Real estate tech company Purplebricks, which allows homeowners to list their homes for a flat fee rather than using the traditional commission-based fee structure, secured a $177 million investment in Q1 2018, the second largest in the real estate tech space during the quarter, according to RE:Tech. “We’re giving consumers a viable alternative versus the traditional real estate model,” said U.S. CEO Eric Eckardt, noting that the company appeals to investors because it is cashflow positive on an adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) basis, “which is almost unheard of for a tech company.” Purplebricks was founded in 2014 in the U.K. and has expanded to six states since its U.S. launch in September 2017: California, New York, Connecticut, New Jersey, Arizona and Nevada. “We’re moving quickly,” said Eckardt, noting the first quarter infusion of capital helped to fuel this rapid expansion. “I think that’s a really validation of great value, great service.” Purplebricks charges home sellers a flat fee of $3,600 to list and market their home for sale. On a property that sells for $500,000 that amounts to a savings of $8,900 overpaying the typical seller-side commission of 2.5 percent. Included in the fee is a local real estate agent to help with the process along with professional photography, a 3D virtual tour of the home, yard signage, and the property is listed for sale on the local Multiple Listing Service (MLS) along with popular listing portals such as Zillow, Trulia and Realtor.com — everything one would expect paying a real estate agent the full commission, according to Eckardt. “If you compare it to a quote-on-quote traditional real estate firm they are getting the same service,” he said, adding that every home seller gets the same level of service, whether the home is selling for $250,000 or $1 million. “Everything we do is built around the consumer.”
Prospective homebuyers using Purplebricks get a $1,000 rebate out of the buy-side commission to use toward closing costs, and Eckardt noted that buyers using Purplebricks also get access to additional online offering and negotiation tools that are not available through a traditional real estate agent. “(Buyers) can transact online 24/7,” he said, adding that the online platform enables peer-to-peer transactions. “If you see a home that you like, you can make an offer directly through the platform. … “When you want to schedule a showing, it goes directly to the home sellers.” At its heart, the Purplebricks model disrupts the traditional role of real estate agents. “The market has spoken. The shift has taken place,” Eckardt said. “There is pressure on commissions. Ten years ago the gatekeeper was the agent, but now consumers have access to that information so now the role of the agent is more of the trusted.” Along with a plethora of other online listing platforms now available, Purplebricks utilizes technology along with property and neighborhood data on its website to provide consumers with self-service access to the information and services that previously would have been provided by agents. “Data and technology is helping buyers and sellers make more informed decisions,” Eckardt said, noting that Purplebricks users can “not just look at price and features of the property, but also look at the community to help them make a more informed buying decision.” The Purplebricks’ model also releases agents from time spent prospecting for new clients given that each agent has an exclusive territory, assigned to all buyers and sellers in those territories, according to Eckardt. “We estimate that a traditional agent spends 70 percent of their time finding new business,” he said, noting that the average Purplebricks agents has seven years of experience — an indication that even veteran agents are interested in hanging up their prospecting hat. “(Our agents are) professional, full-time, ethical, just want to work with customers, not deal with online lead gen or CRM. There is a home at Purplebricks for them. “We still believe the agent is the center of the transaction,” he added. “Their role is more as a trusted advisor rather than gathering information.”
Oil climbs as US drilling stalls, Iranian sanctions bite
Oil prices rose on Monday as U.S. drilling stalled and investors anticipated lower supply once new U.S. sanctions against Iran’s crude exports kick in from November. Benchmark Brent crude oil rose $1.09 a barrel, or 1.4 percent, to a high of $77.92 and was trading at $77.50 by 1130 GMT. U.S. light crude was 50 cents higher at $68.25. “A higher oil price scenario is built on lower exports from Iran due to U.S. sanctions, capped U.S. shale output growth, instability in production in countries like Libya and Venezuela and no material negative impact from a U.S./China trade war on oil demand in the next 6-9 months,” said Harry Tchilinguirian, oil strategist at French bank BNP Paribas. “We see Brent trading above $80 under (that) scenario,” he told Reuters Global Oil Forum. U.S. drillers cut two oil rigs last week, bringing the total count to 860, Baker Hughes said on Friday. The number of rigs drilling for oil in the United States has stalled since May, reflecting increases in well productivity but also bottlenecks and infrastructure constraints. Outside the United States, Iranian crude oil exports are declining ahead of a November deadline for the implementation of new U.S. sanctions. Although many importers of Iranian oil have said they oppose sanctions, few seem prepared to defy Washington. “Governments can talk tough,” said Energy consultancy FGE. “They can say they are going to stand up to Trump and/or push for waivers. But generally the companies we speak to … say they won’t risk it,” FGE said. “U.S. financial penalties and the loss of shipping insurance scare everyone.” While Washington exerts pressure on countries to cut imports from Iran, it is also urging other producers to raise output in order to hold down prices. U.S. Energy Secretary Rick Perry will meet counterparts from Saudi Arabia and Russia on Monday and Thursday respectively as the Trump administration encourages the world’s biggest exporter and producer to keep output up. Investors are concerned about the impact on oil demand of the trade dispute between the United States and other large economies, as well as the weakness of emerging markets. “Trade wars, and especially rising interest rates, can spell trouble for the emerging markets that drive (oil) demand growth,” FGE said. Despite this, the consultancy said the likelihood of much weaker oil prices was fairly low as the Organization of the Petroleum Exporting Countries would probably adjust output to stabilize prices.
DSNews – Minority Neighborhoods Gain Equity
Minority neighborhoods saw some of the largest gains in home equity, coming from the lowest levels of home equity but seeing the most substantial gains from 2012 to 2018, according to a report from Redfin. Meanwhile, white neighborhoods, despite having the lowest levels of equity gain by percentage, still had the largest gains in absolute dollars. Additionally the home equity gap between white and minority communities expanded to $94,000 in 2018. “Home prices over the last six years rose most steeply in minority communities, and unlike in past booms when Americans just borrowed more and more money, these price gains led to real increases in wealth for homeowners of color,” said Redfin CEO Glenn Kelman. “But even though homeowners in mostly minority communities had the largest percentage gains in home equity, it was the folks living in mostly white neighborhoods who had the largest dollar gains, just because they had so much more home equity at the beginning of the recovery. This just goes to show that, even as a strong market broadly benefits homeowners, it’s still very hard for people starting with less money ever to catch up. On an absolute-dollar basis, homeowners in minority communities became wealthier, but still fell further behind.” White communities’ average home equity in 2018 was $348,000, compared to $127,000, representing a $221,000 gain. Minority communities’ average home equity in 2018 was $254,000, compared to $69,000 in 2012, a 265 percent gain, nominally a $185,000 gain. Redfin also covered mixed race communities, which saw a 199 percent gain in home equity, from $104,000 in 2012 to $311,000 in 2018. Overall, people of all races saw a 199 percent gain in equity in that time frame, from $99,000 to $293,000. According to Redfin, Riverside, CA is the only place where minority communities posted the largest equity gains in absolute dollars, followed by mixed-race and then white neighborhoods.
RMBS Performance Stays Strong
mortgagesPrime and nonprime residential mortgage based securities (RMBS) transactions performance have been improving according to the latest RMBS trends study from Fitch Ratings. Prime performance was strong in the first half of 2018, reflecting the high quality collateral attributes strong macroeconomic conditions and continued home price growth, with 60+ delinquencies averaging only 11 basis points for Fitch-rated prime transactions. According to Fitch, the expected pool losses on outstanding prime seasoned pools appears to have declined significantly in recent years, compared to the past low delinquency and significant home price appreciation in recent years. Additionally, Fitch notes that nonprime pools have benefited from strong borrower performance and lower than expected delinquencies to date. The study also found that CPRs have caused senior classes to de-lever and pool factors to decline faster than previously expected. Out of roughly 46,000 loans, only 298 loans are delinquent, and only 60 have incurred a loss. Ratings have seen positive improvements, with RMBS classes initially rated below ‘AAAsf’ since 2010, the prime sector has seen 51 percent upgraded while 16 percent of nonprime were upgraded. This includes 72 classes in Fitch’s biannual review completed in August. Additionally, combined 2018 issuance activity in the prime and nonprime RMBS sectors is on pace to more than double the previous highest annual total since the financial crisis. Volume in both sectors has already exceeded any full year since the financial crisis, with roughly $13 billion in prime and $5 billion in in non-prime RMBS issued through the first half. According to Fitch ratings in an earlier Q1 report, non-bank RMBS servicers are shifting their focus from delinquent borrowers and are concentrating their efforts on Fannie Mae, Freddie Mac, and Ginnie Mae loans. “Mortgage servicers are benefiting from a positive credit environment with clean-paying loans becoming the norm and seriously delinquent loans fading from view,” said Roelof Slump, Managing Director, Fitch. More than 90 percent of the company’s rated servicers managed to curtail delinquencies in the first quarter compared with the Q4 2017, it notes.
More companies dropping college degree requirement for new hires
More and more companies are scrapping college degree requirements for jobs in favor of candidates with experience in non-traditional education. No diploma? No problem. More and more companies are scrapping college degree requirements for jobs. They’re not saying you shouldn’t seek higher education, but not having a degree won’t be a barrier for you to work in certain jobs at their companies. Some of the 15 big companies saying “no bachelor’s degree is fine” include Google, Nordstrom, Bank of America, Ernst & Young, IBM and Apple. The changes are coming as job seekers, as well as high school graduates, consider whether college is worth the skyrocketing cost.