Harris Real Estate University Agent Short Sale Secrets coaching students..Read This Now…Short Sales are about to become easier for you and your clients.

Homeowners will no longer have to pay income tax on foreclosed properties or forgiven mortgages if President Bush signs a new law passed by Congress.
That means that most sellers wont have to worry about being taxed on the loss the bank had as a result of their short sale!

U.S. Sen. George Voinovich’s, R-Ohio, Mortgage Relief Act became a law Tuesday after being amended to win passage in the U.S. Senate and U.S. House of Representatives and winning White House approval before Christmas.
This new law is set to expire in 2009 and changes a current law that forces individuals to pay income tax when they have part of their mortgage forgiven or are forced in to foreclosure.

The way the law works now is that a homeowner can be on the hook to pay taxes on the forgiven debt. All that is about to change.

“Removing this tax penalty encourages homeowners and lenders to work together voluntarily so that payments are manageable and foreclosure can be avoided,” Voinovich said. “This tax actually penalizes those who are trying to work it out in a responsible manner.”

The Internal Revenue Service currently taxes any loan forgiveness as income forcing homeowners more in debt because they are being taxed on income that doesn’t exist, Voinovich said in a press release.

Ohio has the highest foreclosure rate in the nation at 3.7 percent and 32 counties had an increase in foreclosure filings above 24 percent including Montgomery County, according to the Mortgage Bankers Association.

Good morning–this is the start of another place you can get the daily message. For now, this will be posted as a simple podcast but by the first of the year, it will be live with links to other sites, relevant commentary and more. This will be available for FREE in Itunes very soon, and we’ll post the link when it’s time.

All of this chatter from Washington about what the government is going to do to help homeowners in this epic housing crisis. We will be posting to our blog every time there is anything new that will be of value to our students. I have yet to see any plan proposed that is designed to truly help more than a handful of borrowers. A vast majority of homeowners will see no benefit of any of these ‘plans’.
Expect more
‘plans’ to be announced as we get closer to the Presidential election.
It seems that having a ‘Save The Homeowner’ plan is the latest must
have for anyone running for office.

Here is the latest….
The Federal Reserve on Tuesday is set to consider a plan that would
mark the central bank’s biggest regulatory response to date of the
country’s mortgage turmoil.

The staff proposal under review would curb the types of subprime
products lenders can offer, prohibit certain misleading disclosures,
and limit the compensation of mortgage brokers. In other words, the
mortgage brokers may be facing yet another challenge. We are not
proponents of the whole ‘lynch the loan officer’ mantra that is so
popular in the media. Of course there were a few bad apples who did
take advantage of their borrowers and they should be dealt with.
However, people have to take responsibility for their own actions.

Here are the proposed ‘New Rules’. The one main thought that you will
have when you read this list of ‘New Rules’ is…when were these NOT
rules.
• Prohibit a lender from engaging in a pattern or practice of lending
without considering borrowers’ ability to repay the loans from sources
other than the home’s value.
• Prohibit a lender from making a loan by relying on income or assets
that it does not verify.
• Restrict prepayment penalties only to loans that meet certain
conditions, including the condition that the penalty expire at least
sixty days before any possible payment increase.
• Require that the lender establish an escrow account for the payment
of property taxes and homeowners’ insurance. The lender may only offer
the borrower the opportunity to opt out of the escrow account after
one year.
More highlights and quotes from their speech.

It also would ban brokers or creditors from coercing or influencing
home appraisers to misrepresent the value of a home and would prohibit
certain practices from loan servicers, such as failing to promptly
credit payments to customers’ accounts.

“Unfair and deceptive acts and practices hurt not just borrowers and
their families, but entire communities, and, indeed, the economy as a
whole,” said Fed Chairman Ben Bernanke, according to prepared remarks.
“They have no place in our mortgage system.”

The staff’s proposal is aimed at rooting out many of the lending
practices that proliferated during the recent housing and credit boom.
Many of these practices, such as certain prepayment penalties and
low-documentation loans, are attributed with exacerbating the current
mortgage crisis.

The proposal would apply to all lenders — state and federally
licensed — touching every corner of the mortgage market. The Fed has
never used this authority this broadly before, and it has been under
constant criticism this year for not acting more aggressively as
lending standards deteriorated in recent years.

“As the mortgage market has become more segmented and as risk has
become more dispersed, market discipline has in some cases broken down
and the incentives to follow prudent lending procedures have, at
times, eroded,” Mr. Bernanke said.

The Fed staff proposal targets high-cost loans secured by a consumer’s
principal dwelling. The proposal said these loans shouldn’t be made
without regard to a borrower’s ability to repay, without verifying the
income and assets of the borrowers, with a prepayment penalty in
certain circumstances, and without establishing that borrowers pay
insurance and taxes on the property

The staff proposal would also “generally” ban lenders from “directly
or indirectly paying mortgage brokers in connection with consumer
credit transactions secured by a consumer’s principal dwelling, unless
the mortgage broker enters into a written agreement with the consumer”
and provides certain disclosures. Creditors wouldn’t be banned from
paying brokers if the compensation isn’t determined by the borrower’s
interest rate.

Fed staff also are proposing to ban lenders from structuring
traditionally “closed-end” mortgage products as “open-ended.” Fed
staff believes this is necessary to prevent lenders from trying to
evade the new protections.

The new proposal would apply to loans secured by the consumer’s
principal dwelling where the annual percentage rate exceeds the yield
on comparable Treasury securities by at least three percentage points
on first-lien loans, or five percentage points for second-lien loans.

Because the staff recommends the policy be applied to loans where the
principal dwelling is the primary collateral, it would not apply to
speculators or investors who do not live in the homes they purchase.
From an investors stand point…this is a good thing.

If the Fed’s five governors decide to issue the proposal, the public
would likely have at least two months to comment on it before the Fed
ultimately makes it a final rule. The rule would only apply to loans
going forward, not the subprime adjustable-rate loans that became
extremely popular during the recent housing boom. In other words,
those home owners who are already in the deep end…are being left to
sink to the bottom.

The staff proposal would require that prepayment penalties on
high-cost loans expire at least 60 days before an adjustable-rate loan
resets from its starter rate into a higher rate. Many prepayment
penalties on subprime adjustable-rate mortgages ran right up to or
beyond the reset date. This often happened because the loan officers
didn’t explain what the PP was and were often paid an extra
commission. However, in some cases the actual investor may of made the
prepayment penalty a requirement of the loan.

Though the Fed’s proposal would apply to all subprime lenders, the
central bank would not be charged with enforcing its proposal for
every company. But a final rule would make it much easier for state
attorneys general, the Federal Trade Commission, and private lawsuits
to go after those who violate the new policies.

“These proposals alone will not end all of the problems in the
mortgage market,” said Fed governor Randall Kroszner, according to
prepared remarks. “We do believe, however, that the carefully
considered rules that we are proposing today will go far toward
ensuring reasonable credit options for consumers while stemming the
problems we have seen.”

The plan would ban seven marketing practices, including marketing
loans as having “fixed rates” when the fixed rate is for only a
limited period of time. Lenders would also be banned from “advertising
claims of debt elimination if the product would merely replace one
debt obligation with another,” according to the proposal. In case you
didn’t know it many of the companies that market themselves as debt
consolidation firms are actually mortgage companies.

Now Good As Tim As Any To Buy Rental Properties

This past week, Robert Kiyosaki, author of “Rich Dad, Poor Dad,” one of the best-selling personal finance books of all time, dropped by my radio show to talk real estate. Yes the waters are rocky, the mortgages may be harder to come by, but particularly if you’re interested in buying rental properties with an eye toward becoming a bit of a mogul yourself, Kiyosaki says now is as good a time as any.

The stats seem to bear him out. Home prices fell 1.7 percent in the third quarter of this year, according to the S&P Case/Shiller Home Price Index and many experts, including Kiyosaki, are predicting a continued decline.

He says to people like him and Donald Trump, his co-author on a volume called “Why We Want You To Be Rich,” (Rich Press) the fact that prices are going to plummet even further is good news: It makes buying even more lucrative.

But investing in rental properties isn’t a decision to be taken lightly. It requires a whole lot of know-how and (preferably) a shining credit report. You also need a firm understanding of exactly what you’re signing up for, which means knowing your local market inside and out.

Here’s how you can turn today’s bleak market to your advantage:

Get your credit in shape. True, you can probably purchase a property with a middle of the road credit score. But do you want to? A low credit score means a high interest rate on your mortgage, and that increased expense is going to cut into your overhead pretty dramatically. So, take the next 12 months to improve your credit score before diving in. Pay your bills on time, turn down offers of new credit and reduce your outstanding balances.

Study up. Jumping in without knowing the basics is the wrong move. Before you signon any dotted lines, take the time to read a few solid (and up-to-date) books on real-estate investing. Once you feel you have a pretty good — albeit broad — handle on the subject, you can start scoping out the market where you plan to buy.

“You need to go out and see the area for yourself. Look at a lot of properties, get a handle on what they are renting for, and how much insurance and property taxes will be so you don’t have any surprises,” advises Thomas Lucier, an investor in Florida and author of “The No-Nonsense Real Estate Investor’s Kit,” (Wiley, 2006). Do it in person, but also check out the classified sections of your local newspapers to get a feel for the rents.

Spot a good investment. Location is key, obviously, and a good rule of thumb is to not buy rental property in an area where you yourself wouldn’t be willing to live. That means looking at crime rates, as well as walking the neighborhood during the day and after dark. It also means looking at things like the age of the property (an older building can mean more repairs), and enlist the help of a good inspector who will spot any structural problems.

Start small. Lucier suggests a duplex that will allow you the ability to live in one side and rent out the other. Even Kiyosaki, who says he now only buys apartment buildings with more than 300 units, started with a small condo on the island of Maui, Hawaii.

“I’ve ridden the market up and down, and that’s how I got smart,” he explains. As you gain experience, you can slowly begin to expand your portfolio.

Focus on cash flow. The key to making money off of your investment properties is thinking in terms of cash flow rather than capital gains, says Kiyosaki. “When I buy a piece of real estate, my first question is what’s my cash flow? What’s my rental income from the property? A property is only worth its rent.” That means adding up your mortgage payments, property taxes, insurance costs and maintenance, and subtracting that figure from what you can reasonably charge for rent. The amount that’s left? It’s your salary. Increase it by becoming a do-it-yourselfer, if you have the time and skill to fix a leaky faucet.

The Cincinnati Post  Talking Money by Jean Chatzky

The market is radically different than it was 2 years ago-and even six months ago. Real estate agents need to change the way they are doing business even if they had been successful in the past.

Many of those agents were simply unwilling to change, even when their efforts were clearly not working. They actually believed that what worked in the past super hot, almost insane sellers market would work in this market. Nothing could be further from the truth. Agents are often very fearful of change. Its common for agents to say things like;

“I’ve always done things this way”

“I’m just not that kind of person”

“There is only one way to do things and thats the way I am doing them!”

These agents are stuck in the past. If you want to not only survive but thrive in this market you must remember that if you keep doing what you have always done you will go on getting what you have always got. If what you were doing simply doesn’t work in this market and you continue to do it then your only other option will be to leave the real estate business.

There are countless examples of where an unwillingness to try something new, or an unwillingness to do something differently, will interfere with your chances of success. Make a list of everything in your business that is being done the exact same way it was being done 12-24 months ago. Remember, this new market requires that you change. Ask yourself these questions;

1. Have I changed the way that I generate leads?

2. Have I changed the way I do listing presentations?

3. Have I changed my pre-listing package to reflect this market? (do you even have a pre-listing package)

4. Do you use memorized, scripts and presentations that reflect this market?

5. Have I upgraded my skills, or learned skills to work with buyers?

Lead Generation

This time of year you must not be kicking back. You positively must focus and work more intensely than you have at any other time of year. Why?  Simple, because this is the time of year when most of the realtors get out of the business for the rest of the year, because they figure there aren’t any homes left to sell or they get out of the business forever, because they figure the real estate market’s not where they want to be.

Regardless, there has never been a single time in the history of selling homes according to the National Association of Realtors where there’s this many homes for sale. When there are this many homes for sale the only natural conclusion you can come to is that there will be literally millions of expired’s and FSBOs that will be desperately listing their homes with you.

Focus what I’m about to tell you, millions and millions of people need to list their homes and at the same time the number of realtors is going down dramatically. Take advantage of that. Build your listing inventory now for the spring that’s the key, so the focus this week is the commitment to learning and helping you learn how to lead generate. We’re going to give you a few tips.

1. Every single day show up at 8:00 or 9:00 a.m.

I say that and as I was saying it to you I was thinking back to someone in the audience while we were speaking in Orlando. They said they work out of their house, they tried working from the office but it was too distracting, so they found that working from their house was more effective. That’s fine. Showing up at 8:00 or 9:00 in the morning means show up at your office in your house or at the real estate office, but it means show up to work. It means actually being on time as if you had a boss, because you do it’s you and your other boss is your family.

2. Do two to three hours per day of focused intense lead generation.

There are a lot of people listening to this message, 6,000 every day and probably half of you prospect, pick up the phones and work them that’s terrific, continue to do that. A lot of you who haven’t started prospecting yet you have to start prospecting, pick up the phone and begin calling the expired’s. I know it’s scary and if you haven’t done it before I understand why you may be apprehensive, which leads to a special announcement for all of you.

Planning is one thing–changing is another. What are you guys doing? From my new market manifesto. Ask for a copy if you’d like!

The Stages of Change.

1. Anxiety. “Can I deal with this change. Am I ready? Do I know enough? What will happen if I don’t change?” Caution; Don’t allow yourself to go into denial. Anxiety will go away as you progress to the next stage.

2. Happiness. “Hurrah something is going to change. I am excited that I can feel things are finally moving forward. I can now feel like I am finally headed in the right direction. I want to tell the world!”

3. Fear. “Oh Boy, here it comes….can I really deal with this change…what will my family and friends think?. What will the other agents think?. Can I handle the success or potential failure?”Caution: At this stage of change the ego often comes into play. Depak Chopra said that ‘All Fear is based in ego. The ego creates fear to stop the change”

4. Threat. “Lets get ready to rumble. What will the other agent do when I change?What will happen?Who will attack me..will I get sued?” Caution; Watch out that you don’t allow yourself to start to experience disillusionment or a feeling of no longer caring.

5. Guilt. “I cant BELIEVE that I actually believed that before..I can’t believe that I spent SO much time doing something so ridiculous” Caution: Don’t allow yourself to become depressed at this stage. You need to forgive yourself and move on.

6. Gradual Acceptance. “Okay, I am here…thats the past…I am moving forward…”

7. Moving Forward. “Wow, this is really going to work!”

Where are you in this process? Have you been stuck at one of these levels of change and don’t know what to do next? You are not alone.

We’re always available and ready to help. Email coachtimharris@gmail.com for Tim, or coachjulieharris@gmail.com for July.

Go forth and conquer.

Welcome! Thanks again for googling Tim and Julie Harris.

Yes, we will be having a podcast of the best stuff we’re publishing. We’ll have both normal and premium content, and this is the first post. This is a test version so we can submit our podcast to all of the search engines.

You will be able to subscribe in itunes very shortly!

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