Transcript Chapter 2
Welcome Introduction Page 1 Course Goals Knowledge of the role of real estate in the U.S. economy and society Knowledge of the U.S. real estate marketplace Overview of the U.S. real estate transaction Information on the requirements, regulations, and laws associated with U.S. real estate Overview of the REALTOR® organization Recommendations for building key contacts Page 2 International REALTOR® Membership Open to cooperating associations members Included in Find-a-REALTOR® database—at no cost Benefits include access to Realtors Property Resource® database of 165 million U.S. properties www.Realtor.org/global/international-realtormembership Page 3 Earning the CIPS Designation Complete course requirements Document international real estate experience Designation application at www.Realtor.org/global. Page 3-4 ® REALTOR Trademark REALTOR® and REALTORS® are trademarks of the NATIONAL ASSOCIATION OF REALTORS® Not generic term for “real estate agent” Only members of NAR are REALTORS® Page 4 1. The U.S. Economy and Real Estate Market Page 5 Real Estate and the U.S. Economy 15 percent of the national GDP Every home purchase contributes $60,000 to the U.S. economy 500 jobs created for every 1,000 homes sold Homeownership creates wealth for U.S. households Federal government provides incentives Page 6-7 History of Real Estate The American Dream 1950 – 1960 Suburban Migration 1970 – 1980 Back to the City 1990 – 2000 Recession 2008 Recovery 2012 Page 8-9 Investor Opinion Best opportunity for capital appreciation 1. 2. 3. 4. 5. 6. 7. 8. United States Brazil Spain Ireland United Kingdom Netherlands China India Page 10 Most stable and secure real estate investments 1. 2. 3. 4. 5. 6. United States Germany United Kingdom Canada Australia Netherlands How’s the Market? REALTOR® Confidence Existing home sales Months of inventory Time on market Median prices Mortgage Originators Survey Page 10-11 Commercial Real Estate Outlook Job growth and employment Oil prices Currency values Consumer Confidence Index® Can Foreigners Buy U.S. Real Estate? Few restrictions on type, location, or value Same private property rights as U.S. citizens Does not bestow residency or a work permit May encounter difficulties with financing Some reporting requirements Page 10-11 Taxpayer Identification Number required Subject to income tax Large investments may confer residency Cooperatives (not condos) may have restrictions Foreign Buyers—in Numbers 2010 $66 2011 $66 2012 $82 2013 $68 2014 $92 2009 $39 Home Sales Dollar Volume (in US$ Billions) Page 13 2015 $104 Foreign Buyers—in Numbers Home Sales to Foreign Buyers 2009 157,200 2010 Type of Property 300,600 Single Family Home 62% 2011 210,800 Condominium 19% 2012 206,200 2013 192,400 Townhouse 11% 2014 232,600 Land 7% 2015 209,000 Commercial 1% Page 13 Foreign Buyers—in Numbers Type of Area Suburban 46% Intended Use Primary Residence Residential Rental Central/Urban Small Town/ Rural Resort Page 13 33% 12% 9% Vacation Home Vacation and Rental Commericlal Rental For Student in U.S. Unknown 46% 20% 15% 11% 3% 2% 3% Typical Single Family Homes 62% of foreign buyers of U.S. residences prefer single family homes Page 14 Commercial Properties Class A, B, and C space based on architecture, age, quality of construction, locations, amenities, and quality of tenants Page 15 Who Buys U.S. Real Estate? Canada, China, Mexico, India, and the United Kingdom: 51% of purchases 4% of total existing home sales $91 billion in commercial investments Page 16 Gateway Cities and Beyond State's Share of International Sales 21% 50% of sales occur in these 5 states 16% Page 16 5% 3% 3% 3% 3% 2% 2% Arizona New Jersey New York Illinois Washington D.C. Michigan Hawaii Texas California Florida 8% Countries of Origin Major Countries of Origin: International Clients Purchasing Property 14% Page 17 4% 3% 3% 2% Germany France Venezuela 8% U.K. Mexico Canada China 9% India 16% Top 5 Countries of Origin China: 16% of sales, $28.6 billion Canada: 14% of sales, $11.2 billion Mexico: 9% of sales, $4.9 billion India: 8% of sales, $7.9 billion United Kingdom: 4% of sales, $3.8 billion Page 18 2. The U.S. Real Estate Market and the MLS Page 19 MLS: Broker-to-Broker Cooperative Business-to-business cooperative Brokers: Share information on listings Make a unilateral blanket offer of compensation to cooperating brokers Page 20 MLS Mechanics 1. 2. 3. 4. Property listing with broker/agent Property data entered in MLS Property info uploaded and disseminated Agents can search listings, find properties to match buyers needs, wants, price range 5. Offers presented to seller 6. Commission shared Page 22 MLS Benefits For Buyers Access to all the listings in the market For Sellers Market-wide exposure For Brokers and Agents Market-wide exposure for listings Blanket offer of compensation Show any listed property Page 23 Who Owns the MLS? Local association of REALTORS® as a member service Several associations of REALTORS® create a regional MLS MLSs exchange listing data Regional MLSs as independent entities No national MLS Page 23 NAR MLS Policy Mandatory listing service: MLS participation is voluntary, but all listings must be submitted if the member chooses to participate. Voluntary listing service: MLS participation is available and voluntary, and the submission of any listing is optional. Okay to participate in more than one MLS IDX: Brokers show listings of other firms on their Websites Page 25 No Standard Commission The MLS cannot fix, control, recommend, suggest, or maintain: Standard commission rates Schedule of fees for services Percentage split between brokers Page 25 Standardized Terminology REALTOR® affiliated MLSs must use standardized terminology for data fields Real Estate Standards Organization (RESO) Data Dictionary Consistent descriptions of property features Page 26 Commercial Information Exchange Most prevalent form of property information dissemination among commercial brokers Property listing information No unilateral offer of compensation Page 26 Realtor.com® International Sale and rentals 45 countries Translations in 11 languages Page 27-28