by Maeda Palius | Jul 30, 2024 | Industry, News Feed
The S&P CoreLogic Case-Shiller Index and FHFA House Price Index showed “no relief” for homebuyers hoping for falling home prices as mortgage rates remain elevated.
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Home prices showed decent annual gains in May, according to the S&P CoreLogic Case-Shiller Index, as the Federal Housing Finance Agency (FHFA)’s House Price Index remained flat from the previous month, reports released on Tuesday show.
The S&P CoreLogic Case-Shiller National Home Price NSA Index, showed a 5.9 percent annual gain in May, down from 6.4 percent the previous month. On a month over month basis, the National Index showed the same 0.3 percent change as during the previous month.
Meanwhile, the 10-City Composite, which represents the 10 largest cities in the nation, saw an annual increase of 7.7 percent, down from 8.1 percent in April. That index also saw a monthly change of 0.3 percent from the previous month.
The 20-City Composite, representing the largest cities in the country, posted an annual gain of 6.8 percent, down from 7.3 percent the month before. The index saw a monthly change of 0.4 percent from April.
“While annual gains have decelerated recently, this may have more to do with 2023 than 2024, as recent performance remains encouraging,” Brian D. Luke, head of Commodities, Real & Digital Assets at S&P Dow Jones Indices, said in a statement.
“Our home price index has appreciated 4.1 percent year-to-date, the fastest start in two years. Covering the six-month period dating to when mortgage rates peaked, our national index has risen the past four months, erasing the stall experienced late last year. Collectively, all 20 markets covered continue to trade in a homogeneous pattern. Coming into the 2024 presidential election, traditional red states are in a dead heat with blue states, both averaging 5.9 percent gains annually.”
Meanwhile, the FHFA HPI showed that home prices rose 5.7 percent on an annual basis between May 2023 and May 2024, and flat from the previous month.
Across the nine census divisions, the West North Central division showed the lowest price growth, declining by 0.5 percent on a monthly basis. The New England division saw the greatest gains, with the seasonally adjusted price growing by 0.3 percent month over month. On an annual basis, all divisions saw positive growth, with New England once again leading the charge with a gain of 9.2 percent.
“U.S. home price movement was flat in May,” Dr. Anju Vajja, deputy director for FHFA’s division of Research and Statistics, said in a statement. “The slowdown in U.S. house price appreciation continued in May amid a slight rise in both mortgage rates and housing inventory.”
Rates on 30-year fixed-rate conforming mortgages averaged 6.70 percent on Monday, down from a 2024 high of 7.27 percent registered April 25 and the lowest rate since March 10, according to rate lock data from Optimal Blue. Rates on jumbo mortgages exceeding Fannie Mae and Freddie Mac’s $766,550 conforming loan limit averaged 7.01 percent, down from the 2024 high of 7.56 percent on April 15.
As inflation continues to inch closer to 2 percent, economists predict rates rates for conforming mortgages will continue to drop into the low 6s by the end of next year and home price appreciation will cool.
For the time being, however, homebuyers must continue to struggle with high costs associated with owning a home.
“There’s no relief for homebuyers hoping for flattening or falling prices,” Robert Frick, corporate economist with Navy Federal Credit Union, said in a statement sent to Inman. “The Index is re-accelerating after slowing due to higher mortgage rates late last year, and is showing a strong 4.1 percent price increase so far this year. This gives a preview of what’s likely to happen if mortgage rates fall even more later this year. Expect home prices to rise as lower mortgage rates encourage more buyers to enter the market, bidding up prices for the low home supplies available.”
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by Drew Thompson | Jul 30, 2024 | Industry, News Feed
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Buckle up; the game has changed.
The real estate landscape is shifting, and it’s all about empowering buyers. Starting Aug. 17, 2024, a landmark settlement with the National Association of Realtors (NAR) will be implemented, and promises to change the way commissions are handled.
Now, buyers will have more control, negotiating and potentially paying their agent’s commission directly. This means it’s more important than ever for buyers to understand the value their agent brings and have a clear agreement in place before starting their home search.
This shift means a few key things
- More transparency: Buyers will have a clearer understanding of how much they’re paying for representation, leading to more informed decisions.
- Increased competition: Agents will need to compete more aggressively for buyers based on their value proposition and negotiation skills.
- The power of the buyer presentation: Your ability to clearly articulate your value and secure a buyer representation agreement upfront has never been more crucial.
Don’t panic. This new landscape is full of opportunity. This article will equip you with the tools and strategies to adapt to this shift, master your buyer presentations and continue building a thriving real estate business.
7 tips for winning buyers
Ready to step up your game? Let’s dive into the essential tips you need to win clients and earn your commission in 2024 and beyond.
I’ve placed these tips in the order in which I believe you should talk about them in your presentation:
1. Introduce yourself
This is your chance to make a genuine connection with your potential client. Share your story and paint a picture of who you are, both as a professional and as a person.
Here are some key points to include:
- Your experience: Briefly outline your years of experience in real estate and the number of buyers you’ve helped. If you have any specializations (first-time homebuyers, luxury properties, etc.), highlight them here.
- Your expertise: Explain what makes you uniquely qualified to guide them through the buying process. Do you have extensive knowledge of the local market? Are you a skilled negotiator? Do you have a proven track record of success? Make this brief because we will go into more detail on your expertise later in the presentation.
- Your passion: Share your genuine enthusiasm for helping buyers find their dream homes. Explain why you’re passionate about real estate and how that passion translates into exceptional service for your clients.
- Your personal touch: Let your personality shine through. Share a personal anecdote or detail that helps the buyer connect with you on a human level.
Here are a few examples of how you could introduce yourself:
“Hi [buyer’s name], I’m [your name], and I’ve been a passionate real estate agent for [X] years. I’ve helped countless buyers navigate the complex world of real estate and find homes that truly reflect their dreams and lifestyles.”
“Real estate is more than just a job for me — it’s a passion. I love helping people find the perfect place to call home, and I’m committed to providing my clients with the knowledge, expertise and support they need to achieve their goals.”
“I’ve lived in this community for [X] years, and I know the local market like the back of my hand. Whether you’re looking for a family-friendly neighborhood with top-rated schools or a trendy urban condo with walkable amenities, I can help you find the perfect fit.”
Remember, this is your chance to make a great first impression. Be confident, personable and let your passion for real estate shine through.
2. Start with a bang
Kick off your presentation by painting a vivid picture of the challenges buyers face in today’s market. This will grab their attention and show them you understand their pain points.
Here are a few examples of how you can start with a bang:
- Tell a story: Share a brief anecdote about a recent client who struggled to find their dream home due to low inventory, bidding wars or skyrocketing prices. Emphasize the happy ending — how you helped them navigate those challenges and ultimately secure the perfect home.
- Share a startling statistic: “Did you know that the average home in [your market] is now selling for [X] percent over asking price?” or “According to the latest data, there are currently only [X] homes available in your desired neighborhood.”
- Highlight the emotional toll: Talk about the stress, frustration and uncertainty that many buyers experience during the home search process.
- Emphasize the new commission reality: “With the recent changes in commission rules, it’s more important than ever to have an experienced advocate on your side to help you navigate this complex landscape.”
3. Justify your commission
I wrote a previous article for Inman News called “Your essential marketing toolkit for a post-NAR settlement landscape”. In this article is a huge section devoted to how to justify your commission. I recommend you read it, but a summary is below.
Think of yourself as a financial advisor for real estate. Your expertise translates to real savings and smart investments for your clients. Here’s how to break it down:
- Local market mastery: You’re not just familiar with the local market — you’re an expert. You know the up-and-coming neighborhoods, the hidden gems and the school zones that matter. This knowledge isn’t just about finding a nice house; it’s about guiding your clients toward properties with the greatest potential for appreciation.
- Negotiation prowess: Numbers are your playground. You go beyond securing the house; you strategically negotiate repairs, closing costs and contract terms to put thousands back in your client’s pocket. Share examples of how your negotiation prowess has resulted in significant savings for past clients.
- Contract expertise: Contracts aren’t just paperwork to you; they’re a roadmap to protecting your client’s investment. Highlight your ability to spot potential pitfalls, ensure favorable terms and catch costly errors before they become problems.
- Problem-solving: Real estate is full of surprises. But you’re not just reactive, you’re proactive. Share stories about how you’ve anticipated issues and used your resourcefulness to keep deals on track, saving your clients time, money and stress.
- Access and advocacy: Your network is your client’s secret weapon. Explain how your connections with lenders, inspectors and other pros streamline the process and uncover off-market opportunities that other buyers might miss.
By focusing on your expertise, quantifying your value and sharing real-world results, you’ll create a powerful buyer presentation that not only justifies your commission but also positions you as the trusted advisor your clients need in this evolving market.
4. Add success stories and testimonials
Don’t underestimate the power of your past successes. Testimonials are more than just feel-good stories; they’re powerful tools to demonstrate your value proposition to potential clients. But to truly make an impact, it’s time to go beyond generic praise and focus on the numbers.
Encourage your clients to share specific, quantifiable examples of how you’ve helped them save money, maximize their investment or achieve their real estate goals.
Ditch the vague testimonials
Instead of “Jennifer was great!”, get specific about your impact:
- “Jennifer’s negotiation skills are priceless! She saved us $15,000 on our dream home, even in this crazy market!”
- “Jennifer went above and beyond to find us the perfect fixer-upper in our budget. Her knowledge of local contractors and renovation costs was invaluable — we were able to increase the home’s value by 20 percent in just 6 months!”
Share quantitative stories
Craft mini-case studies for your presentation that highlight your unique value:
- “Meet the Smiths! They were feeling discouraged after losing out on 3 bidding wars. I helped them refine their offer strategy and secure their dream home for $10,000 under budget!”
- “Relocating to a new city can be daunting. But for Maria, I made it a breeze. I helped her find the perfect neighborhood with top-rated schools AND secured her dream home for 5 percent below asking price!”
By focusing on specific results and real-world stories, you’ll paint a vivid picture of the value you bring to the table. This will make potential buyers feel confident in their decision to choose you as their trusted advisor in the competitive real estate market.
5. Include your local market expertise
As a dedicated buyer’s agent, you’re not just familiar with the local market—you live and breathe it. You know the pulse of each neighborhood, the hidden gems and the subtle nuances that make all the difference in finding your client the perfect home.
Here’s how your local expertise adds value for your buyer:
Insider intel: We’re not just talking about the basics you can find online. You know about the quiet, tree-lined streets that are perfect for families, the up-and-coming neighborhoods with untapped potential and the charming pockets of history that make a community unique.
Schools: For families, schools are a top priority. You have up-to-date information on school zones, extracurricular activities and even the inside scoop on which schools have the most engaged parent communities.
Future development: New developments, zoning changes and infrastructure projects can significantly impact property values. You stay ahead of the curve, keeping an eye on upcoming changes that could affect your investment, both positively and negatively.
Micro-markets: Every neighborhood has its own micro-market with unique pricing trends and dynamics. You analyze the data and understand the subtle differences to ensure your clients are not overpaying and that their offer is strategic and competitive.
Your goal isn’t just to find your client a house; it’s to find them a home that fits their lifestyle, their budget, and their long-term goals. By leveraging your local market expertise, you can help your clients make an informed decision and secure a property that not only brings them joy but also has the potential for appreciation. Make sure they understand the value of your local market expertise.
6. Explain your value at every point of the buying journey
In your presentation, give your potential buyer client a tour of the home-buying journey. Break down each step, highlighting your role as their trusted advisor and the value you bring:
Step 1: Getting pre-approved
- Your role: You’ll connect them with reputable lenders to secure pre-approval, which strengthens their offers and gives them a clear budget.
- Your value: You’ll help them navigate the pre-approval process, answer any questions they have, and advocate for them to get the best possible terms.
Step 2: Finding their dream home
- Your role: You’ll use your market expertise and powerful search tools to curate a list of properties that match their criteria. You’ll tour homes together, both virtually and in person, to find the perfect fit.
- Your value: You’ll go beyond the MLS to uncover hidden gems and off-market opportunities. You’ll also provide insights into neighborhoods, schools, zoning and amenities to help them make an informed decision.
Step 3: Presenting a winning offer
- Your role: You’ll analyze comparable sales, market trends and the property’s condition to help them craft a competitive offer that protects their interests.
- Your value: You’ll leverage your negotiation skills to secure the best possible price and terms while ensuring a smooth and timely closing.
Step 4: Due diligence
- Your role: You’ll coordinate inspections, appraisals and other due diligence tasks to ensure the property meets their expectations and uncover any potential issues.
- Your value: You’ll connect them with trusted professionals, review reports with them and negotiate repairs or credits on their behalf.
Step 5: Closing
- Your role: You’ll guide them through the closing process, ensuring all paperwork is complete, accurate and submitted on time.
- Your value: You’ll act as their advocate, communicating with all parties involved (lenders, attorneys, title companies) to ensure a smooth and successful closing.
Beyond the closing
- Your role: You’ll continue to be their resource for all things real estate, even after they’ve moved into their new home.
- Your value: You’ll provide ongoing support, answer questions and connect them with local service providers. You’re committed to building a lasting relationship with them, not just closing a deal.
7. Explain the new commission landscape (transparency)
Let’s talk about the elephant in the room: commissions. Don’t stress. I’m here to help you position yourself as the go-to expert your clients need.
Here are the four most important things to review with your potential client about buyer agency and commissions:
- What buyer agency is: Explain what buyer agency means to the buyer. You’re the champion for your buyer clients. Your loyalty lies solely with them, and you’re their advocate throughout the entire buying process. Here are a few key benefits you might want to share in your presentation:
- Unwavering loyalty: As a buyer’s agent, your sole focus is on your client’s best interests. You are not swayed by the seller’s goals or motivations. Your loyalty lies with the buyer, ensuring they get the best possible deal and terms.
- Confidant and advisor: You’re not just there to open doors; you’re their trusted advisor throughout the entire process. You’ll answer their questions, address their concerns and provide unbiased advice to empower your buyer to make informed decisions.
- Protection and advocacy: As their agent, you are legally obligated to protect their interests. You’ll help them navigate complex contracts, negotiate repairs and ensure all contingencies are met to protect their investment.
- Peace of mind: With you by their side, your buyer can have peace of mind knowing that they have a dedicated professional advocating for them every step of the way. They’ll never feel alone or overwhelmed in the process.
- Negotiated commissions: Here’s where things get interesting — and potentially more lucrative for you. It’s crucial to be upfront with your buyer from the start. Clearly explain that you will negotiate with the seller to cover as much of your commission as possible. However, if the seller is unwilling or unable to cover the full amount, the buyer will be responsible for the remainder if they choose to buy that home.
- Your commission structure and fee expectations: I strongly believe in transparency and open communication, especially when it comes to finances. You’ve already shared your value, now it’s time to share what you get paid. Lay it out clearly and with confidence because you’re worth it. Explain how it works, what services it covers and any potential scenarios where they might need to pay a portion directly.
- The buyer representation agreement: This is your new best friend. Before you dive into property showings, have your buyer sign your brokerage’s buyer agreement, which clearly outlines your services and the agreed-upon compensation. Explain that it’s designed to protect both of you and ensure everyone’s on the same page. If you have a buyer who hesitates to sign a longer-term agreement, I suggest using a short-term or single-property agreement. The goal is to move them to a longer-term contract but get to know each other first. With time their trust in you will build.
Your buyer presentation is your superpower — unleash it!
Remember, in this brave new world of real estate commissions, you hold the power. Your buyer presentation is your chance to not only showcase your expertise but also your passion for helping clients achieve their homeownership dreams. By focusing on the real value you bring — through market mastery, negotiation skills, contract smarts and unwavering advocacy — you’ll win over hearts (and signatures) every time.
So, go forth and conquer those buyer presentations. Be confident, be transparent and be the real estate rockstar you were born to be. This new commission landscape might seem daunting, but with the right approach, it’s an opportunity to shine brighter than ever before. Now go make some magic happen.
Marci James is the founder of Be Inspired Digital. Connect with Marci on Linkedin and Instagram.
by Andrew Reichek | Jul 30, 2024 | Industry, News Feed
Greg Sexton, chief operating officer for Century 21 Real Estate, describes the brand’s 45-year-long philanthropic involvement with the Easterseals.
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I’ve devoted almost 30 years of my career to what I think is one of the most significant pillars of our society — turning a house into a home and using an address as a home base for community building. I know this idea resonates widely across our industry, and it’s why real estate professionals are so passionate about what they do.
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We know that people who own homes have higher levels of civic engagement — that’s a fancy term for being aware of and supporting the needs of your community. Our primary role as real estate agents contributes to this simply by being the facilitator of homeownership. But it goes much further than that for so many of us.
We don’t just help our clients buy and sell homes; we are also heavily invested in our communities through volunteering, fundraising, donating and serving. Real estate agents don’t just provide real estate service to their cities and towns; they live there, too, and work tirelessly to make them better places for everyone.
In that vein, I’d like to offer my thoughts on how we as an industry can take our commitment to community to the next level.
Lead by example, literally
Last year, I was honored to be appointed to the Easterseals National Board of Directors. To be clear, this leadership role didn’t just drop into my lap. It was the result of the Century 21 brand’s long-time and fruitful partnership with the organization.
Over the past 45 years of our work with Easterseals, we have raised more than $135 million to support adults and children with disabilities. Our contributions have helped Easterseals further its mission of empowering people with disabilities to be full and equal participants in society.
As a member of the Board of Directors, I have been able to lend my insights and experiences to actively guide the organization in a way that ensures the continued focus on its important mission. For Century 21 Real Estate, we have taken our support to the next level with this leadership opportunity.
I urge you to think about ways you can take your own philanthropic efforts to the next level. Can you join a committee, spearhead an initiative, throw your hat in the ring for leadership roles?
Prioritize philanthropy in your business
Don’t view charitable activities as separate from your business. Incorporate them into your overall business strategy. Participating in charitable efforts can lead to increased business opportunities. While generating more business shouldn’t be the sole motivation, it is a natural outcome of a well-rounded business plan that includes giving back to your community.
Philanthropy should also be an inherent part of your organizational culture. At my brokerage, agents affiliated with our brand learn about our relationship with Easterseals from the moment they join. We emphasize that Easterseals is a core component of our identity as community servants through real estate.
Create a collective focus on community impact
The Century 21 International Week of Giving is a prime example of how a collective focus on philanthropy can make a significant impact. We started this initiative three years ago as a way to mark our brand anniversary while bringing into focus our long-standing commitment to the community.
The first-ever International Day of Giving showcased the community giving efforts of the Century 21 network members around the world. Based on its success, the initiative was expanded to a full week the following year in 2023.
While many companies affiliated with our brokerage’s brand support Easterseals, they also support local efforts in their backyards. Creating an awareness week like this is an impactful way to remind clients and communities of the work that goes on all year long. It also strengthens the sense of community and purpose within each of our local brokerages.
Our 45-year relationship with Easterseals has shown that giving back is not just an obligation but a core part of our identity.
By integrating philanthropy into our business model, we contribute to our communities’ well-being, enhance our brand’s reputation and foster a culture of giving. Real estate professionals have a huge opportunity to make a lasting impact in their communities, and I urge you to seize it now.
Greg Sexton is Chief Operating Officer for Century 21 Real Estate, a post he has held since 2013. Connect with Greg on Linkedin.
by Jason Waugh | Jul 30, 2024 | Industry, News Feed
At the new Homes.com, we always present the listing agent and only the listing agent on any home for sale on our site. Our philosophy is that the leads on an agent’s listings are theirs alone and not anyone else’s to pilfer and sell. This is not a new principle for us. CoStar Group has operated dozens of industry-leading real estate websites for decades and has always operated on this “Your Listing, Your Lead” philosophy because it is the right thing to do for buyers and agents alike.
When a potential buyer reaches out to the listing agent on a home for sale, that’s a potentially valuable lead no agent should be forced to give up. If that lead comes in, the listing agent who knows the house best can answer any questions the buyer has, and if the buyer has a buyer’s agent, the listing agent can then work with the buyer’s agent to sell the house and earn a commission. In some cases, the buyer may not be represented yet, allowing the listing agent to earn a referral fee by referring the buyer to another agent in their brokerage to earn an additional commission. Often, the agent receiving the referral will return the favor, generating future buyer agency commissions for the listing agent.
Many times, the home the agent is listing is not the perfect fit for the buyer, so the listing agent can offer their expertise in the market to the buyer as a buyer’s agent and earn another commission. While it may not be legal in all states or permitted at all firms, hundreds of thousands of agents are able to perform dual agency, and that listing lead can significantly increase their commission.
The importance of portals respecting Your Listing, Your Lead goes beyond commission dollars. Agents put tens of thousands of hours of hard work into building their brands and reputations as real estate experts that deliver the best results for their clients. The most important asset an agent has is their reputation. Indeed, the biggest signal to homebuyers and sellers in search of an agent is the listing sign that shows that someone else has entrusted that agent with selling their home.
But like newspaper classifieds listings, signs in front lawns are no longer all that relevant. According to a 2023 NAR report, 100 percent of buyers now search the internet when buying a home, making agents’ online presence far and away their most important brand-builder.
With “Your Listing, Your Lead,” Homes.com is the first and most agent-friendly site that 100 percent of the time presents the listing agent, their photo and their brand, prominently letting the world know that that agent is a trusted expert. Homes.com has presented agent names to potential buyers and sellers 40 billion times so far this year.
Homes.com is committed to Your Listing, Your Lead because it is a more honest and transparent way to do business. Every seller, every buyer and every agent I speak with thinks Your Listing, Your Lead creates a better homeshopping experience for all.
by Kristine Milkovich | Jul 29, 2024 | Industry, News Feed
Release of historical credit scores on tens of millions of loans will help lenders prepare for transition to VantageScore 4.0 next year. Release of FICO Score 10 T data next on deck.
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Mortgage lenders continue prepping to use new more inclusive credit scoring models that regulators want them to adopt next year as part of an initiative to make the process of qualifying borrowers more fair and competitive.
Fannie Mae and Freddie Mac this month released historical data aimed at smoothing the adoption of the new VantageScore 4.0 model. The mortgage giants say they’re working with their federal regulator to make similar historical data for the FICO Score 10 T available “as soon as possible.”
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The plan put in motion by the Federal Housing Finance Agency (FHFA) two years ago calls for lenders to start using the new Vantage 4.0 and FICO Score 10 T scoring models during the fourth quarter of 2025 for any loans they deliver to Fannie and Freddie.
“The release of historical credit scores on tens of millions of loans provides an extensive resource to help market participants prepare for this transition,” FHFA Director Sandra Thompson said in announcing the release of VantageScore 4.0 data. “The use of these modernized credit score models will enhance risk management while furthering sustainable access to credit for consumers.”
In addition to requiring lenders to phase out the Classic FICO scoring model that’s been in use for nearly three decades, the FHFA will also allow lenders to deliver loans with credit reports from any two of the nationwide consumer reporting agencies, instead of obtaining “tri-merge” reports from all three. The move to give lenders the option of ordering “bi-merge” credit reports is aimed at simplifying the process and saving borrowers money.
In launching an inquiry into mortgage “junk fees” in May, the Consumer Financial Protection Bureau (CFPB) said it was concerned about the rising cost of credit reports and scores.
“To lower costs for credit reports in mortgage lending, limiting chokepoints from specific data monopolists is critical,” CFPB Director Rohit Chopra told industry leaders attending the Mortgage Bankers Association’s annual convention this spring.
Credit reports from the big three consumer reporting agencies are used to generate credit scores for individual borrowers. Those scores have traditionally been generated using algorithms developed by the Fair Isaac Corporation (FICO).
Lenders typically pay the credit reporting agencies for each individual credit score, and agencies pay a licensing fee to FICO. VantageScore is a joint venture of the three nationwide credit reporting agencies — Equifax, Experian and TransUnion — formed to develop credit scoring models to compete with FICO.
“Single credit reports now typically cost between $18 to $30 for an individual report, $24 to $40 for a joint report, and $40 to $60 for a tri-merge report provided by resellers,” Chopra said. “When mortgage credit reports and scores are requested for a mortgage underwriting decision, Equifax, Experian and TransUnion typically set the wholesale price that resellers pay, which is then passed on to users. This is often implemented through an additional fee as compensation for their services in the underwriting process.”
Chopra also noted that when FICO changed its pricing structure in November, moving away from volume-based pricing, smaller lenders saw their costs go up by more than 400 percent.
“For 2024, FICO now charges consumer reporting companies a licensing fee of $3.50 per FICO score used, or approximately $10 for all three scores if a lender obtains a tri-merge report and score bundle,” Chopra said. “That fee doubles if two borrowers apply together.”
On the company’s second-quarter earnings call, FICO CEO Will Lansing said the company is “catching up from 30 years of frozen pricing” and price increases are intended “to close the gap on the value that we provide relative to what we charge.”
FICO has been increasingly willing to share its pricing in the interests of transparency, he said.
“It’s important for everyone to understand that we’re talking about single-digit dollars in a bundle that costs the consumer about $6,000,” Lansing said of total mortgage closing costs.
More inclusive, accurate scoring
In addition to introducing competition, backers tout the new VantageScore 4.0 and FICO Score 10 T credit scoring models as more inclusive and accurate.
VantageScore claims that when lenders are required to begin using VantageScore 4.0 next year when qualifying borrowers for loans that will be sold to Fannie and Freddie, that the eligible pool of mortgage applicants will increase by over 2.5 million borrowers, representing $1 trillion in potential new mortgages.
“This is an important and necessary step to modernize the outdated and exclusionary credit scores that lenders in the conventional-conforming mortgage market have been forced to use,” VantageScore executive Anthony Hutchinson said in a statement.
Fair Isaac claims that lenders using the FICO Score 10T can boost originations by up to 5 percent without taking on additional credit risk, or continue the same volume of lending while reducing default risk and losses by up to 17 percent.
A growing number of lenders already use the FICO Score 10 T to qualify borrowers for non-conforming mortgages that aren’t eligible for purchase by Fannie and Freddie.
In April, Fair Isaac said it had signed clients with $100 billion in annualized mortgage originations to use the FICO Score 10 T. Those lenders include CMG Mortgage, CrossCountry Mortgage, Movement Mortgage, Primis Mortgage and Liberty Home Mortgage. FICO is also signing lenders through a strategic relationship with Lenders One Cooperative, a national alliance of independent mortgage bankers, banks and credit unions.
On Monday, FICO announced a partnership with the National Association of Minority Mortgage Bankers of America (NAMMBA) in which it will provide its “Score A Better Future” credit education curriculum to mortgage professionals pursuing NAMMBA’s Certified Community Lender (CCL) certification.
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by Bernice Ross | Jul 29, 2024 | Industry, News Feed
Industry leaders argued Monday that artificial intelligence will continue disrupting real estate and that leaders must learn how to harness it.
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Technology has been disrupting real estate for years now, but at least one CEO thinks the impact of artificial intelligence is going to be unlike anything the industry has seen so far.
“I absolutely think it’s here to stay,” Malte Kramer said on Monday, adding that “AI is fundamentally different because it impacts every part of the value chain. Everything is getting more efficient. This innovation cycle will be faster than previous innovation cycles.”
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Kramer, the founder and CEO of real estate software company Luxury Presence, made the comments while on stage Monday at Inman Luxury Connect. During the session, he repeatedly argued that AI will have a major, and potentially positive, impact on real estate, and at one point ticked off a list of AI tools he already uses. Those tools, he said, often help with either task management or content creation, and can save industry pros both time and effort.
“AI happens to be amazing at translating unstructured data into structured data,” he said, noting that many real estate professionals hate data entry — meaning the tech can cut down on unpleasant work.
Kramer also advised Luxury Connect attendees to find someone within their organizations who enjoys and understands artificial intelligence and who can keep leaders informed about the field.
From left to right, moderator Holly Meyer Lucas, Malte Kramer and Kevin Van Eck at Inman Luxury Connect Monday. Credit: AJ Canaria Creative Services
Kramer appeared on stage with Kevin Van Eck, president of affiliate strategy at Christie’s International Real Estate. Van Eck agreed with Kramer that artificial intelligence is likely to stick around, in part because there is currently “so much funding and innovation behind it.” But he also cautioned industry leaders that they are likely to receive pushback if and when they roll out new AI tools for their agents. After all, few people immediately enjoy change.
However, Van Eck advised those leaders to “stand firm” because “you know it’s going to make agents more successful.”
“You have to support it,” he added.
Van Eck ultimately concluded that AI will only continue to get better, arguing that the tech “is the worst today that it’ll ever be.” And, he suggested, the people who learn how to use it will have significant advantages in the future.
“You’re not going to be replaced by AI,” Van Eck said. “You’re going to be replaced by others who know how to use it.”
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