Volusia Real Estate News

SUCCESS WITH SHORT SALES

2008-12-19T05:19:00.000-08:00

by Phoebe Chongchua
It may truly be the choosing of the lesser of two evils -- short sale or foreclosure -- but, if you have to get out of your home, finding a way to complete a successful short sale may provide the best outcome for a distressed homeowner.

Since I've covered short sales in previous columns, see Short Sale: May be Solution for Delinquent Homeowners, I am not going to focus on what they are but rather how to make them successful. Short sales are typically more difficult than a regular real estate transaction but they are better than simply walking away from a home and letting it foreclose.

These days, with foreclosures and short sales comprising nearly 40 percent of recent home sales, the National Short Sale Center (NSSC) is receiving more than 3,000 calls per month from homeowners across the nation. The company has already handled more than 1,000 short sales in all 50 states.

Nearly 12 million homeowners are upside down with their mortgages -- owing more than their home's value -- and the number is growing. It's estimated that number will increase to 15 million within a year's time.

Travis Hamel Olsen and some partners opened the NSSC a few years ago. He says the short sale is a "win-win" situation. The bank ends up losing less money than if it ended up taking back the property and the homeowner's credit is not damaged as much as from a foreclosure.

But the short sale process is not easy or financially pain-free. Some lenders will absorb the difference between what the outstanding mortgage is and what the home sells for in a short sale. However, other times the lender will seek to collect the difference from the homeowner.

If you're considering a short sale, here are some tips that you should consider.

Get expert help.

This is a must. Short sales are difficult and negotiating through the process can be very stressful. You need guidance and the best available information that you can find. "There's no charge for our services to the homeowner," says Travis Hamel Olsen, President of National Short Sale Center. That's because the NSSC is paid by splitting commission with the listing agent and the lender pays the company a closing fee that is authorized by the homeowner. For those fees, the company will help the homeowner navigate through rocky waters. "We will guide the homeowners, letting them know all the documents that they need to collect for their specific lender," says Olsen.

Start the process as soon as possible.

Contrary to what some homeowners believe, you do not have to be delinquent to start or complete a short sale. "Don't sign title over to anybody else to conduct a short sale for you," cautions Olsen. He adds, "A lot of people will sign the deed of the property over to somebody to negotiate the property -- that's not needed."

Submit a hardship letter.

Even though you'll utilize the services of expert agents and short sale specialists, you'll still need to do your part to help convince the lender that the short sale is the best outcome for all. The hardship letter explains to the lender why it is impossible for you to pay the full amount of the loan. It demonstrates your true financial hardship. Experts say you have to be careful if there is a big gap between your current income and the income you used to get the initial loan to buy the property. A large gap could point toward possible mortgage fraud, unless your financial circumstances have drastically changed.

Price the short sale competitively.

Usually, it's best to price the property at or near market value. Keep it competitive says Olsen. He says a lot of people want to list the property at what the debt is but that is not usually successful. The good news is that Olsen says banks are more willing to negotiate. "We are seeing more approvals and consequently more closings every single month," says Olsen.

The short sale can be a lengthy process, have, patience, quality experts on your side, and stay on top of what is needed from you to help close the deal. For more information on short sales visit: shortsalecenter.com.
link to article
http://realtytimes.com/rtpages/20081219_shortsales.htm

RATES ARE AT HISTORIC LOWS

2008-12-18T09:14:00.000-08:00

Refinancing Booms as Rates Fall

According to the Zillow Mortgage Marketplace, consumers were being offered 30-year, fixed-rate mortgages for rates 5.25% on Monday. Zillow.com said that the average rate for 30-year FRMs offered on the Zillow Mortgage Marketplace dipped to 5.25% on Monday, Dec. 15. That is contributing to a spike in loan applications for refinancing. Refinancing during the first half of December was up 230% from the first half of November, Zillow.com said. Refinancing accounted for more than half of home loan applications in the December period.

Now is the time to speak to those buyers on the fence on purchasing a home. The purchase rates are in the low 5%, if not lower in some cases. The rates are at a 4.5 year low. Clients should be jumping to purchase homes with these rates.

Remember that with FHA loans the buyer can bring as little as 2.25% for a down payment. VA loans are set at 100% financing. NO MONEY DOWN loans exist for all vets.

Have them call me for a free, immediate qualification. I will send Realtors that pre-qual letter in 1 hour.

Refinancing is also available at 95% loan to value. Call for a quote.

Joe Phillips
386-615-7977

Mortgage Applications Rise

2008-12-18T09:12:00.001-08:00

Mortgage applications climbed last week in response to falling interest rates, according to the Mortgage Bankers Association weekly mortgage applications survey.

The index increased 2.9 percent to 841.4 from 817.7 the previous week on an adjusted basis. On an unadjusted basis, it also increased 2.9 percent and was up 37.3 percent compared with the same week a year ago.

Most of the activity was in refinances, which increased to 76.9 percent of the total.

"It doesn't solve the problem for people who owe more than their home is worth, but for the significant majority who are able to refinance, it is quite a boon," said Bob Walters, chief economist at Quicken Loans in Livonia, Mich.

Interest rates were down last week compared with the previous week, and are expected to decline still further in response to the Federal Reserve cutting its benchmark rate to a record low this week.

Last week’s already low rates continued to decline:

30-year fixed-rate mortgages decreased to 5.18 percent from 5.44 percent;
15-year fixed-rate mortgages decreased to 4.93 percent from 5.08 percent
1-year ARMs decreased to 6.63 percent from 6.76 percent.

Source: Mortgage Bankers Association and Reuters News, Lynn Adler (12/17/2008

Key Interest Rate as low as it can go

2008-12-18T09:10:00.000-08:00

The Federal Reserve on Tuesday lowered its benchmark federal funds rate to a range or zero to 0.25 percent and said it would likely keep rates low for an extended period.

"The Federal Reserve will employ all available tools to promote the resumption of sustainable economic growth and to preserve price stability," the Fed said.

The Fed also said it was prepared to purchase more debt issued or guaranteed by Fannie Mae, Freddie Mac and other government-sponsored mortgage agencies. And it said it is considering purchases of longer-term U.S. Treasury debt.

"The focus of the committee's policy going forward will be to support the functioning of financial markets and stimulate the economy through open market operations and other measures that sustain the size of the Federal Reserve's balance sheet at a high level," it said.

Michael Woolfolk, senior currency strategist, at the Bank of New York-Mellon, applauded the Fed’s approach. "We think it's the best possible move for the U.S.
consumer and for the financial market," Woolfolk said.

5 Ways to Dress Up Your Virtual Tours

2008-11-14T12:00:00.000-08:00

New enhancements to virtual tours give potential buyers a real-life feel for a property while they're sitting at their computer.
By Michael Antoniak | November 2008

Not that long ago, having a virtual gave your online listing "wow" value. Today, virtual tours have become a routine—and even expected—element of property marketing. But that doesn't mean your virtual tours have to be boring.

New advancements and add-ons are taking this tool to the next level, helping buyers get a better feel for the home and the neighborhood without having to leave their chairs.

The biggest virtual tour advancement over the past two years has been the growing popularity of video tours. Video is great for conveying the look and feel of a house, the flow from room to room, and the visual appeal of selling points.

Here are several other new tools, perhaps lesser known than video, that you can use to make your online tours more appealing and informative. Some of these are widely available, while others are exclusive features available only from certain vendors. In my opinion, all of them are underused—which means you have the chance, once again, to stand out from the crowd.

1. Show Off the Floor Plan. Other than actually walking around the home in person, interactive floor plans are the best way to give buyers a sense of how the home is laid out. Interactive floor plans typically display an illustrated map, and let users click on areas of the floor plan to see an image or video clip from that vantage point.

How you can add it: Many vendors offer this feature, including TourVista, Flyinside.com, VHT, MapsAlive, and floorplansonline.

2. Help Them See Improvements. Don't just ask them to "imagine" what new cabinets or flooring would look like. Show them. Prospective buyers can click on an image from the virtual tour and instantly change the wall colors, redo the countertops, add a new roof, and more. Then they can print out the results.

How you can add it: Obeo's StyleDesigner is an upgrade to its HomeSite virtual tour packages. You can virtually decorate the space and then send the image to clients, or e-mail the image to clients so they can do the decorating themselves.

3. Make Marvelous Maps. Most buyers are just as interested in the community as they are in the property itself. Map mash-ups are an effective way to present that information visually. Your MLS likely provides a basic mash-up map populated with landmarks linked to listing photos and information. But you can combine maps with other types of information, too: schools, recreation facilities, shopping centers, restaurants, and even commute times. For example, REALTOR.com’s “Find A Neighborhood” feature combines housing and demographic information with maps consumers can use to explore what’s available.

How you can add it: For an idea of how mash-ups are being used in real estate, check Google’s Maps Mania directory for real estate. Sophisticated as any of these mash-ups may seem, if you can drag and drop, cut and paste, you can create one. It’s just as easy to incorporate it into your Web site or add it to your tour. To learn how, start with Google or Mapbuilder.

4. Use More Pictures, Better Pictures. If you're looking for an easy enhancement, simply add more photos and using some tools to improve the presentation. A survey by Point2Technologies earlier this year found a direct correlation between the number of photos and the effectiveness of online tours. Also, consider adding photos of the view.

How you can add it: TourFactory’s ultimate tour package now gives you the option of viewing pictures in a standard or widescreen mode. JustSnooping.com offers a High Def Home Show package to showcase listings at the maximum image quality and resolution attainable on the Web. For exploring an area, Realtor.com’s HD City Views of select cities (see New York, for an example) demonstrate how far digital imaging has come in its ability to capture the details of a neighborhood in an inviting, interactive image. To improve photos taken of a city view, Imagemaker 360 has a unique feature to called VIEW Technology that restores clarity lost in backlit situations for a more realistic presentation of how the outside appears through the glass.

5. Go 3D. Microsoft has just announced its Photosynth stitching technology that takes two dimensional images and re-renders them in a navigable 3D image. They’re similar but not quite the same as IPIX immersive images. The big difference: you can create them from pictures taken with any digital camera and free software from Microsoft.

Do Your Listings a Favor

Everyone knows how important it is for buyers to be able to view homes on the Web. Yet, too few real estate professionals are rising to the task and offering top-notch virtual tours. Do your listings justice and impress your clients by investigating some of the extras I listed above. In a challenging market, the listings that are presented best on the Web are the ones that will get the most attention.

Mike Antoniak is a journalist and technology expert with a focus on real estate applications.
link to story http://www.realtor.org/rmotechnology/techwatch/columns/0811_techwatch_virtualtours

NOT MARKET

2008-11-14T11:47:00.000-08:00

Hot Market: Fort Myers Market Searing
by M. Anthony Carr

Prices are down 39 percent in Fort Myers, Florida fueling an amazing surge in sales of more than 125 percent in September. Following years of investor-driven profit, prices have been correcting at an alarming rate, at least to those who had funny-money loans. But to buyers who were priced out because of speculating by those seeking quick profits, the price corrections have brought them back into the market.

"Teachers, police officers and others who were priced out of the market during the feeding frenzy of 2006 are buying homes today", says Suzanne Sherer, president-elect of Realtor Association of Greater

Fort Myers and the Beach, Inc. "Anytime a market is driven solely by investors, it can’t sustain itself."

Interestingly the county surrounding the city, Lee County, is in the midst of a shrinking economy with unemployment at more than 9 percent -- nearly double from last year at the same time. But prices have dropped so low that residents can’t help themselves to write contracts at a dizzying pace.

The drop in new home development is another factor affecting the amazing growth in resale units so far this year. New home inventory in Ft. Myers is also dropping precipitously. Building permits for single family homes have dropped 71 percent in the latest reporting period. Meanwhile, condominium construction permits are down 62 percent.

I know we don't like to see the values dropping but sales being up is a good thing.
I hope that trend continues across the state.

New and Existing Home sales Up!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

2008-10-30T08:08:00.000-07:00

Did you hear that correctly?

NEW AND EXISTING HOME SALES ARE BOTH UP.

The National Association of Realtors reported that sales by homeowners jumped in September to an annual pace of 5.18 million, up 1.4% from a year ago. It was the first time that sales rose compared to a year earlier since November 2005.

September sales were up 5% from the August reading of 4.91 million, marking the largest month-to-month increase since July 2003. Economists surveyed by Briefing.com had expected the report to show existing home sales rose to an annual pace of 4.95 million.
Sales of newly constructed homes rose in September, according to the monthly report from the U.S. Census Bureau, inching up 2.7% from August to an annualized rate of 464,000.

We all know that most of the sales are bank owned, but this is the U-turn in the market. We will see slow growth month to month from here on out.

Congrats to all of us who are still in the industry, I believe the worst has come. Now is the time to get out of that funk and be positive and work harder then you ever have in the past, because there are many of us who are being successful in this environment.

Good Luck to all.

Hot Market Orlando searing as Market Turns

2008-10-24T06:57:00.000-07:00

Realtors in the Orlando, Florida, area have found themselves very busy this fall. Sales are up a whopping 37 percent in September with more than 1,300 buyers moving into their new homes compared to the same period a year ago. With prices slipping about 9 percent to a median sales price of $182,000, the area's affordability index leapt in September to 123.74 percent, according to a report from the Orlando Regional Realtor Association.

ORRA explains how the index works: "an affordability index that is over 100 means that median-income earners make more than is necessary to qualify for a median-priced home. Buyers who earn the reported median income of $51,848 can qualify to purchase one of 13,386 homes in Orange and Seminole counties currently listed in the local multiple listing service for $225,204 or less."

Orlando is Florida's top ranking metropolitan area in the Milliken Institutes list of best performing cities for 2008. The region ranked 11th out of 200 metro areas, dropping from fifth place last year.

It appears that this trend will continue through the rest of the year. Pending sales were up 66 percent in September, pointing toward a larger number of home sales in the coming months.

This is great news for the area. It is only a matter of time before we experience similar growth. I believe the light at the end of the tunnel is in view.

Washington Report: FHA Still Going Strong

2008-10-20T12:43:00.000-07:00

The country's top housing official has an urgent message for potential home buyers: You may have heard that the credit markets were "frozen," but FHA has been open for business throughout the credit squeeze, and so are Fannie Mae and Freddie Mac. In fact, FHA's volume has tripled and the agency is now insuring well over a hundred thousand new loans a month.

In an exclusive one-on-one interview with Realty Times, Housing and Urban Development Secretary Steve Preston said that FHA, Fannie and Freddie -- who account for a combined 90 percent plus share of the entire U.S. mortgage market -- "have kept liquidity alive" for home buyers -- and have virtually unlimited funds for new mortgages.

"There is no credit crisis" for individual home buyers who have at least three percent to put down, documentable employment, and at least a moderately good credit record, said Preston.

Business loans and various other types of credit may have been more difficult to obtain in recent weeks, Preston told Realty Times, but thanks to the government's backing of the three biggest sources of mortgages, buyers and refinancers of houses have had no unusual problems.

Preston and HUD are playing key roles in the $700 billion financial system bailout plan now getting underway. Preston is one of just five members of the Financial Stability Oversight Board that oversees the entire effort. HUD's main task in the weeks ahead, he said, will be to either refinance or help work out thousands of delinquent subprime and underwater homes financed by private lenders during the boom years.

The agency's new "Hope for Homeowners" program, which started October 1, allows it to cut the principal debt, monthly payments and interest rates of delinquent loans through refinancings into fixed-rate FHA mortgages.

In the interview, Preston emphasized the importance of a new, $3.9 billion program that has received virtually no attention in the press, but which could have huge positive impacts on neighborhoods and communities struggling with large numbers of foreclosures.

Congress authorized HUD to provide funds and other assistance to local governments to buy, fix up, resell or rent out foreclosed houses that are dragging down local property values.

Known as the Neighborhood Stabilization program, it offers not only roles for local governments to fight housing blight, but also provides opportunities for alert realty agents, rehab contractors, builders and investors to be involved -- profitably -- in the turnaround efforts.

If you're interested, talk to your city or county housing and community development officials for details. Though HUD will be providing the funds, local officials will be calling the shots.

by Kenneth R. Harney
At www.realtytimes.com

MONEY IS AVAILABLE

2008-10-15T07:55:00.000-07:00

The media has created the myth that there is no way to get loan. They say credit is frozen, banks are not lending right now.

THIS IS TOTALLY WRONG!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

I must admit that it is harder to get a loan and lenders are making sure the borrowers can afford the loan they are applying for. (WOW What a concept, being able to afford the loan you request) Lenders guidelines are tougher, but if you have decent credit (NOT GREAT) and you can prove your income there are loans available.

These loans are normally government backed loans from VA, FHA, and the USDA with certain requirements. Some of those requirements are that the properly is their primary residence, they can prove their income, and their credit scores must be above 540.

We can lend up to 100% on VA loans and 97.75% on FHA loans. When you have a potential buyer have they call me so I can provide an immediate pre-qualification for them to see if they qualify for one of these loans. There is no cost to your client for this service.

Again THERE IS PLENTY OF MONEY TO LEND.
Just call your mortgage professional to see what you qualify for.

More Signs of Credit Easing

2008-10-15T07:53:00.000-07:00

Bank-to-bank lending rates dip again, the day after the U.S. government unveils its plan to buy equity in banks.

NEW YORK (CNNMoney.com) -- The credit markets continued to show signs of relief Wednesday after the U.S. federal government announced a plan to get capital directly into banks by buying their stock.

The overnight bank-to-bank lending rate slid, with the London interbank overnight rate (Libor) slipping to 2.14% from 2.18%Tuesday, according to data obtained from Bloomberg.com. The measure had been as high as 5.09% Thursday.

When the rate at which banks are willing to lend to each other decreases, that is a positive sign for the credit markets, and eventually translates into lower borrowing costs for consumers.

Frozen pipelines of credit stalled the economy in the United States and around the world, pushing lawmakers to make global coordinated efforts to increase liquidity in the markets and give banks the confidence to begin lending to each other again.

On Tuesday, the government announced that the Treasury will buy up to $250 billion in senior preferred shares in a variety of banks, and so far, nine banks have agreed to have the government take a stake. In addition, the Federal Deposit Insurance Corp. will temporarily provide unlimited coverage for all non-interest-bearing accounts.

Despite a slew of historic and extraordinary moves, however, it could take a while for the economy to return to health.

Market gauges: The 3-month Libor continued its descent, ticking lower to 4.55% from 4.64% Tuesday, according to data from Dow Jones. The measure had reached 4.82% Friday, the highest since mid-December 2007. On Sept. 15, by contrast, it was only 2.82%.

Libor is a daily average of what 16 different banks charge other banks to lend money in London and is used to calculate adjustable rate mortgages. The higher the rate, the tougher it could be for homeowners to pay those mortgages. Libor is also used to calculate other types of loans, including student and auto.

A market gauge known as the "TED spread" was 4.20%, after moving between 4.30% and 4.09% Tuesday.

The TED spread measures the difference between the 3-month Libor and the 3-month Treasury bill, and is a key indicator of risk. The higher the spread, the bigger the aversion to risk. The spread was 1.04% just a little more than a month earlier and reached a record high of 4.65% on Friday.

Another indicator, the Libor-OIS spread, dipped to 3.35% from 3.39% Tuesday, after touching a record high 3.67% Friday. The Libor-OIS spread measures how much cash is available for lending between banks, and is used by banks to determine lending rates. The bigger the spread, the less cash is available for lending.

Treasurys: Treasury prices rallied Wednesday as stocks retreated from their rallying points earlier in the week.

The benchmark 10-year note was up 17/32 to 99-29/32 while its yield fell to 4.02% from 4.07% late Tuesday. Bond prices and yields move in opposite directions.

The 30-year bond rallied 23/32 to 104-13/32 while the yield decreased to 4.24% from 4.27%.

The 2-year note ticked up 5/32 to 100-16/32 and its yield dipped to 1.75% from 1.81%.

The yield on the 3-month Treasury note was at 0.35%, up from 0.27%. The yield is closely watched as an immediate reading on investor confidence. Investors and money-market funds shuffle funds into and out of the 3-month Treasury bill frequently, as they assess risk in the rest of the marketplace.

After the stock market's 936-point rally on Monday, investors dumped Treasurys in favor of the more profitable equity markets. However, after watching Wall Street's more tepid performance Tuesday, with the Dow closing down 76 points, investors returned to the bond market, causing prices to bounce.

Government debt is considered by investors to be among the safest assets, and so in times of uncertainty, demand for Treasurys increase, sending the price higher.

Investors also shift their funds in and out of the Treasury market based on the movements in the stock market. While government bonds are safe, they do not offer high returns.

Illinois Sheriff: No Foreclosure Evictions on My Watch

2008-10-09T06:44:00.000-07:00

CHICAGO, Illinois (CNN) -- Sheriff Thomas J. Dart said Wednesday he is suspending foreclosure evictions in Cook County, which had been on track to reach a record number of evictions, many because of mortgage foreclosures.

Sheriff Thomas J. Dart of Cook County, Illinois, says proper eviction procedures aren't always been followed.
He said many of the evictions involve renters who are paying their rent on time but are being thrown out because the landlord has fallen behind on mortgage payments.

Mortgage companies are supposed to identify a building's occupants before asking for an eviction, but sheriff's deputies routinely find that the mortgage companies have not done so, he said.

"These mortgage companies only see pieces of paper, not people, and don't care who's in the building," Dart said. "They simply want their money and don't care who gets hurt along the way.

"On top of it all, they want taxpayers to fund their investigative work for them. We're not going to do their jobs for them anymore. We're just not going to evict innocent tenants. It stops today." Watch sheriff announce he won't evict innocent tenants »

Dart said he wants the judiciary or the state Legislature to establish protections for those most harmed by the mortgage crisis.

In 1999, Cook County had 12,935 mortgage foreclosure cases; in 2006, 18,916 cases were filed and last year, 32,269 were filed. This year's total is expected to exceed 43,000.

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"The people we're interacting with are, many times, oblivious to the financial straits their landlord might be in," Dart said. "They are the innocent victims here and they are the ones all of us must step up and find some way to protect."

The Illinois Bankers Association opposed the plan, saying that Dart "was elected to uphold the law and to fulfill the legal duties of his office, which include serving eviction notices."

The association said Dart could be found in contempt of court for ignoring court eviction orders.

"The reality is that by ignoring the law and his legal responsibilities, he is carrying out 'vigilantism' at the highest level of an elected official," it said. "The Illinois banking industry is working hard to help troubled homeowners in many ways, but Sheriff Dart's declaration of 'marshal law' should not be tolerated."

Maybe we should all stop paying our mortgages, they can't take all of our homes.!

from www.cnnmoney.com

Pending Home Sales Show Surprise Rise

2008-10-08T09:35:00.000-07:00

The National Association of Realtors says pending home sales increased 7.4% from July to August; highest since June 2007.

WASHINGTON (AP) -- The National Association of Realtors says pending home rose 7.4% from July to August, an unexpected piece of positive news for the battered U.S. housing market.

The group said Wednesday its seasonally adjusted index of pending sales for existing homes rose to 93.4 from an upwardly revised July reading of 87. The reading was the highest since June 2007.

Wall Street economists surveyed by Thomson/IFR had predicted the index would fall to 84.9.

The index, which sunk to a record low of 83 in March, stood at 85.8 in August 2007.

What about my mortgage?

2008-10-02T07:21:00.000-07:00

The government faces many complications in helping struggling homeowners get affordable loans.

NEW YORK (CNNMoney.com) -- The Bush administration wants to help beleaguered financial institutions - and prevent the financial crisis from getting worse - by spending $700 billion to buy up troubled mortgage securities.

But many struggling homeowners are asking: "Where's my bailout?"

Democratic lawmakers have taken up their battle and say they will include more help for homeowners as part of the proposal, according to Rep. Barney Frank, D-Mass, who heads the House Financial Services Committee. Final details are still being hammered out, but it appears that the idea is gaining traction.

Here's how the bailout could work: Once the Treasury Department takes hold of the securities, it can review the terms of the underlying loans and the financial shape of each homeowner. The department then could opt to modify the loans - by reducing the interest rate or principal balance - to affordable terms for borrowers.

The problem, experts said, is that the mortgages will be bundled into investments and sold. Therefore, the ownership of each loan is divided among all the investors who purchased the security.

And that complicates the process of helping individual homeowners.

"The No. 1 barrier to keeping people in their homes has been the challenge of these loans being in mortgage-backed securities," said Ken Wade, chief executive of NeighborWorks America, a national community revitalization group chartered by Congress whose board is made up of bank regulators. "Counselors across the board say that is the major hurdle they are facing."

Unless the government scoops up all the securities associated with a specific mortgage, they'll run into the same problems in trying to modify the loans as the banks did, experts said. Often it depends on the terms in the securities contracts.

"Mortgages of questionable value have been sold into highly-complex securities, which have been carved up and sold to thousands of investors around the world," said Kathleen Day, spokeswoman for the Center for Responsible Lending. "The government can't put these Humpty Dumpty slices back together again because it won't own or even control them all."

And unless all stakeholders agree to the change in terms, other investors could take the government to court over the modifications, said Chris Mayer, real estate professor at Columbia Business School.

Another complication is that some borrowers just can't afford to keep their homes. The government can't do much for them.

"They key question here is, we want to help homeowners that want to stay in their homes and have the financial capability to stay in their home," Treasury Secretary Henry Paulson said on Sunday. "And the vast majority of foreclosures in this country...are coming from people who either don't want to stay in their home, took out loans they couldn't afford as the result of irresponsible lending practices."

IndyMac example
Many community activists, however, point to IndyMac Bank as an example of how government-led modifications could work.

When the Federal Deposit Insurance Corp. took over IndyMac in July, it quickly suspended foreclosure proceedings on any delinquent loans within the $15 billion portfolio owned by the failed institution. The next month, regulators announced the implementation of a systematic loan modification program available to about 25,000 borrowers.

The loans owned by IndyMac can be changed without too much trouble, experts said. But the agency itself acknowledged that some mortgages serviced by IndyMac are subject to additional terms, forcing regulators to take extra steps to comply with the contracts. The loan servicing portfolio totals about $185 billion.

"IndyMac is really the model," said Kurt Eggert, law professor at the Chapman University School of Law. "I would hope the government only buys loans where they can institute that model."

Reviving economy depends on helping borrowers
Bailing out the banks will only have a limited impact on boosting the economy, experts said. The key is to stabilize the housing market, which can only be done by stemming the onslaught of foreclosures, which hit a record 1.2 million filings in the second quarter.

The Center for Responsible Lending, along with more than 30 other community groups, is pushing for changes to the bankruptcy law that would allow judges to modify mortgages. Congressional Democrats support this measure, as well as a systematic approach to modifying troubled loans.

Once foreclosures subside, home values will stabilize and banks will be more likely to resume lending. This will lift up the economy, experts said.

"The focus should be more on relieving the stress on households rather than bailing out banks," said Christian Menegatti, lead analyst at economic research firm RGE Monitor.

FDIC Helps Citigroup Acquire Banking Ops From Wachovia

2008-09-30T08:44:00.000-07:00

Unable to recover from its ill-advised acquisition of mortgage lender Golden West Financial Corp. in 2006, Wachovia Corp. said it will sell its banking operations for $2.1 billion to Citigroup Inc., which agreed to absorb up to $42 billion of losses from Wachovia's $312 billion loan portfolio.

The Federal Deposit Insurance Corp. (FDIC) agreed to cover any losses beyond that.

Upon the completion of the transaction, Citigroup will have more than 4,300 U.S. branches and $600 billion in deposits, reserving a place alongside Bank of America Corp. and JPMorgan Chase & Co. in dominating the banking industry.

Citigroup will reclaim its spot as the biggest U.S. bank by total assets with $2.91 trillion.

However, the deal forces Citigroup to cut its quarterly dividend in half to 16 cents and dilute existing shares by selling off $10 billion in common stock to bolster its capital position.

In addition to assuming $53 billion worth of debt and up to $42 billion of loan losses from Wachovia's portfolio, Citigroup will issue $12 billion in preferred stock and warrants to the FDIC for the risk it agreed to take on.

Wachovia has not been acquired outright, although it is effectively stripped of much of its core business.

The Charlotte, North Carolina-based company will still maintain its asset management, retail brokerage and certain select parts of its wealth management businesses.

It will continue to be a publicly traded company under the Wachovia brand.

The FDIC noted that Wachovia did not fail, declaring that all depositors are protected and the Deposit Insurance Fund will not be affected by any immediate costs.

The deal remains subject to approval by Wachovia's shareholders and regulators, and must close by the end of the year.

Wachovia shares have plummeted more than 80% in recent months, closing Monday at $1.84 in comparison to 52-week high of $52.25.

Meanwhile, Citigroup has reported losses over three straight quarters totaling $17.4 billion.

During that period, the New York-based bank has written down its assets by roughly $46 billion, the deepest writedown by a U.S. bank.

Much of Wachovia’s struggle stemmed from the $24.3 billion acquisition of Golden West Financial after the housing boom had already crested.

Golden West came with a $122 billion portfolio of Pick-A-Payment loans which allows borrowers to skip monthly payments, leading to a costly deterioration of the portfolio’s value.

Wachovia posted a $9.11 billion loss for the second quarter and announced plans to cut 11,350 jobs, largely from in its mortgage operations.

The company’s wholesale lending operation known as Vertice was included as part of the acquired operations going to Citigroup.

Trends in Garage Space

2008-09-25T07:07:00.000-07:00

We often hear about trends in home design and efficiency, but what about trends in garage spaces? For many homeowners that's a space that is often neglected. But if you're in the market to sell your home, you should get familiar with what buyers are looking for these days in garages.

First of all, garages are making a comeback. For a while, many homeowners decided to convert that space into an office, extra bedroom, or studio. But according to Elizabeth Weintraub with About.com, many homes with similar remodels are lingering on the market, because discriminating buyers are looking for true garage spaces.

The obvious use for a garage is for car storage, and in today's world it isn't uncommon for there to be 3 or 4 cars per family. As a result new homebuilders are making new construction garages bigger, not only in how many cars they can accommodate, but also in dimensions since cars have been growing in size over the years.

But older homes still have options for how many cars they can fit. Auto elevators are becoming increasingly popular. It costs less than a used sedan, and it can be very helpful especially if you live in a community that restricts parking cars on the streets. Here's how it works, you drive into the garage space and after you get out of the car, simply push a button and the car rises, making space underneath for another car to park. If that seems a bit lavish, there are simpler ways to make your space more useful, and appealing to buyers.

First, finish it out. This includes having finished walls, ceilings and floors. It gives the room a cleaner, fresher look.

Next, redecorate. It's amazing what a new coat of paint can do, for any room, including the garage. And don't forget about the flooring. You can stain the existing concrete, add sealed polypropylene tiling, and other more residential looking, yet durable flooring. It can make the room feel like a true extension of the home.

And finally, get organized. Organizational systems are widely available and include cabinets, shelves, workbenches, wall hooks, even closets to hide your clutter.
Just a few small changes to the garage space and your home may look better to buyers, and hopefully be easier to sell.
by Tara Darby

Please visit the site

http://realtytimes.com/rtpages/20080924_garagespace.htm

The turmoil in the financial markets

2008-09-22T08:54:00.000-07:00

Financial crisis tough on homebuyers, sellers
The turmoil in the financial markets has rates on a roller coaster. And with tighter lending standards, fewer people are able to secure financing.

By Melinda Fulmer, MSN Real Estate

The rapidly unfolding crisis in financial markets could make it harder for many buyers to get loans, and could make some types of loans more expensive, experts say.

The nation's credit crunch had started to show some small signs of relief recently, with the number of mortgage applications edging up on declining rates and a government bailout of Fannie Mae and Freddie Mac.

But that glimmer of hope was dashed this week as investors around the world watched the U.S. financial markets stumble badly: Lehman Brothers Holdings filed for bankruptcy protection; Wall Street icon Merrill Lynch agreed be acquired by Bank of America; the federal government agreed to bail out insurer AIG to the tune of $85 billion; and the Fed declined a rate cut.

The most recent news – Treasury Secretary Henry Paulson's proposal to establish a government entity to absorb lenders' bad debt – contributes to the confusion over what will happen in the housing market. "They haven't really addressed how that's going to affect the mortgage market," says Jon Eisen, a San Diego mortgage broker and certified financial planner.

What’s your home worth?Find out what your home is worth in one easy step!
And analysts say there could be even further fallout: Lending standards could get even tighter and rates on nonconforming or jumbo loans could jump.

"The rules have changed so much," says Eisen. "Every few days I get new memos from lenders about how the standards are changing."

Roller-coaster rates
The spiral of bad news initially sent mortgage rates lower before pushing them up.

Rates on 30-year fixed conforming mortgages averaged 6.07% on Sept. 18, according to financial publisher HSH Associates, after dropping below 6% the previous week.

That's still a historically low rate, economists say, but increasingly fewer people actually qualify for it, because of weaker credit scores or low down-payment amounts.

"The ability to have a down payment matters more than ever … and purchasing at a price that gets under the conforming limit," says Susan Wachter, a real-estate professor at the University of Pennsylvania's Wharton School.

For those who do qualify, these conforming rates should remain relatively stable, says Holden Lewis, who covers the mortgage industry for Bankrate.com. He doesn't expect conforming 30-year loans to spike to 8%, for example, or drop considerably.

link to Story
http://realestate.msn.com/Buying/Article2.aspx?cp-documentid=10479096

Builder sentiment rises from record low

2008-09-17T04:03:00.000-07:00

WASHINGTON (AP) -- Battered housing developers are getting a bit more optimistic about their prospects for the next six months, an index of the sector's confidence showed Tuesday.

The National Association of Home Builders/Wells Fargo housing market index rose two points to 18 this month from an all-time low of 16 in July and August.

The survey was taken in the first 10 days of September, and for the most part doesn't reflect the fall in mortgage rates since the government's takeover of mortgage finance companies Fannie Mae and Freddie Mac. It also doesn't take into account this week's Wall Street turmoil, which may push rates downward as nervous investors move into government bonds.

Immediately after the Fannie and Freddie seizure, "the positive impact on mortgage rates was probably not apparent to many builders," the trade group's chief economist, David Seiders, said in an interview.

Average rates on 30-year fixed-rate mortgages dipped to 5.93% last week, down from 6.35% on the Thursday before the takeover, according to Freddie Mac's weekly survey. Rates had been bouncing between 6% and 6.5% since late May.

Treasury takes over Fannie and Freddie

2008-09-08T10:51:00.000-07:00

On Sunday morning the new GSE regulatory agency placed congressionally chartered mortgage giants Fannie Mae and Freddie Mac into separate conservatorships, as the government committed $100 billion to each while removing their CEOs and laying the groundwork for a radical and historic restructuring of the entire U.S. mortgage market.
This is going to be a very good thing for the mortgage market and in turn for the Real Estate market overall.
The funding of these two companies opens up much needed liquidity for lenders. This liquidity will ease some lending guidelines, decrease rates, and eliminate the financial sector's worry about Fannie and Freddie failing. The Bond market, which controls interest rates and the strength of the US Dollar, will become a place where investors will place their money due to the FDIC basically guarantying those investments. The dollar will also get much stronger due to the money pouring into bonds.
What does all this mean to the real estate markets.

1) There will be lower interest rates to help boost sales.

2) More borrowers will qualify for loans.

3) The dollar will be stronger, which will help the economy.

4) More people purchasing homes means we all increase our businesses.

Joe Phillips
AMR manager
386-615-7977

Positive Real Trends

2008-09-02T07:18:00.000-07:00

Resales of existing houses jumped by 3.1 percent in last month to the highest level in nearly half a year.

On top of that -- and to the near total surprise of Wall Street analysts -- new home sales also rose 2.4 percent, according to the Commerce Department.

New home sales showed a similar pattern: Up an amazing 39 percent in the Northeast, 10 percent in the West, 8.2 percent in the Midwest and down by 2.5 percent in the South.

Most notable of all were the strong rebounds in sales in areas that had seen the biggest drops following the boom years -- especially in California and Florida.

Now, in fairness, before we get too enthusiastic about these sales gains, let's be frank about what's pushing this trend: The large numbers of short sales and foreclosures in many once-booming markets are cutting prices to the bone.

But rock bottom prices are also bringing in a flood of first time buyers, fence-sitters and investors who've been waiting for hard, statistical evidence that the cycle is flattening out.

Well, it looks like that hard evidence has finally arrived.

Sales in places like Riverside-San Bernadino, California, and Fort Myers, Florida -- once the West and East Coast symbols of boom and bust -- are now seeing strong growth in sales, according to the National Association of Realtors.

Keep this in mind too: The July resale numbers represent transactions closed before the passage of the new $7,500 federal tax credit. When the impact of the credit begins kicking in during the coming several months, you can bank on even higher sales numbers ... and a turnaround in prices.

In other key economic developments this week: Mortgage applications rose nationally for both conventional and FHA loans to buy houses. Interest rates dropped for the third straight week -- hitting an average 6.44 percent for 30 year fixed rate loans and 5.94 percent for 15 years.

Also the federal government's monthly survey of home prices in more than three hundred markets around the country found that although the national average of prices was down slightly, prices rose in 20 states … and are up year to year in 30 of the 50 states.

Offering Sellers a Menu of Services

2008-08-27T08:47:00.000-07:00

by Jennifer Allan
Have you ever heard the commission-negotiation-avoidance strategy of creating a menu of packages for a seller to choose among? For example (all figures are illustrative only), you might offer a 4 percent package which includes minimal services; a 5 percent package which has a moderate level of service and a 6 percent package that includes a kitchen-sink level of service.

Sounds good, doesn't it? After all, it demonstrates to the seller what you actually DO to sell a house and probably reduces the likelihood of his asking for a discount. If he wants to pay less, he gets less. HIS choice.

Sorry, but I think this is a lousy idea. Why?

Oh, let me count the ways ... .

You want to sell the house don't you? Yes? Well, then why are you asking your SELLER how to market it? As the expert in selling houses, YOU know what needs to be done and you, as a professional, should do those things.

You should also know what doesn't sell houses in your market. And you shouldn't be offering and charging for those services if you (as a professional real estate agent) know they aren't effective.

When I get a new listing, I really want to sell the darn thing and I spend a lot of time and energy figuring out what we need to do to make that happen. By "we," I mean me and my seller. I don't market every house exactly the same, nor do I advise every seller to do the same things. It's part of my service to analyze each situation individually and proceed accordingly. Some listings will benefit from Open Houses, some won't. Some (most) homes need staging, some don't. Some listings will benefit from newspaper ads, most won't. It's my job to know these things.

Besides, you want to provide exceptional service to all your clients, don't you? Don't you want their future business and referrals? By purposely limiting your service (especially if it affects the marketability of the home), you may be blowing your reputation and credibility with this client and potential source of future business. And of course, you may also be blowing your chances of getting a paycheck if your seller doesn't pick the right package and the house doesn't sell.

Be a professional real estate agent and do what it takes to sell your listings. That's your job.

http://realtytimes.com/rtpages/20080827_menuservices.htm

Existing home sales rise, but prices still sinking

2008-08-25T10:38:00.000-07:00

Sales by homeowners increased more than expected in July, as median prices fell 7% from July 2007. But supplies still rise to a record high, pushing prices even lower.Are you better off than you were seven years ago during the last economic downturn?

NEW YORK (CNNMoney.com) -- Sales of existing homes rose more than expected in July, but prices continued to fall and inventory increased. That's according to the latest reading on the battered housing market by an industry trade group released Monday.
The National Association of Realtors reported that sales by homeowners in July increased to an annual pace of 5 million, up from the revised June reading of 4.85 million.
That's better than the annual pace of 4.9 million that economists surveyed by Briefing.com expected, and it's the highest pace since February. Still, July sales were down 13.2% from a year earlier.
"Sales volume is starting to increase because prices are collapsing," said Michael Larson, an economist with Weiss Research. "When lenders are aggressive enough on pricing, especially in certain markets, it's enough to attract buying interest."
Falling prices
The median price of all homes sold during the month - including single-family homes, townhomes, condominiums and co-ops - fell 7.1% to $212,400 from $228,600 a year ago. Before the start of the current housing slump, it had been 11 years since prices fell compared to a year earlier.
At the same time, the single-family home median price fell 7.7% from a year ago to $210,900. The trade group has tracked those sales prices going back to 1989.
The rate of existing home sales rose in every region of the country except the South, where sales slipped by a seasonally adjusted 0.5%. Sales in the Northeast rose 5.9%, while the Midwest saw an increase of 0.9%. The West saw the largest jump in sales, up 9.7%, as prices fell a whopping 22.2% in that region.
Prices in the Northeast declined 4.9%, while the South saw a dip of 3.5%. Prices actually rose 1% in the Midwest.
"Home prices generally follow sales trends after a few months of lag time," said Lawrence Yun, NAR chief economist. "Still, inventory remains high in many parts of the country and will require time to fully absorb."
Expanding inventory
Even as sales picked, up, the excess supply of homes on the market still rose 3.9% in July to a record high of 4.67 million. Realtors estimated that represents an 11.2 month supply.
That is up from the 11.1-month supply in June, though NAR said the rise in inventories was due to a sharp jump in the number of condominiums on the market. Inventory of single family homes declined slightly, falling to a 10.6 month supply from 11 months in June.
"The troubling thing about this report is that the supply issue is not going away," said Larson. "It would be okay as long as the inventory went down, but there were enough new listings that overall supply rose more than sales."
In response to the struggling market, President Bush signed the Housing and Economic Recovery Act late last month. The bill includes a temporary tax credit of up to $7,500 for first-time home buyers who haven't purchased a home in three years.
Qualified buyers must earn less than $75,000 - or $150,000 for a couple - after which point the tax credit begins to phase out. The Senate Finance Committee estimates that about 1.6 million people will use the credit.
But if inventory continues to rise, it may be a while before the the market can recover.
"This report illustrates a housing market that's going to continue to struggle," said Larson. "Pricing pressure will remain for a while."

Get Free & Valuable Media Exposure for your Listing

2008-08-25T06:30:00.000-07:00

As a real estate agent, you are expected to create a marketing plan for your seller. When seeking the listing, you present the seller with your strategies about what you’ll do to promote the home. When was the last time you included Public Relations as part of your marketing matrix? Probably not lately and that’s likely because you don’t understand the public relations process and how the media works. This column will help change that.

The Media is "Looking for News” – Give them what they Want! First, understand this -- the media are (constantly) on the lookout for new, interesting and exciting (news) stories. What this means to you is that the media is entirely approachable. All you need to do is learn how to present "your news” to them.

The Key Four Steps to Obtaining Free Publicity for your Property
So how do you go about getting a property you represent featured in the newspaper or spotlighted on television? It all starts with an angle, followed by a smartly and properly written press release, targeting the right media as a potential outlet for your story and then pitching them your story idea.

That’s it. Your PR game plan consists of four key steps: Angle/Story idea, Press Release, Target Appropriate Media, and Pitching Skills.

Get Started Grabbing

Your Share of the Limelight How do you start getting free publicity? There are a few ways, the media coverage can be about you, your company, about your new listing, or in a perfect world, all three. The questions below will serve as triggers for the things you need to think about and answer that can serve as the basis of a press release you can use to pitch a potential story "about you” to the media.
Disclaimer: Here’s what this Article Will do, and what it will not Do.

This article will not teach you "how to" write a press release. There is not enough space to do that. There are literally hundreds of books both off line and online that can assist you in this area, some for free, others not. What this column will do for you immediately is provide you with the critical thinking that expands your world from a marketing point of view that will allow you to begin the process of understanding what’s involved in creating a proper PR storyline that can help you potentially obtain free media coverage. So let’s begin.

Have you earned any special achievements, awards, certificates, designations, etc?
Have you emerged as a "sales leader” in your organization? Have you overcome any "obstacles” personal and/or professional to achieve the accomplishments or status that you have earned? Do you have any "inside or secret techniques” you can share with your industry colleagues regarding securing listings, reading buyers, negotiating, marketing? How would you document your rise to success – overcoming obstacles, if any, to become a premier player (in whatever niche you might specialize in or if you are a player at the top end of the very elite spectrum of the real estate industry – this applies to "your success” either within your sales organization and/or the industry at large in your community)
Have you worked with – either buyer(s) or seller(s) that are high profile – celebrities from the worlds of entertainment, business, sports, government, etc., etc.?
These connections and tie-ins are very strong and useful in creating media interest and excitement in you and your story, especially if you have photos either of you with them or even just them alone – at your house/property, etc..

Case studies and Teaching Opportunities – what secrets and/or tips can you share that would be helpful and/or informative to others in the industry? Do you have a secret listing technique? What about reading buyers? How do you close? Your tips, if any, on negotiation? What is and/or was the most interesting/challenging home/project listing/sale, etc.? What lessons did you learn from this/these and can these lessons be passed on to your colleagues? Here is the PR bottom line: Maybe you’re special, maybe you’re not. If you can answer these questions, either any single one of them, or any combination of them, in a press release format, with a word count of approximately 550 words, you have a shot at obtaining the media holy grail -- FREE PRESS coverage.
Working from this list you can craft a press release that could potentially be of interest to your local and/or industry real estate trade journals, possibly even your daily newspaper or even magazines. Remember, the media are always looking for news. If you package, present and pitch your information the right way, you may very well find yourself in the media spotlight. That’s good for you, and your business. And best of all, it’s free.

By: Jeff Mustard
http://realtytimes.com/rtpages/20080825_publicrelations.htm

Top Agent's Business plan for 50 transactions a year

2008-08-22T11:16:00.000-07:00

Everyone needs a plan to succeed in this market. This is a great article I found in the realty times.

http://realtytimes.com/rtpages/20080822_topplan.htm

Beginning in the late seventies, Walter re-wrote records in real estate particularly in number of transactions and dollar volume. His best year was 1992 with $72 million in sales. In today’s economy, that would equal to over $133 million dollars per year in personal production sales! He sold a house a day for seventeen years.
Now, he is one of the most requested trainers in real estate. Franchises request and mentor his systems, which he has developed. Delegation, net-profit strategies, working hard and still having a life are a few of the easy to implement, low-cost strategies that we are proud to bring you. Some industry decision-makers believe Walter Sanford was one of the top agents in North America during the ‘80s and early ‘90s. To contact Walter, you can email him at walter@waltersanford.com or by calling 815.929.9258.

DON'T WAIT: CREATE!

2008-08-20T13:39:00.000-07:00

Don't passively wait for business and success to come to you. Proactively create business and make success come to you. Too many Agents have let the market over the last few years create all of their success.

Recently, it has been pretty easy nationally to make a very good living selling real estate. You could have been passive and been okay. In today's marketplace, with changing inventory levels, more cautious buyers, and rising interest rates, you just can't wait – you have to create.

You must proactively and consistently prospect for leads. Most Agents never prospect proactively. Let's look at the truth; we mail things out and rarely pick up the phone or get face-to-face with anyone. Most Agents do lead follow-up, which means they follow-up on leads that came to them. They use passive techniques to create leads. We must also proactively create leads and proactively follow-up on our current leads. I tell Agents all the time, "If you need a boost in your production inventory, call all of your leads, even the longer term ones."

The vast majority of a Champion Agent's new listing inventory in a given month comes from their pipeline of leads. If you want to change your inventory level of listings, first go to your leads. Then start to prospect to build up your pipeline.

Sell prospects on "service presentation" meetings

This is an area we need to improve on. We rely on sending large quantities of information via e-mail rather than getting face-to-face. We have to focus on getting face-to-face with all prospects, even if they are six months out. The way to best determine if the lead is outstanding is the face-to-face meeting. It's also the thing that most other Agents they are talking to are not doing. The tightest connection you can create will be from a face-to-face meeting. In a service presentation meeting, you are not doing your full listing presentation; you are trying to determine desire, need, ability, and authority.

Prospect, Prospect, Prospect

In this marketplace, more time is needed in prospecting. It will take:

* More dials to = same amount of contacts

* More contacts to = same amount of leads

* More leads to = same amount of appointments

* More appointments to = same amount of contracts

* More contracts to = same amount of revenue

It might not be fair; it is what it is

Far too many Agents over the last few years have been totally reliant on one area of business: the "wear it like a badge of honor; I'm a 'by referral only' Realtor." While I believe referrals are essential to a healthy business, they are not the lifeblood of any successful business. Relying on 100% of one's revenue from one source is not a sound business practice. Even having 80% to 90% of one's income from one source leaves the business vulnerable to market shifts.

When the public's consciousness for real estate is at an all-time high, referrals generate significant revenue. When real estate is not the main topic of conversation at every cocktail party across North America, fewer leads and opportunities are created through referrals.

"There is a rude awakening about to happen for a significant segment of successful Agents."

Let's look at a real-world company, recently in the news, that had to declare bankruptcy due to their customer mix coming from predominantly one source. Delphi recently declared bankruptcy because their biggest customer is General Motors. More than 60% of their sales are made to General Motors. Due to the problems at GM and high labor costs, Delphi was forced into bankruptcy.

Many Agents await that same fate because of an eventual drop in referrals. The time to expand our streams of leads and income is now. Once most Agents realize the reduction in the number and quality of referrals due to a lower consumer demand and awareness for real estate, it will be too late. The time to act is now.

Resolve to add one new income stream in the next 90 days. I caution you to only add one. The natural tendency is to try a whole bunch. Focus on adding one with excellence rather than a whole bunch poorly

by Dirk Zeller
Realty News
http://realtytimes.com/rtpages/20080407_dontwait.htm

Investor Rules: Tax Pitfall

2008-08-15T07:01:00.000-07:00

Here's a tax alert for real estate investors who use popular tax-free exchanges: The recently signed federal housing legislation contains a hidden zinger that could cost you thousands of dollars if you don't plan around it.

As of next January 1st, investors who exchange into rental or second home properties that they later convert into their personal homes no longer will be eligible for the full $250,000 to $500,000 tax-free exclusions now available on sales of principal residences.

Instead, they'll need to allocate their time of ownership between taxable investment or second home usage and non-taxable principal residential usage.

To qualify for tax-free exclusions they'll still need to use a property as their primary home for two out of the five years preceding any sale or exchange. But if any part of their total usage time after January 1st is what the new law calls "nonqualified" -- that is, investment, rental or second home use - then that will lower their maximum exclusion.

This an especially big deal for investors using "Section 1031" exchanges because they frequently shield their real estate gains on rental houses and condos by moving into them for a couple of years and converting previously taxable gains into non-taxable principal residential profits.

Just how popular has that technique been in recent years? "Extremely popular," says tax-free exchange intermediary George Foss in Littleton, New Hampshire. "Many of my clients have used it because it's a way to totally shield yourself" from capital gains taxation.

Congress's new limitation of the strategy is "terrible in my opinion," said Foss in a discussion with Realty Times last week. "It's just rotten."

An example of the dollars and cents impact of the change was provided by the Federation of Exchange Accommodators, a national trade group representing investors and intermediaries. Under the old law, an investor could exchange into a property that he or she then rents out for three years. Then the investor would move in and use the property as a principal residence for two years.

When the investor -- who is single -- sold the house for a $300,000 gain, $250,000 of that amount would be tax-free under the old law.

Under the new law, three fifths of that gain -- $180,000 out of the $300,000 -- would be taxable, while just $120,000 would be tax free.

That $130,000 difference is why exchange investors are so upset with Congress's latest tax increase.

Published: August 15, 2008
by Kenneth R. Harney

Has the Market Bottomed Out?

2008-08-06T08:20:00.000-07:00

Commentary by Walt Baczkowski

RISMEDIA, August 5, 2008-At the top of the most frequently asked questions’ list is, “How will we know when the market has ‘bottomed out’ and we should buy a home?”

Historically, two major indicators that a market has bottomed out are: a decline in the number of listings and an increase in listing and sold prices. Obviously the key here is making your move at the right time-which would be right before these two items begin to manifest in the market.

Based on sales data provided by MLSs, it appears that we are beginning to realize a slight decline in listing volume. I say “appears” because with the factors affecting the market today-and the foreseeable future-this may be a seasonal issue or being caused by any number of things.

Tracking the listing volume over the next several months will provide additional information regarding this question. In regard to sold prices, this is more difficult. Real estate-owned property or property in some stage of the foreclosure process has been driving the price point for real estate for some time now.

With a significant volume of lending institution-owned property on the market selling at what historically, could be viewed as discounted prices, we do not anticipate seeing an increase in sales prices in the near future.

With sales showing increases compared to last year in most areas and declines in listing volume, it would appear that the market is slowly changing from the buyer’s market we have experienced for the past several years.

A large listing inventory remains, however, and problems in the job sector-coupled with rising fuel costs and the overall economic state in the country-will undoubtedly prolong the market conditions we are currently experiencing.

During this time, we are also seeing a plethora of innovations and new ideas coming forward. We all need to do something that differentiates us from our competition. New services and products have continued to be introduced over the past few years, only to fail shortly thereafter or morph into something entirely different.

However, a point to keep in mind is that self respect and common sense should remain at the top of everyone’s list. This has been-and remains to be-the basis of business success.

Walt Baczkowski is president of the Metropolitan Consolidated Association of REALTORS®.

To contact him, please e-mail walt@mcaronline.com.

GET MORE OUT OF YOUR MARKETING

2008-08-05T06:25:00.000-07:00

From Realtor.com

In just seven months, real estate marketing coach Jennifer Cummings helped Christina Martinez, the highest-producing real estate agent in the country, boost her commissions to $7 million from $4 million.

Cummings says the secret to success is for agents to move from "advertising," or generating attention and promoting images or brands, to "marketing," which involves motivating someone to make a purchase. She recommends that agents discover the prospect's needs, build trust, and lead them to the point where they are ready to make a commitment.

Cummings also urges agents to market to a specific group, determine whether they will use the Internet or print as their medium of choice, and figure out what message they want to send, then identify the needs and wants of their target audience.

Additionally, practitioners should create a hook to grab the reader's attention, such as "Save up to $100,000 on Your Next Mortgage!," and ensure that their marketing materials are written in a conversational tone.

They should employ bullet points, headlines, and subheads to make their content easy to read and provide a way for prospects to contact them to receive special reports or checklists.

link to this story
http://www.realtor.org/RMODaily.nsf/pages/News2008080405?OpenDocument

TIME TO LOCK IN YOUR MORTGAGE RATE

2008-08-04T07:30:00.001-07:00

Cnnmoney.com reports the following:

Since mortgage interest rates are on the rise, home buyers can save considerable cash by locking in a reasonable rate when they find one.

During the housing boom, interest rates were extremely low - generally between 5.5% and 6.5% - and very stable. So borrowers often didn't bother to ask lenders to lock in their rates regardless of market fluctuations. If one good interest rate deal disappeared, another one was generally right around the corner.

But today the mortgage market is very volatile, and rates are trending upwards. So losing out on a good deal may mean it's gone forever. If buyers see a bargain, say experts, they should pounce.

"If you hear of a rate that seems to be much better than the rest of market, get it in writing and lock it in," said Steve Habetz, a veteran mortgage broker in Connecticut.

We encourage all of our clients to lock in their rates immediately. The volatility in the market demands it. It's like rolling the dice or spinning the roulette wheel, but you are gambling with your home and how much interest you are paying over the term of your loan.

LOCK IN TODAY!!!!!!!!!!!

Selling: Oh, Thank You Very Much, Canada

2008-08-01T07:51:00.000-07:00

Canadian buyers are bolstering business for real estate practitioners throughout the United States. Here's how you can target buyers to the north.
By G.M. Filisko | August 2008

“If it wasn’t for bad luck, I wouldn’t have no luck at all” goes the old blues standard. Change a few words, and you’d be singing the tune of a good many real estate salespeople today.

Not so for real estate pros in resort areas and along the northern United States border, where Canadian buyers are generating significant business today.

“Since the beginning of 2007, all of my buyers have been Canadian,” says Jacques Drouin, a native of Quebec who’s now a sales associate at Realty Executives of the Palm Beaches in Lake Worth, Fla.

Mike Kent, a sales associate at Windermere Real Estate in the resort area of Birch Bay, Wash., also has been buoyed by neighbors from the north. He says 80 percent of his buyer pool is Canadian. ‘The greatest phenomenon is three to four miles from the border,” he says. But it’s not limited to that geography. Kent also represents a large condo project in Bellingham, Wash., about 20 miles south of the Canadian border, where about 40 percent of his sales in late 2007 also were to Canadians.

The weak U.S. dollar means that the Canadian dollar, nicknamed the “loonie,” buys more in the United States. That, coupled with softening real estate prices, makes the U.S. market a bargain for Canadians. The loonie has risen roughly 60 percent against the U.S. dollar from its 2002 low. As of early June, 97 Canadian cents bought one U.S. dollar.

Snowbirds in the Sunbelt

Although interest has picked up in the current market, Canadians have long been investors in U.S. real estate, making up 11 percent of international buyers; that ranks them third behind buyers from Mexico (13 percent) and the United Kingdom (12 percent), according to the 2007 NAR Profile of International Home Buying Activity, the most recent study tracking international buyers.

Where are Canadians buying? In addition to near the Canadian border, “primarily the Sunbelt states,” says Keats. “Arizona is really high, Florida is really high, and California and Texas are, to a lesser extent.”

What are they buying? Diane Byrne, vice president of marketing at Cachet Homes in Scottsdale, Ariz., says most of the homes she’s sold to Canadians have been “lock and leave” lifestyle condos or townhomes in gated communities with such amenities as clubhouses and heated pools.

Kent is selling both single-family homes in a resort community and high-rise condo units.

Calling all Canadians

To target Canadian buyers, “you have to show you have knowledge of the Canadian market in terms of where Canadians are going to live and what their needs are with respect to immigration, taxes, and titling,” Keats says.

Also, be able to send them to attorneys who can explain and guide them through the U.S. property title process, which is different from what they’re accustomed to in Canada.

In addition, Keats recommends joining clubs catering to Canadians. “There are Canadian clubs in just about every state; you can get a list from the Canadian consulate,” he says. “Joining them helps in terms of advertising and doing workshops.”

By G.M. Filisko
From Realtor.org
http://www.realtor.org/rmosales_and_marketing/articles/2008/0808selling

Get To Know the 4 Types of Buyers

2008-08-01T07:05:00.001-07:00

You can improve your sales by understanding buyers as fitting into four distinct personality types, says Bayham Consulting LLC President Alan Bayham.

Once you identify their type, you can customize your presentations to meet their stylistic preferences.

1. Direct Type Buyers have Type A personalities, are direct and in a hurry, and have no qualms about interrupting a presentation. Practitioners would be wise to allow this buyer to do the talking and avoid giving too many details because he or she will make a decision quickly.

2. Interpersonal Buyers are pleasant, excitable, and more focused on relationship building, making it important for practitioners to socialize and create a positive atmosphere without imposing hard restrictions.

3. The Safety or Status Quo Type Buyer is calm, listens to what the practitioner has to say, and asks questions; and practitioners should keep in mind that it is crucial for them to present the information slowly, inquire about the buyer's needs, offer support, and take a gradual approach to obtaining commitment.

4. The Contemplative Buyer does not like small talk, wanting as many details as possible and conducting his or her own research beforehand. Practitioners should be careful not to encroach on this buyer's personal space, be thorough in providing information and documentation, and be willing to wait for the buyer to make a decision.

How Old is The Typical First Time Home Buyer?

2008-07-31T09:22:00.000-07:00

How Old is the Typical First-time Buyer? Question: How old is the typical first time buyer? Answer: According to a 2007 study by the National Association of Realtors, "the typical first-time buyer is 31-years-old, 15 years younger than the typical repeat buyer. More than one in 10 first-time buyers are under the age of 25. The typical repeat buyer is 46 years old; half of repeat buyers are between 35 and 54 years old. Among all groups of buyers, unmarried couples tend to be the youngest at 30 years old and also the youngest among first-time buyers."

New Housing Bill, Who Can Qualify

2008-07-30T06:59:00.000-07:00

Qualified borrowers must live in their homes and have loans that were issued between January 2005 and June 2007. Additionally, they must be spending at least 31% of their gross monthly income on mortgage debt to be eligible for the program.

They can be up to date on their existing mortgage or in default, but either way borrowers must prove that they will not be able to keep paying their existing mortgage - and attest that they are not deliberately defaulting just to obtain lower payments.

Before homeowners can get FHA-backed mortgages, they must first retire any other debt on the home, such as a home equity loan or line of credit. Borrowers are not permitted to take out another home equity loan for at least five years, unless it's to pay for necessary upkeep on the home.

To get a new home equity loan, borrowers will need approval from the FHA, and total debt cannot exceed 95% of the home's appraised value at the time.

How can I apply? Call Joe Phillips @ 386-615-7977

Home Inventory Dips, Homeownership Rises

2008-07-28T07:42:00.000-07:00

The Census Bureau has reported that the inventory of vacant homes listed for sale fell 3% in the second quarter to 2.17 million, and the home ownership rate rose from 67.8% in the first quarter to 68.1%. Listings of vacant homes rose dramatically in 2006 to 2.1 million, and this overhang on the real estate market continues to exert downward pressure on house prices. Home builders view the inventory as a negative factor that depresses demand for newly constructed homes. The Federal Reserve Board's Beige Book noted that home sales are weak across the country and "inventories of unsold homes and condos were reported higher or excessive" in several areas. The Fed's survey of economic activity in early July also found "increased use of incentives and discounting" to sell homes. The Census Bureau report indicates that the home ownership rate for blacks rose from 47.1 % in the first quarter to 47.8% in the second quarter, while the rate for Hispanics rose from 48.9% to 49.6%.

New Home Sale Dip, but So Do Inventories

2008-07-28T07:39:00.000-07:00

Sales of new homes fell to 530,000 units in June, a slight decline from the previous month's level but a 33% drop from that of the same month a year ago. However, in one positive development for the market, the inventory of new homes for sale fell to a 10-month supply, compared with a 10.4-month figure in May, according to statistics compiled by the Census Bureau and the Department of Housing and Urban Development. RBS Greenwich analyst Omar Sharif said the results were better than expected, noting that "perhaps the best piece of news was the sharp drop in the supply of new homes." He added that "more progress will have to be made on the supply front, but June's data provided a glimmer of home."

Fed Myth that needs Debunking

2008-07-22T08:34:00.000-07:00

NEW YORK (Fortune) -- There are two things you may have heard about the Federal Reserve Board, both of which are wrong. We are going to speak of one of them here.

The Fed controls U.S. interest rates.

It's the more common myth, created partly by sloppiness among people in my business who write (and say) things like, "The Fed cut interest rates today."

In fact, we should always insert "short-term" before "interest rates" when we talk about the Fed's control. That because the Fed controls only some short-term rates, primarily the so-called federal funds rate that financial institutions charge each other for overnight loans. The financial markets set long-term rates, which often don't move in the same direction as the fed funds rate.

The case in point: the relationship - or lack of one - between the Fed funds rate and the interest rate on long-term mortgages.

Since September, the Fed has reduced the Fed funds rate by 62% - to 2% from the previous 5.25%. But long-term mortgage rates are higher than on Sept. 18, when the Fed began its rate cuts, as you can see from the adjacent graphic, which is based on numbers from mortgage experts HSH Associates.

The rate on a 30-year fixed-rate conforming mortgage - "conforming" means that the mortgage is eligible for sale to mortgage guarantors Fannie Mae (FNM, Fortune 500) or Freddie Mac (FRE, Fortune 500) - was 6.44% the week before the Fed's first cut, and was recently 6.51%. Jumbo mortgages - mortgages too big to be considered conforming - were going for 7.63%, up from 7.26%. (All of these numbers include up-front points that borrowers pay, in addition to their basic interest rate.)

The Fed and Treasury - along with many of the world's big financial players - would love to have U.S. mortgage rates decline, because that would lend support to home prices, which could use it.

Falling home values - what we have in most U.S. housing markets - increase foreclosures, which increase borrowers' pain and lenders' losses. The declining value of houses as collateral for mortgages makes mortgage lenders less eager to lend, and makes potential home purchasers far less eager to buy. It's a vicious cycle that will end sooner or later - everything does - but it's not something that the Fed (or any individual regulator or player) can control.

The Fed cut short-term rates to help mitigate the panics that have been sweeping the world financial markets for more than a year. In addition, those lower rates - in theory, at least - help prop up the U.S. economy.

But you can also argue that the Fed's lowering of short-term rates has raised inflation fears and contributed to the decline of the dollar in international markets, which in turn has affected commodities prices, whose massive increases are a major factor in U.S. inflation. So repeat after me: the Fed can set only short-term rates. Which may contribute to having long-term rates act in ways that the Fed didn't intend, and doesn't particularly like.

Lead Generation: Do you Seek or Attack

2008-07-22T06:58:00.000-07:00

When the market is tough you need to be more aggressive and creative with your lead generation activities, says Chris Pullig, Director of the Keller Center for Residential Real Estate Sales & Marketing at Baylor University's Hankamer School of Business.

His recent study of lead conversion rates revealed that varying market conditions call for different approaches to lead generation.

When the housing market is tough, a balance of 60 percent seek-oriented activities and 40 percent attract-oriented activities delivered the highest lead generation conversion rates.

A “seek” orientation employs tactics such as phone calls, networking and referrals. An “attract,” or marketing, strategy, employs tactics such as advertising, direct mail and then waiting for the phone to ring.

When your market is sluggish, “You should do some things that are nontraditional and not rely so much on advertising and direct mail,” Pullig says. “Focus more on building networks, acquiring referrals, and other ways that you can generate leads by proactive means."

You can read his complete report at Lead Generation: Do You Seek or Attract?

When the market is tough you need to be more aggressive and creative with your lead generation activities, says Chris Pullig, Director of the Keller Center for Residential Real Estate Sales & Marketing at Baylor University's Hankamer School of Business.

His recent study of lead conversion rates revealed that varying market conditions call for different approaches to lead generation.

When the housing market is tough, a balance of 60 percent seek-oriented activities and 40 percent attract-oriented activities delivered the highest lead generation conversion rates.

A “seek” orientation employs tactics such as phone calls, networking and referrals. An “attract,” or marketing, strategy, employs tactics such as advertising, direct mail and then waiting for the phone to ring.

When your market is sluggish, “You should do some things that are nontraditional and not rely so much on advertising and direct mail,” Pullig says. “Focus more on building networks, acquiring referrals, and other ways that you can generate leads by proactive means."

You can read his complete report at the Baylor Business Web Site.
http://www.baylor.edu/business/kellercenter/index.php?id=55741

New Home Loan Applications Up

2008-07-18T07:30:00.000-07:00

With all the stock market jitters about Fannie Mae, Freddie Mac and the U.S. mortgage system, you might have the impression that the real estate market is on the edge of some sort of cliff.

But that's wrong: Would you believe that new home loan applications jumped by a seasonally-adjusted seven and a half percent last week, according to the Mortgage Bankers of America's national survey! Applications to purchase homes using FHA loans surged by nearly 20 percent.

Even the economy continues to defy predictions of imminent recession. Economic growth in the second quarter is expected to hit a vigorous 2.3 percent annual rate, according to Orawin Velz, chief forecast economist for the Mortgage Bankers Association.

The spurt is the result of booming exports tied to the weak dollar and higher sales at chain stores attributable in part to the economic stimulus plan.

But there's a flip side to all this, warns Velz: Prices of imports to consumers are rising sharply -- up by 2.6 percent in June, for the second straight month. So watch out on the inflation front.

Mortgage rates rose slightly last week -- to an average 6.4 percent for 30-year fixed rate conventional loans, up from 6.3 percent the prior week. Fifteen year loans inched up to 5.94 percent from 5.9 percent the week before.

And how about this: Even the co-founder of the Standard & Poor's Case/Shiller housing price index, which has generally reported the scariest price drops of all indexes during the past two years, is now saying that prices are leveling off and increases are on the way.

Professor Karl Case, an economist at Wellesley College, was quoted in the July 12 stock market advisory publication IStockanalyst.com, that the current drop in new home construction has hit a point where, based on prior downturns in the 70s, 80s and 90s, price declines should soon be over in many hard-hit areas.

In fact, the latest Case/Shiller index showed definite hints of a turnaround. Although on a national basis the index found prices down by 15.3 percent year over year, prices actually rose in eight out of the 20 top metropolitan markets.

Those improving areas included Boston, Charlotte, Chicago, Cleveland, Dallas, Denver, Portland Oregon, and Seattle.

David Blitzer, chairman of Standard and Poor's index committee, commented that virtually none of the journalists who interviewed him about the latest Case/Shiller index had any interest in the positive local performances. "They seemed to focus (instead) on the bad year-over-year number," said Blitzer.

Choose Me! How to Get Online Prospects to Love You

2008-07-14T10:13:00.000-07:00

Prospecting in the Internet age requires you to find new ways to appeal to consumers who are inundated with names and faces of other practitioners. Here's how to set yourself apart.

When I write about how to succeed in this relationship-driven business, I often compare prospecting to dating. After all, courting a customer is similar in many ways to courting a man or woman who may eventually become your partner for life.

So, when strategizing the best ways to get online customers to become your clients, I can’t help but draw parallels to the world of online dating. In both scenarios, you must make yourself memorable in a sea of potential suitors, and then grow a relationship on the Web before eventually meeting in person.

Here are some helpful tips I’ve gleaned from online dating that also apply well to real estate:

Show them you’re special. Don’t be common, or you'll simply be overlooked. Online customers are presented with a deluge of Web advertisements of other practitioners. They must narrow down their possibilities before they can zero in on the one they want to pursue. If your ads look like everyone else’s ads, how will prospects remember you? Advertise your niche, which will help you stand out, and provide useful information on your Web site so prospects will visit again and again throughout their home search.

Respond quickly to e-mails. If you’ve received an e-mail from a prospect, time is of the essence. You must respond quickly and in a professional manner. Remember, the prospect has probably sent e-mails to several other agents, too. The kiss of death is a slow response time; it shows you’re just not that interested, and the prospect will move on to another practitioner.

Be persistent. Your potential clients are probably contacting lots of other practitioners about the listings they've seen online, and they may be overwhelmed with response e-mails. They will most likely go through stages where they contact a lot of people and then when they take a break. If you are persistent in your polite and helpful follow-ups (many practitioners use a drip-marketing campaign for this), you can gain a lot of ground during these fallow periods. It’s often not how great you are but how persistent you are that gets the girl – uh, client. Persistence proves you’re interested, and everyone wants to be wanted.

And endearing. Now that you’re in communication with potential clients, you need to also be engaging and (dare I say it?) fun. Let your personality shine through your e-mail communications. Give them a chance to get to know you better. Offer up white papers to educate them, MP3 recordings on the real estate market or videos of you explaining how the process works and giving them “insider secrets” on how to get the most out of their transaction. The more chances they have to interact with you – even virtually through the web, the closer and more in relationship they feel with you.

Pace yourself. Online customers don’t want to divulge too much about themselves at first. Respect this. Don’t require that they give you their phone number or sign an agreement with you before you supply them with some information to help in their home search. Let them take time to get to know you before you take it to the next level.

But keep moving forward. But there is a balance to that patience. There is a point at which, if you don’t meet, you never will. Be sure conversation continues to move forward in some way, that each communication brings you a step closer to talking on the phone or meeting. Ideally, you’re looking for somewhere between three to seven e-mails before a call or appointment is garnered – depending on the depth of the detail in the e-mails. If there’s really no “chemistry” between you and the prospect, and you get the feeling that he or she isn’t really interested in continuing the relationship, don’t be afraid to move on.

Don’t forget, there’s still a place for old-fashioned courtship. The Web fosters a quick exchange of information, and can be invaluable for consumers and real estate practitioners alike. However, just as in online dating, there’s still a need to meet face-to-face if you’re going to take the relationship to the next level. Granted, online customers have to get to know you and become comfortable with you before they’re willing to give up their anonymity, much less meet for an appointment. In other words, give them a chance to hold your hand before you ask them to marry you.

By Kelle Sparta | July 2008
http://www.realtor.org/rmosales_and_marketing/salescoach/columns/salescoach0708

Are Your Listings Picture Perfect?

2008-07-10T09:40:00.000-07:00

Put an end to boring or unflattering property photos. Here are six quick fixes to common photo challenges.
By Melissa Dittmann Tracey | July 2008

Buyers today want to see photos, and lots of them. But if the snapshots you're taking of your listings are unflattering, lack detail, or are simply too boring, you could actually be doing a disservice.

To get more eyes on your listings, you've got to make sure your photos are showing off properties to their fullest. Photographer Barbara Lane offers photography tips and illustrations for real estate practitioners in her book How to Photograph Interiors When You Barely Know How to Work a Camera (Barbara Lane Photography, 2007). Here’s how she solves the trickiest photo challenges:

1. The problem: Photos are too dark. You have tons of light pouring in from windows, yet your photos look too dark. Sound familiar? When you have your camera in its automatic mode and photograph a room with windows during the day, your camera can get confused and think the room is brighter than it really is. The result? An underexposed, or very dark, image.

Quick fix: First, frame your photo in your viewfinder. Then, move your camera to focus on another part of the room that’s not pointed at a window. Press your camera’s shutter button down halfway to lock the exposure in. Move your camera back into position for the original view. Press the shutter button the rest of the way down and take the picture.

2. The problem: Photos look like UFO sightings. Big, white, blobby hot spots can appear in your images when the reflection of your flash is caught on reflective surfaces, such as windows, mirrors, glass, or metals.

Quick fix: Change the position or shooting angle so that you aren’t facing the reflective surface straight on. Or, if you have enough light, just turn off your flash.

3. The problem: You’re losing details. Buyers looking at your photos should be able to tell crown molding from wallpaper. But blurry photos can leave buyers straining to see a home’s features. The main culprits: not having your camera in focus or not using a tripod in low-light situations.

Quick fix: Before taking a photo, determine the most important element in the scene and make it the focus of your photo. Then, press and hold the shutter button halfway down so that your camera locks its focus on that object. This will help ensure the important features you’re trying to capture are clear.

4. The problem: Photos tend to emphasize flaws in the room. The photos are showing smudges on the windows, disorganized throw pillows, and lopsided lampshades. You don’t want the imperfections to become focal points in your photos.

Quick fix: Be watchful for imperfections. Before you snap, take a close look at what you’re getting. Take a few sample photos to see what's being caught on camera, and then fix any distractions (straighten the lampshades, organize the pillows, etc.) before taking the final round of snapshots.

5. The problem: Your photos are all starting to look the same. You're so attuned to the details that your photos are getting to be a bore, with images that look alike because they're taken from the same angle and are the same size.

Quick fix: Mix it up. Take some horizontal shots and some vertical. Move around the room; go low (kneel down) or high (stand on a chair) to give your images more variety and perspectives. And after you’re finished taking photos, use photo editing software to crop, sharpen, and resize the images so that your listings look picture-perfect.

6. The problem: Your photos are tilted. Walls look like they're leaning and windows are going sideways. It’s a common amateur mistake to tilt the camera while taking a photo — mostly because you don’t realize you’re doing it.

Quick fix: Use a tripod. If that’s not available, manually keep yourself in check: Look inside your camera’s viewfinder and make sure the vertical lines of the walls are parallel to the sides of your viewfinder. You may need to squat lower or stand on stairs or a chair to get the image level.

Market Conditions

2008-07-09T07:02:00.000-07:00

The Fed announced yesterday morning that it would tighten rules on lending to subprime and exotic loan borrowers. What does this mean for the real estate market?

Fed Chairman Ben Bernanke said, "Unfortunately, in the past few years, many mortgage loans were extended that were poorly underwritten or whose terms were inadequately disclosed, particularly in the subprime market. As you know, those poor lending practices have contributed to a sharp increase in mortgage delinquencies and foreclosures. The resulting costs have been felt not only by borrowers but also by entire communities, as foreclosure clusters have caused neighborhoods to deteriorate and reduced municipal tax bases. "

In response to these subprime issues, the Fed is prepared to put a heavy hand on subprime and exotic mortgages -- issuing new lending rules to restrict exotic mortgages and high-cost loans for those with weak credit. Hopefully these efforts, said Bernanke, will "help the financial system return to more normal functioning."

He continued that designing rules for this complex system is not an easy task -- but one which is worth the Fed drawing their attention to.

Published: July 9, 2008

YES THERE IS 100% FINANCING AVAILABLE

2008-06-30T07:14:00.000-07:00

The times that we are currently working through have been a challenge for many of us. I believe the key to success in this market is knowing your market and products better than anyone else.

They say knowledge is power, but I disagree I believe knowledge is potential power. If you have the knowledge but do not utilize it than it is wasted.

Many Realtors do not know all of the mortgage products available today which could help increase their business significantly. If you know that 100% financing is available you may market this demographic. You may not immediately disqualify someone because they do not have a down payment.

I am going to list some programs for 100% financing below, if you have specific questions regarding the programs or need an immediate pre-qual call me at 386-615-7977.

VA loans for eligible veterans, 100% with the seller paying up to 6% of the buyers closing cost. This is a great 0% down option.

FHA purchases. FHA allows for 97.75% financing, but they allow a grant program for the remaining down payment. Companies such as Ameridream and the Nehimaih program assist with the 2.25% down payment and the seller can also contribute to the buyers closing costs. The 2.25% and closings costs can also be from gift money.

USDA will do 100% financing in Flagler county and west of I-95 in Volusia county.
These loans are document intensive and will take up to 45 days to close. But in the right situation this is great option, but there is limited funds available. Once they use the allotted money the program disappears until next year.

These programs have different borrower qualifications, they must be able to prove their income, no stated loans with these programs.

Many programs change with out notice, so call your lender our broker to make sure they are available at the signing of your contracts.

By: Joe Phillips
America's Mortgage Resource
386-615-7977

Property Appraisers Brace for Outcry over Assesments

2008-06-25T07:59:00.000-07:00

By JAMES MILLER Staff Writer

It's only 3 percent, but it's 3 percent that's likely to come as an unwelcome surprise to tens of thousands of Volusia and Flagler counties' homeowners.

When property owners in the two-county area open proposed tax notices in August, an estimated 102,440 of those who benefit from Save Our Homes will get notice that, while their home's market values decreased, it's assessed value went up.

Called "recapture," the phenomenon is the product of a state Department of Revenue rule adopted after voters passed the Save Our Homes cap on annual homestead assessment increases in 1992.

What it means for a tax bill depends on property tax rates.

But, while it affected some homeowners last year, it is expected to affect a much larger number this year, with property appraisers' assessments reflecting decreased values as of Jan. 1.
And appraisers are bracing themselves to hear all about it.

"People don't like it," said Flagler County Property Appraiser Jay Gardner.
He said he had arranged to have photocopies of the rule requiring him to raise assessed values handy in his office to show people that he doesn't have any say in the matter.

"They come in here and say, 'Show me where you're allowed to do this,' " he said. "People don't understand it and don't think it's fair. I'm not judging whether it's fair or not."

Gov. Lawton Chiles and his Cabinet signed off on the rule in 1995.
Basically, it says that Save Our Homes operates in the same way whether values are going up or down.

Save Our Homes caps annual increases in assessed value for properties claimed as primary residences by their owners at 3 percent or the percentage change in the consumer price index, whichever is lower. With the recapture rule, the assessed value will go up by a maximum of 3 percent, even if a property's market value goes down -- until the assessed and market values are the same.

New homesteaders who haven't accumlated any savings under Save Our Homes won't be affected by the provision.
Lee County Property Appraiser Ken Wilkinson, who created Save Our Homes, said its proponents didn't want the rule.

"The concept of recapture never entered anybody's mind in the whole process," he said. "We tried to get them (the governor and Cabinet) to throw out the rule. We lost."
Wilkinson said he expects about 96,000 Lee County homestead-property owners will see assessment increases despite value decreases this year.

Based on first-blush assessment data, Gardner anticipates about 18,860 Flagler County homesteaders will have the same experience. Volusia County Property Appraiser Morgan Gilreath put that county's number at roughly 83,580.
The tax roll value of the 3 percent increase could exceed $400 million in the two counties.
A bill eliminating the provision failed to get through the Legislature this spring.

"People can start contacting their legislators for the 2009 session now, because this recapture creature will raise its ugly head again next year and it is ugly," Gilreath said.
But there is another side to the argument.

Some see it as a balancing out of the benefits that accrued to homestead-property owners as values soared during the early part of the decade.
Combined with tax rates, Save Our Homes has been blamed for shifting a disproportionate share of the property-tax burden to nonhomestead properties like businesses and second homes.

"It doesn't seem unfair to me," said Port Orange homeowner Harry Miller, a retiree from northern Ohio who has benefited from Save Our Homes since 2002.
Miller said he learned of the rule by doing online research after reading a newspaper story about declining values. He conceded his view might not be in the majority.
"Maybe not," he said. "Many people probably want to have the best of both worlds."

From The Daytona Beach News Journal

Property Flipping Rule Suspended

2008-06-20T06:24:00.000-07:00

The Bush administration suspended an old rule that was meant to deter property flipping, this is meant to help eliminate the glut of vacant foreclosed properties.

This rule has only been suspended for the next twelve months with the possibility of a 12 month extension. The new administration will be left to sort things out next year.

The Federal Housing Administration (FHA) will no longer impose a 90 waiting period before foreclosed properties can be sold to receive government-backed loans.

A glut of foreclosed and abandoned homes harms neighborhoods, frustrates home buyers and delays a community's recovery," FHA commissioner Brian Montgomery said in a prepared statement.

Nationwide, 261,255 homes received at least one foreclosure-related filing in May, up 48% from the same month last year, and up 7% from April, foreclosure listing company RealtyTrac Inc. said Friday.

Holding Property in LLC will be Harder

2008-06-19T06:59:00.000-07:00

Many Realtors in the area work with investors who place properties in LLCs. This is going to be a big problem come Aug. 1st, 2008.

Freddie Mac, one of the two largest underwriters of conforming loans, have changed their rules to state that they will no longer refinance a property that has been inside of a Limited Liability Company (LLC) for any time within the past 6 months.

A press release from Freddie Mac in part stated;

"We are revising our requirements for Investment Property Mortgages to reduce the number of financed properties in which a Borrower who owns more than one financed Investment Property may have an individual or joint ownership interest (including the subject property) from 10 to 4. Also, effective for Mortgages with Freddie Mac Settlement Dates on or after August 1, 2008, the Borrower on a cash-out refinance Mortgage must have owned the subject property for at least six months prior to the Note Date of the new refinance Mortgage."

The last statement is the key -- transferring title into your name before applying for a cash-out refinance will be considered a change in ownership and the 6-month trigger will apply. This change won't affect most homeowners, but it has caused a major ripple in the investor community, as has the reduction of properties an investor can own and still get Freddie Mac refinancing.

Fannie Mae is considering this change but has yet to implement. Now is a great time to go to all of your investors that may be considering refinancing in the future and have them lock in prior to Aug.1st with Freddie or get moving before Fannie changes.

Joe Phillips

New Homes: A Silver Lining in Today's Housing Market

2008-06-17T08:20:00.000-07:00

by Dena Kouremetis

While it seems no one has a crystal ball about the housing market, you'd assume it's a bad time to build that dream home – at least until the market comes into some kind of balance.

But the truth is, it may never be a better time to build. The silver lining in all this is that land prices have been and continue to go down, materials prices are competitive and there are a lot of contractors out of work, willing to resort to bargain basement prices for their services.

According to CNN Money, framing lumber is now 18 percent cheaper than it was a year and a half ago, while drywall is selling for 40 percent less. Even land prices are 20 percent lower in some areas due to developers having acquired too much land before the bubble hit.

Thanks to a 34 percent decline in new home starts, you won't have to get on most builders' waiting lists, either.

According northern California-based Kensington Homes' custom homebuilder Jeremy Bernau, just a few years ago when the real estate frenzy was in full bloom, the cost of materials, land and labor was skyrocketing.

Because contractors and trades were so busy, they could charge pretty much anything they wanted for their services. Of course, all that has now changed and a lot of the costs now are reminiscent of ten years ago.

To top it off, many cities and towns are making it easier to cut through the red tape when building a home these days. Building permit and impact fees are adjusting downwards in some areas as a response to changes in the market.

Of course, building a new custom home isn't something to enter into lightly. Building on speculation or to "flip" a property for a profit may not be a safe bet right now.

But if you've been hanging on to land for just the right time to build your dream home to stay in for the long term, it just may be time to dust off those blueprints and get busy getting some bids.

Published: June 17, 2008
http://realtytimes.com/rtpages/20080617_newhomes.htm

Downpayment Gift Money

2008-06-16T06:20:00.000-07:00

This could spell trouble for many who qualify for FHA loans who need the 2.25% downpayment assistance.

Washington Report: Downpayment Gift
by Kenneth R. Harney

It's an issue that's been festering for years, and last week it blew up again: The Bush administration relaunched its campaign to ban “downpayment gift” programs where home sellers make contributions to nonprofit groups that then funnel most of the money to purchasers.

At a National Press Club luncheon, FHA commissioner Brian Montgomery said such programs - which effectively cut downpayments to zero and may artificially inflate sales prices - rack up three times the number of foreclosures and insurance claim losses compared with loans where buyers come up with their own downpayments.

Montgomery noted that “no private mortgage insurance companies back these loans,” and the FHA insurance funds no longer can tolerate their high foreclosure rates. One of every three FHA loans in recent years has carried some form of downpayment gift, often facilitated by large, politically influential nonprofit corporations.

The heads of the two largest downpayment gift providers -- AmeriDream Inc. and Nehemiah Corp. of America -- immediately denounced the proposed ban. Ann Ashburn, president of AmeriDream, which has arranged more than 250,000 gift-assisted loans, said “over 100,000” buyers would be kept out of home ownership in the coming months if HUD gets its way.
Scott Syphax, president and CEO of Nehemiah, said “HUD has the temerity” to relaunch its efforts to ban downpayment gifts despite two federal decisions that blocked the agency's previous regulatory proposal -- issued last October. The court decisions primarily faulted HUD on federal administrative procedural grounds, rather than dealing with the substance of the regulation.

The Congressional Black Caucus, the National Urban League, and the Congressional Hispanic Caucus all have opposed the agency's earlier efforts.

Despite opposition in Congress, however, HUD argues that it has a statutory responsibility to safeguard the integrity of FHA's reserve funds, which it says are being depleted by insurance claims on seller gift-assisted loans that default and must be foreclosed.

Montgomery has warned Congress that the FHA insurance funds, which currently are solvent, will require direct appropriations next year if the losses from the downpayment assistance programs are not cut off.

With newly-authorized loan limits in high cost areas that go as high as $729,750, giant gift-asissted mortgages with effectively no cash investments up front by purchasers are “an unacceptable risk” for the agency, he said.

Where's this all headed? Probably to court again to challenge HUD's proposed regulatory move, and almost certainly back to Congress, which currently is working on an FHA Modernization bill as part of a large housing relief package.

We'll keep you posted as new developments occur.

From: The Realty Times
http://realtytimes.com/rtpages/20080616_washingtonreport.htm

Mortgage rates at 8-month high

2008-06-13T07:34:00.000-07:00

Freddie Mac says 30-year fixed rates rise to 6.32% as Federal Reserve officials express concern over inflation.

NEW YORK (CNNMoney.com) -- Rates on 30-year fixed mortgages have surged nearly a quarter percentage point to an 8-month high on growing concerns about inflation, mortgage backer Freddie Mac said Thursday.

Freddie Mac (FRE, Fortune 500) said 30-year fixed-rate mortgages averaged 6.32% with an average of 0.7 point in the week ending Thursday, up from 6.09% last week. Last year at this time, the 30-year loan averaged 6.74%.
The last time the 30-year fixed rate mortgage was higher was the week ended Oct. 25, when it averaged 6.33%.

"Mortgage rates jumped this week after a number of Federal Reserve officials, most notably Chairman (Ben) Bernanke and Vice Chair (Donald) Kohn, expressed concern over a threat of inflation," said Frank Nothaft, Freddie Mac vice president and chief economist, in a statement.

"This led some market participants to believe that the Fed will raise rates more aggressively over the year than previously thought," Nothaft added.

The 15-year fixed-rate mortgage this week averaged 5.93% with an average 0.6 point, up from last week when it averaged 5.65%. A year ago at this time, the 15-year fixed rate mortgage averaged 6.43%.

The last time the 15-year fixed-rate mortgage was higher was the week ended Oct. 25, when it averaged 5.99%.

"Inflation concerns are still continuing, so that would suggest some upward pressure on interest rates," said Keith Gumbinger, Vice President of HSHAssociates.com, an online publisher of consumer loan information.

Five-year adjustable-rate mortgages (ARMs) averaged 5.70% this week, with an average 0.7 point, up from last week when it averaged 5.51%. A year ago, the 5-year ARM averaged 6.37%.
One-year ARMs averaged 5.09% this week with an average 0.6 point, up from last week when it was 5.06%. At this time last year, the 1-year ARM averaged 5.75%.

Other news in the housing market has been more mixed. The number of homes under contract to be sold rose 6.3% in April, according to National Association of Realtors, showing that buyers were out shopping for bargains.

As interest rates move higher, buyers leave the market, and the lack of demand pushes home prices lower, according to Gumbinger. "The higher interest rates put renewed pressure on home prices," he said.

Single-family home prices dropped 7.7% in the first quarter, according to the National Association of Realtors. The year-over-year drop was the largest decline since the association began reporting on home prices in 1982.

"Serious delinquencies (loans overdue 90 days or more or in foreclosure) for both prime and subprime conventional mortgages nearly doubled between first quarter of 2007 and 2008, according to the Mortgage Bankers Association," added Nothaft.

First Published: June 12, 2008: 10:49 AM EDT

Self Employed Clients

2008-06-10T07:40:00.000-07:00

There are many new loan programs available for your clients in this market, but on the flip side there are many programs that no longer exist. The biggest cut back is on stated income or no income verifiers. These loans are mainly used by self employed individuals who have great income but can not prove it due to good accountanting work. As we know they traditionally write much of their income off of their taxes, so their provable income shows much less then they actually make. This now causes problems qualifying for mortgages and home equity loans. Lenders have become less willing to offer those who can not prove their income mortgages, and when they do the loans are cut back to lessen the lenders risk.

I have listed some of the of the Fannie Mae guidelines relating to non income loans.

The maximum loan to value is 80% on one loan on a primary residence. The reason for this is mortgage insurance companies are not offering MI on stated loans at all. The answer to this problem is to have your client take a line of credit from his bank for the remaining loan to value, or you can have the seller take back a second in the same amount.

example

$220,000 purchase price, borrower is putting down 10% or $22000. The max amount for this stated income loan is 80% or $176,000. That leaves us $22000 short on this transaction. We can have the seller hold a $22000 second for 12 to 24 months or get a line of credit.

Stated income loans are almost if not totally impossible to get on investment properties.
Please understand that lenders change their guideline everyday and what isn't available today may be available tomorrow. It is always in your clients best interest to speak with a mortgage professional to see what they can qualify for.

Pending Home Sales Jump 6.3% in April

2008-06-09T07:43:00.000-07:00

Index of homes under contract rises to the highest level since October, but is 13% lower than last year, Realtor group says.

The number of homes under contract to be sold rose unexpectedly in April as buyers go bargain hunting, according to a report released Monday.

Pending Home Sales Index from the National Association of Realtors (NAR) rose to 88.2 in April, up 6.3% from March's reading of 83 and the highest level since October. The increase defied the consensus estimate of economists polled by Briefing.com, who had expected pending sales to fall by 1%.

This is a great signal for those reluctant buyers to come back into the market.
We all know that the media creates a lot of the momentum in our industry and I see this as a huge positive for all of us.

Time to start making the donuts again. Go get yourself a piece of the pie.

The Market is Turning

2008-06-04T07:47:00.000-07:00

April Home sales have come out for the Daytona Beach area. There was a small 27 sale decrease from last year. The market is turning and buyers are starting to feel as if the bottom is here. Values are down and rates are still at almost all time lows, which is a great situation for new buyers coming into the market.
Below are the April numbers,

........April 2008 ..........April 2007 ........% change

SFR...... .556..................... 602 .....................-8%

condos... 121..................... 102..................... 19%

Total..... 677...................... 704.................. -3.9%

How to Make a Short Sale

2008-06-04T06:18:00.000-07:00

Arizona broker Bob Stephens of West USA Realty has some suggestions:

Disclose, disclose, disclose.
Stephens says the fact that a seller is short must be disclosed to the buyer. If both agents want the transaction to go smoothly, it's wise to get the seller's lender on board before the purchase contract is written.
One way to do that is for the title company or attorney that will be handling the transaction to communicate with the loss mitigation department of the seller's lender to start the process with a "buyer to come" notification.
To get the ball rolling, the seller must give permission to the bank to communicate with the listing and selling brokers.

Document, document, document.
The seller must prove hardship and document why he or she cannot pay what's owed to the lender including W-2s, bank statements, hardship letter, and other proof of inability to pay.
The seller must realize by reading and signing the short sale addendum to the sales contract that the short sale doesn't absolve them of all responsibility for the debt. Short sales may affect their credit scores, and some lenders may not forgive the entire debt, requiring the seller to pay the difference as a personal debt. FHA or VA loans may also require repayment in full. There may also be tax consequences -- the IRS requires a 1099 from the forgiving bank so the amount will be on record and must be declared by the seller at tax time.

Try, try, try.
In short sales, the seller nets zero, because all the proceeds go the seller's bank. Their incentive is to get out from under increasing debt.
Lenders don't want to become homeowners, and if they can avoid foreclosure, they might mitigate their losses. However, the short sale won't happen unless the lender releases the lien and the buyer can have clear title in order to place a new lien on the house. Therefore, all liens must be found and paid, including HOA fees, second liens, equity lines of credit, and so forth, so no other lien holder can come in and spoil the deal.
Says Stephens, "There are misconceptions that the sellers lender seems to be the only one that has any power. Yes, of course they have some but then so does the buyer's lender. The buyers lender makes loans as a business to make money. The sellers lender wants to make the deal so they don’t have the great expense of foreclosure. Too many foreclosures and they will have a real problem getting their loans insured."

That's why short sales could be the short cut to getting many markets back on track.

How to Get More From Your Prospecting

2008-06-02T10:13:00.000-07:00

Real estate professionals need to break out of the Prospecting-Closing-Prospecting cycle — which involves aggressively prospecting until enough deals are in the pipeline, focusing on these transactions until they close, and then returning to heavy prospecting. The cycle can be broken with technique, touch, and time, says veteran real estate marketing and management expert Joe Cooke. As far as technique, he says it is necessary for practitioners to implement data management systems that are easy to use, can be moved from one brokerage to another, and have the ability to send mass e-mails without triggering spam blockers. As for touch, he underscores the importance of categorizing prospects and following up accordingly. The prospects who require the most frequent attention are those who make regular purchases or continually make referrals. Practitioners should then concentrate on qualified prospects who need a little more time before making a move, sending them market updates, newsletters, and other information on a regular basis. Finally, they should devote the least amount of time to prospects with limited interest in their services, offering quarterly market updates and mass mailings only. With regard to time, Cooke says agents must make prospecting a high priority every day in order to create a steady — and likely increasing — stream of income.

Source: RISMedia, Joe Cooke (05/29/08)

Mortgage Rates Rise

2008-05-29T09:32:00.000-07:00

(CNNMoney.com) -- Rates on 30-year mortgages were pushed up this week above 6 percent amid growing concerns about inflation, mortgage backer Freddie Mac said Thursday.
Freddie Mac said 30-year fixed-rate mortgages averaged 6.08% with an average of 0.6 points, up from 5.98% last week. Last year at this time, the 30-year loan averaged 6.42%.
"Mortgage rates drifted up this week over market concerns that the Federal Reserve Board may raise short-term rates later this year," said Frank Nothaft, Freddie Mac vice president and chief economist, in a statement.
"Indeed," Nothaft added, "market inflation expectations increased over the last few weeks and the federal funds futures market now has a 25 basis point rate hike priced in by the end of the year."

From www.cnnmoney.com

100% loans for your buyers

2008-05-27T07:20:00.000-07:00

HELP IS OUT THERE.

This tough market has seen a huge drop in loans at 100% of the value. Most of these loans were sub prime and we all know those companies are out of business.

But thanks to FHA and VA these loans are still possible. VA allows up to 100% financing along with the seller contributing 6% to the closing costs. FHA allows 97.75% with 6% seller concessions. FHA does allow the remaining 2.25% to come from a non profit organization like the Nehemia program. Total combined loan comes out to that 100%.

There are a few parameters on these loans that you have to be aware of. The first is they are full documentation loans only, borrowers must prove their income, no "stated" (no Income verification) loans. The property must be their primary residence and the need to have 2 years on the job. An important key is credit score is not a factor, so even if the client has fair credit there is a good possibility they will be approved.

There is also the "my community" program which allows 95% in this area. The rates are very good but the client does have to qualify credit wise and they can not make more then $53,000. This program is great for first time home buyers.

We offer all of these programs, so call us for your immediate pre-approval.

Existing Home Sales

2008-05-23T07:53:00.000-07:00

from The Wall Street Journal
May 23, 2008

Existing-home sales fell for a second month in a row during April, while inventories surged. Home resales fell to a 4.89 million annual rate, a 1.0% decrease from March's revised 4.94 million annual pace, the National Association of Realtors said. The median home price was $202,300 in April, up from $200,100 in March but down 8.0% from $219,900 in April 2007.
For more information, see:
http://online.wsj.com/article/SB121154951554417233.html?mod=djemalertNEW

Fresh Ideas for Selling in a Tough Market

2008-05-15T06:24:00.000-07:00

I have had many conversations with local Realtors about what they are doing to increase their sales and their exposure to new buyers and sellers. I have listed my favorites.

1) Hold a monthly wine and cheese party that the theme focuses on a different country each month which can be held at your listed homes.

2)Market your listings 24/7 on free sites such as craigslist.org. and Postlets.com. Many agents post their open houses on some of these sites as well.

3)Every service club and Chamber of Commerce on the planet needs speakers. In fact, most Lions, Rotary and Kiwanis clubs need 52 speakers a year. It's an audition for dozens of new customers and yet many clubs struggle to find a speaker each week.

4) Seminars
To reach the powerful baby-boomer segment of buyers and sellers — made up of people 44-62 years old — conduct seminars on topics such as self-directed IRAs, tax implications of real estate sales, and second homes. There are many local professionals that you can partner with that specialize in these topics who would love to have an audience to speak to.

Think outside the box and try every idea you come up with. You will never know what will help your business unless you attempt it. There are no bad ideas and at the very least you are marketing your name.

Quote of the Day,

Setting goals is the first step in turning the invisible into visible.
Tony Robbins

Why use a realtor?

2008-05-14T08:39:00.000-07:00

This is a great article you can show your potential clients.

All real estate licensees are not the same. Only real estate licensees who are members of the NATIONAL ASSOCIATION OF REALTORS® are properly called REALTORS®. They proudly display the REALTOR "®" logo on the business card or other marketing and sales literature. REALTORS® are committed to treat all parties to a transaction honestly. REALTORS® subscribe to a strict code of ethics and are expected to maintain a higher level of knowledge of the process of buying and selling real estate. An independent survey reports that 84% of home buyers would use the same REALTOR® again.
Real estate transactions involve one of the biggest financial investments most people experience in their lifetime. Transactions today usually exceed $100,000. If you had a $100,000 income tax problem, would you attempt to deal with it without the help of a CPA? If you had a $100,000 legal question, would you deal with it without the help of an attorney? Considering the small upside cost and the large downside risk, it would be foolish to consider a deal in real estate without the professional assistance of a REALTOR®.
But if you're still not convinced of the value of a REALTOR®, here are a dozen more reasons to use one:
1. Your REALTOR® can help you determine your buying power -- that is, your financial reserves plus your borrowing capacity. If you give a REALTOR® some basic information about your available savings, income and current debt, he or she can refer you to lenders best qualified to help you. Most lenders -- banks and mortgage companies -- offer limited choices.
2. Your REALTOR® has many resources to assist you in your home search. Sometimes the property you are seeking is available but not actively advertised in the market, and it will take some investigation by your agent to find all available properties.
3. Your REALTOR® can assist you in the selection process by providing objective information about each property. Agents who are REALTORS® have access to a variety of informational resources. REALTORS® can provide local community information on utilities, zoning. schools, etc. There are two things you'll want to know. First, will the property provide the environment I want for a home or investment? Second, will the property have resale value when I am ready to sell?
4. Your REALTOR® can help you negotiate. There are myriad negotiating factors, including but not limited to price, financing, terms, date of possession and often the inclusion or exclusion of repairs and furnishings or equipment. The purchase agreement should provide a period of time for you to complete appropriate inspections and investigations of the property before you are bound to complete the purchase. Your agent can advise you as to which investigations and inspections are recommended or required.
5. Your REALTOR® provides due diligence during the evaluation of the property. Depending on the area and property, this could include inspections for termites, dry rot, asbestos, faulty structure, roof condition, septic tank and well tests, just to name a few. Your REALTOR® can assist you in finding qualified responsible professionals to do most of these investigations and provide you with written reports. You will also want to see a preliminary report on the title of the property. Title indicates ownership of property and can be mired in confusing status of past owners or rights of access. The title to most properties will have some limitations; for example, easements (access rights) for utilities. Your REALTOR®, title company or attorney can help you resolve issues that might cause problems at a later date.
6. Your REALTOR® can help you in understanding different financing options and in identifying qualified lenders.
7. Your REALTOR® can guide you through the closing process and make sure everything flows together smoothly.
8. When selling your home, your REALTOR® can give you up-to-date information on what is happening in the marketplace and the price, financing, terms and condition of competing properties. These are key factors in getting your property sold at the best price, quickly and with minimum hassle.
9. Your REALTOR® markets your property to other real estate agents and the public. Often, your REALTOR® can recommend repairs or cosmetic work that will significantly enhance the salability of your property. Your REALTOR® markets your property to other real estate agents and the public. In many markets across the country, over 50% of real estate sales are cooperative sales; that is, a real estate agent other than yours brings in the buyer. Your REALTOR® acts as the marketing coordinator, disbursing information about your property to other real estate agents through a Multiple Listing Service or other cooperative marketing networks, open houses for agents, etc. The REALTOR® Code of Ethics requires REALTORS® to utilize these cooperative relationships when they benefit their clients.
10. Your REALTOR® will know when, where and how to advertise your property. There is a misconception that advertising sells real estate. The NATIONAL ASSOCIATION OF REALTORS® studies show that 82% of real estate sales are the result of agent contacts through previous clients, referrals, friends, family and personal contacts. When a property is marketed with the help of your REALTOR®, you do not have to allow strangers into your home. Your REALTOR® will generally prescreen and accompany qualified prospects through your property.
11. Your REALTOR® can help you objectively evaluate every buyer's proposal without compromising your marketing position. This initial agreement is only the beginning of a process of appraisals, inspections and financing -- a lot of possible pitfalls. Your REALTOR® can help you write a legally binding, win-win agreement that will be more likely to make it through the process.
12. Your REALTOR® can help close the sale of your home. Between the initial sales agreement and closing (or settlement), questions may arise. For example, unexpected repairs are required to obtain financing or a cloud in the title is discovered. The required paperwork alone is overwhelming for most sellers. Your REALTOR® is the best person to objectively help you resolve these issues and move the transaction to closing (or settlement).

From www.Realtor.com

5 New Rules for Home Buyers

2008-05-12T16:30:00.000-07:00

(Money Magazine) -- There's no telling how long the housing crisis will drag on. Here's what you need to know before you start shopping in a rocky market.

Rule 1: You can't time the bottom

Face it: The house you buy today will more than likely be worth less next year. That could get you thinking about trying to time the bottom. Resist. It's harder to do than you think, and this is the best buyers have had it in two decades, with inventories up and mortgage rates low.

Pace yourself, find the perfect place and drive a hard bargain: Ignore the seller's asking price and bid 10% below what comparable homes are selling for. If the seller balks, move on. Remember that if you're trading up, your home could sit. So sell before you buy.

Rule 2: One reason to buy now - mortgage rates

Homes are plentiful and will remain so, but financing will be getting more expensive. True, the Federal Reserve has slashed interest rates, but fixed mortgages don't directly follow the Fed. They reflect the bond market's expectations about inflation, which remains a concern. The 30-year, now at 6.1%, will likely reach mid-6% by December and 7% in 2009, says Celia Chen of Moody's Economy.com.

That means there could be a penalty for waiting to buy even if prices fall more. Today a $250,000 loan would set you back $1,500 a month. At 7%, a $1,500 payment gets you only a $225,000 mortgage. As for variable-rate loans, the spread between conforming ARMs and fixed loans is too narrow to do you much good.

Rule 3: Another reason to buy - rates on big mortgages

Mortgages in amounts greater than $417,000 - the limit for buying by federally sponsored mortgage agencies - usually run a fifth of a percentage point above conventional products. But investors are shunning jumbos, which now average 7.2% and are unlikely to drop much this year, according to HSH Associates.

Certain jumbo borrowers could get relief, however. A new law allows Freddie Mac and Fannie Mae to buy loans as large as $729,750 in 71 high-priced areas. So far "jumbo conforming" loans average 6.6%. The program has gotten off to a slow start; you'll need to shop around. And unless Congress acts, this bargain will disappear at year-end.

Rule 4: Don't buy cheap; buy good schools

By now you've heard from somebody who knows somebody who got a great deal on a foreclosed property. But when you buy a house, you're also buying into a neighborhood. And foreclosures tend to be bunched in areas where residents and speculators alike took out exotic mortgages to get into homes they subsequently found they couldn't afford. That's not a recipe for stability. Prices and quality of life could both decline further.

Similarly, avoid developments that popped up in the past few years. They too likely have a lot of owners with risky loans and little equity, says Mike Larson of Weiss Research. Instead, go for areas with highly rated schools. They generally fare better during downturns, and that pattern is holding today, according to a recent study by real estate site Trulia.com.

Rule 5: Make sure your agent has your interest at heart

The real estate game has a built-in conflict of interest, since the listing agent and your agent both get paid by the seller. And these days more sellers are offering extra cash to buyer's agents.

So make sure you're not being steered to a house that's better for your agent than for you. Agree up front on his commission (typically 3%) and that any extra payments will go to you, says Jon Boyd, past president of a buyer's agent trade group.

Latest Economic Indicators

2008-05-12T07:15:00.000-07:00

The Existing Home Sales and Median Home Price are based on closings for single family homes, town homes, condominiums, and co-ops. The Pending Home Sales Index is a leading indicator for the housing market based on contracts signed for existing homes.

Existing Home Sales (in millions)
Mar08 4.93
Feb08 5.03
% change -2
Mar07 6.11

Pending Home Sales Index
Feb08 84.6
Jan08 86.2
%change -1.9
Feb07 107.6

Median Home Price
Mar08 $200,700
Mar07 $217,400
%change -7.7

The Value of Successful Home Staging

2008-05-09T07:55:00.000-07:00

Have you ever walked into a beautifully decorated model home and been captivated by it? Did you find yourself dreaming of bathing in that spa-like bathroom, cooking meals in the gourmet kitchen or curling up with a book in that luxurious reading nook? If so, then you have been the successful target of the secret weapon called staging.

As a real estate agent, you know that staging your real estate listings will result in a faster and more profitable sale, but who can you trust to manage this important process for you.

You want the best possible price for your home, but do not want to pay more than your return to achieve this. You need expert and objective home staging guidance that comes from experience and a highly trained eye in order to compete in a buyers market. What you seek is the experience of an Accredited Staging ProfessionalTM (ASPTM).

Staging can entail simple tasks like removing clutter. Clutter eats equity. Stagers aren't maids or house-cleaners; they don't do repairs or paint. Rather they create a neutral, harmonious, spacious, and beautiful environment. They often set tables for dinner so that a prospective buyer can envision themselves in the property having a family dinner.

Think of staging like detailing a car. A smart auto seller would detail a car before selling it to add value. That's precisely what staging can do for a house. As a REALTOR®, I think that staging helps; it makes the property stand out. In turn, good staging can determine which properties sell fast and which do not. It is no longer a market where staging helps the property sell for more. In today's market, it enables the property to have more potential of selling at all. It's a buyer's market, so make your home stand out by creating a sophisticated ambiance.

While some sellers may be hesitant to spend more money on staging in a down market, this is the winning way to get a property sold; and often for a higher asking price.

Professional stagers can see your house as buyers will, and they'll set the scene so that buyers can imagine living there. They're likely to simplify or streamline the furniture in a room for better traffic flow and to enhance its spaciousness. They may neutralize a too-personal color scheme or add touches of color or accessories where needed. In vacant homes that feel cold and lack visual landmarks, stagers often bring in rental furniture to create warmth. This helps Buyers mentally move in and feel that when it's time for them to move in, thy will be able to kick back and relax.

REALTORS® and sellers can hire stagers by the hour or the room. Homeowners typically pay from $200 to $3,000 depending on the level of service required. But the pay-off in time saved and higher sales price can be nice. If all your listings looked like model homes, do you think you'd have an easier time selling them? And do you think they might command a higher selling price? Statistics show this to be true.

Buying a house is largely an emotional decision because people are not just purchasing a home; they are buying a dream ... a lifestyle. If you can help them with their vision so they don't have to rely completely on their imagination, you positively impact how they feel in the home, which will be reflected in the sales price and number of offers you receive. All human beings want comfort, excitement, prestige and love, and all these are at work in the psychology of the home purchase. Effective staging maximizes those feelings, creating an atmosphere that makes people want to linger and imagine themselves living in the space. Ultimately, staging creates a home the prospective buyer will not be able to live without.

People today have busy lives, they want to walk in and look at a home and say, "This is mine. I can move into this home without doing anything."

by Debra Allen
Realty Times

Weekly Mortgage Rates Remain Virtually Unchanged

2008-05-09T07:40:00.000-07:00

Average 30-year Fixed-Rate Mortgage over 52 weeks

Last Week
30 year fixed 6.16%
Last Year
30 Year Fixed 6.06%

"Despite a weak housing market, mortgage rates remained almost unchanged this week based on better-than-expected economic data releases that indicated the economy still has some staying power," said Frank Nothaft, Freddie Mac vice president and chief economist.

"Job losses lessened in April and conditions in both the manufacturing and service industry outperformed market forecasts. Worker productivity also rose in the first quarter as increases in labor costs diminished.

"The housing market is still struggling amid falling house prices and stricter lending standards. Coupled with higher delinquency and foreclosure rates, a smaller share of families own their homes this year.

“The national homeownership rate held at 67.8 percent in the first quarter of 2008, down from its recent peak of 69.0 percent in the third quarter of 2006 and was the lowest rate since 67.6 percent in the second quarter of 2002, according to the Census Bureau."

From the mortgage ledger

An End to the Economy's Nose Dive

2008-05-08T10:14:00.000-07:00

Latest Market Update
May 08, 2008 -- 12:00 ET

[BRIEFING.COM] Stocks have traded in relatively choppy fashion for much of the morning as buying lacks conviction. Still, advancing names have a marginal advantage over decliners on the NYSE and in the S&P 500.

Sentiment in the... More

What if they gave a recession and nobody came?

That's the question that government, private economists and all of us at home are going to have to mull this summer, as an unprecedented flood of monetary and fiscal stimuli, and renewed global demand for our agricultural and industrial exports, appear to have yanked the U.S. economy out of a nose dive and landed it for a slow roll on the tarmac with just a few bumps and bruises.

This might not be everyone's idea of a perfect soft landing for an economy that was screaming along at 5% annual growth during the days of easy credit three years ago, but it's also not the crash that bears have been fearing.

One of the nation's top independent economists reported this week that his data show the United States is now on track for at least 1% annualized economic growth through the first half of 2009, with no three-month spans forecast in the red.

That economist, Ed Hyman, one of the few number crunchers to whom portfolio managers actually pay attention, acknowledges that his finding is surprising, considering he alerted clients at the start of the year to go on "high alert" for recession.

Yet the founder and leader of ISI Group in New York called off his alert Wednesday because he believes that improving credit markets, powerful federal policy action and a massive wave of investments from the global glut of commodity money will bolster U.S. corporate and consumer balance sheets enough to allow industry to muddle through at least the next 18 months without serious disruption.

Rebates and rebounds

If things do go better than expected, then you may wish to buy low-price energy stocks to take advantage, as they have the greatest built-in growth prospects. I know this idea flies in the face of the conventional wisdom that you'd want to avoid stocks at times like these, or buy beaten-down retailers and banks, but that just goes to show how topsy-turvy the link between stocks and economic growth is.

Consider that gross domestic product grew at a fast 4% annualized rate in 1994 while the broad market sank 2%. A year later, GDP growth plunged to 2%, but stocks advanced 34%. Weird, but true.

More from MSN Money

I'll give you a list of my top small-capitalization and midcap picks in a moment, but first let's explore what's happening under the surface of this crazy economy.

One big upside surprise could come from a source everyone has already discounted: tax rebates. Hyman thinks the effect may be astounding, lifting disposable income for consumers by 16% quarter over quarter. And there's a little-known nuance in the rebate code that allows for $50 billion in tax savings for corporations from accelerated depreciations, which will also likely go straight to U.S. industrial suppliers such as Emerson Electric (EMR, news, msgs) and Ametek (AME, news, msgs).

The jobs market may be in better shape than most suspect, as well. Hyman looks at household employment, rather than figures from the Bureau of Labor Statistics, every month because household employment better captures the swelling work forces of small business. By this measure, monthly employment increases over the past year have averaged 97,000 and are well up from their low of 3,000 in December.

Meanwhile, the four-week average of unemployment claims is down, while indexes kept by independent companies Automatic Data Processing and Monster both ticked up in April, in defiance of the weakness displayed by the government's data-gathering process.

Today's state of the U.S. economy may not seem apocalyptic, but a slow and steady economic beating could prove disastrous, MSN Money's Jim Jubak says.

Inflation trends may help, too. Despite what you sense from your own life about higher food and energy costs, the main input for inflation is wages, and they are flat at best. Inflation rarely rises at times of economic softness, and though we are hearing a lot about stagflation, a rare condition unlikely to occur while the costs of the biggest things on which we spend money -- homes and cars -- are falling.

Some aggressive companies such as Starbucks (SBUX, news, msgs) and McDonald's (MCD, news, msgs) are even cutting prices selectively in an effort to grow market share. China also remains a deflationary force; Hyman notes that it is stepping up low-cost production of high-tech medical devices such as MRI machines for export.

Meanwhile, the amount of money pouring into the economy from U.S. and overseas corporate investments is staggering. Hyman provided a list of capital investment plans announced just in the past week that includes $8.6 billion by Russian mining giant Uranium Holdings, $1.6 billion by Bristol Myers (BMY, news, msgs), $2 billion by British American Tobacco (BTAFF, news, msgs), $1.7 billion by Stone Energy (SGY, news, msgs) and $1.9 billion by giant German copper smelter Norddeutsche Affinerie (NDEAF, news, msgs).

19 Positive Outcomes from this Tough Market

2008-05-07T06:09:00.000-07:00

This is a great article from the Realty Times

Twenty Positive Outcomes from This Tough Market
by Walter Sanford

1. If you would start setting up some pro-active seller lead generation systems, you would find that getting listings is easier. Sellers want professionals to sell their homes, and non-professionals seldom make it through a market like this. Sellers look less at discounted real estate services to solve their needs. You will find it takes less energy to capture a good listing. As you increase you personal inventory, you can increase showings, contracts from cooperative agents, buyer phone calls, and more double-end possibilities. I challenge you to start one new seller lead generation system today.

2. You have now found out that it is nice to have something set aside for a rainy day. If buyers who want to steal something and sellers who are no longer happy does not tip you off that the old adage of "Make hay while the sun shines" is not true, I give up!

I challenge you to open up a money market fund at someplace like ING or Fidelity. Have your broker take 10 percent of every commission check and wire it to your account. Even though it sounds scary, you will never miss it! Also, have one of the two companies (or another like them) take $10 to $1,000 out of your account every month. You will not miss it either!

3. I bet this market has proven to you that debt is a drag. Secured debt is alright if the security is making enough money to pay for the debt, but all other kinds of debt is a drag! I challenge you to have a plan of reduction. Implement a plan that entails paying cash for items. Get along longer with what you already have. Stop trying to keep up with the Joneses, because they’re in debt, too! Make pay downs on the balance on a regular basis. Get a board game for the family and figure out to have more fun while spending less. Start with the highest interest rate item first. Negotiate others down.

4. Who needs stuff? I just had dinner last night with 70 year old plus friends. They have lots of stuff. He said, “Every year you are alive, you like stuff less.” I challenge you to learn eBay, take stuff to a local auction, or the re-sale shops. On the items that do not sell, give it to the church or less advantaged. Take the money from the items you do sell, and apply that money to debt or savings account.

5. Discover how much faith can play in your life. If the Lord can give his only begotten Son for your sins, just think how easy it could be for Him to help you achieve your goals? I challenge you to time block some time for church on Sunday morning.

6. It's hard to read the bad news in the press and then hang out with negative people! Start believing that you are a reflection of who you hang out with. REALTORS® will never buy or sell through you so if you hang out with them, they better be uplifting! Get out of the energy-draining relationships. My life never truly turned around until I put all bad and energy-sucking people nicely out of my life. I challenge you not to engage with negativity by filling your time with positives and not returning the calls of the negatives.

7. In tough times, time becomes more valuable. Some of your communication habits have to change. I challenge you urge cooperative agents to leave messages on your voice mail, if it is not your phone answering time. They need to leave a complete message so you can work on the challenge and propose a solution without having to talk to them in person. Many a deal gets put together with effective voice mail messages, never talking to the other person.

Second, when you and your client need information, try a three-way call. Hit the hold, dial the “answer man's” number, and connect all three. It will impress your client, answer further questions, and eliminate telephone tag.

I challenge you to handle the phone better by time-blocking a special two hours a day for return calls, incoming calls, incoming and outgoing E-mails and snail mail. Then I challenge you to start taming the cooperative calls and starting three-way phone calls to handle the challenge immediately.

8. On every bill you pay, I want you to ask, “How do I reduce it, eliminate it, get someone else to pay for it, or a combination?” I challenge you to stop the insanity. The internet took over print years ago. If you are going to do print, it better be creative and contrary to the competition. When everyone else advertises their sellers, why can't you advertise your buyers? If it is not bringing results, try to improve it. If it still has no return, eliminate it. I challenge you to look very carefully at your expenses. Dad said that the fastest way to make more money is to raise your prices and stop spending.

9. Many buyers and sellers have goals that are not being achieved by many REALTORS®. Charge them more if you know how to achieve their goals. This involves asking more questions to better determine their needs. The answers to these questions will determine if they are realistic and motivated enough to participate in a process that is in their own best interest. Next, prepare a listing presentation that meets their core needs.

I challenge you to ask for more commission than the competition is requesting. People are willing to pay for professionals who achieve their goals. If you are one these professionals who achieve goals, ask for more than the “average” agents in your area, but you had better be able to prove you are worth the difference! Now is the time to do it!

10. This market should force you to pay attention to the numbers. How many listings are there compared to 12 and 24 months ago? How long do they take to sell and at what list-to-sale ratio? How does that compare to your list-to-sale ratio? How does that compare to the numbers of the agent that you are about to go up against?

It is all about success. The numbers prove success. People pay for success. People hang out with success. I challenge you to know the numbers that express your market -- your competition’s numbers and your numbers. If they compare well, talk about them in this market and people will take notice.

11. I challenge you to pay more attention to the most profitable aspects of your brokerage business. If there are fewer transactions, it is time to capture the “prime” ones. A double-sided transaction allows a double commission with fewer delays. You know the needs of both parties, and there are less gambits. Maximize their occurrence!

Have a system that turns on the minute you get the listing “go ahead.” As you walk out, take a sign out of your trunk and put it up. Call your assistant or a third-party vendor to get the new listing cards out in twenty-four hours. Delay the publishing of the listing in the MLS for about a week, but please do that as legally and ethically as possible! Contact your database with a quick E-mail about the opportunity. You should also hold the one and only open house that Sunday. Do everything you can do to use the excitement of a new listing to get your own buyer. I challenge you to go back to your most profitable, past transactions and design systems to experience them more often.

12. You are dealing with your old friends. You remember them -- the top people, the survivors, the ones who were around during the last slowdown. The new faces have proven business plans. I challenge you to start leveraging their experience.

One of the best things that I did in my area during the last tough market was to put my “Power Players Group” together. I invited them to my home for a barbeque and proposed that they all send my assistant an E-mail with their number one best buyer and number one best seller, based on fantastic motivation. I wanted them to include with the one person and one property, all the information that I would need to find them the right buyer/seller.

The leads were sent to me on Thursday. I assembled them and sent them out to the members on Friday. If you did not send leads in, you did not get the list. Since it was my idea, my assistant, and my system -- I got a twenty-four hour head start. I put a transaction together every month from that information and so did most of the group. I challenge you to form some strange alliances!

13. A normal market means a normal life. Sellers are only selling if they need to sell. Buyers are only buying if they need to buy and are getting a perceived value. There is no more emotional buying, speculation, and using your home for estate-building by flipping every two years. This means you can work a plan as discussed above. You can time-block your schedule. You can be less responsive to “urgent” and more responsive to “important.”

There are fewer reasons to buy and sell when prices are not going up as fast, going sideways, or down. There are fewer reasons to jump up like a Pop-Tart to handle non-scheduled emergencies. Work the proven plans which produce more listings, make listing presentations, negotiate contracts, and show properties to qualified buyers -- all scheduled in the correct balance every day. 14. You need more marketing time. If a seller thinks that limiting your listing period will motivate you, please explain the opposite is true because of human nature. You, the agent, have to present the resources upfront. You want realistic expectations to pay back your overhead and make a profit. Please sell them on your time-blocked status reports, and go for a listing period that allows extra time for the buyers to go through the excess inventory. In most areas, a year listing is now the goal. I challenge you to get the time you need to make a profit.

15. Get out and see the inventory again. Yeah, I know -- what a waste of time. However, if you have an efficient office tour or a tour put on by the MLS, it is now time to start going on them again. You see, the new listings start leading the trend down, therefore allowing you to pay less attention to the comps and more attention to the listings that are setting the new low prices. When I went on tour in a tough market, the outstanding values were the price setters, not the sales from 6 months ago. If you have to talk to REALTORS®, then maybe say, “Hi” to them on tour. I challenge you to figure out how to efficiently see the new listings in your market area about once a week. Stay away from “Sam Slow’s” listings, because he never gets it right. See what the killers are listing, what they offer, and how they are pricing.

16. There are fewer agents out there. Start wearing a name tag again. Put up one of those stupid magnetic signs on your car. There are fewer agents, even fewer who are not hiding in a bunker. Start showing your bright disposition! When asked “How is real estate going?” you can say “My clients are making a fortune. What are your plans in the next twenty-four months?”

17. You will never be poor again. You see the people having trouble now have never have seen a tough market. They sold for the last ten years. They thought that buyers bugged you to buy and sellers asked you to sell. They thought you did not need down payments or credit ratings. They thought that real estate always goes up. They scoffed when you said, “Be careful.” They actually believed that it was easy to make a six figure income in real estate. They bought their own home with no money down and got an interest only loan. They used the money. They saved on their loan and down payment to buy a great car(s) and beat the Joneses.

The ones who are making it have been through tough times before. Whatever does not kill you, will make you stronger. If you listen to me carefully and do the stuff you should be doing, you will make it! If you make it through this market, you will be set for life, because it does not get much harder than this. I challenge you to prosper now as you set yourself up for life.

18. You will be convinced that buyers are the least profitable segment of market, no matter what market. I challenge you to stop listening to non-agents selling technology that solicits buyers as your main income lead generator.

19. You will get to the point faster. “Either you want to buy or sell, or please call someone else.” You will be able to say that nicely with no one thinking you are full of yourself. I challenge you to start that exercise today.

Longer closing times

2008-05-06T09:20:00.000-07:00

We have seen much longer closing times from lenders. We all think that since business is down the closing times should be faster, that the lenders should be knocking loans out left and right. The things we all forget are that since the down turn many lenders have greatly reduced their staff and of course guidelines have tightened up significantly.

A big key to delays is the increase in FHA loans. Since "subprime" is gone the number of FHA loans being submitted to lenders has skyrocketed. They can't handle the huge increase with the reduction in staff that has occurred. Also, many brokers who are new to doing FHA loans do not know the guidelines and all of the additional documentation needed to submit these loans properly. This lack of knowledge just increases the delays because underwriters have to sort through these bad files, basically wasting time on loans that should never have been submitted.

The average "approval" time for a submitted FHA loan is approximately 8 days. That means that the loan package sits at the lender for up to 8 days before anyone looks at it. Once the approval has been sent, they are taking upwards of 4 days to clear any outstanding conditions. As you can clearly see that's 12 days of down time. These days are added onto the "normal" closing times.

The way to expedite closing times is to make sure the broker/lender has FHA experience, make sure you know the lenders time frame on approvals, make sure all expectations are communicated up front with the broker/lender and all parties involved.

These delays are based on FHA loans, many conforming non FHA loans are taking much less time to close. If you have a borrower who is putting down 20% on a purchase that loan should close in 2 weeks, as long as no unforseen problems arise. Which we all know never happens.