Importantly, the National Association of REALTORS® (NAR) helped to maintain the 1031 Tax Deferred Exchange.
Section 1031 of the IRS Code to Stay on the Books
Section 1031 of the Internal Revenue Code referring to like-kind exchanges which allows taxpayers to defer but not eliminate payment of capital gains and recapture tax on the sale of property is to remain in the tax code.
Both the board of the National Association of REALTORS® (NAR) and grass-roots educational efforts from NAR members helped to make this happen.
Despite Pandemic, 2021 A Banner Year for US Housing Industry
NAR’s Chief Economist Lawrence Yun said, “Once the numbers are counted up at the end of December, we will find out home sales this year (may) have been the best in 15 years since 2006.”
Yun expects that supply chain issues will improve 2022 but that labor shortages will be an ongoing challenge not just for the housing sector but for the economy as a whole.
NAR 2021 Profile of Home Buyers and Sellers
One of the most important data points in this NAR 2021 Profile of Home Buyers and Sellersis that 73% of homebuyers and 82% of home sellers interviewed only one agent. In other words, the first agent who meets the prospective client in-person is the agent who gets the business.
This means that as soon as an agent receives a buyer or seller lead, that agent’s TOP priority is to arrange a face-to-face appointment with that client whether or not that client intends to transact right away.
Building Relationships with Buyers
The goal of your first face-to-face appointment with a prospective buyer is to help them check their credit report for errors, determine whether or not they will qualify for down payment assistance and begin the mortgage pre-approval process. Also, determine whether or not the prospective buyer is also a prospective seller.
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According to NAR’s 2021 Home Buyer and Seller Generational Trends, 51% of all buyers owned their previous house. If your prospective buyer is a Baby Boomer, this 51% goes up from 65% to 85%.
Building Relationships with Sellers
The goal of your first face-to-face appointment with your prospective seller is to give them an updated, current valuation of their residential property along with other valuations and information from sources such as HomeDisclosure.com and NARRPR.
If the prospective seller is considering another home purchase in the same area, make sure you update them on any market changes, interest rate changes and help them begin the preapproval process.
Know that 73% of sellers either knew or worked with their agent based upon a referral.
Other Key Data Points
Sellers are now staying in their homes just 8 years, down from 10 years since 2010.
The average sales price of a home in the US in 2021 was 100% of the listing price.
Time on the market decreased from three weeks in 2020 to a median of just one week in 2021. According to the 2021 Profile, “62% of sellers reported that their home was on the market for two weeks or less.”
Only 7% of all sellers were FSBOs (For Sale By Owners). Only 3% of sellers did not know the eventual buyer while 4% already did know the buyer.
Less than 1% of all sellers used an iBuyer. (Stop worrying about them.)
Thanks to the National Association of REALTORS® and Inman.