Judicious home remodeling is still worth the investment, according to Remodeling magazine's annual "Cost vs. Value Report."
By G.M. Filisko
Uncertainty and restraint are the order of the day in this economy, and that sense of caution is reflected in home owners’ return on their investment in remodeling projects, according to REALTORS® in 80 metropolitan markets surveyed by Remodeling magazine for this year’s Cost vs. Value Report.
The majority of the 10 remodeling projects with the best return on investment nationally are a testament to pragmatism. Six of the 10 projects—siding and window replacement using a variety of materials—involve home maintenance that costs less than $14,000.
Two more—adding an attic bedroom or a wood deck—reinforce the notion that boosting the amount of livable space in and around your home will attract buyers who are increasingly looking for more room for their buck. In past years, converting an attic into a bedroom was a project that landed squarely in the middle of the rankings, but this year it leapfrogged over other categories into third place. It’s an admittedly pricey project, with an average national cost of nearly $50,000, but it generates an average national return of 83.1 percent and a better-than-100 percent return on investment, according to REALTORS® in 14 of the 80 cities surveyed. Adding a wood deck is much more economical, with an average national cost of slightly more than $10,000. Its average national return is 80.6 percent, but in six cities, its return is estimated at 100 percent or greater.
The six siding and window home maintenance projects in the top 10, combined with the project with the biggest return on investment—a mid-range entry door replacement—prove something that every sales associate tells sellers throughout the country: First impressions count. A mid-range entry door replacement, a project new to the survey this year, is the only home remodeling project that REALTORS® expect to generate a full return for the money nationally. It’s the least expensive of the 33 projects included in the analysis, yet it brings a whopping average national return on investment of 128.9 percent. It generates a better-than-100 percent return in 48 of the 80 cities, according to REALTORS® surveyed, and in several cities, its return is estimated at more than double its cost.
Additional data prove the value of restraint. Upgrading kitchens and baths is still a smart bet. However, home owners will recoup the greatest share of their costs by foregoing super-deluxe projects in favor of mid-range kitchen and bath remodels. A mid-range kitchen remodel brings an average 72.1 percent return on investment, while an upscale kitchen re-do returns only an average of 63.2 percent of the money invested. A mid-range bathroom project has an average 71 percent cost recovery, but the average recovery on an upscale bathroom project is nearly 10 points lower, at 61.6 percent.
The only upscale projects that cracked the top 10 were the home maintenance projects of fiber-cement siding replacement and vinyl window replacement. The average cost of fiber-cement siding is more than $13,000, but its return on investment reached 83.6 percent, placing it squarely in second place in the survey. The average cost of vinyl window replacement is nearly $14,000, and it generates an average return of 76.5 percent, or tenth place in the survey. Of the 12 upscale projects, nine landed in the bottom half.
Overall, home owners recouped an average of 63.8 percent of their investment in 33 different home improvement projects, according to REALTORS® who responded to the survey. The expected cost recoup was generally down from previous years in line with the drop in home prices nationally (see page 23). The return on home owners’ investment in remodeling projects has declined an average of 3.5 percentage points between 2008 and 2009. That’s down from the 2.7 point drop between 2007 and 2008 and much less than the 5.5 point drop between 2006 and 2007 and the 10.5 point drop from 2005 to 2006.
Zooming in from the national to the city level, Honolulu sits atop the rankings for having the most projects—18—that generate at least a full return on investment. In Honolulu, adding a wood deck, completing a minor kitchen remodel, adding fiber-cement siding, and replacing an entry door bring the highest returns, ranging from 121.1 to 195.3 percent return on investment. San Francisco is closest behind with 10 projects generating at least a full return on investment. Adding a master suite, doing a minor kitchen remodel, and replacing an entry door have the biggest returns, producing between 112.2 and 119.1 percent return on investment.
One surprise: Despite the common perception that contractors are hungry for work and therefore willing to wheel and deal, the average national cost of every project surveyed has gone up, though at a slower rate than in the previous year.
Thursday, December 31, 2009
Tuesday, December 15, 2009
Useful Work Phrases
I was reading through some very old archived items on my hard drive searching for inspiration and came across this and it made me laugh (It’s been one of those mornings). Hope you enjoy!
Useful Work Phrases
1. Thank you. We’re all refreshed and challenged by your unique point of view.
2. The fact that no one understands you doesn’t mean you’re an artist.
3. I don’t know what your problem is, but I’ll bet it’s hard to pronounce.
4. Any connection between your reality and mine is purely coincidental.
5. I have plenty of talent and vision. I just don’t care.
6. I like you. You remind me of when I was young and stupid.
7. What am I? Flypaper for freaks!?
8. I’m not being rude. You’re just insignificant.
9. I’m already visualizing the duct tape over your mouth.
10. I will always cherish the initial misconceptions I had about you.
11. It’s a thankless job, but I’ve got a lot of Karma to burn off.
12. Yes, I am an agent of Satan, but my duties are largely ceremonial.
13. No, my powers can only be used for good.
14. How about never? Is never good for you?
15. I’m really easy to get along with once you people learn to worship me.
16. You sound reasonable. Time to up my medication.
17. I’ll try being nicer if you’ll try being smarter.
18. I’m out of my mind, but feel free to leave a message.
19. I don’t work here. I’m a consultant.
20. Who me? I just wander from room to room.
21. My toys! My toys! I can’t do this job without my toys!
22. It might look like I’m doing nothing, but at the cellular level I’m really quite busy.
23. At least I have a positive attitude about my destructive habits.
24. You are validating my inherent mistrust of strangers.
25. I see you’ve set aside this special time to humiliate yourself in public.
26. Someday, we’ll look back on this, laugh nervously, and change the subject.
Useful Work Phrases
1. Thank you. We’re all refreshed and challenged by your unique point of view.
2. The fact that no one understands you doesn’t mean you’re an artist.
3. I don’t know what your problem is, but I’ll bet it’s hard to pronounce.
4. Any connection between your reality and mine is purely coincidental.
5. I have plenty of talent and vision. I just don’t care.
6. I like you. You remind me of when I was young and stupid.
7. What am I? Flypaper for freaks!?
8. I’m not being rude. You’re just insignificant.
9. I’m already visualizing the duct tape over your mouth.
10. I will always cherish the initial misconceptions I had about you.
11. It’s a thankless job, but I’ve got a lot of Karma to burn off.
12. Yes, I am an agent of Satan, but my duties are largely ceremonial.
13. No, my powers can only be used for good.
14. How about never? Is never good for you?
15. I’m really easy to get along with once you people learn to worship me.
16. You sound reasonable. Time to up my medication.
17. I’ll try being nicer if you’ll try being smarter.
18. I’m out of my mind, but feel free to leave a message.
19. I don’t work here. I’m a consultant.
20. Who me? I just wander from room to room.
21. My toys! My toys! I can’t do this job without my toys!
22. It might look like I’m doing nothing, but at the cellular level I’m really quite busy.
23. At least I have a positive attitude about my destructive habits.
24. You are validating my inherent mistrust of strangers.
25. I see you’ve set aside this special time to humiliate yourself in public.
26. Someday, we’ll look back on this, laugh nervously, and change the subject.
Buying a Home in Time to Get Credit
House hunting usually slows down this time of year, as people put their searches on hold during the holidays.
This winter could be different, however, thanks to the extension -- and expansion -- of the first-time home-buyer tax credit.
"We're going to see far more interest in the fourth quarter than we generally do because of the tax credit," says Heather Fernandez, vice president of Trulia.com, a real-estate search engine. Traffic surged on the site on Nov. 5, the day Congress approved the credit extension, she says.
The new law extends the tax credit for first-time home buyers and opens it up to some existing homeowners as well: The credit is now up to $8,000 for first-time buyers and up to $6,500 for repeat buyers.
All buyers must have a binding contract on a house in place on or before April 30. The purchase must be for a principal residence and must close on or before June 30.
To be considered a first-time home buyer, an individual must not have owned a home in the past three years. And to be eligible, existing homeowners need to have lived in the same principal residence for five consecutive years during the eight-year period that ends when the new home is purchased.
Income limits have risen as well. According to the Internal Revenue Service's Web site, the home-buyer tax credit phases out for individuals with modified adjusted gross incomes between $125,000 and $145,000, and between $225,000 and $245,000 for people filing joint returns.
The inclusion of move-up buyers might inspire homeowners to take action and list their house if they've been putting it off, says Carolyn Warren, a Seattle mortgage broker.
"If people love their home, it's not going to entice them to sell," Ms. Warren says. "If they've had it in the back of their minds and really would like to move up, it might push them into doing it sooner than later."
If you're thinking of purchasing a home, here are five tips:
Don't procrastinate
Start your house search now. Getting an early start will give you a better chance of finding the right house before the credit deadline.
When first-time buyers thought that the credit would expire Nov. 30, people scrambled to find properties in September and October, says Pat Lashinsky, chief executive of ZipRealty, a residential real-estate brokerage firm. In some cases, "there wasn't inventory that fit people's needs," he says. In some markets, including Phoenix, Chicago and parts of California, for example, properties had multiple bidders, Mr. Lashinsky adds.
Before you start house hunting, get preapproved for a mortgage, says Eddie Fadel, a Miami-based mortgage banker. And do a realistic assessment of what you can afford.
Buyers who have to sell an existing home should price it aggressively from the beginning to drum up interest and get a buyer as soon as possible, Ms. Fernandez says.
Don't count on another extension
The credit won't be available forever, Mr. Fadel says.
"This is a medication for the housing crisis," he says, "Once the patient -- which is the housing market -- is cured, there will be no medication needed."
Be mindful of interest rates
Interest rates are low right now, but will likely rise next year, Ms. Warren says. Higher rates will affect your monthly mortgage payments, thus the affordability of the house you are buying.
"It's pretty universally accepted that rates will be higher next year," she says. "What is unknown is how fast and by how much."
Average rates on 30-year fixed-rate mortgages have been hovering around 5%. But when the Federal Reserve stops buying large amounts of mortgage-backed securities next year, interest rates could rise, Ms. Warren points out. The Fed plans to end its purchase program in March.
Communicate with your lender
Make sure you're speaking with your lender regularly to avoid any delays. If the lender asks for any additional documentation, turn it in as soon as possible, says Doug Heddings, a New York-based real-estate agent with Charles Rutenberg Realty.
And think twice before pursuing a short sale. That's where someone sells a home for less than what he or she owes on a mortgage, with permission of the lender. The process can be lengthy and unpredictable because the homeowner's lender has to approve any deal, Ms. Warren says, and it can get complicated when there is a second mortgage associated with the property.
Don't take shortcuts
Don't forgo any of the steps you would normally take just to make the tax-credit deadline. That means making sure the house is a good fit and is in the right location and getting a home inspection, Mr. Lashinsky says. Skipping steps could cost you in the long run.
"Don't let the tax credit get you to make a decision to buy a house that you wouldn't otherwise want to buy," he says. "Don't shortcut the process to get the tax credit."
This winter could be different, however, thanks to the extension -- and expansion -- of the first-time home-buyer tax credit.
"We're going to see far more interest in the fourth quarter than we generally do because of the tax credit," says Heather Fernandez, vice president of Trulia.com, a real-estate search engine. Traffic surged on the site on Nov. 5, the day Congress approved the credit extension, she says.
The new law extends the tax credit for first-time home buyers and opens it up to some existing homeowners as well: The credit is now up to $8,000 for first-time buyers and up to $6,500 for repeat buyers.
All buyers must have a binding contract on a house in place on or before April 30. The purchase must be for a principal residence and must close on or before June 30.
To be considered a first-time home buyer, an individual must not have owned a home in the past three years. And to be eligible, existing homeowners need to have lived in the same principal residence for five consecutive years during the eight-year period that ends when the new home is purchased.
Income limits have risen as well. According to the Internal Revenue Service's Web site, the home-buyer tax credit phases out for individuals with modified adjusted gross incomes between $125,000 and $145,000, and between $225,000 and $245,000 for people filing joint returns.
The inclusion of move-up buyers might inspire homeowners to take action and list their house if they've been putting it off, says Carolyn Warren, a Seattle mortgage broker.
"If people love their home, it's not going to entice them to sell," Ms. Warren says. "If they've had it in the back of their minds and really would like to move up, it might push them into doing it sooner than later."
If you're thinking of purchasing a home, here are five tips:
Don't procrastinate
Start your house search now. Getting an early start will give you a better chance of finding the right house before the credit deadline.
When first-time buyers thought that the credit would expire Nov. 30, people scrambled to find properties in September and October, says Pat Lashinsky, chief executive of ZipRealty, a residential real-estate brokerage firm. In some cases, "there wasn't inventory that fit people's needs," he says. In some markets, including Phoenix, Chicago and parts of California, for example, properties had multiple bidders, Mr. Lashinsky adds.
Before you start house hunting, get preapproved for a mortgage, says Eddie Fadel, a Miami-based mortgage banker. And do a realistic assessment of what you can afford.
Buyers who have to sell an existing home should price it aggressively from the beginning to drum up interest and get a buyer as soon as possible, Ms. Fernandez says.
Don't count on another extension
The credit won't be available forever, Mr. Fadel says.
"This is a medication for the housing crisis," he says, "Once the patient -- which is the housing market -- is cured, there will be no medication needed."
Be mindful of interest rates
Interest rates are low right now, but will likely rise next year, Ms. Warren says. Higher rates will affect your monthly mortgage payments, thus the affordability of the house you are buying.
"It's pretty universally accepted that rates will be higher next year," she says. "What is unknown is how fast and by how much."
Average rates on 30-year fixed-rate mortgages have been hovering around 5%. But when the Federal Reserve stops buying large amounts of mortgage-backed securities next year, interest rates could rise, Ms. Warren points out. The Fed plans to end its purchase program in March.
Communicate with your lender
Make sure you're speaking with your lender regularly to avoid any delays. If the lender asks for any additional documentation, turn it in as soon as possible, says Doug Heddings, a New York-based real-estate agent with Charles Rutenberg Realty.
And think twice before pursuing a short sale. That's where someone sells a home for less than what he or she owes on a mortgage, with permission of the lender. The process can be lengthy and unpredictable because the homeowner's lender has to approve any deal, Ms. Warren says, and it can get complicated when there is a second mortgage associated with the property.
Don't take shortcuts
Don't forgo any of the steps you would normally take just to make the tax-credit deadline. That means making sure the house is a good fit and is in the right location and getting a home inspection, Mr. Lashinsky says. Skipping steps could cost you in the long run.
"Don't let the tax credit get you to make a decision to buy a house that you wouldn't otherwise want to buy," he says. "Don't shortcut the process to get the tax credit."
"USA Today" Survey shows spike in first-time home buyers
SAN DIEGO — The U.S. housing market welcomed a bigger share of first-time buyers and single women this past year, while a majority of sellers resorted to dialing down prices to get their homes sold, a new home buyer survey shows.
First-time buyers accounted for a record 47% of U.S. home sales between July 2008 and June this year, up from 41% in the prior-year period, according to the survey conducted by the National Association of Realtors.
The annual survey gleans details on everything from how buyers came up with down payments to how long it took sellers to unload their homes. The latest results were derived from more than 9,000 responses, the trade association said.
Home sales and prices have shown some signs of stabilizing this year, and the survey results affirm the market continued to favor buyers, particularly first-timers.
HOUSING FORECAST:Home prices to rise 4% in 2010
"Tax incentives, record high affordability conditions and a pent-up demand brought a record share of first-time home buyers into the market," said Paul Bishop, the trade association's vice president of research.
First-time homebuyers this year have been able to take advantage of a tax credit of up to $8,000 meant to entice new home buyers to enter the market.
Congress extended the tax incentive through next June, as long as the buyer signs a binding contract by the end of April. The program also was expanded to include a $6,500 credit for existing homeowners who buy a new place after living in their current residence for at least five years.
First-time buyers had a median age of 30 and reported a median income of $61,600, the survey shows. The typical first-time buyer paid $156,000 for their home, about $9,000 less than in the Realtors' 2008 survey.
Repeat buyers were typically a few years older, 48, and earned a bit more than first-timers: $88,100. They also said they planned to stay in the home for 12 years.
Sellers had to go the extra mile to sell their homes, with 52% offering incentives like paying for closing costs. They also lowered prices.
The typical home sold for 95% of the original listing price, the survey shows.
Still, many sellers came out ahead. The median amount over the price sellers originally paid for their home was $36,000.
First-time buyers accounted for a record 47% of U.S. home sales between July 2008 and June this year, up from 41% in the prior-year period, according to the survey conducted by the National Association of Realtors.
The annual survey gleans details on everything from how buyers came up with down payments to how long it took sellers to unload their homes. The latest results were derived from more than 9,000 responses, the trade association said.
Home sales and prices have shown some signs of stabilizing this year, and the survey results affirm the market continued to favor buyers, particularly first-timers.
HOUSING FORECAST:Home prices to rise 4% in 2010
"Tax incentives, record high affordability conditions and a pent-up demand brought a record share of first-time home buyers into the market," said Paul Bishop, the trade association's vice president of research.
First-time homebuyers this year have been able to take advantage of a tax credit of up to $8,000 meant to entice new home buyers to enter the market.
Congress extended the tax incentive through next June, as long as the buyer signs a binding contract by the end of April. The program also was expanded to include a $6,500 credit for existing homeowners who buy a new place after living in their current residence for at least five years.
First-time buyers had a median age of 30 and reported a median income of $61,600, the survey shows. The typical first-time buyer paid $156,000 for their home, about $9,000 less than in the Realtors' 2008 survey.
Repeat buyers were typically a few years older, 48, and earned a bit more than first-timers: $88,100. They also said they planned to stay in the home for 12 years.
Sellers had to go the extra mile to sell their homes, with 52% offering incentives like paying for closing costs. They also lowered prices.
The typical home sold for 95% of the original listing price, the survey shows.
Still, many sellers came out ahead. The median amount over the price sellers originally paid for their home was $36,000.
Monday, December 7, 2009
Predictions on Future Mortgage Rates
What will happen to mortgage rates if the Federal Reserve stops buying mortgage-backed securities next March?
If and when that program ends, mortgage rates will rise, but most financial observers say it is very likely they won’t skyrocket.
Keith Gumbinger, a vice president at financial publishers HSH Associates, predicts that the end of Fed intervention will push rates up about three-quarters of a point for a 30-year conforming loan–somewhere in the mid-5 percent range. By late 2010, Gumbinger says the rate will be closer to 6 percent.
Michael Larson, a real estate analyst at Weiss Research, is dubious that the Fed will actually end the program. He contends that the Fed will continue buying mortgage backed-securities as long as the housing recovery is tenuous. And as long as the Fed continues to dominate that market, “we’re not really going to move the needle on rates,” Larson says.
If and when that program ends, mortgage rates will rise, but most financial observers say it is very likely they won’t skyrocket.
Keith Gumbinger, a vice president at financial publishers HSH Associates, predicts that the end of Fed intervention will push rates up about three-quarters of a point for a 30-year conforming loan–somewhere in the mid-5 percent range. By late 2010, Gumbinger says the rate will be closer to 6 percent.
Michael Larson, a real estate analyst at Weiss Research, is dubious that the Fed will actually end the program. He contends that the Fed will continue buying mortgage backed-securities as long as the housing recovery is tenuous. And as long as the Fed continues to dominate that market, “we’re not really going to move the needle on rates,” Larson says.
Monday, November 30, 2009
Tax Credit Quandaries Answered
The complexity of new home buyer tax credits leaves potential buyers with many questions. Here are answers to some of the most confusing: How does a current home owner qualify for the $6,500 credit?Buyers must have lived in their homes for at least five out of the last eight years. The home they buy must become their primary residence, but buyers don’t have to sell their previous home. They can use the previous home as a rental or a second home and still claim the credit.Does the new home have to be more expensive than the one the buyer currently owns?No. It is fine to use it to downsize. If the property sells for more than $800,000, the buyers don’t qualify.Can buyers who are building a new home claim the credit? Yes, although the contract must be in place by April 30 and the buyer must move in by July 1.Can buyers claim the credit if they purchase a home from a relative? No. The legislation prohibits taxpayers from claiming the credit if the sale is between “related parties,” including parent, grandparent, child, or grandchild.
Tuesday, November 24, 2009
Rates on 30-year mortgages remain below 5 percent
McLEAN, Va. -- Rates on 30-year mortgages stayed below 5 percent this week but remained above the record set earlier this year, Freddie Mac said Thursday.
The average rate for a 30-year fixed mortgage fell to 4.83 percent, down from 4.91 percent last week, the mortgage company said. Last year at this time, 30-year mortgages averaged 6.04 percent.
Rates hit a record low of 4.78 percent in the spring, and remain attractive for people looking to buy a home or refinance their existing mortgage. Still, credit standards remain tough, so the best rates usually are available only to borrowers with solid credit and a 20 percent down payment.
The Federal Reserve has pumped $1.25 trillion into mortgage-backed securities to try to lower rates on mortgages and loosen credit. Rates on 30-year mortgages traditionally track yields on long-term government debt.
Low fixed rates in the third quarter led to about $1.1 trillion in refinancing activity, saving borrowers about $10 billion in monthly payments over the first 12 months of their new loan, said Frank Nothaft, Freddie Mac's chief economist.
Freddie Mac collects mortgage rates on Monday through Wednesday of each week from lenders around the country. Rates often fluctuate significantly, even within a given day, frequently in line with long-term Treasury bonds.
The average rate on a 15-year fixed-rate mortgage fell to 4.32 percent from 4.36 percent last week, according to Freddie Mac.
Rates on five-year, adjustable-rate mortgages averaged 4.25 percent, down from last week's 4.29 percent. Rates on one-year, adjustable-rate mortgages declined to 4.35 percent from 4.46 percent.
The rates do not include add-on fees known as points. The nationwide fee for loans in Freddie Mac's survey averaged 0.7 point for 30-year loans. The fee averaged 0.6 point for 15-year, five-year and one-year loans.
The average rate for a 30-year fixed mortgage fell to 4.83 percent, down from 4.91 percent last week, the mortgage company said. Last year at this time, 30-year mortgages averaged 6.04 percent.
Rates hit a record low of 4.78 percent in the spring, and remain attractive for people looking to buy a home or refinance their existing mortgage. Still, credit standards remain tough, so the best rates usually are available only to borrowers with solid credit and a 20 percent down payment.
The Federal Reserve has pumped $1.25 trillion into mortgage-backed securities to try to lower rates on mortgages and loosen credit. Rates on 30-year mortgages traditionally track yields on long-term government debt.
Low fixed rates in the third quarter led to about $1.1 trillion in refinancing activity, saving borrowers about $10 billion in monthly payments over the first 12 months of their new loan, said Frank Nothaft, Freddie Mac's chief economist.
Freddie Mac collects mortgage rates on Monday through Wednesday of each week from lenders around the country. Rates often fluctuate significantly, even within a given day, frequently in line with long-term Treasury bonds.
The average rate on a 15-year fixed-rate mortgage fell to 4.32 percent from 4.36 percent last week, according to Freddie Mac.
Rates on five-year, adjustable-rate mortgages averaged 4.25 percent, down from last week's 4.29 percent. Rates on one-year, adjustable-rate mortgages declined to 4.35 percent from 4.46 percent.
The rates do not include add-on fees known as points. The nationwide fee for loans in Freddie Mac's survey averaged 0.7 point for 30-year loans. The fee averaged 0.6 point for 15-year, five-year and one-year loans.
Friday, November 6, 2009
Extension and expansion of federal tax credit
Homeowners win big with extension and expansion of federal tax credit
The U.S. House of Representatives today voted 403 to 12 to extend and expand the home buyer tax credit. The bill passed the U.S. Senate late yesterday and now will go to President Obama for his signature, where it is expected to be signed this week.
The tax credit will be extended through April 30, 2010, with a 60-day extension if a binding contract is in place prior to the deadline. First-time home buyers will continue to receive a tax credit of up to $8,000, while existing homeowners will receive a credit of up to $6,500. Existing homeowners will be eligible for the $6,500 if they have lived in their current residences for at least five years. The bill also will increase the qualifying income limits from $75,000 for single tax filers and $150,000 for joint filers to $125,000 and $225,000, respectively. The purchase price of the home is capped at $800,000.
Under additional provisions in the bill, taxpayers can claim the credit on purchases completed in 2010 on their 2009 income tax returns. The bill maintains the provision that home buyers do not have to repay the credit, provided the home remains their primary residence for 36 months after purchase, and waives this requirement for active duty military personnel who move due to a military order.
For weeks, the CALIFORNIA ASSOCIATION OF REALTORS (C.A.R and its members have urged Congress and the U.S. Senate to extend and expand this crucial piece of legislation.
Nationwide, more than 1.4 million first-time home buyers were given the opportunity to become homeowners as a result of the Federal Tax Credit for First-time Home Buyers. According to C.A.R. research, nearly 40 percent of first-time home buyers surveyed said they would not have purchased a home without the federal tax credit, and approximately 70 percent said the tax credit was "the most important" or a "very important" factor in their decision to buy a home
The U.S. House of Representatives today voted 403 to 12 to extend and expand the home buyer tax credit. The bill passed the U.S. Senate late yesterday and now will go to President Obama for his signature, where it is expected to be signed this week.
The tax credit will be extended through April 30, 2010, with a 60-day extension if a binding contract is in place prior to the deadline. First-time home buyers will continue to receive a tax credit of up to $8,000, while existing homeowners will receive a credit of up to $6,500. Existing homeowners will be eligible for the $6,500 if they have lived in their current residences for at least five years. The bill also will increase the qualifying income limits from $75,000 for single tax filers and $150,000 for joint filers to $125,000 and $225,000, respectively. The purchase price of the home is capped at $800,000.
Under additional provisions in the bill, taxpayers can claim the credit on purchases completed in 2010 on their 2009 income tax returns. The bill maintains the provision that home buyers do not have to repay the credit, provided the home remains their primary residence for 36 months after purchase, and waives this requirement for active duty military personnel who move due to a military order.
For weeks, the CALIFORNIA ASSOCIATION OF REALTORS (C.A.R and its members have urged Congress and the U.S. Senate to extend and expand this crucial piece of legislation.
Nationwide, more than 1.4 million first-time home buyers were given the opportunity to become homeowners as a result of the Federal Tax Credit for First-time Home Buyers. According to C.A.R. research, nearly 40 percent of first-time home buyers surveyed said they would not have purchased a home without the federal tax credit, and approximately 70 percent said the tax credit was "the most important" or a "very important" factor in their decision to buy a home
Tuesday, October 20, 2009
Your Personal Mission Statement
One of the most powerful things in your life is your vision (or lack thereof) and your perceived mission.
To help crystallize direction for your life and business develop a personal mission statement. Ask yourself what you alone you can do. Not what can you do, but what is it that won’t get done if you alone don’t or won’t do it.
Here’s a simple guide to developing your personal mission statement -
Definition of Mission - The special duty or function for which someone is sent as a messenger or representative; and the special task or purpose for which a person is apparently destined in life; a calling.
What is your personal mission statement? - Your personal mission statement focuses on the special purpose you want to achieve in your life and the special approach you will take to achieve it. It is the consequence of your mission being achieved. It is a description of how the world will be after you’ve traveled through it.
A clarifying question - “If we were meeting back here on ______________________, and you were looking back over the preceding ______________, what would have to have happened during those years for you to feel really good about yourself, your life, and the fulfillment of your personal vision?”
Answer this question to state your Personal Mission Statement- “My unique mission is…”
Once we have vision and mission clearly identified, it becomes very easy to make life changing decisions. Whenever I am faced with a fork in the road of life, The answers will simply fall into place when I simply weigh my options against my vision and mission and ask - “Is this in line with who I am?” and “Does this bring me closer to where I know I need to go?”
To help crystallize direction for your life and business develop a personal mission statement. Ask yourself what you alone you can do. Not what can you do, but what is it that won’t get done if you alone don’t or won’t do it.
Here’s a simple guide to developing your personal mission statement -
Definition of Mission - The special duty or function for which someone is sent as a messenger or representative; and the special task or purpose for which a person is apparently destined in life; a calling.
What is your personal mission statement? - Your personal mission statement focuses on the special purpose you want to achieve in your life and the special approach you will take to achieve it. It is the consequence of your mission being achieved. It is a description of how the world will be after you’ve traveled through it.
A clarifying question - “If we were meeting back here on ______________________, and you were looking back over the preceding ______________, what would have to have happened during those years for you to feel really good about yourself, your life, and the fulfillment of your personal vision?”
Answer this question to state your Personal Mission Statement- “My unique mission is…”
Once we have vision and mission clearly identified, it becomes very easy to make life changing decisions. Whenever I am faced with a fork in the road of life, The answers will simply fall into place when I simply weigh my options against my vision and mission and ask - “Is this in line with who I am?” and “Does this bring me closer to where I know I need to go?”
The First Step is Always the Same
When it comes to achieving your financial goals the first step is always same. No matter where you are on the financial spectrum everyone starts with the same first step. Whether you want to retire, start a business, go on a dream vacation, buy a second home, start a college fund for the kids, or whatever your financial goal it all starts with one simple step. Save money! It may be simple but that doesn’t necessarily translate into being easy. In order to have the tool you need to actively pursue your dreams you have to spend less than you make.
“We are all self-made. But only the successful will admit it.” Unknown
In the 1940 essay, The Common Denominator of Success Albert E.N. Gray tells of his journey to discover the secret to success. After pouring through numerous biographies, autobiographies, dissertations, and the lives of successful men, Mr. Gray discovered this powerful and vitally important common denominator. “The common denominator of success - the secret of success of every man who has ever been successful - lies in the fact that he formed the habit of doing things that failures don’t like to do.” (Albert E.N. Gray, 1940).
If you want to be financially successful you must separate yourself from the masses. You must be able to do the things that most others do not like to do. For us the first step is clear, you must live within your means, you must save money. The following chart from the Bureau of Economic Analysis, U.S. Department of Commerce shows us that the vast majority of Americans do not save money and/or those who do save very little.
Thus applying the common denominator of success you can see that the first step is critical because you will be doing something that most people fail to do. Think of it this way: Being Financially Independent => In the Minority <= People Who Save Money.
So why haven’t I been able to save money? Once we understand the importance of saving money and how it puts us on the track to wealth we change our attitude and become motivated. The problem is that motivation and attitude are not enough. In order to be successful you must transform your words, thoughts, and efforts. These three transformations are true for financial success and are definitely applicable for implementing the first step. In order to achieve your financial goals you must transform the words you use, you must transform how you think, and you must transform where you place your efforts. For some this may be a reminder and serve to refresh and refocus what you are already doing. For others this may be new and will require a little introspection to grasp how this works. Because it is so important to our future success we will explore these three transformations further. Remember it’s simple but not necessarily easy.
The first transformation required for success seems inconsequential but is possibly the most important of all transformations. Transforming your words. One of the most powerful things you can do is to change your vocabulary. Vocabulary is a big part of learning any new specialty. If you want to achieve success in a particular field you must learn the vocabulary. Doctors, Lawyers, and Wall Street Brokers all use their own language. Words affect our thoughts, thoughts affect our actions, and actions affect our success. We all know the subtle difference between “I need” and “I want” or “I can” or “I can’t”. The words you use set the stage, they program your life.
If you want to save money you have to change the words you use. For example, some of us like to justify our spending by saying “I deserve it” but what we should be asking is “Can I afford it?” meaning what will it cost me in terms of achieving my financial goals and dreams. You can treat yourself but only to the extent that you can afford it and it doesn’t detract from your financial goals. If you’re always saying that “I never have enough money” and “I can’t save a dime” then what is the most likely outcome. It truly is the little decisions that compound over time to add up to wealth or indebtedness. When you consciously understand the impact of the little decisions you begin to change the words you use and that changes the way you think.
Transforming your words is not enough you must also transform your thoughts. Thoughts shape your life. If you want to change something in your life you must change the way you think. Often times the reason we don’t save money is because we think it is about denying yourself. If you operate out of this paradigm you will find saving money to be an unrewarding activity. You’ll feel that you are constantly giving up things, denying yourself, and missing out. Through that paradigm it’s no wonder you don’t save money (i.e. spend less than you make.)
You must shift your paradigm and see saving money for what it really is. It’s about opening up opportunity, about giving yourself the one tool you need to actively pursue your dreams. Saving money isn’t about denying yourself it is about taking control and becoming actively engaged in building wealth and creating possibilities. You can’t retire, start a business, go on a dream vacation, buy a second home, start a college fund for the kids, or achieve any financial goal without saving. Still some people plan on a windfall or the winning the lottery to achieve these goals. They never realize the power to change and to achieve their financial goals is as simple as spending less than you make. Once you make the paradigm shift you begin to transform your thoughts you’ll look at saving money in a whole new way. No longer is it about denial. Instead it is about unlocking the life you’ve dreamed and reaching your financial goals. Shifting your paradigm to this new way of thinking revolutionizes the decisions you make about money and directly impacts your desire and ability to save money. With this knowledge in hand you’ll begin to transform your efforts.
”If you want something you’ve never had you have to do something you’ve never done.”
Transforming your efforts requires a change in the way you have approached things in the past. We must make decisions and choices that we have not been making (usually the ones we know we should make but don’t). Some have this part locked on but others know they could be putting forth more effort. But effort for effort’s sake is not the point. Misguided effort just compounds the problem. The key is to focus on what you can control. You could be putting forth tremendous effort but if your efforts are focused on things you can’t control you will get frustrated and withdraw.
This is especially true when it comes to the little things. For example, if you have made a commitment to saving and someone asks if you want to spend money on a new Rolex you’ll probably say no and stay committed to our goals. However if you’re hungry and you’re asked if you want to go out to eat you might easily say yes. Then while out to eat you figure what’s a few extra dollars for desert and/or drinks. Next thing you know your spending money on things you really don’t want. We must be consciously aware of the little things that sneak up and cause us to lose focus on what is truly important in our financial picture.
It’s important that you focus on the things you can control not on the things you can’t. Most of us spend time focusing our efforts on things we can’t control at the expense of things we can. For example, we hear about people concerned about the price of gas but for most of us, despite the hype, there is very little we can do to affect the price of gas. Despite complaining about gas it doesn’t stop some from driving to the mall and spending money on clothes they don’t really need. Often we think we don’t have enough money because we don’t make enough money. So we don’t coupon shop or recycle cans (things within our control) because that stuff seems insignificant. Instead, we focus on how much money we make (out of our control) which causes us to lose focus on the everyday little things we can do.
The key to transforming your efforts is to walk your talk or at least, in the beginning, stumble your mumble. Focus your efforts on things you can control and make decisions and choices about what you will do with your money based on what is truly important to you. There are lots of little decisions that add up over time and mean the difference between success and failure. You should endeavor to align your efforts with reality, to focus on the little things you can control and stop using the big things as a distraction or excuse.
The first step is the same for everyone no matter how much money you have. You have to save money, you have to spend less than you make. If you make a million dollars and spend $1.2 million then you are broke. Remember, the rich have the same problems as everyone else just with more zeros. In order to accomplish this simple yet sometimes difficult task we must transform our words, thoughts, and efforts. Our words, thoughts and efforts have immense power. Choose them carefully and begin to create a successful life and achieve your financial goals.
“We are all self-made. But only the successful will admit it.” Unknown
In the 1940 essay, The Common Denominator of Success Albert E.N. Gray tells of his journey to discover the secret to success. After pouring through numerous biographies, autobiographies, dissertations, and the lives of successful men, Mr. Gray discovered this powerful and vitally important common denominator. “The common denominator of success - the secret of success of every man who has ever been successful - lies in the fact that he formed the habit of doing things that failures don’t like to do.” (Albert E.N. Gray, 1940).
If you want to be financially successful you must separate yourself from the masses. You must be able to do the things that most others do not like to do. For us the first step is clear, you must live within your means, you must save money. The following chart from the Bureau of Economic Analysis, U.S. Department of Commerce shows us that the vast majority of Americans do not save money and/or those who do save very little.
Thus applying the common denominator of success you can see that the first step is critical because you will be doing something that most people fail to do. Think of it this way: Being Financially Independent => In the Minority <= People Who Save Money.
So why haven’t I been able to save money? Once we understand the importance of saving money and how it puts us on the track to wealth we change our attitude and become motivated. The problem is that motivation and attitude are not enough. In order to be successful you must transform your words, thoughts, and efforts. These three transformations are true for financial success and are definitely applicable for implementing the first step. In order to achieve your financial goals you must transform the words you use, you must transform how you think, and you must transform where you place your efforts. For some this may be a reminder and serve to refresh and refocus what you are already doing. For others this may be new and will require a little introspection to grasp how this works. Because it is so important to our future success we will explore these three transformations further. Remember it’s simple but not necessarily easy.
The first transformation required for success seems inconsequential but is possibly the most important of all transformations. Transforming your words. One of the most powerful things you can do is to change your vocabulary. Vocabulary is a big part of learning any new specialty. If you want to achieve success in a particular field you must learn the vocabulary. Doctors, Lawyers, and Wall Street Brokers all use their own language. Words affect our thoughts, thoughts affect our actions, and actions affect our success. We all know the subtle difference between “I need” and “I want” or “I can” or “I can’t”. The words you use set the stage, they program your life.
If you want to save money you have to change the words you use. For example, some of us like to justify our spending by saying “I deserve it” but what we should be asking is “Can I afford it?” meaning what will it cost me in terms of achieving my financial goals and dreams. You can treat yourself but only to the extent that you can afford it and it doesn’t detract from your financial goals. If you’re always saying that “I never have enough money” and “I can’t save a dime” then what is the most likely outcome. It truly is the little decisions that compound over time to add up to wealth or indebtedness. When you consciously understand the impact of the little decisions you begin to change the words you use and that changes the way you think.
Transforming your words is not enough you must also transform your thoughts. Thoughts shape your life. If you want to change something in your life you must change the way you think. Often times the reason we don’t save money is because we think it is about denying yourself. If you operate out of this paradigm you will find saving money to be an unrewarding activity. You’ll feel that you are constantly giving up things, denying yourself, and missing out. Through that paradigm it’s no wonder you don’t save money (i.e. spend less than you make.)
You must shift your paradigm and see saving money for what it really is. It’s about opening up opportunity, about giving yourself the one tool you need to actively pursue your dreams. Saving money isn’t about denying yourself it is about taking control and becoming actively engaged in building wealth and creating possibilities. You can’t retire, start a business, go on a dream vacation, buy a second home, start a college fund for the kids, or achieve any financial goal without saving. Still some people plan on a windfall or the winning the lottery to achieve these goals. They never realize the power to change and to achieve their financial goals is as simple as spending less than you make. Once you make the paradigm shift you begin to transform your thoughts you’ll look at saving money in a whole new way. No longer is it about denial. Instead it is about unlocking the life you’ve dreamed and reaching your financial goals. Shifting your paradigm to this new way of thinking revolutionizes the decisions you make about money and directly impacts your desire and ability to save money. With this knowledge in hand you’ll begin to transform your efforts.
”If you want something you’ve never had you have to do something you’ve never done.”
Transforming your efforts requires a change in the way you have approached things in the past. We must make decisions and choices that we have not been making (usually the ones we know we should make but don’t). Some have this part locked on but others know they could be putting forth more effort. But effort for effort’s sake is not the point. Misguided effort just compounds the problem. The key is to focus on what you can control. You could be putting forth tremendous effort but if your efforts are focused on things you can’t control you will get frustrated and withdraw.
This is especially true when it comes to the little things. For example, if you have made a commitment to saving and someone asks if you want to spend money on a new Rolex you’ll probably say no and stay committed to our goals. However if you’re hungry and you’re asked if you want to go out to eat you might easily say yes. Then while out to eat you figure what’s a few extra dollars for desert and/or drinks. Next thing you know your spending money on things you really don’t want. We must be consciously aware of the little things that sneak up and cause us to lose focus on what is truly important in our financial picture.
It’s important that you focus on the things you can control not on the things you can’t. Most of us spend time focusing our efforts on things we can’t control at the expense of things we can. For example, we hear about people concerned about the price of gas but for most of us, despite the hype, there is very little we can do to affect the price of gas. Despite complaining about gas it doesn’t stop some from driving to the mall and spending money on clothes they don’t really need. Often we think we don’t have enough money because we don’t make enough money. So we don’t coupon shop or recycle cans (things within our control) because that stuff seems insignificant. Instead, we focus on how much money we make (out of our control) which causes us to lose focus on the everyday little things we can do.
The key to transforming your efforts is to walk your talk or at least, in the beginning, stumble your mumble. Focus your efforts on things you can control and make decisions and choices about what you will do with your money based on what is truly important to you. There are lots of little decisions that add up over time and mean the difference between success and failure. You should endeavor to align your efforts with reality, to focus on the little things you can control and stop using the big things as a distraction or excuse.
The first step is the same for everyone no matter how much money you have. You have to save money, you have to spend less than you make. If you make a million dollars and spend $1.2 million then you are broke. Remember, the rich have the same problems as everyone else just with more zeros. In order to accomplish this simple yet sometimes difficult task we must transform our words, thoughts, and efforts. Our words, thoughts and efforts have immense power. Choose them carefully and begin to create a successful life and achieve your financial goals.
Friday, October 16, 2009
Double-digit mortgage rates on horizon?
At a recent real estate conference, I found myself standing next to Richard Williams, a Century 21 Realtor from the Atlanta area, who had founded something called Clickit Inc., which provides flat-fee pricing for sales and listings. I would say we chatted, but Williams is a born raconteur and I mostly just listened.
After a while, a young man from New York joined us and in the course of the shifting conversation, the Big Apple dude wistfully noted he was renting an apartment but considering buying a condo. Williams turned his attention to the young fellow. "Now is the time to buy," he exclaimed.
The reason for Williams' emphasis on buying now? Was it because housing prices had gotten so low that good deals were everywhere? Actually, no. Williams strongly suggested to the New Yorker he should make his investment sometime this year as expectations are that interest rates were bound to rise and wouldn't stop climbing until they hit double digits. That would make any future purchase considerably more expensive than it would today.
I, too, expect interest rates to start heading north again, but double digits seemed far out there -- not in terms of a time line, but psychologically.
Williams rationalized that at some point in the near future, the economy was going to elevate very dramatically, which would raise the specter of inflation. If that happened, the Federal Reserve would push up interest rates to keep inflation under control.
I didn't disagree with that scenario. However, I don't believe the economy, when it does turn around, will take off like a rocket, so the government's need to contain a budding inflationary climate would be moderate at best.
There are other factors to consider as well.
Interest rates have been kept low since the short recession at the turn of this century, and this was one of the causes of the housing bubble that lasted until 2007. Once the economy stabilizes, I figure the Fed might want to raise interest rates, thus slowly bringing them back to more sustainable levels, something like 3-4 percent.
Then there is the massive pumping of stimulus dollars into the economy.
Globally, the first major nation to experience economic recovery has been Australia, and there is already speculation interest rates will start to rise there. Now, tell me if this doesn't sound familiar: as the Wall Street Journal reported, Australia's recovery comes at a time "when huge amounts of government stimulus are still coursing through the Australian economy, raising fears of higher inflation in the years ahead if the central bank doesn't start raising rates fairly soon."
All those stimulus dollars have to come from somewhere. Sure, we could just print more money, but that would be hyperinflationary, so the federal government, instead, borrows it, which is less inflationary.
There are concerns about the budget deficit, which "looks like it is going to be huge," notes Celia Chen, a senior director at Moody's Economy.com. "If the budget deficit is too large, then the government is borrowing a lot and having to issue more Treasury bonds. That will cause the price of Treasuries to fall and if that happens, yields have to increase and interest rates will rise."
No matter, how one slices and dices the economic prestidigitations, pressure continues to build on the government to raise interest rates, probably next year.
"There is no doubt that interest rates are going to have to go up," says William Conerly, an economic consultant and author of "Businomics From the Headlines To Your Bottom Line: How To Profit in Any Economic Cycle."
At some point the Federal Reserve is going to have to worry about inflation, Conerly adds. "Certainly not in 2009, but in 2010 the Fed will probably start pushing up short-term interest rates. If the economy gains some steam in the second half of this year, the long-term markets will push rates up even before the Fed tightens, so we'll see Treasury yields rise even further between now and spring 2010."
As of the third quarter, the spread between mortgages and the 10-year Treasury was wider than normal, which will narrow, but that won't be enough to prevent the cost of borrowing from getting more expensive. Does that mean Richard Williams was on target in soothsaying interest rates and subsequently mortgage rates will be heading into the double-digit range, thus making home purchases considerably more expensive?
In summer 2009, mortgage rates had risen from below 5 percent earlier in the year to about 5.2 percent, and Conerly's predictions are that the 30-year fixed mortgage rate will climb to 7.7 percent at the end of 2010.
Chen's crystal ball shows a more conservative picture. "We have the fixed-rate climbing to 6.6 percent in 2010," she says. "We expect mortgage rates to rise to 6.9 percent in mid-2011 and we don't have those numbers going above 7 percent until the year 2012."
Chen expects a reasonable economic rebound but inflation remaining at bay. Still, she recognizes there are some risks ahead. "Those predicting a higher mortgage rate are worried about too much credit on the market and the Fed having to keep inflation from creeping back," she adds.
I bought my first home back in the 1970s. Apparently, sometime around then so did Conerly, because we both remember having to acquire homes at double-digit interest rates. Indeed, it wasn't until 1985 that interest rates fell below double digits. The concern about interest rates rising past what to some is the seemingly astronomical 6 percent mark brings considerable levity to Conerly's demeanor.
"I hear real estate brokers whining that interest rates, which have been at record lows, may go up to 6.5 percent," he says. What these brokers don't realize, he adds, "is that they are really living in the golden age of mortgage rates."
Steve Bergsman is a freelance writer in Arizona and author of several books, including "After the Fall: Opportunities and Strategies for Real Estate Investing in the Coming Decade."
After a while, a young man from New York joined us and in the course of the shifting conversation, the Big Apple dude wistfully noted he was renting an apartment but considering buying a condo. Williams turned his attention to the young fellow. "Now is the time to buy," he exclaimed.
The reason for Williams' emphasis on buying now? Was it because housing prices had gotten so low that good deals were everywhere? Actually, no. Williams strongly suggested to the New Yorker he should make his investment sometime this year as expectations are that interest rates were bound to rise and wouldn't stop climbing until they hit double digits. That would make any future purchase considerably more expensive than it would today.
I, too, expect interest rates to start heading north again, but double digits seemed far out there -- not in terms of a time line, but psychologically.
Williams rationalized that at some point in the near future, the economy was going to elevate very dramatically, which would raise the specter of inflation. If that happened, the Federal Reserve would push up interest rates to keep inflation under control.
I didn't disagree with that scenario. However, I don't believe the economy, when it does turn around, will take off like a rocket, so the government's need to contain a budding inflationary climate would be moderate at best.
There are other factors to consider as well.
Interest rates have been kept low since the short recession at the turn of this century, and this was one of the causes of the housing bubble that lasted until 2007. Once the economy stabilizes, I figure the Fed might want to raise interest rates, thus slowly bringing them back to more sustainable levels, something like 3-4 percent.
Then there is the massive pumping of stimulus dollars into the economy.
Globally, the first major nation to experience economic recovery has been Australia, and there is already speculation interest rates will start to rise there. Now, tell me if this doesn't sound familiar: as the Wall Street Journal reported, Australia's recovery comes at a time "when huge amounts of government stimulus are still coursing through the Australian economy, raising fears of higher inflation in the years ahead if the central bank doesn't start raising rates fairly soon."
All those stimulus dollars have to come from somewhere. Sure, we could just print more money, but that would be hyperinflationary, so the federal government, instead, borrows it, which is less inflationary.
There are concerns about the budget deficit, which "looks like it is going to be huge," notes Celia Chen, a senior director at Moody's Economy.com. "If the budget deficit is too large, then the government is borrowing a lot and having to issue more Treasury bonds. That will cause the price of Treasuries to fall and if that happens, yields have to increase and interest rates will rise."
No matter, how one slices and dices the economic prestidigitations, pressure continues to build on the government to raise interest rates, probably next year.
"There is no doubt that interest rates are going to have to go up," says William Conerly, an economic consultant and author of "Businomics From the Headlines To Your Bottom Line: How To Profit in Any Economic Cycle."
At some point the Federal Reserve is going to have to worry about inflation, Conerly adds. "Certainly not in 2009, but in 2010 the Fed will probably start pushing up short-term interest rates. If the economy gains some steam in the second half of this year, the long-term markets will push rates up even before the Fed tightens, so we'll see Treasury yields rise even further between now and spring 2010."
As of the third quarter, the spread between mortgages and the 10-year Treasury was wider than normal, which will narrow, but that won't be enough to prevent the cost of borrowing from getting more expensive. Does that mean Richard Williams was on target in soothsaying interest rates and subsequently mortgage rates will be heading into the double-digit range, thus making home purchases considerably more expensive?
In summer 2009, mortgage rates had risen from below 5 percent earlier in the year to about 5.2 percent, and Conerly's predictions are that the 30-year fixed mortgage rate will climb to 7.7 percent at the end of 2010.
Chen's crystal ball shows a more conservative picture. "We have the fixed-rate climbing to 6.6 percent in 2010," she says. "We expect mortgage rates to rise to 6.9 percent in mid-2011 and we don't have those numbers going above 7 percent until the year 2012."
Chen expects a reasonable economic rebound but inflation remaining at bay. Still, she recognizes there are some risks ahead. "Those predicting a higher mortgage rate are worried about too much credit on the market and the Fed having to keep inflation from creeping back," she adds.
I bought my first home back in the 1970s. Apparently, sometime around then so did Conerly, because we both remember having to acquire homes at double-digit interest rates. Indeed, it wasn't until 1985 that interest rates fell below double digits. The concern about interest rates rising past what to some is the seemingly astronomical 6 percent mark brings considerable levity to Conerly's demeanor.
"I hear real estate brokers whining that interest rates, which have been at record lows, may go up to 6.5 percent," he says. What these brokers don't realize, he adds, "is that they are really living in the golden age of mortgage rates."
Steve Bergsman is a freelance writer in Arizona and author of several books, including "After the Fall: Opportunities and Strategies for Real Estate Investing in the Coming Decade."
The new REO reality: above-asking offers
Q: I am in the market for a new home, and I am worried. My friend recently put an offer in on a house of $109,000, which was the list price. The bank came back with a counteroffer of $150,000! Is that even ethical? Can the bank really do that? Is that something I should be looking out for?
A: Your question reflects the essence of why I write this column. I know that's a little heavy, but let me explain. Hindsight for hindsight's sake sounds a little too much like fodder for guilt or blame or regret for my tastes. Those are probably three of the most counterproductive of all the human emotions, and definitely cause more harm than good.
But looking back at what happened in your own -- or a friend's -- past transaction to glean the lessons for how you can avoid the same mistakes, protect yourself or optimize your experience the next time around? Now that's what I'm talking about! (Translation: Learning from the past is definitely a worthwhile pursuit.)
So here's the skinny on your friend's REO offer. Her dismaying surprise at the bank's counteroffer, which was far and above the list price, might just save you from losing one or two of your "dream" homes. These days, there is an intense amount of competition among buyers, as first-time homebuyers try to close their deals before the Nov. 30 deadline and as cash-waving investors take advantage of what they see as bargain-basement property pricing.
As the tax credit deadline looms nearer, the competition and number of multiple offers grows more and more intense. The result? Many bank-owned homes are selling over the asking price.
That's probably what happened in your friend's situation. Her competing offerors viewed the list price like I used to view the speed limit: as a suggested minimum, or starting point. The offer prices went way over asking and, frankly, the bank and listing agent did your friend the favor of giving her another shot at it by issuing a counteroffer -- giving her the opportunity to get into the game if she wanted to.
More often, a bank will counter only the top offer or so, or will generically counter all offers asking them to come back with their "highest and best," requiring everyone to take a total shot in the dark about whether it would take an increase of $5,000 or $50,000 (or no increase at all) to get into or retain the top spot.
Know this -- when you are in a multiple-offer situation, you are in a competition. A "good" offer is not enough, because the second- and third-place offers don't get the house. Every house might not be worth going to your extreme top price for, but you need to be aware of the rules of the game.
To fully answer your question, though, it's unfortunate, but not at all unethical for the bank to do what it did in your friend's situation. In fact, as I said, I feel like your friend got better than she would have in the average case, where she'd likely have received nothing more than a rejection.
Why do I think your friend's loss might be your gain? Well, time and time again I've seen buyers ignore their agent's advice to offer more than the asking price for a listed home because they think the fact that it's a buyer's market or that the property is a foreclosure renders an over-asking offer absurd.
Many such buyers lose a couple of homes in this fashion before they get aggressive about offering more than the asking price, while they experience what I call "the market educating them."
In fact, multiple offers and above-asking sales prices are the rule of the day in many areas. Your friend's experience has very likely opened both her and your eyes to these market realities. When it comes time for you to start your own house hunt, ask your agent to brief you on local list-price-to-sale-price ratios, so you can focus your search on homes listed appropriately lower than the maximum price you can spend, empowering you to compete and offer more than the asking price, as necessary.
A: Your question reflects the essence of why I write this column. I know that's a little heavy, but let me explain. Hindsight for hindsight's sake sounds a little too much like fodder for guilt or blame or regret for my tastes. Those are probably three of the most counterproductive of all the human emotions, and definitely cause more harm than good.
But looking back at what happened in your own -- or a friend's -- past transaction to glean the lessons for how you can avoid the same mistakes, protect yourself or optimize your experience the next time around? Now that's what I'm talking about! (Translation: Learning from the past is definitely a worthwhile pursuit.)
So here's the skinny on your friend's REO offer. Her dismaying surprise at the bank's counteroffer, which was far and above the list price, might just save you from losing one or two of your "dream" homes. These days, there is an intense amount of competition among buyers, as first-time homebuyers try to close their deals before the Nov. 30 deadline and as cash-waving investors take advantage of what they see as bargain-basement property pricing.
As the tax credit deadline looms nearer, the competition and number of multiple offers grows more and more intense. The result? Many bank-owned homes are selling over the asking price.
That's probably what happened in your friend's situation. Her competing offerors viewed the list price like I used to view the speed limit: as a suggested minimum, or starting point. The offer prices went way over asking and, frankly, the bank and listing agent did your friend the favor of giving her another shot at it by issuing a counteroffer -- giving her the opportunity to get into the game if she wanted to.
More often, a bank will counter only the top offer or so, or will generically counter all offers asking them to come back with their "highest and best," requiring everyone to take a total shot in the dark about whether it would take an increase of $5,000 or $50,000 (or no increase at all) to get into or retain the top spot.
Know this -- when you are in a multiple-offer situation, you are in a competition. A "good" offer is not enough, because the second- and third-place offers don't get the house. Every house might not be worth going to your extreme top price for, but you need to be aware of the rules of the game.
To fully answer your question, though, it's unfortunate, but not at all unethical for the bank to do what it did in your friend's situation. In fact, as I said, I feel like your friend got better than she would have in the average case, where she'd likely have received nothing more than a rejection.
Why do I think your friend's loss might be your gain? Well, time and time again I've seen buyers ignore their agent's advice to offer more than the asking price for a listed home because they think the fact that it's a buyer's market or that the property is a foreclosure renders an over-asking offer absurd.
Many such buyers lose a couple of homes in this fashion before they get aggressive about offering more than the asking price, while they experience what I call "the market educating them."
In fact, multiple offers and above-asking sales prices are the rule of the day in many areas. Your friend's experience has very likely opened both her and your eyes to these market realities. When it comes time for you to start your own house hunt, ask your agent to brief you on local list-price-to-sale-price ratios, so you can focus your search on homes listed appropriately lower than the maximum price you can spend, empowering you to compete and offer more than the asking price, as necessary.
Friday, October 9, 2009
Aides: Home Buyer Tax Credit Extension Likely
Extending the First-Time Home Buyer Tax Credit, due to expire at the end of November, is high on the Democratic Congressional to-do list, legislative aides said.
After Wednesday’s meeting with President Obama and House Speaker Nancy Pelosi (D-Calif.), Senate Majority Leader Harry Reid (D-Nev.) released a statement that the government should “continue efforts to strengthen the housing market by extending the home buyer tax credit.”
Mark Zandi, chief economist at Moody’s Economy.com, who is a consultant to Democrats in the administration and Congress, is advocating extending the credit through August and making it available to all home buyers. He said failure to extend the credit just as more foreclosures enter the market will push housing prices down.
Also, on Thursday, the House is expected pass legislation to extend the credit through 2010 for people who have been out of the country in the military, intelligence, or foreign services.
After Wednesday’s meeting with President Obama and House Speaker Nancy Pelosi (D-Calif.), Senate Majority Leader Harry Reid (D-Nev.) released a statement that the government should “continue efforts to strengthen the housing market by extending the home buyer tax credit.”
Mark Zandi, chief economist at Moody’s Economy.com, who is a consultant to Democrats in the administration and Congress, is advocating extending the credit through August and making it available to all home buyers. He said failure to extend the credit just as more foreclosures enter the market will push housing prices down.
Also, on Thursday, the House is expected pass legislation to extend the credit through 2010 for people who have been out of the country in the military, intelligence, or foreign services.
Wednesday, October 7, 2009
California's rollercoaster ride to end?
The up-and-down rollercoaster ride that California home sales and prices have been on for the last several years could finally even out in 2010, although the state will continue to have a bifurcated housing market, the California Association of Realtors said today.
The "new normal" for California housing markets -- brisk sales and lean inventory on the low end, coupled with continued roadblocks to closing deals on the high end -- could produce a slight increase in the state's median home price, even as sales cool down a bit, CAR said.
In its 2010 forecast, CAR projects the state's median home price will rise 3.3 percent next year to $280,000, even though sales of existing homes are expected to decrease by 2.3 percent, to 527,500 units.
After double-digit declines in sales in 2006 and 2007 -- followed by double-digit increases in 2008 and 2009 -- CAR sees sales moderating to "a more sustainable pace" in 2010.
During the boom, sales of existing homes peaked at 625,000 in 2004 and 2005, and bottomed out at 346,900 in 2007. The median home price has also been on a rollercoaster ride, peaking at $560,300 in 2007 and falling to a projected $271,000 this year.
"Housing in California has become a tale of two markets," CAR President James Liptak said in a press release. "The low end continues to attract first-time buyers and investors, with a resulting shortage in the number of homes for sale. Sellers at the high end, however, continue to be challenged by the ability of homebuyers to secure financing as well as their concerns about where prices are headed."
CAR expects demand for low-end properties from first-time buyers will continue throughout next year, but it remains to be seen whether discretionary sellers return to the market by the second half of 2010, the group said CAR chief economist Leslie Appleton-Young expects distressed properties will account for nearly one-third of sales next year and that inventory will be "relatively lean" -- under six months of supply in the off-season, and about four months during the peak season.
"Although it appears at this time that lenders are closely monitoring the flow of distressed properties onto the market, there could be an exertion of downward pressure on home prices should a heavier-than-expected wave of foreclosures come to market next year," she said.
"The wild cards for 2010 include foreclosures, loan resets, the labor market, the California budget crisis, and the actions of the federal government," Appleton-Young said.
Like other real estate industry groups, CAR is calling on Congress to not only extend but expand the $8,000 first-time homebuyer tax credit that's scheduled to expire Nov. 30.
Liptak said 2009 presented a unique opportunity for first-time homebuyers, who were helped not only by the tax credit but more affordable home prices and interest rates at near historic lows.
CAR is forecasting that the 30-year fixed-rate mortgage will average 5.6 percent next year, up from 5.2 percent this year, and that rates on one-year adjustable-rate mortgage (ARM) loans will increase to 5.2 percent, up from an average of 4.8 percent this year
The "new normal" for California housing markets -- brisk sales and lean inventory on the low end, coupled with continued roadblocks to closing deals on the high end -- could produce a slight increase in the state's median home price, even as sales cool down a bit, CAR said.
In its 2010 forecast, CAR projects the state's median home price will rise 3.3 percent next year to $280,000, even though sales of existing homes are expected to decrease by 2.3 percent, to 527,500 units.
After double-digit declines in sales in 2006 and 2007 -- followed by double-digit increases in 2008 and 2009 -- CAR sees sales moderating to "a more sustainable pace" in 2010.
During the boom, sales of existing homes peaked at 625,000 in 2004 and 2005, and bottomed out at 346,900 in 2007. The median home price has also been on a rollercoaster ride, peaking at $560,300 in 2007 and falling to a projected $271,000 this year.
"Housing in California has become a tale of two markets," CAR President James Liptak said in a press release. "The low end continues to attract first-time buyers and investors, with a resulting shortage in the number of homes for sale. Sellers at the high end, however, continue to be challenged by the ability of homebuyers to secure financing as well as their concerns about where prices are headed."
CAR expects demand for low-end properties from first-time buyers will continue throughout next year, but it remains to be seen whether discretionary sellers return to the market by the second half of 2010, the group said CAR chief economist Leslie Appleton-Young expects distressed properties will account for nearly one-third of sales next year and that inventory will be "relatively lean" -- under six months of supply in the off-season, and about four months during the peak season.
"Although it appears at this time that lenders are closely monitoring the flow of distressed properties onto the market, there could be an exertion of downward pressure on home prices should a heavier-than-expected wave of foreclosures come to market next year," she said.
"The wild cards for 2010 include foreclosures, loan resets, the labor market, the California budget crisis, and the actions of the federal government," Appleton-Young said.
Like other real estate industry groups, CAR is calling on Congress to not only extend but expand the $8,000 first-time homebuyer tax credit that's scheduled to expire Nov. 30.
Liptak said 2009 presented a unique opportunity for first-time homebuyers, who were helped not only by the tax credit but more affordable home prices and interest rates at near historic lows.
CAR is forecasting that the 30-year fixed-rate mortgage will average 5.6 percent next year, up from 5.2 percent this year, and that rates on one-year adjustable-rate mortgage (ARM) loans will increase to 5.2 percent, up from an average of 4.8 percent this year
Friday, October 2, 2009
Relating Skills to Master
I am asked from time to time why some do so well in this business and some, well, don’t. There are more than a handful of “secrets” but there are very few that are more important that mastering your relatioanl skills. In fact, there is nothing in this world that pays better, in every realm of life, than relational skill mastery. Here’s a few things to keep in mind as you go through your day.
Don’t just listen to or understand people: Really hear them.
Love and support everyone, but require their best.
Speak in messages, not clichés, opinions, or possibilities.
Communicate fully in the moment.
See faults in people, but accept them.
Be unconditionally constructive.
Fully handle tasks.
Don’t seek credit.
Want the best for people, but don’t be tied to it.
Show people you care.
Be others focused.
Be interested in the conversation at hand.
Appreciate others.
Watch your association.
Be interdevelopmental with people: Not codependent, dependent, or merely interdependent.
Be grateful to and for others, and they feel it.
Cause things to happen, don’t wait for them to happen.
Always add value.
Give the gifts that the other person really wants.
Don’t just listen to or understand people: Really hear them.
Love and support everyone, but require their best.
Speak in messages, not clichés, opinions, or possibilities.
Communicate fully in the moment.
See faults in people, but accept them.
Be unconditionally constructive.
Fully handle tasks.
Don’t seek credit.
Want the best for people, but don’t be tied to it.
Show people you care.
Be others focused.
Be interested in the conversation at hand.
Appreciate others.
Watch your association.
Be interdevelopmental with people: Not codependent, dependent, or merely interdependent.
Be grateful to and for others, and they feel it.
Cause things to happen, don’t wait for them to happen.
Always add value.
Give the gifts that the other person really wants.
The First Step to Success
“The first step to success is to stop lying to yourself”
I would dare say that the vast majority of people would consider themselves honest, ethical people. In fact, I was in a room of 500 top producing agents when the speaker asked who in the room felt they had integrity. 98% of the room raised their hands. When asked to lower their hand if they had ever lied to themselves or made a promise, resolution or goal and not kept it all the hands went down.
Our quest for success starts within and to truly address the issues that are getting in the way of our achieving our wildest and most audacious dreams we need to have an honest look at ourselves. Our justification, excuses and reasons are all hindering us. The first step to our success is to face the truth about our situation.
I am not talking about condemnation, guilt or shame - none of those have a place in helping us. But honesty and truth, yes, honesty and truth will allow us to see things for what they are. Once problems and issues are identified our mind has a way of seeking answers that were previously hidden from us. I’m not talking in a meta-physical way, but in a very practical way. Our mind blocks millions of things a day from our 5 senses that it doesn’t feel are relevant. When we face our issues, the possible solutions become relevant and our mind will allow us to see and hear them.
If we want to achieve success, whether it is an increase in income, growth in business or overall life balance, we must first face the truth of where we are and the very real disparity of where we want to go and seek the solutions that will allow us to bridge the gap.
Remember, The first step to success is to stop lying to yourself.
I would dare say that the vast majority of people would consider themselves honest, ethical people. In fact, I was in a room of 500 top producing agents when the speaker asked who in the room felt they had integrity. 98% of the room raised their hands. When asked to lower their hand if they had ever lied to themselves or made a promise, resolution or goal and not kept it all the hands went down.
Our quest for success starts within and to truly address the issues that are getting in the way of our achieving our wildest and most audacious dreams we need to have an honest look at ourselves. Our justification, excuses and reasons are all hindering us. The first step to our success is to face the truth about our situation.
I am not talking about condemnation, guilt or shame - none of those have a place in helping us. But honesty and truth, yes, honesty and truth will allow us to see things for what they are. Once problems and issues are identified our mind has a way of seeking answers that were previously hidden from us. I’m not talking in a meta-physical way, but in a very practical way. Our mind blocks millions of things a day from our 5 senses that it doesn’t feel are relevant. When we face our issues, the possible solutions become relevant and our mind will allow us to see and hear them.
If we want to achieve success, whether it is an increase in income, growth in business or overall life balance, we must first face the truth of where we are and the very real disparity of where we want to go and seek the solutions that will allow us to bridge the gap.
Remember, The first step to success is to stop lying to yourself.
Thursday, September 17, 2009
What have you done to change the world today?
I have a saying that is permanently written on one of the white boards in my office. As the projects come and go, the one saying stays as an overarching reminder.
“What have you done to change the world today?”
I remember I had a professor in college that would ask that simple question of the students as he roamed the campus. I’m not sure how many students over the years were impacted by it. But the first day I ran into him and he launched his signature question, He changed me - forever. That question lives with me, no, it haunts me.
So every day, I attempt to answer the question that stares at me. How have I changed the world today? Most days it in small ways, some days I hit a home run. But every day I attempt to leave my mark on the world around me by sowing into the lives God has chosen to place in my life.
In real estate, we have an incredible honor to deeply touch those we work with. We see people in the depths of despair, stress and worry. We see them in the heights of elation as long held dreams are realized. The one common thing in both circumstances is that we have an opportunity to leave our mark, good or bad, forever. Be purposed in what you do and why you do it - you leave a legacy whether you realize it or not.
“What have you done to change the world today?”
I remember I had a professor in college that would ask that simple question of the students as he roamed the campus. I’m not sure how many students over the years were impacted by it. But the first day I ran into him and he launched his signature question, He changed me - forever. That question lives with me, no, it haunts me.
So every day, I attempt to answer the question that stares at me. How have I changed the world today? Most days it in small ways, some days I hit a home run. But every day I attempt to leave my mark on the world around me by sowing into the lives God has chosen to place in my life.
In real estate, we have an incredible honor to deeply touch those we work with. We see people in the depths of despair, stress and worry. We see them in the heights of elation as long held dreams are realized. The one common thing in both circumstances is that we have an opportunity to leave our mark, good or bad, forever. Be purposed in what you do and why you do it - you leave a legacy whether you realize it or not.
Good Morning,
We like what’s familiar and today is practice for tomorrow.
If you practice worry, fear and anxiety, you’ll get better at them.
Sadly, practicing these rob the present moment of peace and happiness; instead, practice being happy, prosperous and free.
What you focus on increases, so become aware of what you’re thinking. If you should happen to think frightening thoughts, change them for something positive.
An excellent thing to change is gratitude.
When you focus on what you are grateful for, your sense of the fullness and abundance of life will increase. If you catch yourself indulging in worry, fear or anxiety… STOP! And practice gratitude instead.
On Your Team,
Milt
We like what’s familiar and today is practice for tomorrow.
If you practice worry, fear and anxiety, you’ll get better at them.
Sadly, practicing these rob the present moment of peace and happiness; instead, practice being happy, prosperous and free.
What you focus on increases, so become aware of what you’re thinking. If you should happen to think frightening thoughts, change them for something positive.
An excellent thing to change is gratitude.
When you focus on what you are grateful for, your sense of the fullness and abundance of life will increase. If you catch yourself indulging in worry, fear or anxiety… STOP! And practice gratitude instead.
On Your Team,
Milt
Happy
Good Morning.
Did I figure it out?
I don't have to be unhappy to change. I can be happy and still change. The only reason I am ever unhappy is because I think I should be.
Today I encourage you to notice that whatever you do when you are unhappy you will do better when you are happy.
I have heard it said that, "Success is not the key to happiness but happiness is the key to success."
What happens when you imagine feeling happy today for no reason at all?
Milt
Did I figure it out?
I don't have to be unhappy to change. I can be happy and still change. The only reason I am ever unhappy is because I think I should be.
Today I encourage you to notice that whatever you do when you are unhappy you will do better when you are happy.
I have heard it said that, "Success is not the key to happiness but happiness is the key to success."
What happens when you imagine feeling happy today for no reason at all?
Milt
Thursday, September 10, 2009
Thoughts Worth Pondering
Know how you measure success-
Start living your life by design.
Abandon perfectionism-
Replace perfectionism with pride.
Accept, then perfect, what isn’t perfect-
Acceptance is the first step toward perfection.
Enjoy an absence of personal problems-
Life’s too short for problems of any kind-become a problem-free zone.
Automate the business of your life-
Don’t you have better things to do?
Upgrade your personal and professional network-
People bring you the best opportunities in life.
Seriously invest in a special skill set-
The more you can deliver, the more you can earn.
Have whims worth following-
Perfection occurs as you respond to what tugs at you.
Perfect your self-care-
A perfect life isn’t sustainable without advanced self-care.
Lighten your footprint-
Need less-be more.
Evolve your sources of energy-
Design advanced sources of motivation.
Raise your standards-reduce your expectations-
This raises you above the muck of life into the realm of the perfect.
Start living your life by design.
Abandon perfectionism-
Replace perfectionism with pride.
Accept, then perfect, what isn’t perfect-
Acceptance is the first step toward perfection.
Enjoy an absence of personal problems-
Life’s too short for problems of any kind-become a problem-free zone.
Automate the business of your life-
Don’t you have better things to do?
Upgrade your personal and professional network-
People bring you the best opportunities in life.
Seriously invest in a special skill set-
The more you can deliver, the more you can earn.
Have whims worth following-
Perfection occurs as you respond to what tugs at you.
Perfect your self-care-
A perfect life isn’t sustainable without advanced self-care.
Lighten your footprint-
Need less-be more.
Evolve your sources of energy-
Design advanced sources of motivation.
Raise your standards-reduce your expectations-
This raises you above the muck of life into the realm of the perfect.
Thursday, September 3, 2009
8145 Hillsdale Drive, Orange CA The original owner is selling this two story, four bedroom, three bath home, located on the "view side" of hillsdale, with endless views of Irvine Park and the mountains, miles from the house. The courtyard entry leads to a formal living room with wood floors and fireplace, a formal dinning room, and gentle winding staircase. The open kitchen features a center island, an eating area which overlooks the backyard, and opens to the family room with a wetbar adn fireplace. One of the bedrooms is located downstairs with a full bath. The laundry room leads to a roomy 3 car garage.
Upper level features a dramatic master suite with soaring ceilings, view balcony, private bath with soaking tub/shower, and dual vanities. Two additional bedrooms lead to a bonus/game/upstairs family room, which is perfect for informal enterainment area. Energy saving dual zoned central air and tile roof. The rear yard has bbq island and open fence to natural rollings hills below. Close to toll roads, parks, trails and shopping.
Upper level features a dramatic master suite with soaring ceilings, view balcony, private bath with soaking tub/shower, and dual vanities. Two additional bedrooms lead to a bonus/game/upstairs family room, which is perfect for informal enterainment area. Energy saving dual zoned central air and tile roof. The rear yard has bbq island and open fence to natural rollings hills below. Close to toll roads, parks, trails and shopping.
Tuesday, September 1, 2009
by Unknown Author
No one can make you serve customers well. That’s because great service is a choice.
Harvey MacKay, tells a wonderful story about a cab driver that proved this point.
He was standing in line for a ride at the airport. When a cab pulled up, the first thing Harvey noticed was that the taxi was polished to a bright shine. Smartly dressed in a white shirt, black tie, and freshly pressed black slacks, the cab driver jumped out and rounded the car to open the back passenger door for Harvey.
He handed me a laminated card and said:
“I’m Wally, your driver. While I’m loading your bags in the trunk I’d like you to read my mission statement.”
Taken aback, Harvey read the card. It said:
“Wally’s Mission Statement: ‘To get my customers to their destination in the quickest, safest and cheapest way possible in a friendly environment.’” This blew Harvey away. Especially when he noticed that the inside of the cab matched the outside. Spotlessly clean!
As he slid behind the wheel, Wally said, “Would you like a cup of coffee? I have a thermos of regular and one of decaf.”
I said jokingly, “No, I’d prefer a soft drink.”
Wally smiled and said, “No problem. I have a cooler up front with regular and diet Coke, water, and orange juice.”
Almost stuttering, Harvey said, “I’ll take a Coke.”
Handing him his drink, Wally said, “If you’d like something to read, I have The Wall Street Journal, Time, Sports Illustrated and USA Today.”
As they were pulling away, Wally handed me another laminated card. “These are the stations I get and the music they play, if you’d like to listen to the radio.”
And as if that weren’t enough, Wally told Harvey that he had the air conditioning on and asked if the temperature was comfortable for him. Then he advised Harvey of the best route to his destination for that time of day. He also let him know that he’d be happy to chat and tell him about some of the sights or, if Harvey preferred, to leave him alone with his own thoughts.
“Tell me, Wally,” Harvey asked the driver, “have you always served customers like this?”
Wally smiled into the rear view mirror. “No, not always. In fact, it’s only been in the last two years. My first five years driving, I spent most of my time complaining like all the rest of the cabbies do. Then I heard the personal growth guru, Wayne Dyer, on the radio one day.
“He had just written a book called ‘You’ll See It When You Believe It.’ Dyer said that ‘if you get up in the morning expecting to have a bad day, you’ll rarely disappoint yourself.’ He said, ‘Stop complaining! Differentiate yourself from your competition. Don’t be a duck. Be an eagle. Ducks quack and complain. Eagles soar above the crowd.’”
“That hit me right between the eyes,” said Wally. “Dyer was really talking about me. I was always quacking and complaining, so I decided to change my attitude and become an eagle. I looked around at the other cabs and their drivers. The cabs were dirty, the drivers were unfriendly, and the customers were unhappy. So I decided to make some changes. I put in a few at a time. When my customers responded well, I did more.”
“I take it that has paid off for you,” Harvey said.
“It sure has,” Wally replied. “My first year as an eagle, I doubled my income from the previous year. This year I’ll probably quadruple it. You were lucky to get me today. I don’t sit at cabstands anymore. My customers call me for appointments on my cell phone or leave a message on my answering machine. If I can’t pick them up myself, I get a reliable cabbie friend to do it and I take a piece of the action.”
Wally was phenomenal. He was running a limo service out of a Yellow Cab. I’ve probably told that story to more than fifty cab drivers over the years, and only two took the idea and ran with it. Whenever I go to their cities, I give them a call. The rest of the drivers quacked like ducks and told me all the reasons they couldn’t do any of what I was suggesting.
Wally the cab driver made a different choice. He decided to stop quacking like ducks and start soaring like eagles.
How about us?
Smile, and the whole world smiles with you … The ball is in our hands!
I have posted this article written by an unknown author because I feel it is important for all of you to understand how I conduct my business.
By Referral Only means that I dedicate 100% of my time delivering world class service to you, my clients. I want you to be so satisfied with my services you feel compelled to refer your friends and family to me not by obligation, but because you truly believe they will benefit. You see, your referrals are the heart of my business.
Milt
No one can make you serve customers well. That’s because great service is a choice.
Harvey MacKay, tells a wonderful story about a cab driver that proved this point.
He was standing in line for a ride at the airport. When a cab pulled up, the first thing Harvey noticed was that the taxi was polished to a bright shine. Smartly dressed in a white shirt, black tie, and freshly pressed black slacks, the cab driver jumped out and rounded the car to open the back passenger door for Harvey.
He handed me a laminated card and said:
“I’m Wally, your driver. While I’m loading your bags in the trunk I’d like you to read my mission statement.”
Taken aback, Harvey read the card. It said:
“Wally’s Mission Statement: ‘To get my customers to their destination in the quickest, safest and cheapest way possible in a friendly environment.’” This blew Harvey away. Especially when he noticed that the inside of the cab matched the outside. Spotlessly clean!
As he slid behind the wheel, Wally said, “Would you like a cup of coffee? I have a thermos of regular and one of decaf.”
I said jokingly, “No, I’d prefer a soft drink.”
Wally smiled and said, “No problem. I have a cooler up front with regular and diet Coke, water, and orange juice.”
Almost stuttering, Harvey said, “I’ll take a Coke.”
Handing him his drink, Wally said, “If you’d like something to read, I have The Wall Street Journal, Time, Sports Illustrated and USA Today.”
As they were pulling away, Wally handed me another laminated card. “These are the stations I get and the music they play, if you’d like to listen to the radio.”
And as if that weren’t enough, Wally told Harvey that he had the air conditioning on and asked if the temperature was comfortable for him. Then he advised Harvey of the best route to his destination for that time of day. He also let him know that he’d be happy to chat and tell him about some of the sights or, if Harvey preferred, to leave him alone with his own thoughts.
“Tell me, Wally,” Harvey asked the driver, “have you always served customers like this?”
Wally smiled into the rear view mirror. “No, not always. In fact, it’s only been in the last two years. My first five years driving, I spent most of my time complaining like all the rest of the cabbies do. Then I heard the personal growth guru, Wayne Dyer, on the radio one day.
“He had just written a book called ‘You’ll See It When You Believe It.’ Dyer said that ‘if you get up in the morning expecting to have a bad day, you’ll rarely disappoint yourself.’ He said, ‘Stop complaining! Differentiate yourself from your competition. Don’t be a duck. Be an eagle. Ducks quack and complain. Eagles soar above the crowd.’”
“That hit me right between the eyes,” said Wally. “Dyer was really talking about me. I was always quacking and complaining, so I decided to change my attitude and become an eagle. I looked around at the other cabs and their drivers. The cabs were dirty, the drivers were unfriendly, and the customers were unhappy. So I decided to make some changes. I put in a few at a time. When my customers responded well, I did more.”
“I take it that has paid off for you,” Harvey said.
“It sure has,” Wally replied. “My first year as an eagle, I doubled my income from the previous year. This year I’ll probably quadruple it. You were lucky to get me today. I don’t sit at cabstands anymore. My customers call me for appointments on my cell phone or leave a message on my answering machine. If I can’t pick them up myself, I get a reliable cabbie friend to do it and I take a piece of the action.”
Wally was phenomenal. He was running a limo service out of a Yellow Cab. I’ve probably told that story to more than fifty cab drivers over the years, and only two took the idea and ran with it. Whenever I go to their cities, I give them a call. The rest of the drivers quacked like ducks and told me all the reasons they couldn’t do any of what I was suggesting.
Wally the cab driver made a different choice. He decided to stop quacking like ducks and start soaring like eagles.
How about us?
Smile, and the whole world smiles with you … The ball is in our hands!
I have posted this article written by an unknown author because I feel it is important for all of you to understand how I conduct my business.
By Referral Only means that I dedicate 100% of my time delivering world class service to you, my clients. I want you to be so satisfied with my services you feel compelled to refer your friends and family to me not by obligation, but because you truly believe they will benefit. You see, your referrals are the heart of my business.
Milt
July pending home sales rise to 2-year high
The National Association of Realtors said pending U.S. home sales rose for the sixth straight month and is now 12 percent above the same month last year.
WASHINGTON - A gauge of future U.S. home sales rose more than expected in July to the highest level in over two years as first-time buyers rushed to take advantage of a tax credit that expires this fall.
The report showed the housing market is rebounding faster than expected from its historic bust. Low prices and the looming expiration on Nov. 30 of a first-time homebuyers’ tax credit of up to $8,000 have spurred sales. Prices in much of the country have begun to rise from the depths of the slump.
“The overall trend toward stabilization is undeniable at this point,” wrote Mike Larson, real estate analyst at Weiss Research.
The National Association of Realtors said Tuesday its seasonally adjusted index of sales contracts signed in July for previously occupied homes rose 3.2 percent to 97.6. It was the sixth straight increase, and 12 percent higher the same month last year.
Economists surveyed by Thomson Reuters had expected the index to edge up to only 96.5.
The index of pending home sales indicates how sales completed this month and next will turn out. Typically, there is a one- to two-month lag between a contract and a final deal. But delays in getting mortgages approved and appraisals completed have recently lengthened the time it takes to close a deal in many cases.
Analysts predict sales will drop off when the tax credit expires, or if mortgage rates rise from near-record lows. Foreclosures also continue to rise, and banks are forced to sell those properties at deep discounts, pushing prices down.
A 12 percent jump in sales contracts in the West and a 3 percent increase in the South drove July’s overall increase. Sales fell in the Northeast and Midwest.
The Realtors group projects that around 2 million first-time buyers will take advantage of the credit this year, and says it is spurring 350,000 additional sales that wouldn’t have happened otherwise.
Nationally, home prices in the second quarter posted their first quarterly increase in three years, according to the Standard & Poor’s/Case-Shiller national index released last week. Prices are growing in some parts of the country, but “beware a rise in supply as frustrated would-be sellers see their chance,” wrote Ian Shepherdson, chief U.S. economist at High Frequency Economics.
While home prices are still 30 percent below the mid-2006 peak, their new direction should bring relief to lenders, homeowners and buyers alike.
Falling property values have wiped out $4 trillion in homeowners’ equity, and thousands have walked away from homes that are worth far less than their mortgage balance. But now, with prices stabilizing, many buyers who had been staying out of the market are coming off the sidelines.
WASHINGTON - A gauge of future U.S. home sales rose more than expected in July to the highest level in over two years as first-time buyers rushed to take advantage of a tax credit that expires this fall.
The report showed the housing market is rebounding faster than expected from its historic bust. Low prices and the looming expiration on Nov. 30 of a first-time homebuyers’ tax credit of up to $8,000 have spurred sales. Prices in much of the country have begun to rise from the depths of the slump.
“The overall trend toward stabilization is undeniable at this point,” wrote Mike Larson, real estate analyst at Weiss Research.
The National Association of Realtors said Tuesday its seasonally adjusted index of sales contracts signed in July for previously occupied homes rose 3.2 percent to 97.6. It was the sixth straight increase, and 12 percent higher the same month last year.
Economists surveyed by Thomson Reuters had expected the index to edge up to only 96.5.
The index of pending home sales indicates how sales completed this month and next will turn out. Typically, there is a one- to two-month lag between a contract and a final deal. But delays in getting mortgages approved and appraisals completed have recently lengthened the time it takes to close a deal in many cases.
Analysts predict sales will drop off when the tax credit expires, or if mortgage rates rise from near-record lows. Foreclosures also continue to rise, and banks are forced to sell those properties at deep discounts, pushing prices down.
A 12 percent jump in sales contracts in the West and a 3 percent increase in the South drove July’s overall increase. Sales fell in the Northeast and Midwest.
The Realtors group projects that around 2 million first-time buyers will take advantage of the credit this year, and says it is spurring 350,000 additional sales that wouldn’t have happened otherwise.
Nationally, home prices in the second quarter posted their first quarterly increase in three years, according to the Standard & Poor’s/Case-Shiller national index released last week. Prices are growing in some parts of the country, but “beware a rise in supply as frustrated would-be sellers see their chance,” wrote Ian Shepherdson, chief U.S. economist at High Frequency Economics.
While home prices are still 30 percent below the mid-2006 peak, their new direction should bring relief to lenders, homeowners and buyers alike.
Falling property values have wiped out $4 trillion in homeowners’ equity, and thousands have walked away from homes that are worth far less than their mortgage balance. But now, with prices stabilizing, many buyers who had been staying out of the market are coming off the sidelines.
Friday, August 28, 2009
Fed Chair Says the Worst Is Over
Federal Reserve Chair Ben Bernanke said on Friday that he was optimistic the economy is about to take off.
Bernanke acknowledged that credit is still tight, especially for businesses, but he told an audience of bankers, academics, and economists that the worst is over.
"Although we have avoided the worst, difficult challenges still lie ahead," Bernanke said. "We must work together to build on the gains already made to secure a sustained economic recovery."
Bernanke called for stronger regulation of financial rules "to ensure that the enormous costs of the past two years will not be borne again."
Source: The Associated Press, Jeannine Aversa (08/21/2009)
Bernanke acknowledged that credit is still tight, especially for businesses, but he told an audience of bankers, academics, and economists that the worst is over.
"Although we have avoided the worst, difficult challenges still lie ahead," Bernanke said. "We must work together to build on the gains already made to secure a sustained economic recovery."
Bernanke called for stronger regulation of financial rules "to ensure that the enormous costs of the past two years will not be borne again."
Source: The Associated Press, Jeannine Aversa (08/21/2009)
IRS Scrutinizes Mortgage Deductions
According to published reports, the Internal Revenue Service is more closely examining how taxpayers are reporting mortgage interest deductions.
The IRS is reportedly examining some returns with high deductions for mortgage interest and enforcing obscure rules that most home owners and many accountants could be unfamiliar with.
The calculations are very complex and rely on precise records that some home owners may have trouble producing
Experts advise home buyers who have borrowed more than $1 million in mortgages and home equity loans since 1987, the year deductibility limits were enacted, to consult a tax expert because the newest loan may not be tax deductible.
Source: Investment News Daily, Art Auerbach (08/25/2009)
The IRS is reportedly examining some returns with high deductions for mortgage interest and enforcing obscure rules that most home owners and many accountants could be unfamiliar with.
The calculations are very complex and rely on precise records that some home owners may have trouble producing
Experts advise home buyers who have borrowed more than $1 million in mortgages and home equity loans since 1987, the year deductibility limits were enacted, to consult a tax expert because the newest loan may not be tax deductible.
Source: Investment News Daily, Art Auerbach (08/25/2009)
First-Time Buyer Tax Credit Extension Possible
Bills to extend the maximum $8,000 tax credit for first-time home buyers, which expires Nov. 30, are pending in both the U.S. House and the Senate.
Sen. Christopher J. Dodd, a Connecticut Democrat and chairman of the Senate Banking, Housing, and Urban Affairs Committee, is co-sponsor of a bill with Georgia Republican Sen. Johnny Isakson that would raise the credit amount to a maximum of $15,000.
Senate Majority Leader Harry M. Reid of Nevada favors an extension of the current credit. He was quoted by the Las Vegas Sun saying, "It's something we can get done."
Odds are that the credit will be extended and broadened to cover all buyers next year, but the chances of the amount increasing aren’t as good, observers say.
Source: Washington Post Writers Group, Kenneth R. Harney (08/22/2009)
Sen. Christopher J. Dodd, a Connecticut Democrat and chairman of the Senate Banking, Housing, and Urban Affairs Committee, is co-sponsor of a bill with Georgia Republican Sen. Johnny Isakson that would raise the credit amount to a maximum of $15,000.
Senate Majority Leader Harry M. Reid of Nevada favors an extension of the current credit. He was quoted by the Las Vegas Sun saying, "It's something we can get done."
Odds are that the credit will be extended and broadened to cover all buyers next year, but the chances of the amount increasing aren’t as good, observers say.
Source: Washington Post Writers Group, Kenneth R. Harney (08/22/2009)
Friday, August 7, 2009
10 Cities Leading the Market Recovery
10 Cities Leading the Market Recovery
Here’s more evidence that housing is turning around. Forbes magazine identified 161 of the country’s largest metro areas where sales activity has increased compared to 2008, and where foreclosure sales as a percentage of total sales, are low.
The magazine considers these markets as on the road to recovery.
1. Miami-Ft. Lauderdale, Fla.
2. Lincoln, Neb.
3. Colorado Springs, Colo.
4. Salem, Ore.
5. San Luis Obispo, Calif.
6. Bremerton, Wash.
7. Denver, Colo.
8. Redding, Calif.
9. Santa Barbara, Calif.
10. San Jose, Calif
.
Here’s more evidence that housing is turning around. Forbes magazine identified 161 of the country’s largest metro areas where sales activity has increased compared to 2008, and where foreclosure sales as a percentage of total sales, are low.
The magazine considers these markets as on the road to recovery.
1. Miami-Ft. Lauderdale, Fla.
2. Lincoln, Neb.
3. Colorado Springs, Colo.
4. Salem, Ore.
5. San Luis Obispo, Calif.
6. Bremerton, Wash.
7. Denver, Colo.
8. Redding, Calif.
9. Santa Barbara, Calif.
10. San Jose, Calif
.
Fed: Recession Ending, Rates Left Alone
Fed: Recession Ending, Rates Left Alone
The Federal Reserve ended its policy-making meeting Wednesday with the declaration that the recession is ending and it would move toward more normal policies.
The Fed said, “Economic activity is leveling out.” It added that it expected inflation would remain “subdued for some time.”
The Fed said it will keep the short-term key interest rate near zero, but it will end its program to buy $300 billion worth of Treasury bonds by the end of October. Buying bonds was one of the Fed’s efforts to drive down the cost of home mortgages.
“In a way, it’s more of a thumbs-up than if they had said they were continuing the Treasury-buying,” said Edward McKelvey, an economist at Goldman Sachs. “They’re saying that things are going according to plan, and that the policy is O.K.”
The Federal Reserve ended its policy-making meeting Wednesday with the declaration that the recession is ending and it would move toward more normal policies.
The Fed said, “Economic activity is leveling out.” It added that it expected inflation would remain “subdued for some time.”
The Fed said it will keep the short-term key interest rate near zero, but it will end its program to buy $300 billion worth of Treasury bonds by the end of October. Buying bonds was one of the Fed’s efforts to drive down the cost of home mortgages.
“In a way, it’s more of a thumbs-up than if they had said they were continuing the Treasury-buying,” said Edward McKelvey, an economist at Goldman Sachs. “They’re saying that things are going according to plan, and that the policy is O.K.”
Second Quarter Existing-Home Sales Rise
Second Quarter Existing-Home Sales Rise Existing-home sales in the second quarter showed healthy gains from the first quarter in the vast majority of states, and price declines have increased affordability in most metro areas, according to the latest survey by the NATIONAL ASSOCIATION OF REALTORS®.
Total state existing-home sales, including single-family and condo properties, rose 3.8 percent to a seasonally adjusted annual rate of 4.76 million units in the second quarter from 4.58 million units in the first quarter. However, they remain 2.9 percent below the 4.90 million-unit pace in the second quarter of 2008.
Thirty-nine states experienced sales increases from the first quarter, and nine states were higher than a year ago; the District of Columbia showed both quarterly and annual rises.
NAR: Gain Appears to Be Sustainable“
With low interest rates, lower home prices, and a first-time buyer tax credit, we’ve been seeing healthy increases in home sales, which are a hopeful sign for the economy,” says Lawrence Yun, NAR chief economist. “There have been sustained sales gains in Arizona, Nevada, and Florida, as well as diverse areas such as Maryland, the District of Columbia, and Nebraska. More recently, we’ve seen strong double-digit gains in Idaho, Utah, New Mexico, Washington, Hawaii, New York, New Jersey, Maine, Vermont, Wisconsin, Indiana, South Dakota, and Montana.”
Yun also explained housing’s impact on the overall economy.
“Given the need for related goods and services, each home sale pumps an additional $63,000 into the economy – that’s how the housing engine traditionally pulls us out of recession. In addition, sales are drawing down inventory and that will help stabilize home values, which in turn will lessen foreclosure pressure and boost credit availability for other sectors of the economy.”
Distressed SalesDuring the second quarter, 129 out of 155 metropolitan statistical areas reported lower median existing single-family home prices in comparison with the second quarter of 2008, while 26 areas had price gains.Distressed sales – foreclosures and short sales – accounted for 36 percent of transactions in the second quarter, which continued to weigh down median home prices because they typically are sold at a 15 to 20 percent discount; first-time buyers accounted for one-third of transactions.
The national median existing single-family price was $174,100, which is 15.6 percent below the second quarter of 2008.
According to Freddie Mac, the national average commitment rate on a 30-year conventional fixed-rate mortgage declined to a record low 5.03 percent in the second quarter from 5.06 percent in the first quarter; the rate was 6.09 percent in the second quarter of 2008.
NAR President Charles McMillan said there are unique opportunities in the current market.
“Housing affordability is hovering near record highs and there’s a wide selection of homes, but first-time buyers need to move quickly to take advantage of the $8,000 tax credit because they have to finalize the transaction by November 30,” he says. “Various state, local, and nonprofit programs target first-time buyers, and a REALTOR® can help you identify the programs and financing options that are currently available in your area.”States With Largest GainsThe largest sales gain between the first and second quarters were in:
Idaho, up 67.5 percent
Hawaii, up 24.2 percent
New York, up 22.3 percent
Wisconsin, up 21.7 percent
Nebraska, up 20.3 percent
Twelve other states experienced double-digit sales increases from the first quarter. Year over year, California, Minnesota, and Michigan are showing double-digit gains from the second quarter of 2008 but are off from the first quarter of this year.
The largest single-family home price increase in the second quarter was in the Davenport-Moline-Rock Island area of Iowa and Illinois, where the median price of $113,200 rose 30.6 percent from a year ago. Next was the Cumberland area of Maryland and West Virginia at $123,500, up 21.7 percent from the second quarter of 2008, followed by Elmira, N.Y., where the median price increased 11.3 percent to $85,000.
Price Gains and Declines
“The sharpest price declines continue to be concentrated in metros with high levels of foreclosures, including areas in California, Florida, Arizona, and Nevada, where distressed homes comprise many of the transactions,” Yun said.
Median second-quarter metro area single-family home prices ranged from a very affordable $55,700 in the Saginaw-Saginaw Township North area of Michigan to $569,500 in Honolulu.
The second most expensive area in the second quarter was the San Jose-Sunnyvale-Santa Clara area of California, at $500,000, followed by San Francisco-Oakland-Fremont at $472,900.
Other affordable markets include the Youngstown-Warren-Boardman area of Ohio and Pennsylvania at $71,500, and Lansing-East Lansing, Mich., at $81,200.
“Recently sold homes are concentrated in lower price ranges. The median price may not be representative of overall values in a given area because many middle-priced homes are not on the market,” Yun says.
Condo Market
In the condo sector, metro-area condominium and cooperative prices – covering changes in 57 metro areas – showed the national median existing-condo price was $176,900 in the second quarter, down 19.8 percent from the second quarter of 2008. Four metros showed annual increases in the median condo price and 53 areas had declines.The metros with condo price increases were:
Virginia Beach, Va.
Wichita, Kan.
Dallas
Colorado Springs, Colo.
Metro-area median existing-condo prices in the second quarter ranged from $66,400 in Las Vegas-Paradise, Nev., to $405,700 in San Francisco-Oakland-Fremont. The second most expensive reported condo market was Honolulu at $318,400, followed by Boston-Cambridge-Quincy at $277,400.
Other affordable condo markets include the Sacramento-Arden-Arcade-Roseville area of California at $101,200 in the second quarter, and Tucson, Ariz., at $102,500.
Snapshot Across the Country
Regionally, NAR reports the following with existing-home sales:
Northeast: jumped 15 percent in the second quarter to a pace of 797,000 units but are 8.4 percent below a year ago. The median existing single-family home price in the Northeast declined 9.7 percent to $246,000 in the second quarter from the same quarter in 2008.
After Elmira, N.Y., the best gain in the region was in Buffalo-Niagara Falls, N.Y., where the median price of $115,400 rose 6.7 percent from the second quarter of 2008, followed by Syracuse, N.Y., at $124,600, up 0.8 percent.
Midwest: rose 3.2 percent in the second quarter to a pace of 1.06 million but are 5.3 percent below a year ago. The median existing single-family home price in the Midwest was down 8.6 percent to $146,800 in the second quarter from the same period in 2008.
After Davenport-Moline-Rock Island, the next strongest metro price increase in the region was in Bismarck, N.D., where the median price of $157,800 was 3.5 percent higher than a year ago, followed by Springfield, Ill., at $116,200, also up 3.5 percent, and Topeka, Kan., at $113,300, up 2.7 percent.
South: increased 3.9 percent in the second quarter to an annual rate of 1.76 million but are 7.2 percent lower than the second quarter of 2008. The median existing single-family home price in the South was $158,600 in the second quarter, down 10.3 percent from a year earlier.
After the Cumberland region of Maryland and West Virginia, the strongest price increase in the region was in Beaumont-Port Arthur, Texas, with an 11.0 percent gain to $138,600, followed by, Jackson, Miss., at $140,100, up 8.2 percent, and Shreveport-Bossier City, La., at $146,800, up 3.0 percent.
West: declined 2.3 percent in the second quarter to an annual rate of 1.13 million but are 11.8 percent above a year ago. The median existing single-family home price in the West was $212,600 in the second quarter, which is 26.6 percent below the second quarter of 2008.
The best metro price performances in the West were in Kennewick-Richland-Pasco area of Washington, where the median price of $163,900 rose 0.3 percent from a year earlier, and Yakima, Wash., at $162,800, also up 0.3 percent. No other areas covered in the region reported increases.
Total state existing-home sales, including single-family and condo properties, rose 3.8 percent to a seasonally adjusted annual rate of 4.76 million units in the second quarter from 4.58 million units in the first quarter. However, they remain 2.9 percent below the 4.90 million-unit pace in the second quarter of 2008.
Thirty-nine states experienced sales increases from the first quarter, and nine states were higher than a year ago; the District of Columbia showed both quarterly and annual rises.
NAR: Gain Appears to Be Sustainable“
With low interest rates, lower home prices, and a first-time buyer tax credit, we’ve been seeing healthy increases in home sales, which are a hopeful sign for the economy,” says Lawrence Yun, NAR chief economist. “There have been sustained sales gains in Arizona, Nevada, and Florida, as well as diverse areas such as Maryland, the District of Columbia, and Nebraska. More recently, we’ve seen strong double-digit gains in Idaho, Utah, New Mexico, Washington, Hawaii, New York, New Jersey, Maine, Vermont, Wisconsin, Indiana, South Dakota, and Montana.”
Yun also explained housing’s impact on the overall economy.
“Given the need for related goods and services, each home sale pumps an additional $63,000 into the economy – that’s how the housing engine traditionally pulls us out of recession. In addition, sales are drawing down inventory and that will help stabilize home values, which in turn will lessen foreclosure pressure and boost credit availability for other sectors of the economy.”
Distressed SalesDuring the second quarter, 129 out of 155 metropolitan statistical areas reported lower median existing single-family home prices in comparison with the second quarter of 2008, while 26 areas had price gains.Distressed sales – foreclosures and short sales – accounted for 36 percent of transactions in the second quarter, which continued to weigh down median home prices because they typically are sold at a 15 to 20 percent discount; first-time buyers accounted for one-third of transactions.
The national median existing single-family price was $174,100, which is 15.6 percent below the second quarter of 2008.
According to Freddie Mac, the national average commitment rate on a 30-year conventional fixed-rate mortgage declined to a record low 5.03 percent in the second quarter from 5.06 percent in the first quarter; the rate was 6.09 percent in the second quarter of 2008.
NAR President Charles McMillan said there are unique opportunities in the current market.
“Housing affordability is hovering near record highs and there’s a wide selection of homes, but first-time buyers need to move quickly to take advantage of the $8,000 tax credit because they have to finalize the transaction by November 30,” he says. “Various state, local, and nonprofit programs target first-time buyers, and a REALTOR® can help you identify the programs and financing options that are currently available in your area.”States With Largest GainsThe largest sales gain between the first and second quarters were in:
Idaho, up 67.5 percent
Hawaii, up 24.2 percent
New York, up 22.3 percent
Wisconsin, up 21.7 percent
Nebraska, up 20.3 percent
Twelve other states experienced double-digit sales increases from the first quarter. Year over year, California, Minnesota, and Michigan are showing double-digit gains from the second quarter of 2008 but are off from the first quarter of this year.
The largest single-family home price increase in the second quarter was in the Davenport-Moline-Rock Island area of Iowa and Illinois, where the median price of $113,200 rose 30.6 percent from a year ago. Next was the Cumberland area of Maryland and West Virginia at $123,500, up 21.7 percent from the second quarter of 2008, followed by Elmira, N.Y., where the median price increased 11.3 percent to $85,000.
Price Gains and Declines
“The sharpest price declines continue to be concentrated in metros with high levels of foreclosures, including areas in California, Florida, Arizona, and Nevada, where distressed homes comprise many of the transactions,” Yun said.
Median second-quarter metro area single-family home prices ranged from a very affordable $55,700 in the Saginaw-Saginaw Township North area of Michigan to $569,500 in Honolulu.
The second most expensive area in the second quarter was the San Jose-Sunnyvale-Santa Clara area of California, at $500,000, followed by San Francisco-Oakland-Fremont at $472,900.
Other affordable markets include the Youngstown-Warren-Boardman area of Ohio and Pennsylvania at $71,500, and Lansing-East Lansing, Mich., at $81,200.
“Recently sold homes are concentrated in lower price ranges. The median price may not be representative of overall values in a given area because many middle-priced homes are not on the market,” Yun says.
Condo Market
In the condo sector, metro-area condominium and cooperative prices – covering changes in 57 metro areas – showed the national median existing-condo price was $176,900 in the second quarter, down 19.8 percent from the second quarter of 2008. Four metros showed annual increases in the median condo price and 53 areas had declines.The metros with condo price increases were:
Virginia Beach, Va.
Wichita, Kan.
Dallas
Colorado Springs, Colo.
Metro-area median existing-condo prices in the second quarter ranged from $66,400 in Las Vegas-Paradise, Nev., to $405,700 in San Francisco-Oakland-Fremont. The second most expensive reported condo market was Honolulu at $318,400, followed by Boston-Cambridge-Quincy at $277,400.
Other affordable condo markets include the Sacramento-Arden-Arcade-Roseville area of California at $101,200 in the second quarter, and Tucson, Ariz., at $102,500.
Snapshot Across the Country
Regionally, NAR reports the following with existing-home sales:
Northeast: jumped 15 percent in the second quarter to a pace of 797,000 units but are 8.4 percent below a year ago. The median existing single-family home price in the Northeast declined 9.7 percent to $246,000 in the second quarter from the same quarter in 2008.
After Elmira, N.Y., the best gain in the region was in Buffalo-Niagara Falls, N.Y., where the median price of $115,400 rose 6.7 percent from the second quarter of 2008, followed by Syracuse, N.Y., at $124,600, up 0.8 percent.
Midwest: rose 3.2 percent in the second quarter to a pace of 1.06 million but are 5.3 percent below a year ago. The median existing single-family home price in the Midwest was down 8.6 percent to $146,800 in the second quarter from the same period in 2008.
After Davenport-Moline-Rock Island, the next strongest metro price increase in the region was in Bismarck, N.D., where the median price of $157,800 was 3.5 percent higher than a year ago, followed by Springfield, Ill., at $116,200, also up 3.5 percent, and Topeka, Kan., at $113,300, up 2.7 percent.
South: increased 3.9 percent in the second quarter to an annual rate of 1.76 million but are 7.2 percent lower than the second quarter of 2008. The median existing single-family home price in the South was $158,600 in the second quarter, down 10.3 percent from a year earlier.
After the Cumberland region of Maryland and West Virginia, the strongest price increase in the region was in Beaumont-Port Arthur, Texas, with an 11.0 percent gain to $138,600, followed by, Jackson, Miss., at $140,100, up 8.2 percent, and Shreveport-Bossier City, La., at $146,800, up 3.0 percent.
West: declined 2.3 percent in the second quarter to an annual rate of 1.13 million but are 11.8 percent above a year ago. The median existing single-family home price in the West was $212,600 in the second quarter, which is 26.6 percent below the second quarter of 2008.
The best metro price performances in the West were in Kennewick-Richland-Pasco area of Washington, where the median price of $163,900 rose 0.3 percent from a year earlier, and Yakima, Wash., at $162,800, also up 0.3 percent. No other areas covered in the region reported increases.
6 Reasons Why Some Homes Sell and Others Dont!
6 Reasons Why Some Homes Sell !
Why do some houses sell and others don’t?
There’s no ultimate answer to this question, but Tribune Media Services columnist Ilyce Glink has a theory. Here are her six top reasons properties linger on the market:
Lousy pictures on the Web.
Priced too high for the neighborhood.
Blah interior; ho-hum landscaping.
Little online marketing and hard-to-find MLS listings.
Low commissions. Practitioners make sure their customers see properties that offer a payoff.
Miserable maintenance, including ceiling stains, leaky faucets, and ancient furnaces.
Why do some houses sell and others don’t?
There’s no ultimate answer to this question, but Tribune Media Services columnist Ilyce Glink has a theory. Here are her six top reasons properties linger on the market:
Lousy pictures on the Web.
Priced too high for the neighborhood.
Blah interior; ho-hum landscaping.
Little online marketing and hard-to-find MLS listings.
Low commissions. Practitioners make sure their customers see properties that offer a payoff.
Miserable maintenance, including ceiling stains, leaky faucets, and ancient furnaces.
Thursday, August 6, 2009
A Winning Attitude
A WINNING ATTITUDE Winners choose attitudes that produce positive behavior knowing that behavior determines results. They achieve their goals with the confidence that they can and will solve any problem that may arise by turning it into a positive advantage.
Following are some of the attitudes that winners incorporate into their lives:
* Positive Thinking Winners do not worry about what cannot be done. They instead focus on what can be done and have detailed plans for overcoming obstacles.
* Committed Winners commit to success from the start. They make a definite choice and commit themselves to following it. They do not try a course of action for a few weeks with the intention of abandoning it if it turns out to be difficult. They make it work.
* Responsible Winners accept personal responsibility for their actions, acknowledging their mistakes and learning from them.
* Creative Winners develop their creativity, exercise it and trust it.
* Take action Winners put forth the effort, time, creativity and money required to achieve their goals. * Persistent Winners never quit. They choose their goal and pursue it persistently until they succeed.
==>Everybody Knows...
You can't be all things to all people.
You can't do all things at once.
You can't do all things equally well.
You can't do all things better than everyone else.
Your humanity is showing just like everyone else's.
So...
You have to find out who you are and be that.
You have to decide what comes first and do that.
You have to discover your strengths and use them.
You have to learn not to compete with others.
Because no one else is in the contest of "being you."
Then...
You will have learned to accept your own uniqueness.
You will have learned to set priorities and make decisions.
You will have learned to live within your limitations.
You will have learned to give yourself the respect that is due, and you'll be a most vital mortal.
Dare to Believe...
That you are a wonderful person.
That you are a once-in-all history event.
That it's more than a right, it's your duty to be who you are.
That life is not a problem to solve, but a gift to cherish. And you'll be able to stay one up on what used to get you down. ~ Author Unknown
Following are some of the attitudes that winners incorporate into their lives:
* Positive Thinking Winners do not worry about what cannot be done. They instead focus on what can be done and have detailed plans for overcoming obstacles.
* Committed Winners commit to success from the start. They make a definite choice and commit themselves to following it. They do not try a course of action for a few weeks with the intention of abandoning it if it turns out to be difficult. They make it work.
* Responsible Winners accept personal responsibility for their actions, acknowledging their mistakes and learning from them.
* Creative Winners develop their creativity, exercise it and trust it.
* Take action Winners put forth the effort, time, creativity and money required to achieve their goals. * Persistent Winners never quit. They choose their goal and pursue it persistently until they succeed.
==>Everybody Knows...
You can't be all things to all people.
You can't do all things at once.
You can't do all things equally well.
You can't do all things better than everyone else.
Your humanity is showing just like everyone else's.
So...
You have to find out who you are and be that.
You have to decide what comes first and do that.
You have to discover your strengths and use them.
You have to learn not to compete with others.
Because no one else is in the contest of "being you."
Then...
You will have learned to accept your own uniqueness.
You will have learned to set priorities and make decisions.
You will have learned to live within your limitations.
You will have learned to give yourself the respect that is due, and you'll be a most vital mortal.
Dare to Believe...
That you are a wonderful person.
That you are a once-in-all history event.
That it's more than a right, it's your duty to be who you are.
That life is not a problem to solve, but a gift to cherish. And you'll be able to stay one up on what used to get you down. ~ Author Unknown
Friday, July 31, 2009
June Sales Show an increase overall
In this journal entry we have some very exciting statistics that are good for both buyers and sellers. As I work with my clients it is wonderful to be able to say that the rebound has began and Real Estate values and pricing are seeing a definite increase. This is a great time for both buyers and sellers so read the following article from the California Association of Realtors and I hope it is informative for you.
C.A.R. reports June home sales increased 20.1 percent, median home price declined 26.4
Existing, single-family home sales increased 20.1 percent in June to a seasonally adjusted rate of 514,110 on an annualized basis.· The statewide median price of an existing single-family home increased 4.2 percent in June to $274,740, compared with May 2009.· C.A.R.’s Unsold Inventory Index fell to 4.1 months in June, compared with 7.6 months in June 2008.
LOS ANGELES (July 27) – Home sales increased 20.1 percent in June in California compared with the same period a year ago, while the median price of an existing home declined 26.4 percent, the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) reported today.
“Many first-time buyers, especially those who were previously priced out of certain areas, are realizing that tax credits from both the state and federal governments, increased affordability, and low interest rates are creating a prime time to purchase a home,” said C.A.R. President James Liptak. “June marked the 10th consecutive month of positive sales gains, and the fourth month of rising median home prices.“
The statewide median price for existing condos increased for the third consecutive month in June, while sales climbed 27 percent compared with last year," Liptak said. "Both of these trends are indicative of increased interest in condos on the part of first-time and other buyers.”
Closed escrow sales of existing, single-family detached homes in California totaled 514,110 in June at a seasonally adjusted annualized rate, according to information collected by C.A.R. from more than 90 local REALTOR® associations statewide. Statewide home resale activity increased 20.1 percent from the revised 427,910 sales pace recorded in June 2008. Sales in June 2009 decreased 6 percent compared with the previous month.
The statewide sales figure represents what the total number of homes sold during 2009 would be if sales maintained the June pace throughout the year. It is adjusted to account for seasonal factors that typically influence home sales.
The median price of an existing, single-family detached home in California during June 2009 was $274,740, a 26.4 percent decrease from the revised $373,100 median for June 2008, C.A.R. reported. The June 2009 median price rose 4.2 percent compared with May’s $263,600 median price.
“Shrinking inventory in the lower end of the market is impacting prices, as many distressed properties are receiving multiple bids,” said C.A.R. Chief Economist Leslie Appleton-Young. “The year-to-year price declines are diminishing, and are at the lowest level since March 2008.
“Although another surge of foreclosures is expected later this year, demand remains strong, so the market may be able to absorb more distressed properties without significantly impacting the median price,” said Appleton-Young.
Highlights of C.A.R.’s resale housing figures for June 2009:.
C.A.R.’s Unsold Inventory Index for existing, single-family detached homes in June 2009 was 4.1 months, compared with 7.6 months (revised) for the same period a year ago. The index indicates the number of months needed to deplete the supply of homes on the market at the current sales rate..
Thirty-year fixed-mortgage interest rates averaged 5.42 percent during June 2009, compared with 6.32 percent in June 2008, according to Freddie Mac. Adjustable-mortgage interest rates averaged 4.93 percent in June 2009, compared with 5.15 percent in June 2008..
The median number of days it took to sell a single-family home was 44.3 days in June 2009, compared with 49 days (revised) for the same period a year ago.
Regional MLS sales and price information are contained in the tables that accompany this press release. Regional sales data are not adjusted to account for seasonal factors that can influence home sales. The MLS median price and sales data for detached homes are generated from a survey of more than 90 associations of REALTORS® throughout the state. MLS median price and sales data for condominiums are based on a survey of more than 60 associations. The median price for both detached homes and condominiums represents closed escrow sales.
In a separate report covering more localized statistics generated by C.A.R. and DataQuick Information Systems, 20 of the 376 cities and communities reporting showed an increase in their respective median home prices from a year ago. DataQuick statistics are based on county records data rather than MLS information. DataQuick Information Systems is a subsidiary of Vancouver-based MacDonald Dettwiler and Associates. (The lists are generated for incorporated cities with a minimum of 30 recorded sales in the month.)
Note: Large changes in local median home prices typically indicate both local home price appreciation, and often, large shifts in the composition of housing market activity. Some of the variations in median home prices for June may be exaggerated due to compositional changes in housing demand. The DataQuick tables listing median home prices in California cities and counties are accessible through C.A.R. Online athttp://car.org/economics/historicalprices/2009medianprices/jun09medianprices.
Statewide, the 10 cities with the highest median home prices in California during June 2009 were: Beverly Hills, $1,775,000; Manhattan Beach, $1,475,000; Burlingame, $1,475,000; Los Altos, $1,398,000; Saratoga, $1,375,000; Laguna Beach, $1,265,000; Palo Alto, $1,192,000; Santa Monica, $1,022,000; Cupertino, $1,020,000; Mill Valley, $1,009,000; and Los Gatos, $857,500..
Statewide, the cities with the greatest median home price increases in June 2009 compared with the same period a year ago were: Laguna Hills, 20.6 percent; Diamond Bar, 6.2 percent; Santa Monica, 5.9 percent; Upland, 5.7 percent; Thousand Oaks, 4.7 percent; Placentia, 2.9 percent; Big Bear Lake, 2.5 percent; Lake Forest, 2.4 percent; Walnut, 2.1 percent; and Dana Point, 1.4 percent.
Note: Statewide median home prices and sales data have been revised for April 2008 to May 2009 to reflect updates to San Diego Region data.
C.A.R. reports June home sales increased 20.1 percent, median home price declined 26.4
Existing, single-family home sales increased 20.1 percent in June to a seasonally adjusted rate of 514,110 on an annualized basis.· The statewide median price of an existing single-family home increased 4.2 percent in June to $274,740, compared with May 2009.· C.A.R.’s Unsold Inventory Index fell to 4.1 months in June, compared with 7.6 months in June 2008.
LOS ANGELES (July 27) – Home sales increased 20.1 percent in June in California compared with the same period a year ago, while the median price of an existing home declined 26.4 percent, the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) reported today.
“Many first-time buyers, especially those who were previously priced out of certain areas, are realizing that tax credits from both the state and federal governments, increased affordability, and low interest rates are creating a prime time to purchase a home,” said C.A.R. President James Liptak. “June marked the 10th consecutive month of positive sales gains, and the fourth month of rising median home prices.“
The statewide median price for existing condos increased for the third consecutive month in June, while sales climbed 27 percent compared with last year," Liptak said. "Both of these trends are indicative of increased interest in condos on the part of first-time and other buyers.”
Closed escrow sales of existing, single-family detached homes in California totaled 514,110 in June at a seasonally adjusted annualized rate, according to information collected by C.A.R. from more than 90 local REALTOR® associations statewide. Statewide home resale activity increased 20.1 percent from the revised 427,910 sales pace recorded in June 2008. Sales in June 2009 decreased 6 percent compared with the previous month.
The statewide sales figure represents what the total number of homes sold during 2009 would be if sales maintained the June pace throughout the year. It is adjusted to account for seasonal factors that typically influence home sales.
The median price of an existing, single-family detached home in California during June 2009 was $274,740, a 26.4 percent decrease from the revised $373,100 median for June 2008, C.A.R. reported. The June 2009 median price rose 4.2 percent compared with May’s $263,600 median price.
“Shrinking inventory in the lower end of the market is impacting prices, as many distressed properties are receiving multiple bids,” said C.A.R. Chief Economist Leslie Appleton-Young. “The year-to-year price declines are diminishing, and are at the lowest level since March 2008.
“Although another surge of foreclosures is expected later this year, demand remains strong, so the market may be able to absorb more distressed properties without significantly impacting the median price,” said Appleton-Young.
Highlights of C.A.R.’s resale housing figures for June 2009:.
C.A.R.’s Unsold Inventory Index for existing, single-family detached homes in June 2009 was 4.1 months, compared with 7.6 months (revised) for the same period a year ago. The index indicates the number of months needed to deplete the supply of homes on the market at the current sales rate..
Thirty-year fixed-mortgage interest rates averaged 5.42 percent during June 2009, compared with 6.32 percent in June 2008, according to Freddie Mac. Adjustable-mortgage interest rates averaged 4.93 percent in June 2009, compared with 5.15 percent in June 2008..
The median number of days it took to sell a single-family home was 44.3 days in June 2009, compared with 49 days (revised) for the same period a year ago.
Regional MLS sales and price information are contained in the tables that accompany this press release. Regional sales data are not adjusted to account for seasonal factors that can influence home sales. The MLS median price and sales data for detached homes are generated from a survey of more than 90 associations of REALTORS® throughout the state. MLS median price and sales data for condominiums are based on a survey of more than 60 associations. The median price for both detached homes and condominiums represents closed escrow sales.
In a separate report covering more localized statistics generated by C.A.R. and DataQuick Information Systems, 20 of the 376 cities and communities reporting showed an increase in their respective median home prices from a year ago. DataQuick statistics are based on county records data rather than MLS information. DataQuick Information Systems is a subsidiary of Vancouver-based MacDonald Dettwiler and Associates. (The lists are generated for incorporated cities with a minimum of 30 recorded sales in the month.)
Note: Large changes in local median home prices typically indicate both local home price appreciation, and often, large shifts in the composition of housing market activity. Some of the variations in median home prices for June may be exaggerated due to compositional changes in housing demand. The DataQuick tables listing median home prices in California cities and counties are accessible through C.A.R. Online athttp://car.org/economics/historicalprices/2009medianprices/jun09medianprices.
Statewide, the 10 cities with the highest median home prices in California during June 2009 were: Beverly Hills, $1,775,000; Manhattan Beach, $1,475,000; Burlingame, $1,475,000; Los Altos, $1,398,000; Saratoga, $1,375,000; Laguna Beach, $1,265,000; Palo Alto, $1,192,000; Santa Monica, $1,022,000; Cupertino, $1,020,000; Mill Valley, $1,009,000; and Los Gatos, $857,500..
Statewide, the cities with the greatest median home price increases in June 2009 compared with the same period a year ago were: Laguna Hills, 20.6 percent; Diamond Bar, 6.2 percent; Santa Monica, 5.9 percent; Upland, 5.7 percent; Thousand Oaks, 4.7 percent; Placentia, 2.9 percent; Big Bear Lake, 2.5 percent; Lake Forest, 2.4 percent; Walnut, 2.1 percent; and Dana Point, 1.4 percent.
Note: Statewide median home prices and sales data have been revised for April 2008 to May 2009 to reflect updates to San Diego Region data.
Tax credit can be used as additional down payment
WASHINGTON - Speaking to the National Association of Home Builders Spring Board of Directors Meeting, U.S. Housing and Urban Development Secretary Shaun Donovan today announced that the Federal Housing Administration (FHA) will allow homebuyers to apply the Obama Administration's new $8,000 first-time homebuyer tax credit toward the purchase costs of a FHA-insured home. Donovan said that today's action will help stabilize the nation's housing market by stimulating home sales across the country.
The American Recovery and Reinvestment Act of 2009 offers homebuyers a tax credit of up to $8,000 for purchasing their first home. Families can only access this credit after filing their tax returns with the IRS. Today's announcement details FHA's rules allowing state Housing Finance Agencies and certain non-profits to "monetize" up to the full amount of the tax credit (depending on the amount of the mortgage) so that borrowers can immediately apply the funds toward their down payments. Home buyers using FHA-approved lenders can apply the tax credit to their down payment in excess of 3.5 percent of appraised value or their closing costs, which can help achieve a lower interest rate. To read the FHA's new mortgagee letter, visit HUD's website.
"We believe this is a real win for everyone," said Donovan. "Today, the Obama Administration is taking another important step toward accelerating the recovery of the nation's housing market. Families will now be able to apply their anticipated tax credit toward their home purchase right away. At the same time we are putting safeguards in place to ensure that consumers will be protected from unscrupulous lenders. What we're doing today will not only help these families to purchase their first home but will present an enormous benefit for communities struggling to deal with an oversupply of housing."
Currently, borrowers applying for an FHA-insured mortgage are required to make a minimum 3.5 percent downpayment on the purchase of their home. Current law does not permit approved lenders to monetize the tax credit to meet the required 3.5 percent minimum down payment, but, under the terms of today's announcement, lenders can now monetize the tax credit for use as additional down payment, or for other closing costs, which can help achieve a lower interest rate. Buyers financing through state Housing Finance Agencies and certain non-profits will be able to use the tax credit for their downpayments via secondary financing provided by the HFA or non-profit. In addition to the borrower's own cash investment, FHA allows parents, employers and other governmental entities to contribute towards the downpayment. Today's action permits the first-time homebuyer's anticipated tax credit under the Recovery Act to be applied toward the family's home purchase right away. Unlike seller-funded down-payment assistance, which was a vehicle for abuse, this program will allow homebuyers to shop for the best home price and services using their anticipated tax credit.
According to estimates by the National Association of Home Builders, the Administration's homebuyer tax credit will stimulate 160,000 home sales across the nation - 101,000 of which will be first-time buyers who will receive the credit. Another 59,000 existing homeowners will be able to buy another home because a first-time buyer purchased their home. Given FHA's current market share, it's estimated that thousands of families will be able to purchase a home by allowing the anticipated tax credit to be applied toward their purchase together with an FHA-insured mortgage.
Homebuyers should beware of mortgage scams and carefully compare benefits and costs when seeking out tax credit monetization services. Programs will vary from organization to organization and borrowers should consider whether the services make sense for them, as well as what company offers the most suitable and affordable option.
For every FHA borrower who is assisted through the tax credit program, FHA will collect the name and employer identification number of the organization providing the service as well as associated fees and charges. FHA will use this information to track the business closely and will refer any questionable practices to the appropriate regulatory agencies, as necessary.
The American Recovery and Reinvestment Act of 2009 offers homebuyers a tax credit of up to $8,000 for purchasing their first home. Families can only access this credit after filing their tax returns with the IRS. Today's announcement details FHA's rules allowing state Housing Finance Agencies and certain non-profits to "monetize" up to the full amount of the tax credit (depending on the amount of the mortgage) so that borrowers can immediately apply the funds toward their down payments. Home buyers using FHA-approved lenders can apply the tax credit to their down payment in excess of 3.5 percent of appraised value or their closing costs, which can help achieve a lower interest rate. To read the FHA's new mortgagee letter, visit HUD's website.
"We believe this is a real win for everyone," said Donovan. "Today, the Obama Administration is taking another important step toward accelerating the recovery of the nation's housing market. Families will now be able to apply their anticipated tax credit toward their home purchase right away. At the same time we are putting safeguards in place to ensure that consumers will be protected from unscrupulous lenders. What we're doing today will not only help these families to purchase their first home but will present an enormous benefit for communities struggling to deal with an oversupply of housing."
Currently, borrowers applying for an FHA-insured mortgage are required to make a minimum 3.5 percent downpayment on the purchase of their home. Current law does not permit approved lenders to monetize the tax credit to meet the required 3.5 percent minimum down payment, but, under the terms of today's announcement, lenders can now monetize the tax credit for use as additional down payment, or for other closing costs, which can help achieve a lower interest rate. Buyers financing through state Housing Finance Agencies and certain non-profits will be able to use the tax credit for their downpayments via secondary financing provided by the HFA or non-profit. In addition to the borrower's own cash investment, FHA allows parents, employers and other governmental entities to contribute towards the downpayment. Today's action permits the first-time homebuyer's anticipated tax credit under the Recovery Act to be applied toward the family's home purchase right away. Unlike seller-funded down-payment assistance, which was a vehicle for abuse, this program will allow homebuyers to shop for the best home price and services using their anticipated tax credit.
According to estimates by the National Association of Home Builders, the Administration's homebuyer tax credit will stimulate 160,000 home sales across the nation - 101,000 of which will be first-time buyers who will receive the credit. Another 59,000 existing homeowners will be able to buy another home because a first-time buyer purchased their home. Given FHA's current market share, it's estimated that thousands of families will be able to purchase a home by allowing the anticipated tax credit to be applied toward their purchase together with an FHA-insured mortgage.
Homebuyers should beware of mortgage scams and carefully compare benefits and costs when seeking out tax credit monetization services. Programs will vary from organization to organization and borrowers should consider whether the services make sense for them, as well as what company offers the most suitable and affordable option.
For every FHA borrower who is assisted through the tax credit program, FHA will collect the name and employer identification number of the organization providing the service as well as associated fees and charges. FHA will use this information to track the business closely and will refer any questionable practices to the appropriate regulatory agencies, as necessary.
Thursday, July 23, 2009
****CONSUMER ALERT*****
California Department of Real Estate ** CONSUMER ALERT ** (Issued 3/2009) 1 FRAUD WARNINGS FOR CALIFORNIA HOMEOWNERS IN FINANCIAL DISTRESS
I. HOME LOAN MODIFICATIONS.
Because of the current economic situation, you may not be able to afford your mortgage payment. If you are also not able to refinance your home loan, an option that may be available to you is a Loan Modification.
What is a Loan Modification? That is where you and your lender agree to modify one or more of the terms of your home loan. The terms could be a lower interest rate, an extension of the length of the loan (like making a 30 year loan into a 40 year loan), a conversion of an adjustable rate loan (called an ARM) to a fixed rate, the deferring of some of your payments, or any other modification of loan terms.
The goal of a Loan Modification is to help you keep your home and to give you a real, meaningful, sustainable, and long-term adjustment to your current home loan that works for your financial situation.
II. BEWARE OF LOAN MODIFICATION SCAMS AND CON ARTISTS, WHO USUALLY DEMAND THE PAYMENT OF UPFRONT FEES.
Just like after a hurricane hits, where unscrupulous contractors and repair people may collect money for repairs and then not do anything, there are numerous rogue and dishonest operators and companies (many of whom are unlicensed) that have appeared in the wake of the current economic downturn -- and more are popping up every day. They make false promises about their abilities to help get you a loan modification, collect money up front, and then do nothing or next to nothing. They are predators who take advantage of those who are or may be vulnerable.
III. THINGS TO DO TO PROTECT YOURSELF FROM BECOMING A LOAN MODIFICATION OR FORECLOSURE RESCUE SCAM VICTIM.
A. Do It Yourself (and Do It As Soon As Possible) -- You can contact your mortgage servicer and/or lender directly and request a Loan Modification that works for you and your lender. Don’t wait to call if you cannot make or believe you will not be able to make your mortgage payments. Be persistent! - call back many times. Make detailed notes about your attempts to call, when you have left messages, who you speak with, what was said, and what offers are discussed and/or made.
B. Other Free and Safe Options -- If you don’t believe you can negotiate a Loan Modification yourself, or if you do not want to, there are free and safe options available to you. (Issued 3/2009) 2
1. The U.S. Department of Housing and Urban Development ("HUD") offers Foreclosure Avoidance Counseling through non-profit agencies in California. Go to HUD’s web site at www.hud.gov, or call 800-569-4287, to find counselors. HUD also offers information to homeowners facing the loss of their home.
2. HOPE NOW Alliance - this is a cooperative effort of home loan counselors and lenders, and it consists of HUD intermediaries. Go to the HOPE NOW web site at www.hopenow.com or call 888-995-HOPE.
C. Locate and Work with a Legitimate, Licensed, and Qualified person or company ("Log on, Look em up, and Check em out") -
1. California licensed real estate brokers can perform loan modification work, and licensed real estate salespersons can do such work under the supervision of their employing broker.
While it is legal for a real estate broker to charge you in advance of performing the loan modification services before a Notice of Default is recorded, you do not have to pay anything in advance of a successful loan modification, and all broker fees are negotiable. If a real estate broker wishes to charge an advance fee, he or she must submit an Advance Fee Agreement and all supporting materials to the Department of Real Estate ("DRE"). If the agreement and materials meet the requirements under the law, DRE issues a no-objection letter. All fees collected in advance must be properly handled as trust funds, which require special handling and must be deposited into the broker’s trust account. A licensee must refund to you any unearned portion of the advance fee(s) collected if any of the promised services are not completed.
But please understand that a no-objection letter does not mean that DRE recommends, approves or endorses the agreement or the services of the real estate licensee. You should go to DRE’s web site at www.dre.ca.gov, review and check the information on advance fees and loan modification services, carefully review the public license information on the real estate broker (that information will include any disciplinary history), and look for any Desist and Refrain Orders (D&Rs) that have been issued against companies and individuals. If a D&R has been issued, that means that DRE has determined the individual and/or company is unlicensed and/or has operated unlawfully.
2. California licensed lawyers can also perform loan modification work, but only when such lawyers render those loan modification services in the course and scope of their practice as an attorney at law.
Lawyers can also charge fees in advance (typically called a retainer), and even after a Notice of Default has been recorded. But lawyers must have a written fee agreement with you. And as is the case with real estate licensees, you do not have to pay anything in advance of a successful loan modification, and all legal fees are negotiable. Any fees that you pay to the lawyer(s) in advance do not have to be placed in their trust accounts. (Issued 3/2009) 3
Just as you should do with real estate licensees, check out lawyers by going to the website of the California State Bar, www.calbar.ca.gov. Check the lawyer‘s bar membership records and look for any discipline.
Unfortunately, some loan modification business models have claimed lawyer involvement but they are just unlawful schemes to avoid the prohibition against the collection of advance fees by a real estate licensee after a Notice of Default is recorded. In others, lawyers are just a "front" or non-participating "magnet" for business from desperate homeowners.
****Be on Guard and Check Them Out -- Do Your Own Homework**** In addition to looking at the license records, contact the Better Business Bureau to see if they have received any complaints about the person or company. But please understand that this is just another resource for you to check, and the loan modification provider might be so new that the Better Business Bureau may have little or nothing on them (or something positive because of insufficient public input).
Also, and very importantly, ask the loan modification "specialists" (whether they are real estate licensees or lawyers) about their financial, mortgage and real estate experience, the options and methods they use to renegotiate home loans, when they were first licensed, whether their license is still active, whether they have ever been disciplined, where they got their experience, and also ask them to define a loan modification and the process that they will undertake and the time that they will spend to negotiate a long-term, affordable and sustainable modification for you.
D. Signals of Fraud/Red Flags to Watch Out For --
1. Demand for payment up front (advance fee payment). While not unlawful if paid to licensed persons in the certain limited situations discussed above, the demand or request for advance payment should alert you to the possibility of fraud.
2. Promises or guarantees of success, such as "We Can Save Your Home. We Have Saved Thousands. Free Consultation. Money Back Guarantee". No such guarantees are possible, and there are no assurances of a successful loan modification.
3. Too good to be true testimonials, such as "We Modified Terri G’s Adjustable Rate Loan, Which Had Spiked to 8 Percent, to a 3.5 Percent Fixed Rate Loan".
4. Claims that a loan modification company is attorney-backed, attorney-affiliated, or attorney-based -- especially where no lawyer or law firm is identified or mentioned. Many of these entities are simply using the name of an attorney (the name might be for show only, and/or there might not even be a lawyer involved) and scams skirting the law. (Issued 3/2009) 4
5. Claims that a loan modifier is operating under a California Finance Lender‘s (CFL) license issued by the California Department of Corporations. This is not lawful according to the Commissioner of the Department of Corporations.
6. A request that you grant a "power of attorney" to the loan modifier. The scammer may use the power of attorney to sell the home right out from under you.
7. A request that you transfer title to your home to the loan modifier or some third party. This is likely evidence of a scam where these scam artists will strip all of the remaining equity in your home.
8. Promises that you can repair your credit history by the payment of rent to the loan modifier or some third party.
9. Lease/rent-back scams, where you are told to transfer title to a third party, rent the home from that party, and then buy it back later. Transferring your deed gives the con artists the ability to evict you and sell the home.
10. Instructions to pay someone or some company other than your home loan lender or servicer.
11. Claims that a loan modification company will file a bankruptcy or other frivolous case for you to "force" a lender to negotiate a loan modification. So-called "forensic loan reviews" may fall into this category.
12. Assertions by the so-called loan modifier that you should just sign documents that they have filled out, without reviewing them first. You must carefully read and understand all of the documents you sign. Be especially wary of promises by salespeople that they will "take care of everything" and you just need to sign "a bunch of forms with boring legalese".
13. Lawyers or real estate licensees who tell you that they have no time to meet with you face-to-face.
14. Unlicensed people or companies.
15. Instructions from a loan modification provider that you should not contact your home loan lender or servicer, a lawyer, an accountant, or a non-profit housing counselor.
16. Being advised to miss payments in order to improve your chances of getting a loan modification.
17. High-pressure sales tactics or warnings that "you must act today" or "tomorrow may be too late". (Issued 3/2009) 5
It is impossible to list all of the Red Flags that might suggest fraud, since the scammers and con artists continue to modify and refine their stories, pitches and cons. They are ruthless and clever. Please be alert, be skeptical, and do your own homework.
And remember, Don’t Rush! You are always able to "slow down" or "pause", and you should tell the provider of loan modification services that you want to check out their license status with the DRE or the California State Bar. Any service provider who objects to that request may have something to hide, like no credentials or license (or bogus credentials) – so be wary!!! Log on, Look em up, and Check em out!!! www.dre.ca.gov..
IV. WHAT YOU CAN DO IF YOU HAVE BEEN SCAMMED (OR BECOME AWARE OF A LOAN MODIFICATION SCAM)? REPORT FRAUD AND FILE COMPLAINTS WITH --
1. The DRE if a real estate licensee is involved, or if the person or company is unlicensed. If the person or company is unlicensed, the DRE will file a Desist and Refrain Order. If the person or company is licensed, the DRE will commence disciplinary action, http://www.dre.ca.gov/cons_complaint.html.
2. The District Attorney, Sheriff, local police and local prosecutor in your community.
3. The California Attorney General, at www.ag.ca.gov/consumers/general.php.
4. The California State Bar if a lawyer is involved, or if an unlicensed person claims to be a lawyer at www.calbar.ca.gov.
5. The California Department of Corporations, at www.corp.ca.gov, if a loan modification claims to be operating under a California Finance Lender License.
6. The Federal Trade Commission, at www.ftc.gov. They have an excellent fact sheet on Foreclosure Rescue Scams.
7. Federal Bureau of Investigation (FBI), at www.fbi.gov.
8. HUD, at www.hud.gov.
9. The Federal Deposit Insurance Corporation (FDIC), at www.fdic.gov.
10. The Better Business Bureau in your community.
11. The Chamber of Commerce in your community.
12. File a Small Claims Court action. These are informal courts where disputes are resolved quickly and inexpensively by a judge. Since 2008, you can recover up to $7,500 in Small Claims Court. You represent yourself, and can request a judgment for money damages. If (Issued 3/2009) 6
your judgment is based on fraud, misrepresentation, or deceit, or conversion of trust funds, and the judgment is against a real estate licensee, DRE has a Recovery Fund that may be able to pay your claim. Go to the DRE web site at www.dre.ca.gov, and look under the tab for "Consumers". Also, the California Secretary of State has a "Victims of Corporate Fraud Compensation Fund" that provides restitution to victims of corporate fraud. Go to the Secretary of State’s web site at www.sos.ca.gov/vcfcf for more information.
I. HOME LOAN MODIFICATIONS.
Because of the current economic situation, you may not be able to afford your mortgage payment. If you are also not able to refinance your home loan, an option that may be available to you is a Loan Modification.
What is a Loan Modification? That is where you and your lender agree to modify one or more of the terms of your home loan. The terms could be a lower interest rate, an extension of the length of the loan (like making a 30 year loan into a 40 year loan), a conversion of an adjustable rate loan (called an ARM) to a fixed rate, the deferring of some of your payments, or any other modification of loan terms.
The goal of a Loan Modification is to help you keep your home and to give you a real, meaningful, sustainable, and long-term adjustment to your current home loan that works for your financial situation.
II. BEWARE OF LOAN MODIFICATION SCAMS AND CON ARTISTS, WHO USUALLY DEMAND THE PAYMENT OF UPFRONT FEES.
Just like after a hurricane hits, where unscrupulous contractors and repair people may collect money for repairs and then not do anything, there are numerous rogue and dishonest operators and companies (many of whom are unlicensed) that have appeared in the wake of the current economic downturn -- and more are popping up every day. They make false promises about their abilities to help get you a loan modification, collect money up front, and then do nothing or next to nothing. They are predators who take advantage of those who are or may be vulnerable.
III. THINGS TO DO TO PROTECT YOURSELF FROM BECOMING A LOAN MODIFICATION OR FORECLOSURE RESCUE SCAM VICTIM.
A. Do It Yourself (and Do It As Soon As Possible) -- You can contact your mortgage servicer and/or lender directly and request a Loan Modification that works for you and your lender. Don’t wait to call if you cannot make or believe you will not be able to make your mortgage payments. Be persistent! - call back many times. Make detailed notes about your attempts to call, when you have left messages, who you speak with, what was said, and what offers are discussed and/or made.
B. Other Free and Safe Options -- If you don’t believe you can negotiate a Loan Modification yourself, or if you do not want to, there are free and safe options available to you. (Issued 3/2009) 2
1. The U.S. Department of Housing and Urban Development ("HUD") offers Foreclosure Avoidance Counseling through non-profit agencies in California. Go to HUD’s web site at www.hud.gov, or call 800-569-4287, to find counselors. HUD also offers information to homeowners facing the loss of their home.
2. HOPE NOW Alliance - this is a cooperative effort of home loan counselors and lenders, and it consists of HUD intermediaries. Go to the HOPE NOW web site at www.hopenow.com or call 888-995-HOPE.
C. Locate and Work with a Legitimate, Licensed, and Qualified person or company ("Log on, Look em up, and Check em out") -
1. California licensed real estate brokers can perform loan modification work, and licensed real estate salespersons can do such work under the supervision of their employing broker.
While it is legal for a real estate broker to charge you in advance of performing the loan modification services before a Notice of Default is recorded, you do not have to pay anything in advance of a successful loan modification, and all broker fees are negotiable. If a real estate broker wishes to charge an advance fee, he or she must submit an Advance Fee Agreement and all supporting materials to the Department of Real Estate ("DRE"). If the agreement and materials meet the requirements under the law, DRE issues a no-objection letter. All fees collected in advance must be properly handled as trust funds, which require special handling and must be deposited into the broker’s trust account. A licensee must refund to you any unearned portion of the advance fee(s) collected if any of the promised services are not completed.
But please understand that a no-objection letter does not mean that DRE recommends, approves or endorses the agreement or the services of the real estate licensee. You should go to DRE’s web site at www.dre.ca.gov, review and check the information on advance fees and loan modification services, carefully review the public license information on the real estate broker (that information will include any disciplinary history), and look for any Desist and Refrain Orders (D&Rs) that have been issued against companies and individuals. If a D&R has been issued, that means that DRE has determined the individual and/or company is unlicensed and/or has operated unlawfully.
2. California licensed lawyers can also perform loan modification work, but only when such lawyers render those loan modification services in the course and scope of their practice as an attorney at law.
Lawyers can also charge fees in advance (typically called a retainer), and even after a Notice of Default has been recorded. But lawyers must have a written fee agreement with you. And as is the case with real estate licensees, you do not have to pay anything in advance of a successful loan modification, and all legal fees are negotiable. Any fees that you pay to the lawyer(s) in advance do not have to be placed in their trust accounts. (Issued 3/2009) 3
Just as you should do with real estate licensees, check out lawyers by going to the website of the California State Bar, www.calbar.ca.gov. Check the lawyer‘s bar membership records and look for any discipline.
Unfortunately, some loan modification business models have claimed lawyer involvement but they are just unlawful schemes to avoid the prohibition against the collection of advance fees by a real estate licensee after a Notice of Default is recorded. In others, lawyers are just a "front" or non-participating "magnet" for business from desperate homeowners.
****Be on Guard and Check Them Out -- Do Your Own Homework**** In addition to looking at the license records, contact the Better Business Bureau to see if they have received any complaints about the person or company. But please understand that this is just another resource for you to check, and the loan modification provider might be so new that the Better Business Bureau may have little or nothing on them (or something positive because of insufficient public input).
Also, and very importantly, ask the loan modification "specialists" (whether they are real estate licensees or lawyers) about their financial, mortgage and real estate experience, the options and methods they use to renegotiate home loans, when they were first licensed, whether their license is still active, whether they have ever been disciplined, where they got their experience, and also ask them to define a loan modification and the process that they will undertake and the time that they will spend to negotiate a long-term, affordable and sustainable modification for you.
D. Signals of Fraud/Red Flags to Watch Out For --
1. Demand for payment up front (advance fee payment). While not unlawful if paid to licensed persons in the certain limited situations discussed above, the demand or request for advance payment should alert you to the possibility of fraud.
2. Promises or guarantees of success, such as "We Can Save Your Home. We Have Saved Thousands. Free Consultation. Money Back Guarantee". No such guarantees are possible, and there are no assurances of a successful loan modification.
3. Too good to be true testimonials, such as "We Modified Terri G’s Adjustable Rate Loan, Which Had Spiked to 8 Percent, to a 3.5 Percent Fixed Rate Loan".
4. Claims that a loan modification company is attorney-backed, attorney-affiliated, or attorney-based -- especially where no lawyer or law firm is identified or mentioned. Many of these entities are simply using the name of an attorney (the name might be for show only, and/or there might not even be a lawyer involved) and scams skirting the law. (Issued 3/2009) 4
5. Claims that a loan modifier is operating under a California Finance Lender‘s (CFL) license issued by the California Department of Corporations. This is not lawful according to the Commissioner of the Department of Corporations.
6. A request that you grant a "power of attorney" to the loan modifier. The scammer may use the power of attorney to sell the home right out from under you.
7. A request that you transfer title to your home to the loan modifier or some third party. This is likely evidence of a scam where these scam artists will strip all of the remaining equity in your home.
8. Promises that you can repair your credit history by the payment of rent to the loan modifier or some third party.
9. Lease/rent-back scams, where you are told to transfer title to a third party, rent the home from that party, and then buy it back later. Transferring your deed gives the con artists the ability to evict you and sell the home.
10. Instructions to pay someone or some company other than your home loan lender or servicer.
11. Claims that a loan modification company will file a bankruptcy or other frivolous case for you to "force" a lender to negotiate a loan modification. So-called "forensic loan reviews" may fall into this category.
12. Assertions by the so-called loan modifier that you should just sign documents that they have filled out, without reviewing them first. You must carefully read and understand all of the documents you sign. Be especially wary of promises by salespeople that they will "take care of everything" and you just need to sign "a bunch of forms with boring legalese".
13. Lawyers or real estate licensees who tell you that they have no time to meet with you face-to-face.
14. Unlicensed people or companies.
15. Instructions from a loan modification provider that you should not contact your home loan lender or servicer, a lawyer, an accountant, or a non-profit housing counselor.
16. Being advised to miss payments in order to improve your chances of getting a loan modification.
17. High-pressure sales tactics or warnings that "you must act today" or "tomorrow may be too late". (Issued 3/2009) 5
It is impossible to list all of the Red Flags that might suggest fraud, since the scammers and con artists continue to modify and refine their stories, pitches and cons. They are ruthless and clever. Please be alert, be skeptical, and do your own homework.
And remember, Don’t Rush! You are always able to "slow down" or "pause", and you should tell the provider of loan modification services that you want to check out their license status with the DRE or the California State Bar. Any service provider who objects to that request may have something to hide, like no credentials or license (or bogus credentials) – so be wary!!! Log on, Look em up, and Check em out!!! www.dre.ca.gov..
IV. WHAT YOU CAN DO IF YOU HAVE BEEN SCAMMED (OR BECOME AWARE OF A LOAN MODIFICATION SCAM)? REPORT FRAUD AND FILE COMPLAINTS WITH --
1. The DRE if a real estate licensee is involved, or if the person or company is unlicensed. If the person or company is unlicensed, the DRE will file a Desist and Refrain Order. If the person or company is licensed, the DRE will commence disciplinary action, http://www.dre.ca.gov/cons_complaint.html.
2. The District Attorney, Sheriff, local police and local prosecutor in your community.
3. The California Attorney General, at www.ag.ca.gov/consumers/general.php.
4. The California State Bar if a lawyer is involved, or if an unlicensed person claims to be a lawyer at www.calbar.ca.gov.
5. The California Department of Corporations, at www.corp.ca.gov, if a loan modification claims to be operating under a California Finance Lender License.
6. The Federal Trade Commission, at www.ftc.gov. They have an excellent fact sheet on Foreclosure Rescue Scams.
7. Federal Bureau of Investigation (FBI), at www.fbi.gov.
8. HUD, at www.hud.gov.
9. The Federal Deposit Insurance Corporation (FDIC), at www.fdic.gov.
10. The Better Business Bureau in your community.
11. The Chamber of Commerce in your community.
12. File a Small Claims Court action. These are informal courts where disputes are resolved quickly and inexpensively by a judge. Since 2008, you can recover up to $7,500 in Small Claims Court. You represent yourself, and can request a judgment for money damages. If (Issued 3/2009) 6
your judgment is based on fraud, misrepresentation, or deceit, or conversion of trust funds, and the judgment is against a real estate licensee, DRE has a Recovery Fund that may be able to pay your claim. Go to the DRE web site at www.dre.ca.gov, and look under the tab for "Consumers". Also, the California Secretary of State has a "Victims of Corporate Fraud Compensation Fund" that provides restitution to victims of corporate fraud. Go to the Secretary of State’s web site at www.sos.ca.gov/vcfcf for more information.
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