By Ilyce R. Glink with Samuel J. Tamkin
Saturday, July 5, 2008; F06
Real estate agents are used to competing heartily against one another for listings. They're used to competing against other agents who have comparable houses for sale in the same neighborhood. Local Realtor organizations host award ceremonies each year to recognize real agents with the most sales. Heck, real agents are even used to fighting for ad space in the local media.
But on the World Wide Web, the nature of real estate competition is changing -- particularly for those interested in snagging Gen Y-ers, those young and future home buyers who are now in their 20s.
For real estate agents, finding these buyers and interacting with them requires some of the same skills your teenager might have already mastered, combined with a mastery of local real estate and demographic information.
The second iteration of the Internet is known as Web 2.0, and at its core is social networking. Over the past four months, we've been dipping our toes into the social networking world, to better understand how today's teens and those in their 20s interact with one another and the outside world -- and what this means for real estate.
We started by launching Ilyce Glink sites at Facebook, MySpace, Current.com, Friendster, Bebo and elsewhere. These sites feature some of the real estate and personal finance content I've created through the years. The other part of our social networking strategy includes "twittering" regularly at Twitter.com/glink, uploading dozens of videos about real estate and personal finance to YouTube.com/expertrealestatetips, and signing up for LinkedIn.com, a site that allows business colleagues and partners to network, and tends to pitch toward a somewhat older crowd.
There are plenty of real estate agents, brokers, investors, educators and mortgage lenders who are already active on these sites.
Are you a real estate professional who wants to stand out in a crowd? There are fewer than 14,000 members of the "Real Estate Investing" group on MySpace, and fewer than 15,000 members of the top five real estate groups on Facebook. While that seems like a lot of people, there are probably few who live in your own neighborhood. You can also demonstrate your expertise by engaging in a group discussion.
Or, go for the "big fish in a small pond" mentality. There are loads of real estate-related groups to join that have fewer than 100 members. Social networking sites allow you to "friend" members of these groups, and start a group of your own.
You can join or start real estate-related groups with location-specific ties. Brokers with expertise in a specific neighborhood start groups that might provide information about a three-block-square area. Buyers and sellers interested in the happenings of that micro-market will be able to find out information that may be unavailable elsewhere. That can make your group popular.
If you're a broker in a college town with students who may be looking for a home, you might be able to link them into your site so they could get updates about neighborhoods they might want to live in after graduation. Agents are also connecting to one another, setting up relationships that can be profitable by increasing their referral networks.
The person heading up our initiative is our intern Claire Young, a student at Northwestern University's Medill School of Journalism. Her observation? Although she says she learned about social networking in college, the next generation of kids will have social networking in their blood.
More than that, she confirms recent news reports that suggest people in her age group are using social networking to make many big-picture decisions, including renting an apartment, buying a car, getting married, buying a digital camera or buying a house.
Today's teenagers will grow up using the Internet to connect their social and business interactions. This clock can't be turned back.
Whether you work in real estate or some other business, here are some things to think about if you're going to dabble in Web 2.0:
· Social networking takes time. Connecting online can help build your business, but it takes awhile -- and time generally is in short supply for real estate agents.
· Be flexible. You can start with a plan but be prepared to make changes along the way. Be willing to try out new groups, change your profile and add features and content.
· Stay attuned to new technology and Web sites. New social networking sites pop up all the time. Most of them won't make it. But if you're among the first to sign up, you'll be able to get a jump on making connections.
· The more connections, the better. LinkedIn, Facebook, MySpace, Twitter, your other social networking sites and your blog can all be linked together to help you build a strong online community. Create links from one to another. Connect Twitter and your blog so that they automatically upload to the other sites. Try to get your friends, colleagues and online connections to try out your other sites.
You don't have to be a technical genius to make this work. Most of the social networking sites we have joined make it easy to get started, upload written content, photos and video, and get going.
Don't get me wrong: I'm not suggesting these are uncharted territories by any stretch of the imagination. There are thousands of real estate agents and mortgage lenders who have signed up for these sites and are spending time trying to forge connections that will bring in business.
What's becoming clear is that you've got to be there, or you may be left behind.
Q I have a Veterans Administration loan and want to do a streamline refinance, which I've done before. I can't find what I believe is a true source of current VA loan rates. I've been to Bankrate.com and don't see the information I'm looking for. Can you help me find this information and choose the best lender? I also have a home equity line of credit that I would like to roll into the streamline refinance. Is this possible?
A Many lenders that offer conventional loans may also offer VA loans. But most VA loan rates are not advertised the same way conventional loan rates are advertised.
To find a good lender with expertise in VA loans, I'd start with the VA regional loan centers ( http://www.homeloans.va.gov/rlcweb.htm). Each of the regional loan centers has a Web site as well as a bricks-and-mortar office, and is set up to help veterans, active duty personnel, Reserve members and National Guard personnel with financing a home.
When shopping for a good lender, it helps to start with a couple of reputable lenders in your area. You should check in with a local bank or savings and loan in your area, particularly if they are active residential lenders who work often with VA loans. You should also contact a mortgage broker in your area and a national mortgage lender.
Ask each of the lenders to quote you the VA rate, and then ask them to tell you what fees they charge in connection with the loan. While VA loans have higher fees than conventional loans, you want to make sure the lender you approach does not add any additional fees to the transaction. If they do add additional fees, then you want to be able to compare the various lenders on equal footing.
If the lender is a good lender for conventional loans and they have experience with VA loans, you should be okay. The key is to make sure that that lender has done enough VA loans to get the deal done, but just because you find a lender that does only VA loans does not mean that the lender will be a good lender.
As far as your equity line is concerned, you should be able to obtain a VA loan to refinance both your loans. Unfortunately, whether the lender will be able to "streamline" your application may depend on your particular circumstances.
While VA loans have not been affected the same way as the rest of the mortgage market by the credit crunch, my impression is that your application for a VA loan will require full documentation.
You may be able to get a streamlined loan, but I don't know if your circumstances or even the general real estate market in your area would affect your ability to obtain a VA loan with limited documentation, particularly when you are paying off the equity line you have and increasing the amount you want to borrow.
Your best bet is to sit down with a lender with extensive experience with VA loans and go over these issues.
How has the residential market been in Albany, N.Y., over the past year or two? I have an investment property there (three-unit), and I am trying to get an idea how badly I will get hit if I try to sell, or if I will escape the worst of the housing slump. Do you know of any reports or studies that would be helpful?
It's difficult to know how any particular real estate market is doing. You can look at the Office of Federal Housing Enterprise Oversight home price index, which indicates that housing in New York state fell just over 4 percent in value in the past year. Or, you can look at the S&P/Case-Shiller Home Price Indices, which are based on 20 top housing markets (not including Albany), and which indicate that home prices are down roughly 15 to 16 percent from their high.
None of these tell you what's going on in a neighborhood. And, when it comes to real estate, the old mantra of "location, location, location" remains valid. It's all about what's going on down the block and in your back yard.
If you're thinking about selling your investment property, you should invite three top neighborhood agents in to do a comparative marketing analysis of the property. This analysis is an agent's calling card. He or she will walk through your property, go back to the office and pull up the comparable sales of similar properties in the neighborhood. Then the agent will come back with a marketing plan and a suggested list price. You'll be able to see the research: what has sold in your neighborhood, when it sold, and for how much.
After reviewing the data, you can make a decision to sell or keep your rental property.
My daughter is buying a house from me with 25 percent down in cash. We can close anytime, and, at age 28, she has excellent credit (over 700). Should she get a mortgage now or should we hold off a few months for a better interest rate, as rates are now climbing again?
I don't think anyone knows where interest rates are going at the moment. But it's true that mortgage interest rates have been on the rise lately, despite the Federal Reserve lowering the short-term federal funds rate. That, in conjunction with falling home values, is making some buyers nervous.
I hope mortgage interest rates don't climb much beyond where they are at the moment. If they go too much higher, first-time buyers may have trouble qualifying for a home.
In your case, it sounds as though you have the luxury of time. If I were you, I would help your daughter find a quality lender and get pre-approved for her mortgage. That way, when you're ready to close, the lender will be ready as well.
If your daughter decides to obtain financing now and rates go down to a level that would justify her refinancing the loan, she can do that later. The interest rate your daughter gets on her loan today is still near a historically low level.
Rates may rise over the next couple of months, and if she waits she will have lost the opportunity to get today's rates. But if she takes today's rates and over the next year or two rates decrease, she can refinance. And, if rates decrease after she applies for the loan, many lenders will give her the ability to re-lock her loan rate once or twice before the deal closes.
My father and I are joint tenants with rights of survivorship on a two-family house. He is 88 and is not well. We went to a real estate lawyer and had the house put in my name.
If Dad goes into a nursing home, what is the lookback period for Medicaid? Would Medicaid be entitled to half of the equity in the property? Would I have to sell the house?
Under new federal rules, the Medicaid lookback period is five years from the date of transfer. In other words, if Medicaid has to pay for your father's stay in a nursing home because your dad is broke, the government could reverse any transfer of wealth from your father to anyone for the previous five years, if they suspect him of trying to hide assets or he transferred assets that could have been used to pay for Medicaid costs.
Would you have to sell the property? Maybe. It's also possible the government would put a lien against the property that would have to be satisfied when the property is sold or refinanced down the line.
For more details, talk to a real estate lawyer or an estate lawyer.
Ilyce R. Glink is an author and nationally syndicated columnist. Her latest book is "100 Questions Every First-Time Home Buyer Should Ask." Samuel J. Tamkin is a real estate lawyer in Chicago. If you have questions for them, write Real Estate Matters Syndicate, P.O. Box 366, Glencoe, Ill. 60022, or contact them through Glink's Web sites, http://www.thinkglink.comandhttp://www.expertrealestatetips.net.
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