More contracts are being settled on time, according to a survey of REALTORS® in the  May 2018 REALTORS® Confidence Index Survey.  The monthly survey asks REALTOR® respondents: “Think of your most recent sales contract in the past 3 months that was either closed or terminated. Please explain how the deal concluded.”

Among respondents who either closed a sale or terminated a sales contract in the past three months (March, April, May), 76 percent reported that their most recent sales contract[1] was settled on time, 19 percent reported a delay, and five percent reported the most recent contract ended in a termination. Broadly, the fraction of contracts that are settled on time has increased since October 2016.

Among contracts that had a delayed settlement, obtaining financing and appraisal-related issues were the major reasons. Among contracts that were delayed, 33 percent had issues related to the buyer obtaining financing, and/or 22 percent had issues related to the appraisal.[2]

Home inspection was cited as a cause in 15 percent of delayed settlements, and titling/deed issues was cited in 11 percent.

Home/flood insurance issues was cited as a cause for two percent of the delayed contracts.

The median days to close a contract has also hovered at 30 days since August 2017, a decrease from about 40 days since NAR tracked this information in July 2015. Fannie Mae and Freddie Mac have been implementing programs to streamline and make the process easier for borrowers, which may account for the increase in contracts being settled on time.[3]

[1] Responses about the most recent sales contract can be viewed as a random sample of all sales contracts during the three -month period.

[2] The respondent can cite several issues that caused the delayed settlement.

[3]Fannie Mae introduced the Desktop Underwriter Validation Service and Property Inspection Waiver, and Freddie Mac introduced the Automated Collateral Valuation for certain Loan Product Advisor mortgages, both in 2017.

By Bronwen Leibe

Hi there! I am this summer’s research intern here at NAR! I attend the University of Maryland (go Terps!) where I am studying economics and history. I have been working on a few interesting reports and learning a great deal about real estate! Currently, I am updating the report “Real Estate in a Digital Age” that will be published this summer.

By every measure, real estate is among the countless industries adapting to new technologies. Understandably, members feel that their toughest challenge is keeping up with the new innovations. In the midst of modernization, some REALTORS® are being negatively impacted—and if it is happening in this industry, it is definitely affecting the most vulnerable in our communities. Although, it is not all bad! I attended a summit on “Innovation for Inclusion” where they discussed how technology can be for everyone.

Even so, how is innovation translating to economic equality? At the Urban Institutes’ panel on “Innovation for Inclusion: Harnessing Technology to Create More Equitable Cities,” panelists echoed how modernization has created a substantial amount of marginalized people. While the private and public sector traditionally have different processes, these companies and governments are putting titles aside and working for one cause— inclusion.

The private sector is infamously known for being profit-minded; but these four companies may just change your mind. They have mobilized innovations to connect marginalized communities to opportunities. Are they modernizing the American Dream?

• FreshEBT by Propel.

Jimmy Chen, Founder and CEO of Propel, left behind the booming tech industry in Silicon Valley to use his knowledge and knack for innovation to help low income Americans. Their app, FreshEBT connects people to their food stamp balance, coupons and budgeting tops; acting almost like a mobile banking application.

• CleanMyRecords by Code For America

Code for America is using technology to refurbish the criminal justice system—a structure of society that largely exploits minority communities. The app has evolved into an automated system that processes records that can be expunged. The app is creating second chances for people who have been systematically disenfranchised.

• Rezility by Enterprise Community Partners

Enterprise Community Partners is a progressive non-profit organization in the real estate industry. The app, Rezility, is connecting people and their communities through opportunities. Affordable housing, job opportunities and stronger communities are the three pillars of Rezility’s mission. The app is genuinely supporting the desired progression in society—the American Dream.

• Neighborly

Connecting communities to capital (through municipal bonds) for civic projects, whether it be a school, a library or bike lanes. Neighborly works for accessibility and transparency through its online platform. Their innovative work makes financing vital infrastructure projects easier. Certainly, this platform is among the real estate industry’s most socially progressive tools through its economic development fundamentals.

Are governments using technology to be more inclusive too?

Of course! Although, there is always more to be done. While cities across the world have introduced new innovations, such as City Bikes (or something similar), they rarely get used by low income communities. This may be due to unawareness, poor accessibility, or social stigmas around government help. But whatever the case may be, governments should be making conscious decisions about implementation and inclusion of marginalized communities.

University of Chicago’s Rayid Ghani discussed how academia is helping with public safety. Instead of policepersons using data to search for criminals, which historically targets minority communities, Rayid Ghani suggests using data to search for at risk police persons (those who have the potential to abuse their power) as a preventative measurement. This creates better relationships with communities and therefore better, more equitable cities.

Ellen Hwang, from Philadelphia’s Office of Innovation and Technology, also suggests that the public and private sectors should work together to harness technology for social justice. She discussed how a considerable portion of Philadelphia’s population reads at a fourth-grade level. The city of Philadelphia worked with Comcast to establish digital literacy in the region, targeting low income individuals and giving them an equal opportunity to acquire valuable skills.

While these are just a couple ways governments are harnessing technology to create equality, there is always more to do. I urge the private and public sector to work collectively, not just simultaneously. They should be involved with each other at every step of the way, to pinpoint the issue, harness the technology as a solution, and implement the collective policy to create accessibility and inclusion.

This blog was originally published on June 29, 2017.  It has since been updated to reflect new data.

Consumers who are seriously in the home buying and home selling market should be mindful of a variety of competing home price estimators. Solely relying on just one price estimate is likely to skew the views of what a particular property will actually transact for. When it comes to online home value estimates, however, the number one caveat for consumers is that these estimates are not a substitute for formal appraisals, comparative market analyses, and the in-depth expertise of real estate professionals. Nonetheless, it is important to know the different sources of Automated Valuation Models or AVMs and home value estimates available online, so that members can help clients and potential clients understand these estimates in their proper context.

Where are these home value estimates coming from? The prevalence of technology can give anyone more access to a broad spectrum of information on the internet. In real estate, access to property details and values is easier due partly to low-cost immense computing power. AVMs spit out a price for a property based on computer algorithms and calculations that take different sets of property data and look for patterns and relationships between property value and the input data. There are websites that will have a home value estimate available by just searching an address, while others may provide an estimate only upon request.

The most popular sources of home value estimates online are those that use AVMs. These estimates have varying levels of accuracies and may not take into account the unique qualities of a home, a neighborhood, and local markets. The main sources of AVM estimates are:

• Realtors Property Resource® (RPR®): RPR® has two home value estimates, their AVM estimate and the Realtors Valuation Model® (RVM®) estimate. The difference between the two is that RVM® uses the same data as the AVM plus Multiple Listing Service (MLS) Data. Both AVM and RVM® show the accuracy level of the estimate by giving estimate ranges and confidence scores. This resource is available for REALTORS® only and allows a significant amount of expert customization, making it a useful tool for members, especially when working with well-researched clients.
• REALTOR.com®: Realtor.com® uses tax assessment records, recent sale prices of comparable properties, and other factors to estimate home values. This estimate is free and publicly available.
• Redfin: Redfin is a web-based real estate brokerage that gives the Redfin estimate for the property, which is based on market, neighborhood, and home-specific data, including MLS data on recently sold homes. Redfin cites that their estimates for properties currently on the market are more accurate than estimates for off-market properties. This estimate is free and publicly available.
• HouseCanary: HouseCanary has two main services: valuations and forecasting. Their estimates use property level data from public records and the MLS. Their accuracy will vary across markets depending on the availability of data. This estimate is available with subscription to their services.
• Homes.com: Homes.com’s estimate mainly uses public records. They test and benchmark the accuracy of their estimates. This estimate is free and publicly available.
• Zillow: Zillow has the Zestimate, which is their home value estimate for properties and is computed using public and user-submitted data. Their estimates have different accuracy levels depending on the data of the property and location. This estimate is free and publicly available.
• Eppraisal.com: Eppraisal.com uses property records, home sales data, and local market data for their estimates. Their accuracy depends on the accuracy and completeness of public data. This estimate is free and publicly available.
• Trulia: The estimate from Trulia is likely to be very similar to Zillow’s zestimate since it is part of the same Zillow Group. Having a separate Trulia price estimate is more a marketing gimmick to give the impression to consumers that there is more competition, though it is just the same company trying to establish a greater market power, hence the ability to extract a higher fee from real estate professionals.

There are also websites that provide home value estimates by request only or estimates using user inputs: ForSaleByOwner.com, GuaranteedSale.com, HomeFacts.com, HomeLight.com, HomeValues.com, SmartAlto.com, ValuemyHouse.com, and ZipRealty.com. Some banking and financial institutions, such as Chase Bank, Bank of America, the Federal Housing Finance Agency, Fifth Third Bank, and PennyMac, also provide estimates to accompany their other financial services. Some real estate agents and brokerages also share their estimators through their websites. Again, it is important to know that these estimates have varying levels of accuracies. These sites may or may not use Automated Valuation Models, but can be another source of property and home value data that anyone can access.  Additionally, there are also data companies, such as Attom Data Solutions and CoreLogic, that market propriety AVMs.

As technologies advance and more data becomes available, the number of sites that provide home value estimates may grow. With the knowledge of where to find home value estimates online, it is important to note that these home value estimates are not interchangeable with formal appraisals, comparative market analyses, and they cannot be used as a basis for a loan. Most of these sites, if not all, reiterate the importance of consulting the expertise of real estate professionals to receive an in-depth and in-person analysis of the property and the local market.