The Treasury Department on Wednesday expanded its foreclosure prevention plan, lifting the current 105 percent loan-to-value cap to refinance up to 125 percent of a home’s value.
Applications to refinance mortgages have fallen as rates have increased in the last couple of weeks, but this move may bring more borrowers to the table.
At the same time, Fannie Mae and Freddie Mac have agreed to reduce the processing fee for borrowers who select a 25-year mortgage.
Fannie said in a statement, “The reduction is intended to lure borrowers to select shorter terms and build positive equity in their homes sooner than with a typical 30-year mortgage.”
Entrepreneurs don’t retire, they just find a new project.
Over the past decade, baby boomers produced a high rate of entrepreneurial activity, and Dan Stangler, senior analyst at the Kauffman Foundation, says the number of baby boomers starting a business in their traditional retirement years is likely to increase.
In response to that analysis, U.S. News & World Report identified 10 places that it says are the best places for an entrepreneurial baby boomer to retire. It picked the areas because they have an affordable cost of living, proximity to healthcare, fun recreational amenities, and access to information, particularly colleges and university with technology-focused departments.
Lately, we (realtors) have the unenviable task of being the bearers of bad news. It seems more than ever we are having conversations with people about what the market is telling us regarding the price of their home, or we are talking to sellers about lowering the price of their property. As expected and given the recession, rarely is it good or welcomed news. I know that a lot of home owners believe that there is a course in real estate school wherein the first thing an agent is taught is to recite the following sentence, We need to lower the price.” Trust us, that is the last conversation we want to have with any client. It’s not fun for us and it’s not fun for you, but to use a cliché, “It is what it is!”
It’s important to keep in mind that one of our main jobs is to decipher and interpret the market data. These days, the data is fairly well encrypted and a good agent will be able to pinpoint where the buyers are, how many, what they are buying, why and how you can stay ahead of the curve. We find too many people who are trying to chase the market down. This is bad strategy and you know what I mean. “I’ll start a little higher than what the agent suggested because I can always come down.” That’s chasing the market down and a buyer can see that strategy from a mile away. Buyers today are so smart and savvy, it’s unlikely that you are going to outwit or out strategize them. They have done their home work, have seen dozens of properties, and know exactly what they can buy for their money. It means that they know the market better than you do.
The number one phrase of out every buyer’s mouth these days is “I want a deal.” Forget the days of “Does the home fit their needs or do they like it?” because that’s out the window. It’s all about the deal, so sellers get ahead of the curve. Be significantly better priced than all of your competition. Make it so that when a buyer walks in, the first words out their mouth is “Wow this is a value.”
Dan Polimino is a Realtor with Fuller Sotheby’s International Realty. He can be reached at DPolimino@fullerproperties.com and www.CoDreamHouse.com
Mortgage applications bounced back last week after nearly a month in the doldrums when the number of applications fell to a seven-month low.
The market index compiled by the Mortgage Bankers Association rose 6.6 percent on a seasonally adjusted basis to 548.2 points from 514.4 points the previous week.
On an unadjusted basis, the index increased 6 percent compared with the previous week and rose 17.2 percent compared with the same week a year ago.
Both purchases and refinances were up with the purchase share increasing 7.3 percent and refinances rising 5.9 percent.
A first-time home buyer tax credit of up to $8,000 has helped to move housing inventory during an otherwise sluggish real estate cycle. Now both legislators and the business community are hoping to build on the incentive’s success by expanding it.
A number of bills have been introduced in the House and the Senate that lobby for an expansion of the measure. Among the proposed changes:
Setting a new cap of $15,000.
Extending the tax break into mid-2010.
Making the benefit available to all home buyers, not just first-timers.
Offering a separate tax credit to $3,000 for borrowers who refinance.
Without a doubt, communication and expectations are two of the biggest problems we have in real estate today. By no means does real estate corner the market on a lack of communication or failure to manage expectations, but these are two topics that seem to come up a lot in conversations.
There are two types of sellers out there. The first type wants to be clued in on every step that the realtor makes including all marketing pieces, emails, phone calls, and discussions. The second type is very bottom line oriented who tells the realtor to go and do his or her thing and to call them when there is an offer.
Long ago, I started asking my sellers on how clued in they wanted to be. If they wanted it, I would send them a report each week, telling them what I did including the when, where, and how. If they just wanted the highlights, I would simply check in with them once or twice each month. Or they didn’t have to hear from me at all.
No matter what type of seller you are, I think it’s important for realtors to establish what type of communication the seller wants or needs. This, naturally is called managing expectations.
On the topic of expectations, I found out that more and more sellers have one vision of what the seller/agent relationship will look like while the agent has a completely different idea. The best example of this is marketing. Sellers have in mind as to what the agents should be doing to market their homes. This continues to be a point of friction between sellers and agents. Agents know what is working in marketing and that game plan may not be in sync with what the sellers have in mind. Agents may also be working behind the scenes on the internet, working the phones, communicating with their sphere, and following up leads. This is all marketing, but doesn’t show up on a printed page for the seller to see.
It’s important for agents to tell sellers exactly what they are going to do, to put it in writing, and then follow up with the sellers to show that it’s been done. This is managing an expectation, and you can’t do that without communication.
Dan Polimino is a Realtor with Fuller Sotheby’s International Realty. He can be reached at DPolimino@fullerproperties.com and www.CoDreamHouse.com
This stunning home features a blend of contemporary convenience and just the right amount of European touches artfully crafted into more than 6,000 square feet. Sitting on 3.3 acres, this 5 bedroom, 5 bathroom masterpiece is surrounded by sumptuous greenery and is a 5-minute stroll to Pinehurst Country Club and Colorado Academy. Exemplified by its 3-car garage and classic stucco finish, this entire property is the perfect execution of functional elegance.
Homebuyers may be surprised to find that homeowners insurance isn’t going down, despite precipitous declines in sale prices.
“There has been a lot of noise lately around market values, but market value and the cost to rebuild are two totally different things,” says Elaine Baisden, vice president of national property for property casualty insurer Travelers.
Marshall & Swift, which calculates building costs, says it can cost as much as 30 percent more to rebuild than to build. Reconstruction costs are greater because of demolition and removal expenses and the price of bringing older structures up to current codes.
While mortgage companies require borrowers to carry 100 percent coverage at time of closing, it is unnecessary to continue this coverage because the value of the land isn’t at risk. Typically, the building lot accounts for 25 percent of a home’s value.
The story goes like this: A friends of mine who is a mortgage lender was really upset and was having a horrible week when I called. It turns out that he got involved in a loan transaction for some questionable people (both the buyer and real estate agent). Now, what he knew and when he knew it is not germane to the story, but the bottom line is that my friend took all the blame when things went bad even though he was not at fault and was out significant time and money.
I seem to hear one story after another about those who have gotten involved with questionable people. It’s not just in the real estate business as it crosses all occupations and income levels. That got me thinking that maybe, the very best thing that we can do for ourselves in these economic times is to make sure that we are doing business with people of exemplary character. It’s easy these days to work with people who have the best price. It’s desirable to hire people who are top producers or have significant name recognition. It’s even easier to go with the person that tells you exactly what you want to hear.
Now, the older I get, the more I am convinced that out of all the attributes listed above, integrity trumps them all. Sure, it’s possible to find a service provider at a reasonable price that is famous and exudes integrity, but let’s be honest that it seems as though that this kind of person is a dying breed. I am constantly looking for that person or organization that breeds integrity. You know what I am talking about: people who do what they say they are going to do on the day they say they are going to do it. These are people who are not afraid of the words “work,” “responsibility,” and “whatever it takes to get the job done.” I am talking about the type of integrity that breeds dependability, peace of mind, confidence, honesty, and one that strengthens your faith in your fellow man. These are people who care enough to return your phone calls and reply to your emails on the same day.
When I find those types of people, they have my undying loyalty, respect, and my business. They should have yours too.
Dan Polimino is a Realtor with Fuller Sotheby’s International Realty. He can be reached at DPolimino@fullerproperties.com and www.CoDreamHouse.com
Higher interest rates put the brakes on mortgage refinancing this week, according to Freddie Mac.
The firm’s weekly survey pegged interest on 30-year fixed mortgages at an average of 5.59 percent — up from 5.29 percent last week and the highest rate since November 2008.
Other rates also climbed:
Interest climbed to 5.06 percent from 4.79 percent for 15-year fixed loans;
5.17 percent from 4.85 percent for five-year, adjustable-rate mortgages;
5.04 percent from 4.81 percent for one-year ARMs.
Freddie Mac chief economist Frank Nothaft says the gains are not affecting home purchase loans.
