a leadership role with House of Refuge(link is external), a nonprofit providing transitional housing and social services like job training to homeless families. The organization, which launched in 1996, has acquired 88 two-bedroom homes for the families it serves as well as a church and annexed office building for its operations. House of Refuge offers an initial one-year stay for families who qualify for its program, helping 1,060 people in 2021 alone.

Guy, who is chair of the board for House of Refuge, says its services, which include onsite learning and recreational activities for children, are especially important as affordability in the real estate market plummets. “Rents continue to increase, and a living wage is very difficult right now,” she says. “Our residents find themselves in situations where they’re just not able to make ends meet. If we had 200 more houses, we could fill them all. The need is so prevalent.”

Kayla Kolar, president and CEO of House of Refuge, says Guy is helping the nonprofit recruit volunteers and board members that bring an array of perspectives to the issue of solving homelessness. Guy even converted a former House of Refuge resident into a board member. “Her leadership also provides oversight to board governance, policymaking and fundraising that, in turn, helps the homeless families we serve,” Kolar says.

Guy says she’s now focusing on the future for House of Refuge and how to expand its offerings. “What’s next for the parents and for the kids? How do we lift them up and create opportunity? Vocational school? College? How do we make that space for them? These are our big dreams to empower them to stop the cycle of homelessness.”

To learn more about Guy and other REALTORS® who are making extraordinary contributions to their communities and beyond, visit the REALTORS® Are Good Neighbors Facebook page(link is external).

National Association of REALTORS®
Reprinted with permission

Mary Liu helps underserved children locally and abroad receive life-changing medical care while also giving Asian Americans a tool to combat hate.

REALTOR® Mary Liu was born with a cleft palate and lip that required eight surgeries to correct. It was thanks to the help of several nonprofit organizations that she was able to receive the medical care she needed, she says, because her family was too poor to afford the surgeries.

“I remember what that was like, and I always said I was going to give back when I was able,” recalls Liu, a sales associate with Vanguard Properties in San Francisco. She says her real estate business has given her the opportunity to do just that.

For a while, Liu was involved in public speaking. And through her speaking engagements, she met some of the people behind an organization called Alliance for Smiles, based in San Francisco(link is external). The organization sends surgical teams all over the world to provide free cleft palate and lip surgeries to underserved children and families. Liu knew it was the right organization in which to get involved. “At first, I helped with fundraising, and I went on the medical missions as the photographer and record keeper. Now I oversee the medical missions process,” she says.

Liu says her involvement in Alliance for Smiles is a healing and life-changing endeavor. As a Chinese American, Liu’s first mission in China gave her insight into the puzzle of her own experience, providing her closure. “I have no photos of me as a child before I had my surgeries,” she says. “On my first mission to China, I was able to see what I would have looked like. I was able to be in the operating room and see the surgery. It brought everything full circle for me.”

Pivoting in a Moment of Need

When COVID-19 hit, Alliance for Smiles was no longer able to send its surgery teams around the world, but Liu wanted to make sure the organization could continue to help children anyway. Fundraising, which was overseen by Liu, continued online. Each year, the organization’s annual gala was its main fundraising effort, but it was shuttered due to the pandemic. But Liu found a way to transition the gala to an online event. For two years, the event was held online with much success, which allowed Alliance for Smiles to continue funding surgeries.

“We started training nurses and doctors in various parts of the world over Zoom,” Liu says. “That way, they could still perform the surgeries. Now we can go back to in-person missions, but we found that the Zoom trainings were really helpful, so we still do them.” The trainings, she said, prepare the local medical team in advance, which streamlines the surgery and aftercare process once the Alliance for Smiles team is on the ground. “Within an hour and a half, we’ve changed the life of a child and their family.”

Shielding Her Community From Harm

Also active in the Rotary Club of San Francisco, Liu has been involved in a number of projects over the years. She’s helped provide bikes to underserved children, hosted baby showers for mothers in need and fed families facing food insecurity. She serves as the club’s president as well. “I’m the first Asian American president in the club’s history,” she says.

One of the most recent projects she worked on through the Rotary Club was in response to the rise in hate crimes targeting Asian Americans. “When I kept hearing news reports every day about an Asian person being attacked, I asked what I could do to protect others and myself,” she adds.

She’d stopped carrying a purse and quit wearing her jewelry outside of her home, but she wanted to do more at the community level. She wanted to provide a layer of safety to the Asian American community in San Francisco, so she wrote a grant for personal safety alarms. The alarm, about 2.5 inches, fits on a keychain or lanyard. It has a pin that, when pulled, releases a 130-decibel siren designed to scare off the attacker or alert the surrounding area that the individual is in trouble. “Through Rotary Club, we partnered with the San Francisco Police Department, the Chamber of Commerce and other Rotary Clubs to identify where the greatest need was,” she says.

They identified Asian seniors in low-income housing areas as being the most in need. Liu and the Rotary Club then partnered with the local Mercy Housing, the Catholic Charities and a local food bank to distribute the safety alarms. “This is about education as well,” Liu says. “We’ve not only handed out thousands of these alarms but also made sure the seniors knew how to use them and where to carry them. We also handed out pamphlets with information on how and when to use the alarm.” The safety devices, she says, provide a layer of protection for a section of the community that had none. “In Chinatown, for instance, seniors were scared to get their food or walk the streets of San Francisco. Having the alarm gives them a sense of security.”

National Association of REALTORS®
Reprinted with permission

Pending home sales are posting annual losses in the double-digits as home buyers continue to back away from the market due to surging mortgage rates.

House hunters are backing away from the housing market as mortgage rates continue to rise sharply. The National Association of REALTORS®’ newly released Pending Home Sales Index—a forward-looking indicator of home sales based on contract signings—fell 2% in August compared to July and is down 24.2% compared to a year ago. This marks the third consecutive month that pending home sales have fallen.

“The direction of mortgage rates—upward or downward—is the prime mover for home buying, and decade-high rates have deeply cut into contract signings,” says Lawrence Yun, NAR’s chief economist. “If mortgage rates moderate and the economy continues adding jobs, then home buying should also stabilize.”

Until then, home buyers are faced with mortgage rates that have doubled compared to a year ago, adding hundreds of dollars to monthly mortgage payments. Yun warned that mortgage rates are likely to rise to near 7% in the coming months. That would mark a far jump from the 2.88% rates just one year ago.

The Mortgage Bankers Association reported on Wednesday that 30-year rates with conforming loan balances reached 6.52% last week, prompting mortgage applications for home purchases to fall by 29% compared to the same week a year ago.

Yun has said the real estate market has fallen into a “housing recession.” He expects the economy to remain sluggish throughout the remainder of the year. “Only when inflation calms down will we see mortgage rates begin to steady,” Yun says.

The higher rates also are leading more home buyers to get cold feet and back out of existing-home purchase contracts. About 15.2% of contracts for homes in August were canceled, according to newly released data from Redfin. That’s up from 12.1% a year earlier. In some Sun Belt regions, like Phoenix, Tampa, Fla., and Las Vegas, the number of canceled contracts has risen by 20% or more. These areas of the country also have seen the largest uptick in home sales and price appreciation over recent years.

What’s Ahead for Housing

NAR predicts that the higher mortgage rates will cause existing-home sales to drop by15.2% in 2022, reaching 5.19 million units. New-home sales are projected to drop by 20.9%.

Still, limited housing inventory and nearly “nonexistent distressed property sales” continue to support home prices, Yun says. Despite the drop in sales, he forecasts that home prices will post an increase of 9.6% for 2022.

But Yun does foresee slower price appreciation ahead for 2023 and says home sales will bounce back. “Next year, the annual median home price is expected to rise by only 1.2%,” Yun says. “Home sales will pick up in the second half of 2023, but will be down by 7.1% overall.”

Regional Snapshot for Contract Signings

Three out of the four major regions of the U.S. saw month-over-month decreases in contract signings in August. The West was the only one to post a gain, albeit modest, NAR reports. All major regions posted year-over-year, double-digit declines.

“Home prices are the least affordable in the West and, consequently, the region suffered deeper annual declines in contract signings due to rising interest rates when compared to other areas of the country,” Yun says. “However, the recent increases of the last two months, though small, are encouraging.”

National Association of REALTORS®
Reprinted with permission

Mauricio Umansky, husband of “Real Housewives” star Kyle Richards, has his own show following his brokerage, The Agency. He offers a peek inside the occu-soap “Buying Beverly Hills” and makes predictions for high-end housing in 2023.

Mauricio Umansky’s The Agency(link is external) caters to the rich and famous. As CEO and founder of the billion-dollar brokerage, Umansky has built a reputation around flashy marketing, using storytelling techniques, videos and high-tech tools to garner attention for his A-list properties. His brokerage, which has been featured on several television shows, including “Million Dollar Listing Los Angeles” and “The Real Housewives of Beverly Hills,” is now the subject of a new Netflix series, “Buying Beverly Hills(link is external).” The show is set to premiere this fall.

Umansky reportedly holds the distinction of selling the most homes in the country priced above $20 million. He has represented some of the most noteworthy properties over the years, including the first house in Los Angeles to sell above the $100 million mark as well as well-known residences belonging to Michael Jackson, Prince and the Walt Disney estate. He also has represented major brands like The Ritz-Carlton.

Since its inception in 2011, The Agency has grown to more than 50 corporately owned and franchised offices and nearly 1,000 agents across the U.S., Canada, Mexico and the Caribbean. REALTOR® Magazine recently caught up with Umansky to talk about what lies ahead for the housing market and his new buzzed-about Netflix series.

Q: What do you believe is in store for the luxury real estate market for 2023? Is the high-end market starting to slow like we’re seeing in the lower price points?

A: I believe we are beginning to see real estate markets across the country normalize. It’s important not to compare our current market to 2020 or 2021 because those years were an anomaly, and truthfully, the rapid pace of the market was unsustainable for the long term. The pandemic will likely be one of the most important events we’ll experience in our lifetime, when the home evolved even more into a personal sanctuary. So, it is impossible to compare this year’s market activity and predict 2023 in relation to these events.

I do anticipate that we will return to a new normal, yet the COVID experience is still behind today’s decision-making. Real estate will always be a sound investment and a safe bet when global markets are in upheaval and a recession is looming. Despite the market shifting, there is still so much global wealth. As the market slowed over these past few months, we finally began to see a return to real estate seasonality, which we have not experienced in the past two years.

I think a lot of buyers are still ready to buy and are collectively waiting for the next move once markets have stabilized. And, of course, now buyers can finally purchase a property at more realistic pricing without being completely outbid. As far as inventory, there’s definitely is still a dearth, especially in desirable markets and neighborhoods. I anticipate more inventory coming to the market in the coming months, but I predict it will still be slim across the board.

Do you notice any buyer or seller trends emerging that you believe could be even bigger in 2023?

People continue to crave outdoor space and desire turnkey living. They want more white palettes—simple and minimalistic—as more people gravitate away from heavy colors. When seeking a new home, buyers want more flexibility in a floor plan so they can use rooms for different functions, such as a secondary office, guest room for in-laws or playroom for kids. People also are prioritizing homes with accessory dwelling units that they can rent out for additional income or use for multiple purposes as needed by their families. Privacy and security also tend to be top of mind for buyers seeking a new home.

The Agency has long been known for its tech and marketing innovations. What technology lately has you the most excited for its potential in real estate?

In May, we announced The Agency’s acquisition of the tech-powered brokerage Triplemint, which is now The Agency New York. In tandem with the merger, The Agency has launched a new website and creative center for its agents, which further positions the brokerage for strategic and sustainable growth across the Northeast and around the world.

The Agency’s new website features enhanced functionality, making it easier for consumers to search and share listings and agents to receive client insights. The first phase includes new features such as a powerful universal property search, saved searches and property portfolios, tour sheets, expanded agent profiles, advanced lead generation and a redesigned, SEO-optimized blog.

The Agency Creative Center is the firm’s new fully accessible online marketing platform, home to its comprehensive marketing toolkit. The platform gives agents access to create everything they need to market themselves and their properties across print and digital channels. The Agency’s Creative Center offers more avenues and streamlined processes for collaborating, marketing asset creation, printing, and project management.

How will the acquisition of Triplemint help your company’s expansion efforts?

We’re thrilled Triplemint is now The Agency New York and to offer our agents an improved website and a new creative marketing suite as we continue to focus on streamlining our services with an emphasis on quality over quantity. We plan to continue our expansion using both our very talented and productive agents and Triplemint’s proprietary technology.

The Agency will continue to develop and enhance its existing full suite of cutting-edge tools, now powered by Triplemint’s predictive analytics and machine learning. These tools improve the agent experience and will enhance real-time communication between agents and clients while increasing productivity; automatically track the market and produce customized, real-time alerts; and foster lead generation to automatically capture, vet and convert leads.

Tell us about your new Netflix show, “Buying Beverly Hills.” What can we expect from the first season?

As the show’s slogan says: “We said no ass—-s. But we never said no drama.” The new real estate “occu-soap” follows the agents and clients with The Agency. People will be able to see my role as CEO, working alongside my daughters, Farrah Brittany and Alexia Umansky, and our talented group of agents. The show highlights the high-stakes world of luxury real estate in Los Angeles. Beverly Hills is one of the most sought-after ultra-high-end markets in the world. This show provides a look inside the deals and listings of our agents, both newer and experienced. One of the standout elements of “Buying Beverly Hills” is the crew of newer agents we have working alongside the veteran agents. There is a lot of beautiful real estate, and we are also showing what it’s like trying to break into the industry with the learning curves, the challenges, etc. Viewers also will be able to follow the market trends our agents navigate through the season.

National Association of REALTORS®
Reprinted with permission

How professionals are managing the biggest obstacles to the home valuation process.

From allegations of appraiser bias in the home valuation process to new controversial methods of conducting an appraisal, the profession is under intensifying scrutiny—and a new National Association of REALTORS® survey offers insights into these challenges.

Many appraisers express dissatisfaction with the impact industry regulations and appraisal management companies are having on their business, saying these issues are delaying their work, according to NAR’s 2022 Appraisal Survey. Appraisers also are facing more lawsuits claiming racial bias in undervalued homes, which adds to their stress on the job. “We currently have big targets on our backs,” writes one survey respondent who is an appraiser. “We are being called racists left and right in an attempt to destroy the appraiser.”

The survey of more than 600 appraisers and 2,500 residential real estate pros was conducted in May.

Only 3% of real estate professionals report witnessing or experiencing discrimination in the appraisal process, the NAR survey shows. However, 16% say they believe such discrimination exists. A property owner’s race or color is the most likely catalyst for appraisal bias, survey respondents say. “An appraiser valued a home at one-third less than the actual value after meeting the homeowners,” one respondent writes.

Appraisers also say they’re feeling the pressure from recent lawsuits, with one respondent commenting: “We are the most policed player in the mortgage transaction, and no one could get away with long-term discrimination without being discovered and terminated from the profession. The comparables do not lie. We are reporters of the market statistics—nothing more.”

Top Appraisal Challenges

Accusations of appraisal bias are not the biggest issue appraisers are reporting, even though it has become a larger issue in the public eye. The number one concern for appraisers, the survey shows, is appraisal management companies that are disrupting the industry. AMCs work with lenders and appraisers to order, track and deliver appraisal reports. Survey respondents complain that AMCs can delay appraisals for days or even weeks as lenders shop for appraisers with the lowest fees or quickest turnaround times.

Appraisers also report the following challenges facing the profession.

The majority of appraisals continue to be conducted in person, but desktop and drive-by appraisals—which don’t require an appraiser to enter the home—are becoming more frequent options, the survey shows. Yet, 63% of appraisers surveyed admit they are “very uncomfortable” with desktop appraisals and many other alternative valuation methods that are completed remotely.

National Association of REALTORS®
Reprinted with permission

Nineteen percent of real estate professionals say they avoid having any interaction with an appraiser, mostly fearing they’re not legally allowed to.

Forty-seven percent of real estate professionals say they have had a transaction fall through due to a problem in the appraisal process, according to the National Association of REALTORS®’ 2022 Appraisal Survey. The most common culprits are an appraised value coming in lower than the contract price and a perception that the appraiser lacks knowledge of a neighborhood or uses inappropriate comps, the survey shows.

The survey of more than 600 appraisers and 2,500 residential real estate pros was conducted in May.

Yet, many real estate professionals say they are fearful of talking to appraisers and try to keep their distance from this part of the transaction. Twenty-one percent say they interact with appraisers only when there is an issue with the value; 19% say they don’t interact with appraisers at all. Of those who don’t interact, most say they avoid contact because they think they’re not legally allowed to speak to the appraiser, or they’re concerned that the interaction might lead to appraisal bias.

However, “regulations allow real estate agents, or other persons with an interest in the real estate transaction, to communicate with the appraiser and provide additional property information, including a copy of the sales contract,” according to NAR’s FAQs on the residential appraisal process.

Real estate pros who do interact with appraisers say they try to provide additional information to help them in their valuation, the survey shows. These pros also may meet with the appraiser onsite to provide comps, a list of improvements made to the property or information on multiple offers.

National Association of REALTORS®
Reprinted with permission

You know that client credit is critical for mortgage approval, but are you aware of the impact it can have on your real estate business?

Your clients’ credit is relevant in many more ways than just getting approved for a mortgage. You may be surprised to know that their scores have implications for your business and how much you get paid for your services. How is that? Here are five ways your clients’ credit affects you.

When clients get unfavorable loans because of bad credit, it can reflect on you. The first step for most home buyers is to get preapproved for a mortgage, though not everyone agrees on the merits of preapprovals. Clients who have limited loan options because of a low credit score likely will seek advice not only from mortgage officers but also from you. Here’s where your knowledge and reputation as a customer service provider is important.

You should, for example, be prepared to answer questions and warn of risks associated with “nonprime loans,” a postrecession PR nomenclature for subprime loans. These loans, which clients can get when they don’t qualify for a traditional mortgage, can be risky. So when you work with a client who has secured a nonprime loan, you are showing support for risky financial behavior that may come back to reflect badly on you.

Help clients who have good to great credit scores get preapproved for a loan in their financial comfort zone. Advising them to wait a few months in order to pay down debt or otherwise improve their credit report can benefit both your client and your business reputation. Educate yourself on the factors that impact credit scores, including:

• Length of credit history
• Debt-to-income ratio
• Debt to available credit ratio
• Payment history
• Public records such as bankruptcies or collection items (even library fines can reflect poorly on a credit report)
• Inquiries
• Accounts in use

Credit scores don’t reveal your clients’ entire financial picture, but they give a good indication of their future ability to pay the mortgage and keep the home you worked hard to find for them.

Better client credit earns you higher commissions. A client may be preapproved for a smaller loan if their credit history is not long or their credit score is not high. While you can still work with clients in the good credit score range to find a mid-range house, helping people settle for an OK home is not what most real estate professionals are clamoring to do. And it won’t pay you well.

You work hard every weeknight and weekend writing and rewriting offers, anxiously awaiting escrow to close. You want to get paid handsomely for your hard work. A wonderful client with a low credit score is not going to be able to get preapproved for a competitive mortgage for a premium property. So the more clients you have with low scores, the smaller your commission checks will be.

Even if you’re getting a lot of clients and leads with less-than-amazing credit scores, there’s hope. You can help buyers who are on the verge of a great credit score improve it with better financial habits or clear up small credit issues by writing a letter to the creditors. You may be surprised by the impact a few negative items can have on your clients’ credit report. On top of getting clients approved for the home they really want, if you genuinely care about people, the good news will spread(link is external). You will more than likely get referrals from people who like and trust you.

Clients with low credit scores require your knowledge of alternative financing options. If your clients’ credit scores are not in the high 700s, you can help them utilize other resources. FHA and VA loans help hardworking families become homeowners. If you choose to work with buyers who have lower credit scores, you’ll need to educate yourself on alternative financing options like these.

• Get an FHA loan: Over 3,000 counties in the U.S. decided to follow the recent national limit increase, with some loan limits for single-family homes reaching in the high $600,000s.
• Consider a VA loan: Eligible borrowers include “service members and veterans, spouses, and other eligible beneficiaries.” It’s worth looking into if a VA loan could help a client save money on the down payment or get approved sooner.
• Provide a higher down payment: If your client has poor credit, they can sweeten their offer with more cash up front. However, the way the market is trending, even people with great credit are offering a higher down payment. So improving their credit score is still a good idea for most of your clients.

You’ll get more business from clients with great credit. Clients who are happily settled in their new home and steadily paying their mortgage are more likely to refer friends and neighbors to you. Usually, these happy home buyers are people who have less financial risk on the line and are more likely to be financially stable in the coming years. They likely have friends in similar positions, so your referrals will be high quality.

On the other hand, the young couple whom you nudged a bit toward the home just outside their budget and who now have a baby on the way are wondering if they should have said no to this house. They may not be a great referral source. In fact, unhappy clients may be a source of bad press, something that’s hard to shake.

It’s imperative that you pay attention to your clients’ nonverbal cues—one of which is their credit score. Even if a client can get approved for a higher loan, or their partner can, it doesn’t mean they should. If your clients have a poor credit score (below 650) then you may get the backlash of buyer’s remorse down the road.

Clients with great credit are more likely to buy investment properties. Similar to referrals, repeat clients can keep your business afloat. Whether they’re middle-aged parents cosigning on their child’s first home or investors trusting you to tell it to them straight, your clients’ credit score can really boost your repeat business and help you sell more properties.

Clients with great credit are more likely to buy a second investment property. Bankrate lists being a “strong borrower” as a competitive advantage for those looking to snag real estate investment properties. The indication of a strong borrower is a credit score above 740. In addition to a loan, banks want serial investors to have a reserve for each property set aside. Clients with great credit scores have a proven financial track record, save money in their everyday expenses, and are in a better position to purchase a home and investment property soon after.

No matter whether your clients have great credit or poor credit, it will affect many parts of your business, from closing the sale to getting referrals and creating a network of happy clients. Understand credit, and you can close more sales and help your clients get the home they deserve.

National Association of REALTORS®
Reprinted with permission