Author Archives: egrifenhagen
Applications for home mortgages surged more than 20 percent last week
The Mortgage Bankers Association said its seasonally adjusted index of mortgage application activity, which includes both refinancing and home purchase demand, jumped 23.1 percent in the week ended January 13.
The MBA’s seasonally adjusted index of refinancing applications climbed 26.4 percent, while the gauge of loan requests for home purchases rose 10.3 percent.
“With mortgage rates reaching new lows, refinance volume jumped,” Michael Fratantoni, MBA’s vice president of research and economics, said in a statement. “Purchase activity also increased as buyers returned to the market after the holiday season.”
The refinance share of total mortgage activity rose to 82.2 percent of applications from 80.8 percent the previous week, making it the highest refinance share since October 2010.
Fixed 30-year mortgage rates averaged 4.06 percent, down 5 basis points from 4.11 percent.
The survey covers over 75 percent of U.S. retail residential mortgage applications, according to MBA.
Source: “Mortgage Applications Surge on Refinancing Demand,” Reuters (Jan. 18, 2012)
Freddie Mac’s 2012 Outlook: Housing to Slowly Gain Ground
While most recent indicators have been upbeat about the economy inching toward a recovery in 2012, Freddie Mac’s chief economist warns that threats still loom, particularly for housing.
Freddie’s Chief Economist Frank Nothaft says that foreclosures will continue to put downward pressure on overall home prices and most likely remain high throughout 2012, although at lower levels than last year. He is forecasting for home prices to begin stabilizing in the second half of the year.
Another looming threat: A double-dip recession, Nothaft says. He predicts a one-in-four chance that the U.S. is heading back into a recession, although that risk is lower than what he predicted six months prior. Also, high unemployment continues to threaten the recovery in the housing market and increase foreclosures. Nothaft predicts little movement in the unemployment rate throughout the year.
Still, mortgage rates have helped push housing affordability higher and has been at record lows in recent weeks. Nothaft expects rates to stay low by historical standards, but he is forecasting that the 30-year fixed-rate mortgages (which have been hovering at 4 percent or lower in recent weeks) will tick up to 4.8 percent by the end of the year, and 5.6 percent by the end of 2013.
Overall, several recent indicators have pointed to a real estate market on the mend — pending sales contracts are up, existing and new home sales have increased, construction starts and spending are rebounding, and lower vacancy rates are occurring in the rental market.
Still, Nothaft told Market News International that the housing market is “moving in the right direction,” but “very slowly.”
Source: “Freddie Mac Economist: 25% Risk of U.S. Double Dip Recession,” Market News International (Jan. 5, 2012)
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Simple Steps to Your Best 2012 Business Plan, Part 1
Real estate agents are people, too. You have personal lives. You have emotional ups and downs in addition to financial ups and downs. Following my system of 16 steps, the first five of which are outlined in Part 1, will ensure that your 2012 business plan works for your business and your life.
Most of the steps in this plan can be completed in 15 minutes or less. It is important to complete each step before moving on to the next. Spend no more than 60 minutes at a time with these business-planning steps, Complete this plan in a series of brief planning sessions over at least 30 days. This allows for your creativity and insight to rise and anxiety to fall.
If you finish this simple planning process before the beginning of 2012 you will have your best year ever (or best for a long time). If it is not possible to complete this plan before the year’s end, then complete it over the next 30 days.
It is not the work that is hard. It is the self-discipline, which starts with beginning your work on this business plan, today.
The Steps, Part 1
- Make a list of your Dream Priorities in every aspect of life.
- Write your answer to this question: “What do you want your real estate career to do for your life in 2012?”
- Why do you want that? Why is that important to you?
- Who else will benefit? How will they benefit? Why is that important to you?
- Choose one of those dream priorities from #1, above, and break it down. Write what you would like to accomplish in that area by the end of each month in the next year, January trhough December. Do this quickly. You can improve it later.
- Answer this question: What are your three greatest strengths that will contribute to your success in 2012? How will each contribute to your success by the end of 2012?
- What are three to five of your real estate of business skills that need the most improvement? That is, they are costing you money, and by improving them your production will increase.
Home Owners to Lawmakers: Do More to Help Housing
That’s a key finding of a Yahoo! Real Estate survey of 1,500 current and aspiring homeowners, fielded in October. The study, known as Home Horizons 2012, was mapped to the U.S. adult population of homeowners and renters.
Altogether, 51% of American adults agree that the government should do more to rescue homeowners at risk of losing their mortgage, while 27% disagree and 22% don’t have an opinion. Among those with opinions on the matter, about two-thirds believe the government should offer additional assistance such as low-cost loans.
The study also finds that four out of five adults believe that the 2012 Presidential Election will have either a small or large influence on the housing market. Altogether, 43% of respondents believe that the national election will have a large influence on the housing market.
Neither major political party fares especially well in the study with regard to perceptions of the impact that either may make on the troubled housing market. One third of respondents said neither party would make either a positive or negative impact on the housing market.
However, more adult respondents stated that Republicans’ impact on the housing market would be negative, at 39%, edging the Democrats’ negative numbers at 32%. Accordingly, Democrats’ also scored higher positive numbers, 35% to the Republicans’ 27%.
With 11 months left until national elections, the troubled housing market is not front-and-center either in Republican debates or in Obama administration talking points. Congress, obsessed with budget deficits, appears to be experiencing bailout fatigue.
Seeking Help
Meanwhile, the housing crisis is still grim in some areas, particularly where high unemployment is the status quo. Although housing prices have stabilized in many parts of the country, it’s also true that home prices are still sinking in many cities such as Las Vegas, Nev., putting significant pressure on homeowners with negative equity.
The National Association of Realtors (NAR), a powerful industry trade group, favors government intervention. “Helping even more families stay current on their mortgage and remain in their homes will continue to reduce the negative impact of foreclosures on families and communities and aid in the recovery,” a spokeswoman told Yahoo! Real Estate.
According to Stan Humphries, Chief Economist at Zillow, “28.6% of single-family homes with mortgages are in a negative equity position. That’s about 15 or 16 million,” mortgages that may need assistance. But, he adds, “There’s no silver bullet to knock out negative equity.”
Humphries favors “options that keep the current owner in the house.” To that end, he contends that private investors have options that Fannie Mae and Freddie Mac might not be able to implement such as principle write-downs, renegotiating the terms of a mortgage to a lower rate, or in some cases renting out a house to current owner directly.”
What’s in Place
To date, the federal government has enacted two key laws to help homeowners with troubled mortgages refinance to more manageable payments:
- The Home Affordable Foreclosure Avoidance Program (HAFA) is designed to help streamline the short-sale process; and
- The Home Affordable Refinance Program (HARP) helps underwater homeowners avoid foreclosure by refinancing their mortgage to make it more affordable. But, the recently revised HARP 2 is only available for refinances of Fannie Mae and Freddie Mac held loans, according to NAR.
Is the program working effectively? Since 2008 there have been 4.02 million foreclosure sales, according to LPS Applied Analytics, but another eight million home mortgages are at risk according to a recent Bank of America report.
Still, through the third quarter of this year, the Federal Finance Housing Agency reports that it has “completed nearly 2 million foreclosure prevention actions,” of which “nearly 1.7 million … have allowed borrowers to retain homeownership, with more than one million being permanent loan modifications.”
But not everyone is happy about it. “The situation would be much worse if none of those programs or efforts had been tried,” contends Bruce Hahn, president of the Grassroots Alliance, an advocacy group in Arlington, Va. “But we still have an extremely serious problem. We need something more dramatic – a game changer.”
No Bottom Yet
Housing could take on a larger role in the 2012 national political debate if potential voters such as Bonnie, a renter in Kansas City, Mo., who is not in the market to buy a home, makes her voice heard. “I think homeowners should have a chance to keep their home, like lower payments etc.,” she says. “No one should be homeless or have to live in their cars. After all, we’re supposed to be a rich country. We send money to other countries and that’s okay, but I believe charity begins at home.”
Despite the passions of the electorate, there is no consensus political solution to the mortgage crisis. “A large-scale government policy that’s going to fix all of this – no one has seen such a thing,” says Zillow’s Humphries. “Stabilization in home prices and then a slow upward movement in prices to work down negative equity – that’s a multiyear affair.”
And homeowner bailouts may not appeal to the mortgage industry. “You’ve had many programs put in place to curb foreclosures and they really haven’t worked,” said Michelle Meyer, a senior economist at Bank of America Merrill Lynch, appearing as a guest on a Bloomberg program earlier this month. “You have a serious problem in the housing market that just needs to be worked out over time.”
Meyer sees no housing recovery on the horizon: “It will be hard for prices not to fall further – I would say another 5% decline from here on a national basis.” Paradoxically, if Meyer’s pessimistic forecast comes true, many more homeowners will demand mortgage relief programs from the federal government in 2012.
Though a thriving housing market recovery would appear to serve everyone’s interests, there are competing views about how to reverse the fortunes of this vital industry. Political solutions may be hard to come by, especially in an election year in which the presidency and possession of both houses of Congress are at stake.
Top 5 Relationship-Building Tips in Real Estate Sales
Guest Contributor Matthew Collis of IXACT Contacts says:
Relationship-building in real estate sales is paramount. It has been shown time and again that the most successful agents generate the bulk of their business from repeat clients and from referrals. What’s the key to this, the magic ingredient? It’s relationship-building! A recent survey by the National Association of REALTORS® has shown that the majority of home buyers and sellers found their agent through a referral or used an agent that they’ve worked with previously. If you want people to refer you and use your services over and over, you need to ensure you’re nurturing lifelong relationships and staying “top of mind.” Below are five great tips that will help you cement those long-term relationships with your sphere.
1. Make sure you know your clients’ birthdays. And, for that matter, learn the birthdays of all your prospects. Record those birthdates in your real estate contact management system so the CRM system will remind you when a particular birthday approaches and trigger you to send a happy birthday wish. Also, keep track of your clients’ move in dates so you can call them up on their move in anniversary. This is a great opportunity to thank them again for their business and ask if there’s anything you can do for them. Perhaps they’re looking for a good Contractor or Electrician, for example, that you can recommend.
2. Expand your professional network. A large professional network is important because business professionals can send a lot of business your way. Moreover, knowing a lot of great professionals means you’ll have knowledge of key resources you can refer to people. Referring other business professionals, such as Attorneys, Interior Designers or Home Theatre Installers, to your clients will make clients come to you in between transactions and view you as someone who continues to add value long after the sale.
3. Drip email / drip marketing campaigns can help ensure you’re staying in touch with your sphere, are top of mind, and are nurturing relationships. Drip emails are simply a series of emails that get automatically sent out at various times of your choosing. A real estate contact management system will allow you to do this. You’ll need to supplement your drip emails with more personal interactions, but drip campaigns will save you time and, if done right, can be highly effective. For example, a client of ours, Deanna, recently shared with me the tremendous success she’s had with a) assigning new leads to drip email campaigns and b) using drip email campaigns to keep in touch with past clients by providing ongoing valuable homeowner tips and advice.
4. Quarterly Keep in Touch calls, or KIT calls as I like to refer to them, are essential in my opinion. There’s nothing like picking up the phone and calling someone these days. All too often we rely solely on email communication or that trusty newsletter to keep in touch. But a call adds a personal touch. When on the phone with a past client, ask them if they need a referral and about their life. Ask how they’ve been. Next time you pick up the phone and call, you’ll have something relevant to talk about and won’t feel uncomfortable starting the conversation. For instance, you can begin with asking how John and Mary’s son’s baseball tournament went.
5. Plan special events like client appreciation parties, home exert seminars, and housewarming parties. It’s a great way to build relationships and get people to remember you so next time they’re asked about a real estate agent, or next time they’re looking to move, they’ll think of you! People simply remember events and events stick with them. Client appreciation parties, for example, really demonstrate to your clients that you appreciate their business. And as a result, you’ll get more of it. If you’re wondering what a home expert seminar is, it involves getting an expert to give a presentation to your clients and prospects where they can get some great tips on improving their home. For example, you might want to hire an Interior Designer for an hour to talk about tips on renovating bathrooms quickly and easily. Throwing a house warming party for your clients is also great because when they move in, they likely don’t know too many people on their street or in their community. Client appreciation parties, home expert seminars, and housewarming parties are all fantastic loyalty builders and will make you stand out from other REALTORS®. If you have a real estate CRM, planning and organizing these events is truly a breeze. And you won’t have to remember to do a thing!
HouseLogic Poll Finds Voters Driven by Jobs, Housing in 2012 Election
A recent survey by Houselogic.com, the consumer Web site from the National Association of REALTORS®, finds that jobs and the housing market will be two of the most important issues for voters in the 2012 election. Nearly one-third of respondents said housing will be the top issue on their mind when they head to the polls next November.
“We need to keep housing first on the nation’s public policy agenda, because housing and home ownership issues affect all Americans,” said NAR President Moe Veissi, Veissi, broker-owner of Veissi & Associates Inc., in Miami. “The results of this survey show that many Americans understand that.”
Respondents were asked “What issue area will have the greatest impact on your vote in 2012?” National security, healthcare, and energy/environment trailed housing and unemployment by wide margins:
- Jobs/Unemployment: 54 percent
- Housing: 27 percent
- National Security: 8 percent
- Healthcare: 4 percent
- Energy/Environment: 2 percent
- Other: 4 percent
With unemployment still high, it is easy to see why so many Americans are concerned about the job market. However, employment and the housing market are inextricably linked because economic growth and job creation cannot occur without a housing recovery.
Housing accounts for more than 15 percent of the U.S. Gross Domestic Product – it’s a key driver of the national economy. Home sales generate jobs. NAR estimates that for every two homes sold, one job is created. New spending on homebuilding products, furniture, and other residential investments also have a significant economic impact.
Some recent indicators show that the economy might be starting to rebound, with pending home sales rising strongly in October, according to NAR’s Pending Home Sales Index. However, any changes to current programs or incentives must not jeopardize a housing and economic recovery. Unemployment, consumer confidence and consumer spending will not rebound until a number of issues are addressed.
“NAR actively advocates public policies that promote responsible, sustainable home ownership, which will in turn support overall economic recovery,” said Veissi. “We want to ensure affordable, accessible financing; support tax policies that encourage homeownership; and help more people stay in their homes or avoid foreclosure through streamlined short sales.”
This HouseLogic survey shows Americans understand that a housing recovery is essential to the nation’s economic recovery, and many of those housing-related issues will be on the minds of voters in 2012.
HouseLogic is a free source of information and tools for homeowners from the National Association of REALTORS® that helps homeowners make smart decisions and take responsible actions to maintain, protect and enhance the value of their home. HouseLogic helps homeowners plan and organize their home projects and provides timely articles and news; home improvement advice and how-to’s; and information about taxes, home finances and insurance. For more information on official contest rules and tips on how to make smart decisions and take responsible actions to maintain, protect and enhance the value of your home, visit http://www.houselogic.com.
Source: NAR
Report Predicts Drop in Delinquencies Next Year
The number of borrowers behind on their mortgage payments is expected to drop sharply by the end of next year, according to a new report released by TransUnion.
Mortgage delinquency rates reflect the ratio of borrowers 60 or more days behind on their loan payments. Rates are expected to rise to about 6 percent during the first three months of 2012 before dropping to 5 percent by the end of the year, TransUnion forecasts. At its peak in the fourth quarter of 2009, mortgage delinquencies stood at a 6.89 percent rate.
An improving jobs picture, along with a stabilizing housing market, are expected to be the main contributors in curtailing mortgage delinquencies in 2012, TransUnion says.
But there’s still a long way to go. Even at a 5 percent rate forecasted for 2012, mortgage delinquencies will still be well above the pre-recession average of 1.5 to 2 percent, according to TransUnion.
“We have a long way to go to get back,” Steven Chaouki, a TransUnion vice president, told the Associated Press.
Source: “Mortgage Delinquency to Drop Sharply in 2012, Report Says,” Associated Press (Dec. 7, 2011)
Three Quarters of Owners Continue to Overvalue
Despite survey after survey showing that consumers expect home prices to continue to decline next year, most home owners still believe their houses are worth more than what their agents recommend.
Nearly three out of four home owners, 76 percent, believe their homes are worth more than the recommended agent listing price. By contrast, 68 percent of home buyers believe homes are overpriced, according to the latest HomeGain. Thirty-two percent said homes are overpriced by more than 10 percent.
The gap between what sellers expect and what agents recommend has actually grown slightly over the past year even though national median prices have declined about 4-7 percent this year. A year ago, some 73 percent of owners thought their homes were worth more than their agent’s recommended listing price and 69 percent of buyers thought homes were overpriced.
“The market in the Syracuse, NY area is classified as a buyers market. Sellers are still not understanding the importance of proper pricing as most sellers properties are priced 5 to 10% over market value,” said one professional.
“Seller pricing is not necessarily the problem. The issue is making it possible for buyer candidates to buy a home. More buyers equal better quality offers. The credit system needs to be reinvented,” commented another.
Forty-two percent of real estate agents and brokers and 37 percent of homeowners think that home values will decrease in the coming six months. Only 15 percent of real estate professionals expect home values to increase in the next six months, up four percent from last quarter. Fifteen percent of home owners also expect home values to increase in the next six months, up three percent from last quarter.
“Home owners and real estate professionals appear to be in sync regarding the direction of home prices. Home buyers and sellers, however, continue to remain apart as to home valuations with the vast majority of home owners thinking their homes are worth more than their agents and the market are telling them,” said Louis Cammarosano, General Manager of HomeGain.
Over 400 real estate agents and brokers and over 2,000 home owners were surveyed in HomeGain’s nationwide fourth quarter 2011 home values survey.
From – RISMedia – http://rismedia.com –
6 Ways to Go the Extra Mile
Salespeople can outdo competitors by taking one of two avenues: lowering prices or boosting the quality and quantity of service they provide to customers. All too often, however, they make the mistake of dismissing customer-service requests as an administrative burden rather than embracing them as an opportunity to distinguish themselves from the rest of the field.
Consumer polls have shown time and time again that customers will pay more for a product when impressed with the level of post-transaction service they receive. Real estate professionals who get into the habit of providing stellar service will reap the benefits in the form of increased sales, improved customer loyalty, and more business due to positive word-of-mouth advertising from happy clients.
Practitioners can ramp up their customer service by:
1. Responding to customer calls and e-mails within an hour.
2. Mailing a handwritten thank-you note to new customers once a transaction closes.
3. Proactively contacting customers to see if they have any service needs.
4. Handling customer requests expeditiously.
5. Building rapport and strengthening relationships with top clients by taking them out for a casual meal.
6. Keeping in touch with customers by mailing out a motivational or business article every six months or so.
Source: “Develop the Habit of Going the Extra Mile,” RISMedia (Dec. 4, 2011)
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