Meridian Real Estate

Keeping the Collectors away

2008-07-24T08:24:00.002-04:00

An ARM a Month Keeps the Collectors Away

An ARM a Month Keeps the Collectors Away
By Landon McGehee

Originally conceived as a means for more affluent homeowners to keep your cash tied up in investments which would produce greater returns than the interest rates they'd be paying, Adjustable-Rate Mortgages have since come into much wider spread use, often as a means for people to live over their heads in homes they couldn't otherwise afford.

Speculative buyers who intended to resell their homes after they had appreciated are now stuck with depreciated homes instead, and feeling the pinch as well. With many of these ARM's reaching their recalculation points now, we're beginning to see the first wave of casualties, and the numbers will only continue to get worse from here.

Highlighting the first point are statistics recently released from the Federal Housing Finance Board. The generally accepted mortgage one can afford is on a house valued at 2 to 2.5 times their annual income. As the housing boom saw a drastic rise in prices this became next to impossible for the average family.

The average house was priced at $283,000, which would require an ideal salary range of $113,520 to $141,900, yet the median household income as of 2003 was just $43,350, meaning the average household can only realistically afford to mortgage a house valued in the $100,000 range. This has been circumvented by using an ARM, providing initially lower interest rates and flexible payment options

Whether home owners of modest means truly understood the implications of what would happen with their rates down the line is unknown. As short-term rates rise and the loan eventually gets recalculated to include the principal, the minimum per month amount owed can jump drastically, often as much as 50% or more, and often eclipse the rates one would owe through a fixed-rate mortgage.

This would seem to be simple math, by paying less than a fixed-rate mortgage for a length of time, it's only natural that one would eventually have fees that surpass it to make up the difference, but many homeowners have been caught off guard by the jump nonetheless.

This isn't to say that ARM's can't be useful and used wisely. When used with their original intent in mind, they can be powerful tools. On a mortgage in the $1 million dollar range, an interest-only mortgage could save the homeowner as much as $1,000 or more per month over a fixed-rate mortgage.

Those savings can then be reinvested with the intention of earning more than the interest rate owing. For people who move around a lot they can also be a great way to pay a minimum monthly amount, allowing them in effect to 'rent' a house for a period of time at a very reasonable rate.

Taking out an ARM or an interest-only loan is a risky proposition for those on the low end of the income bracket barely covering household expenses, and this is being proved in greater numbers as many home owners have been forced to abandon their homes with nothing to show for it due to being overwhelmed with readjusted rates.

As tempting as it can be to live above your means, the smokescreen and mirrors will eventually disappear, leaving you exposed and vulnerable. Be sure to plan ahead and take on a loan that will work for you both now and in the future.

Don't delay - Now is the right time to gain more knowledge on the subject of household expenses. Learn from our years of experience, visit everlife.com.

Article Source: http://EzineArticles.com/?expert=Landon_McGehee
http://EzineArticles.com/?An-ARM-a-Month-Keeps-the-Collectors-Away&id=1344661

Is the OIL BUBBLE BURSTING?

2008-07-20T09:36:00.002-04:00

Brought to you by
Sean McAlister

Lease to Own- Saving for Your Down Payment

2008-07-17T14:44:00.004-04:00

With the Real Estate market where it is ..sellers and investors are more creative than ever. Builders, Land Developers and the like have suddenly found themselves sitting on product with minimal qualified individuals to purchase. There are a lot of builders and house "flippers" that have built a spec home or a "fixed up" a distressed house now cannot find buyers.

These investors need to cover their payments or they are at risk of losing their investment and the house to foreclosure. Herein comes the Lease to Own. I have incorporated this into several houses that I own and could not sell. Investors are more likely to look beyond some credit blemishes as long as you can prove that you can make the monthly payment. It is a win-win. This is a great way to save for a down payment.

How? Well in addition to any contributions towards your savings account monthly and being "Disciplined" as previously mentioned you can maximize your savings through a lease to own. If you are currently renting with a payment of lets say $1000.00 per month you are currently giving 100% of the payment to the landlord.

In a lease to own scenario, the Landlord agrees to set a percentage of the payment towards a down payment to purchase the home. This percentage will vary and can be negotiated. For example, a landlord may agree to allow 30% of the payment to apply towards the down payment to purchase the home. This would equal $300.00 per month of the $1000.00 overall rent payment to be put in a kiddy which equals $3,600 per year. Lets say you are already saving $300 per month outside of your existing rent you now have doubled your savings from $3,600 to $7,200 in just 12 months.

Lease to own deals are common and just take a little research to find. You can also approach existing Builders and investors, in your market, and see if they are willing to entertain the thought. Watch the local paper and trade magazines in your area for houses that have been on the market for a period of time and or express "Motivated Seller" or "Creative Financing Available". These sellers will be more open minded. And for the sellers who are not promoting this but have been sitting on their house for a while may just need to be educated to the idea. This is a great way to move into a house now in which you begin building equity from the start in addition to automatically saving towards a down payment monthly. This is also a great option for individuals who can afford a monthly payment but are strapped with being able to save anything additional. .. this is a cycle that a lot of Americans find themselves in these days. Of course you will need to research the subject a bit and get familiar with the concept if you are not already but this can be one of the best ways to build equity and savings for a house.

Good luck to you

Sean McAlister”

Real Estate Contracts-Getting Back to the Basics

2008-07-15T07:43:00.004-04:00

When it comes to selling or purchasing a home, it is a big deal and can be one of the biggest transactions you will ever enter into during your life. As with most transactions of this sort, a contract is required. Ah, but what if you are not a lawyer?

Let's start off with the basics. A contract is simply an agreement between two parties in which each promises to do something. In its most basic form a real estate sales contract is an agreement wherein the seller promises to exchange title to the property in exchange for the buyer's promise to hand over a boat load of money. If one party fails to live up to its promise, then that party is in "breach" of the contract and a court action can be filed to enforce the promise.

If you have ever purchased a home, you know a real estate agreement -or- sales contract can be more complex than the simple example in the previous paragraph. You might not know why exactly, but the sheer thickness of the agreement tells you as much. So, what is all that extra stuff? More importantly how can you gain quick access and knowledge to all that extra stuff?

Well I have the answer
Complete Real Estate Forms

With the click of a button, you can download a legal and binding contract in seconds, easily customized to your particular needs. These contracts are approved for all 50 States.

Are You Selling A Home?
Access all of our Real Estate Forms. Forms include: Real Estate Sales Contract, Offer to Purchase Real Estate, Property Disclosure Form, and more.

Need a Real Estate Form Today?
All of these forms open in your Word program. All you have to do is Open, Edit, Save or Print. You will also receive a follow up email with your download link. This link allows you to come back anytime in the future to access your forms.

You will find contracts and agreements such as:

Offer to Purchase Forms
Real Estate Sales Contract s
Quit Claim Deed s
Condo Sales Contracts
Residential Leases
Rental Applications
Property Disclosure Forms
Real Estate Articles's

as well as other resources such as:
Online Listings - Sell your Home Online in your Area's
Real Estate For Sale by Owner Help's
Real Estate Investment Tools and Resources

Real Estate contracts are vital when it comes to buying and selling real estate. For this reason I will be conducting a 4 week course specific to Real Estate Contracts. This course will cover different types of contracts what they mean and when they should be used.

Feel free to link to this site or grab the RSS Feed so that you can have instant access to this valuable information and the 4 week course.

This course will begin within the next couple of weeks and is guaranteed to provide useful helpful insight when it comes to Real Estate Contracts.

And don' forget... you can have access to a Complete Package Real Estate Forms right now!

Remember. You can do anything you put your minds to and have the resources necessary to achieve it!

Wishing you much success
Sean McAlister

Smooth a Bumpy Road to Foreclosure Purchase

2008-07-12T17:43:00.004-04:00

MERIDIAN REAL ESTATE PRESENTS:

Buyer's Agent Smoothes Sometimes Bumpy Road to Foreclosure Purchase

By Rick Sharga, Vice President of Marketing for RealtyTrac

Whether it's the first time or the tenth, buying a home can be both an exhilarating and overwhelming experience. As with any major purchase, there's a significant amount of pressure to make the right decisions about such matters as where and what to buy, and ultimately how much to spend. How can you make sure you get the best deal possible on a property that suits your needs, or find exactly the right property to fit your budget and your lifestyle? Increasingly, many homebuyers are doing this by secure the representation of a Buyer's Agent.

Most people hire a real estate agent to sell their home, but overlook the importance of having an agent when buying a property. While in some cases it's possible to negotiate your purchase through the seller's representative, make no mistake: these seller's representatives are charged with making the sale and negotiating the best deal for their clients — the sellers! With that in mind, it's best to secure your own representation as a buyer, in order to minimize potential conflicts, and make sure your interests are represented.

In the more complex foreclosures market, a Buyer's Agent can be even more valuable. The agent can help you negotiate with the owner before a property comes on the market and can also act as a buffer during the negotiating process to make sure you've completed all the necessary steps before closing. Done right, it's like having your own personal tour guide to help you find your way through the foreclosure buying process.

For buyers looking to uncover substantial bargains in real estate, the foreclosures market does offer a treasure trove of opportunities. Foreclosure properties are some of the best opportunities in real estate today with savings of 10-30 percent below market value. Some properties offer savings of up to 50 percent or more! But like any investment offering a high return, there are sometimes higher risks involved in buying a foreclosure than in buying more traditional real estate. One of the ways to maximize the value while minimizing the risk is to work with Buyers Agents who specialize in this market, with specific experience navigating the twists and turns that come with purchasing a foreclosure.

"If you're in the market for a foreclosure property, you should really take some time to look for an agent with actual foreclosure transaction experience," explains James J. Saccacio, chief executive officer at RealtyTrac, the leading online foreclosure marketplace. "The nuances of this market make it a different animal from conventional real estate, so buyers owe it to themselves to secure a seasoned agent who's familiar with the foreclosures process, and has knowledge of local, regional and state laws."

RealtyTrac's National Agent Network connects prospective buyers of foreclosure properties with local agents who specialize in foreclosures. Homebuyers can go to www.realtytrac.com to identify and research potential home purchases, as well as to find all the tools and professional resources they need to help them close the deal.

Of course, it's also important to consider the agent's knowledge of the area where you wish to purchase property, their ability to close a deal, and their access to other professionals such as attorneys, lenders, and title companies. It's often a good idea to interview two or three agents to ask about their credentials and to test out chemistry, just as you would when selecting any valued business partner. Ask for references from previous buyers to see what people who have been in your shoes have to say about the agent's credentials and demeanor. Ultimately, your agent should make you feel confident that they know how to steer you correctly through the foreclosure buying process.

Here are some questions to ask a prospective buyer's agent if you're buying a foreclosure:

Are you a licensed, full-time an agent?

Are most of your clientele buyers or sellers?

How long have you worked with foreclosure real estate?

How many clients are you working with presently?

Do you have former clients I can contact as references?

How will you help me contact owners in default?

Are you familiar with the foreclosure laws in this area?

How much commission will I pay as a buyer?

Once you've selected an agent, you'll need to set up some ground rules for how you want to work together, such as times you are available to view homes, expectations regarding the agent previewing properties on your behalf, and courtesies expected by both parties.

Keep in mind that even the most intuitive agents are not mind readers. You need to make your preferences, priorities and spending limits clear up front, so neither party wastes valuable time looking at properties that don't meet your needs.

Finally a word about etiquette: While you don't necessarily have to commit to working exclusively with a single agent (unless you've signed an exclusive agreement with them), it's most proper to ultimately extend your loyalty to an agent who spends a significant amount of effort helping you find a property. Remember, real estate agents work on commission, so the time they spend working on your behalf amounts to nothing if you don't ultimately make a purchase through them. If for some reason, you find that your needs are not being met by a particular agent, it's best to set the record straight early in the process, either to correct the problem or to retain alternate representation.

Working with a Buyers Agent can often result in a net savings on property purchases—whether traditional resale homes or foreclosure properties, and can also help inexperienced home buyers from making costly mistakes in negotiations, contract terms and property research.

Greatest Real Estate Opportunities Have Moved Overseas

2008-06-04T19:25:00.001-04:00

Trump: Greatest Real Estate Opportunities Have Moved Overseas
By Matt Valley

Jun 4, 2008 4:23 PM

Once the place for the world’s great investors to park their money, the United States is no longer the kingpin for generating business opportunities and has lost respect around the globe, says famed real estate developer Donald Trump, who is convinced that the situation is not irreversible.

“I look at what’s going on in the rest of the world – Russia, India, China. You don’t hear about the United States in the same breath. When the great funds of the world come to me, they want to do a job in India, they want to do a job in other countries,” remarked the charismatic Trump during a luncheon speech Monday before several hundred hotel industry professionals at the Waldorf=Astoria. The appearance of the chairman and president of The Trump Organization marked one of the highlights of the 30th annual New York University International Hospitality Industry Investment Conference that attracted approximately 2,400 attendees.

“The problem that I see with the United States is that we’re no longer respected, we really aren’t,” lamented Trump, pointing out that there is plenty of blame to go around, starting with the political leadership. “I think that [perception] can be changed. We have the greatest people, the greatest businesses.”

One important issue that needs to be rectified, Trump says, is the U.S. trade deficit with China. Trump’s solution? “Put John Gray in charge of negotiating terms with China. Guess what? I think we’d do very well.” Jonathan Gray, of course, is a legendary tough-as-nails negotiator in his role as co-head of the real estate arm for The Blackstone Group. Trump’s suggestion drew a big chuckle from the audience.

The problem is that the U.S. has diplomats negotiating trade agreements with China and Japan, not seasoned business professionals and deal makers, argues Trump. “I’ve watched this for years, where Japan would just rip us. By the way, they [the Japanese] tell me, ‘I can’t believe we’re getting away with it.’” It’s much the same with the Chinese, says Trump.

When Trump talks, the industry listens. The Trump Organization owns several pieces of high-end real estate in New York, including Trump International Hotel & Tower, Trump Tower, and 40 Wall Street. The company also is one of the world’s largest operators of hotels and casinos, including three casino hotels in Atlantic City. Fortune magazine ranks The Trump Organization No. 31 on its list of the 35 largest private U.S. companies. The Organization generated $10.7 billion in revenues in 2007.

The company increasingly is developing projects overseas. The Palm Trump International Hotel and Tower in Dubai is a 48-story mixed-use condo-hotel and residence with a 300-room five-star hotel and 360 residential apartments. The $600 million development, a joint venture with Dubai-based Al Nakheel, is expected to be completed sometime in 2009.

“From the standpoint of everybody in this room, you go where the action is, but personally I’d rather not fly to the Middle East. I’d rather not fly to Dubai.” Trump is quick to add, however, that he cherishes his business relationships with his partners in Dubai.

The financing climate is the worst that Trump has ever encountered. The global credit crunch has a silver lining for the hotel industry because it will limit supply growth, Trump says, a starkly different situation than in the early 1990s when a supply glut existed.

Trump related the story of an office developer who can’t get financing despite the fact that a tenant with a Triple-A credit rating has committed to the space. “The banks don’t have money. They’ve hurt themselves, and what they’ve done is inexcusable, and now they’re starting to hurt the world,” says Trump. The European financial markets, for example, are starting to feel the effects of the subprime residential mortgage fallout.

Still, there are pockets of vigorous real estate investment activity in the U.S. market, most notably New York where investment capital continues to stream in from abroad. “But part of the reason that New York is working is the dollar is so low,” says Trump. If the dollar were to suddenly rise, the New York economy could experience some hiccups, he says.

brought to you by Sean McAlister

3.55 Billion Fourth-Quarter Loss- Fannie Mae

2008-02-27T09:53:00.000-05:00

Fannie Mae Has $3.55 Billion Fourth-Quarter Loss (Update2)

By James Tyson

Feb. 27 (Bloomberg) -- Fannie Mae, the largest source of money for U.S. home loans, posted a $3.55 billion fourth-quarter loss and said its slump will worsen this year as rising foreclosures send credit costs soaring.

The net loss was triple analyst estimates. Fannie Mae recorded a $3.2 billion drop in the value of derivative contracts and $2.9 billion in credit expenses, according to a filing with the Securities and Exchange Commission.

``We are working through the toughest housing and mortgage markets in a generation,'' Fannie Mae Chief Executive Officer Daniel Mudd said in an accompanying statement.

Fannie Mae increased its estimates for credit losses and said home prices will decline more than its previous forecast, boosting costs for the $2.3 trillion of mortgages that the government-chartered company owns or guarantees. The prediction by Fannie Mae, which accounts for at least one in five home loans, heightened concerns that the housing market may drive the U.S. economy into recession and sent stocks lower.

``I expect it's only the beginning,'' said Joshua Rosner, the managing director of New York-based research firm Graham Fisher & Co.

Fannie Mae today raised its estimates for credit losses this year to a range of 11 basis points to 15 basis points from a range of 8 basis points to 10 basis points. Analysts including Paul Miller at Friedman Billings Ramsey & Co. in Arlington, Virginia, say credit losses will rise to a range of 15 basis points to 25 basis points this year and in 2009.

Loan Losses

The company has lost more than half its market value in the past year as the housing slump deepened. Analysts at Goldman Sachs Group Inc. and Merrill Lynch & Co. cut their recommendations to ``sell'' in the past week on concern that falling home prices will restrict earnings.

Fannie Mae fell 34 cents, or 1.2 percent, to $26.63 as of 9:40 a.m. in New York Stock Exchange composite trading. Freddie Mac, which ranks second to Fannie Mae, dropped 72 cents to $24.49 and is down more than 61 percent in the past year.

Fannie Mae's net loss amounted to $3.80 share, compared with profit of $604 million, or 49 cents, a year earlier, Fannie Mae said. Excluding some items, the per-share loss was $3.79, compared with the $1.20 average estimate of 12 analysts in a Bloomberg survey.

Foreclosures Rise

Fannie Mae and Freddie Mac profit by holding mortgages and mortgage bonds as investments and by charging a fee to guarantee and package loans as securities. They record losses when defaults rise.

Freddie Mac is scheduled to report tomorrow. The McLean, Virginia-based company had losses of $2.02 billion in the third- quarter and $480 million in the year-earlier fourth quarter.

Bank seizures of U.S. homes almost rose 90 percent to 45,327 last month from the same period a year ago, according to RealtyTrac Inc., a seller of foreclosure statistics that has a database of more than 1 million properties. Total foreclosure filings, which include default and auction notices as well as bank seizures, increased 57 percent. More than 233,000 properties were in some stage of default last month, RealtyTrac said in a statement.

Timely Earnings

Fannie Mae, by reporting timely audited financial results for the first time since 2004, met conditions for the removal of a federal limit on its $724 billion in mortgage investments imposed after a $6.3 billion overstatement of earnings. Its portfolio of home loans and mortgage-backed securities is one of its two main sources of profit.

Still, the need to bolster capital against the worsening housing market will inhibit growth this year, Miller said. Fannie Mae sold its preferred shares in December after its third-quarter loss of $1.4 billion.

``For me to get very comfortable in recommending this stock, I'd like to see something above $15 billion in capital raising,'' Miller said.

The cost of protecting Fannie Mae bonds from default have doubled this year. Credit-default swaps tied to the bonds rose 8 basis points to 87 basis points today, according to broker Phoenix Partners Group in New York.

A basis point on a credit-default swap contract protecting $10 million of debt for five years is equivalent to $1,000 a year. Credit-default swaps are financial instruments based on bonds and loans that are used to speculate on a company's ability to repay debt. They pay the buyer face value in exchange for the underlying securities or the cash equivalent should a borrower fail to adhere to its debt agreements.

Derivatives are financial instruments derived from stocks, bonds, loans, currencies and commodities, or linked to specific events like changes in the weather or interest rates. Fannie Mae and other companies use derivatives to hedge against losses on assets and investments including home loans and mortgage bonds.

To contact the reporter on this story: James Tyson in Washington at at jtyson@bloomberg.net

2008- The Rebound Year for Housing?

2008-02-17T19:37:00.002-05:00

Peter Schiff vs a Real Estate agent with Caldwell Banker on Fox News stand off about this years housing market. While it is a good time to buy I agree with Peter Schiff. The market is simply overbuilt and new house construction will continue to decline over coming months and years.

Housing is still a bit over priced and will continue to adjust down. The fact that it is a buyers market does not mean that housing in 2008 will rebound. The ripple effect in the market stretches to far. What's your opinion.
Sean McAlister

New Yorkers and Their opinion on Real Estate

2008-02-16T07:51:00.002-05:00

Watch as some New Yorkers express their opinion on the New York Real Estate Market.
What's your opinion

Romney's exit raises McCain's hopes

2008-02-08T00:30:00.000-05:00

Real Estate and searching for Real Estate can be difficult for the Real Estate Investor. Real Estate Taxes, Economic Conditions and Market Conditions can play a major role with your Real Estate Investments. Meridian Real Estate is committed to providing you with everything we can that may have an impact on your Real Estate Portfolio

US Congress Passes $152 Billion Stimulus Package

2008-02-07T20:46:00.000-05:00

The Stimulus package was just passed by the Senate and the House.
Here is the Full article

By Donna Smith and Richard Cowan

WASHINGTON (Reuters) - The Congress passed a nearly $152 billion plan on Thursday to stave off an election-year recession by sending government rebate checks to millions of Americans and providing business tax incentives to boost spending.

Moving quickly to get the economic package to President George W. Bush, the House of Representatives passed the bill by 380-34, just hours after the Senate cleared the measure on a vote of 81-16. Bush is expected to sign the bill next week.

The legislation will provide one-time rebates of up to $600 for individuals or $1,200 for couples, plus $300 for each child. Low-income people, including retirees on Social Security and disabled veterans who pay no income taxes, would receive checks of $300. The rebates would start to phase out for people with taxable incomes of more than $75,000 for individuals and $150,000 for couples.

At a news conference with congressional leaders, Treasury Secretary Henry Paulson said the rebate checks would go to more than 130 million Americans. "We're going to have the checks out beginning of May and this is largely going to be done by the time summer's over," he added.

Bush praised the final package.

"This plan is robust, broad-based, timely, and it will be effective," he said in a statement. "This bill will help to stimulate consumer spending and accelerate needed business investment."

The final bill was broader than the original House-passed package backed by Bush. The Senate added the elderly and disabled veterans who had been left out of the House bill. To win more Republican support in the closely divided Senate, Democrats had to drop demands for benefits for long-term unemployed workers and other provisions that would have helped low-income people pay heating bills and home builders write off current year losses against previous tax years.

The Senate also added language to help ensure illegal immigrants did not receive rebate checks.
Senate Majority Leader Harry Reid, a Nevada Democrat, said the stimulus package approved by the Senate would "change the economic direction of this country" and added that lawmakers likely would do more this year to stimulate the economy.

The latest economic data suggest the U.S. economy is stalling. Pending sales of previously owned homes fell by 1.5 percent in December and were off a sharp 24 percent from a year ago, the National Association of Realtors said on Thursday.

At the same time the Labor Department said the number of workers drawing jobless benefits has hit a 2 1/4-year high and major retailers reported a slowdown in consumer spending.

Lawmakers hope the rebate checks and incentives for business investments will send Americans on a shopping spree that will help jump start the economy.

The bill also provides for higher loan limits for the Federal Housing Administration insurance program and mortgage financing giants Fannie Mae and Freddie Mac to help lift the sagging housing market.

But even as Congress acted on the bill, some lawmakers were discussing a possible second package to help the economy.

Senate Finance Committee Chairman Max Baucus, a Montana Democrat, said Congress would move more stimulus legislation "If the economy continues to go south; if there are significant increases in foreclosures and bankruptcies and so forth."

Reid said Republican opposition to expanded unemployment benefits and aid to low-income families for paying winter heating bills would haunt them in the November elections.

"They are following this president right off a cliff," Reid said.
Senate Republican Leader Mitch McConnell of Kentucky said the economic package transcended politics.

"This is not a victory for Republicans or Democrats. This is a victory for the American people," McConnell said.

Reid and other Democratic senators said they would try to move legislation later this year expanding unemployment benefits and helping the housing industry.

(Editing by Eric Walsh)

2007-2008 Real Estate Market...You are not alone.

2008-02-07T12:17:00.000-05:00

20/20 Report with some interesting facts about the market, looming recession and trying to sell your house.

Hover your mouse at the bottom of the video player to watch the second video

The Basics about Land Contracts

2008-01-09T18:09:00.000-05:00

by Sean McAlister

The Basics about Land Contracts

Land contracts are sometimes used by buyers who do not qualify for conventional mortgage loans offered by traditional lending institutional, for reasons of poor credit or an insufficient down payment. The legal status of land contracts varies from region to region. Typical land contracts are easy to understand and usually only make up 3-5 pages. Land contracts are common throughout the United States.

Buyers
Buyers are less likely to walk away from a land contract or stop paying on the installment sale contract if the buyer has made a big down payment. Often times, home buyers are in a financial position to afford the monthly payments associated with home ownership, but they lack the down payment necessary to purchase a home. In those cases, it often makes sense for the buyers to consider purchasing a home or piece of real estate and have the owner/seller provide the financing for the purchase.

Property

The owner-carried financing can include an existing mortgage balance or the property can be free and clear. Upon payment in full, the Vendor hands the Vendee a deed to the property. The basic difference between a land contract and a mortgage is the buyer does not receive a deed or clear title to the property until the land contract is paid off. The company can then make the tax payments to your property assessor and you can be assured the taxes will be paid on time. Consider including an acceleration clause in the contract, which will allow you to make the Vendee refinance the property if the condition of the property becomes a risk to your financial investment. This property may be improved or unimproved, vacant, or a home or a commercial building. With a land contract, a down payment is usually made, then equal monthly installments are paid until the property is paid for or until a balloon payment is required.

Selling

Likewise, selling a home by way a land contract can prove beneficial to the seller in many ways. In some states, they are called Trust Deeds, Contract for Deed, Deeds of Trust, Notes, or (privately held) Mortgages, but they all represent the same thing: a way of selling property where the buyer "borrows" from or relies upon the seller for the financing rather than paying cash up front or borrowing from a bank.

Land contracts vary widely from transaction to transaction. Land contracts are often misunderstood and are frequently avoided in favor of other less preferred ways of buying & selling real estate. I recommend the following information on Land contacts

Marketing and Pricing. The Difference between the #7 and #9

2007-11-02T19:29:00.001-04:00

by Sean McAlister

Why are most products that I see priced with the number 7 in them?
(especially in INternet Marketing)

$7
$37
$47
$197

I know that there are psychologies with various pricing methods but where and when did the number 7 replace the number 9 for instance.

I also know that there are a number of urban legends have grown up around the number 7±2. Could this be why?

In general, memory span for verbal contents (digits, letters, words, etc.) strongly depends on the time it takes to speak the contents aloud, and on the lexical status of the contents (i.e., whether the contents are words known to the person or not. Seven is the smallest positive integer requiring more than one syllable in English.

Now I realize that this report is a bit dated it still spurs further
curiosity...

According to a 1997 study published in the Marketing Bulletin, approximately 60% of prices in advertising material ended in the digit 9, 30% ended in the digit 5, 7% ended in the digit 0 and the remaining seven digits combined accounted for only slightly over 3% of prices evaluated.

Which mix was the number 7 in?

In a traditional cash transaction, fractional pricing imposes intangible costs on the vendor (printing fractional prices), the cashier (producing awkward change) and the customer (stowing the change). These factors have become less relevant with the increased use of checks, credit and debit cards and other forms of currency-free exchange.

Now that many customers are used to odd pricing, high-end retailers such as Nordstrom psychologically-price in even numbers in an attempt to reinforce their brand image of quality and sophistication.

So are most of the products at the xx7 price tag perceived as a lesser value?

Kenneth Wisniewski and Robert Blattberg at the University of Chicago's Center for Research in Marketing showed that when the price of margarine was lowered from 89 cents to 71 cents, sales volume increased a mere 65%, but when it was lowered from 89 to 69 cents, sales volume increased by 222%. In another study, the perceived value of all the numbers between 1 and 100 were studied, and 77 was shown to have the lowest perceived value relative to its actual value

Schindler & Kibarian (1996) tested odd pricing using three versions of a direct mail catalog for women's clothing. The catalogs were identical except for the prices, which ended with 00, 99, or 88. The version with prices ending in 99 generated 8% more sales volume and had more purchasers than the 00-ending version. The 88-ending catalog produced a similar sales volume and number of purchasers to the 00-ending version.

Pricing involves asking questions like:

How much to charge for a product or service? This question is a typical starting point for discussions about pricing, however, a better question for a vendor to ask is

- How much do customers value the products, services, and other intangibles that the vendor provides.

What are the pricing objectives?

Do we use profit maximization pricing?

How to set the price?:
(cost-plus pricing, demand based or value-based pricing, rate of return pricing, or competitor indexing)

Should there be a single price or multiple pricing?

Should prices change in various geographical areas, referred to as zone pricing?

Should there be quantity discounts?

What prices are competitors charging?

Do you use a price skimming strategy or a penetration pricing strategy?

What image do you want the price to convey?

Do you use psychological pricing?

How important are customer price sensitivity (e.g. "sticker shock") and elasticity issues?

Can real-time pricing be used?

Is price discrimination or yield management appropriate?

Are there legal restrictions on retail price maintenance, price collusion, or price discrimination?

Do price points already exist for the product category?

How flexible can we be in pricing? :

The more competitive the industry, the less flexibility we have. The price floor is determined by production factors like costs (often only variable costs are taken into account), economies of scale, marginal cost, and degree of operating leverage.

The price ceiling is determined by demand factors like price elasticity and price points.

Are there transfer pricing considerations?

What is the chance of getting involved in a price war?

How visible should the price be?
- Should the price be neutral? (ie.: not an important differentiating factor), should it be highly visible? (to help promote a low priced economy product, or to reinforce the prestige image of a quality product), or should it be hidden? (so as to allow marketers to generate interest in the product unhindered by price considerations).

Are there joint product pricing considerations?
What are the non-price costs of purchasing the product? (eg.: travel time to the store, wait time in the store, dissagreeable elements associated with the product purchase - dentist -> pain, fishmarket -> smells)

What sort of payments should be accepted? (cash, check, credit card, barter) Pricing Process of determining what a company will receive in exchange for its products.

A well chosen price should do three things :

1. Achieve the financial goals of the firm (eg.: profitability)

2. Fit the realities of the marketplace (will customers buy at that price?)

3. Support a product's positioning and be consistent with the other
variables in the marketing mix.

-Price is influenced by the type of distribution channel used, the type of promotions used, and the quality of the product price will usually need to be relatively high if manufacturing is expensive, distribution is exclusive, and the product is supported by extensive advertising and promotional campaigns.
-A low price can be a viable substitute for product quality, effective promotions, or an energetic selling effort by distributors

-From the marketers point of view, an efficient price is a price that is very close to the maximum that customers are prepared to pay.

-In economic terms, it is a price that shifts most of the consumer surplus to the producer.

I am unsure as to what the difference between 37 and 36 dollars for a product is but if you are offering a good quality product wouldn't $39.00 be a better price?

Sean McAlister

10 Tips on Flipping Houses

2007-10-29T20:54:00.000-04:00

by: Sean McAlister

Here some tips if you are wanting to Flip Houses (Buy a house fix it up and then Resell it for profit)

If you are into real estate investing then you more than likely have been thinking about the idea of buying and selling houses. I have been doing it for quite some time and here are some tips for you.

1. If you know nothing about construction then I HIGHLY recommend you hire a General Contractor ( GC ). A reputable contractor will meet you onsite and look at the subject property. You should be able to get some estimates of repair. Make sure he/she is licensed and insured. Get a copy of his contractors license. Absolutly DO NOT try to go into it thinking you get everything done yourself in 4 weeks on a budget of $10,000.00

2. When arranging your financing with a lender ask for an interest only loan for 1 year. Your payments will be lower. If for some reason it takes longer than a year to sell the house you can sign for another year. Make sure you confirm this with your bank.

3. Make sure that you figure your carrying costs into your loan. By doing this you will have financed the payments and be able to draw from the bank when a payment is due. The amount of payments you can include will vary depending on the Loan to Value (LTV)

This will keep you from going out of pocket for a few months. Hopefully the property will sell.

3. When you have received the estimate from the contractor add about 3-5% to it. I am not suggesting that your contractor is trying to scam you. The fact is all budgets (when flipping houses) run over. So count on it up front so you are not surprised in the end.

4. Call your insurance company get the premium amount and add those numbers into your loan. When the payment is due draw from the loan.

5. Make sure you figure in utility expenses. Take into consideration the season and the type of utilities the property has. You may need to add more or less depending.

6. Strongly evaluate the market in which you are investing. Do your homework and see what other properties are selling for. Too many times I see people get into this business, not figure in all that there is and then try to sell for more because they are over budget. Have all your numbers together.

7. Go to the job EVERYDAY or at least every other day. If you do not have time to do this ...then do not flip houses. Whether you are doing the work or a GC, the project will go more smoothly, closer to budget and be completed on time. If you are using a GC this is imperative. He or she will need your opinion daily.

8. Always install new appliances.

9. Pick out all of your colors out before you start. Write them all down and make sure your GC has a copy. This is crucial to getting the job done on time. If anything needs special ordered you will know it upfront. Not to mention if you have to be unavailable for some sort of emergency...everyone can still keep working.

10. Allow a reasonable time frame. Take into consideration holidays and weather. Do not kid yourself. Be realistic. Don't expect anyone to work on Christmas day unless you are.

I have had good flips and bad ones. Every flip has had a surprise. With my most recent one I encountered over 200 bats in the roof. It cost me $1,800 to have them removed and I did not have that expense figured into the budget.

Have you ever flipped a house. If so please share.

To your success,
Sean

Flip This House

2007-10-15T17:58:00.000-04:00

Hello Everyone,

When it comes to flipping houses Armando from the A&E channel has it down. I am good at what I do, but lets face it he has over 4 million people who watch him maybe oneday I will be on TV.

Internet millionaire Armando Montelongo of armandomontelongo.com
launched a new site called Armando Montelongo.com.

This site is catered to one market,
entrepreneurial people and business opportunity seekers.

"The site is there for all types of people who want to
meet with other who have some of the same business
interests. It caters to any type of
opportunity, investment clubs, franchises, Network
opportunities, Day traders, you name it and the site caters
to it.

With so many filters on the internet, even legitimate subscriber
email is getting blocked, which unfortunately rendering
newsletters somewhat ineffective leaving opportunity seekers
no valid or cost effective way to find or communicate with each
other.

ArmandoMontelongo.com is very different in that it allows
people to communicate in real time audio and video conferencing
in a secure environment.

People can join free knowing that others on the site will enjoy
hearing about their opportunities.

You can visit the site by
Clicking Here

To your success,
Sean

2007-09-20T16:39:00.001-04:00

Mortgage Points- Pro's and Con's

2007-08-30T08:46:00.000-04:00

Mortgage points are often a confusing aspect of home lending. Getting a first-time mortgage or even a refinance just by itself can be a major undertaking. There is a lot of financial information to grasp and very few places to turn for help in doing so. Sometimes it's hard for many home buyers to work out what is the best option to take.

Many potential borrowers find themselves wondering "what are points on a mortgage," how do they work and why they should be considered. Let's take a look at points and their pros and cons.

First off, a mortgage point, or discount point, is nothing more than one percent of the loan amount. When "points are paid" upfront, it means that a fee is being paid to the lender in advance of the loan. Generally, this maneuver results in a lower interest rate being charged, since the lender is getting part of its interest payment in advance. This payment does not reduce the principle amount of the loan.

For example, if a mortgage is set for $100,000 at 5 percent and 2 points, the borrower will need to pay $2,000 to the lender at the time of closing to enjoy that 5 percent rate. Most lenders offer borrowers the ability to choose a higher interest rate instead of points, which makes it easier to obtain a loan with little or no money down.

The pros and cons of going with points will depend on the individual loan and the personal financial and credit situation of the buyer, but there are some generalizations that can be made in most cases. They include:

Pros

Can result in a tax deduction. The IRS sees points, in many cases, as an advanced interest payment. This means these fees might be deductible from income taxes. The rules about how much or how little can be claimed and in what years should be reviewed carefully. On mortgage refinances, for example, the deduction might not be allowed in the year the points are paid.
Can result in a lower end price. If a mortgage is going to be kept for the duration, the end result of buying points on the front end can be great on the back end. When all is said and done, there can be some substantial money savings. It is wise to ask and see a truth in lending statement workup for both scenarios, with points paid and without. This will help show the true bottom line.

Cons
The upfront costs for buying a home are often greater when points are included in the mix. On the converse, if points are excluded, a person might have to pay later, but they can enjoy the home in the meantime.
Lost money on resale. If the intent is to keep the home and mortgage for only a short period of time, paying points probably isn't the wisest choice. The few dollars saved in monthly fees likely won't add up to cover the costs in points if a mortgage is closed out within a year or two of origination.
Making the choice between points or no points can be a little confusing. It's best to ask your lender to see a full breakdown of both options before moving forward.

2007-08-28T21:53:00.000-04:00

Home Sales Offer Encouraging Signs

2007-08-27T09:37:00.000-04:00

By Jeff Bater
From The Wall Street Journal Online

New-home sales defied expectations and stopped sliding during July, making a modest increase that gave the beleaguered housing market a little good news.

Meanwhile, demand surged for expensive goods during July in a broad-based increase that topped expectations by a wide margin and included a strong climb in a key barometer of capital spending by businesses.

Sales of single-family homes increased by 2.8% last month to a seasonally adjusted annual rate of 870,000, the Commerce Department said Friday. June new-home sales fell 4% to an annual rate to 846,000; originally, the government said June sales dropped by 6.6% to 834,000.

Related Link

Join a reader discussion on the U.S. housing market.
The median estimate of 23 economists surveyed by Dow Jones Newswires was a 1.4% decline in July sales to an 822,000 annual rate.

Year over year, new-home sales were 10.2% lower than the level in July 2006.

The sickly housing sector has pulled down U.S. economic growth for six straight quarters. Groundbreakings by home builders in July fell to the lowest level in 10 years. Analysts expect the slump to continue. Lenders are tightening standards for borrowers, which sent up mortgage rates during the summer. Inventories of homes are running high.

Friday's data showed the ratio of new houses for sale to houses sold slipped during July, falling to 7.5 from 7.7 in June. There were an estimated 533,000 homes for sale at the end of July, down from June's 538,000. The median price of a new home increased by 0.6% to $239,500 in July from $238,100 in July 2006. The average price decreased by 3.4% to $300,800 from $311,300 a year earlier. In June this year, the median price was $230,600 and the average was $304,900.

Regionally last month, new-home sales increased 22.4% in the West and 0.6% in the South. Demand plunged 24.3% in the Northeast and dropped 0.9% in the Midwest. An estimated 74,000 homes were actually sold in July, down from 77,000 in June, based on figures not seasonally adjusted.

Dumping the real-estate agent might spur your home's sale

2007-08-26T22:27:00.000-04:00

Posted by the Asbury Park Press on 08/26/07

If you are selling property now in a market bedeviled by huge inventories of homes and a credit crunch, you could do better if you dumped your real-estate agent.

With a wide range of flat-fee and Internet-based services, you may fare well on your own, yet it's still important to know your options.

For years, homeowners relied upon licensed real-estate agents or brokers, who charged from 5 percent to 7 percent commissions. These middlemen included your home in the industry's Multiple Listing Service and did marketing, advertising and negotiating.

What if you listed and sold the property yourself and avoided the commission?National Real Estate Listings without the Commissions!

According to a recent study, people who used a "for sale by owner" Web site, also known as FSBO, got at least as much for their homes as those who went through a conventional broker.

In many cases, considering the Web site only charged a flat fee, the vendors obtained a higher net selling price than through broker contracts.

Researchers Aviv Nevo and Igal Hendel of Northwestern University, and Francois Ortalo-Magne of University of Wisconsin-Madison examined sales conducted from 1998 to December 2004 through the Web site www.FSBOMadison.com.

Shorter time

Although the study only looked at one Internet service, it noted that listing on the MLS — instead of the Web site — "does shorten the time it takes to sell a house."

The study is welcome news for sellers who want to lower their commission costs and boost net sales prices.

Homeowners could use some help when dealing with the real-estate industry these days. As the revolution in do-it-yourself home selling takes on new forms, it isn't having a significant impact in lowering brokerage expenses.

While housing prices have risen over the past five years, when adjusted for inflation, commissions haven't dropped, even with new services and increased efficiencies in real-estate transactions.

"From 1998 to 2005, U.S. housing prices climbed 37 percent in real terms, and, although national average commission rates appear to have fallen from 5.5 percent to 5 percent, average brokerage fees per transaction rose 26 percent in real terms during the same period," according to a U.S. Federal Trade Commission report published in April.

Industry defenses

The mainstream real-estate brokerage industry has fought discounting in a number of ways.

In 10 states, the industry has succeeded in having "anti- rebate" laws enacted that forbid brokers from discounting commissions, according to the FTC.

Agents typically split their fees with cooperating brokers. In anti-rebate states, no commission discount would be allowed, a practice that clearly hurts home sellers.

Another seemingly anti-consumer tactic is a "minimum-service law" in seven states that requires real-estate brokers to provide specific services.

Local real-estate groups were also accused of restricting flat-fee brokers' access to multiple listing services, which has resulted in several suits against industry organizations by the FTC during the past year.

Right service

Echoing the findings of the trade commission, the Consumer Federation of America, a Washington-based public-action group, found in its own report last year that "the desire of traditional brokers to "double dip' — where one broker collects all of the commission — lies behind all of their anti- competitive actions."

Is greed good when you are desperate to sell a property? Or are you better off avoiding a full-service broker altogether? The answer depends on how adept you are at selling your own property.

If you need full service and your broker can deliver a sale based on his referral network, then it may be worth the commission. If not, you have some options.

"Limited Service" or "Flat-Fee" brokers may charge you as much as $595 for listing or advertising your home. But that's all they are obligated to do.

You can often find a cheaper "MLS-only" package that will only add your home in the industry's listing service. You are responsible for advertising, showing and negotiating.

"Flat-Fee Plus" packages often include negotiating and other assistance for an additional $1,500 or more. You can also upgrade to full service at discounted rates with some online brokers.

Legitimate buyer

Keep in mind that if you take the do-it-yourself route, while your net sales proceeds will be higher, you will have to do much more work and it may take longer to close a sale.

The bottom line is finding a legitimate buyer who is willing to pay the highest possible price. If you have a buyer already lined up or live in a high-demand neighborhood, you certainly don't need a full-service broker.

Should you not feel comfortable marketing your home, brokers with advertising and referral resources may be a better bet. They are also helpful in finding financing.

Although commissions are still too high in an era in which securities and mutual-fund commissions have dropped to practically nothing, there's still the guiding hand of economic self interest that influences who is likely to close a deal.

As the FTC study notes, "brokers have certain incentives to "steer' consumers toward those homes that offer the highest cooperating broker commission and away from homes listed by brokers known to charge discounted commission rates."

ON THE WEB: Visit our Web site, www.app.com, and click on this story for a link to a bonus William Pesek column.

John F. Wasik, author of "The Merchant of Power," is a columnist for Bloomberg News.

Home price slide goes nationwide

2007-08-26T06:01:00.000-04:00

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By David Leonhardt, Vikas Bajaj
New York Times

Published on: 08/26/07

The median price of American homes is expected to fall this year for the first time since federal housing agencies began keeping statistics in 1950.Thinking of Selling Your Home? Let REALTORS® Compete For Your Business!

Economists say the decline, which could be foreshadowed in a widely followed government price index to be released this week, will probably be modest —- from 1 percent to 2 percent —- but could continue in 2008 and 2009. Rather than being limited to the once-booming Northeast and California, price declines are also occurring in cities such as Chicago, Minneapolis and Houston, where the increases of the last decade were modest by comparison.

Home prices in Atlanta —- which rose far less than in some other cities during the first half of this decade —- are essentially flat.

The predicted national reversal is particularly striking because many government officials and housing-industry executives had said that a nationwide decline would never happen, even though prices had fallen in some coastal areas as recently as the early 1990s.

While the housing slump has already rattled financial markets, it so far has had only a modest effect on consumer spending and economic growth. But forecasters believe its impact will lead to a slowdown over the next year or two.

"For most people, this is not a disaster," said Nigel Gault, an economist with Global Insight, a research firm in Waltham, Mass. "But it's enough to cause them to pull back."

In recent years, many families used their homes as a kind of piggy bank, borrowing against their equity and increasing their spending more rapidly than their income was rising. A recent research paper co-written by the vice chairman of the Federal Reserve said that the rise in home prices was the primary reason that consumer borrowing had soared since 2001.

Now, however, that financial cushion is disappearing for many families. On an inflation-adjusted basis, the national median price —- the level at which half of all homes are more expensive and half are less —- is not likely to return to its 2007 peak for more than a decade, according to Moody's Economy.com, a research firm.

Unless the real estate downturn is much worse than economists are expecting, the declines will not come close to erasing the increases of the last decade. And for many families who do not plan to move, the year-to-year value of their house matters little.

It does, however, contradict the widely held notion that there is no such thing as a nationwide housing slump. A 2004 report jointly written by the top economists at five organizations —- the industry groups for real estate agents, homebuilders and community bankers, as well as Fannie Mae and Freddie Mac, the large government-sponsored backers of home mortgages —- was typical. It said that "there is little possibility of a widespread national decline since there is no national housing market."

In 2005, Ben S. Bernanke, then an adviser to President Bush and now the Fed chairman, said "strong fundamentals" were the main force behind the rise in prices. "We've never had a decline in housing prices on a nationwide basis," he added.

But Global Insight, the research firm, estimates that the home-price index to be released Thursday by the Office of Federal Housing Enterprise Oversight, a regulatory agency, will show a decline of about 1 percent between the first and second quarter of this year. Other forecasters predict that the index will rise slightly in the second quarter before falling later this year.

In all, Global Insight expects a decline of 4 percent, or roughly 10 percent in inflation-adjusted terms, between the peak earlier this year and the projected low point in 2009. In California, prices are expected to decline 16 percent —- or about 20 percent after taking inflation into account.

Since the index began in 1975, it has slipped from one quarter to the next on a few occasions, but it has never fallen over a full year.

Another index dating back to 1950, calculated by Freddie Mac, has also never shown an annual decline. Price data published by the National Association of Realtors, based on the prices of houses sold in a given year, have also never declined. According to the association, the median home price is now about $220,000.

High Tension for the Buyer and Seller of Real Estate Can Be Reduced

2007-08-25T08:18:00.000-04:00

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Planning on Buying or Selling? Find a Local Realtor

Tensions can run high in both the selling and buying of real estate. After all, there is a lot of money and emotion involved! There are also time pressures and numerous privacy issues to deal with. The sale and purchase of real estate can be a lengthy process involving numerous professionals from many fields.

The Real Estate Center at Texas A&M University asked 3,000 Texas home buyers to describe their recent purchase, about 400 replied. Their responses showed how stressful buying a home can be, for buyers and sellers. The Realtors and attorneys who try to keep all tensions at bay in order to complete the transaction also feel the burdens of stress!

"The process is grueling in the best of circumstances, and the severe buyers' market of recent times only increased the stress," says Dr. Jack C. Harris, Center research economist. "In conjunction with Lawyers Title Company, the Real Estate Center asked recent home buyers about their buying experience and what changes they think would make the process more buyer friendly."

The final question on the survey was, "If you could change anything about the home buying process, what would that be?" Almost a third answered the question, and most of them expressed dissatisfaction about some phase of the process.

Understandably some of the complaints were about circumstances beyond anyone's control. This included high prices, interest rates, the lack of listings in a specific area, where they wanted to buy, etc.

However, all of us Real Estate Professionals can learn much from some of the things that WE can, and should, do something about. Many of the folks surveyed felt that the Realtor did not perform up to their expectations. They were especially miffed when the Realtor assumed too much, that they understood what was going on, and didn't keep them well enough informed. In such a pressure cooker of financial and time constraints, the unfamiliar territory of buying and selling a property can be nerve wracking!

Many buyers and sellers need to be reassured and comforted. It is sometimes hard for the Realtor to know which of the dozens or even hundreds of people they are working with at one time need the most attention. Some of the Realtors' clients felt the agent did not take enough time with them. This was true even for some buyers who had a Buyer's Agent under contract to work on their behalf alone.

Realtors should alert and educate their clients, whether they be sellers or buyers, to the complexities and details of the real estate transaction. Some buyers feel that they are rushed through the looking, choosing, buying and settling process, and sometimes they are.

More and more buyers, especially the most savvy ones, are using Buyer's Agents. When there is a Buyer's Agency Agreement signed, most buyers expect far more service. Some feel that they don't always get it. In fact, according to the survey, 70% of those who had a Buyer's Agent wanted even more care, concern and service from their agent than they felt they had received.

The sellers, too, felt they had received too little service, care and attention in many cases, for the commission involved. Some seller's felt that the selling agent was not responsive enough to them, that calls were not returned promptly enough, or that not enough assurance, information, concern and communication was forthcoming from their agent.

Even though it is legally the seller who pays the Real Estate commission, it is really part of the overall transaction. Many buyers feel that they are the ones who are really paying that commission. They feel that the several thousand dollar commission is just tacked onto the selling price by the seller and thus it is they, the buyer, who is ultimately paying more for the property than they should! Buyers often feel that sellers inflate home prices to recover the cost of the commission.

Some purchasers want more contact with the sellers of the property; before, during and after they decide on the property and place a contract on it. Many wanted to develop a relationship with the seller of the property and have direct communication with them between the time of the contract and the settlement. Some felt that an agreement would have been more easily arrived at if the sellers and buyers could have hammered out details in person.

Other buyers had met with the sellers and considered that it had been the biggest error of the entire process. Most folks felt that the insulation of the Realtor(s), keeping the sellers and buyers apart and in communication only via written offers and changes to the contract was appropriate as it gave them the advantage of advice and discussion with their Realtor and time to think and discuss things before responding.
A huge part of the work and value that a Realtor or all the Realtors involved bring to the transaction is the mediation, conflict resolution, refereeing and monitoring of communications between buyer and seller. Often that is a huge and difficult task. Sometimes it is just too monumental to achieve satisfaction on the part of their client. Often it is those clients who are most difficult to work with that are the least satisfied with their Realtor. That is all part of the job we do. We do our best, from our own viewpoint, we try to satisfy the personality of our clients, and usually that is well appreciated!

After all, the natural flavor of a buying and selling transaction is adversarial. The Realtor is like a Gladiator in most cases; going to battle, in an honorable way and according to the rules, on behalf of their backer -- their client. There are many behind-the-scenes conflicts on behalf of clients that never are divulged and shouldn't be. It is the duty of the Realtor to put all parts of the transaction in the best, although truthful, light possible. A Realtor who transfers the natural adversarial animosities between buyer and seller does a disservice to his client no matter which side of the transaction is being represented.
Most buyers and sellers comments on the survey evidenced the importance and value of the agent in the transaction process. However, it is important that all of us Real Estate professionals (especially realtors) learn from our buyers and sellers, especially to responses they give about our profession when they are being surveyed on our service.

From the survey results of the Texas A&M University, Realtor(s )are well advised to learn that respondents praised especially helpful agents. It is reasonable to assume the majority who wrote nothing when asked to comment on any dissatisfaction, on this anonymous survey, were well satisfied with the service they received from their Realtor(s).

"We had a great experience," wrote one buyer. "The agent made all the difference. She kept us well informed almost daily. This was so important to us." While a majority of survey respondents had no comment regarding agents, 85% said they would use or recommend the agent again.

According to the survey report, complaints about the complexity of the home buying process fell into one of three categories: too complicated, too time-consuming or too costly. Many felt the process involved too much paperwork. Undoubtedly, they were reacting to the numerous, lengthy legal forms they had to sign before, during and after the contracting of the property as well as the seemingly almost unconfrontable stack of documents requiring a signature at closing.
It can take a terrific amount of time to find and buy a home. We often work with buyers for months seeking the right home. Some of them we've been working with, staying in touch with, and showing properties to -- for years. Those with some particular interests may find that a "possible" choice for them might only come on the market once in a great while! It is not an easy or comfortable situation for anyone involved, but the finding and buying or selling of a home or property can be made a MUCH more comfortable process with open, full and honest communication between the agent and the client at all times.

Many of our sellers would like us to find a buyer in a week or less for their property. Interestingly enough, it is often the property that is most difficult to find a buyer for that has the most impatient seller.
Even after a property is chosen by a buyer, there is a lot of time and work still needed from all those involved. The time, the continued negotiations, the inspections, reports, and evaluations needed, all the calls and appointments that need to be made on behalf of all parties involved almost always take far more time than anyone not directly involved can realize. This is usually frustrating to everyone. The sellers as well as the buyers often feel they are stuck in quicksand, unable to move or do anything without sinking further into the mire. At the same time -- that same quicksand of details required to complete the transaction seems at times to be filled with alligators ready to bite and take them down anyway. In some ways, that is all too true. And, it is the duty of all the Realtors involved to keep our clients and customers as comfortable as possible during these trying times of details and difficulties.

The Realtor usually spends a good deal of time trying to manage the lender(s) and get the money required to bring the deal to closing. Often this is the most difficult part of the transaction, even when the buyers and sellers are easy to work with. Usually, the first contact with a lender is all roses and sunshine. All too often however, the clouds and thorns of problems are soon evident. Realtors are often fully employed trying to get all the requirements fulfilled for the lender and the purchaser and when those are complete we work to make certain the promised funds are still available, approved and ready for closing, ON TIME.

At the closing, there is another 2% to 3% or, in some few cases, even more of the purchase price involved at closing for each the buyer and the seller. The long list of expensive items often seems too costly to both the buyer and the seller. Some folks find this irritating and feel it to be unfair. Some wonder why there are so many fees and services that find their way to the settlement table and may wonder if the fees and services were even necessary.

The myriad details involved with the finding, selecting, negotiating, contracting and transferring of ownership and funds at final settlement is time consuming, detailed, and often challenging.

People are accustomed to buying most things instantaneously and getting instant gratification for their decisions. Especially for those of us who use the Internet a lot. In a recent survey it was shown that most people who purchase via the Internet want the purchase delivered to them via overnight service. MOST buyers do not appreciate the legal complexities of taking title to real estate. They most often, simply do not understand why it should be so complicated to buy a piece of land or a home, nor do they understand the complexities of getting them approved for the best rate and terms in the mortgage obligation -- even if they have done it before.

The real estate industry has made great and consistent accomplishments in speeding up the entire buying process; from searching via the Web to getting mortgage approvals in sometimes an hour. Even title searches, lien searches, judgment searches and the typing of the dozens of pages of legal documentation has been streamlined with modern devices and techniques. However, there is another bundle of issues that slow the process while the aforementioned have sped it up. The litigious society we live in, the relatively recent and growing list of written disclosure requirements and legal contingencies have adversely affected the time and ease involved. It has limited the progress and speed of the individual parts of the transaction steps at nearly every point.

We, as Real Estate Professionals should, in fact we must, pay special attention and take special care in helping buyers and sellers understand what is going on at each step of the selling and purchasing process. We need to make it clear why the various expenses incurred at closing are ordinary and necessary. We need to alert our clients and customers to the potential consequences of each place where they can be financially and legally harmed or put at risk by cutting corners. We do our best!
Based on every available survey, it is evident that the Internet is growing and soon to be of utmost importance to buyers searching for a home. A review of 37 major search engines showed that Real Estate related searching and use was the third major use of the Internet, world wide. In America, it was second except for a temporary flurry of interest in searching for information on digital cameras which barely put it in third place here also.

The Internet is, however, not the only factor in the overall search. At price ranges of $300,000 and more; about 90% of the first contacts are to a Realtor with an attractive, informative, workable and fast acting Web site. As the price of the home descends, the percentage of buyers using the Web decreases. For homes under $100,000, only about 25% of our personal response is a result of our Web site presence and expertise.
Simultaneously, fewer Realtors instead of more, are finding the Web useful according to our recent survey. The reason is obvious to some of us; most users want sites to be far more informative, more private, and want the sites to have a lot more content. They want more pictures, better descriptions, related sales, crime reports, etc. Some of these things are not even available yet for our market area but the buyers still want them. People would like to rule out those homes they are not interested in before they even contact a Realtor in most cases -- especially for the more expensive properties.

Users want the sites to come up faster and to be more intuitive of their interests and needs. People are also reluctant to show what they don't know as it makes them feel vulnerable. Thus we try to have lots of data on our site so the sellers and buyers can educate themselves before they contact a Realtor.

Some clients seem to realize and appreciate that Realtors are also dependent on other professionals to make the home buying transaction go more safely, more legally proper and in all ways more smoothly. Buyers do expect the agent to keep them informed about progress and to effectively, quickly and professionally handle any obstacles to their goals and purposes in the transaction.

The entire process of selling and or buying a property, especially a home, can be nerve wracking and full of tension for everyone concerned. Some problems are unavoidable, some are unpredictable, some are created out of nothing by some party to the transaction. Many problems can be resolved or avoided if the sales agent provides information, reassurance and support to the buyer.

In the final analysis, it is up to you, the buyer or the seller to be the "squeaky wheel in need of oil" and call, write, e-mail and otherwise let your Realtor know immediately when you feel needy of more communication, care, solace or help. Our job is about 98% invisible to our customers and clients. Even when we tell everyone what we are doing, it is almost always hard for them to believe the time it takes for what seems, to them, a simple task. We usually have a few dozen customers and clients at any one time that we are trying to service as if they were the only person in our professional lives.

New Home Sales Down 10% in July

2007-08-24T15:29:00.000-04:00

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Friday, August 24, 2007

Inman News

The rate of new single-family home sales dropped about 10.2 percent in July and the median sales price rose 0.59 percent compared to the same month last year, the U.S. Census Bureau and Department of Housing and Urban Development announced today.

Sales of new single-family houses in July 2007 reached a seasonally adjusted annual rate of about 870,000, compared with the July 2006 estimate of 969,000. The rate is calculated as a projection of the monthly sales total over a 12-month period, adjusted for seasonal fluctuations in sales activity.

The median sales price of new houses sold in July 2007 was $239,500, compared with a median price of $238,100 in July 2006. Meanwhile, the average price of new homes sold in July 2007 was $300,800, down 3.4 percent compared with the July 2006 average price of $311,300.
What's" Your Home Worth?

The seasonally adjusted estimate of new houses for sale at the end of July was 533,000, which represents a supply of 7.5 months at the current sales rate. A supply greater than six months is generally considered to indicate a buyer's market.

Statistics are estimated from sample surveys and are subject to sampling variability as well as nonsampling error including bias and variance from response, nonreporting and undercoverage, the agencies noted.

Changes in seasonally adjusted statistics can show irregular movement, and it can take five months to establish a trend for new houses sold. Preliminary new-home sales figures are subject to revision. On average, the preliminary seasonally adjusted estimate of total sales is revised about 3 percent, according to the report.

Housing Starts Fall to 10-Year Low amid Slow Sales, Tightening Credit

2007-08-21T07:57:00.000-04:00

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By Jeff Bater From The Wall Street Journal Online

Home builders slowed groundbreakings during July, pulling construction to its lowest rate in 10 years as sales keep tumbling and credit tightens, a government report said Thursday.

Housing starts decreased by 6.1% to a seasonally adjusted 1.381 million annual rate, after rising 2.1% in June to 1.470 million, the Commerce Department said. Originally, Commerce reported June starts 2.3% higher at 1.467 million.

July starts were lower than Wall Street had predicted. The median forecast of 22 economists surveyed by Dow Jones Newswires was a 4.6% drop to a 1.400 million annual rate. It was the lowest level of starts since 1.355 million in January 1997.

Discuss Have you recently sold your home in a down market? Tell us your story.

The housing sector is a mess. Year-to-year, housing starts were 20.9% below the level in July 2006. Falling demand for new homes and bloated inventories are discouraging builders. They are also worried about tight credit, a fear that has rattled financial markets in the past week and led central banks in parts of the world to rush in with injections of liquidity.

This week, the National Association of Home Builders said its August survey found members' confidence at the lowest since 1991.

"The decline in builder confidence is consistent with our outlook for further construction cuts and a prolonged housing recession," Lehman Brothers said in a note to clients Wednesday.

The Federal Reserve released a survey on Monday examining credit conditions in the U.S. Of the 16 domestic banks surveyed that originate subprime loans, 56% said they have tightened standards on those loans. Of those originating nontraditional mortgages including adjustable-rate and interest-only mortgages, 40% said they had tightened credit standards. The quarterly study of senior loan officers said demand for many types of commercial and consumer loans has weakened in the past three months. And 38% of survey respondents reporting weaker demand for prime mortgages; 44% of subprime issuers reported weaker demand.

The subprime crisis is behind an anxiety that some label a "credit crunch." Fears abound that more and more lenders will grow gun-shy. The phenomenon has been described as a financial contagion leading to a restriction on the availability of credit in world financial markets. The roots of the crisis are in the high-cost money that lenders doled to borrowers with bad credit who wanted to purchase homes. Rising interest rates and falling property values drove up defaults and foreclosures among these homeowners. That caused some lenders to shut down and cost investors billions of dollars in securities tied to subprime mortgage assets. Analysts see an unpleasant impact on the slumping housing market.

"Prospects for future sales remain grim given credit problems in the mortgage market," Lehman's note said. "Builders fear that tighter lending standards and the liquidity squeeze in the mortgage market will limit mortgage availability, further restraining sales."

Thursday's data contained a sign things will get even worse: building permits tumbled 2.8% to a 1.373 million annual rate in July. Economists had expected permits to drop 0.6% to a rate of 1.405 million. June permits fell 7.0% to 1.413 million. Permits, of course, are an indicator of future building activity.

July single-family housing starts decreased 7.3% to 1.070 million. Construction of housing with two or more units fell 1.6% to 311,000; within that category, groundbreakings of homes with five or more units -- or multi-family -- were 2.5% lower.

Regionally, housing starts decreased by 1.3% in the Northeast, 3.7% in the West, and 11.0% in the South. Construction rose in the Midwest, up 2.6%.

Nationwide, an estimated 127,800 houses were actually started in July, based on unseasonally adjusted figures. An estimated 118,600 building permits were issued last month, also based on unadjusted figures.

Jobless Claims Rise
The number of U.S. workers filing new claims for jobless benefits increased for a third-straight time last week to its highest level in two months, suggesting that labor markets continue to soften after tepid job gains in July.

Jobless claims were up 6,000 to 322,000 on a seasonally-adjusted basis in the week ended Aug. 11, the Labor Department said Thursday. Claims for the Aug. 4 week were unrevised.

Wall Street forecasts had called for 1,000 decline last week to 315,000, according to a Dow Jones Newswires survey.

The four-week average -- which economists use to gauge underlying labor market trends -- rose 4,750 last week to 312,500.

Labor markets are being eyed amid growing worries about the availability of credit in financial markets that have led to steep drops in global equity markets. As long as labor markets hold up, economic fundamentals should support growth. But if they start to falter, then consumers could curtail spending, which makes up the bulk of economic activity.

Nonfarm payrolls expanded by just 92,000 last month and the unemployment rate ticked up, though it remains low by historical standards. Thursday's claims figures suggest the underlying trend remains decent, though not as strong it was earlier in the year.

The Federal Reserve last week held interest rates steady at 5.25% for a ninth-straight time dating back to last summer and continued to cite inflation as its primary concern, though it acknowledged some downside growth risks. Officials again cited high resource utilization -- a nod to the tight jobs market -- as an inflation risk.

If labor markets and, in turn, consumption head lower it would likely intensify pressure on Fed officials to lower rates. Futures markets are already pricing in rate reductions as early as next month to alleviate credit crunch worries.

According to the Labor Department report Thursday, continuing claims for workers drawing unemployment benefits for more than a week rose 17,000 to 2,567,000 in the week ended Aug. 4, the latest week for which such data are available. That's the highest reading in four months.

The insured unemployment rate was unchanged at 1.9% in the Aug. 4 week.

There were 33 states and territories reporting an increase in initial jobless claims for the Aug. 4 week, while 20 reported a decrease.

Kentucky had the biggest increase, 4,731, due to layoffs in automobile and manufacturing industries. California reported the sharpest decline, 1,999, due to fewer layoffs in trade and services industries.

-- Brian Blackstone contributed to this article.
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