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A real estate trend is any consistent pattern or change in the general direction of the real estate industry which, over the course of time, causes a statistically noticeable change. This phenomenon can be a result of the economy, a change in mortgage rates, consumer speculations, or other fundamental and non-fundamental reasons.
At one time, all real estate brokers and agents, or Realtors, practiced "single agency", meaning they represented only the buyer or the seller. In the 1990s, the concept of buyer agency became popular, allowing a buyer to retain an agent who would represent the best interests of the buyer alone. The first national company to provide this service was The Buyer's Agent, Inc. A 2008 study by Consumer Reports indicates that prior to this development, a Realtor was presumed by state law to be working for the seller. The same study shows that buyers using buyer agents obtained a savings of $5000 in the price of the home as compared to prices paid by unrepresented buyers. [1] It remains true that an unrepresented real estate buyer can still call the sellers agent to arrange a showing of the property. In such cases, the buyer should be advised by Agency Disclosure Laws (a state law in every state in the U.S.) that any information obtained, as well as all conversations and negotiations undertaken, will be for the benefit of the seller.
Historical rates are presented in a report by the Government Accountability Office, Congress's investigative arm. A 2005 study [2] of real estate commission rates, reported that realtors tended to charge, "about 5 percent to 7 percent of a property's selling price...". More recently, CBS News, "60 Minutes" television news magazine reported in 2007 that competitive pressure resulting from a record number of licensed agents has driven down the average sales commission rates paid by sellers. [3] A new breed of marketplaces that enable agents to compete for sellers further add pressure to the commission rate structure.
In some states, companies such as Redfin still advertise a commission, but provide a rebate to sellers based on the quality of their surveys reflected in post-close surveys. This is also fraught with difficulties. [4]
Another trend is the emergence of alternatives to the commission model, including flat-fee, hourly home selling, and for sale by owner tools.
The Internet has become a major lead generation method for real estate marketing, eclipsing local newspapers and all other sources as the consumer's most preferred method to learn about homes for sale. When the National Homebuying Survey was conducted in 1981, the most important rated information source in the home search, after agents, was newspaper ads. In 2020, 97% of homebuyers used the internet in their home search. [5] With social distancing and health guidelines coming from the COVID-19 pandemic, technology has played an even larger role in the buying and selling of homes according to a study by the National Association of Realtors (NAR). The majority of real estate companies use popular internet marketing methods like SEO, advertising, and social media.
Websites like Craigslist (United States), Daft.ie (Republic of Ireland) and Gumtree (UK) became in the 21st century the main sources for both buyers and sellers. Rapid changes in the market environment forced some countries to introduce new laws regulating real property market on the web.
Even with the introduction of the internet, traditional media and methods of generating leads were still an important part of Real Estate trend:
Though the internet was the most popular source, buyers also cited information from real-estate agents (85%), yard signs (62%), open houses (48%), and print or newspaper ads (47%). Fewer buyers relied on home books or magazines, home builders, television, billboards, and relocation companies. [6]
Mobile applications are also changing the way real estate agents conduct business. [7] Apps like Zillow, Trulia, Zumper, and Rentberry are primarily accessed via mobile devices and have become very popular sources for listing properties for sale or rent. These applications function similarly to websites like Craigslist in that they allow agents or private sellers to list a property like they would in a classified ad albeit with a more dynamic display as well as mechanisms for users browsing a listing to contact the seller directly from the app. These platforms allow buyers to view homes in their desired area from anywhere. [8] Mobile applications are particularly prominent with millennial real estate customers.
The United States Department of Justice Antitrust Division announced the launch of a new website in October 2007 to "educate consumers and policymakers about the potential benefits that competition can bring to consumers of real estate brokerage services and the barriers that inhibit that competition." [9] Among other findings, they report that certain new sales models can reduce consumer home sales costs "by thousands of dollars. For example, in states that allow open competition, some buyer's brokers rebate up to two-thirds of their commission to the customer, and some seller's brokers offer limited-service packages that let sellers list their homes on the local Multiple Listing Service (MLS) for as little as a few hundred dollars." [10] The Justice Department updated their information in a new website in 2016. [11]
Renting has recently been gaining popularity in the United States. This has become a more popular residential choice for younger generations due to student loan debt and more convenient locations. Some other pros for renting are amenities, flexibility, and credit building opportunities. The demand for rental units is increasing as there become more perks to renting. [12]
This aims to be a complete list of the articles on real estate.
A multiple listing service is an organization with a suite of services that real estate brokers use to establish contractual offers of cooperation and compensation and accumulate and disseminate information to enable appraisals. A multiple listing service's database and software is used by real estate brokers in real estate, representing sellers under a listing contract to widely share information about properties with other brokers who may represent potential buyers or wish to work with a seller's broker in finding a buyer for the property or asset. The listing data stored in a multiple listing service's database is the proprietary information of the broker who has obtained a listing agreement with a property's seller.
The National Association of Realtors (NAR) is an American trade association for those who work in the real estate industry. It has over 1.5 million members, making it the largest trade association in the United States including NAR's institutes, societies, and councils, involved in all aspects of the residential and commercial real estate industries. The organization holds a U.S. trademark over the term "Realtor". NAR also functions as a self-regulatory organization for real estate brokerage. The organization is headquartered in Chicago.
A real estate agent, referred to often as a real estate broker, is a person who represents sellers or buyers of real estate or real property. While a broker may work independently, an agent usually works under a licensed broker to represent clients. Brokers and agents are licensed by the state to negotiate sales agreements and manage the documentation required for closing real estate transactions. Buyers and sellers are generally advised to consult a licensed real estate professional for a written definition of an individual state's laws of agency.
For sale by owner (FSBO) is the process of selling real estate without the representation of a broker or agent. Homeowners may employ the services of marketing, online listing companies, or market their own property. Typically, they represent themselves with the help of a lawyer or solicitor throughout the sale. As in most areas, there are detailed legal requirements pertaining to sellers and disclosures they must make.
Closing costs are fees paid at the closing of a real estate transaction. This point in time called the closing is when the title to the property is conveyed (transferred) to the buyer. Closing costs are incurred by either the buyer or the seller.
A listing contract is a contract between a real estate broker and an owner of real property granting the broker the authority to act as the owner's agent in the sale of the property.
Redfin Corporation, based in Seattle, provides residential real estate brokerage and mortgage origination services. The company operates in more than 100 markets in the United States and Canada. The company has a 0.80% market share in the United States by number of units sold and has approximately 2,000 lead agents.
The Real Estate Settlement Procedures Act (RESPA) was a law passed by the United States Congress in 1974 and codified as Title 12, Chapter 27 of the United States Code, 12 U.S.C. §§ 2601–2617. The main objective was to protect homeowners by assisting them in becoming better educated while shopping for real estate services, and eliminating kickbacks and referral fees which add unnecessary costs to settlement services. RESPA requires lenders and others involved in mortgage lending to provide borrowers with pertinent and timely disclosures regarding the nature and costs of a real estate settlement process. RESPA was also designed to prohibit potentially abusive practices such as kickbacks and referral fees, the practice of dual tracking, and imposes limitations on the use of escrow accounts.
A buyer brokerage or buyer agency is the practice of real estate brokers and their agents representing a buyer in a real estate transaction rather than, by default, representing the seller either directly or as a sub-agent. In the United Kingdom and Australia, the most common term is buying agent.
Flat-fee multiple listing service or flat-fee MLS refers to the practice in the real estate industry of a seller entering into an "à la carte service agreement" with a real estate broker who accepts a flat fee rather than a percentage of the sale price for the listing side of the transaction. A flat-fee MLS brokerage typically unbundles the services a traditional real estate brokerage offers and lists the property for sale in the local multiple listing service (MLS) à la carte without requiring the seller to use all services.
Stefan J. M. Swanepoel, is an American business executive, author and real estate businessperson. He has served as president of two non-profit organizations and seven companies, including a New York-based global franchise network. He is most known as a business and trends author, having written more than 20 books and reports. His books have been listed on the New York Times and Wall Street Journal bestseller lists.
An electronic version of the real estate industry, Internet real estate is the concept of publishing housing estates for sale or rent online, and for consumers seeking to buy or rent properties through such platforms. Often, Internet real estate properties are listed and managed by landlords themselves. However, there are few exceptions where an online real estate agent would exist, still dealing via the World Wide Web and often stating a flat fee and not a commission based on the percentage of total sales. Internet real estate platforms surfaced around 1999 when technology advanced and statistics prove that more than 1 million homes were sold by the owners themselves in the United States alone in 2000. Some of the primary Internet real estate platforms include Zillow, Trulia, Yahoo! Real Estate, Redfin and Realtor.com.
Metropolitan Regional Information Systems, Inc. provides a multiple listing service in the United States. As of mid-July 2010, it served 51,171 real estate professionals in Baltimore-Washington Metropolitan Area including Maryland, Washington DC, Northern Virginia, and parts of West Virginia and Pennsylvania.
A real estate license is an authorization issued by a government body to give agents and brokers the legal authority to represent a home seller or buyer in a real estate transaction. Real estate agents and real estate brokers are required to be licensed when conducting real estate transactions in the United States and many other countries.
HomeServices of America is the United States' largest residential real estate services company, based on closed transactions. The company provides real estate brokerage services, mortgage loan origination, franchising, title insurance/escrow and closing services, home warranties, property insurance, casualty insurance, and relocation services.
An exclusive buyer agent (EBA) (also known as an exclusive buyer broker (EBB)) is a U.S. real estate firm (or an agent or broker who works in such a company) that represents only buyers of real estate. EBA firms never take listings and, therefore, never represent the seller in a real estate transaction.
Realtor.com is a real estate listings website operated by the News Corp subsidiary Move, Inc. and based in Santa Clara, California. It is the second most visited real estate listings website in the United States as of 2021, with over 100 million monthly active users. The site launched as the Realtor Information Network in 1995, serving as a closed network for members of the National Association of Realtors. It relaunched in 1996 as a public website displaying property listings. Since then, Realtor.com claims to be the largest real estate website in the United States, and in 2016 was valued at $2.5 billion by Morgan Stanley.
Trulia is an American online real estate marketplace which is a subsidiary of Zillow. It facilitates buyers and renters to find homes and neighborhoods across the United States through recommendations, local insights, and map overlays that offer details on commute, schools, churches and nearby businesses.
NeighborCity was a residential real estate information and service company that rated real-estate agents in the United States, offering a way for buyers and sellers of homes to compare and evaluate agents. It was based in San Francisco.
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