By Jerry W. Jackson
RISMEDIA, January 16, 2009-(MCT)-Every day, more people slip into the foreclosure whirlpool and spiral downward toward the day they may have to leave their home. What should you do if you are on the verge of getting a foreclosure notice?
First and foremost, industry specialists say, you should resist the natural human tendency to freeze up. Face the issue head on and prepare for days and weeks of making phone calls and corresponding with people who may be able to help.“Don’t assume it’s too late to act,” said Ralph Roberts, a consumer advocate in Michigan and co-author of Foreclosure Self-Defense for Dummies. “As long as you are residing in the home, you probably have some opportunity to keep your home.”
Roberts, a Realtor who lost his home to foreclosure back in the 1970s, said people facing foreclosure have more avenues to pursue than they might realize-certainly more than the typical “pay up or move out” that many people think is their only choice.
Potential solutions include:
- Negotiating a modification of the loan.
- Refinancing the loan.
- Listing the home through an agent for a possible “short sale.”
- Selling the home to an investor on your own.
- Declaring bankruptcy.
Short sales-in which the lender agrees to take less than is owed on the home, writing off some or all of the loss to avoid the expense of a foreclosure-typically are handled by real estate agents, which at least takes some of the pressure off of a harried homeowner. Many professional real estate agents are working more short sales these days and have buyers lined up looking for bargains, though the process can be slow and frustrating.
“The banks are just not moving fast enough. They are sitting on these, and it’s outrageous. Something’s got to be done about that” at the national level, said Ernst Urbainczyk, a veteran agent with Keller Williams Heritage Realty in Lake Mary, Fla. Lenders may also reject short-sale offers, sometimes leaving the seller with little or no time to prevent the foreclosure.
Matthew Englett of Kaufman Englett & Lynd, an Altamonte Springs, Fla., law firm that specializes in foreclosure defense, real estate litigation and bankruptcy, said there are usually several different defenses a borrower can take to dispute a foreclosure, including “wrongful or misleading conduct on behalf of the lender or its agents.”
As the case moves forward, the law firm negotiates with the lender to try to get it to modify the mortgage with a lower interest rate and loan amount.
“In many cases, that would mean the principal would have to be reduced,” Englett said. The law firm charges a flat fee ranging from $1,750 to $2,500 for its foreclosure-defense cases.
© 2009, The Orlando Sentinel (Fla.).Distributed by McClatchy-Tribune Information Services.
RISMedia welcomes your questions and comments. Send your e-mail to: realestatemagazinefeedback@rismedia.com.
Saturday, January 17, 2009
It's Time to Sweat the Small Stuff
By Susan Tompor
RISMEDIA, January 17, 2009-(MCT)-After watching the worst financial fiasco since the 1930s unravel throughout last year, we must treat 2009 as a year of rebuilding.
If only, really, we could rebuild all this mess in a year, right? We’ve all got a long, uncertain road ahead of us when it comes to working our way through the recession, rebuilding our retirement plans, recreating lost wealth, and, frankly, redefining the way we handle money.
Still, you’ve got to start the cleanup sometime-and 2009 is as good a time as any. Here are some suggestions:
- Get your resume–and yourself–in shape in case of a job loss. Work the network. Go back to friends and former coworkers to help them open doors for you. Some send e-mails endorsing you to potential employers.
- Do what you can to control spending. Even an extra $25 a week saved now could offer some relief in the future if you lose your job. Go to the library. Make do with what you’ve got at home in the freezer. Shop your closet.
- Create a lifestyle built around saving, not spending. Even as things start looking better–or OK, maybe just stop looking worse–many families won’t be able to effortlessly make quick money in their 401(k) plans or their homes anymore. Saving for retirement or college will require saving money– not spending it.
“Painful as it is, you’re not going to get bailed out by your home appreciating,” said Mitch Stapley, chief fixed income officer for Fifth Third Asset Management in Grand Rapids, Mich.
- Stop charging on your credit card. Pay the bill in full each month or pay cash only.
- Know how much money you have in that 401(k) after it was sliced and diced by the ‘08 Vegematic sold on Wall Street.
- If buried in debt, work with a nonprofit counselor, such as Green Path Debt Solutions, at www.greenpath.com.
- Homeowners who are running into trouble should contact their lenders, as well as seek free mortgage counseling through the Hope Now Alliance at 888-995-4673.
- Don’t do anything stupid. Don’t spend like there’s no tomorrow because you’ve got some money now. Don’t dump all your 401(k) money into GM stock or Ford stock. Don’t engage in risky personal–and later way-too-costly–behaviors. No one needs another speeding ticket.
- Focus on your financial footprint–not overall gloom and doom. Remind yourself of what you may have done right–say if you have little or no debt, you have savings and continue to have equity in your home.
- Talk to your loved ones and friends about where you need to spend money and where you don’t. Get out of any spending ruts–you don’t have to buy the same things that you did last year.
- Leave room for the possibility that ‘09 could look better than ‘08. While many people, rightfully so, feel grim, some market experts say that the stock market could post a double-digit rebound in ‘09.
Susan Tompor is the personal finance columnist for the Detroit Free Press.
© 2009, Detroit Free Press.Distributed by McClatchy-Tribune Information Services
RISMEDIA, January 17, 2009-(MCT)-After watching the worst financial fiasco since the 1930s unravel throughout last year, we must treat 2009 as a year of rebuilding.
If only, really, we could rebuild all this mess in a year, right? We’ve all got a long, uncertain road ahead of us when it comes to working our way through the recession, rebuilding our retirement plans, recreating lost wealth, and, frankly, redefining the way we handle money.
Still, you’ve got to start the cleanup sometime-and 2009 is as good a time as any. Here are some suggestions:
- Get your resume–and yourself–in shape in case of a job loss. Work the network. Go back to friends and former coworkers to help them open doors for you. Some send e-mails endorsing you to potential employers.
- Do what you can to control spending. Even an extra $25 a week saved now could offer some relief in the future if you lose your job. Go to the library. Make do with what you’ve got at home in the freezer. Shop your closet.
- Create a lifestyle built around saving, not spending. Even as things start looking better–or OK, maybe just stop looking worse–many families won’t be able to effortlessly make quick money in their 401(k) plans or their homes anymore. Saving for retirement or college will require saving money– not spending it.
“Painful as it is, you’re not going to get bailed out by your home appreciating,” said Mitch Stapley, chief fixed income officer for Fifth Third Asset Management in Grand Rapids, Mich.
- Stop charging on your credit card. Pay the bill in full each month or pay cash only.
- Know how much money you have in that 401(k) after it was sliced and diced by the ‘08 Vegematic sold on Wall Street.
- If buried in debt, work with a nonprofit counselor, such as Green Path Debt Solutions, at www.greenpath.com.
- Homeowners who are running into trouble should contact their lenders, as well as seek free mortgage counseling through the Hope Now Alliance at 888-995-4673.
- Don’t do anything stupid. Don’t spend like there’s no tomorrow because you’ve got some money now. Don’t dump all your 401(k) money into GM stock or Ford stock. Don’t engage in risky personal–and later way-too-costly–behaviors. No one needs another speeding ticket.
- Focus on your financial footprint–not overall gloom and doom. Remind yourself of what you may have done right–say if you have little or no debt, you have savings and continue to have equity in your home.
- Talk to your loved ones and friends about where you need to spend money and where you don’t. Get out of any spending ruts–you don’t have to buy the same things that you did last year.
- Leave room for the possibility that ‘09 could look better than ‘08. While many people, rightfully so, feel grim, some market experts say that the stock market could post a double-digit rebound in ‘09.
Susan Tompor is the personal finance columnist for the Detroit Free Press.
© 2009, Detroit Free Press.Distributed by McClatchy-Tribune Information Services
Monday, January 5, 2009
Why Now is a Smart Time to Buy
RISMEDIA, March 19, 2008-Considering all of the negative press the housing market received in late 2007, it’s more important than ever for buyers to separate fact from fiction when deciding on a time to buy a home. This report is intended to help home buyers assess the facts of the real estate market objectively.
About Inventory
FACT: The housing market is undergoing a natural cyclical correction. It’s impossible to ignore the ongoing news surrounding the downturn of the housing cycle. The recent “housing boom,” which lasted from 2001 to 2005, was caused by low interest rates and a rapid increase in property valuations, resulting in high numbers of renters opting to buy. Three factors caused this decade’s housing boom to spiral upward:
1) A run-up in home-price valuations that spurred a high sense of urgency in home buying and selling.
2) Poor lending practices, which caused many home buyers to secure loans that they ultimately couldn’t afford over the long term.
3) Speculative purchases of homes also increased, with buyers investing in real estate with the hope of a quick return on investment.
Like the dot-com bust, the housing market has begun to correct itself after a number of years of unwise purchasing, but unlike what the media would have us believe, a correction in the housing market doesn’t equate to a crash. Unfortunately, the ongoing negative news about the troubled areas in the U.S. has caused a ripple effect, with home buyers and sellers on a national level exercising caution before making a decision. This has caused an overall slowdown in the marketplace.
The National Association of Realtors’ chief economist, Lawrence Yun, projects that nationally, the “median existing-home price will drop about 1.7% this year. This is a small, minor adjustment after a strong run-up in housing prices.”
True, the number of homes sold in 2007 will have dropped from the year before, but 2007 is still among the highest years on record, with numbers of sales for both 2007 and 2008 projected to be even higher than the levels seen in 2002.
However, with homes taking longer to sell, the number of homes on the market has grown. In markets like California and Arizona where homes are taking much longer to sell than the 11-month national average, this has caused a glut in the marketplace.
In the Pacific Northwest, where the inventory of homes on the market ranges from seven to 10.5 months as of November 2007, this equates to good news for buyers who have more homes at more price ranges from which to choose.
About Mortgages
FACT: Low mortgage rates give buyers more house for their dollar.
With the 30-year fixed rate hovering between 6-7%-a 45-year low-qualified buyers continue to have access to incredibly low interest rates. This means that although housing prices have risen, monthly mortgage payments remain reasonable for those who look at real estate as a long-term investment. For example, today if a buyer secured a 6.5% interest rate on a 30-year fixed loan for a $300,000 home (with no money down), the monthly mortgage payment would be $1,896.20. In 1991, the same monthly mortgage payment would have bought a house worth only $230,492 when mortgage rates were 9.25%. In 1982, when the 30-year fixed rate was 14.6%, the same payment would have bought a house worth only $151,657.
FACT: Heavy speculation and overbuilding result in an increase in foreclosures when prices go down.
The media has been focusing on the hardest-hit areas of the country that have seen a dramatic downturn in the market: California, Nevada, Florida and Arizona. Over the past five years, these markets have experienced an abundance of new housing, a rise in investment properties and a rise in prices that was high above the national average.
Now that home prices are starting to drop and stabilize, the areas that went through a building frenzy and experienced the largest price increases are suffering a heavy devaluation in home prices, which in turn has caused homeowners to foreclose on loans.
Those suffering the most in California, Nevada and Florida are far above the national average of foreclosure with one out of every 325, 152 and 282 homes in foreclosure, respectively. Washington, Oregon and Idaho are well below the national average of one in every 617 homes in foreclosures because fewer home buyers in the Pacific Northwest opted for subprime mortgages and because home values have continued to steadily appreciate.
Washington has seen one in 1,072 homes in foreclosure, and Oregon and Idaho have one in 1,275 and 893, respectively.
FACT: Subprime borrowers get a reality check.
Then there are the problems that are affecting subprime borrowers: those who are considered at a higher mortgage risk due to a past history of bankruptcy, delinquent loan payments and low credit scores. During the last number of years, some home buyers in the U.S. qualified only for these riskier subprime loans to fund the American dream.
But, again, unlike the media’s portrayal, the reality is that subprime loans comprise only 9% of total loans nationwide and of those 9%, less than 11% of those subprime ARM and fixed borrowers have defaulted on their loans. The Pacific Northwest stands apart as its own micro-market, with more home buyers qualifying for prime loans. Homeowners in the Northwest have been able to successfully sell their homes for a profit or refinance to pay off their subprime loans.
Real Estate Cycles and Economics
FACT: Over the long-term, real estate has always appreciated in value.
The continuing appreciation of homes in the Northwest is not an anomaly. Real estate has always been one of the most solid investments in the U.S, because, after all, people always need a place to live. Real estate has less volatility than the stock market and over the historical long-term it remains a guaranteed return-on-investment. Take this example from NAR’s Yun: If a buyer were to put down $10,000 for a down payment on a “typically priced home in the United States at a typical appreciation rate of 5%…(he/she) would see a return of $110,300 after 10 years. The same $10,000 invested in the stock market appreciating 10% annually will result in $23,600.”
As history has shown, for those who choose to keep their home for six to 10 years (and not flip for a quick profit) real estate investments do pay off, and pay off well. In fact, what we’re seeing now is a repeat of a housing cycle we’ve seen before. In the early 1980s and 1990s, some areas of the country experienced the worst downturn they had seen in the last 25 years, which were caused by localized economic weaknesses and loss of jobs while on a nationwide average, others, including the Pacific Northwest were barely affected at all. But even those areas that were hit the hardest in the past experienced a historic uptick in prices, and then a continuing long-term appreciation.
Excerpted from a January 2008 Report from John L. Scott Real Estate
For more information, please visit www.johnlscott.com.
About Inventory
FACT: The housing market is undergoing a natural cyclical correction. It’s impossible to ignore the ongoing news surrounding the downturn of the housing cycle. The recent “housing boom,” which lasted from 2001 to 2005, was caused by low interest rates and a rapid increase in property valuations, resulting in high numbers of renters opting to buy. Three factors caused this decade’s housing boom to spiral upward:
1) A run-up in home-price valuations that spurred a high sense of urgency in home buying and selling.
2) Poor lending practices, which caused many home buyers to secure loans that they ultimately couldn’t afford over the long term.
3) Speculative purchases of homes also increased, with buyers investing in real estate with the hope of a quick return on investment.
Like the dot-com bust, the housing market has begun to correct itself after a number of years of unwise purchasing, but unlike what the media would have us believe, a correction in the housing market doesn’t equate to a crash. Unfortunately, the ongoing negative news about the troubled areas in the U.S. has caused a ripple effect, with home buyers and sellers on a national level exercising caution before making a decision. This has caused an overall slowdown in the marketplace.
The National Association of Realtors’ chief economist, Lawrence Yun, projects that nationally, the “median existing-home price will drop about 1.7% this year. This is a small, minor adjustment after a strong run-up in housing prices.”
True, the number of homes sold in 2007 will have dropped from the year before, but 2007 is still among the highest years on record, with numbers of sales for both 2007 and 2008 projected to be even higher than the levels seen in 2002.
However, with homes taking longer to sell, the number of homes on the market has grown. In markets like California and Arizona where homes are taking much longer to sell than the 11-month national average, this has caused a glut in the marketplace.
In the Pacific Northwest, where the inventory of homes on the market ranges from seven to 10.5 months as of November 2007, this equates to good news for buyers who have more homes at more price ranges from which to choose.
About Mortgages
FACT: Low mortgage rates give buyers more house for their dollar.
With the 30-year fixed rate hovering between 6-7%-a 45-year low-qualified buyers continue to have access to incredibly low interest rates. This means that although housing prices have risen, monthly mortgage payments remain reasonable for those who look at real estate as a long-term investment. For example, today if a buyer secured a 6.5% interest rate on a 30-year fixed loan for a $300,000 home (with no money down), the monthly mortgage payment would be $1,896.20. In 1991, the same monthly mortgage payment would have bought a house worth only $230,492 when mortgage rates were 9.25%. In 1982, when the 30-year fixed rate was 14.6%, the same payment would have bought a house worth only $151,657.
FACT: Heavy speculation and overbuilding result in an increase in foreclosures when prices go down.
The media has been focusing on the hardest-hit areas of the country that have seen a dramatic downturn in the market: California, Nevada, Florida and Arizona. Over the past five years, these markets have experienced an abundance of new housing, a rise in investment properties and a rise in prices that was high above the national average.
Now that home prices are starting to drop and stabilize, the areas that went through a building frenzy and experienced the largest price increases are suffering a heavy devaluation in home prices, which in turn has caused homeowners to foreclose on loans.
Those suffering the most in California, Nevada and Florida are far above the national average of foreclosure with one out of every 325, 152 and 282 homes in foreclosure, respectively. Washington, Oregon and Idaho are well below the national average of one in every 617 homes in foreclosures because fewer home buyers in the Pacific Northwest opted for subprime mortgages and because home values have continued to steadily appreciate.
Washington has seen one in 1,072 homes in foreclosure, and Oregon and Idaho have one in 1,275 and 893, respectively.
FACT: Subprime borrowers get a reality check.
Then there are the problems that are affecting subprime borrowers: those who are considered at a higher mortgage risk due to a past history of bankruptcy, delinquent loan payments and low credit scores. During the last number of years, some home buyers in the U.S. qualified only for these riskier subprime loans to fund the American dream.
But, again, unlike the media’s portrayal, the reality is that subprime loans comprise only 9% of total loans nationwide and of those 9%, less than 11% of those subprime ARM and fixed borrowers have defaulted on their loans. The Pacific Northwest stands apart as its own micro-market, with more home buyers qualifying for prime loans. Homeowners in the Northwest have been able to successfully sell their homes for a profit or refinance to pay off their subprime loans.
Real Estate Cycles and Economics
FACT: Over the long-term, real estate has always appreciated in value.
The continuing appreciation of homes in the Northwest is not an anomaly. Real estate has always been one of the most solid investments in the U.S, because, after all, people always need a place to live. Real estate has less volatility than the stock market and over the historical long-term it remains a guaranteed return-on-investment. Take this example from NAR’s Yun: If a buyer were to put down $10,000 for a down payment on a “typically priced home in the United States at a typical appreciation rate of 5%…(he/she) would see a return of $110,300 after 10 years. The same $10,000 invested in the stock market appreciating 10% annually will result in $23,600.”
As history has shown, for those who choose to keep their home for six to 10 years (and not flip for a quick profit) real estate investments do pay off, and pay off well. In fact, what we’re seeing now is a repeat of a housing cycle we’ve seen before. In the early 1980s and 1990s, some areas of the country experienced the worst downturn they had seen in the last 25 years, which were caused by localized economic weaknesses and loss of jobs while on a nationwide average, others, including the Pacific Northwest were barely affected at all. But even those areas that were hit the hardest in the past experienced a historic uptick in prices, and then a continuing long-term appreciation.
Excerpted from a January 2008 Report from John L. Scott Real Estate
For more information, please visit www.johnlscott.com.
Spring the Season of Selling - 5 Suggestions for "Easy" Curb Appeal
RISMEDIA, March 27, 2008-With the traditionally heavy home buying season just around the corner, now is the time to think about putting your house on the market. But with the housing market in a continued downturn, it’s more important than ever to choose home improvement projects that will not only add value to your home, but make it stand out in the crowd.
Brad Staggs, HGTVPro.com and DIY show producer and host, and a licensed contractor, offers tips for homeowners preparing to sell their home. “The most important thing is to update the most visible areas, common gathering rooms like the den and kitchen. But don’t forget the front and back yards. Prime home-buying season coincides with spring and summer, and that first impression, your home’s curb appeal, can make all the difference.”
1. Molding: icing on the cake.
“It’s amazing the difference a little bit of decorative wood molding can make,” says Staggs. “Frame out a picture window, add deep crown molding to a high ceiling, even a simple chair rail in a guest bathroom changes the entire look of a room.”
2. Front porch first impressions.
Your front porch is often the first thing a potential homebuyer will see. According to Staggs, it should be in perfect shape. “Add a fresh coat of paint to brighten the front of your house. Nice wooden Adirondack-style chairs are welcoming, especially when enhanced by bright flowers in colorful pots. You want your porch to signal the start of something wonderful!”
3. Look behind you.
Don’t neglect the backyard! Outdoor living spaces grow in popularity each year. Impress potential home buyers with a backyard to die for: overflowing garden boxes, some nice wooden outdoor furniture, a charming gazebo and perhaps a new deck. “Spend a few weekends dressing up your backyard before everything blooms,” suggests Staggs.
4. Floor them.
Nothing says “welcome home” like the feel of smooth real wood floors. Easily installed and completely affordable, wood floors enhance any decorating style and evoke immediate “ahhhhs” from guests in your home.
5. Add a visual surprise.
“Find something cool to add to a room in your home, a little visual pop no one will expect,” suggests Staggs. “Like adding beadboard panels to a kitchen island, then painting it a funky accent color.”
Staggs also offers his thoughts on choosing appropriate building materials. “As a consumer, the most important thing you can do is buy sustainable. Choose natural building products, those that truly fit the definition of “green.” One of my favorite materials to use in any home improvement project is Southern Pine. It’s real wood, so it’s not just strong and beautiful, it’s also recyclable. Southern Pine in the U.S. comes from well-managed and well-maintained forests; forests that are in better health now than they were a century ago!”
For more information, visit http://www.spanpine.com.
Brad Staggs, HGTVPro.com and DIY show producer and host, and a licensed contractor, offers tips for homeowners preparing to sell their home. “The most important thing is to update the most visible areas, common gathering rooms like the den and kitchen. But don’t forget the front and back yards. Prime home-buying season coincides with spring and summer, and that first impression, your home’s curb appeal, can make all the difference.”
1. Molding: icing on the cake.
“It’s amazing the difference a little bit of decorative wood molding can make,” says Staggs. “Frame out a picture window, add deep crown molding to a high ceiling, even a simple chair rail in a guest bathroom changes the entire look of a room.”
2. Front porch first impressions.
Your front porch is often the first thing a potential homebuyer will see. According to Staggs, it should be in perfect shape. “Add a fresh coat of paint to brighten the front of your house. Nice wooden Adirondack-style chairs are welcoming, especially when enhanced by bright flowers in colorful pots. You want your porch to signal the start of something wonderful!”
3. Look behind you.
Don’t neglect the backyard! Outdoor living spaces grow in popularity each year. Impress potential home buyers with a backyard to die for: overflowing garden boxes, some nice wooden outdoor furniture, a charming gazebo and perhaps a new deck. “Spend a few weekends dressing up your backyard before everything blooms,” suggests Staggs.
4. Floor them.
Nothing says “welcome home” like the feel of smooth real wood floors. Easily installed and completely affordable, wood floors enhance any decorating style and evoke immediate “ahhhhs” from guests in your home.
5. Add a visual surprise.
“Find something cool to add to a room in your home, a little visual pop no one will expect,” suggests Staggs. “Like adding beadboard panels to a kitchen island, then painting it a funky accent color.”
Staggs also offers his thoughts on choosing appropriate building materials. “As a consumer, the most important thing you can do is buy sustainable. Choose natural building products, those that truly fit the definition of “green.” One of my favorite materials to use in any home improvement project is Southern Pine. It’s real wood, so it’s not just strong and beautiful, it’s also recyclable. Southern Pine in the U.S. comes from well-managed and well-maintained forests; forests that are in better health now than they were a century ago!”
For more information, visit http://www.spanpine.com.
5 Tips for Selling Your Vancant Home
RISMEDIA, April 8, 2008-This spring, as it becomes a popular time for homeowners to begin preparing their homes for sale, Showhomes encourages them to do some essential steps to make sure the most important first step takes place: buyers make the decision to view the home.
“Many people think all they have to do is make sure the inside of their home is clean, but it really goes far beyond that when it comes to making sure your home looks its best so that buyers will take a look,” said Thomas Scott, vice president of Operations for Showhomes Franchise Corporation. “That is why we have released five essential tips that can help local residents stay on the right track when preparing their homes for a sale.”
Scott reveals five tips for selling a vacant home:
1. Curb Appeal - the better the curb appeal of your home is, the more attractive it is to prospective buyers.
- Trim overgrown bushes, weed beds and add a fresh layer of mulch- Clean your front door and repaint if needed- Add a fresh doormat- Keep grass cut, edged and blown- Plant some color in the beds to add contrast
2. Cleaning - for most buyers, dirt equals stress and the last thing most buyers want is more stress in their lives.
- Pressure-wash the driveway and sidewalks.- Clean windows inside and out- Pressure wash decks and patios
3. Paint - the condition and color of the paint can make a huge difference in how buyers react to your home. Select light neutrals - creamy kakis, pearly grays or soft greens.
4. Replace Worn Carpet - Dirty carpet is unsanitary and nobody will be able to overlook your worn carpet. Replace the top layer with inexpensive neutral colored carpet and you will always recoup the investment.
5. Stage your home - Buyers who look at vacant homes only see floors, walls and ceilings. With nothing else to look at, they focus on flaws. Because of this, vacant houses are very vulnerable to low-ball offers and often sell for 15-20 percent below list price.
For more information, please visit www.showhomes.com.
“Many people think all they have to do is make sure the inside of their home is clean, but it really goes far beyond that when it comes to making sure your home looks its best so that buyers will take a look,” said Thomas Scott, vice president of Operations for Showhomes Franchise Corporation. “That is why we have released five essential tips that can help local residents stay on the right track when preparing their homes for a sale.”
Scott reveals five tips for selling a vacant home:
1. Curb Appeal - the better the curb appeal of your home is, the more attractive it is to prospective buyers.
- Trim overgrown bushes, weed beds and add a fresh layer of mulch- Clean your front door and repaint if needed- Add a fresh doormat- Keep grass cut, edged and blown- Plant some color in the beds to add contrast
2. Cleaning - for most buyers, dirt equals stress and the last thing most buyers want is more stress in their lives.
- Pressure-wash the driveway and sidewalks.- Clean windows inside and out- Pressure wash decks and patios
3. Paint - the condition and color of the paint can make a huge difference in how buyers react to your home. Select light neutrals - creamy kakis, pearly grays or soft greens.
4. Replace Worn Carpet - Dirty carpet is unsanitary and nobody will be able to overlook your worn carpet. Replace the top layer with inexpensive neutral colored carpet and you will always recoup the investment.
5. Stage your home - Buyers who look at vacant homes only see floors, walls and ceilings. With nothing else to look at, they focus on flaws. Because of this, vacant houses are very vulnerable to low-ball offers and often sell for 15-20 percent below list price.
For more information, please visit www.showhomes.com.
Reverse Mortgages Gaining Popularity in Tough Economy
By Elizabeth Rhodes
RISMEDIA, Dec. 12, 2008-(MCT)-Like many retirees, Marlene Laffoon, 73, watches in dismay as both her home’s value and her investments slide southward. And yet everyday costs for this former bookkeeper aren’t falling correspondingly.
So Laffoon’s spirits rose last month on an unexpected windfall of good news: Loan amounts on reverse mortgages have been increased and the fees decreased.
A reverse mortgage allows homeowners 62 or older to borrow up to $417,000 of their home’s equity to use any way they wish; the old limit was $352,790. They don’t have to repay it as long as they stay in the home.
Laffoon promptly asked her reverse-mortgage officer, Jerry Dawson at Frontier Bank in Everett, Wash., how much cash she could get if she took out a new reverse mortgage to replace the one she got several years ago.
“I really don’t want to touch anything in my investments now, and yet I can’t wait 10 years to have something to draw on,” says Laffoon, who used funds from her original reverse mortgage to remodel the bathrooms and re-roof her Snohomish County, Wash., home of 43 years.
As the economy unwinds, Dawson says he’s increasingly been hearing from older homeowners who are anxious about their finances and looking for cash.
“I’ve taken five applications in the last two weeks for that very reason,” says Dawson. “A lot of people rely on liquidating their portfolios over their lifetime to supplement their income. Now they’re asking if there’s a way to use the equity in their home instead of selling their portfolio in a bad time.”
In Mountlake Terrace, Wash., Golf Savings Bank reverse-mortgage officer Chris Anderson also is seeing increased interest. Some is coming from older workers.
“They’re concerned their job will be gone, and their chances of finding a new job over age 62 aren’t good,” says Anderson. “They want to be able to put a reverse mortgage in motion. It does take away the anxiety knowing there’s an option, whether you need to take it or not.”
Reverse mortgages have been growing in popularity for some years now, with more than 100,000 homeowners nationally taking them out so far this year. They’ve been offered by private lenders, by quasi-governmental mortgage backer Fannie Mae and by the Federal Housing Administration.
Following the turmoil in the mortgage industry, both private-lender and Fannie Mae reverse mortgages have either ceased or cut back substantially, says Darryl Hicks, associate director of the National Reverse Mortgage Lenders Association in Washington.
That leaves the FHA as the biggest player on the block. It recently announced the new across-the-board national $417,000 limit for its reverse, called Home Equity Conversion Mortgage, or HECM for short.
“It’s going to allow those people who own higher-priced homes to access a lot more of the equity of their homes for whatever need they may have,” notes Hicks.
A borrower’s age and home equity determine the amount of money available. There are no income or credit score requirements, and a homeowner who’s already had a reverse mortgage can get another.
The older the borrower, and the more equity they have, the more money they can pocket. They can take it in monthly payments, in a lump sum or as a line of credit to be drawn on as needed. The amount of a reverse mortgage has to be paid back once the homeowners move out of the house-even if the house isn’t sold.
Anderson ran hypothetical numbers for an owner whose home, worth $400,000, is paid off. At age 62, $228,581 would be available. By age 80, the amount would climb to $290,186. The money is tax-free.
The typical borrower is in his or her 70s. Getting a reverse mortgage doesn’t affect the borrower’s ability to get Social Security or Medicare.
A home needn’t be paid off for its owner to get a HECM reverse. However, the owner must pay off the outstanding mortgage balance as part of the process.
So, for example, if the same owner of that hypothetical $400,000 house owed $100,000, at age 62 that owner would still qualify for $228,581, but would have to spend $100,000 of it to retire the outstanding mortgage. So they’d walk away with $128,581.
The FHA requires counseling for those considering a reverse so they clearly understand the pros and cons.
The Urban League of Metropolitan Seattle is one of the approved counseling agencies. A. Linda Taylor, its housing director, says there are a lot of misconceptions about reverse mortgages, which counseling clears up.
A common fallacy: Homeowners who get a reverse mortgage are signing their house over to the government or a loan company. That’s incorrect; they still own it.
Another one: Owners will have monthly mortgage payments. That’s not true, nor can the seller (or the seller’s estate) ever owe more than the total loan amount (including interest, which can be either variable or fixed).
However, Taylor suggests that homeowners and their families consider the reverse issue carefully because getting one isn’t always the best answer.
The loan, which requires all the normal closing costs plus mortgage insurance, can be expensive relative to the amount borrowers get, particularly if they’re near the minimum limit of age 62 or they have little equity in their home.
And finally, a reverse may not be the best solution for a cash-strapped homeowner.
Taylor recalls an elderly man who came with his large family for counseling.
“He was worried to death” about his finances, she said, but also concerned that getting a reverse would use up home equity he’d hoped to leave to his children.
A frank family conversation revealed the man was struggling to secretly pay a family member’s bills. When they others learned of this, they prevailed upon that family member to stop relying on the elderly man for support.
They also did the repairs the man’s home needed, repairs that would have consumed his reverse mortgage money. So in the end, he found he didn’t need a reverse mortgage at all.
As for Marlene Laffoon, she doesn’t have a pressing need for cash right now, so she’s taking a line of credit.
“There’s always the old washer and dryer,” she said. “You don’t know when they’ll go.”
Getting a reverse mortgage “was a win-win as far as I was concerned.”
For Consumer Considering a Reverse Mortgage, Here’s Help:
A reverse mortgage, which allows homeowners to cash out some of their home’s equity, is available to those 62 and older who own and occupy a single-family house, a condominium, town house, co-op, manufactured home or two- to four-unit building. (Some limitations may apply.)
Consumer Reports magazine suggests homeowners educate themselves by visiting these websites: ARP, at www.aarp.org/money/revmort/, has thorough information about reverse mortgages, plus a calculator that allows homeowners to estimate how much money might be available to them.
The National Reverse Mortgage Lenders Association, at www.nrmla.org, has mortgage information, plus a list of approved lenders who subscribe to its code of ethics.
Housing and Urban Development, at www.hud.gov, has information plus a list of HUD approved housing counseling agencies.
Federal Trade Commission has information on its site, www.ftc.gov, as do some banks’ sites.
© 2008, The Seattle Times.Distributed by McClatchy-Tribune Information Services.
RISMEDIA, Dec. 12, 2008-(MCT)-Like many retirees, Marlene Laffoon, 73, watches in dismay as both her home’s value and her investments slide southward. And yet everyday costs for this former bookkeeper aren’t falling correspondingly.
So Laffoon’s spirits rose last month on an unexpected windfall of good news: Loan amounts on reverse mortgages have been increased and the fees decreased.
A reverse mortgage allows homeowners 62 or older to borrow up to $417,000 of their home’s equity to use any way they wish; the old limit was $352,790. They don’t have to repay it as long as they stay in the home.
Laffoon promptly asked her reverse-mortgage officer, Jerry Dawson at Frontier Bank in Everett, Wash., how much cash she could get if she took out a new reverse mortgage to replace the one she got several years ago.
“I really don’t want to touch anything in my investments now, and yet I can’t wait 10 years to have something to draw on,” says Laffoon, who used funds from her original reverse mortgage to remodel the bathrooms and re-roof her Snohomish County, Wash., home of 43 years.
As the economy unwinds, Dawson says he’s increasingly been hearing from older homeowners who are anxious about their finances and looking for cash.
“I’ve taken five applications in the last two weeks for that very reason,” says Dawson. “A lot of people rely on liquidating their portfolios over their lifetime to supplement their income. Now they’re asking if there’s a way to use the equity in their home instead of selling their portfolio in a bad time.”
In Mountlake Terrace, Wash., Golf Savings Bank reverse-mortgage officer Chris Anderson also is seeing increased interest. Some is coming from older workers.
“They’re concerned their job will be gone, and their chances of finding a new job over age 62 aren’t good,” says Anderson. “They want to be able to put a reverse mortgage in motion. It does take away the anxiety knowing there’s an option, whether you need to take it or not.”
Reverse mortgages have been growing in popularity for some years now, with more than 100,000 homeowners nationally taking them out so far this year. They’ve been offered by private lenders, by quasi-governmental mortgage backer Fannie Mae and by the Federal Housing Administration.
Following the turmoil in the mortgage industry, both private-lender and Fannie Mae reverse mortgages have either ceased or cut back substantially, says Darryl Hicks, associate director of the National Reverse Mortgage Lenders Association in Washington.
That leaves the FHA as the biggest player on the block. It recently announced the new across-the-board national $417,000 limit for its reverse, called Home Equity Conversion Mortgage, or HECM for short.
“It’s going to allow those people who own higher-priced homes to access a lot more of the equity of their homes for whatever need they may have,” notes Hicks.
A borrower’s age and home equity determine the amount of money available. There are no income or credit score requirements, and a homeowner who’s already had a reverse mortgage can get another.
The older the borrower, and the more equity they have, the more money they can pocket. They can take it in monthly payments, in a lump sum or as a line of credit to be drawn on as needed. The amount of a reverse mortgage has to be paid back once the homeowners move out of the house-even if the house isn’t sold.
Anderson ran hypothetical numbers for an owner whose home, worth $400,000, is paid off. At age 62, $228,581 would be available. By age 80, the amount would climb to $290,186. The money is tax-free.
The typical borrower is in his or her 70s. Getting a reverse mortgage doesn’t affect the borrower’s ability to get Social Security or Medicare.
A home needn’t be paid off for its owner to get a HECM reverse. However, the owner must pay off the outstanding mortgage balance as part of the process.
So, for example, if the same owner of that hypothetical $400,000 house owed $100,000, at age 62 that owner would still qualify for $228,581, but would have to spend $100,000 of it to retire the outstanding mortgage. So they’d walk away with $128,581.
The FHA requires counseling for those considering a reverse so they clearly understand the pros and cons.
The Urban League of Metropolitan Seattle is one of the approved counseling agencies. A. Linda Taylor, its housing director, says there are a lot of misconceptions about reverse mortgages, which counseling clears up.
A common fallacy: Homeowners who get a reverse mortgage are signing their house over to the government or a loan company. That’s incorrect; they still own it.
Another one: Owners will have monthly mortgage payments. That’s not true, nor can the seller (or the seller’s estate) ever owe more than the total loan amount (including interest, which can be either variable or fixed).
However, Taylor suggests that homeowners and their families consider the reverse issue carefully because getting one isn’t always the best answer.
The loan, which requires all the normal closing costs plus mortgage insurance, can be expensive relative to the amount borrowers get, particularly if they’re near the minimum limit of age 62 or they have little equity in their home.
And finally, a reverse may not be the best solution for a cash-strapped homeowner.
Taylor recalls an elderly man who came with his large family for counseling.
“He was worried to death” about his finances, she said, but also concerned that getting a reverse would use up home equity he’d hoped to leave to his children.
A frank family conversation revealed the man was struggling to secretly pay a family member’s bills. When they others learned of this, they prevailed upon that family member to stop relying on the elderly man for support.
They also did the repairs the man’s home needed, repairs that would have consumed his reverse mortgage money. So in the end, he found he didn’t need a reverse mortgage at all.
As for Marlene Laffoon, she doesn’t have a pressing need for cash right now, so she’s taking a line of credit.
“There’s always the old washer and dryer,” she said. “You don’t know when they’ll go.”
Getting a reverse mortgage “was a win-win as far as I was concerned.”
For Consumer Considering a Reverse Mortgage, Here’s Help:
A reverse mortgage, which allows homeowners to cash out some of their home’s equity, is available to those 62 and older who own and occupy a single-family house, a condominium, town house, co-op, manufactured home or two- to four-unit building. (Some limitations may apply.)
Consumer Reports magazine suggests homeowners educate themselves by visiting these websites: ARP, at www.aarp.org/money/revmort/, has thorough information about reverse mortgages, plus a calculator that allows homeowners to estimate how much money might be available to them.
The National Reverse Mortgage Lenders Association, at www.nrmla.org, has mortgage information, plus a list of approved lenders who subscribe to its code of ethics.
Housing and Urban Development, at www.hud.gov, has information plus a list of HUD approved housing counseling agencies.
Federal Trade Commission has information on its site, www.ftc.gov, as do some banks’ sites.
© 2008, The Seattle Times.Distributed by McClatchy-Tribune Information Services.
Forbidden Words - The Powerful Effect of Language
By Kim Ades
RISMEDIA, Jan. 1, 2009-I never thought I would do it. I always regarded it as a restriction on freedom of speech. I always believed that people should be able to express themselves freely. Even swear words were not a huge deal in my books, as long as they did not insult or hurt anyone. “Speak your mind,” I always thought.
Well last night I reneged on that stand and I implemented a new rule in my house. This is what I heard myself spouting:
“There are two statements I never want to hear in this house ever again. In fact, I forbid you to use them.”
Me? Forbidding anyone from anything? That didn’t sound like me - I’m all about enabling and empowering - how could I ‘forbid’ anyone from self-expression?
I continued, “Here are the words I never want to hear: ‘It’s hard’ and ‘I can’t.’ Those words don’t serve you, and they don’t belong in your language. You are done with that.” I laid down the law and that was how it was going to be. It was a monologue following my son’s response to my asking him to do his homework.
Needless to say, homework can be a tumultuous experience for a 12-year-old boy who is becoming exposed to increasingly higher academic demands. I was adamant about my request and stopped short of implementing a consequence where he would have to pay a 25 cent fee each time one of those phrases slipped through his lips.
Language has a powerful effect on people. Language is not just composed of words. We attach meaning to the words and the meaning impacts our perspective on everything in our lives. The words represent our beliefs. If my son believes his homework is hard and that he can’t do it, he will find evidence to support it - and he does. The language we use cements our thoughts into place, and sometimes those thoughts stand in the way of great success. In my world, there is no room for such language - the cost is far too high.
The good news is that the language we use can also help to propel us to higher and higher levels of success. While things are much harder if we believe them to be so, the contrary is also true. If we believe things are easy, there is a much greater likelihood that things will happen with greater ease. Choosing to use different words in our speech makes us conscious of the decisions we make about our beliefs. Are there words that you would be better off eliminating from your language? Are there words you use that only slow you down?
Are there other words you could trade them in for that would serve you better?
It’s very important to take a look at our language and understand the outcome that it has on our lives. Writing in a journal is the best way to discover which words you want to trade in. Working with an online coach through this process can be tremendously helpful. When an online coach reads your journal entries, they are able to help you to pinpoint the patterns of language and thought in your life that are not moving you in the direction of success. An online coach can offer suggestions of how to change your thinking and adapt the kind of language you use, offering thoughts and words to support your dreams and goals and make a significant impact on your desired results.
Kim Ades, MBA President of Frame of Mind Coaching, and her team of experts have created an online coaching program called FOM52. You are guided about what to write about weekly and an experienced coach reviews your work and makes comments and suggestions to help you make significant changes in your life.
For more information, visit www.fom52.com or you can contact Kim at kim@fom52.com.
RISMEDIA, Jan. 1, 2009-I never thought I would do it. I always regarded it as a restriction on freedom of speech. I always believed that people should be able to express themselves freely. Even swear words were not a huge deal in my books, as long as they did not insult or hurt anyone. “Speak your mind,” I always thought.
Well last night I reneged on that stand and I implemented a new rule in my house. This is what I heard myself spouting:
“There are two statements I never want to hear in this house ever again. In fact, I forbid you to use them.”
Me? Forbidding anyone from anything? That didn’t sound like me - I’m all about enabling and empowering - how could I ‘forbid’ anyone from self-expression?
I continued, “Here are the words I never want to hear: ‘It’s hard’ and ‘I can’t.’ Those words don’t serve you, and they don’t belong in your language. You are done with that.” I laid down the law and that was how it was going to be. It was a monologue following my son’s response to my asking him to do his homework.
Needless to say, homework can be a tumultuous experience for a 12-year-old boy who is becoming exposed to increasingly higher academic demands. I was adamant about my request and stopped short of implementing a consequence where he would have to pay a 25 cent fee each time one of those phrases slipped through his lips.
Language has a powerful effect on people. Language is not just composed of words. We attach meaning to the words and the meaning impacts our perspective on everything in our lives. The words represent our beliefs. If my son believes his homework is hard and that he can’t do it, he will find evidence to support it - and he does. The language we use cements our thoughts into place, and sometimes those thoughts stand in the way of great success. In my world, there is no room for such language - the cost is far too high.
The good news is that the language we use can also help to propel us to higher and higher levels of success. While things are much harder if we believe them to be so, the contrary is also true. If we believe things are easy, there is a much greater likelihood that things will happen with greater ease. Choosing to use different words in our speech makes us conscious of the decisions we make about our beliefs. Are there words that you would be better off eliminating from your language? Are there words you use that only slow you down?
Are there other words you could trade them in for that would serve you better?
It’s very important to take a look at our language and understand the outcome that it has on our lives. Writing in a journal is the best way to discover which words you want to trade in. Working with an online coach through this process can be tremendously helpful. When an online coach reads your journal entries, they are able to help you to pinpoint the patterns of language and thought in your life that are not moving you in the direction of success. An online coach can offer suggestions of how to change your thinking and adapt the kind of language you use, offering thoughts and words to support your dreams and goals and make a significant impact on your desired results.
Kim Ades, MBA President of Frame of Mind Coaching, and her team of experts have created an online coaching program called FOM52. You are guided about what to write about weekly and an experienced coach reviews your work and makes comments and suggestions to help you make significant changes in your life.
For more information, visit www.fom52.com or you can contact Kim at kim@fom52.com.
Friday, January 2, 2009
Fixing the Market One Person at a Time
‘We all have a part in re-establishing consumer confidence’
By Stephanie Andre
RISMEDIA, Jan. 2, 2009-The economic events that have transpired over the past five months-let alone the housing downturn of the past two years-are all too real. So how do we rise above and look ahead? For starters, each and every broker and agent needs to take control-and some responsibility-for where the market is now and where it’s going, says HomeServices of America Chairman and CEO Ron Peltier. As Peltier tells it, “We can’t continue to think that the market is going to go back to 7 million home sales per year; it’s not…It’s our job to recognize that and help people understand that real estate is still a great long-term investment. If we can do that, there will be buyers.”
Real Estate magazine: Has the changed market affected HomeServices’ thoughts on its integrated one-stop-shopping approach?
Ron Peltier: No, it hasn’t. When you look at the contraction in the market, having a one-stop-shopping business model is more important than ever before. A contraction in sales activity and a drop in average sales price both affect company dollars, which ultimately migrates down to margins. The notion of integrated offerings becomes even more critical now.
Great companies offer a menu of services and consumers don’t have to pay a premium for that. When we look at our expectations for going forward, we are seeing mortgage and title profitability, and right now, that combined total is more than our brokerage business. As we have witnessed a contraction in the mortgage business, those still in the business have a greater sense of business acumen and a good percentage of that is proper governing of your business.
RE: How will all the current changes in the U.S affect the housing market?
RP: We have a mindset across the U.S. of what I call, “Recession, Depression, Obsession.” With all the negative media, consumer confidence is at an all-time low. Business in general is controlled by the mindset of the consumer; 70% of the gross domestic product (GDP) is driven by the consumer. We are now faced with a negative consumer mindset-most of which is based on what they’ve heard and read.
We’re in for an extended recession. If people continue to obsess over that, they will hold tight. Hopefully, with a new Washington and new efforts put in place this year, perhaps we’ll see an uptick and begin the process of recovery and a return to optimism…but it’s going to be tough.
RE: It stands to reason that the U.S. economy will not be well for some time. What type of marketplace do you see for 2009?
RP: Going forward, the marketplace is clearly more realistic and more in line with a balanced market. A good barometer is the pre-boom existing-home sales of 5 million per year. In the boom years, that grew beyond a sustainable level to7 million, largely driven by speculators-who represented about 25%. If you take the speculators out of the equation, you get to about the same numbers as what we saw in 2000.
RE: Buyers and sellers aside, what will be key to getting back on track?
RP: Granted, we now have a larger population base and more area, but I think we’re in a market of about 5 to 5.5 million transactions-and, if that’s the case, the industry should be able to work with that. That’s where we were in the early 2000s. We have to right-size our companies. We can’t continue to think that the market is going to go back to 7 million home sales per year; it’s not. In 2000, we could do quite well because we were sized correctly and our expenses were in line with our expected sales activity.
We are clearly in a recession. The more we delude ourselves about that and believe that we’re going to return to ‘04-’06 levels, the harder a time we’re going to have, and the harder it’s going to be to see good margins.
That market was enabled by the credit standards, allowing mortgages by people who were speculators or bad credit risks. All that it did was create confusion, chaos and greed in the housing industry. It was significantly negative, and now we’re dealing with collateral damage. Foreclosure mitigation efforts by the Treasury Department and Congress, and hopefully lower interest rates, will go a long way toward correcting the balance.
RE: What are the most important drivers toward restoring consumer confidence?
RP: The two biggest drivers to our business are consumer confidence being favorable and the employment/unemployment ratios. We’re likely to see unemployment at 8-10% before it changes. Clearly, people don’t make housing decisions if they’re worried about their jobs and day-to-day living. At the end of 2008, we still saw continuing layoffs and unemployment at almost 6.5%. I believe that will continue through the first quarter. Hopefully, those levels won’t reach double digits. If they do, it will have a significant impact on the level of activity in the housing market.
RE: Some say it is the housing market that will lead to an economic resurgence. How do you see HomeServices fitting into this revival?
RP: As industry leaders, what we need to do is be a voice of reason to the necessary forces that impact our business. Interest rates are too high, relative to the cost of credit and standards-they overreacted from loose standards they had instituted before. We need more balance. The maximum loan limits for government-sponsored enterprises (GSEs) need to get back in line. They are scheduled to be reduced this year. We, as an industry, need to be a voice-and a loud one-to our congressmen to speak out for the housing industry and help housing get back on its feet.
RE: From a business standpoint, what will HomeServices be doing in 2009?
RP: On a core business level, we are truly focused on being more in line with bringing a higher level of customer service to people. Mortgages have reached new levels of complexity for home buyers. We need to provide clarity and understanding; having a focused, single point of contact helps achieve that. We are fully committed to expanding our footprint through key markets, but we prefer to grow in current markets through tuck-in acquisitions.
RE: What should the real estate industry be doing to get people back into buying and selling?
RP: We’re now in a buyer’s market, and today, based on a correction in prices and inventory, it is a great time to buy. It’s our job to make consumers understand this. We need to take initiatives in each market to get to the news media the very things we’re talking about-yes, the market corrected, and yes, values have dropped, but over a five-year horizon, housing is still a great investment and very safe.
By Stephanie Andre
RISMEDIA, Jan. 2, 2009-The economic events that have transpired over the past five months-let alone the housing downturn of the past two years-are all too real. So how do we rise above and look ahead? For starters, each and every broker and agent needs to take control-and some responsibility-for where the market is now and where it’s going, says HomeServices of America Chairman and CEO Ron Peltier. As Peltier tells it, “We can’t continue to think that the market is going to go back to 7 million home sales per year; it’s not…It’s our job to recognize that and help people understand that real estate is still a great long-term investment. If we can do that, there will be buyers.”
Real Estate magazine: Has the changed market affected HomeServices’ thoughts on its integrated one-stop-shopping approach?
Ron Peltier: No, it hasn’t. When you look at the contraction in the market, having a one-stop-shopping business model is more important than ever before. A contraction in sales activity and a drop in average sales price both affect company dollars, which ultimately migrates down to margins. The notion of integrated offerings becomes even more critical now.
Great companies offer a menu of services and consumers don’t have to pay a premium for that. When we look at our expectations for going forward, we are seeing mortgage and title profitability, and right now, that combined total is more than our brokerage business. As we have witnessed a contraction in the mortgage business, those still in the business have a greater sense of business acumen and a good percentage of that is proper governing of your business.
RE: How will all the current changes in the U.S affect the housing market?
RP: We have a mindset across the U.S. of what I call, “Recession, Depression, Obsession.” With all the negative media, consumer confidence is at an all-time low. Business in general is controlled by the mindset of the consumer; 70% of the gross domestic product (GDP) is driven by the consumer. We are now faced with a negative consumer mindset-most of which is based on what they’ve heard and read.
We’re in for an extended recession. If people continue to obsess over that, they will hold tight. Hopefully, with a new Washington and new efforts put in place this year, perhaps we’ll see an uptick and begin the process of recovery and a return to optimism…but it’s going to be tough.
RE: It stands to reason that the U.S. economy will not be well for some time. What type of marketplace do you see for 2009?
RP: Going forward, the marketplace is clearly more realistic and more in line with a balanced market. A good barometer is the pre-boom existing-home sales of 5 million per year. In the boom years, that grew beyond a sustainable level to7 million, largely driven by speculators-who represented about 25%. If you take the speculators out of the equation, you get to about the same numbers as what we saw in 2000.
RE: Buyers and sellers aside, what will be key to getting back on track?
RP: Granted, we now have a larger population base and more area, but I think we’re in a market of about 5 to 5.5 million transactions-and, if that’s the case, the industry should be able to work with that. That’s where we were in the early 2000s. We have to right-size our companies. We can’t continue to think that the market is going to go back to 7 million home sales per year; it’s not. In 2000, we could do quite well because we were sized correctly and our expenses were in line with our expected sales activity.
We are clearly in a recession. The more we delude ourselves about that and believe that we’re going to return to ‘04-’06 levels, the harder a time we’re going to have, and the harder it’s going to be to see good margins.
That market was enabled by the credit standards, allowing mortgages by people who were speculators or bad credit risks. All that it did was create confusion, chaos and greed in the housing industry. It was significantly negative, and now we’re dealing with collateral damage. Foreclosure mitigation efforts by the Treasury Department and Congress, and hopefully lower interest rates, will go a long way toward correcting the balance.
RE: What are the most important drivers toward restoring consumer confidence?
RP: The two biggest drivers to our business are consumer confidence being favorable and the employment/unemployment ratios. We’re likely to see unemployment at 8-10% before it changes. Clearly, people don’t make housing decisions if they’re worried about their jobs and day-to-day living. At the end of 2008, we still saw continuing layoffs and unemployment at almost 6.5%. I believe that will continue through the first quarter. Hopefully, those levels won’t reach double digits. If they do, it will have a significant impact on the level of activity in the housing market.
RE: Some say it is the housing market that will lead to an economic resurgence. How do you see HomeServices fitting into this revival?
RP: As industry leaders, what we need to do is be a voice of reason to the necessary forces that impact our business. Interest rates are too high, relative to the cost of credit and standards-they overreacted from loose standards they had instituted before. We need more balance. The maximum loan limits for government-sponsored enterprises (GSEs) need to get back in line. They are scheduled to be reduced this year. We, as an industry, need to be a voice-and a loud one-to our congressmen to speak out for the housing industry and help housing get back on its feet.
RE: From a business standpoint, what will HomeServices be doing in 2009?
RP: On a core business level, we are truly focused on being more in line with bringing a higher level of customer service to people. Mortgages have reached new levels of complexity for home buyers. We need to provide clarity and understanding; having a focused, single point of contact helps achieve that. We are fully committed to expanding our footprint through key markets, but we prefer to grow in current markets through tuck-in acquisitions.
RE: What should the real estate industry be doing to get people back into buying and selling?
RP: We’re now in a buyer’s market, and today, based on a correction in prices and inventory, it is a great time to buy. It’s our job to make consumers understand this. We need to take initiatives in each market to get to the news media the very things we’re talking about-yes, the market corrected, and yes, values have dropped, but over a five-year horizon, housing is still a great investment and very safe.
Home Buyers Spending More Time Online
December 24, 2008
Home Buyers Tracking Real Estate Markets, Spending More Time Online
by Peter L. Mosca
"Opportunity Knocks," a new brochure from the National Association of Home Builders that describes the many unprecedented opportunities in today's housing market, can be found online at NAHB.com as well as the site claims, "everything you need to know about buying, financing, building, maintaining or remodeling your home." That's good news for builders, since the Internet is the tool that savvy real estate consumers are using to make better business decisions. Even more good news: ultimately, those decisions lead them to the professionals who understand best the real estate market, so found the October comScore Media Metrics report. The report shows that visitors on Realtor.com, for example, are spending more time and viewing more pages as they closely track the pulse of the real estate market in the midst of one of the most challenging housing markets in recent history.
"We're encouraged to see continued increases in page views and the time our users invest on Realtor.com as they search for real estate," said Realtor.com President, Errol Samuelson. "This trend confirms earlier findings from our recent survey indicating a pent up demand for real estate with markets like Stockton-Lodi, CA, Fort Myers-Cape Coral, FL, Las Vegas, NV and Detroit, MI experiencing the greatest year-over-year increases in searches by consumers."
Based on historical comScore data, Realtor.com continues to be the most popular real estate Web site with engagement statistics unmatched by competitors in the category. Consumer traffic increased on the site by 31% year-over-year and by 35% month-to-month as more users visited Realtor.com than any other real estate site in October. Visitors viewed 14% more pages on Realtor.com compared to the same month last year. They spent 460% more minutes on the site compared to the closest competitor, for an 11% year-over-year increase in minutes, as time spent on the entire online real estate category declined by -8%.
Lorna Borenstein, President of Move, Inc. adds, "In today's market, consumers need trustworthy, timely and comprehensive information as they contemplate making a significant investment in real estate. To that end, we continue to develop real estate search tools and resources that deliver the right information at the right time." Borenstein points out that over the past year, the number of users saving a search or listing has doubled and registrations have increased by 50 percent. Also impressive, when visitors to the category leader were offered the opportunity to opt in to receive marketing offers and other communications, they now do so 10 times more often than they did a year ago.
Based on consumer search trends, real estate search is picking up in the markets hit hardest by the recent economic conditions, indicating renewed consumer interest in these areas. Local markets with the greatest year-over-year increases in October searches on Realtor.com included Stockton-Lodi, CA (67.4%), Fort Myers-Cape Coral, FL (57%), Riverside-San Bernardino, CA (44.9%), Naples, FL (42.7%), Las Vegas, NV (40.7%), Miami, FL (35.4%) and Oakland, CA (30%).
In a survey conducted last month, more than two thirds of identified homebuyers said they've held off buying a home because of the overall economic condition. However, approximately five percent of consumers said they plan to buy a home in the next 12 months, about three times the percentage that actually bought this year, and another 17.7 percent plan to buy a home in one to five years from now.
"While today's challenging housing market has affected many, search activity on Realtor.com and findings from recent surveys tell us the desire for homeownership is alive and strong," said Errol Samuelson, President of Realtor.com.
According to the National Association of Home Builders (NAHB), sales of new single-family homes declined 5.3 percent in October to a seasonally adjusted annual rate of 433,000. "The drop in new home sales last month comes as no surprise," said NAHB Chairman Sandy Dunn, a home builder from Point Pleasant, W. VVA "Housing starts in October and NAHB's most recent Housing Market Index, which gauges builder sentiment about the market, were at record lows. And the extreme turmoil in the financial markets in October definitely undermined consumer confidence and served as a drag on demand for housing." Although the new home sales rate declined in October, the Commerce Department reported that homebuilders are making progress in reducing the number of unsold units on the market, said NAHB's Chief Economist David Crowe. "The number of new homes for sale dropped from 414,000 on a seasonally adjusted basis to 381,000. Builders are doing what they need to do to get the market moving again, including cutting prices to the bone, offering incentives and decreasing production," he said.
However, more needs to be done. An economic stimulus package that includes measures to spur home buying and stem the tide of foreclosures is essential to the housing market and to the nation's economy. More specifically, Congress should consider significant consumer incentives such as expanding the first-time home buyer tax credit and providing a government buy-down of mortgage interest rates for home purchasers."
More needs to be done and looking online could be an answer. The numbers speak for themselves: real estate consumers are more educated and are turning to professional experts for advice and services.
________________________________________
Copyright © 2008 Realty Times. All Rights Reserved. With an award winning staff of writers providing up to the minute real estate news and advice, thousands of REALTORS® in North America reporting daily market conditions, and a nationally broadcast television news program, Realty Times is the one-stop shop for real estate information. That's why over 10,000 real estate professionals have turned to us for their publicity needs
Home Buyers Tracking Real Estate Markets, Spending More Time Online
by Peter L. Mosca
"Opportunity Knocks," a new brochure from the National Association of Home Builders that describes the many unprecedented opportunities in today's housing market, can be found online at NAHB.com as well as the site claims, "everything you need to know about buying, financing, building, maintaining or remodeling your home." That's good news for builders, since the Internet is the tool that savvy real estate consumers are using to make better business decisions. Even more good news: ultimately, those decisions lead them to the professionals who understand best the real estate market, so found the October comScore Media Metrics report. The report shows that visitors on Realtor.com, for example, are spending more time and viewing more pages as they closely track the pulse of the real estate market in the midst of one of the most challenging housing markets in recent history.
"We're encouraged to see continued increases in page views and the time our users invest on Realtor.com as they search for real estate," said Realtor.com President, Errol Samuelson. "This trend confirms earlier findings from our recent survey indicating a pent up demand for real estate with markets like Stockton-Lodi, CA, Fort Myers-Cape Coral, FL, Las Vegas, NV and Detroit, MI experiencing the greatest year-over-year increases in searches by consumers."
Based on historical comScore data, Realtor.com continues to be the most popular real estate Web site with engagement statistics unmatched by competitors in the category. Consumer traffic increased on the site by 31% year-over-year and by 35% month-to-month as more users visited Realtor.com than any other real estate site in October. Visitors viewed 14% more pages on Realtor.com compared to the same month last year. They spent 460% more minutes on the site compared to the closest competitor, for an 11% year-over-year increase in minutes, as time spent on the entire online real estate category declined by -8%.
Lorna Borenstein, President of Move, Inc. adds, "In today's market, consumers need trustworthy, timely and comprehensive information as they contemplate making a significant investment in real estate. To that end, we continue to develop real estate search tools and resources that deliver the right information at the right time." Borenstein points out that over the past year, the number of users saving a search or listing has doubled and registrations have increased by 50 percent. Also impressive, when visitors to the category leader were offered the opportunity to opt in to receive marketing offers and other communications, they now do so 10 times more often than they did a year ago.
Based on consumer search trends, real estate search is picking up in the markets hit hardest by the recent economic conditions, indicating renewed consumer interest in these areas. Local markets with the greatest year-over-year increases in October searches on Realtor.com included Stockton-Lodi, CA (67.4%), Fort Myers-Cape Coral, FL (57%), Riverside-San Bernardino, CA (44.9%), Naples, FL (42.7%), Las Vegas, NV (40.7%), Miami, FL (35.4%) and Oakland, CA (30%).
In a survey conducted last month, more than two thirds of identified homebuyers said they've held off buying a home because of the overall economic condition. However, approximately five percent of consumers said they plan to buy a home in the next 12 months, about three times the percentage that actually bought this year, and another 17.7 percent plan to buy a home in one to five years from now.
"While today's challenging housing market has affected many, search activity on Realtor.com and findings from recent surveys tell us the desire for homeownership is alive and strong," said Errol Samuelson, President of Realtor.com.
According to the National Association of Home Builders (NAHB), sales of new single-family homes declined 5.3 percent in October to a seasonally adjusted annual rate of 433,000. "The drop in new home sales last month comes as no surprise," said NAHB Chairman Sandy Dunn, a home builder from Point Pleasant, W. VVA "Housing starts in October and NAHB's most recent Housing Market Index, which gauges builder sentiment about the market, were at record lows. And the extreme turmoil in the financial markets in October definitely undermined consumer confidence and served as a drag on demand for housing." Although the new home sales rate declined in October, the Commerce Department reported that homebuilders are making progress in reducing the number of unsold units on the market, said NAHB's Chief Economist David Crowe. "The number of new homes for sale dropped from 414,000 on a seasonally adjusted basis to 381,000. Builders are doing what they need to do to get the market moving again, including cutting prices to the bone, offering incentives and decreasing production," he said.
However, more needs to be done. An economic stimulus package that includes measures to spur home buying and stem the tide of foreclosures is essential to the housing market and to the nation's economy. More specifically, Congress should consider significant consumer incentives such as expanding the first-time home buyer tax credit and providing a government buy-down of mortgage interest rates for home purchasers."
More needs to be done and looking online could be an answer. The numbers speak for themselves: real estate consumers are more educated and are turning to professional experts for advice and services.
________________________________________
Copyright © 2008 Realty Times. All Rights Reserved. With an award winning staff of writers providing up to the minute real estate news and advice, thousands of REALTORS® in North America reporting daily market conditions, and a nationally broadcast television news program, Realty Times is the one-stop shop for real estate information. That's why over 10,000 real estate professionals have turned to us for their publicity needs
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