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Great minds, great information…

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Between Freddie and Fannie there are still 218,000 foreclosures set to come on the market.  As reported in Creative Real Estate Daily, in terms of Fannie, just as we were so surprised and pleased that Freddie Mac had actually turned a profit in the first quarter of this year (see the article, “Did I Miss the Freddie Mac Bake Sale?” posted last week), Fannie Mae comes out with its first quarter numbers. The GSE had a loss to the tune of $8.7 billion in the 2011 first quarter! It’s enough to make you want to do a Donald Trump on the agency—you’re fired!

Fannie Mae says this was mainly because of declining home prices in that quarter. Really? Would that be the only reason?

With needing to draw additional funds to cover these losses, Fannie Mae’s draw on the government piggy bank (since the government seized control of Fannie in late 2008) has now reached nearly $100 billion.

Fannie Mae’s first quarter production numbers look like this:

  • 51,043 loan modifications
  • 78,000 single-family loan workouts  (including  60,000+ home retention solutions)
  • 17,120 short sales and deeds-in-lieu of foreclosure
  • 53,549 REO properties gained through foreclosure  (up nearly 8,000 from the 2010 first quarter)
  • Total single-family REO inventory (as of Mar. 31, 2011): 153,224 with a value of $14.1 billion.

Dave Liniger mentioned at the Catalyst Conference that Bank of America is holding 700,000 properties that are 90 days late – not sure what other banks are holding.

The big question is – how many are here locally?  How will it affect our market?  How will it affect our prices?

RealtyTrac has released the results of its statistical study on which U.S. cities are the best places to buy foreclosures in 2011. It started with the 100 most highly populated metropolitan areas, and then used a 10-category criteria of things like unemployment rates, foreclosure activity, and sales prices to narrow the field. The result is the 10 best cities to buy and invest in foreclosures this year:

  1. Akron, OH
  2. Rochester, NY
  3. Buffalo, NY
  4. Cleveland, OH
  5. Portland, ME
  6. Milwaukee, WI
  7. San Jose, CA
  8. Memphis, TN
  9. San Diego, CA
  10. Durham, NC

Guess what, we aren’t in here which is good for us!  Thanks for the update Creative Real Estate Daily!

Microsoft bought Skype for $8.5B – Wow! EBay Inc. bought Skype in 2005 for around $3.1 billion but took a $1.4 billion charge for the transaction in 2007 after it failed to produce.  Regardless, jump on board Skype – 107 million users Skyped 207 billion minutes.  Also, when communicating with people 55% of communication is physiological, 38% is tonality and 7% is words.  Emails and texts can get misconstrued, get in front of your clients or get them on Skype – it’s free!

State attorneys general are holding meetings with the nation's largest mortgage servicers this week to negotiate a settlement agreement for the robo-signing issues that surfaced last fall.  Speculation on the combined fine amount ranges from $5 billion to $20 billion.  The services include Bank of America and Wells Fargo among other banks.  Stay tuned for more details.

Mark Zuckerman of Facebook looks to have purchased a $7,000,000 home in California.  Not too shabby for a 26 year old!

Online real estate brokerage Redfin has removed 42 agents from its partner referral program due to mixed customer reviews, the company announced in a blog post Friday.  Redfin also axed eight partner agents for creating fake customer reviews – integrity counts.  We just have to get them to not rebate back to buyers off the HUD!!

Home Alone house is on the market for $2.4 million!  Great house, great neighborhood, bratty kid not included!

Mortgage rates are at this year’s lows, purchase mortgage loans are up and I know Leslie Wish will tell us all about it and MARS has reared its head again and I know Sadaf Saberi and Ryan Koppel will cover this topic for us as well.

You now have great information to help you with your business and to talk with clients about to show you are the expert.  Get it?  Got it?  Good!

Now, go sell something!

 

A fad? I don’t think so!

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Social Media is here to stay.  It was reported on the news that the killing of Osama Bin Laden was being tweeted live by Sohaib Athar as the raid occurred.  As the death Bin Laden was being reported, over 4,000 tweets per second were being posted – the typical average is 600 per second.  If you noticed, people at the Mets and Phillies game were getting the news of his death on their smart phones – no doubt many through social media postings.  The question is, how did you hear about his death?  I heard several people saw the postings on Facebook.  If people are going to these sites so frequently and getting their news there, why aren’t you there?

People are getting the news of school delays from weather from social media sites as well as other news about friends and family.  If you aren’t it the social media game, you will be out of the game before you know it.

  1. Check out the Facebook numbers – http://www.facebook.com/press/info.php?statistics
  2. Here are twitter’s numbers – http://www.marketingpilgrim.com/2011/03/twitter-by-their-numbers.html  – there are over 460,000 new accounts per day in the last month alone!
  3. How about YouTube?  http://www.reelseo.com/youtube-statistics/   - more of the same!
  4. Then there is Linkedin – over 100 million users and the identities are real people.

There are so many other sites but these are the some of the most visited.  Get busy getting social if you want to survive and thrive in today’s business world.  Get it?  Got it?  Good!

Now, go sell something!

In like lion, out like a lamb….NOT!

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Look at house 

Here is a quick market update for the end of April. 

The spring market is officially in high gear!  Let’s see what the numbers are telling us about the real estate market in our area.

Our resale inventory for the Northern Virginia Market has increased 8 consecutive weeks and we are now over 7,100 houses currently for sale.  It is the first time we have had this much inventory since the third week of November 2010.  It is important to realize that houses continue to sell when they are priced right – which means under market in some areas and price points – and show like model homes. 

The good news is distressed property inventory is down.  Distressed properties only make up 16.1% of our market – down from a high of 45.5%.  This is good for now but more distressed properties loom on the horizon.  At RE/MAX meetings this week Dave Liniger reported that Bank of America has over 700,000 loans more than 90 days late on their payments.  

Inventory of vacant properties continues to decline which means we are flushing through foreclosure properties.  Pending sales are down slightly over the last seven days but it is taking longer to negotiate contracts so we may see an uptick next week – stay tuned. 

We currently have a 2.2 month supply of homes for houses that have gone under contract the last 30 days and a 3.2 month supply of houses that settled the last 30 days. 

The market is staying strong for investors – prices remain reasonable, rental prices are up, interest rates are low and we have a 1.1 month supply of rentals – extremely low.

When armed with the right information, you can give your clients the right advice whether they are buying or selling a house.  Get it?  Got it?  Good!

Now, go sell something!

Got Short Sales? What you need to know…

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House 2 
 
We had another outstanding training on Friday, this time on short sales.  Jane Clawson and Sara Rodriguez put on an informative meeting that went over 1.5 hours on how to increase the chances of your short sale getting to settlement. 

First thing to know is that although short sale/distressed property inventory is down locally and has been decreasing over the last several weeks, they are going to be a part of our residential landscape for the next 3 to 5 years.  So whether you like to deal with them or not, you need to learn how to deal with them appropriately to get the best results for your clients whether they are buying or selling houses.

First things first, set the right expectations for your sellers.  In today’s market, short sales are taking a very long time to complete, banks are not necessarily releasing people of their liabilities, they are providing 1099’s at closing, they have been asking for interest free loans for a portion of the balance owed and most importantly, they need to be upfront with you.  Are they current with their payments – if not, when was the last time they made a payment.  Also, how many loans are on the property, are there any judgments against the property, and are they current on their HOA or condo dues.  Just so you don’t have any complications at the last minute, ask them to speak with a reputable bankruptcy attorney to make certain this is or is not an option for them.  Speak with the bank about a potential loan mod as well.  Lastly, speak with an accountant about potential tax liabilities of the short sale. 

In order to give yourself the best shot, fill out the owner’s bank paperwork –not forms you develop or others that you may have picked up at a seminar.  The best way to expedite this part of the process is to go to shortsalesuperstars.com.  They have every bank’s short sale paperwork readily available or get the paperwork directly from the lender.  Every page needs to have the owner’s name and loan number on them – bar none.  Have your title company do a preliminary HUD-1 with all charges that apply – past due association fees, well/septic fees, home warranty, agent fees, etc. because bank will push back on fees so it is better to give them the worst case scenario dollars wise upfront and provide them with a title search as well.

Follow up 24 -48 hours after you send it to ensure it was received.  The process only begins once the entire package has been received.  Ask if they have a complete package.

Harassment works – call two to three times per week.  Ask if foreclosure date is set – if so, when.  Has a negotiator been assigned?  Have they ordered the BPO yet – if not, can you call and order while I am on the phone?  Where are we in the process…whatever it is just call regularly.  Remember the person on the phone doesn’t think outside the box so work within their guidelines.

The bank is not always the investor so you need to find out who the investor is and who will be making the decisions.  Also, all banks handle short sales differently so you need to know the bank and their process – some only answer emails, some only answer phones in the morning, and others the afternoon.  Get into their routine and know how to work with them.

Other notes of interest – foreclosures can be stopped with a contract but all hands need to be on deck and work expeditiously to get it done.  Short sales can hurt your credit for 2-4 years, bankruptcy and foreclosure are both longer.  For more details on the credit situations, go to http://lindaferrari.com/.  Remember, the title company represents the transaction and not the seller so title companies will not do seller only closings.  Also, it is best to have the seller directly negotiate the outstanding condo, HOA or IRS judgments with the appropriate party as they will have the most leverage.  They are less likely to negotiate with an attorney because they will say if they can pay for an attorney, they can pay their bill.

For additional questions or concerns, feel free to call Jane or Sara at 703-448-3556 or me at 703-652-5777.  Again, keep up with trends, numbers, and processes and you will get results.  Get it?  Got it?  Good!

Now, go sell something!

 

It’s good to know!

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We had another great real estate exchange yesterday at Clyde’s in Ashburn sponsored by Jane Clawson at Ekko Title and Josh Burruss at Potomac Mortgage Group.  We discussed the Loudoun housing market as well as the Northern Virginia housing market and how inventory is up due to the time of year but distressed property inventory is down.  This trend has been occurring for the last few weeks throughout the region. 

New home sales are more and more prevalent as the houses that are for sale are not priced right or are not in the right condition and if they are, they are receiving multiple offers with escalation clauses.  In addition to lack of acceptable housing in the resale market, builders are now priced right and are offering a viable option. 

A few agents are experience appraisal issues and as prices escalate, we anticipate seeing even more as underwriters are not in sync with the market and appraisers want to be conservative and not be too far ahead of the curve in pricing like we saw from 2004-2006 – stay tuned!

Josh mentioned that rates remain great – 4.75% with no points on conforming/FHA products and just 5% on conforming jumbo products.  One reason we continue to see great rates is that inflation is came in lower than expected on Friday despite the fact that gas prices and food prices are on the rise.  On Monday, Standard and Poor’s downgraded the US debt which resulted in a slight uptick in rates.  It is the first time since 1995-1996 that they have downgraded the debt, if this trend continues, we will see rates rise and rise quickly – keep an eye out for further announcements.  Loan applications continue to roll in for purchases – 86% of applications were purchase apps and 75% of those were for new homes.  Again, new homes are having an impact in the Northern Virginia housing market.

Jane discussed the importance of utilizing reputable partners when buying or selling houses.  They have seen recent trends when researching titles that there are rampant defects in title.  This is because previous title companies have not gone back 40 years when looking at the title history, they just went back an owner or two. Jane and her team will go back and contact the banks to get liens released or indemnify the parties so they can move forward with the transaction, receive their title insurance and move forward. Lately, they are seeing unreleased liens, mistakes made with the wrong substitute trustee selling the properties, issues with previous second trusts and more.  Be sure you work with a reputable team to handle these issues and protect your clients.   Also, remember that you cannot put “owner of record” as seller on your contracts.  Call Ekko and they can do a quick title bring down and let you know who is the owner of the property – you need to know who has the authority to sell the house. It’s good to know and to work with people in the know.

Next, we discussed our listings and reviewed buyer needs.  Activity on listings is up which means buyers are out in the marketplace – get your house in the right condition and price it right to get a sale!  Investors are still hungry for properties in the lower price points as the rental market remains strong and rents are brining great returns.

It is imperative to stay on top of the market, review trends, and network with other professionals to inform your clients of what to do when buying or selling real estate.  Get it?  Got it?  Good!

Now, go sell something!

Don’t kick yourself later…stay on top of the trends!

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Platinum Group April 2011

The Platinum Group is made up of Realtors from various companies that meet once per month who earn in excess of $250,000 – the true top producers in the business.  We discuss market conditions, trends, short sales, foreclosures and many other topics.  The advice given should be taken to heart if you are in the market to buy or sell as this is relevant information in regards to our market.  If you are an agent, feel free to share what we discuss with your clients.

Spring has sprung…inventory levels are up just as we had expected them to be this time of year but what has surprised me is that the level has jumped 13% in just 2 weeks.  Luckily, there are buyers out there looking to own because decent listings are coming on and off the market.  Houses are selling but the properties need be in the right condition and priced right.  Above average condition is selling – low prices are selling – if you have both they are sold, if you only have one or the other you are sitting on the market.  It is imperative now more than ever to understand this scenario.  If you don’t, the house will stay on the market.

Although inventory levels are rising, the good news about our market is that foreclosure and short sale activity have been stable and are making up a lower percentage of the inventory available.  I am not completely sure if we have seen the bottom on this or not – my experience and what will be written about later also indicate we are not completely out of the woods in regards to distressed properties.

In the price range $475,000-650,000, there has been little to no activity in Centreville/Chantilly…first time buyers are buying and the wealthy understand the value of the market – interest rates, property values, etc. so they are buying in upper price points.  The reason for this being a difficult price point is because of lack of move up buyers in the market today.  Many move up buyers over the last 3-4 years have either short sold or got foreclosed on so there is now a void in the market – it may take a few more years for this segment of the market to recover – stay tuned!

Sellers are more willing to do work today – they are watching home improvement shows, are  going on line and look at other properties and how they are presented and making the house show to attract buyers.  Putting the home in model condition is the key.  Decluttering, neutralizing colors, sprucing up the yard, packing up belongings and getting a storage unit are the keys to getting the house in the right condition to sell.  I find it interesting that we spoke about this on more than one occasion this month.

Be careful how you load you photos – some internet sites only pull the first 5 posted on MLS.

Foreclosure releases are slow and have been since November.  Many people are still in the house because they know they can stay in the house and not pay any mortgage or rent and cash for keys is nowhere near the savings of not paying at all.  In reviewing the paper and in particular, the public notice section, more foreclosures are likely to come on the as filing notices are increasing in the paper.  Fannie Mae is sitting on 162,000 properties valued at $15 Billion.  All total with banks, and Freddie included, there is over $1 Trillion inventory.  Obviously, these numbers are national numbers – we are looking into local numbers so stay tuned.

To understand the consequences of short sales and foreclosures, go to www.lindaferrari.com she has all the potential scenarios.  Your credit score may be the least of your worries.

Interest rates are projected to be in the range they are today through the summer which should help us absorb the increase in inventory levels this time of year.

This is valuable, timely and informative which needs to be acted upon and/or shared.  Get it?  Got it?  Good!

Now, go sell something!

Tidbits from the Spring Economic Update…

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Yesterday was the Spring Economic Update 2011 for NVAR and as usual, it was chock full of information on not only the national economy but the local economy as well.  The featured speaker was Dr. Stephen Fuller and he gave his insight into what could expect on our way out of the recession and on the road to recovery.

35% of the local economy is the federal government but it is not driving our growth as it did from 2000-2010 when it was a much larger factor.

The remaining 65% of the economy is driving our growth even though it doesn’t have the bank roll of the gov’t it is still good.  We can’t print money like the federal government.

Still a jobless recovery – efficiency and technology recovery – more productive workforce and is stronger than everyone expected.  We are on track for a recovery for similar to 1991 – 52,000 jobs lost in 2009 we lost 50,000 but tracking in terms of GDP in the 2009 recession.

Differences 1/3 GDP was manufacturing – today is 10% of GDP; Global Economy today; flexible workforce – people work from home; Stimulus money helped us as well; Expansion is wide spread & broad based – educ/health, professional & business serv, leisure and hospitality, and manufacturing are leading the way.

Credit card debt is up 2 months in a row – savings are down as well.  People are spending – consumer confidence is up – February not as bad as last year in terms of weather so people were out spending.

Manufacturing up 19 consecutive months – non manufacturing up 17 months – these are both better than expected.  New orders continue to come in as well.

We are doing same amount of work with 8,000,000 fewer workers since recession began. ¼ of workers have been re-employed then unemployed again.  Unemployment numbers are down and are coming down faster than expected but may be misleading.  Unemployment is at 8.9% now was at 9.5% at the beginning of the year and is projected to be 8.8% by the end of the year.

Consumer’s perspective on the economy – they believe future is better than the past and are close to optimistic but the present situation is not as good as expectations.

New home sales, although at near historic lows, are on the road to recovery.  Next year will be better and their increases will come in the last quarter of this year.

Federal Reserve is expected to increase the Fed Rate by ¼% and as a result, mortgage rates will increase.  Expect rates to remain low through the fall buying season then increase after that time frame.

Energy prices, taxes, and rates are all going to go up.  Oil prices will rise – payroll taxes will go up – interest rates are going up as well.

No big bubbles on the horizon in the economy.

Locally, we are in recovery with a good trajectory and gaining altitude.

Jobs are coming back but not as much as was predicted by the labor bureau.  January was strong for job growth.  We have gained the most jobs out of the top 15 markets – Washington area and Boston are the only 2 markets to increase and we doubled them in creation of jobs.  This January was the first January in we did not lose jobs in the construction sector.  Over 40,000 jobs were lost in this sector alone.  We have 4.7% unemployment rate in NOVA – Arlington is 4.3% and is the lowest in the state.  Non-local service businesses will help pick up the slack of the government not expanding.  These are businesses are businesses that don’t need to be here but want to be here – not tied to the government.

The economy is expanding without the aid of housing – 19% of GDP is the housing sector and all that goes along with it.  Typically housing is the juice that fueled the recoveries in the past – this recovery will not see housing contribute until 2012/2013 – we saved the best for last.  Pent up demand in move up market will help drive the recovery in the future.  NOVA is driving the housing recovery locally.  If we average 6%, which is predicted, then we will get our numbers/values back in 3 years.

Forecast and challenges in 2011 for housing

  1. Low consumer confidence – fear about jobs/economy
  2. More difficult lending processes
  3. Lack of urgency
  4. Foreclosures remain in some jurisdictions
  5. Shift in housing preference – will affect builders more than re-sales but buyer’s preferences will dictate what will sell
  6. More apartments will be built – a few condo projects are on the horizon – new builds will enter market near the end of the year, beginning of next year

We have a shortage of housing – 705,000 jobs are needed to fill the demand we have in our area which is 220,000 households that we will need that we don’t have currently.  The future is bright for us in housing.  Public policy will be our challenge – gov’t wants the jobs but not the houses because houses mean police/fire & rescue, schools, etc.

Policy-cra.gmu.edu is where you can find PowerPoint slides

It is more important now than ever to stay up to date and informed as the market continues to evolve.  More changes are on the horizon with Fannie Mae and Freddie Mac, pricing, short sale reforms and much more I am sure so read, attend seminars and go to trainings.  Get it?  Got it?  Good!

Now, go sell something!

 

 

Cha, Cha, Cha,Changes….

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The real estate market continues to change. Loan programs are changing, rules and regulations in lending are changing, interest rates are changing, prices are changing, activity levels are changing and it takes a professional to help consumers wade through the complexities of the market and give their buyers and sellers the right advice when dealing with real estate. Yes, there are agents who have a license, who can show properties, write contracts, attend inspections and settlement but it takes a professional to explain trends, understand data, and give the right advice to people when buying and selling homes.

The internet has helped the consumer find information on real estate – what is for sale, neighborhood information, school information, crime reports, and if they can dig deep enough, sold data through tax record information. But does this really tell the whole story? Were points or closing costs paid by the seller –if so, how much was paid? What was the property’s condition? Was it a distressed property or not and how did that play into the final sales price? Were there multiple contracts on the property? There is so much more to the story – tell your clients about this information that is not available on the web. The internet provides information – as a professional, you need to provide insight. If you do, you will demonstrate your value and get paid what you are deserved each and every time.

To be able to tell someone now is a good time to buy or sell a home takes market awareness. Where are interest rates today and why? Will they be rising or falling and why? How does this impact the decision on when to buy or sell and why? What is happening with FHA condo approvals and how will it impact both buyers and sellers? Is activity up or down in the market and how will impact pricing? Is activity up or down? How does the agent know? It isn’t knowledge that is power it is the use of knowledge that is power. Use your knowledge to empower people to make the right decisions.

Get involved in the market – preview houses, visit new home sites, network with other leading professionals in our business to get the pulse on the market. Now is the time to make yourself an indispensable asset to your database and create clients for life. Get it? Got it? Good! Now, go sell something!

Shakespeare said it then, Scott says it now

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To blog or not to blog – that is the question.  My answer is to blog. There is business to be gained by blogging.  What is important to keep in mind when posting is what is the purpose of your blog?  Are you looking to pick up buyers or sellers, be a neighborhood expert or do have another goal in mind?   Whatever it is, keep this as your focus in every blog you post.

My belief is it is our job to let the consumer read what they need to read, hear what they need to hear and learn about what is really happening in the market from the experts and so they don’t get wrapped up in what the media wants them to read, hear and see.   The media’s job is to sell negative information and not plant the right seed.

What can you blog about?  Neighborhoods, client interactions, success stories, your listings, homes you have previewed – deal of the day or week, life experiences, your interactions with others or anything else you find interesting or think someone else may find interesting. 

Why is it important?  It is important because the consumer goes to the internet to get information on everything – not just houses.  This being said, when they are looking to make one of the biggest decisions of their life, don’t you think they will do more research on this topic than not?  This is why blogging is important.  Get your word out to others on where the market is – don’t be afraid to make your opinion known.

Who is reading blogs?  As previously mentioned, the consumer but also other are people you will invite to read it – past clients, other Realtors and real estate professionals, your sphere of influence and people interested in the neighborhood or area you are blogging about.  If you make it interesting, keep it up to date, and do it consistently, you will gain readership.  Why are Realtors and other industry professionals reading blogs?  To find good referral sources for their relocating clients.  If you have a relocating client, do you help them find a Realtor where they are moving?  How do you narrow down the selection?  Typically I look at production, what their hobbies and interests are and if they match my client’s hobbies and interests, if they have a website and if they blog.  If they blog, I read their blog to determine if they are positive or negative, on target with the market and generally what their knowledge is in real estate.  The more they know in what they say and how they say it, the more likely I am to refer them.

Pitfalls – time, writing ability, how to come up with new ideas, where to get started, to pay or not to pay for your blog site, and does your company have a policy on blogging?

Good examples

Bad examples

What to avoid – negativism, writing about a specific case as it is in process, defamation of character issues

What to include – add pictures, hyperlinks and video.  Have a good title, insert good metatags and keywords.  Solve a problem or provide valuable information (housing stats, trends, pricing, DOM, companies moving/relocating into the area), say it simply and in layman’s terms not in our language, again, have a call to action (subscribe here, click here for free home search, follow us here, email me for more details here, click here for a free home buying/home selling consultation, etc. and as always, make it about them – not you!

It’s all about results and ROI on your time.  Be sure to work with a site that will allow you to track numbers such as total page views, average page views per day, unique visitors, bounce rates, referral websites and most popular pages.  Also, ask for people to share and comment on your blog and you in turn should return the favor.  Give in slices, get returned in loaves!

Things to consider now that we have reviewed blogging…How do you benefit?  What can happen?  How do you do it?  It can only produce results.  Get it?  Got it?  Good!

Now, go sell something!

It’s about time!

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The national news is now reporting good news about the housing market.  Existing home sales are up, interest rates are down, inventory levels remain low, builders are selling homes and distressed property inventory is staying at bay from the market.  In addition, we are seeing more showing activity at our listings, we are receiving more calls on our signs and as a result, more sales are happening.  This has also resulted in higher prices which is a good thing for all home owners.  What a great momentum shift taking us into the spring market.  All this news can do is to continue to help the economic recovery and build consumer confidence.  As consumer confidence grows and spending occurs – we all win! 

The advice you should take away from this information is – buy today while prices are still low, interest rates are below 5% and great properties are available to you.  The spring market can result in higher prices, higher interest rates and even less inventory as fewer homes are coming on the market.  There is no time like the present. 

For Realtors, spread the word, get busy contacting everyone you know and start selling more homes.  Get it?  Got it?  Good!

Now, go sell something!