May 2010


Top News

Tightened rules for banks’ loans proposed – CNBC – – The rule-setting board for corporate accounting has proposed tightened rules that would force banks to value loans at current prices, prompting renewed opposition from the banking industry over a long-simmering issue.

Market News

Mortgage rates again sink to yearly low; 30-year at 4.78% – USA Today – – WASHINGTON Mortgage rates have fallen to the lowest level of the year as European turmoil caused investors to pour money into the safe haven of U.S. government securities.

5/26/2010 Mortgage Refinance Applications Continue to Increase, Purchase Applications Decline Further in

Latest MBA Weekly Survey » – Mortgage Bankers Association – – Welcome to MBA. The Refinance Index increased 17.0 percent from the previous week. This third consecutive increase marks the highest Refinance Index recorded in the survey since October 2009. 
New home sales soar 15% in April – CNN Money – – NEW YORK (CNNMoney.com) — New home sales soared in April as homebuyers rushed to claim the tax credit that expired at the end of the month. New home sales rose 14. 

O.C. real estate giant to split into two companies – Orange County Register – – One of the nation’s largest real estate firms has gotten so big that its managers have decided to divide it into two separate companies. 

Home prices fall 3% in early 2010 – CNN Money – – Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. 

Technology News

Browser Add-on Blocks Google Analytics – PC World – – Google has released an add-on for Web browsers that blocks information from

Other News

Luxury homebuilder Toll Brothers takes smaller 2Q loss – USA Today – – HORSHAM, Pa. (AP) — Luxury homebuilder Toll Brothers (TOL) said Wednesday that it took a smaller loss in its second quarter as write-downs of assets decreased.

Going, going, gone: Boom in house auctions – CNN Money – – NEW YORK (CNNMoney.com) — Going, going, gone: An increasing number of homes are now being sold at auction — rather than through real estate brokers — in an effort to dump properties more quickly and efficiently. 

 

   
Strategic Defaulters May Not Buy Again Soon
Home owners who abandon their mortgage because of reasons that don’t involve some sort of personal hardship probably won’t be able to borrow for a house purchase for several years.
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Mortgage Rates Close in on Record Lows
Consumers shopping for homes right now are finding extremely favorable mortgage rates.
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Luxury Home Market Improving
The luxury home market appears to be recovering, but its sustained success hinges on the volatile stock market.
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Overseas Personnel Eligible for Tax Credit
Members of the U.S. military, intelligence organizations, and the foreign service who served overseas between the end of 2008 and May 1, 2010, have until April 30, 2011, to get a property under contract.
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International Housing Market Spotty
Home prices in most of Asia are recovering quickly, but Europe is looking a bit shakier.
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Mortgage Rates Might Not Be Low for Long

The near-record low mortgage rates seen during the past few weeks may not be around much longer.

Signs of improving economic conditions could lead Federal Reserve Chair Ben Bernanke to raise key interest rates, driving up mortgage rates, says Stephen Stanley, chief economist at Pierpont Securities LLC.

The evidence includes more consumers are paying their bills on time. Past-due accounts at American Express declined 34 percent compared to a year ago, and Target Corp. reported its lowest delinquency rate in two years during the second quarter.

In another sign of economic improvement, fewer banks reported tightening lending standards this month, one reason consumer borrowing rose for the second time in three months.

“If lending standards start to stabilize, that’ll be another reason to remove the emergency measures, including the zero rate,” says Jay Bryson, a senior global economist at Wells Fargo Securities LLC in Charlotte, N.C., who formerly worked at the Fed in Washington.

Source: Bloomberg, Bob Willis and Anthony Feld (05/28/2010)

 

 
Mortgage Applications Slide for Fourth Week
Purchase applications were at their lowest in 13 years last week, says the Mortgage Bankers Association.
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Post-Tax Credit Buyers May Save Money
Interest rates have fallen so dramatically since April 30th that delaying a purchase could save buyers a bundle over the long haul.
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Bankers Ignored Risks When Housing Boomed
Faulty risk models and an eagerness for profits skewed banks’ lending decisions during the housing boom, according to a University of Maryland study.
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10 Batches of Toxic Drywall Identified
An excessive amount of hydrogen sulfide is the culprit in the Chinese-made samples, a laboratory says.
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Retail Occupancy Recovery Expected in 2011
Vacancies reached 11 percent in the first quarter of the year, but the worst appears to be over as credit and capital begin to return.
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April Homes Sales Spike 14.8%

Sales of new homes jumped in April, climbing 14.8 percent to a seasonally adjusted rate of 504,000 last month, up from 439,000 in March, the U.S. Commerce Department reported Wednesday.

Sales were up 47.8 percent over the same period a year ago.

The surge was driven by the home buyer tax credit, which expired April 30. “We got two solid increases in March and April,” says Mark Vitner, senior economist at Wells Fargo. “We may see sales fall to a record low in the aftermath of the tax credit program, but any fallback should be short-lived.”

The government estimates that there were 211,000 new homes on the market at the end of April, a five-month inventory.

Source: CNNMoney.com, Hibah Yousuf (05/26/2010)

 
Commercial Vacancies to Peak Near Early 2011
Multifamily housing is a bright spot, with increased demand expected, NAR says.
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Top 10 Towns for the ‘Cool’
Ely, Minn., is rated highest for its outdoor qualities.
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Lock in Super Low Rates Today, Not Tomorrow
Rates are unlikely to go lower than they are now, analyst says.
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When Should You Use a Short-Sale Negotiator?
Specialists can free up your time for business-building but the relationship has to be well-thought out.
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Show Sellers How to be “Weekend Warriors”

Have you met your prospecting goals for the month? Drop in on potential clients and customers and encourage them to tackle minor but money-saving or big-impact home upgrades over Memorial Day weekend.

Show them how with the May “Weekend Warrior” bundle now available at the REALTOR® Content Resource, the new tool brought to you by the National Association of REALTORS®, where your NAR membership entitles you to download free homeownership content in your consumer Web site, blog, or e-newsletter.

The “Weekend Warrior” bundle includes tips on projects sellers can conquer in just a weekend like saving energy on water heaters. Here are just a couple of tips available now at the REALTOR® Content Resource:

Turn down the temperature. Many water heaters come from the factory with the temperature set needlessly high. For every 10 degrees sellers turn it down, they’ll save 3 percent to 5 percent on their bill, according to the American Council for an Energy Efficient Economy (ACEEE). A setting between 120-140 degrees is plenty hot for most uses. But sellers shouldn’t go below 120 degrees, which could lead to the unsafe growth of bacteria inside the tank.

Install low-flow fixtures. One of the surest ways to cut hot water costs is to use less of it. According to ACEEE, a family of four uses 700 gallons of hot water per week. By installing low-flow showerheads and faucet aerators, which cost as little as $10-$20 each, sellers can cut hot water consumption by 25 percent to 60 percent. These devices are easy to install and will save 14,000 gallons of hot water annually, plus the energy it takes to heat it. By cutting water consumption in half, sellers will save more than $200 annually.

If sellers have already made changes to their water heater, share tips on exterior lighting, inspecting and maintaining their garage, and fast gutter fixes, all of which are also part of the “Weekend Warrior” bundle.

The REALTOR® Content Resource, the new tool brought to you by the National Association of REALTORS®, is an exclusive, free benefit for NAR members. HouseLogic is the National Association of REALTORS®no-topic-left-uncovered consumer Web site geared to helping home owners make smart decisions to maintain, protect, and increase the value of their home.

— NAR

LATEST DEVELOPMENTS
Existing-Home Sales Continue to Improve in April
Existing-home sales rose again in April with buyers motivated by the tax credit, improving consumer confidence and favorable affordability conditions, according to the latest survey. Existing-home sales increased 7.6 percent to a seasonally adjusted annual rate of 5.77 million units in April from an upwardly revised 5.36 million in March, and are 22.8 percent higher than the 4.70 million-unit pace in April 2009. Monthly sales rose 7.0 percent in March. Lawrence Yun, NAR chief economist, said the gain was widely anticipated. “The upswing in April existing-home sales was expected because of the tax credit inducement, and no doubt there will be some temporary fallback in the months immediately after it expires, but other factors also are supporting the market,” he said. “For people who were on the sidelines, there’s been a return of buyer confidence with stabilizing home prices, an improving economy and mortgage interest rates that remain historically low.”
Read the release >
View Existing Home Sales Data >

7 Timeless Skills for Any Real Estate Market

 

Regardless of how your market is performing, you’ll succeed in real estate if you can master these essential skills.
By Kelle Sparta // | June 2010

The real estate profession changes every day, but the qualities you find in top-performing practitioners do not. The details may shift as technology rolls forward, yet the underlying skills are always the same. If you can master these, you’ll be successful in any market.

Skill 1: Meeting New People

The simple fact is that if you never meet anyone new, you will never have anyone new to sell to. Whether you encounter them for the first time in person, online, or over the phone doesn’t matter. Get one-on-one with them in a conversation about their needs, and you’ve at least started down the path to success. 

Skill 2: Making Personal Connections

You don’t have to be the best at everything to succeed in this business. You just have to be competent and likeable.People buy from people they like. Develop the ability to connect with your clients and make them trust you, and 90 percent of your sales process is done. Want a quick way to engender trust? Tell the client something that it’s not in your best interest to tell them. Show them that honestly is more important than anything to you.

Now, this doesn’t mean to tell them that you got sued last week — that will make people nervous. But it could mean mentioning that the houses in another neighborhood have the same amount of space and are less expensive. They know that you get paid more if you sell them a higher-priced house. Showing them something in their best interests instead of yours makes you trustworthy.

Skill 3: Following Up on Every Lead

Follow-up is a big area where agents fail. If you aren’t going to take every lead you get and work it to death, then you’ll never be a top performer. Working every lead until it either closes or is clearly not a lead anymore is critical to building the solid pipeline that’s required to keep your business continually producing. This means that you need a system to make sure that nothing gets dropped or forgotten. Throw away your Post-it notes; they should never be used as a place to write down a lead. All leads need to be kept in one place, and all of them need a minimum amount of information. That includes:

  • The person’s name
  • Contact information
  • What property they contacted you about (or where they came from if it wasn’t from a property)
  • What their timeframe is for moving
  • If they’re buying, selling, or both
  • If they’re buying, what they’re looking for and in what area
  • What their emotional hot buttons are (what they get excited or angry about)

If you don’t have all of the information you need, don’t be afraid to contact them again for more information. And once you have the information you need, continue to contact them on a regular basis to make sure they stay on track. Don’t worry that you’ll be bothering them—instead, worry that they would otherwise forget who you are or feel ignored by you.

Skill 4: Asking for What You Want

This is typically a big problem with real estate rookies, but you’d be surprised how many veterans forget this piece of the puzzle, too. It’s not always easy, but you have to ask for things to get them. Ask for the sale. Ask for the appointment. Ask for the phone number of the person your client wants to refer.

Don’t wait for people to call you, for the clients to say they’re ready, or for the buyers to tell you that this is the house they want. Be direct. Ask them, “Is this the house you want to buy?” “I’ll get your house on the market tomorrow if you’ll sign right here.” “Which is better for you: Monday at 6 p.m. or Wednesday at 3 p.m.?” “Why don’t you give me your friend’s number and then you don’t have to think about it anymore?” All of these are great closing questions used by some of the top practitioners in the industry.

Skill 5: Setting Appropriate Expectations

Once you have the contracts signed and your clients are committed to the process, then it’s all about meeting expectations. And make no mistake, there will be expectations—whether you set them or your clients do. This is why it’s important to set those expectations yourself; you don’t want to get blindsided by something the clients decided to expect without consulting you.

The best real estate professionals are masters at setting expectations. They know what reasonable timeframes are, and they don’t make promises they can’t keep. They let clients know immediately if things need to change and they set the new expectations quickly and decisively, leaving no room for the clients to wonder (and worry) what happens next. 

Skill 6: Taking Care of Details

You must treat you business like a business. This means that having a system in place to make sure that deadlines get met, appraisals are ordered, home inspection responses come in on time, appointments aren’t forgotten, and problems are solved. You should even have systems to make sure that your clients—and, if you’re really smart, the other side’s clients—have handled all of the details that they need to attend to. Hold on to every deal and work it until it closes, letting nothing go. In saving multiple deals from certain death each year, top performers improve their closing ratios and increase their per-hour earnings. 

Skill 7: Paying Close Attention to Money

Lots of agents tell me that it’s not about the money for them; it’s about the people. And that’s great. I love helping people, too. But if you don’t focus on making money, you’re not going to make any. Real estate is your business, your livelihood, and you deserve to be compensated for the skills and services you provide. If you stop paying attention to the money, you’ll do things like:

  • Negotiate away your commission.
  • Not take a referral fee “to be nice.”
  • Work on listings that will never pay you anything close to reasonable compensation for the amount of work they are because you “feel bad for the person.”
  • Take overpriced listings so that the sellers will like you.
  • Not make buyers sign contracts.
  • Stay with a broker who pays you a below-market split.

 

All of these things result in you working too hard and not making what you deserve. It’s not your job to right the wrongs of the world. It’s your job to make a living for yourself, preferably a really good one. It’s not about the number of deals you do; it’s about how much money you get to keep when the deals are done. 

You have to focus on the money if you hope to be successful. If you’re not making a profit, you’re running a charity, not a business, and you don’t get grants like charities do to make ends meet.

You have to keep up with changes in technology, industry regulations, buyer and seller priorities, and economic conditions. But the skills that I’ve listed above will take you further than any new flashy marketing plan or social media technique. No matter what’s going on in real estate, these skills will be the difference between a good agent and a great one.

Kelle Sparta is the author of The Consultative Real Estate Agent

 Building Relationships that Create Loyal Clients, Get More Referrals, and Increase Your Sales, as well as being a speaker and trainer specializing in the real estate industry. Kelle is the founder of Sparta Success Systems, a real estate training company that provides tools, products, and training to empower agents and brokers to create lives and businesses they can love. For more information, visit her website at www.spartasuccess.com.

 

More People Are Choosing to Rent
A National Apartment Association survey finds that more people prefer renting to owning in today’s market. The report also says most renters and home owners do not have plans to change their housing status within the next year.
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Auctioneers Pick Up Business in Tough Market
According to the National Auctioneers Association, auctions are up by 14 percent compared to 2009.
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Housing Still Lacks Stable Funding
FHA Commissioner David Stevens tells bankers that the home-loan market is “sick” without enough private capital.
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Defaults on Apartment-Building Loans Set Record
A report by Real Capital Analytics reveals that defaults for apartment construction loans have hit a record of 4.6 percent for U.S. banks.
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N.C. Sellers Must Disclose Proximity to Bases
Starting July 1, sellers in North Carolina will have to disclose if they live close to a military base.
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Top 8 Most Transient States
California ranked No. 1 in both gain and loss of residents in 2009, according to Movers.com. See which other states and cities made the list.
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