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Friday, December 23, 2011

FInd your confidence...

“All we need is confidence.” (Charlie Brown). I like this little saying that was on the Jack’s Winning Words Blog on Thursday.

If there’s one thing that holds back many new agents it’s the lack of confidence in themselves. They tend to get into the mindset that they’ll make a fool of themselves in front of potential customers if they don’t know everything. So, that lack of confidence paralyzes them into inactivity.

In my mentoring role for new agents in our office, I try to help them see a way out of this dilemma by having them develop presentations (listing or new buyer) that focus more upon the strength of the company that they work for and the support team that is standing behind them. I get them to understand that it’s OK to say “I don’t know, but I’ll find out” and to explain how our company team supports new agents. It is relatively easy to turn what might have been an uncomfortable negative situation into a strength that actually benefits the client.

So the thing to do, especially when just getting started in the business, is to focus the client upon the strength of the company that you are a part of rather then just on your individual skills or experience. If you have confidence in your company and the people available to support you and answer questions for you, that confidence will show through in your presentations in front of clients. If you find that you really don’t have that support structure in your company, maybe you’re in the wrong company.

Happy Holidays to all!

Wednesday, December 14, 2011

There's good news and bad news in the chart...

It's feels like the market is comng back in the Milford, Michigan market area and there are statstics to prove that. When I recently went to the Altos Research site to look at the charts that they create for the markets that they track, I got the following chart for median home sale values and inventory for Milford Township and Village combined -

Real Estate Market Chart by Altos Research

It's pretty easy to see that there is good news and bad news in this chart and that perhaps one is actually causing the other.

The bad news is that inventory has fallen off a cliff. People just aren't listing right now, mainly because so many are so far underwater on their mortgages.

As a result, there's good news - median home prices for homes that have sold are soaring. It's a classic supply and demand situation. The demand for homes in the Milford community remains strong, but there are few to choose from, so the few good ones that are on the market are getting bid up.

That's good news if you've been waiting to sell. Values won't recover all of the lost 30-40% that they lost over the last 3-4 years; however, they have started a nice recovery and they are headed in the right direction. If you have a nice home, in good condition, now is a great time to list. There is obviously less competition and there will not be continued downward price pressure. In fact, you may end up on the winning end of a bidding war situation.

Just in the statistics that I track at, I can see the turn around. Prices in the Milford market were down below $90/Sq Ft for a while. Now they are back near $100/Sq Ft. That's still a far cry from the $140/Sq Ft average during the peak, but gettign closer to the long term average that we had achieved befoer the market overheated. A steady-state market in the $105 - $125/Sq Ft range is within reason and probably sustainable in this area.

Hope for Help in HARP 2.0

I suppose I’m a little like Linus sitting in the pumpkin patch on Halloween nioght awaiting the coming of The Great Pumpkin; however, I still have hope that at least one Federal program might end up doing some good for the housing industry – perhaps HARP 2.0.

The original Home Affordable Refinance Program, aka. HARP 1 – was a failure mainly because it failed to recognize the severity of the problem and had too many built in restrictions that limited the number of underwater homeowners who could qualify. HARP 2.0 lowered or removed those bars and should end up helping more homeowners. At least that’s the goal.

The major idea is to let homeowners who’s home values have sunk below what they owe on their old mortgages refinance with new loans at lower rates, even if the home wouldn’t appraise at the loan value in today’s market. In fact, the house won’t even ned to be re-appraised. The keys to the program are demonstrating the ability to continue to pay the new mortgage. You’ll note the “continue to pay” phrase. HARP 2.0 is aimed at people who have kept their current mortgages current, not those who are behind and headed for foreclosure. HARP 2.0 hopes to prevent foreclosures by providing some payment relief to those who have struggled but kept up payments, so far.

One key component to HARP 2.0 is that the mortgage on your house must be owned or guaranteed by Fannie Mae or Freddie Mac, which covers the majority of U.S. mortgages. Even if you send your money to another company called the ”mortgage servicer”, Fannie or Freddie may be in the background for your mortgage. To find out if your home qualifies, you can to go their Web sites – or and look up your address.

The program should be available now through most mortgage companies, so check with your preferred lender. If they aren’t supporting the program, check with a different lender.

So, maybe it’s not the Great Pumpkin after all; but, maybe it will help keep a few more homeowners who are struggling in this weak economy in their homes.

Wednesday, December 7, 2011

Taken’ it to the max in Texas…

You gotta love this story out of Tarrant County, Texas, as relesed by The Associated Press and rehashed in the Daily Realtor Magazine news feed.

Squatters in Texas are taking advantage of a loophole in state laws in Texas to move into $Million+ mansions. According to the story written by Yamil Berard which appeared on the Star-Telegram Web site on December 4, Texas state law allows squatters to claim property if no owner is around to challenge them. Texas squatters are apparently targeting vacant properties where owners have died or home owners are away because of a job or even illness. The story referrenced one incident in Houston, in which squatters threw away the owner’s belongings in a commercial garbage bin and moved in while the home owner was having chemotherapy (probably in a hospital).

According to the article. the laws in Texas allow a person to file a claim of adverse possession on the properties with the county clerk., much as one might do on a piece of disputed land or right-of-way in most states. The filing fee is a modest $16 and the filer must sign a pledge to keep the place up to pay property taxes and to live there for at least three years. Heck, why not, it's free!

Perhaps Texas, rather than California, is leading the nation this time on the housing front. What a great opportunity to solve the homelessness problem. Basically, if ever state had laws like Texas, the homeless could not only find housing, but they could live in the lap of luxury by squatting in vacant mansions.
Of course, we’d likely have to change the real estate model a bit. Maybe we could become “spotters” for vacant properties for some sort of fee. We’d have a list of homeless people (or maybe just people looking for a move up the real estate ladder) that we could keep an eye out for vacant homes. Apparently in Texas the owners don’t have to be gone that long, just gone and not around to contest the occupancy of their property. So, we could be on the look-out for people going on vacation and, BAM! We move a new family right into the house while they are vacationing on a cruise.

You’ve got to love the state that gave us George W. Bush and, now Rick Perry. In this case they are so far ahead of the rest of us in solving the housing problem for all Americans. Heck, this would even let us recapture the glory days of the early 2000’s – no money, no job, no problem, let us find you a place to squat. We could even run ads modeled upon the Publishers Clearing House ads - "Be on the lookout for the Squat Patrol coming to your neighborhood soon."

Sunday, December 4, 2011

An idea that is finally catching on...

I noted this week, with some amusement, that Realty Times featured an article by Tanya Marchiol, who is said to be a real estate investing guru, which espoused the same Principal Reduction solution that I've been writing about for some time. Perhaps the idea will gain traction, now that a guru is behind it, too.

Tanya does a good job of explaining why investors should be jumping on the Principal Reduction bandwagon and why the banks and other mortgage servicers are holding them back. It's all about the money involved - the fees that the servicers are charging, which is much more if they can ride a property into foreclosure than they would be if the loan were redone to include a principal reduction or even in a short sale. She also re-stated a point that I made in my earlier posts that the banks can certainly afford to take the accounting hits on these underwater loans.

Until this issue is addressed we will continue to have a slow (in some placed stalled) real estate market. The people out at the end of these bad mortgages are the only ones in the chain who can't afford to take the financial hit. So, they are holding on to underwater properties, locked into place by the very mortgage products that were made to look, oh, so attractive a few years back.

Tanya did note that the lack of action in Washington towards this solution is also driven by money - campaign contributions to the major parties and politicians - to guarantee that nothing is done to endanger those fees. It will likely take an uprising of the people even larger that the Occupy Wall Street movement to ween our politicians from the teats of the big money banks.