Realtor Coaching & Training: real estate
What will happen when the Fed pulls out the support for the mortgage markets..later this month?
That is one of the biggest ‘unknowns’ in the real estate industry.
Interesting points from this video:
* Home sales DOWN over 7%.
* Despite interest rates BELOW 5% demand is not increasing…why?
* Millions of homeowners are upside down and can’t move up…so interest rates don’t help those folks.
* Jumbo Loans are still VERY difficult to obtain. Lenders have to use their own money vs Fannie/ Freddie.
* Shadow inventory expected to hit the markets….5,000,000.
* Government programs are slowing the correction that must happen inorder for the housing market to completely ‘clear’.
Here is the video:
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I have to confess…Julie and I have been sorely remiss in sharing this with you…
.…something that we know from our personal real estate sales experience will make a simply massive impact on your business.
1800HomeHotline.com
Well, during tomorrow’s FREE HREU Friday Superstar Interview we will right the wrong….we will show you exactly how to make money using a 1-800# IVR System.Watch the 1-800 Home Hot line video now to get a sneak preview of what we have in store for you tomorrow.
If you are like me the last thing you want to deal with is some overly technical, hard to use real estate marketing system. Or some marketing widget that ends up taking all your time…and money…that produces little to no results.
Listen, I get it….. You don’t have the time (or the patience) to learn something that won’t lead directly to closed deals….
Here is all the info for tomorrow’s FREE Event:
EVENT: Super Star Interview
DATE & TIME: Friday, March 5th at 9:00am Pacific
FORMAT: Simulcast! (Attend via Phone or Webcast — it’s your choice)
TO ATTEND THIS EVENT, CLICK THIS LINK NOW…
http://AttendThisEvent.com/?eventid=10734663
On tomorrow’s Superstar Interview we will give you the top 10 ways to make money using a 1-800 IVR info line. Even better, we will share with you the exact ways WE used the system in our own real estate business. We can personally attest to the importance if of using a 1-800# Info Line in your real estate business.
Using this system is simply one of the most effective tools for you to use to:
* Take more listings…
* Double end the listings you have….
* An absolutely lethal listing tool…
* Track all your marketing…know what is and isn’t working….
* Amaze your REO Asset Mangers. Show them how you will use this market tool to win listings (REO Assignments)
* One of our favorite hidden benefits of this system…you will learn how to make it so your real estate business runs 24/7 (with out you).
* Attract buyers like a fly to a bright light…..use this system to set up an ‘Exclusive VIP Buyer Program’ where you make available all the latest REO listings…and he buyers call in to your system to get the lastest info.
* In case you didn’t know…whenever anyone calls a 1-800 number they can’t block caller ID from working. What this will result in for you is literally dozens of hot buyer (and seller) leads to follow up on. Lack of leads will no longer be a problem!
We have prepared our exact scripts, listing presetations, buyer presentations…and techniques to share with you on this FREE event. If you have attended our weekly Superstar interviews before you know they are always a lot of fun. Here is the info one last time:
EVENT: Super Star Interview
DATE & TIME: Friday, March 5th at 9:00am Pacific
FORMAT: Simulcast! (Attend via Phone or Webcast — it’s your choice)
TO ATTEND THIS EVENT, CLICK THIS LINK NOW…
http://AttendThisEvent.com/?eventid=10734663
Popularity: 2% [?]
How much underwater does a homeowner have to be before they walk?
In other words…is there a magic number…a number that once reached triggers a strategic default or ‘walk-away’?
Turns out there is.
That number is $70,000 or 25%.
From Diana Olicks blog:
With more and more evidence of more and more borrowers walking away from their mortgage commitments due to overwhelming negative equity, I got to thinking: What exactly is the monetary tipping point for a homeowner, someone occupying the home, hanging pictures on the walls, perhaps raising their kids in the second and third bedrooms, going to the neighborhood block parties…what exactly is the negative equity number that makes them say, “We’re outta here.”
Negative $70,000.
At least according to First American Core Logic. FACL put out its quarterly negative equity report today, showing that the number of “underwater” loans is rising, from 10.7 million in Q3 to 11.3 million in Q4 or 24 percent of all borrowers from 23 percent.
What interested me was a paragraph lower down in the report:
“The rise in negative equity is closely tied to increases in pre-foreclosure activity and is a major factor in changing homeowner default behavior. Once negative equity exceeds 25 percent, or the mortgage balance is $70,000 higher than the current property values, owners begin to default with the same propensity as investors.”
This behavior is apparently measured by the actual data, that is, the default rates of investors vs.. owners and comparing that to loan-to-value ratios.
Agents, don’t think for a second that homeowners doing strategic defaults is going to be a short term problem.
The mortgage industry/ mortgage lenders are living in fear that this trend will become viral. For example, if you hear your neighbor is doing a strategic default you will at least consider doing one yourself.
We are not advocating agents telling their homeowners to strategically default. We ARE advocating agents leaning how to help homeowners who choose to strategically default to short sale vs allowing the home to go into foreclosure. The advantages to the homeowners for doing a short sale massively out weigh a foreclosure….The New Treasury Departments HAFA Guidelines that take effect April 5th will be the next step in streamlining the short sale process.
Bottom line…
Learn how to become a HREU CDPD (Certified Distressed Property Designation) agent. Watch the FREE Agent Short Sale Secrets video and grab your FREE Agent Short Sale Secrets book.
I asked for a little deeper explanation from their economist, Mark Fleming.
“The closing of the gap between owners and investors represents the change in owners behavior because up to that point investors default at higher rates, but beyond that point owners propensity to default increases to nearly match that of investors. It’s not necessarily strategic default – I don’t even like that term because it can’t be identified – but I would characterize it as the behavior becoming more rational or calculating. Put another way, when someone is 25% or on average $70k in the hole, they know they will not climb out of that hole for some time and they figure that they can default and repair their damaged credit while saving money faster than they can ride out the price recovery.”
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More on the just released Case Shiller Home Price Index:
* US Home Prices have been rebounding since April 2009.
* Shadow Inventory…bank owned homes….are going to be a huge problem.
* Many buyers entering the market now because many people simply…feel better…more confident.
* Dr. Shiller thinks the banks Shadow Inventory could reverse the positive trend and there will be another 10% of home value loss in the next 24 months.
Agents, read this post about how to become a REO Listing Agent:
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Interesting article from Bankrate.com. Worth sharing with your real estate clients.
Entering 2010, many home sellers feel they’re mired in the winter of their discontent, but there are signs the real estate market is on the mend. Sales activity is up, homebuilders are finally moving inventory and values are rising slightly in many American cities. At year-end 2009, mortgage rates stood at historic lows, spurring a wave of new applications.
But don’t be too jubilant. A recent report by Deutsche Bank estimates that by 2011, about 48 percent of all U.S. mortgages will be underwater. Short sales and foreclosures will continue to put pressure on home prices in 2010 as they work their way through the pipeline slowly. It was apparent in 2009 that lenders were holding back much of their foreclosure inventories and REO, or real estate-owned property, in an effort to keep values up.
Translation: 2010 IS the Year of the Short Sale. Expect the number of approved short sales to skyrocket in 2010-2011. Learn the NEW ways to easily list and sell short sales. Watch the FREE HREU CDPD Short Sale Secrets video now…and grab your FREE Short Sale book.
Meanwhile, housing’s biggest economic driver — the job market — continues to stagnate as average unemployment remains high, at around 10 percent. So it’s no surprise the new year will ring in another buyer’s market, though with far more upside than in 2009. With that as a backdrop, here are 10 real estate tips for homebuyers and owners in 2010.
Tip 1: Take up Uncle Sam on his offer.
The $8,000 first-time homebuyer tax credit program that helped jump-start the real estate market in 2009 has been extended into 2010 and expanded. First-time homebuyers who sign a binding contract to buy a home by April 30, 2010, and close on it by June 30, 2010, qualify. The program’s maximum income limits have jumped from $75,000 to $125,000 for individuals and from $150,000 to $225,000 for couples.
For those who have owned their homes for at least five years and want to trade up to a different primary residence, a separate $6,500 tax credit has been added. Further, many homeowners who are underwater in their real estate loans are eligible for a loan-modification program with their current mortgage company or loan servicer through the Making Home Affordable Program.
The buyers want to imagine themselves in the house for years to come and your excess decor and whatnots only distract from this vision. And don’t get defensive about colors or design patterns or flooring that you love. It’s OK to grit your teeth as you grin. Let your agent be the buffer. Remember, the customers (your buyers) are always right, unless, of course, they’re low-balling you.
Might as well get a piece of that big stimulus pie while it lasts. At some point, the federal government will have to let the toddler walk on its own legs.
That time…is April of this year. Let your buyers know that they must buy now if they want to take advantage of the tax credit…
Tip 2: Find down payment assistance.
There are several down payment assistance programs for first-time homebuyers at the federal and local levels. Other down-payment assistance programs that can piggyback ongoing federal programs are often available at the city, county and state level. Just conduct an Internet search for “down-payment assistance programs” with your locality’s name added.
Tip 3: Make home improvements now.
For households with access to credit, now may be the best time in years to fix up the homestead, either for a potential sale or simply for the sake of better living. Low financing costs, reduced construction materials costs and lower contractor costs make rehabs more affordable. Repairs that typically yield the highest returns are kitchen and bathroom makeovers with an emphasis on counters and cabinets. Get three different estimates. Then, factor in an additional 10 percent for those on-the-fly “change orders” that inevitably crop up. See home improvement strategies and checklists at Homegain.com.
Tip 4: Hire real estate agents and home inspectors wisely.
Now is not the time to hire a friend or relative as your real estate agent, especially with one of the most important transactions of your life on the line in this still-shaky market. You want someone who is well-connected with other agents, lenders and other fellow industry pros. Check credentials, references and recent performance histories.
Translation: only work with agents who know how to do short sales….list and sell REOs. Agents who have the new mindset of service and the needed skillset to be of service and having their best years ever. Its NOT too late for you to become a REO listing agent. Watch the FREE Agent REO Secrets video and download the FREE Agent REO Secrets book.
If you’re hiring an appraiser, make sure he or she is a veteran with at least five years of experience who’s appropriately state-licensed or state-certified. Because of potential conflicts of interest, don’t pick one based solely on a reference from a real estate agent. The same diligence should apply to hiring a home inspector. Conduct reasonably brief phone interviews with at least two or three before you choose.
Tip 5: Price accordingly, sellers.
This should be on every real estate seller’s priority list. In most of the U.S., there are few reasons that a house can’t go under contract in 60 days or less. The listings that generate activity while others gather dust are typically those whose owners have adjusted expectations based on comparably priced homes, or “comps.” That doesn’t mean you should drop your price precipitously on your well-maintained home to undercut the litany of poor-condition foreclosure homes. It just means “price to the present,” not to a fantasy market.
Tip 6: Don’t wait out the recovery.
Yes sellers, housing has been repriced. And by the looks of things, it will take years — even a decade or more — for values to return to their highs of two years ago. That potential loss you’re fretting over may only be on paper, especially if you’ve been in the house awhile. Example: Take a move-in-ready house that appraises for $250,000. Because there’s competing inventory, your agent advises you to take 10 percent off the price. Now you’ll be selling for $225,000. “Ouch,” you might say. But consider that you only paid $175,000 for the place in 2000. So how is a $50,000 profit, a loss? What’s more, if you’re planning to move up in the same or a similar market, you will likely realize that same 10 percent discount on your move-up purchase.
Tip 7: Think long term.
Buyers, don’t settle for “good enough.” Just because you’re getting a bargain doesn’t mean you’re getting a home that suits your long-term needs. Think functionality, neighborhood, location, access to services, highway access, work routes, schools, relatives and mass transit, and not price only. Do your homework, keep a cool head and carefully examine all the options. If you can spare the time, give yourself an extra month or two to make a decision. A house is a habitat first, an investment second.
If you want to take it a step further, you can buy greener (and more expensive) energy-saving products, including solar energy systems, geothermal heat pumps, small wind systems, residential fuel cells and micro-turbine systems, and get 30 percent tax credit with no spending limit on each system, through 2016. Go to EnergyStar.gov’s Federal Tax Credits for Energy Efficiency for a complete summary.
Tip 9: Consider rent-to-own deals.
The current market has driven many former homeowners into rentals, where they have nothing to show for their payments. Rent-to-own or lease-to-own deals allow buyers to “tire-kick” a home for a designated period while paying a higher-than-market rent to buy down an eventual down-payment. This gets renters vested in a home while they repair their credit and also helps frustrated sellers generate an above-market revenue stream. Make sure to draft a very specific contract that spells out all the options.
Tip 10: Don’t take or make it personal.
Our homes have such a personal connection to us that we’re often challenged to turn them back into just plain houses when it’s time for us to sell. It is always best to remove personal effects such as pictures, knickknacks, mementos, trophies, greeting cards and the like before showing a house. (A good agent or home-stager should emphasize this.) There is a rule of thumb that you should count every item in every room of a for-sale home and eliminate or store 50 percent of them.
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This article cites the increasing unemployment rate as the primary culprit for the projected increase in foreclosures later this year…
We suggest that is only part of the picture.
The real drivers in the seemingly never ending foreclosures are:
1) Higher end homes unable to sell because the move up buyers can’t move up…because their homes are upside down.
2) Virtually not financing available for non FHA qualifying mortgages.
3) Massive number of ARMs adjusting and those owners can’t refinance. Why? They are upside down and no programs exist to help them…
As the biggest driver for new foreclosures in 2010:
4) Strategic Defaults. Homeowners making the economic decision to strategically default vs keeping their underwater home. With the advent of the HAFA Guidelines starting in April, expect even more homeowners to bail on their homes….HREU Students, remember…2010 IS the year of the short sale.
Source: LATimes.com
Reporting from Washington – Experts fear that a new wave of foreclosures will hit this year as prolonged unemployment makes it difficult for millions of homeowners to pay their mortgages — and many of them aren’t likely to get much help from a federal program aimed at keeping them in their houses.
Banks participating in the Home Affordable Modification Program, announced a year ago this week by President Obama, have been slow to turn temporarily reduced mortgage payments into permanent ones.
“The overarching sense is that the mortgage modification process has not worked that well,” said Bert Ely, an independent banking consultant.
Obama administration officials acknowledge that the $75-billion program, which offers banks cash incentives to reduce payments, has had growing pains, and they said they were considering revisions to make it more effective.
Still, the program is expected to show continued progress when data from January are released Wednesday after a strong push by Treasury Department officials to get banks to make more of the modifications permanent.
For example, Bank of America Corp., the nation’s largest servicer of mortgages, said Tuesday that it had increased the number of permanent mortgage modifications to 12,700 last month from 3,200 in December. BofA said an additional 13,700 permanent modifications were in their final stage.
But that’s a drop in the bucket considering that BofA holds about 1 million mortgages that are at least 60 days delinquent. About 4 million homeowners nationwide are 90 days or more delinquent on their mortgages or in foreclosure proceedings, according to Moody’s Economy.com, which analyzes data from credit reporting company Equifax Inc.
Trial modifications and other delays have kept many of those mortgages out of foreclosure, but by the end of this year, 2.4 million borrowers are expected to lose their homes, said Celia Chen, a housing economist at Economy.com.
OK, Full stop! Read that number again….2.4 million short sales and foreclosures in 2010. There are expected to be less than 5 million total home sales….that is staggering.
As an agent you simply must know how to do short sales. When this much of the market is dominated by short sales…what choice do you have. Do this, watch the FREE HREU CDPD (Certified Distressed Property Designation) Agent Short Sale Secrets video…then grab the FREE Short Sale Secrets book. <———Go NOW.
That would be up from 2.1 million foreclosures and short sales last year and five times the annual numbers earlier in the decade.
It’s unclear when those distressed properties would hit the market, but their large numbers are likely to push home prices back down this year, to a bottom in the fourth quarter, Chen said. And that would make things worse for the 25% of homeowners who already owe more on their mortgages than their houses are worth.
We have been predicting that 50% of all homes in the US with mortgages would be upside by mod 2010…..and that prediction appears to be coming true.
The biggest blows will be felt in California, Florida, Nevada and other states where home prices have dropped the most and the ranks of struggling homeowners have swelled.
As of December, 11.4% of California homeowners were 90 days or more late on their loans, according to First American CoreLogic, a Santa Ana real estate data firm. That compares with a delinquency rate of 8.4% nationwide.
Despite an increasing number of foreclosure-prevention efforts, lawmakers and community advocates say they haven’t seen enough improvement.
A report last week by Moody’s Investors Service called the Obama administration modification program’s effect “underwhelming.” But administration officials said the program was on track to reduce payments for 3 million to 4 million homeowners through 2012.
As of Dec. 31, the program had helped get 787,231 home loans modified for three months and had helped make an additional 66,465 modifications permanent.
Officials noted that not all homeowners are eligible — the program is only for owner-occupied homes, and excludes a variety of mortgages, including jumbo loans. And the administration continues to make changes, including a requirement added last month that homeowners document their income before a trial modification is granted.
But the program continues to draw criticism. Banks have complained they’ve had trouble getting homeowners to provide the necessary documents. Frustrated homeowners have complained of bureaucratic runarounds from their servicers. Federal watchdog agencies have criticized the program. And last month the chairman of the House Oversight and Government Reform Committee announced an investigation.
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Is detoxifying your debt obligations by ‘walking away’ from your mortgage morally repugnant or fiscally prudent?
One of the Mega Trends to watch out for this year is the predicted staggering increase in strategic foreclosures (or strategic short sales).
With the implementation of the new HAFA Guidelines will ‘walking away’ become even MORE acceptable?
Expect more and more homeowners requesting your help to short sale their homes to get out of their underwater mortgage vs. the traditional hardship reasons. Agents, take action now and learn how the new HAFA Guidelines will revolutionize the short sale process and allow for the steamlined short sale.
Listen to the replay of the HREU CDPD Short Sale Secrets teleconference:
Emergency HREU CDPD Agent Short Sale Secrets Event Info. <——-Click NOW.
Watch this ABC News story and share your thoughts….
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