Hello Family & Friends,
I've been working hard to establish myself in many ways for my business. Everyday I'm adding new things to my "to do list". Today just happened to be my day of working on my Blog profile. Once you get into these things there is so much that you can do, and one of those is to add 10 email addresses to my Blog list. So, I threw in a few to test this thing out. Just in case you don't want to receive emails from this Blog just let me know and I'll see if I can't figure out how to remove you:) I'm not a huge writer, so I put articles, listings, and personal comments on this.
Enjoy!
My favorite Quote;
"All the art of living lie in a fine mingling of letting go and holding on."
Henry Ellis - English Explorer
Tuesday, November 11, 2008
Team Building and Success
Nov. 11, 2008-?I don?t know what else to do,? said the HR manager of a large manufacturing company. ?We?ve just completed another team-building program to help get rid of the silo mentality and selfish politics around here but nothing seems to last.? ?Did you know that the failure rate data on these types of training programs range from 70 to 100% depending on the study?? I said. She fell back in her chair. ?They failed to mention that when they sold me the program.? She felt like she had been duped. Many well-intended team-building programs frustrate HR executives when they fall short of their promises. But why do some teams perform while others flounder even with the same training methods? We found clues during our research of teams in the death zone; that altitude above 26,000 feet which makes long-term survival impossible because of the lack of oxygen. Climbing teams bear a resemblance to corporate teams. Some live passionately to achieve challenging missions, others behave like dysfunctional committees. They both come with all levels of implementations from nave textbook copycats to deep accountability-driven groups. And when put to the test, climbing teams and corporate teams react similarly: sometimes rising to the occasion, other times running for cover. Expeditions to the world?s highest mountains provide the perfect laboratories to examine the challenges every team faces. At these extreme altitudes success or failure is easily measured, and simple mistakes kill team members. Here, we expected to find new principals that separate the great teams from the not so great, but we found something else. Teams who produce peak performance in the face of extreme challenges - what we call high altitude teams -are remarkably different. Rather than being seduced by the latest teamwork platitudes, clichs or feel-good theories, they instead succeed by recognizing and surviving specific dangers; dangers that always emerge when a team moves to higher levels of performance. New theories don?t make these teams great, but overcoming these dangers does. In the most extreme situations, on the battlefield or in the mountains, losing to these dangers results in death. We personally learned a lot about these dangers when leading groups that have to perform at the peak of their ability in the most extreme circumstances. It?s no surprise that we find the same dangers when we help corporations develop their teams. Specifically, we find that four dangers specifically haunt high-altitude teams: Selfishness, tools seduction, cowardice, and lone heroism. Selfishness At altitude, selfishness kills people when teamwork is critically needed to deal with injuries, equipment malfunction, limited resources, and threats of avalanche and weather. In corporate teams, selfishness kills performance and projects. First, it infects a team when one or more of its members: ? Let their career or personal agendas supersede the team?s mission. ? Think that being right is more important than collaboration and dialogue. ? Take individual credit for team achievements, while blaming the team for its failures. ? Are unwilling to compromise or seek consensus during conflict. Then the damage escalates as 15-minute meetings start taking an hour, projects take twice as long as necessary, members say something outside the team meeting that should?ve been said in the meeting, or talk about someone instead of challenging them directly. What seems like innocent office politics brings down the best of teams. Postmortem business case-studies blame the failures on reasons like strategic missteps or poor implementations of good ideas. But digging deeper among the carcasses we find that selfishness alone drove the denial, avoidance, blindness, or cover-ups until it was too late. High Altitude teams, on the other hand, are driven by a fervor and zeal for achieving the team?s results - what we call a compelling saga (from the ancient Norse term) - and this inspires passion greater than selfish ego?s agenda. Is your team driven by a passionate saga, or just empty words in a mission statement? Tool Seduction In mountaineering, tool seduction endangers climbers every time they dress in the latest gear but apply the wrong techniques and behaviors to the challenge. In their overconfidence (or naivet) they end up lost on a storm-ravaged slope for days while experienced climbers are at base camp having a beer and watching the weather. Similarly, the danger from a parade of experts packing the latest tools for organizational change, leadership development, process improvement, teambuilding and other management methods bog down progress and distract teams from focusing on the vital issues. But tools are important, right? Yes. Tools offer hope. Tools make people feel like they have the right answer. Who dares argue with the ideas from a best-selling business book? But the results aren?t pretty when you get seduced by the buzzwords and cool concepts. Teams fail when tools become crutches for ?safe? answers, or worse, weapons to use against each other. And in critical moments, even the best tools break or fail, resources are lost, or circumstances change. So, the problem isn?t with the tools, but how teams relate to them. Is the team using the tools, or are the tools using the team? Industry feels the costs and risks of tool seduction every day: ? ?Our team had all the measurement charts on the wall that they trained us to have but we couldn?t figure out what we needed to do differently.? ? ?Why did our R&D team have to take a TQM class? I mean how are we supposed to measure the quality of creativity and breakthrough? The classes were a distraction. It was ridiculous.? ? ?Why did we have to waste so much time on Six Sigma? I mean we were only making bottle caps. They worked great at Three Sigma!? ? ?Our team still hasn?t recovered from the cultural damage of our latest reengineering effort.? High Altitude teams only use tools that drive team success, and don?t get distracted by industry fashion trends. They know that tool seduction can suck productivity and morale out of a team so they adapt the tools and focus on behavior - the actions and decisions made - which truly drives high performance results. Do your team?s tools allow it to act decisively, or just clog your shelves with interesting, but irrelevant, information? Do these tools fuel team passion for the challenge ahead, or derail production with useless meetings, lingo, and processes? Cowardice Cowardice dangerously stops both mountaineering and corporate teams from challenging the status quo, holding each other accountable, and exposing weaknesses. This danger happens as soon as team members are too afraid to confront violations of accountability, take necessary risks, or maintain team principles and values during times of trouble. And it causes team failures by stopping the essential act needed for effective execution . . . tell the truth. Cowardice eats truth. Lack of truth eats team performance. Initially telling the truth can upset people and cause discomfort, but good teams love it and it drives accountability to new levels. The alternative of keeping the truth at unspeakable levels only produces collateral damage which can include accumulating dead-weight from marginal team members and sticking with doomed projects are too long. High altitude teams develop bravery which allows them to achieve the accountability, risk-taking, commitment, and truthful communication necessary for achieving their goals. Rather than reveal the truth about a situation does your team choose avoidance, denial, and silence in order to avert possible discomfort, anger, retribution, and other unpleasantries? Do team members hide or only whisper about the uncomfortable team issues? Lone Heroism The danger of a selfish, glory-seeking lone-hero breaks a team as they step on other team members without even removing their crampons. Lone heroism contributes to higher operating costs, lower innovation, increased risks, delayed execution, higher turnover, and missed sales opportunities. The lone hero?s journey makes for compelling literature, but in real-life human experience dating back to the earliest prehistoric times, it typically equates with failure and death. High altitude leaders choose a different path: partnership - engaging and leveraging others to help them. Imagine how much more productive teams would be if lone heroes spent less time proving their superiority and more time producing results. Lone-hero damage can be extensive: Slow performance as everyone thinks they?re the only one able to contribute meaningfully. Low accountability from lone-heroes avoiding accountability or usurping it from others by doing their jobs. In an accountability vacuum everyone wonders why nothing is getting done. Misaligned direction by putting personal agendas ahead of team?s goals. Demoralization. No one wants to work with someone to just make that person look great. Hostages. Is there someone the company thinks it?s can?t live without? Is lone-heroism happening in your team? Who is trying to do it all? Who thinks it?s a sign of weakness to ask for help? Or, worse, who thinks he or she is the only one who can do something right? Viewing team failures from a higher altitude lets us see the hidden dangers which derail most well-intended team building methods. Which dangers most threaten your team? Don Schmincke is a dynamic keynote speaker and co-author of High Altitude Leadership with Chris Warner, releasing November 2008. Visit www.HighAltitudeLeadership.com for a free team assessment exercise, and to view their remarkable strategic, leadership, and organizational change programs.
Saturday, October 18, 2008
Buying vs Renting
Is now the right time for you to buy a home? You have many options to consider and choices to make. Buying a home is a big responsibility, financially and emotionally, but most people want to own a home. Homeownership often is referred to as"the American dream." Why is it so special? Among the reasons: Real estate often is an excellent investment, perhaps the number one
source of wealth-building for families. Owning a home has many benefits. When you make a
mortgage payment, you are building equity - and that's an investment. Owning a home also qualifies you for tax benefits that may assist you in dealing with your new financial responsibilities - such as homeowners'insurance, real estate taxes, and upkeep - which can be
substantial. But given the freedom, stability, and security of owning your own home, they are definitely worth it! Owning your own home also can be a great source of pride and stability.
But homeownership may not be for everyone. It's a big financial commitment - starting with the initial shock of your purchase (including a "down payment" and fees paid to a real estate agent, the lender and others) followed by years of monthly mortgage payments, real estate taxes, property insurance and maintenance costs. When you decide to purchase a home, you
accept responsibility for paying for these expenses. They are additional costs to your monthly mortgage payment and should be included in your budget estimates:
Property Taxes and Special Assessments
Home/Hazard Insurance
Utilities
Maintenance
Home Owner Association (HOA) Fee if applicable.
One of the advantages of renting is being generally free of most maintenance responsibilities
and the flexibility of moving almost as soon as you decide. But by renting, you lose the
chance to build equity, take advantage of tax benefits, and protect yourself against rent increases. Also, you may not be free to decorate without permission and may be at the mercy of the landlord for your housing needs. There are many considerations in choosing between renting and buying:
There are tax advantages to homeownership in both the short and long terms. The mortgage interest and real estate taxes are tax deductible, which allows you to subtract part of your housingrelated expenses from your taxable income, which could reduce your tax bill. In many cases, the amount of money a renter spends on rent can be about the same as or less than the amount a homeowner spends on a mortgage. With the tax benefit for homeowners, the savings can be significant. Do you want to spend several years in a house and in a neighborhood?
Do you enjoy lawn and garden work? Might you need to move suddenly to care for family?
Do you want to keep your assets accessible in the bank, or do you want to invest long-term in a home?
source of wealth-building for families. Owning a home has many benefits. When you make a
mortgage payment, you are building equity - and that's an investment. Owning a home also qualifies you for tax benefits that may assist you in dealing with your new financial responsibilities - such as homeowners'insurance, real estate taxes, and upkeep - which can be
substantial. But given the freedom, stability, and security of owning your own home, they are definitely worth it! Owning your own home also can be a great source of pride and stability.
But homeownership may not be for everyone. It's a big financial commitment - starting with the initial shock of your purchase (including a "down payment" and fees paid to a real estate agent, the lender and others) followed by years of monthly mortgage payments, real estate taxes, property insurance and maintenance costs. When you decide to purchase a home, you
accept responsibility for paying for these expenses. They are additional costs to your monthly mortgage payment and should be included in your budget estimates:
Property Taxes and Special Assessments
Home/Hazard Insurance
Utilities
Maintenance
Home Owner Association (HOA) Fee if applicable.
One of the advantages of renting is being generally free of most maintenance responsibilities
and the flexibility of moving almost as soon as you decide. But by renting, you lose the
chance to build equity, take advantage of tax benefits, and protect yourself against rent increases. Also, you may not be free to decorate without permission and may be at the mercy of the landlord for your housing needs. There are many considerations in choosing between renting and buying:
There are tax advantages to homeownership in both the short and long terms. The mortgage interest and real estate taxes are tax deductible, which allows you to subtract part of your housingrelated expenses from your taxable income, which could reduce your tax bill. In many cases, the amount of money a renter spends on rent can be about the same as or less than the amount a homeowner spends on a mortgage. With the tax benefit for homeowners, the savings can be significant. Do you want to spend several years in a house and in a neighborhood?
Do you enjoy lawn and garden work? Might you need to move suddenly to care for family?
Do you want to keep your assets accessible in the bank, or do you want to invest long-term in a home?
Thursday, October 16, 2008
Lender Checklist: What You Need for a Mortgage
□ W-2 forms — or business tax return forms if you're self-employed — for the last two or three years for every
person signing the loan.
□ Copies of at least one pay stub for each person signing the loan.
□ Account numbers of all your credit cards and the amounts for any outstanding balances.
□ Copies of two to four months of bank or credit union statements for both checking and savings
accounts.
□ Lender, loan number, and amount owed on other installment loans, such as student loans and
car loans.
□ Addresses where you’ve lived for the last five to seven years, with names of landlords if
appropriate.
□ Copies of brokerage account statements for two to four months, as well as a list of any other major assets of
value, such as a boat, RV, or stocks or bonds not held in a brokerage account.
□ Copies of your most recent 401(k) or other retirement account statement.
□ Documentation to verify additional income, such as child support or a pension.
□ Copies of personal tax forms for the last two to three years.
person signing the loan.
□ Copies of at least one pay stub for each person signing the loan.
□ Account numbers of all your credit cards and the amounts for any outstanding balances.
□ Copies of two to four months of bank or credit union statements for both checking and savings
accounts.
□ Lender, loan number, and amount owed on other installment loans, such as student loans and
car loans.
□ Addresses where you’ve lived for the last five to seven years, with names of landlords if
appropriate.
□ Copies of brokerage account statements for two to four months, as well as a list of any other major assets of
value, such as a boat, RV, or stocks or bonds not held in a brokerage account.
□ Copies of your most recent 401(k) or other retirement account statement.
□ Documentation to verify additional income, such as child support or a pension.
□ Copies of personal tax forms for the last two to three years.
Common First Time Home Buyer Mistakes
1. They don’t ask enough questions of their lender and end up missing out on the best deal.
2. They don’t act quickly enough to make a decision and someone else buys the house.
3. They don’t find the right agent who’s willing to help them through the homebuying process.
4. They don’t do enough to make their offer look appealing to a seller.
5. They don’t think about resale before they buy. The average first-time buyer only stays in a home for four years.
2. They don’t act quickly enough to make a decision and someone else buys the house.
3. They don’t find the right agent who’s willing to help them through the homebuying process.
4. They don’t do enough to make their offer look appealing to a seller.
5. They don’t think about resale before they buy. The average first-time buyer only stays in a home for four years.
Wednesday, September 24, 2008
Alger Hieghts, MI Homes for Sale!
Details
Address: 1039 Ottillia St SE Type: Residential Style: 1 1/2 Story Bedrooms: 3 Bathrooms: 1 Garage: Double, Detached Basement: Yes, Full Size: 936 sq. ft. Lot Type: Rectangular Lot Size: 46ft x 150ft Year Built: 1950 MLS®: 730868
Description
A perfect home for that first time hme buyer. The home features a living room with a fireplace and penty of room for storage. The basement has a fireplace as well and ready to be finished into a family room. The back yard is fenced in with a deck for entertaining. The home is located close to many conveniences such as shopping, entertainment, and the city golf courses. Make an offer today!
Features
Interior Features
▪ Carpeted Floors
Sewer/Water Systems
▪ Public
Exterior Finish
▪ Aluminum
Lot Features
▪ Deck
▪ Fenced Yard
Roof
▪ Asphalt Shingles
Extra Features
▪ Cable Available
▪ High Speed Internet Available
Heating
▪ Forced Air
Jeff Newberg
Exit Success Realty
1009 44th St
Wyoming, MI 49509
Cell: 231-740-6775
Grand Rapids, MI Homes for Sale!
Details:
Address: 1030 Crosby St NW Type: Residential Style: 2 Story Bedrooms: 3 Bathrooms: 2 Garage: Double, Detached Basement: Yes, Full Size: 1,350 sq. ft. Lot Type: Rectangular Lot Size: 44ft x 132ft Year Built: 1880 MLS®: 730866
Description:
This home is very well maintained and has been completely updated. The updates are from top to bottom with a new roof, siding, electrical, drywall, Int & Ext doors, trim, flooring and some windows. This is also a newer two stall garage with the home which has cable tv wire to it. The home is move in ready and close to schools, shopping and downtown. Don't miss out on this one!
Features:
Interior Features
▪ Hardwood Floors
Heating
▪ Forced Air
Exterior Finish
▪ Vinyl
Sewer/Water Systems
▪ Public
Roof
▪ Asphalt Shingles
Lot Features
▪ Front Porch
▪ Landscaped
▪ Patio
▪ Trees / Shrubs
Appliances
▪ Dishwasher
▪ Gas Range
▪ Microwave
▪ Refrigerator
Extra Features
▪ Cable Available
▪ High Speed Internet Available
Jeff Newberg
Exit Success Realty
1009 44th St. SW
Wyoming, MI 49509
Cell: 231-740-6775
Wednesday, August 13, 2008
Water Frontage! Scottville, MI
Exit Success Realty
1009 44th St. SW
Phone:
(616) 534-4480 x278
Cell:
(231) 740-6775
Fax:
(616) 828-0212
Details
Address: 756 W. Sippy Rd. Type: Residential Style: Lot / Land Lot Type: Rectangular Lot Size: 0.46 acres 105ft x 271ft MLS®: 601256
Description
St. Mary's all sport lake with limited public access. Property has a SW view with 105ft of sandy bottom beach. Buildable lot with walkout potential. Property has been perk tested for well and septic. Resrictive covenants per request. Perfect for seasonal or year around living. Close to Pentwater, Ludington, and Lake Michigan.
Features
View
▪ Lake
(616) 534-4480 x278
Cell:
(231) 740-6775
Fax:
(616) 828-0212
Details
Address: 756 W. Sippy Rd. Type: Residential Style: Lot / Land Lot Type: Rectangular Lot Size: 0.46 acres 105ft x 271ft MLS®: 601256
Description
St. Mary's all sport lake with limited public access. Property has a SW view with 105ft of sandy bottom beach. Buildable lot with walkout potential. Property has been perk tested for well and septic. Resrictive covenants per request. Perfect for seasonal or year around living. Close to Pentwater, Ludington, and Lake Michigan.
Features
View
▪ Lake
Holland, MI Condo
"Like new, built in 2004"
Exit Success Realty
1009 44th St. SW
Wyoming, MI 49509
Jeff Newberg
Email Jeff
Phone:
(616) 534-4480 x278
Cell:
(231) 740-6775
Fax:
(616) 828-0212
Details
Address: 4716 Heritage Meadow Dr. Type: Residential Style: Single Story Bedrooms: 2 Bathrooms: 2 Garage: Single, Attached Basement: Yes, Full "Finished" Size: 950 sq. ft. "1900 Sq. Ft. including basement." Lot Type: Rectangular Year Built: 2004 Taxes: $1,800.00 (2007) Condo Fees: $117.00 MLS®: 715207
Description
Built in 2004 and still like new. This condo in Heritage Meadows Development offers a quiet lifestyle in a country setting. The unit has many newer updates and has been completely been completely finished in the lower level. The unit boasts two full baths with tile floors, a deck off the living room and patio off the lower bedroom. There is also a den that could be converted into a third bedroom. Holland Christian Schools are close by, and many other convieniences. Don't miss out on this one!
Features
Interior Features
▪ Carpeted Floors
▪ Laundry Room
Heating
▪ Forced Air
Exterior Finish
▪ Brick
▪ Vinyl
Sewer/Water Systems
▪ Public
Roof
▪ Asphalt Shingles
Lot Features
▪ Courtyard
▪ Deck
▪ Landscaped
▪ Lawn
▪ Patio
Appliances
▪ Dishwasher
▪ Dryer
▪ Garbage Disposal
▪ Microwave
▪ Refrigerator
▪ Stove
▪ Washer
Extra Features
▪ Cable Available
▪ Garage Door Opener
▪ High Speed Internet Available
▪ Pets Allowed
▪ Satellite Dish
▪ Storage
Cooling
▪ Central Air
Jeff Newberg
Email Jeff
Phone:
(616) 534-4480 x278
Cell:
(231) 740-6775
Fax:
(616) 828-0212
Details
Address: 4716 Heritage Meadow Dr. Type: Residential Style: Single Story Bedrooms: 2 Bathrooms: 2 Garage: Single, Attached Basement: Yes, Full "Finished" Size: 950 sq. ft. "1900 Sq. Ft. including basement." Lot Type: Rectangular Year Built: 2004 Taxes: $1,800.00 (2007) Condo Fees: $117.00 MLS®: 715207
Description
Built in 2004 and still like new. This condo in Heritage Meadows Development offers a quiet lifestyle in a country setting. The unit has many newer updates and has been completely been completely finished in the lower level. The unit boasts two full baths with tile floors, a deck off the living room and patio off the lower bedroom. There is also a den that could be converted into a third bedroom. Holland Christian Schools are close by, and many other convieniences. Don't miss out on this one!
Features
Interior Features
▪ Carpeted Floors
▪ Laundry Room
Heating
▪ Forced Air
Exterior Finish
▪ Brick
▪ Vinyl
Sewer/Water Systems
▪ Public
Roof
▪ Asphalt Shingles
Lot Features
▪ Courtyard
▪ Deck
▪ Landscaped
▪ Lawn
▪ Patio
Appliances
▪ Dishwasher
▪ Dryer
▪ Garbage Disposal
▪ Microwave
▪ Refrigerator
▪ Stove
▪ Washer
Extra Features
▪ Cable Available
▪ Garage Door Opener
▪ High Speed Internet Available
▪ Pets Allowed
▪ Satellite Dish
▪ Storage
Cooling
▪ Central Air
Friday, June 20, 2008
Fastest Growing Real Estate Markets
Daily Real Estate News June 17, 2008
Despite the housing crisis, there are cities where prices are expected to rise significantly in the coming years. Here are the top 10 cites where analysts for Money Magazines expect price appreciation.
McAllen, Texas
Rochester, N.Y.
Birmingham, Ala.
Syracuse, N.Y.
Buffalo/Niagara Falls, N.Y.
New Orleans, La.
Scranton, Pa.
Grand Rapids, Mich.
Baton Rouge, La.
El Paso, Texas
Source: Money (06/15/08)
Despite the housing crisis, there are cities where prices are expected to rise significantly in the coming years. Here are the top 10 cites where analysts for Money Magazines expect price appreciation.
McAllen, Texas
Rochester, N.Y.
Birmingham, Ala.
Syracuse, N.Y.
Buffalo/Niagara Falls, N.Y.
New Orleans, La.
Scranton, Pa.
Grand Rapids, Mich.
Baton Rouge, La.
El Paso, Texas
Source: Money (06/15/08)
Common First-Time Home Buyer Mistakes
1. They don’t ask enough questions of their lender and end up missing out on the best deal.
2. They don’t act quickly enough to make a decision and someone else buys the house.
3. They don’t find the right agent who’s willing to help them through the homebuying process.
4. They don’t do enough to make their offer look appealing to a seller.
5. They don’t think about resale before they buy. The average first-time buyer only stays in a home for four years.Source: Real Estate Checklists and Systems, www.realestatechecklists.com.
2. They don’t act quickly enough to make a decision and someone else buys the house.
3. They don’t find the right agent who’s willing to help them through the homebuying process.
4. They don’t do enough to make their offer look appealing to a seller.
5. They don’t think about resale before they buy. The average first-time buyer only stays in a home for four years.Source: Real Estate Checklists and Systems, www.realestatechecklists.com.
Monday, June 2, 2008
Existing Home Sales Dip 1% in April
Existing-home sales slowed in April, partly because tight lending guidelines hampered home buyers. But there are some things to be happy about: A greater number of market areas are showing sales gains from a year ago, and a recent reversal in mortgage policy means the market is better positioned for a turnaround, according to the NATIONAL ASSOCIATION OF REALTORS®. Existing-home sales – including single-family, townhomes, condominiums and co-ops – declined 1.0 percent to a seasonally adjusted annual rate of 4.89 million units in April from an upwardly revised pace of 4.94 million in March, and are 17.5 percent below the 5.93 million-unit level in April 2007. More Favorable Mortgage Options Will HelpWith less-restrictive mortgage options opening up for buyers, “we could see an upturn in home sales this summer,” says NAR President Richard F. Gaylord. Last week, Freddie Mac and Fannie Mae announced that they were eliminating their “declining market” policies, effective June 1. NAR and others believed the policy was bad for the housing market because it discouraged consumers from buying homes in areas hardest-hit by foreclosures.“This means consumers across the country will have access to safe, affordable financing with down payments of only 5 percent on most mortgages, with 100 percent financing available on some loan products.” Lawrence Yun, NAR chief economist, said eliminating restrictive policies should be a big help to home buyers. “I would encourage buyers who were disappointed by poor mortgage options to take another look at the market because the lending changes are significant,” he said. “Also, a recent notable drop in interest rates on conforming jumbo loans will help consumers in high-cost markets like California and New York.”National Prices, Inventory LevelsNationally, the median existing-home price for all housing types was $202,300 in April, which is 8.0 percent below a year ago when the median was $219,900. Because the slowdown in sales from a year ago is greatest in high-cost areas, there is a downward distortion to the national median with relatively more sales in low- and moderate-priced markets.
Total housing inventory at the end of April rose 10.5 percent to 4.55 million existing homes available for sale, which represents an 11.2-month supply at the current sales pace, up from a 10.0-month supply in March.
Mortgage rates declined, according to Freddie Mac. The national average commitment rate for a 30-year, conventional, fixed-rate mortgage slipped to 5.92 percent in April from 5.97 percent in March; the rate was 6.18 percent in April 2007.
Single-family home sales slipped 0.5 percent to a seasonally adjusted annual rate of 4.34 million in April from 4.36 million in March, and are 16.1 percent below the 5.17 million-unit level recorded one year ago. The median existing single-family home price was $200,700 in April, down 8.5 percent from April 2007.
Existing condominium and co-op sales fell 5.2 percent to a seasonally adjusted annual rate of 550,000 units in April from 580,000 in March, and are 27.9 percent below the 763,000-unit pace in April 2007. The median existing condo price was $214,900 in April, which is 3.7 percent below a year ago. Regional Sales Volume, PricesThe unusual mix of market conditions around the country continues, but areas showing healthy price gains include Greenville, S.C., and Springfield, Mo., both with solid local economies. “On the other hand, some markets like San Diego, Calif., and Fort Myers, Fla., are experiencing rising sales after sudden double-digit drops in local home prices, so lower prices and low interest rates are starting to generate results,” Yun said.
In the West, existing-home sales rose 6.4 percent in April to a level of 1.00 million but are 15.3 percent below a year ago. The median price in the West was $285,700, which is 16.7 percent lower than April 2007.
In the South, existing-home sales were unchanged from March at an annual rate of 1.92 million in April, but are 18.6 percent below April 2007. The median price in the South was $170,800, down 5.1 percent from a year ago.
In the Northeast, existing-home sales fell 4.4 percent to an annual pace of 870,000 in April, and are 14.7 percent below a year ago. The median price in the Northeast was $262,000, which is 7.7 percent below April 2007.
In the Midwest, existing-home sales were at an annual rate of 1.10 million in April, which is 6.0 below March and 19.7 percent lower than April 2007. The median price in the Midwest was $159,100, down 2.9 percent from April 2007.
Total housing inventory at the end of April rose 10.5 percent to 4.55 million existing homes available for sale, which represents an 11.2-month supply at the current sales pace, up from a 10.0-month supply in March.
Mortgage rates declined, according to Freddie Mac. The national average commitment rate for a 30-year, conventional, fixed-rate mortgage slipped to 5.92 percent in April from 5.97 percent in March; the rate was 6.18 percent in April 2007.
Single-family home sales slipped 0.5 percent to a seasonally adjusted annual rate of 4.34 million in April from 4.36 million in March, and are 16.1 percent below the 5.17 million-unit level recorded one year ago. The median existing single-family home price was $200,700 in April, down 8.5 percent from April 2007.
Existing condominium and co-op sales fell 5.2 percent to a seasonally adjusted annual rate of 550,000 units in April from 580,000 in March, and are 27.9 percent below the 763,000-unit pace in April 2007. The median existing condo price was $214,900 in April, which is 3.7 percent below a year ago. Regional Sales Volume, PricesThe unusual mix of market conditions around the country continues, but areas showing healthy price gains include Greenville, S.C., and Springfield, Mo., both with solid local economies. “On the other hand, some markets like San Diego, Calif., and Fort Myers, Fla., are experiencing rising sales after sudden double-digit drops in local home prices, so lower prices and low interest rates are starting to generate results,” Yun said.
In the West, existing-home sales rose 6.4 percent in April to a level of 1.00 million but are 15.3 percent below a year ago. The median price in the West was $285,700, which is 16.7 percent lower than April 2007.
In the South, existing-home sales were unchanged from March at an annual rate of 1.92 million in April, but are 18.6 percent below April 2007. The median price in the South was $170,800, down 5.1 percent from a year ago.
In the Northeast, existing-home sales fell 4.4 percent to an annual pace of 870,000 in April, and are 14.7 percent below a year ago. The median price in the Northeast was $262,000, which is 7.7 percent below April 2007.
In the Midwest, existing-home sales were at an annual rate of 1.10 million in April, which is 6.0 below March and 19.7 percent lower than April 2007. The median price in the Midwest was $159,100, down 2.9 percent from April 2007.
Friday, May 2, 2008
Short Sale Success
Unfortunately, short sales are a reality for home owners who owe more than their property is worth. If you have patience, persistence, and a knack for problem-solving, this niche could be for you.
You’re so happy you got the listing — at least until the sellers inform you the price you’re suggesting based on your careful CMA just isn’t enough. Why? They owe more than that on their mortgage and home equity loans. Welcome to the world of short sales. Flat or falling home prices, home-equity credit lines, 100-percent financing that sucked out equity, and spiking interest rates on adjustable mortgages are converging to create a regrettable, but expanding, niche for real estate practitioners: the short sale. To help you gain a better understanding of short sales and what it takes to specialize in this growing area, we took a look at some of the most common questions on this topic that you and your customers likely will face today. Armed with this information, you can decide whether short sales are an avenue worth exploring for your business. What is a short sale? A short sale occurs when the net proceeds from the sale of a home are not enough to cover the sellers’ mortgage obligations and closing costs, such as property taxes, transfer taxes, and the real estate practitioner’s commission. The seller is unwilling or unable to cover the difference. Some — although by no means all — short sellers may also be in default on their mortgage loans and be headed for foreclosure. However, home owners who bought at the top of the market or who took out large amounts of equity with a refinance and who now need to sell because of divorce or job transfer may also find themselves upside down, owing more than the home is currently worth when closing costs are factored in. Tip: Losing your home can be very emotional and most people don’t want to face up to the reality until foreclosure sets in. "You have to have to have a very soft sell approach, but still keep sellers focused on getting forms and paperwork complete," says Sheryl Thomson, associate broker, Exit Island and Beach Realty, Merritt Island, Fla. Other sellers simply don’t understand that if they have assets, such as stocks or a high-salaried job, a lender is not going to let them just walk away from a short sale without signing a note to repay what they owe, says Steve White, broker with Keller Williams VIP Properties, Santa Clarita, Calif. How do I know it’s short? A CMA will be your first indicator, but you also need to ask the seller what their outstanding debt is and calculate the cost associated with a sale — from transfer taxes to your commission. This will give you an estimate of the net proceeds that will be realized, often called the net sheet. This information can then be entered into a HUD-1 Settlement Statement to calculate out the final, negative result at closing. Some lenders also have their own forms. Check with the title company and the lender to get exact figures on closing costs and loan balances and to find out what procedures they have in place. If they can afford it, sellers should also consider getting a home inspection to determine what repairs are needed on a home and how this might affect its value, says White. Tip: Get the seller to send a brief letter to all mortgage holders, giving them permission to speak with you. Otherwise, privacy laws will prevent them from talking to you about the loans, says Larry Hollingsworth, associate with HomeCity Realty, Dallas/Frisco, Texas, and a short-sale course instructor. It’s also critical to build a relationship with the seller’s lender. Once you have credibility, the entire process becomes easier, he says. Who do I and the seller need to talk to about the problem? If there are a first and second mortgage or a home equity line of credit, you may have to talk to more than one lender to get approval for a short sale. In addition, you may also need approval from the entity that holds the pool of loans if the mortgage has been securitized. "The presence of two lenders makes a short sale more complicated since it’s often the lender holding the second, or junior, mortgage that has to absorb most of the loss," says White, who with Gina Covello, e-Pro®, broker associate at Keller Williams Realty, Studio City, Calif., teaches a course called “The Anatomy of the Short Sale.” Opinions differ, but most experts suggest that you let the lender involved know as soon as possible of the potential short sale. Others say you should wait until you have an offer because you’ll get no action until then. “Without a viable purchase offer, your deal won’t be considered by mortgagees,” says Margot Cole-Murphy, broker with RE/MAX Equity Group, Portland, Ore.Tip: Be sure you contact the bank’s loss mitigation department, which will be the group to decide whether to accept a short sale, rather than the collection or customer service department, which is only interested in recouping past due loan payments. "Finding the decision maker is often one of the biggest initial challenges in a short sales," says Thomson. What information will the bank need to decide whether to accept a short sale? The sellers’ submission package should include W-2 forms from employers (or a letter explaining the seller is unemployed), bank statements, two years of tax returns, and other financial documents outlining income and debt obligations. The bank will also need comps or a broker’s price opinion showing your estimate of value. In addition, the sellers should submit a “hardship letter,” explaining the circumstances that make it impossible for them to pay the full amount of the loan. The seller needs to be able to show true financial hardship. Someone with the assets or the income to pay is unlikely to be considered, say most interviewees. Tip: In preparing the package, be careful about discrepancies between the seller’s income and the income used to obtain the loan, cautions Lance Churchill, an attorney and instructor on short sales and REOs with FrontLine Seminars. A big gap may indicate mortgage fraud, unless employment circumstances have drastically changed. What are the options besides a short sale? Thanks to programs such as those proposed by Fannie Mae and Freddie Mac to assist subprime borrowers, many lenders are more willing to offer loan modification options. This option can extend the term of the loan, add on delinquent payments to the loan principal, and/or reduce the interest rate to make the loan more manageable for the home owner. Another option is a repayment plan that requires home owners to increase their monthly payments until the loan is current, says Loni Parmelly, a real estate practitioner and consultant who specializes in short sales. Parmelly also is author of Success in Short Sales (2004), a book she sells on her Web site. It may be possible to refinance an adjustable rate loan with a Federal Housing Authority or conventional fixed loan. Note that lenders will not postpone a foreclosure just because a property is listed, although they may postpone if you have a reasonable offer in the works. Tip: The ideal candidate for a short sale is still making loan payments and has a credit rating worth preserving. Otherwise, it may not be worth going through the complicated process, says Steve Pierce, broker and operating principal of Keller Williams Benchmark Properties, Fremont, Calif. How should I price a short sale property? In general, most short sale experts say to price the property at or near fair market value, although a few will begin with the total payoff amount owned by the seller. How frequently prices are dropped will depend in part on whether the property is in preforeclosure. Most banks have a formula for what percentage under market value they will accept, say interviewees. Figures cited vary from 8 percent under to almost 20 percent under. "I always price the property 10 percent lower than comparable to peak buyer interest and initiate buyer activity," says Cole-Murphy, who’s also founder and curriculum developer for Real Estate Pro Guides, a line of educational books for practitioners. However, it’s important for buyers to understand that the bank will not give away the property, she says. Tip: Most lenders will want to get a broker’s price opinion or even an appraisal to see what the property is worth before you and seller set a list price. One way to help ensure that the bank’s estimate of value is realistic is to offer comps of recent sales — both traditional and REO, says Churchill, who is also the author of The Foreclosure Specialist: A Real Estate Agent’s Complete Guide on Working in the Foreclosure Market (Valco Press, 2007). “Practitioners who do BPOs are rated in part on how close their estimates are to the final sale price, so they usually welcome information on legitimate comps,” he says. What and how should I disclose about the short-sale property to prospective buyers?Opinions vary on this topic, although most experts favor disclosing that a property is a short sale in the comments section of the MLS listing. Others suggest waiting to disclose the need for lender approval of the sale until a buyer is ready to make an offer. Debra Allen, ABR®, e-Pro®, with Prudential Arizona Properties, Gilbert, Ariz., uses a disclosure form prepared by her brokerage just for short sales. She also had a special sign rider for the yard sign made indicating a property is a short sale. Tip: Watch out for unethical investors who will try to convice an owner facing foreclosure to sign a quit-claim deed for the property, and then lease the property, warns Jim Cacioppo, broker/owner of Grand Realty Group. Grayslake, Ill. In such cases, the former owners will still be liable for the mortgage payments, even though they no longer own the house. How long does it take to complete a short sale? Although response times vary from lender to lender, it can take two weeks or as long as 60 days to receive an approval of a short sale from a lender. That’s why it’s critical that buyers and their representative understand and accept that time frame before they make an offer. An addendum to the California Association of REALTORS® purchase contract includes a provision allowing either party to cancel a short-sale contract within a set period if the seller hasn’t gotten the deal approved, says White. Properties with securitized loans (which are the majority these days) may require a longer time to get an approval of a short sale because of the possible need for approval from the entity holding the pool of securities, says Churchill. Tip: Keep in mind that the purchase contract on a short-sale property is a legally binding agreement once the earnest money has been deposited. Without language in the contract stating that the lenders must approve the offer and release all liens on the property, the seller may face a legal problem for failing to execute the contract if the short sale is not approved, says Hollingsworth. What can the seller and I do to make a short sale more attractive to a lender? Getting a lender to approve a short sale is primarily a question of economics. You have to provide hard numbers to show that the amount of money a bank will realize on the short sale is better than the amount it may recoup from foreclosing on the property and selling the property as an REO, says Todd Ruckle, ABR, RE/MAX Associates Inc., Newark, Del. A 2002 study by Craig Focardi of the Tower Group estimated that the entire cost of a foreclosure was $58,759 and took 18 months. Other factors that can influence a bank’s decision include the liability risk it assumes by owning the property after foreclosures, the money tied up during the holding period for a foreclosure and REO resale, additional costs associated with an REO such as attorneys’ fees, and the additional reserves it will need if REOs rise in the bank’s portfolio. Tip: A buyer that is willing to close in 30 days and who can make a substantial down payment may make the deal more attractive than a buyer who wants 95 percent financing, notes Michael Termine, GRI, CRB, associate broker, Prudential Rand Realty, New York City. All buyers should be preapproved for a mortgage before submitting the offer. However, to avoid unnecessary costs, buyers should wait on having a home inspection and an appraisal for the loan until after the bank has accepted the short sale proposition, say Cole-Murphy. Genuine hardship, such as a lost job or high medical bills from an illness may also have an influence, says Covello. What are the seller’s options if a short sale is rejected by the lender? There are a variety of reasons a bank will reject a short sale — from too low a price to too many files on the loss mitigator’s desk. You can look for another buyer or even try resubmitting the same contract. "Banks don’t want to take properties back in foreclosure, so they are going to do everything they can to make it work," says Pierce. You also need to prepare your seller in advance for the possibility of foreclosure if a short sale fails, says Parmelly. Tip: A short sale might be rejected if the loan is less than a year old. In such cases, the servicer that’s bought the loan can often require the original lender to buy it back, says Hollingsworth. What financial or credit liabilities will a seller have as a result of a short sale? Many lenders ask sellers to sign a promissory note for all or part of the difference between the proceeds of the short sale and the debt obligation as a condition to a short sale. In such cases, the note gives lenders the right to sue a seller and attach other assets if the note is not paid when due. It’s particularly important to understand this distinction if you work in states such as California that have a nonrecourse mortgage, says Churchill. In such states, the lender cannot pursue a deficiency judgment against a seller for any deficiencies after a property is foreclosed. Because of this distinction, sellers who are already in default on a mortgage and do not have the resources to pay off a separate promissory note after a short sale might be better off letting the lender foreclose, he says. If you are working in a state in which mortgage loans are nonrecourse, be sure and alert your seller-clients to this distinction. Tip: Having a portion of a loan forgiven may have an adverse affect on the seller’s credit. Encourage your client to try and sign a lease on an apartment before credit is further damaged, suggests Roberta Murphy, an associate broker with Windermere Exclusive Properties, San Diego. What tax liabilities will a seller have as a result of a short sale? One often overlooked aspect of short sales is that a seller must count any amount forgiven by the lender as income and pay taxes on that income, even if no actual money was received. The IRS requires lenders to submit a Form 1099 stating the forgiven amount. Sellers who meet the Internal Revenue Service definition of insolvency (either in bankruptcy or with debts exceeding assets) will not have to pay taxes on the forgiven amount. Tip: The U.S. House of Representatives has introduced the Mortgage Cancellation Tax Relief Act (H.R. 1876), which would eliminate taxes on any debt forgiven on a principal residence through either short sale or foreclosure. The NATIONAL ASSOCIATION OF REALTORS® has been working to support this bill. What compensation will I receive as the real estate salesperson or broker in a short sale? Banks are going to want you to discount your commission. "It’s the first place they’ll look to save on closing costs," says Ruckle. Rates offered can vary, but are typically 1 percent to 2 percent below averages in the market, say interviewees. However, says Hollingsworth, more lenders now seem willing to pay a full commission on sales. Tip: When you offer cooperative compensation through the MLS, be sure you also advise potential cooperating brokers that the gross commission established in your listing agreement is subject to court or lender approval and could potentially be reduced. You might also indicate in the remarks or comments field how you’ll share the compensation you receive with the successful cooperating broker in the event the gross commission is reduced, instead of locking yourself to a specific percentage of compensation to the cooperating broker, says White. Where can I find clients if I’m interested in specializing in short sales? Word of mouth remains the biggest source of new business, experts say, but you can also promote your services to individuals attending credit counseling classes (now required prior to filing bankruptcy), to people who receive state notices of loan defaults, and to home owners named on lists of ARMs that will be resetting in the next few months. To find buyer clients, creativity is a plus. For example, Thomson is developing a monthly “Short Sale Hot Sheet” she e-mails to investors. Tip: FSBOs are another good source since many upside-down sellers think they can’t afford to pay a commission and so try to sell on their own. Many don’t realize that in a short sale, the lender pays the broker’s commissions, says Churchill. Are short sales for me? With many more adjustable rate mortgages ready to reset to higher loan amounts in the next couple of years, short sales represent a growing sector of the market. However, because sales are time consuming, they aren’t for everyone. "I always say that if you’re going to succeed in short sales, you need the 3 Ps — patience, persistence, and problem solving," says Cacioppo.
You’re so happy you got the listing — at least until the sellers inform you the price you’re suggesting based on your careful CMA just isn’t enough. Why? They owe more than that on their mortgage and home equity loans. Welcome to the world of short sales. Flat or falling home prices, home-equity credit lines, 100-percent financing that sucked out equity, and spiking interest rates on adjustable mortgages are converging to create a regrettable, but expanding, niche for real estate practitioners: the short sale. To help you gain a better understanding of short sales and what it takes to specialize in this growing area, we took a look at some of the most common questions on this topic that you and your customers likely will face today. Armed with this information, you can decide whether short sales are an avenue worth exploring for your business. What is a short sale? A short sale occurs when the net proceeds from the sale of a home are not enough to cover the sellers’ mortgage obligations and closing costs, such as property taxes, transfer taxes, and the real estate practitioner’s commission. The seller is unwilling or unable to cover the difference. Some — although by no means all — short sellers may also be in default on their mortgage loans and be headed for foreclosure. However, home owners who bought at the top of the market or who took out large amounts of equity with a refinance and who now need to sell because of divorce or job transfer may also find themselves upside down, owing more than the home is currently worth when closing costs are factored in. Tip: Losing your home can be very emotional and most people don’t want to face up to the reality until foreclosure sets in. "You have to have to have a very soft sell approach, but still keep sellers focused on getting forms and paperwork complete," says Sheryl Thomson, associate broker, Exit Island and Beach Realty, Merritt Island, Fla. Other sellers simply don’t understand that if they have assets, such as stocks or a high-salaried job, a lender is not going to let them just walk away from a short sale without signing a note to repay what they owe, says Steve White, broker with Keller Williams VIP Properties, Santa Clarita, Calif. How do I know it’s short? A CMA will be your first indicator, but you also need to ask the seller what their outstanding debt is and calculate the cost associated with a sale — from transfer taxes to your commission. This will give you an estimate of the net proceeds that will be realized, often called the net sheet. This information can then be entered into a HUD-1 Settlement Statement to calculate out the final, negative result at closing. Some lenders also have their own forms. Check with the title company and the lender to get exact figures on closing costs and loan balances and to find out what procedures they have in place. If they can afford it, sellers should also consider getting a home inspection to determine what repairs are needed on a home and how this might affect its value, says White. Tip: Get the seller to send a brief letter to all mortgage holders, giving them permission to speak with you. Otherwise, privacy laws will prevent them from talking to you about the loans, says Larry Hollingsworth, associate with HomeCity Realty, Dallas/Frisco, Texas, and a short-sale course instructor. It’s also critical to build a relationship with the seller’s lender. Once you have credibility, the entire process becomes easier, he says. Who do I and the seller need to talk to about the problem? If there are a first and second mortgage or a home equity line of credit, you may have to talk to more than one lender to get approval for a short sale. In addition, you may also need approval from the entity that holds the pool of loans if the mortgage has been securitized. "The presence of two lenders makes a short sale more complicated since it’s often the lender holding the second, or junior, mortgage that has to absorb most of the loss," says White, who with Gina Covello, e-Pro®, broker associate at Keller Williams Realty, Studio City, Calif., teaches a course called “The Anatomy of the Short Sale.” Opinions differ, but most experts suggest that you let the lender involved know as soon as possible of the potential short sale. Others say you should wait until you have an offer because you’ll get no action until then. “Without a viable purchase offer, your deal won’t be considered by mortgagees,” says Margot Cole-Murphy, broker with RE/MAX Equity Group, Portland, Ore.Tip: Be sure you contact the bank’s loss mitigation department, which will be the group to decide whether to accept a short sale, rather than the collection or customer service department, which is only interested in recouping past due loan payments. "Finding the decision maker is often one of the biggest initial challenges in a short sales," says Thomson. What information will the bank need to decide whether to accept a short sale? The sellers’ submission package should include W-2 forms from employers (or a letter explaining the seller is unemployed), bank statements, two years of tax returns, and other financial documents outlining income and debt obligations. The bank will also need comps or a broker’s price opinion showing your estimate of value. In addition, the sellers should submit a “hardship letter,” explaining the circumstances that make it impossible for them to pay the full amount of the loan. The seller needs to be able to show true financial hardship. Someone with the assets or the income to pay is unlikely to be considered, say most interviewees. Tip: In preparing the package, be careful about discrepancies between the seller’s income and the income used to obtain the loan, cautions Lance Churchill, an attorney and instructor on short sales and REOs with FrontLine Seminars. A big gap may indicate mortgage fraud, unless employment circumstances have drastically changed. What are the options besides a short sale? Thanks to programs such as those proposed by Fannie Mae and Freddie Mac to assist subprime borrowers, many lenders are more willing to offer loan modification options. This option can extend the term of the loan, add on delinquent payments to the loan principal, and/or reduce the interest rate to make the loan more manageable for the home owner. Another option is a repayment plan that requires home owners to increase their monthly payments until the loan is current, says Loni Parmelly, a real estate practitioner and consultant who specializes in short sales. Parmelly also is author of Success in Short Sales (2004), a book she sells on her Web site. It may be possible to refinance an adjustable rate loan with a Federal Housing Authority or conventional fixed loan. Note that lenders will not postpone a foreclosure just because a property is listed, although they may postpone if you have a reasonable offer in the works. Tip: The ideal candidate for a short sale is still making loan payments and has a credit rating worth preserving. Otherwise, it may not be worth going through the complicated process, says Steve Pierce, broker and operating principal of Keller Williams Benchmark Properties, Fremont, Calif. How should I price a short sale property? In general, most short sale experts say to price the property at or near fair market value, although a few will begin with the total payoff amount owned by the seller. How frequently prices are dropped will depend in part on whether the property is in preforeclosure. Most banks have a formula for what percentage under market value they will accept, say interviewees. Figures cited vary from 8 percent under to almost 20 percent under. "I always price the property 10 percent lower than comparable to peak buyer interest and initiate buyer activity," says Cole-Murphy, who’s also founder and curriculum developer for Real Estate Pro Guides, a line of educational books for practitioners. However, it’s important for buyers to understand that the bank will not give away the property, she says. Tip: Most lenders will want to get a broker’s price opinion or even an appraisal to see what the property is worth before you and seller set a list price. One way to help ensure that the bank’s estimate of value is realistic is to offer comps of recent sales — both traditional and REO, says Churchill, who is also the author of The Foreclosure Specialist: A Real Estate Agent’s Complete Guide on Working in the Foreclosure Market (Valco Press, 2007). “Practitioners who do BPOs are rated in part on how close their estimates are to the final sale price, so they usually welcome information on legitimate comps,” he says. What and how should I disclose about the short-sale property to prospective buyers?Opinions vary on this topic, although most experts favor disclosing that a property is a short sale in the comments section of the MLS listing. Others suggest waiting to disclose the need for lender approval of the sale until a buyer is ready to make an offer. Debra Allen, ABR®, e-Pro®, with Prudential Arizona Properties, Gilbert, Ariz., uses a disclosure form prepared by her brokerage just for short sales. She also had a special sign rider for the yard sign made indicating a property is a short sale. Tip: Watch out for unethical investors who will try to convice an owner facing foreclosure to sign a quit-claim deed for the property, and then lease the property, warns Jim Cacioppo, broker/owner of Grand Realty Group. Grayslake, Ill. In such cases, the former owners will still be liable for the mortgage payments, even though they no longer own the house. How long does it take to complete a short sale? Although response times vary from lender to lender, it can take two weeks or as long as 60 days to receive an approval of a short sale from a lender. That’s why it’s critical that buyers and their representative understand and accept that time frame before they make an offer. An addendum to the California Association of REALTORS® purchase contract includes a provision allowing either party to cancel a short-sale contract within a set period if the seller hasn’t gotten the deal approved, says White. Properties with securitized loans (which are the majority these days) may require a longer time to get an approval of a short sale because of the possible need for approval from the entity holding the pool of securities, says Churchill. Tip: Keep in mind that the purchase contract on a short-sale property is a legally binding agreement once the earnest money has been deposited. Without language in the contract stating that the lenders must approve the offer and release all liens on the property, the seller may face a legal problem for failing to execute the contract if the short sale is not approved, says Hollingsworth. What can the seller and I do to make a short sale more attractive to a lender? Getting a lender to approve a short sale is primarily a question of economics. You have to provide hard numbers to show that the amount of money a bank will realize on the short sale is better than the amount it may recoup from foreclosing on the property and selling the property as an REO, says Todd Ruckle, ABR, RE/MAX Associates Inc., Newark, Del. A 2002 study by Craig Focardi of the Tower Group estimated that the entire cost of a foreclosure was $58,759 and took 18 months. Other factors that can influence a bank’s decision include the liability risk it assumes by owning the property after foreclosures, the money tied up during the holding period for a foreclosure and REO resale, additional costs associated with an REO such as attorneys’ fees, and the additional reserves it will need if REOs rise in the bank’s portfolio. Tip: A buyer that is willing to close in 30 days and who can make a substantial down payment may make the deal more attractive than a buyer who wants 95 percent financing, notes Michael Termine, GRI, CRB, associate broker, Prudential Rand Realty, New York City. All buyers should be preapproved for a mortgage before submitting the offer. However, to avoid unnecessary costs, buyers should wait on having a home inspection and an appraisal for the loan until after the bank has accepted the short sale proposition, say Cole-Murphy. Genuine hardship, such as a lost job or high medical bills from an illness may also have an influence, says Covello. What are the seller’s options if a short sale is rejected by the lender? There are a variety of reasons a bank will reject a short sale — from too low a price to too many files on the loss mitigator’s desk. You can look for another buyer or even try resubmitting the same contract. "Banks don’t want to take properties back in foreclosure, so they are going to do everything they can to make it work," says Pierce. You also need to prepare your seller in advance for the possibility of foreclosure if a short sale fails, says Parmelly. Tip: A short sale might be rejected if the loan is less than a year old. In such cases, the servicer that’s bought the loan can often require the original lender to buy it back, says Hollingsworth. What financial or credit liabilities will a seller have as a result of a short sale? Many lenders ask sellers to sign a promissory note for all or part of the difference between the proceeds of the short sale and the debt obligation as a condition to a short sale. In such cases, the note gives lenders the right to sue a seller and attach other assets if the note is not paid when due. It’s particularly important to understand this distinction if you work in states such as California that have a nonrecourse mortgage, says Churchill. In such states, the lender cannot pursue a deficiency judgment against a seller for any deficiencies after a property is foreclosed. Because of this distinction, sellers who are already in default on a mortgage and do not have the resources to pay off a separate promissory note after a short sale might be better off letting the lender foreclose, he says. If you are working in a state in which mortgage loans are nonrecourse, be sure and alert your seller-clients to this distinction. Tip: Having a portion of a loan forgiven may have an adverse affect on the seller’s credit. Encourage your client to try and sign a lease on an apartment before credit is further damaged, suggests Roberta Murphy, an associate broker with Windermere Exclusive Properties, San Diego. What tax liabilities will a seller have as a result of a short sale? One often overlooked aspect of short sales is that a seller must count any amount forgiven by the lender as income and pay taxes on that income, even if no actual money was received. The IRS requires lenders to submit a Form 1099 stating the forgiven amount. Sellers who meet the Internal Revenue Service definition of insolvency (either in bankruptcy or with debts exceeding assets) will not have to pay taxes on the forgiven amount. Tip: The U.S. House of Representatives has introduced the Mortgage Cancellation Tax Relief Act (H.R. 1876), which would eliminate taxes on any debt forgiven on a principal residence through either short sale or foreclosure. The NATIONAL ASSOCIATION OF REALTORS® has been working to support this bill. What compensation will I receive as the real estate salesperson or broker in a short sale? Banks are going to want you to discount your commission. "It’s the first place they’ll look to save on closing costs," says Ruckle. Rates offered can vary, but are typically 1 percent to 2 percent below averages in the market, say interviewees. However, says Hollingsworth, more lenders now seem willing to pay a full commission on sales. Tip: When you offer cooperative compensation through the MLS, be sure you also advise potential cooperating brokers that the gross commission established in your listing agreement is subject to court or lender approval and could potentially be reduced. You might also indicate in the remarks or comments field how you’ll share the compensation you receive with the successful cooperating broker in the event the gross commission is reduced, instead of locking yourself to a specific percentage of compensation to the cooperating broker, says White. Where can I find clients if I’m interested in specializing in short sales? Word of mouth remains the biggest source of new business, experts say, but you can also promote your services to individuals attending credit counseling classes (now required prior to filing bankruptcy), to people who receive state notices of loan defaults, and to home owners named on lists of ARMs that will be resetting in the next few months. To find buyer clients, creativity is a plus. For example, Thomson is developing a monthly “Short Sale Hot Sheet” she e-mails to investors. Tip: FSBOs are another good source since many upside-down sellers think they can’t afford to pay a commission and so try to sell on their own. Many don’t realize that in a short sale, the lender pays the broker’s commissions, says Churchill. Are short sales for me? With many more adjustable rate mortgages ready to reset to higher loan amounts in the next couple of years, short sales represent a growing sector of the market. However, because sales are time consuming, they aren’t for everyone. "I always say that if you’re going to succeed in short sales, you need the 3 Ps — patience, persistence, and problem solving," says Cacioppo.
Monday, April 28, 2008
Sell Your Listing by Throwing a Party!
Throw a Party for Your Listings Where’s the party? At the homes and condos that developers and real estate professionals most want to sell.Swanky and creative parties are the newest ways to woo customers. The food and drink at these bashes is top shelf and the entertainment is likely to be big name – or at least something better than a radio."I was nervous when I saw how many people had shown up," says Ricardo Vadia, an assistant vice president of development for Related Group, a luxury South Florida developer. "But it was well worth it. We got people into the buildings who otherwise wouldn't have come."Wendy J. Sarasohn, a senior vice president of the Corcoran Group in New York City, hosts theme parties at her listed properties – including one for Oscar night – and insists the caterer send "very attractive waiters.""Eye candy is good," she says. Attractive waiters, cocktails and good food, she adds, can help put people "in a mood to buy."
The 10 Hardest Cities to Sell In!
10 Most Challenging Housing Markets The hardest places to sell homes are those with falling prices and a large inventory of unsold homes. Forbes magazine, which examined markets all over the country, concluded that Florida has the most markets that are really in the doldrums. Several cities there are overbuilt, saddled with lousy loans and flat sales. Jonathan Miller, president of Miller Samuel, a Manhattan-based real estate appraisal company that assisted with the analysis, says it is hard for a city to climb out of a slowdown because in the best of circumstances there's generally a three- to six-month lag between the time buyers start putting a serious dent into the inventory and the time when prices start to improve.Here are the 10 markets where Forbes says the sales opportunities are the most challenging:
Miami
Orlando
Phoenix
Tampa
Los Angeles
Washington, D.C.
Chicago
Baltimore
San Diego
Denver
Miami
Orlando
Phoenix
Tampa
Los Angeles
Washington, D.C.
Chicago
Baltimore
San Diego
Denver
Home Sales Forecast
Existing-Home Sales Slip in March Existing-home sales edged down in March, remaining within a narrow range of sales activity that has persisted since last September, NAR says. Existing-home sales, which include single-family, townhomes, condominiums, and co-ops, were down 2.0 percent to a seasonally adjusted annual rate of 4.93 million units in March from a level of 5.03 million in February, and remain 19.3 percent below the 6.11 million-unit pace in March 2007. A rise in condo sales in March was offset by a drop in single-family sales. Regionally, sales rose in the Northeast and West but fell in the Midwest and South.Lawrence Yun, NAR chief economist, says the market is performing unevenly. “Though mortgage rates are at historically low levels, some borrowers are facing restrictive lending practices in declining markets,” he says. “At the same time, many buyers continue to bide their time with a large number of homes to choose from, while other potential buyers remain on the sidelines.”The national median existing-home price for all housing types was $200,700 in March, down 7.7 percent from a year ago when the median was $217,400. Because the slowdown in sales from a year ago is greater in high-cost areas, there is a downward pull to the national median with relatively higher sales activity in low-cost markets.A mix of market conditions continues around the country, but areas showing healthy price gains include Des Moines, Iowa; Austin, Texas; and Durham, N.C. NAR President Richard F. Gaylord says there are problems with the implementation of mortgage guidelines. “It appears there is some over-reaction on the part of some lenders now in requiring higher downpayment percentages than may be necessary,” he says. “On the other hand, buyers in many parts of the country are able to take advantage of more lenient policies for FHA loans. However, because lenders don’t have enough underwriting experience with FHA loans in high-cost areas, there are localized bottlenecks in loan processing."Yun offers a caution. “With elevated inflation, the Federal Reserve should be extra careful about further rate cuts,” he says. “Mortgage interest rates, which do not move directly with Fed funds rates, may rise measurably and hurt the housing recovery if inflation gets out of hand. Monetary stimulus is plentiful – what is needed more at this point is a home buyer tax credit to get buyers off the sidelines and prevent the market from overshooting on the downside.”
Tuesday, April 8, 2008
Real Estate Investing
Investor Strategy Proposal
The market has many great investments for real estate investors. With the market values in decline over the last couple years there comes a time when things will change and those values will start to go back up. As we speak right now the values have declined on average 30% in the West Michigan area. The prediction is that the market will turn around in the next 1 to 1 ½ years. That’s not to say that values will go up, but sales should be more favorable.
Real Estate Proposal
My proposal to investors is this:
1) Search for investments with equity of $30,000.00 or more with a focus on higher end homes. Higher end homes will need less work to put back on the market for a quick resale.
2) Set up a web site through GRAR for all investors with the criteria they are looking for.
3) Market the investment through email drips, cable TV, personal web site, and the local media channels.
4) Do personal inspections with a photo library built for the investor.
5) Calculate all costs required to purchase the property including repairs.
6) Finalize a report and overnight it or send it through email or fax.
7) Once property is acquired then a series of steps will be followed:
a) Lock changes
b) Trash outs
c) Repair work
d) Winterize (seasonal)
e) Maintain property: Landscaping
f) Gas & electric turned on if warranted.
These steps are similar to what a bank would require. This I see as a hassle free way for the investor with less to worry about. What the investor will see is a monthly report on the subject property. That report will include, but not limited to:
1) Monthly activity on the subject property for showings.
2) A calendar showing ad’s run and in what media channel.
3) A weekly statistics report through GRAR on listing activity.
4) A monthly cost statement for electric and gas. (If applicable)
5) A detailed progress report on any sale and the steps taken for a quick close.
Purpose
The purpose is to minimize the time the investor will need to put in looking for homes.
My Requirement
My requirement from the investor would be to sell and buy properties for the investor at a commission rate that would be determined based on the cost of the property.
Investment Craze
The real estate investment craze is on in West Michigan. Most homes that are good investments are being sold with in a few days and then being re-listed at a later date. Remember when you said “I wish I would have bought that property year’s ago as it’s tripled in its price today”. Demand is what drives price. The population isn’t getting smaller in our country and that demand will be back at some point. The prices that are being seen now are prices of what homes were costing 10 years ago.
Banking News
Some brief news of the banking industry today and the mortgage crisis. We have seen a different attitude from banks. They are now more than ever willing to negotiate a short sale rather that let homes go into foreclosure. Homes in foreclosure are bad news on the books and technically banks can’t own properties other than what they do business out of. So they need to sell these properties. They are attempting to renegotiate loans through loss mitigation and refinancing. So needless to say the investment properties are here now, but may be gone tomorrow.
Thanks,
Jeff Newberg
Exit Success Realty
1009 44th St. SW
Wyoming, MI 49509
Office: 616-534-4480 x278
Fax: 616-828-5616
Cell: 231-740-6775
Email: jnewberg@comcast.net
Web: http://www.jnewberg.com/
The market has many great investments for real estate investors. With the market values in decline over the last couple years there comes a time when things will change and those values will start to go back up. As we speak right now the values have declined on average 30% in the West Michigan area. The prediction is that the market will turn around in the next 1 to 1 ½ years. That’s not to say that values will go up, but sales should be more favorable.
Real Estate Proposal
My proposal to investors is this:
1) Search for investments with equity of $30,000.00 or more with a focus on higher end homes. Higher end homes will need less work to put back on the market for a quick resale.
2) Set up a web site through GRAR for all investors with the criteria they are looking for.
3) Market the investment through email drips, cable TV, personal web site, and the local media channels.
4) Do personal inspections with a photo library built for the investor.
5) Calculate all costs required to purchase the property including repairs.
6) Finalize a report and overnight it or send it through email or fax.
7) Once property is acquired then a series of steps will be followed:
a) Lock changes
b) Trash outs
c) Repair work
d) Winterize (seasonal)
e) Maintain property: Landscaping
f) Gas & electric turned on if warranted.
These steps are similar to what a bank would require. This I see as a hassle free way for the investor with less to worry about. What the investor will see is a monthly report on the subject property. That report will include, but not limited to:
1) Monthly activity on the subject property for showings.
2) A calendar showing ad’s run and in what media channel.
3) A weekly statistics report through GRAR on listing activity.
4) A monthly cost statement for electric and gas. (If applicable)
5) A detailed progress report on any sale and the steps taken for a quick close.
Purpose
The purpose is to minimize the time the investor will need to put in looking for homes.
My Requirement
My requirement from the investor would be to sell and buy properties for the investor at a commission rate that would be determined based on the cost of the property.
Investment Craze
The real estate investment craze is on in West Michigan. Most homes that are good investments are being sold with in a few days and then being re-listed at a later date. Remember when you said “I wish I would have bought that property year’s ago as it’s tripled in its price today”. Demand is what drives price. The population isn’t getting smaller in our country and that demand will be back at some point. The prices that are being seen now are prices of what homes were costing 10 years ago.
Banking News
Some brief news of the banking industry today and the mortgage crisis. We have seen a different attitude from banks. They are now more than ever willing to negotiate a short sale rather that let homes go into foreclosure. Homes in foreclosure are bad news on the books and technically banks can’t own properties other than what they do business out of. So they need to sell these properties. They are attempting to renegotiate loans through loss mitigation and refinancing. So needless to say the investment properties are here now, but may be gone tomorrow.
Thanks,
Jeff Newberg
Exit Success Realty
1009 44th St. SW
Wyoming, MI 49509
Office: 616-534-4480 x278
Fax: 616-828-5616
Cell: 231-740-6775
Email: jnewberg@comcast.net
Web: http://www.jnewberg.com/
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