When everyone seems to be talking about the “r” word — recession — it can make homeowners nervous, especially if they’re not sure whether they want to move in the next couple of years or not. But because recessions are cyclical, we know a few things about the best options to take for both buyers or sellers when one is looming.
If selling your house might be an option for you and you have flexibility over when you want to move, here is some guidance about what to expect about selling a home during a recession.
Recessions are a buyer’s market
The truth for sellers is that recessions are much better for buyers. Home prices tend to stagnate or even fall, and depending on what the economy is doing, fewer people may have the financial wherewithal to buy a home at all during a recession. Most people are tightening their belts, not looking to spend a lot of money on a house, and so that means the buyers who are qualified and ready to take immediate action on a sale are few and far between.
There’s still a lot you can do to maximize your home’s appeal during a recession, but the first and most primary truth of the matter is that a recession is not a great time to sell if you have any choice in the matter.
Timing is everything
So when is the best time to sell a house? This is where it gets tricky because oftentimes the very best time to sell a house is before a recession. Home values can fall during a recession, but they’re usually at a peak right before the recession hits, so if you can, it’s smart to sell high and buy low.
Of course, it’s not easy to accurately predict exactly when home prices are going to start turning more toward a buyer’s market than a seller’s market — if it were, then everybody would be investing in real estate with abandon. So if you want to list your house before a recession, feel free to do so, but remember that it can be a dangerous game with no guaranteed payout.
Less desirable homes will drop more in value
Of course, any seller thinks that their house is one of the best homes in the neighborhood, but if you’re realistic about where you live, then you know that there are probably nicer homes and probably homes that are not quite as nice as yours. But do you know what buyers are looking for on your street and the street around yours?
It seems like an obvious truth, but it bears emphasizing that homes that buyers don’t want quite as much are going to drop more in value than homes that are more desirable for buyers. This might mean that a certain number of bedrooms or bathrooms is at a premium in your neighborhood, or it could mean that buyers are prioritizing certain lot sizes or square footage in their home search.
How can you find out how desirable your home is in the current market, and how to make it more desirable? The best way is to talk to a real estate agent who’s active in your area so that you can get a sense of what homes they see receiving multiple offers and even starting a bidding war versus the homes that linger on the market like an afterthought.
Take care of any upgrades you can
Some sellers think that selling before a recession means they can avoid sprucing up their house for a buyer at all, but in fact, the opposite is true. Selling your home before a recession means that you’re working within a window of time that might close tomorrow, so you don’t really have time to get hung up in the inspection or appraisal process.
Some sellers decide to hire an inspector before they list their home so they can identify most of the possible issues and address them before any buyers ever step foot inside. This can be a very smart strategy for sellers before a recession to show they are motivated and serious, which will in turn attract the most qualified buyers to make offers on your lovely house.
Price it fairly
Speed is of the essence if a recession is looming on the horizon, which means you really don’t have time to test the market with a fantasy price that you hope will fly with some uneducated but desperate buyers out there. In a worst-case scenario, the recession could hit while you’re haggling back and forth with a buyer who originally offered a price you were happy to take … and then that bird in the hand who would have happily bought your house a couple of weeks ago will suddenly find themselves in the candy store of a buyer’s market and most likely tell you to go negotiate with somebody else.
What constitutes a fair price? A real estate agent can tell you if you’re unsure, so ask yours what they think your house could sell for tomorrow, then adjust accordingly.
Don’t forget, recessions are cyclical — if you miss this one, another one will come along in a few years. Sellers who have the flexibility to time their home sales according to the economy are in a prime position to take advantage of the ups and downs of home values, but it’s important to be careful not to get too confident and try to time things too close to the peak.
In a society where we refer to our homes as our castles, it makes sense that we also want to feel safe and secure in our residences. But as we spend more time inside looking at screens and less time outside making connections with neighbors, it also makes sense that many homeowners today feel less safe and secure than they did a few decades ago.
The irony is that violent crime rates have decreased even as our feelings of danger lurking around every corner have increased. So what can you do to help assuage your fears — and actually make your community safer in the bargain?
Plenty! Establishing yourself as a community and working together with your neighbors is one of the best ways to increase feelings of safety while actually reducing crime in your area. Here’s how to get started.
Form a Facebook group
Let’s face it: We are all on Facebook a lot more than is probably healthy for us. But this can be turned to your advantage if you leverage it as an asset.
Form a community safety Facebook group that is geared toward your specific community. There is more than likely already a general community Facebook group; join that one, too, and ask the moderators if it’s okay to advertise your safety-focused group there.
It’s up to you if you want to create standards for joining the group. If you decide to do that, it might make sense to recruit a moderator or three to help you manage to join requests and to maintain the standards of the group.
You can use this Facebook group to talk about safety issues, advertise safety meetings, make safety-related announcements, and much more.
The great thing about Nextdoor — the neighborhood-focused social network — is that Nextdoor does the hard work of verifying that the people in your neighborhood group actually do live in your neighborhood (no lurkers!).
Using Nextdoor can be another excellent way to figure out which of your neighbors are interested in helping you increase community safety, and to warn your neighbors of any thefts or other safety risks in the area. If you do use Nextdoor as a warning method, make sure you’re providing only factual information and not conjecture or speculation. You want your neighbors to pay attention and act accordingly, not for the conversation to devolve into an argument over whose houseguest might have been trespassing on whose property, or whose kids are inviting unsavory characters into the neighborhood.
To that end, talk to your neighbors online about standards for identifying scofflaws and their behavior (especially underage ones). For example, if there’s a teenager who drives erratically and over the speed limit down a road with small children every day, most parents are going to be fine with identifying the vehicle make, model, and color, the sex and general appearance (clothing, hair color, and so on) of the driver, the time of day they usually drive down the road, and other details specific to this situation. Sharing a license plate number or taking a picture of the driver on social media, however, might be considered a violation of privacy by some parents.
Create clean-up groups
Some safety issues emerge because city and county departments might be strapped for cash or short several employees, and things that ought to get done as a result just … aren’t. Maybe a tree fell across a popular trail and hasn’t yet been cleared, or maybe there are local public-access staircases that are covered with slippery leaves or other debris.
If there’s a safety issue that you can easily and professionally tackle with a group of people, organize one! Use your social media groups or fliers in the local cafe or post office to advertise a clean-up day at the local park or along a busy street. Ask the local dump or trash company if they’d be willing to donate a dumpster or supplies and trash pickup. Sometimes all it takes to make an area safer for everyone is a little coordination and elbow-grease, and the coordination is the hardest part, so try to tackle it and see where it gets you.
Start a neighborhood watch
Do you know all your neighbors? Are you familiar with the cars they drive, their regular visitors, and any special guests who pop in from time to time?
For most people, the answer is “definitely not.” But having a sense of who’s who in your neighborhood can help prevent a lot of crime, from illegally dumping trash to burglary or robbery.
If your block or neighborhood doesn’t already have a neighborhood watch program, consider starting one. The first step is to find neighbors who are interested in participating. Once you have a group of people willing to put in the time, call up your local law enforcement bureau and tell them what you’re doing. Many local law enforcement offices will be willing to send a police officer or two to your neighborhood watch meetings, which can be an invaluable resource for helping you learn how to spot and safely report any suspicious activity.
Coordinate meeting times for your neighborhood watch, which can be held in a community space or even online. Talk about the safety issues that concern you the most, and ask your law enforcement liaisons what you can do to help.
Secure your own space
There’s only so much that neighbors can do to help you keep your home safe. Ultimately, the responsibility to secure your property lies with you — so make sure you spend some time looking at your own home’s vulnerabilities and decide how to fix them.
For example, routinely leaving your door unlocked when you leave the house is a good way to invite burglary. Some smart locks allow you to remotely lock your door if you forget, so it might be a good idea to upgrade your door lock. New camera technologies allow you to see who’s on your front porch when the doorbell rings and replacing broken or damaged windows is also a good safety move.
You can’t be responsible for everyone’s house on the block, but if you’re responsible for your own, the odds that you’ll experience a safety violation go down. It’s worth it!
Problem-solve using SARA (scan, analyze, respond, assess)
Many police departments use the SARA method to solve problems, and it’s a method that community safety advocates can also use with a lot of success.
The SARA method involves four steps: scan, analyze, respond, assess. First, scan the situation. Take it all in. Try to absorb everything you possibly can about what’s happening. In this step, you are identifying and describing the problem.
Next, analyze the situation. Think about who is involved, what they are doing, what social and economic realities exist that feed into the situation, and try to determine what has caused this situation or problem.
Then, respond to the problem. The response usually works best in a collaborative environment. Ask different people involved in the situation what they think. Involve the community in brainstorming possible solutions and arriving at an option that seems to work well for most people. Form an action plan for what you’re going to do — and do it.
Finally, assess the results. Spend some time looking at how your response has changed the situation (or not). Did it solve the problem? Did new problems emerge as a result of your response? How well did the response work in terms of both process and the impact it had? Who is happy with the results, and who is not, and why?
By using the SARA method for community problem-solving, you’ll help maintain the collaborative philosophy that’s central to any successful community safety program.
Host regular meetings or touch-base sessions
Meetings and touch-base sessions are the glue that holds any community group together, and this rings true for safety advocates, too. The people involved in your community safety efforts will want opportunities to talk to each other, share ideas, brainstorm ideas, or even just to get to know each other.
Take the time to organize regular opportunities for the people in your community to get together and talk about safety. How often you do this really depends on your community; once a month is usually a good rule of thumb for setting up meetings, but some communities might prefer to meet every two weeks, while others don’t see a need for meeting more often than bimonthly. Supplement your meetings with social media Q&A sessions and other ways to involve your community, and consider taking notes at your meetings and making them available in your social media groups, too.
Warn people of suspicious activity
Your law enforcement liaisons will be the best resource for exactly how to do this. Maybe your contribution involves disseminating the police department’s announcements about crime more widely to your community group, or perhaps you can have regular discussions about what’s been happening in the newspaper’s crime blotter.
Talk to your law enforcement partners about which types of suspicious activity they think should include a community warning. It probably will also be helpful to them if you ask about false reports and whether there are any common themes. The last thing you want is for your police department to get tied up investigating something trivial and non risky, so make sure anybody warning others of suspicious activity in your community groups understands what types of activity are suspicious and doesn’t raise alarm bells unnecessarily.
Host a self-defense course
Although playground fights may have been a rite of passage for some of us, many of us don’t have any experience with self-defense and wouldn’t know what to do if (heaven forbid) we were actually attacked. A free, local self-defense course with a qualified instructor can give everybody who’s interested a little bit of training and supplement their confidence in being able to take care of themselves under adverse situations.
Ask your local law enforcement liaison if there are any self-defense instructors they recommend or use themselves, then talk to that instructor about whether it’s possible to set up a free class. You can give the instructor the opportunity to plug more extensive training before and after the session. Invite everyone who might be interested, and ask questions of both the attendees and people who expressed interest but didn’t attend. It’s possible, for example, that some women in your community would prefer a women-focused class and decided not to attend for that reason — if that happens, then you’ve got a great case for asking the instructor to come back and teach gender-specific mini-courses.
Share tips for safer landscaping
You might not think of your landscaping as a safety hazard, but think again: Dead or dying trees or carpets of dry pine needles can be a real fire hazard, and if your landscaping allows someone to creep up to your front door unseen by anyone else, that can be a problem, too. And that’s not all. There could be an insect or vermin infestation that presents a safety hazard (wasps’ nests, anybody?).
Landscaping safety might not be at the top of your list of things to address, and that’s okay, but it’s a good topic to consider once the low-hanging fruit has been plucked. Again, your local law enforcement liaison may have ideas and thoughts about which hazards are most critical for your area, so talk to them about the landscaping safety tips they wish everybody knew, then do your best to spread the word.
Coordinate community events to reclaim spaces
Vacant lots or abandoned parks are nobody’s problem and everybody’s problem all at once. There might not be a lot you can do about private property, but if there are any public areas that have fallen into disuse or disrepair, then maybe those would be a good project for your community safety group to tackle.
Just cleaning up the trash and removing dead plants and shrubs from an area can eliminate or reduce new refuse and discourage people from dumping hazardous materials there. If you can take additional steps to repair and revitalize public spaces, so much the better. Your local law enforcement liaison can help you identify spots that could use a little bit of attention and contact the appropriate people in the city and county offices to make sure you’re moving forward with everyone’s blessing.
Document your strategy and analyze your results
There’s nothing wrong with approaching your neighborhood watch with the philosophy of throwing things at the wall to see if they stick — but if you can be methodical about how you document what you’re doing and the results, you may find a whole world of opportunity opens up. Public funds might become available once your local administrators see what a great job you’re doing. Other people might become inspired to join in and help out if you can articulate how you’ve improved the neighborhood.
Talk to the different members of your neighborhood watch and ask if there are any analysts or analytically minded members who might want to take on this task. Ask them to keep notes and track metrics around your activities, and encourage them to report back to the group about what they discover. Your ability to cite cold, hard numbers when you’re having conversations about community safety will benefit you everywhere.
Teach social media safety
Even though billions of people are on social media, it’s still a new world for many of us. As a result, people often post updates or photos on social media that are an actual safety risk.
One obvious example is announcing your vacation plans on social media or posting photos of your trip while you’re still away. It might not lead to anything harmful, but if someone happens to be waiting for an opportunity to break into your house … well, you just provided them with a good one.
Share safety tips and best practices on social media with your community group, and encourage them to spread the word. The more people know about the risks of posting random life updates on social media, the better — after all, you can always upload those photos of your toes in the sand after you’re back at home, giving yourself a little vacation extension at the same time.
Give neighborhood tours for kids
We don’t let kids run around outside as much as we used to, but it’s nonetheless a really good idea to make sure the children in your neighborhood know how to navigate it. One way to encourage kids to learn more about their neighborhood is to host a kid-friendly tour that parents can join, too.
What should be on the tour? Kids might want to know where the schools, playgrounds, parks, police stations, and fire stations are in their neighborhoods, so include those for sure. It might also be worth your time to talk to retail store owners or other stakeholders in the neighborhood and ask them if they have any information they want you to pass along during the tour. Where can kids go skateboarding without breaking any rules? Does the owner of the ice-cream shop have a bike rack where they can lock up their bikes?
Depending on how many children are in your neighborhood, this might be a one-time activity, or it could be something you repeat several times a year. Talk to the parents in your community safety group to ask them what’s best for them — may be one of them can help coordinate the tours moving forward.
Set boundaries for where your children may go
If you have kids yourself, make sure that they not only know their neighborhood but are also very aware of their own boundaries. If you don’t want them venturing onto undeveloped property or beyond certain roads, tell them! Show them exactly where their cutoff points lie and talk to them about what to do if they’re tempted to travel beyond them — maybe after a lost ball. Help them make a plan for how to handle those situations so they won’t be hurt and you won’t be angry.
Making the neighborhood safer isn’t just one person’s job — it’s everybody’s. By joining forces with your neighbors and working with local law enforcement, you’ll be improving safety in your area by leaps and bounds.
One of the most enticing aspects of choosing real estate as a career is the flexibility that it offers you. You can work as much or as little as you decide is right for you, and you can maintain those hours as long as they work for you.
The hard part, of course, is realizing when you need to make a change in your career that better reflects your lifestyle. Although any agent can at any point decide that it’s time to move from full-time to part-time, not every agent takes advantage of their career’s ability to flex and flow with their needs. If your motivation is flagging and you’re having trouble finding the joy in your day-to-day working life, it might be time to think about a change for the better, and that could mean reducing your hours and transitioning from a full-time agent to a part-time agent.
Why transition from full-time to part-time?
There’s a bit of a stigma against part-time agents in real estate, so it’s understandable that many agents might feel hesitant to cut their hours and declare themselves part-time after living so many years as full-time real estate professionals. But there are plenty of very valid reasons why many full-time agents choose to go part-time — and then they often stay in real estate for many years to come because they’ve managed to reclaim some of their work-life balance and rejuvenate their motivation.
Some agents might be ready to retire financially but they enjoy the business and want to keep doing a deal or two here and there, especially for friends or family members. Others may be exploring a new hobby, launching another entrepreneurial endeavor, deciding to stay home more with kids, renovating a home — the possibilities for other ways to spend your time are truly endless, and there is no single right or wrong reason why you might consider going part-time.
If you’ve had that slightly itchy feeling in your career and you sense that something needs to change, but you aren’t certain what it is, then exploring the possibility of part-time real estate work might unlock the mystery inside your head. This doesn’t have to be a permanent decision; a supportive broker should help you navigate it and give you the opportunity to change your mind and transition back to full-time if you realize that you made a mistake.
How do you know it’s time?
This answer is going to be different for everybody. Unlike many other careers, most real estate agents have to set aside funds for retirement without any help from an employer. The biggest question you should ask yourself before you transition to part-time is: What will this do to my financial situation, and can I afford it?
Perhaps you’re sitting on a sizable nest egg that you’re confident will carry you through your golden years. In that case, maybe real estate is more about a way to keep busy than earning a living, and you can consider cutting your hours and serving fewer clients every month. Or perhaps you’ve been investing in real estate and you’re now in a comfortable enough position that you want to spend some time seeing to your properties — but you don’t want to leave your career behind entirely.
Take a close look at your financial picture and ask yourself how it makes you feel. If the answer is “not the best,” ask yourself what would make it better. How much more money would you need to be making, or need to have saved in the bank, before you would feel safe making a major career change? Would you want to have some additional income streams, and what might those look like?
What does your plan entail? And what’s your backup?
After you’ve evaluated your current situation — and if you’ve decided that yes, moving from full-time to part-time makes good sense for where you are today — you’re going to need to do two things. The first is to define what, exactly, part-time means for you. Will you be scaling back your hours from 40-plus every week to around 30? Or 20? Or 15 or 10?
Again, there aren’t any wrong answers here, but you need to know how much (ideally) you’d like to work before you can decide which work you’ll be referring out and what you’ll want to keep for yourself. The idea is to take a close look at your client mix and figure out what to keep and what to shed — and how exactly you’re going to be shedding that extra weight, so to speak.
Once you’ve got a ballpark idea for how much you want to work, it’s time to take a look at your lead-generation activities and make some decisions. It’s not unreasonable to decide that you want to keep some or most — or even all — of your lead generation strategies in place if the leads you’re getting are high in quality. Referring these leads to another qualified agent who’s able and willing to close the deal can be a lucrative additional income stream for many agents. You might be able to form a partnership with an agent who plans to stay in real estate for a long time, sharing business with them and easing your transition to fewer hours.
On the other hand, you might decide that your sphere of influence and word of mouth from past clients is going to generate all the business you care to handle and save yourself some money on lead gen, in which case you might experiment with scaling back before pulling the plug entirely. That way, if your plan doesn’t go as expected, you still have a pipeline to start getting back into a full-time business as soon as you can.
Speaking of plans not going as expected, it’s probably smart to ask yourself what you’re going to do if your move to part-time doesn’t work out exactly as you’d hoped. Will you ramp back up to a full-time business, or would you prefer to find a different part-time gig to supplement your real estate work? This is another intensely personal question that’s going to depend on how long you’ve been in the industry and why, exactly, you’re hoping to transition from full-time to part-time. But it’s an important one to consider because you want to be very clear on when and how you will make adjustments to your plan.
How will you spread the word?
Depending on the details of your plan, you might want to announce to some or most or all of your clients that you’ll be changing your business model slightly. Or, you might want to keep things quiet and just inform clients on an individual basis when they reach out and ask you for help. It doesn’t matter exactly how you tell the world, or even if you do — but you need to think about it so that you have a plan and can execute that plan consistently.
The beauty of the real estate industry is that you have ultimate flexibility over your career and your schedule. If you think it’s time to consider scaling back your efforts, talk to your broker, and see what your options are. Once you’re certain you’re financially able to make the change, and you have a plan for the transition, you’ll be set up to determine whether this is the next best step for you.
Rent-to-own agreements have a bad reputation in the real estate industry, but is it deserved? Well, it depends. There are many different kinds of rent-to-own agreements, and each one can be modified and customized for the tenant and the landlord. Many rent-to-own agreements overwhelmingly favor the would-be seller of the property, the landlord, which is one reason why they have the reputation they do.
What do you need to know about rent-to-own agreements — and could it be worth it for you?
The rent-to-own basics
In a nutshell, the way rent-to-own works is that tenants agree to pay additional money in rent every month in exchange for the opportunity to buy the house. There are a couple of different ways these agreements can be structured, but they always boil down to above-market-level rent so that the tenant can start building some equity in the home.
This can be problematic simply on its surface. For tenants who struggle to save up enough money for a down payment, it might not be at all easy to spend several hundred dollars every month on top of their rent value. On the other hand, tenants who can’t manage to save a down payment might find that this is actually a better option — the money is going somewhere they can’t touch it, and when the time comes to buy the house, it’ll already be there waiting for them.
Lease option and lease purchase agreements
There are two essential types of rent-to-own agreements, a lease option agreement, and a lease-purchase agreement. Of the two, the lease-purchase agreement is more legally binding: If you sign one of these, you are obligated to buy the house when your tenancy is over. In a lease option agreement, however, you have the option to buy the home when your lease is up — but you are not required to.
These agreements will also include details about the home purchase. Sometimes a lease option or lease-purchase agreement will go so far as to state the sales price of the home when the tenant’s lease is up, either based on the home’s current market value or calculated as a projected value. But other agreements specify that the home purchase price will depend on the real estate market when the tenant is actually ready to buy.
In both of these lease agreements, the tenant is responsible for securing financing for the home purchase once the lease is up and the tenant is ready to buy. This means that if you sign a rent-to-own agreement and you aren’t able to get a mortgage loan when your lease is up, you may forfeit all of the extra money you paid throughout your tenancy.
The cons for buyers
There are a few big red flags that buyers should look for in any rent-to-own contract. And if you’re seriously considering buying a home like this, do lots of research on the seller. You don’t want to find yourself at the mercy of a shady person with unethical business practices because you were too excited to own a house to do any due diligence.
Buyers will have to pay an additional upfront fee for the opportunity to buy the house at a later date. Often called option money, this money might or might not apply to the equity in your home, and will almost definitely be lost if something happens and the deal falls through.
One thing that buyers need to think about is maintenance clauses. In many rent-to-own agreements, buyers are responsible for maintenance and repairs on the home during their tenancy. This might not be a big deal if you have to get a window air conditioning unit fixed, but what if there’s something wrong with your water heater or your sewer main? Or your fuse box? Those repairs can really add up, and you’re still not the owner, so you’re spending your own money to repair a house that you might not ever own.
Another clause to keep an eye on is the one that outlines under what conditions the agreement can be broken. Often, if the buyer is late with a single rent payment, they lose all of their investment. And if the landlord isn’t in good financial standing and forecloses on the house, the buyer loses all their money invested then, too.
This is why it’s important to research your landlord-seller. If they have a history of taking advantage of buyers, then you can probably find evidence of it. Ask them for references, and do your best to figure out what kind of person you’re doing business with. Lots of people who offer rent-to-own opportunities are ethical humans, but of course, there are always bad apples.
And, of course, if something happens with your job or your family, and you have to move out of the area, you’ll have to break the agreement and leave your home (and investment) behind.
The pros for buyers
Many clauses in a rent-to-own agreement are negotiable, which means you can ask for things, too! You can request that your option money go toward your equity in the home, for example, or for the seller to maintain the big systems in the house while you’re in charge of smaller wear-and-tear items. So one pro is that if you know your rights and you’re willing to work with your landlord-seller, you can come up with an agreement that works well for both of you.
Another is that for buyers who want to own a home but aren’t quite financially ready, rent-to-own can really help you build equity and set yourself up to buy the house where you’re living in a couple of years.
A rent-to-own agreement isn’t for everyone. It can be more expensive than buying a home the traditional way over the long term, and if buyers have the ability to save up a down payment and jump through all the hoops, they will most likely get a better deal on a house that isn’t a rent-to-own. But if you’re in love with the house where you live and it’s worth it to get your foot on the homeownership ladder that much sooner, it might be something you should consider.