FRONT LINES: Fast Takes

Less income at home
Home-based sole practitioners in real estate make less money than their counterparts who maintain an outside office, a U.S. Small Business Administration analysis shows.

Using 2002 federal tax return data, the SBA found home-based practitioners earned $10,000 per year less than those with an office—$38,000 versus $48,000. The tax data provided no clues why home-based practitioners earned less, but other studies have found that home-based practitioners in all industries tend to put in fewer hours, SBA says.

The analysis identified 99,400 sole proprietors in the real estate sector—brokers, sales associates, property managers, and appraisers—of which nearly 86,000 were home-based.

(Mis)stated-income loans.
In the drive to reach more borrowers and speed up loan processing, lenders have been touting low-document stated-income loans. These loans—which target borrowers who are self-employed, work on commission, or have difficulty documenting their income—don’t require income verification. But judging from findings by the Mortgage Asset Research Institute, a mortgage fraud analyst, the loans spell trouble. Ninety percent of stated incomes were inflated by 5 percent or more, and in about 60 percent of cases, incomes were exaggerated by 50 percent or more. The percentages are based on one lender’s comparison of incomes stated in its applications and incomes reported to the IRS.

FOR MORE ONLINE
Stated-income loan findings from “Eighth Periodic Report to Mortgage Bankers Association” (p. 12)

Innovator among us.
NAR technology guru Mark Lesswing has been named the 2006 recipient of the Inman News “Individual Innovator” award. The award recognizes one person each year who embodies the spirit of innovation in real estate. Lesswing has headed up NAR’s Center for REALTOR® Technology for five years. In July he was named NAR chief technology officer and senior vice president. In his new role, Lesswing oversees the association’s information technology initiatives.

Newer salespeople drive Internet advertising.
Only 36 percent of practitioners in business 10 years or more advertise listings and their business on the Internet. Sixty-four percent of those with less than 10 years under their belt do, according to figures from “Update: Online Real Estate Advertising,” July 2006, by media analyst Borrell Associates Inc.