With the glut of available homes on the market, how your home is marketed is the biggest factor in determining how quickly it will sell (assuming the price is reasonably presented). A real estate agent’s marketing plan should be the most crucial determinant in deciding who to list your home with. But, how can you really know about the agent’s marketing strategies?
One way is to see what they are doing with their current clients. Do those homes “stand out”? Contact those sellers. Are they getting a lot of showings and offers?
Another way is looking at how the agent markets themselves and their services:
Does the photo they use for themselves represent how they look?
Does their print advertising look like everyone else’s?
What technology are they using to show your home? Are they using video?
Is their website interesting and full of current information or just cookie cutter?
Do they have a professional presence on social networks?
Does their marketing show them as an expert or does it merely pat them on the back?
Quality photos on the web and top notch video may be the factor that drives people to see your house (and they are very important). However, how an agent drives traffic to see those photos and videos is even more important.
We all know the saying – “It’s not what you know…it’s who you know.” However, in marketing, it’s more crucial to know “who knows you”. Agents who are unknown are not good marketers. Today, you need an excellent marketer to represent you.
Posted By: KCMBlog.com
December 23rd, 2011 by Joe New
Posted in Keeping Current Matters
InfoGraphic
The graphic depicts pricing of all homes from their ‘peak through current declines’ as per Case Shiller. This index looks at prices in 20 major metropolitan areas.
Each market peaked at different times. Therefore, the InfoGraphic doesn’t cover one segment of time. Here is a site where you can see when each market actually peaked:
http://www.housingviews.com/2011/11/29/how-the-cities-did-in-the-latest-release/how-cities-did-september-2011/
Posted By: KCMBlog.com
December 11th, 2011 by Joe New
Posted in Keeping Current Matters
In any business, whether it be real estate or other, in order to be successful one must have a systematic approach to their craft. This holds true when putting a short sale transaction together. During our 5 year tenure negotiating short sales, we have found that some Real Estate professionals lack such an approach.
I learned early in my mortgage career that if I submitted a lackluster credit file to my underwriting department I would receive lackluster results. These results included denied files, upset underwriters and a processing department that wanted to throw the file back on my desk faster than I wanted it submitted. I quickly remedied the situation after a conversation with a very good friend who is a million dollar producer in the financial services industry. He shared with me his systematic approach when handling his clients. He did not sway from this system. He applied the approach to every client that he spoke to. He did the work up front, asking every detailed question imaginable on his fact finding sheet. He left no stone unturned. Though sometimes monotonous in nature, this systematic approach allowed him to implement a solid financial plan for his clients and provide the bridge to a solid financial future.
I quickly adopted a similar approach with my clients. I was able to come up with a systematic approach to my origination method that was both trackable and attainable. I left no stone unturned when speaking to my clients. I made sure I over documented the credit file and provided a complete and accurate credit profile to my underwriting department for every client I had the pleasure of writing a loan for. The results were amazing. I was pushing files through underwriting with transaction speeds never seen before and I was making allies doing so. When the processing and underwriting departments received a file from me, they knew it would only have to be touched one time and a conditional approval would be granted. They actually wanted to receive files from me rather than wanting to throw them back on my desk. Success!
I share this information because the short sale application process is very similar to the loan origination process.
However, if you take a shot gun approach rather than a targeted systematic approach to the process, you will set yourself up for failure. Below are the documents one must attain to make sure the short selling bank does not throw the file back on your desk when submitting the file for short sale approval:
Financial Information
Tax information
Two most recent 1040′s
Two most recent W2′s
60 days of current bank statements
30 days of current pay stubs or commission check stubs
If self employed-pay stubs or YTD profit and loss statement
Monthly budget/financial statement signed and dated same day as P&S
Hardship information
Hardship letter dated signed same day as purchase contract
Any docs supporting the actual hardship
Medical bills
Child support or alimony payment information. Divorce decree or child support order
Mortgage & Other Relevant Property Information
1st Mortgage statement
2nd Mortgage statement if applicable
Recent Real Estate tax bills
Recent condo association bills if applicable
Any recent water or sewer bills
Other Pertinent Documentation
Authorization form
Short sale disclosure
Waiver of conflict if representing the buyer
3 recent comps
Listing agreement
Offer/P&S
Listing history
Buyer proof of funds letter or Pre Approval letter
It is important to understand that the above documents are required for almost every short selling bank. There are also bank specific forms that, in most cases, must accompany the above. You may contact your negotiator or the bank directly to obtain the bank specific documents. However, if you make an attempt to structure a document checklist with the above documents and systematically approach every short sale file with the idea of fulfilling that checklist, you will soon see that the short sale process will be one which will prove to be lucrative. The end result will be a happy buyer, seller, production team and, of course, bank negotiator. After all, a systematic approach to the short sale process will alleviate the negotiator throwing the file back on your desk for deficient information. In fact, they will be eagerly awaiting the next file with your name on it!
Posted By: kcmblog.com
December 5th, 2011 by Joe New
Posted in Keeping Current Matters
Last week, we explained that having someone who truly knows the market was crucial if you were planning to buy or sell a home today. This expert should know what is happening in real estate, understand why it is happening and be able to simply and effectively explain each point to you and your family. Today, we want to discuss the consequences if you don’t have a true industry professional on your side.
When families enter into a contract to buy or sell a house, two things are true:
The buyer wants to own the home.
The seller wants to sell the home.
In order for both these things to take place, the transaction must be completed. That is not an easy task in the current market. The National Association of Realtors (NAR) released their Existing Homes Sales Report yesterday. In the report, NAR announced that one out of every three contracts to purchase a home in October never made it to a closing table. How does that ratio stack up against previous numbers? Here is a graph showing previous rates of cancellations:
Cancellations have more than quadrupled in the last 14 months! According to NAR, cancellations are caused by:
“… declined mortgage applications, failures in loan underwriting from appraised values coming in below the negotiated price, or other problems including home inspections and employment losses.”
Bottom Line
No one can guarantee you won’t face challenges. However, the best agents and mortgage professionals know how to manage the expectations of all the parties involved thus dramatically increasing the chances your deal will close and you and your family will be able to move on with your lives. Hire that true professional!!
Posted By: KCMBog.com
November 27th, 2011 by Joe New
Posted in Keeping Current Matters
In today’s real estate market, it is easy to get confused. There seems to be an overabundance of information and much of it seems to be conflicting. As an example, we offer you two headlines that appeared within 24 hours of each other last week.
National Delinquency Rate Falls to Lowest Level in Three Years
- Mortgage Bankers Assoc. 11/17/2011
Second Consecutive Increase in First Mortgage Default Rates
- Standard & Poors 11/18/2011
(Remember, foreclosures impact home values and the cost of mortgage money. This makes current delinquency rates an extremely important data point.)
Though these headlines seem to be saying opposite things, both are actually correct. Each report was looking at different data points over different periods of time.
In their article regarding the MBA report, DSNews explains:
“Industry data released Thursday indicates the number of borrowers in the United States behind on their mortgage payments is showing signs of improving. The Mortgage Bankers Association (MBA) reported that the national delinquency rate for residential home loans fell to 7.99 percent in the third quarter.”
In their post, S&P claims:
“First mortgage default rates rose from 1.99% in September to 2.08% in October.”
Bottom Line
Make sure you are dealing with local real estate and mortgage professionals. They will help you and your family decipher the hordes of information available so you can truly understand your best options.
Posted By: KCmblog.com
November 21st, 2011 by Joe New
Posted in Keeping Current Matters
At a campaign stop in Nevada on Monday, President Obama announced an expansion of the HARP (Home Affordable Refinance Program) which would eliminate the current maximum LTV of 125%. The initiative is being looked at as a way to reward those homeowners who have been good payers of their mortgages but, because of declining home values, they could not take advantage of today’s lower interest rates.
While the actual details on the program will not be released until next month, here’s the buzz:
It will only pertain to loans currently being serviced by Fannie Mae or Freddie Mac
Because of the removal of the LTV cap, appraisals may not be required
With the only qualifying criteria announced being that the last six payments be on time, it is possible that income documentation may be streamlined and credit scores might be more forgiving
Fees allegedly will be reduced
Incentives may be offered to people who shorten their repayment time
It also sounds that the banks may be given some incentive by not holding them liable for the underwater portion of the new loan (a major incentive for sure).
The government is on the hook for these loans already. By lowering the payments (by offering lower rates), they will likely help these loans to continue to perform and make it less likely for the underwater homeowner to walk away.
The original HARP was expected to help 5 million families. After two years, it has yet to reach 900,000; therefore, estimates ranging from 800,000 to 1.6 million borrowers who may benefit need to be taken with a grain of salt.
Whether the Administration is looking for purely political rhetoric points or not, my advice to underwater homeowners is too keep an eye out for the final guidelines because you just might be able to lower your payments.
Posted by: http://www.kcmblog.com
October 31st, 2011 by Joe New
Posted in Keeping Current Matters
We believe very strongly that now is the time to buy a home. Some will say we are just saying this to create real estate transactions and commissions. Because of that, today we will quote what those outside the real estate profession are saying to the people who look to them for financial advice.
The Wall Street Journal
Last week, in an article entitled It’s Time to Buy That House, the WSJ told their subscribers:
“It’s an excellent time to buy a house, either to live in for the long term or for investment income…Houses aren’t the magic wealth creators they were made out to be during the bubble. But when prices are low, loans are cheap and plump investment yields are scarce, buyers should jump.”
In an article two weeks ago, MarketWatch.com (the on-line blog for WSJ) told their readers:
“Now could be the best time in history to buy a home.”
Forbes.com
In a report to their subscribers, Capital Economics reported that:
“The previous declines in house prices and the more recent drop in mortgage rates to record lows have created an unusual situation in which the median monthly mortgage payment is more or less the same as the median rental payment.”
Why is this important? Last week, Forbes explained to their readers:
“If rents simply kept up with inflation at a 3.2% annual increase, a $1,500 rent payment would cost that renter nearly $900,000 over the next 30 years. The same $1,500 payment made to their mortgage would be only $540,000 (because the payments don’t increase with inflation).”
They went on to explain the advantages of homeownership during retirement:
“Even with a dismal 1% growth rate over 30 years, a $300,000 property would appreciate well over $100,000 giving the homeowner an additional nest egg for retirement…
At a time when retirement is becoming much more challenging, an extra $400,000 (or likely more) can make a major difference not to mention the impact of NOT having to pay a mortgage. How much less would you have to save for retirement if you didn’t pay the mortgage?”
Bottom Line
When the iconic financial newspaper and the iconic financial magazine say that it now makes financial sense to purchase a house, perhaps it’s time to buy a home.
Posted By: KCMBLOG.com
October 17th, 2011 by Joe New
Posted in Keeping Current Matters
October 9th, 2011 by Joe New
Posted in Keeping Current Matters
We are enjoying extremely low interest rates, for sure. With the global economy, the national economy and unemployment where they are, no one is predicting a dramatic change in rates any time soon. BUT, on Monday, the Obama Administration floated out some interesting proposals they are considering through the Acting Director of the Federal Housing Finance Agency (FHFA), Edward DeMarco. It appears that two significant changes in housing financing are on the table.
You should know that FHFA is the new regulator that is overseeing the restoration of viability of Fannie Mae and Freddie Mac. They are charged with reducing the risk on loans delivered to the GSEs in order to protect the U.S. taxpayer.
In a speech this past Monday, Mr. DeMarco mentioned two potential changes:
Increasing the role of the private sector to lessen the risk held by the public sector.
The method mentioned was increasing the insurance coverages assumed by the PMI (Private Mortgage Insurance) companies. One result could be higher insurance rates for loans where customers put less than 20% down. The second wrinkle is potentially more damaging…the idea that PMI coverage may be required on loans with 21%-25% (maybe even 30%) down! Clearly, this is an attempt to get more fee income to the MI companies to entice them to remain viable and continue to serve those with less than 20% down. Regardless, the net result is that more people will have to pay more money for private mortgage insurance. “How much?” and “To what extent?” is yet to be defined; however, more costs to more people is bad.
Adjusting fees.
Recognize that the GSEs charge fees. Explaining what they are and why they exist is a topic for a different day. Suffice to say, today, fees are fairly standard geographically speaking. Mr. DeMarco is talking about adjusting the fees (i.e., increasing them) for areas that have proven more risky. This proposal means the hardest hit areas will have the most difficult time recovering because the increased fees always get passed on to the consumer. Rather than “spread the risk”, FHFA is talking about punishing the defenseless.
The predictable outcome of these “strategies” is higher costs to the consumer which makes buying a home more expensive. As costs go up, desire to buy goes down (as does the borrower’s ability to be approved for a mortgage).
Message: Buy sooner rather than later!
Posted By: KCMBlog.com
September 23rd, 2011 by Joe New
Posted in Keeping Current Matters
