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Month: October 2008 (page 6 of 7)

October 8, 2008

Mortgage Market Week in Review – on a Wednesday?

by

Mortgage Officer

Author website

Yeah, I know it’s only Wednesday, but when I looked at my schedule for the rest of the week, I realized that I wasn’t going to be in one place long enough or have the time to sit down and write this update, so I decided that I better do it today.    In addition to that, we’ve had plenty of news in the last couple of days.   So, here are some thoughts about the markets, the housing market, perception and reality.

The markets – I think that it’s safe to say that none of us have seen this type of stock market declines in our lives.   I wanted to bring up a couple of points about the markets:

1. It’s very important, when looking at long term investing, to keep a rational view of things.   If you aren’t going to need the money for 25 years, don’t make decisions based on fear and panic that is currently swirling around in the markets.  Look at the long term and make decisions for the long term.

2. Stop listening to the main stream media.   There are many things where they don’t know what they are talking about and they love to paint a darker and more scary picture because it helps ratings.   I was listening to a local AM radio talk show yesterday while driving between appointments and was struck by a couple of things:

a. Morning talk show hosts shouldn’t be giving out advice about FDIC insurance.   The facts as they were stating them were just plain wrong.

b. Someone who is 44 years old (they said so) called in and said that on Monday (one of the lowest points in the market in the last 5 years) he sold everything in his 401K plan and moved it to cash.   If I had the time, I would have called in and told them a thing or two.   I was shocked at how much fear is taking over for rational long term planning.

3. I’m 43 (yeah I know, I’m over the hill) and I want to answer the question a lot of people are Read more

October 8, 2008

It’s a great time to be a Realtor or a lender — if you’re a good one. At BloodhoundBlog Unchained in Orlando, you’ll learn how to dominate your market in the dark days ahead

by

Suburban Phoenix Real Estate Broker

Author website

What came out of last night’s Presidential debate? No matter who wins, we all lose. As painful as it might be to suffer a quick drop in housing values, followed by a recovery, we are in for a much more extended agony. Whether Obama wins in November or McCain, we’re in for an lengthy period of government “help” — mortgage work-outs or price supports or some other crafty means of disguising the true value of homes. This might be good for you if you are headed for foreclosure but haven’t yet crossed the bar, but it promises years of depressed housing prices for everyone else.

That’s bad for homeowners — but good for many landlords. And it’s bad for lenders who have perfected the art of re-financing the same clients again and again — but good for lenders who can generate the flow of new business necessary to live off of primary purchase loans. And a perpetually plateaued real estate market is very bad for by-owners sellers and lazy, stupid, cheap Realtors — but very good for Realtors who can actually get the job done.

An all of this is why you should be coming to BloodhoundBlog Unchained in Orlando. We’re about nothing but practical tactics for taking advantage of the internet to build your business — which is precisely what you need to be doing right now. Real estate has always been a hard way to make an easy living — and it’s about to get a lot harder. The Realtors and lenders who can sustain a pipeline of viable prospects will prosper in the coming years. The rest will get other jobs.

Here’s just a few of the topics we’ll be talking about:

  • Brian Brady will show you how to build a presence on the internet so that your prospective clients will not be able to go anywhere without finding you.
  • Mitch Ribak will talk to you about the techniques he and his team are using to close dozens of transactions a month.
  • Kelly Koehler will share with you her unique pay-per-click strategies, using an array of long-tail keywords to net clients at a very Read more
October 7, 2008

Does Your Home Equity Have 4 Wheels?

by

Realtor, Rabble-Rouser

Author website

I received a call the other day from a young couple wanting to take a look at my new construction project.  Because the building is starting to look more and more like a building, I recommended that they meet me at the site so we could walk through the units – albeit still a skeleton.  For those who can’t visualize the space while it is taking shape, I knew it could be a crap shoot, but hey – they could at least see it in progress.  The plans were taking life.

I was at the site a few minutes before our scheduled appointment, checking up on the progress, pleased to see that the steel staircase had been installed.  We could use stairs, not ladders.

At roughly 2:00pm, a jet black, late model Range Rover Sport with chrome tipped exhaust screeched to a halt in front of the building.  It was snazzy.  Out hopped my potential clients – young – attractive almost 30-something couple.  Unfortunately, not quite dressed to walk through an active construction site – but we’d manage.

We introduced ourselves.

“I like your car”  I said.

“Yeah – it’s a sweet ride”  the husband said.

I handed them the marketing brochure and rattled off my schpel regarding the developer, the construction method, available finishes, delivery etc.  I asked them about their timing – what was prompting a the search for a new home?

“We want to take advantage of the market” the husband stated.  “I’ve been reading that home prices are way down and developers are really hurting – we want to make a deal.”

Can’t say I haven’t heard that reason before.

“Do you have a home to sell?”  I probed.

“Umm – we’re not sure if we’ll sell.  I think we may keep our current place – at this point, we’re expl….”

“We’re expecting a baby and we need more room” the wife interjected.  “We have a 2 bedroom condo that we purchased when we got married 2 years ago in Lakeview.  We’re not sure what we can get for it – so we don’t know if we should sell our not.”

Ahh – the voice of reason.

“Honestly, that is Read more

October 7, 2008

Following a trail of breadcrumbs from an internet-enabled cell phone

by

Suburban Phoenix Real Estate Broker

Author website

I’ve written about our breadcrumbs philosophy before. Cliff’s Notes: If we build a single property web site for a listing — or a previewing site for buyers featuring dozens of houses — we never delete worthwhile work product from our file server:

We leave the pages and sites on our file server forever. If there were anything confidential in the pages, we would excise it. But there never is — because the web is not secure. So the pages live on forever, each one a detailed chronicle of a particular house at a particular moment in time.

This Sunday just past, a potential buyer was sitting outside 14179 West Shaw Butte Drive in Surprise, AZ. From her phone, she Googled the address. Guess who she found?

I’m not the lister on that house — and it had sold before she called me. But I stand a fair chance of selling her something else, with my client-acquisition cost being pretty close to $0.00.

Leaving breadcrumbs on the trail is not a strategy, not even a tactic. It’s a side-effect. We’re building the content for other purposes. But we sometimes get extra business simply by not killing those pages. This has always been good for us, going back years, but it promises to get better and better. First, we’re always building new pages, which increases our long-tail exposure. And second, there are more and more web-enabled mobile phones out there every day.

There’s more: I think it’s important to “triangulate” on pages like this from a weblog, this so Google finds the new content in a sprightly fashion. I talked about triangulation at Unchained in Phoenix, and I’ll be addressing it again in Orlando. (And if you buttonhole Brian Brady, he might reveal to you what I’m doing in this post as a side-effect of having written it.)

Bur even though this is all just a side-effect of other efforts, we still have a complicated, scientific name for this phenomenon: We call it free money.

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October 7, 2008

More WP security fun…

by

The Real Estate Group, Virginia Beach and Chesapeake VA

Author website

A while back, I wrote a post about how my blog was hacked and what I did about it. Turns out it dropped me out of Google for a week or two, but the experience was well worth it. Shortly thereafter, Eric Bramlett posted the solution of setting Google Alerts on your site. (Can’t find it, or I’d link to it). Trace and others had some good comments and suggestions as well. I did what Bramlett suggested and I want to show you an example of how it works.

This morning, I received an alert (one of many that I have on my site), to wit:

Google Web Alert for: site:ericonsearch.com +viagra

High gas prices and online marketing…a correlation? : Southern …
… phentermine shipped tramadol without perscription dopamine phentermine generic cialis pills generic viagra levitra prescribing information valium valium …

This as-it-happens Google Alert is brought to you by Google.

I quickly went and found the offending post(s) and promptly deleted hundreds of “bad neighborhood” links. Nice. And yes. I am making further changes to beef security that I am not going to talk about publicly. Will be happy to share them with you privately one to one if you have been hacked.

The good news about this go around is that we are being PROACTIVE and getting to them before we have to bug Google or other search engines about it. By setting yourself up a boatload of alerts for site:mydomain.com +(insert poker,porn, or pharmaceutical term), you can get ahead of any issues that arise.

If you Google “Indiana SEO” or other similar terms, you will see that as of today’s date, I am still blessed to be doing OK for now.

So if you haven’t taken the time to do this to your blog… Now’s a good time.

October 6, 2008

And Now, No Reason to Root At All

by

Real Estate Renaissance Man

Author website

Last week, while watching the House contort itself in a self-serving round of navel-gazing over the bailout package, I pondered two connotations of their disconnect with the populace.  Taken together they are a question really, that looks at the motivation behind politicians’ decisions; the metaphysical understanding of a Representative if you will.  This question in particular asks why our elected officials vote for legislation they know their constituents are against.  At the time, many of our representatives had chosen not to support the bailout package; not because they were against it – quite the contrary, they wanted to vote for it – no, their problem was their constituents didn’t want it and the election was to close for a nice spin cycle.  So I wondered if they ignored the people who elected them because:

  • …constituents are too stupid to understand

or

  • …constituents are not the ones who pay their bills

Over the weekend I am sad to report the answer became clear.  The majority of America (at least the majority of America who contact their representatives) were against the bailout the first time around.  I had hoped it was due to the fact that middle America was smarter than the politicians and pundits surmised.  But then Wall Street had its little temper tantrum and middle America couldn’t wait for the bailout package to pass.  They told their representatives so with an onslaught of voice mails, emails and snail mails.

Walls Street’s melt down affected every-one’s retirement funds and investment funds and saving funds… if they elected to sell them that day.  Otherwise it made not a wit of difference to the average person on the street who does not expect to need those funds for years yet.  But people panicked anyway.

I learned from this episode a lesson most politicians must learn early in their career.  I learned that middle America did not read up on or have at least a passing understanding of what the bailout meant, nor did they look into and try to understand how Wall Street’s shoe stomping episode actually affected them.  Instead, middle America did what they always do: they Read more

October 5, 2008

Please Come Again

by

Realtor, Rabble-Rouser

Author website

According to the clock on my dashboard it was 2:43pm – where had my day gone?  – I couldn’t help but wonder.  I had just wrapped up with my client who proudly unveiled the newly renovated rental units at the building he just purchased on Washington Park – the proposed location of the Olympic Stadium if and when Chicago should land the 2016 Summer Games – best described as an “up and coming” part of Chicago’s south side.  He wanted me to see what he had done and wanted my assurance that he could get the units rented at a much higher rent than was usual for the area.  From what I saw – he would have no problem renting the units – for how much?  that was yet to be seen.

I was hungry and I hadn’t had anything to eat – with the exception of the venti Red Eye I’d picked up earlier that morning during my walk with my dogs – breakfast.  I had to be back on the north side of town for a 4:00pm appointment, so I knew I didn’t have time to eat – and there’s scarcely any place to eat nearby the building – or at least that’s what I thought.

Okay forget about lunch – I’ll just pick up a diet Pepsi I figured – I can stop at the Shell station before I pull on to the Dan Ryan to head back north.  As I began my journey, I turned onto one of the wide boulevards lined with overgrown empty lots and neglected buildings.

I wasn’t paying attention to the street names – I was simply heading towards the freeway when I noticed a stand alone convenience store – a building at a nondescript corner at the fringe – on the “other side” of the up and coming neighborhood – not sure where the real boundary lay, but I had the distinct impression it wasn’t “up and coming” any time soon.

I couldn’t help but notice the store – it was the only business operating in several blocks.   I’m sure most could identify with seeing Read more

October 4, 2008

The Life

by

Chicago Broker Owner Realtor | RE 2.0 Blogger

Author website

I know a guy who makes stupid money. He doesn’t even call it money. He calls it trump.

“I make sick trump,” he once told me. (Stupid money.)

“I have a Hot Mess at home,” he continued. “And she’s sick, too.” (An attractive girlfriend with a drinking problem.)

“It’s ill.” (Troubling.)

According to this guy, a derivatives trader at the Chicago Merc, if you don’t make 30/40 (million per year) you’re not a Whale. (A sick big spender with a lot of trump and at least one Hot Mess at at least one sick home.)

“30/40 is the magic number. You can buy all the whores in Sin City with that kind of trump.” (Duh. Even I figured that and I don’t really have a head for math.)

Not surprisingly, he met his own Hot Mess at the Paris Las Vegas. They were doing ice block Southern Comfort shots (don’t ask) together at a Whale’s private party and decided to hook up for the near, if not immediate, domestic future. He shipped her and her Two Brats back east to Chicago. This guy trades farm futures so I would imagine he knew what he was getting into. Although not risk aversive, he has assured me on more than one occasion that he is not yet a Whale. He’s more than a Chump certainly, but definitely not a Whale.

A Chump is a million dollar a year guy. You are either a Chump, a Whale, or Bank in his world (The Life). Bank trumps Whale. Then Chump. Everyone else is Home Depot. Wonderful.

“No offense,” he tells me, “but the average Joe Home Depot in this country is living paycheck to paycheck. They couldn’t care less when the market goes apeshit. (Apeshit means apeshit. Think about it.) They squawk like they do care but they got no real skin in the game. Bullshit 401K pennies maybe. They got no trump. Joe Home Depot can always find another Home Depot with matching funds to bag nails and pay the bills. A Chump, however, is ruined in an apeshit scenario. The Life is over for him. I know Read more

October 4, 2008

Other types of credit may be feeling the crunch, but home mortgages are still readily available

by

Suburban Phoenix Real Estate Broker

Author website

This is my column for this week from the Arizona Republic (permanent link).

 
Other types of credit may be feeling the crunch, but home mortgages are still readily available

Bad news about the economy is coming in from all directions, so you may be in the mood for some good news: There is plenty of money available for home loans.

By taking over FannieMae and FreddieMac, the federal government has essentially nationalized the secondary mortgage market. The lenders themselves are still private entities, but the government’s loan guarantees are viewed as being so strong that, by now, virtually all residential real estate loans are coming through Fannie, Freddie, the FHA or the VA.

The other way of saying the same thing: There is virtually no secondary mortgage market left for non-conforming or sub-prime loans.

So while you may have trouble getting new car financing or a loan for your business, you should have no problem getting a home loan — if you qualify and if the amount you’re borrowing falls within the limits set by the four government agencies guaranteeing home loans.

And there’s the rub: For most of the Phoenix area, qualifying for a conforming loan should be no problem. But higher-priced homes are sold with non-conforming “jumbo” loans, which are difficult to obtain right now and come at much higher interest rates.

Using an FHA loan, it is still possible to buy a home with “nothing down.” FHA borrowers are obliged to pay a 3.5% down payment, but this can be offset by the $7,500 tax credit incorporated in the mortgage relief bill passed in July. FHA borrowers can ask the seller for up to 6% in closing costs, so they can take possession of the home for no money out of pocket.

But there’s a catch: To obtain an FHA loan, the home will have to pass a rigorous FHA appraisal, which will eliminate many foreclosed homes unless the seller is willing to correct the most serious defects.

All that notwithstanding, while the financial sky might be roiling with dark clouds, real estate is still a silver lining. Because of the government’s loan guarantees, lenders are willing Read more

October 3, 2008

Bloodhound Blog Radio: Living in a Post-Bailout World

by

Commercial Real Estate Finance Expert
Structured Debt and Equity
Licensed Real Estate Broker in AL, CA, and FL

Author website

Last Monday, Sean Purcell and I hosted Top Dawg Greg Swann on Mortgage Mondays on Bloodhound Blog Radio.  We discussed what real estate agents and lenders can do in a post-Bailout world.

The bailout bill passed today after the Senate signaled its support to the House.  President Bush signed this bill into law and the world is safe, once again.

Interesting points in our conversation:

1- The Community Reinvestment Act (original sub-prime loans), conceived in 1977 and super-charged in 1995, was the actual starting point of the “toxic loan” revolution that took our economy down.

2-The Bailout may be an instrument to keep people into homes through the “loansharking collection” principle.

3-Greg talks about his strategy of working with investors (and why it works).

4- Predictions about the convergence of low-priced and mid-priced homes through financing caps.

5- Strategies for REALTORs to find ready, willing (and most importantly) and ABLE clients.

If you run an 8-minute mile, you can get a 10K in while you listen to this on your iPod.  Mere mortals should just download the podcast and try to get 3 miles in on the treadmill whil listening to the three of us.

Listen to the podcast here.

October 3, 2008

Mortgage Market Week in Review

by

Mortgage Officer

Author website

Well, here we are on Friday again. Are you getting motion sickness from all of the news and rumors that are flying back and forth? Wow has it been another week to forget, hasn’t it?

Here are the topics we’re going to talk about today: The Bailout/Rescue Plan, some very weak economic reports, the credit markets and do bankers really trust each other?

First, there were several economic reports that came out. None of them were good. Here’s a rundown of them:

1. Jobs – the jobs report came out this morning and showed that 159,000 jobs were lost in September. While the number was lower than what the markets expected (they expected 200,000), it was a very weak report.

2. Factory orders came in down 4%. That’s not the direction we’d like them to go.

3. Car Sales fell off a cliff in September. Ford’s sales dropped 35%. Ouch.

4. A couple of reports on personal incomes, personal expenditures and the like came out and they weren’t good.

If these were the only issues that we had, we’d have our hands full and we’d see mortgage rates drop due to the increased weakness in the economy.

But that’s not all. The credit markets have taken a major hit in the last week. What’s happening with that? A couple of brief highlights:

1. Banks are very concerned about running out of money (capital). Wachovia (more on this later) and Washington Mutual have been “bought out” to keep them from going under. Other banks are concerned that the losses they are experiencing will not enable them to keep their capital ratios where they should be. Due to that, there is an increasing reluctance to lend to commercial customers and to lend to consumers. How bad is it? I’ve heard a variety of conflicting reports. What I can say from personal experience is that for people (consumers, not businesses) who have the following: 1) Some equity in the Read more

October 2, 2008

Deregulation is the New Regulation

by

Commercial Real Estate Finance Expert
Structured Debt and Equity
Licensed Real Estate Broker in AL, CA, and FL

Author website

From the Wayback Vault in The New York Times Building:

Fannie Mae, the nation’s biggest underwriter of home mortgages, has been under increasing pressure from the Clinton Administration to expand mortgage loans among low and moderate income people and felt pressure from stock holders to maintain its phenomenal growth in profits.

In addition, banks, thrift institutions and mortgage companies have been pressing Fannie Mae to help them make more loans to so-called subprime borrowers. These borrowers whose incomes, credit ratings and savings are not good enough to qualify for conventional loans, can only get loans from finance companies that charge much higher interest rates — anywhere from three to four percentage points higher than conventional loans.

”Fannie Mae has expanded home ownership for millions of families in the 1990’s by reducing down payment requirements,” said Franklin D. Raines, Fannie Mae’s chairman and chief executive officer. ”Yet there remain too many borrowers whose credit is just a notch below what our underwriting has required who have been relegated to paying significantly higher mortgage rates in the so-called subprime market.”

Some Lessons I’ve Learned From The Credit Meltdown:

(1) Borrowers who can’t meet prime underwriting guidelines are “sub” prime

(2) When government regulates private industry to make crappy loans and the crappy loans are the cause of the crisis, you can’t blame the theory of deregulation; you must levy the blame at overregulation.

In July, the Department of Housing and Urban Development proposed that by the year 2001, 50 percent of Fannie Mae’s and Freddie Mac’s portfolio be made up of loans to low and moderate-income borrowers. Last year, 44 percent of the loans Fannie Mae purchased were from these groups.

(3) When you move down the credit and income scale, you can expect more defaults.

Here’s Senator Obama, talking about his solution:

Finally, I will modernize our outdated financial regulations and put in place the common-sense rules of the road I’ve been calling for since March – rules that will keep our market free, fair, and honest; rules that will restore accountability and responsibility in the boardroom, and make sure Wall Street can never get away with the Read more

October 2, 2008

Making the Riccelli bet to take away the fear of trying something new

by

Suburban Phoenix Real Estate Broker

Author website

Richard Riccelli doesn’t write here very much, but, when he does, it’s pure gold. I’ve been writing in BloodhoundBlog about Richard since the blog was young, as have others, and Richard has been writing with us for as long as we’ve been a group blog. I can’t sing his praises enough. I’m sure I can’t even see nine-tenths of his genius, but I am forevermore enthralled by what I can see.

A peculiar aspect of Richard’s brilliance is his uncanny ability to identify and excise the deal-killing objection. In his own marketing business, his fees can run dauntingly high. Don’t want to pay? No problem. If he loves the project, Richard will work for a cut of the take instead. This is unheard of in direct marketing, and the shear audacity of it can silence every other objection he might hear from his clients. How can you argue with free?

For months now I’ve been playing with Riccelli-style direct marketing ideas at ABetterListing.com. The site’s not done yet. Taking account of testing, it will never be done. But it takes on its first big market test tomorrow.

This is the back of an open house invitation card for a house we’ll be listing next Friday:

Cathleen and her crew of energetic teenagers will be distributing 2,500 of those cards this weekend, with another 2,500 going out next weekend. The whole launch is a Very Big Deal since the house we’re listing falls into the Jumbo Zone — where desire is unlimited and loans are unavailable.

But ABetterListing.com was built for this kind of door-to-door direct marketing promotion, and the promotion itself is built around a Riccelli bet: We’re betting that we’re better than anyone else you’ll talk to, and we’ll pay off on the bet if you don’t agree.

An even better Riccelli bet would be this: “If we don’t get you a contract within 30 days, we’ll sell it for free!” Unfortunately, in the neighborhood we’re working in, homes are selling in 267 days — on average — when they sell at all. We’ll save that offer for a better market.

I’ll talk more about ABetterListing.com another Read more

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Inventing Real Estate 2.0

Welcome to BloodhoundBlog, the national real estate industry marketing and technology weblog written by, for and about real estate professionals. Better yet, welcome to the wired world of real estate. We are busily inventing Real Estate 2.0 – technology, marketing, service and salesmanship. Like all Bloodhounds, we are smart, frisky and fiercely independent. We've built a spot on the earth – beloved over all – where each one of us can be who we are, no matter who that might be. We are committed to an idea of excellence that will flush the bums, the con-men and the crybabies out of the real estate industry. If you yearn to have your failures excused, your moral lapses absolved or your boo-boos kissed, seek elsewhere. But if you are sick to death of mediocrity – welcome home. Read all about us, subscribe to our feed and steel yourself for the hunt. We work hard, we play hard, we learn everything we can – and we bow to no one.

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