Investment propertySecond Home Buyers, Sellers Get Special Representation
Years in the making, a new real estate industry trade certification will help consumers quickly find professional representation with experience specific to the second home market.
Available to National Association of Realtors members beginning in January 2006, the Resort and Second-Home Property Specialist (RSPS) will be granted to those who complete course-work specific to the second home sector.
The new certification is in response to the more than 140,000 NAR member real estate agents who already work in resort and second home markets -- a 30 percent increase from the previous year. The certification also official designates the resort and second home industry as a specific real estate industry specialty, along with commercial, international, buyer representation and other sectors.
The certification follows NAR"s "2005 National Association of Realtors Profile of Second-Home Buyers," a report that found, among all homes purchased in 2004, 36 percent were second homes purchases -- about two thirds of them were purchased as investment properties and another third as vacation homes. Thirty-eight percent of the homes of the nation"s existing housing stock are second homes.
Statistics, however, belie how second homes are actually used. Some investment properties later become retirement homes. Vacation homes are frequently rented out when the owner isn"t vacationing. And resort investment properties are also used by the owner when they aren"t being rented out.
Managing such a purchase -- both as a structure and as an investment -- is alone enough to require specialized professional help, but there"s much more.
"The single most important thing this designation can give Realtors is insight into how the second home market is significantly different for their buyers. They are buying something they want, not something they need. Even if they don"t plan on renting it out, buyers are looking for investment values, so RSPSes really need to know the market," said Christine Karpinski, real estate investor and author of "Profit From Your Dream Vacation Home" (Dearborn, $19.95) and other second home investment books.
"Often good second home agents concentrate only on a very small geographic area, so they can truly be experts in their market. Also, fostering long term relationships with their buyers is important since most often it takes 18 months to three years for buyers to make the plunge. The agents need to have robust websites, filled with content about the area and offer constant communication with prospective buyers via blogs and newsletters. The designation should help inform agents about all this," added Karpinski, also director of Owner Advocacy for the WVR Group, a network of vacation rental listing Web sites.
The special certification is a first for NAR, but not the first time agents have banded together to identify themselves as specialists in the second home market.
In a partnership with the Park City, UT-based Rocky Mountain Resort Alliance (RMRA) of area real estate professionals, the alliances" "Resort Specialist" (RS) designation was championed by second home online portal EscapeHomes.com. Since 1998 EscapeHomes.com has held that second home consumers needed special representation from agents familiar with the second home sector.
NAR"s RSPS certification also grew from work initiated by the Rocky Mountain Resort Alliance. The certification is granted only after certain education requirements are met. On-the-job experience is not a requirement for NAR certifications.
Conversely, the EscapeHomes.Com/RMRA designation, is not unlike other designations granted in-house by individual real estate companies or organizations and is based on on-the-job experience. In this case, real estate practitioners have had experience in facilitating buying, selling, or management of properties for investment, development, retirement, or second homes in a resort, recreational and/or vacation destination. The RS designation is not sanctioned nor recognized by NAR as an NAR designation.
NAR fully expects that those who obtain NAR"s RSPS certification will have in the field experience specific to the second home market, much as do those designated as an RS.
"There isn"t any question about it. Most of our people who get certification have already been around NAR for along time and just haven"t had the opportunity to get certified in this specialty," said Ben Blair chairman of NAR"s Resort & Second-Home Committee.
While the alliance was instrumental in getting NAR"s attention to develop the RSPS, EscapeHomes.com sponsored many of the symposiums and events leading up to RSPS certification.
"EscapeHomes supported and cooperated with the NAR"s efforts, which were made through their own committee work and we are pleased to see the results," said Clark Thomson, EscapeHomes.com"s founder.
In both cases, the RSPS-to-be and the current RS designated agents typically are in touch with the unique discretionary spending and buying habits of second home buyers, second home financing, investment property management, local and regional market conditions and other elements of the second home market.
Second-home savvy agents also typically have established a network of like agents throughout the nation, especially in resort and vacation markets and they"ve established a network of related professionals (property managers, contractors, and the like) property owners will need to maintain and protect their investment.
Among the nation"s entire existing housing stock of 115.9 million homes, 38 percent of them -- 43.8 million homes -- are second homes. Among the 43.8 million second homes, the vast majority, 37.2 million, are investment units while only 6.6 million are vacation homes, according to NAR, basing its findings on 2003 U.S. Census data.
Among 2004 sales, while the investment property segment of existing homes was larger than the vacation property share, vacation home sales grew faster. Vacation-home sales rose 19.8 percent from 850,000 in 2003 to 1.02 million in 2004. Investment property sales rose 14.4 percent from 1.57 million in 2003 to 1.80 million last year.
"Serving the resort and vacation real estate market has come of age at a time when the second home market has never been stronger and savvy buyers increasingly demand the expertise of a real estate professional with proven knowledge of resort and second-home market conditions," said Blair, who is also a real estate developer and owner of Kansas Development in Topeka, KS.
Detailed requirements for the new RSPS certification are available online, but generally call for the successful completion of two NAR-accredited courses and two NAR-accredited electives.
The courses are the two-day Resort & Second Home Markets Course and a two-day Tax-Deferred (1031) Exchange Course. The two electives can be selected from among nine courses including residential property management, small business property management, international real estate, real estate investments, commercial real estate investments, and a resort symposium.