Monday, January 31, 2011

Obama's New Law and Mortgage Plan for the Unemployed

President Obama signed a law extending unemployment benefits for another 13 months when he signed a larger tax-cut bill on December 17, 2010. However, those who have already collected 99 months worth of benefits will not be collecting additional money.

Unemployment benefits: How the system works
 Here's how the system works: Unemployment pay comes in five consecutive tiers, and each one offers a set number of weeks of benefits, depending on the unemployment situation in a given state. If Congress and the president had not agreed to extend qualifying dates, workers would not have been able to move to the next higher tier.

Thanks to this new legislative compromise, about 7 million Americans will still be able to move into the next tier of benefits, allowing some to be eligible for up to 99 weeks of benefits. Only workers in states where unemployment rates are high enough can they qualify for up to 99 weeks worth of benefits; currently, 25 states meet this threshold.

The tiers are as follows:
1. Regular benefits: 26 weeks
2. First tier: 20 additional weeks
3. Second tier: 14 additional weeks
4. Third tier: 13 additional weeks
5. Fourth tier: 6 additional weeks
6. Fifth tier: 20 additional weeks (total 99 weeks)

Unemployment benefits extension: Who gets what?
The expiration of extended unemployment benefits on November 30, 2010 meant unemployed Americans got checks only until the end of whatever tier of unemployment they were in. The recent unemployment extension grants additional benefits for those who had not yet exhausted their full 99 weeks. There is no extension, however, for those who have collected benefits for a full 99 weeks--about 4 million Americans, and an additional 4 million will lose benefits in early 2011. If you have not yet exhausted your benefits, it is absolutely critical that you act to save your home before it's too late.

Mortgage modification plan for the unemployed
The Home Affordable Unemployment Program (UP) was added to the Making Home Affordable arsenal in May, and as of August 1, unemployment benefits will only be considered for UP and not for HAMP mortgage modification applications. UP is a forbearance plan for qualified borrowers which temporarily reduces (to no more than 31 percent of their gross income) or eliminates their mortgage payments for a period of time.

If you are facing the prospect of losing your unemployment benefits and have a mortgage, you have no time to waste. It is absolutely crucial that you understand that once you are more than three months late on your mortgage, you are too late to qualify for this program. By acting now you might be able to save your home. With the UP, mortgage servicers must offer a forbearance plan to borrowers who meet the following criteria:
  • The property must be a principal residence and consist of one to four units.
  • The mortgage must have been originated before January 1, 2009, and the current unpaid principal balance cannot exceed $729,750.
  • The mortgage must currently either be in default or at risk of "imminent" default.
  • The mortgage cannot have already been modified under HAMP and you can't have received a previous UP forbearance.
  • You must request the UP before three monthly payments are due and unpaid. This is the biggie. You can make your request by phone, mail or e-mail, but given mortgage servicers' track record with HAMP documentation, you should probably get some proof of the timeliness of your request.
  • You must be unemployed and have received at least three months of benefits (this requirement can be waived by the lender or loan servicer at its discretion) on the date you request the UP, and you must document that you will receive benefits in the month of the forbearance period effective date even if the unemployment benefits are scheduled to expire before the end of the UP forbearance period. This means that you won't be eligible for UP once your benefits expire.
  • The servicer must evaluate you for the program within 10 days, and if they make a determination by the 15th, your forbearance period effective date would most likely be the first day of the following month.
To get forbearance, your timing is critical. You must (usually--check with your lender) have received three months of benefits, but not be more than three months behind on your mortgage. And your benefits cannot have run out by the time you begin your forbearance period.

What about HAMP?
If you are eligible for UP, the servicer is not required to offer you a modification under HAMP as long as you are eligible for the UP forbearance plan. You may request reconsideration under HAMP at a future time if you meet the requirements for continuing eligibility.

Friday, January 28, 2011

Steps to Paying off Your Mortgage and Becoming Debt Free

I am often asked when a homeowner should put the focus of paying off their mortgage. Although the answer to this question is specific to each homeowner, my general recommendation lies within a 4-step plan that I use to advise each of my clients.

Each step is numbered based upon the priority. In other words, step one should be on track before moving on to step two, and so on. The problem is that many homeowners jump ahead before the prior step is mastered. This typically leads to living paycheck to paycheck, getting stuck in the consumer debt rut, or reaching retirement to find that you are equity rich and cash poor. By following the steps below, you can help ensure you reach retirement having achieved the long-term goals you desire.

Step 1 - Develop a Cash Reserve

The most important step is to have a reserve fund to cover short-term unplanned expenses. Without having cash reserve, shortages typically result in having consumer debt. Once consumer debt is established, it can lead to destructive long-term habits that are difficult to break. If you have a cash reserve, you should never have a need for unsecured debt.

Step 2 – Pay off ALL Consumer Debts

This is the step where you become consumer debt free, with the exception of your mortgage. Revolving and unsecured debts should be paid off first, with car loans and other secured loans being paid off second. Remember that cars are depreciating assets, and you will always have car expenses. If you are able to pay off your car, you can begin to save money to pay cash for your next car.

Step 3 – Create Significant Liquidity

One of the greatest gifts we have is the gift of compounding interest. This is the quadrant that grows and compounds. Even if you are not secure in steps 1 & 2, if possible, you need to develop the habit of putting cash into long-term investment accounts. Once you are secure in steps 1 & 2, make this quadrant your primary focus and watch your net worth rise over time.

Step 4 – Focus on Home Equity – Paying off your Mortgage

Once you have developed a cash reserve, have paid off all consumer debts, and are on track to meet or exceed your retirement goals, then you can put a focus on paying off your home loan.

Personal finance is most often a reflection of habits. If you develop good financial habits, and exercise them over-time, long-term you will likely do well. Not only can you use the four step plan to help you allocate cash flow in the budget, but you should also use the plan to help you to allocate cash and home equity net worth.

If you have specific questions regarding your personal situation, please call or send me an e-mail.

Also, if you have a friend or family member in need of advice, I would be honored to help them as well. Having professional advisors to help you manage your investments, mortgage, taxes, and estate is the best way to protect your long-term results.

Thursday, January 27, 2011

Getting the Rest of the House Ready to Sell

Uncluttering the House

Closet Clutter
Closets are great for accumulating clutter, though you may not think of it as clutter. We are talking about extra clothes and shoes – things you rarely wear but cannot bear to be without. Do without these items for a couple of months by putting them in a box, because these items can make your closets look "crammed full." Sometimes there are shoeboxes full of "stuff" or other accumulated personal items, too.
Furniture Clutter
Many people have too much furniture in certain rooms – not too much for your own personal living needs – but too much to give the illusion of space that a homebuyer would like to see. You may want to tour some builders’ models to see how they place furniture in the model homes. Observe how they place furniture in the models so you get some ideas on what to remove and what to leave in your house.
Storage Area Clutter
Basements, garages, attics, and sheds accumulate not only clutter, but junk. These areas should be as empty as possible so that buyers can imagine what they would do with the space. Remove anything that is not essential and take it to the storage area.

Or have a garage sale.

Wednesday, January 26, 2011

Ten Things Learned from this Recession

From my chair, I have noticed a silver lining through the pain and heartache people are experiencing. In the midst of the financial chaos, many are finding a new beginning. Could it be that people are realizing there are financial habits in their lives that have been destructive and need to change? Somehow, there seems to be peace and healing going on in the lives of many families as they face the realities of years of over indulgence and financial leveraging.

I know people are suffering. All too often I am having gut wrenching conversations with families who are hurting financially, relationally, and emotionally as a result of financial downfalls. Many of the people I have talked to ultimately find peace and acceptance and growth through the process of de-leveraging and developing habits of living within their means.

I have learned a great deal from those who have used their painful experiences to creat a better future. The lessons they have taught me are both powerful and insightful, and are certainly worth sharing. Below is a summary of the top ten lessons from my notes written during countless interviews:
  1. Recessions cause you to be more creative and frugal.
  2. Tough times force you to make difficult decisions and give up material luxuries.
  3. You learn that the most important things in life are relational not material.
  4. You realize that living beyond your means is not sustainable.
  5. It reminds you that real wealth isn’t about the stuff you own.
  6. You learn that cash flow management and cash reserves are the most important components in your personal finances.
  7. If you are still employed, you appreciate your employer even more.
  8. It is wise to spend less than you make and save at least 10% of your income.
  9. Tough times can further develop a spirit of gratitude and appreciation for what you have vs. continually focusing on what you want.
  10. At the end of the day, regardless of whether there is a paycheck each month, or money in the bank, family is what matters. Don’t sacrifice what you want most for what you want at the moment.
While you may not be able to control what happens with the economy, you can control your own mental focus. Usually, this determines whether you feel anxiety and fear or peace and hope. The many who have grown through tough circumstances have found that by releasing the pressures of living an unsustainable life, they discover the possibility of a new future.

Difficult decisions must be faced. Rather than avoid making the tough choices, I encourage you to face them head on, without delay. It is my hope that each of you who are hurting will find peace and comfort in your circumstance.

If there is anything I can do to help, please let me know. I appreciate your friendship and the trust you place in me as your mortgage planner.

Tuesday, January 25, 2011

More Agent Mobile Apps - How to Boost Your Productivity

If you work in real estate sales, chances are you spend the majority of your time on the move. Therefore, it’s important to take advantage of mobile application tools that you can access from the field.

Mobile applications or “apps” are the wave of the future and catching on fast across the real estate industry.  Apps can help you with the financial side of a deal, locate a list of available properties in your area and boost your overall productivity.  These tools also prevent wasted time spent running back to your office to use the Internet.

There are currently thousands of apps available for iPhone, Blackberry, Droid and other smartphone users. However, the iPhone has the greatest selection of apps targeted towards the real estate industry. Dozens of cost effective real estate apps and add-ons are available for purchase online at the iTunes store.  Below is a list of top-rated iPhone apps for real estate professionals, brokers and investors.

Many agents are choosing to use a Blackberry based phone for GPS due to longer battery/talk like and are using an iPad to be able to use the mobile app.  One agent I spoke with actually is using their iPad instead of a computer these days - so their entire office is "mobile" - with them every minute of the day.

Here are some more select iPhone/iPad Apps for Real Estate Agents:

BA II Plus Financial Calculator:  This calculator tool has everything you need to crunch numbers while you’re on the road.

Zillow:  This is one of the most popular and comprehensive real estate apps for iPhone. Zillow data on 95 million properties is now also available for Android and Droid smartphones.  This app uses GPS to find more information about the houses in your surrounding area. This is a great tool to help you appraise, find or buy homes and rental properties.

TourNarrator: This is a useful tool for real estate agents who want to effectively manage their clients and properties. TourNarrator allows you to take notes and gather client feedback. (I also offer my agents a similar tool for Virtual Tours, feedback and me and we can talk!)

Home Tracker:  This app lets you take notes on the properties you visit and keep them for future reference. Home Tracker also comes in handy for those who are searching and visiting a number of homes in a single day.

Agent Feedback:  This is a simple app to help real estate agents gage client feedback on a scale ranging from “just looking” to “extremely interested.”

LoopNet:  This is the first commercial real estate search app for iPhone users and features a GPS location finder, custom search that filters results by price, building size and property type (i.e., office, industrial, retail, land, multifamily), and driving directions.

Until next time - Happy App-ing!

Monday, January 24, 2011

5 Ways to Successfully Market a Green Home

  1. Replace ‘green’ with ‘high-performance’.  Green is too ambiguous, high-performance sounds better and is more accurate.  A home that is extremely energy efficient is high-performance.
  2. Sell the steak, not the sizzle.  Sell the real world green benefits of the home not the pie-in-the-sky stuff.  Buyers/renters care more about lowering their utility bills and keeping their families safe than they do about the polar bears. They may agree with the environmental reasons but they NEED the real world utility bill savings.  Sell them on their needs first, their wants second.
  3. Optimize your flyer.  Most real estate flyers look the same: big picture of house, smaller pics of different rooms, short description, agent picture, phone #.  95% of flyers show the features of the home, not any of the real benefits.   Green Homes give you a HUGE opportunity to differentiate the value of the home over non-Green homes.

     Here’s a few simple suggestions to maximize your flyer for a Green Home:
    1. Use the back of the flyer to list the green benefits of your home.  List both the benefits AND the value of that benefit.  For example: Benefit: EnergyStar water heater, Value- Reduce water bill by 25%.
    2. List the projected monthly utility bill savings for your property.  Also list the projected  annual savings and the projected 5 year savings. For example, if you save $150/month, that equates to $1800/year; $9000 in 5 years. That’s not chump change.
    3. List the projected increase in appraised value (due to green features).  For example, lets say you have a property where comps are $200k. Green homes tend to appraise for at least 10% higher than comparable homes so your home would be worth $20k more than comparable comps. Extrapolate that out to get to a 5 year projection.

  4. Use the terms ‘non-toxic’ or ‘low toxins’ instead of ‘eco-friendly’.  The latter is nice, the former is needed.  Again, sell on the needed, not just the nice.  I need oxygen to breathe, a Bentley would be nice.

  5. Use wall placards within the home to highlight different areas/methods.  For example, stick a placard that says ‘Non-Toxic Paint’ on a wall painted with no-VOC paint.  You can even put a little blurb underneath the title explaining the value.  For example: ‘Non-toxic paint was used in every room in this home to ensure that you and your family are not breathing in harmful chemicals found in most interior paint like ammonia, benzine, etc. which are all neuro-toxins and have been documented to be harmful to your health.’.

    A few areas to put placards: energy-efficient water heaters, dishwashers; around foam gasket light switches; around high efficiency sinks/shower-heads; near insulated exposed water pipes, etc.  These will help sell your property whether you or your agent are there or not.
Successful marketing is not about clever jingles or cool graphics.  It’s all about showing the value in your product to your prospect.  Green properties are no different. Show your prospects the value (to them) of your home.  Be clear and sell them on their needs.  Remember, comps don’t sell homes, value sells homes.

Friday, January 21, 2011

NAR Releases December SFH Sales Numbers

Single-family existing home sales jumped by almost 12% in December after rising 6.7% in November to end the year with a "strong finish," according to new figures released by the National Association of Realtors.

NAR reported that sales of previously owned single-family homes rose to a seasonally adjusted annual rate of 4.64 million in December, compared to a 4.15 million rate in November.

"The December pace is near the volume we're expecting for 2011, so the market is getting much closer to an adequate, sustainable level," said Realtors chief economist Lawrence Yun.  In terms of actual sales, Realtors sold 4.31 million existing single-family homes (not including condos and cooperatives) in 2010, the lowest reading since 1997.

On a year-over year basis, actual sales are down 5.6% from 2009.  But the median existing single-family home price rose 0.6% to $173,200.  An NAR survey shows that distressed sales comprised 36% of existing home sales in December.  Foreclosures made up 24% of single-family, condo and co-op sales and 12% were short sales.

NAR economists expect distressed sales will make up about 33% of total sales in 2011, about the same as last year. Meanwhile, first-time buyers purchased 33% of the homes in December and investors accounted for 20% of sales.  All-cash sales represented 29% of December's transactions. "All-cash sales have been consistently high at about 30% of the market over the past six months," Yun said.

Sales of Existing Single-Family Homes

Thursday, January 20, 2011

Another Technology Breakthrough

Mobile Media Month continues...

Are your single property websites generating the leads like you would like them to? If not, you need the call capture capabilities of our property websites with mobile phone technologies. Contact me and lets create your account today.
Yes, I am a loan officer.  And yes, I am in business to support real estate agents I with whom I am working.

To that end, my marketing team now offers single property websites with mobile phone website capabilities, including text messaging with call capture! Anyone can text your property ID to our system and receive property information and the URL to your mobile phone website... and their phone number is captured.

Exactly what is my marketing team is building for YOU, the real estate agent? (And did I mention it's FREE service for you...)


  • A complete professional property website

  • "Texting for" property info with call capture

  • Mobile phone website included

  • Complete dynamic virtual tour created

  • Unlimited pictures, documents and medias

  • A complete showings feedback system

  • Quick and fast online printing of flyers

  • One-Click classified postings to Craig's List

  • Feeds to popular classified real estate sites

  • Easy to use online browser control panel

  • High quality PVC sign riders in 5 colors

  • 24 hour access to all marketing information

  • And more...

    Sell more, List more, Earn more.  Please call or email me today to learn more.


    Wednesday, January 19, 2011

    Helping your Clients Improve their Financial Health

    Here are ten things your clients can do to improve their financial situation. Each one can easily be done in fifteen minutes and then forgotten about, but over time, these moves will slowly put significant money in their pockets. Think of it as an investment of time that continually pays dividends to the saver.

    1. Request a reduction in your credit card interest rate. Take your credit card. Flip it over. Call the phone number on the back. Ask to speak to a supervisor (when you finally get to a real person). Say that you’re considering switching credit cards with a 0% balance transfer and ask if they can reduce your rate to keep you as a customer. It won’t always work, but it’ll work often enough to make it well worth your while.

    2. Review your health insurance and other benefit choices at work. Take a look at what kind of health insurance you chose at work. Do you use it regularly? Would a less expensive option cover you just as well in an emergency? Do the same for your other benefits as well. This is a good time to bump up your 401(k) contribution a bit, too.

    3. Sign up for a customer rewards program. If you shop regularly at a particular store (for me, the weakness is Borders), sign up for their customer rewards program, especially if it’s free. I constantly get 20% and 30% off coupons from Borders, and somewhat regularly I get $5 in credit there as well. The program costs nothing, I get the coupons in my email, and it took me just a few minutes to sign up. Concerned about spam? Just use a Gmail address for this purpose – it’s free and the spam filtering is impressive.

    4. Install a programmable thermostat. A programmable thermostat lets you define a program for temperature change in your house throughout the day, which basically means your air conditioner and/or furnace won’t run during the day when you’re away from home or during the night when you’re asleep. This will save drastically on your energy bills. Even better, they’re easy to install if you’re a bit familiar with home electricity – but don’t hesitate to get an electrician to install it for you if you don’t know what you’re doing.

    5. Optimize your auto insurance. Consider raising your deductible on your comprehensive insurance – or consider entirely eliminating it if you’re thinking about buying a new car. Call your agent to get quotes on these changes. It might also be worthwhile to shop around a little.

    6. Visit your local library. You’ll find out exactly what’s available there – and the quantity and quality of the free stuff is usually surprising, from books to CDs and DVDs. You might just find yourself using their DVDs for your DVD rental needs for free instead of buying them or using Netflix. For me, I get the majority of my books from the library, saving quite a lot on book costs.

    7. Air up your car tires. Look in your car’s manual and see what the recommended maximum tire pressure should be on your car – that’s what the pressure for your tires should be. Get an air gauge, then the next time you’re at a gas station, head over to the free air pump. Check the pressure in each tire, then air up to the maximum. For every 8 PSI you add to any tire, you improve your gas mileage by 1%, and the average tire is 10-12 PSI below the recommended maximum. Thus, airing up your tires can save 6% on your gas mileage. If gas costs $3 a gallon and your car currently gets 20 miles per gallon, over your next 10,000 miles (a typical year), this tip will save you $85.

    8. Eliminate any monthly bills for items you don’t use. Still paying for Netflix but haven’t received a new movie in months? Paying for unlimited text messages but only use four or five each month? What about premium movie channels on your cable bill that you maybe watch once every few weeks? These are pure money wasters, and they’re well worth getting rid of. All you have to do is look at your last month’s worth of checking account statements to identify your regular bills, then eliminate the ones that you’re not using. Then, look at a few specific bills, like your cell phone bill, and eliminate any optional services you’re not using. The first time I did this, I came up with an extra $30 a month quite quickly.

    9. Replace your light bulbs with CFLs. Even if they’re not burnt out, replace them. Let’s say you use a bulb four hours in an average day. Over one year, at $0.10 per kilowatt hour, replacing a 75 watt bulb with a 26 watt equivalent CFL will save you $7.15 over a year. The bulb has paid for itself in four months. Even better, consider replacing every bulb in your home – replacing just fourteen of the old incandescents will put $100 a year directly in your pocket.

    10. Sign up for an online savings account and set up an automatic savings plan. There are a lot of reputable online-only savings accounts out there offering interest rates above 4%. Sign up for one, then set up an automatic savings plan within the account to pull out a small amount from your checking account each week. How much? Why not just save the amount you’ve saved from these other tips? Let’s say all together, you figure that you’re saving $60 a month from these tips. Set up a plan to save $15 a week into the account. You won’t notice any difference at all in your day-to-day spending, and at the end of the year, you’ll have about $750 in the account without lifting a finger!

    And of course, people who have not  yet looked to refinance their existing higher interest rate mortgage should do so now...they could save hundreds a month, and thousands over the life of the loan.

    Until tomorrow -

    Tuesday, January 18, 2011

    Helping Real Estate Agents Learn How to Blog

    Remember it's techhie month?

    One of the things I decided to add to my list of things to accomplish this year was to help as many real estate agents as possible to grow their business in every way possible.

    One way to increase your exposure in your local market is to start a blog.  No, you don't have to be an award winning author to do this and you don't even have to blog every day.  But you do have to be consistent and loyal to posting new thoughts or tips for your clients two to three times a week. 

    It’s one thing to say that you are blogging on a regular basis and providing quality, (dare I say it…) hyper-local content, but it’s another to say that you are doing it correctly so that your goals of reaching the right type of client are met.

    By now it’s hopefully not new news that blogs can get you ranked on google and other search engines (but who really uses the other ones anyway?) ten times faster than your conventional website can. By strategically using techniques such as keyword research, strategic real estate blogging videos, and more you can also achieve excellent google ranking too.

    One of the keys to gaining higher rankings is by getting more airtime.  By this I mean keeping your readers on your blogsite for longer than a few seconds.  Yes, we’re talking seconds here people, but what we want to achieve is as many minutes as possible!

    You can do this by adding more content to your site and ensuring people browse your archives.  You can also add more content by linking to another informational site with relevant, non-competing articles (you wouldn't link to a competitor of yours, but to a national real estate site such as Realtor(tm).

    When you want to share another website within your blog post, DO NOT, I repeat, DO NOT add the link to that site without having it open in a NEW WINDOW.   Why?  Because if you add the link without having it open in a new window, you’ve just lost your reader to the other site YOU sent them off to and cut your airtime short on your own site!

    If all this seems a bit complicated, no worries.  Just pick up the phone and call me.  My marketing team has a lot of useful tips for local agents - we will make an appointment for you to learn how to use blogs and other parts of my free marketing system for real estate agents. 

    Looking forward to hearing from you!

    Monday, January 17, 2011

    A Tribute to Martin Luther King, Jr

    Martin Luther King Jr. has now been dead longer than he lived. But what an extraordinary life it was.

    At 33, he was pressing the case of civil rights with President John Kennedy.

    At 34, he galvanized the nation with his "I Have a Dream" speech. At 35, he won the Nobel Peace Prize. At 39, he was assassinated, but he left a legacy of hope and inspiration that continues today.

    Hatred, present in many ways, still happens in our everyday world. Although we have come a long way in America through interpretation of our Constitution and through the passing of various laws, problems still exist in this country and in others.

    People worldwide still feel the effects of racism, lack of religious freedom, and prejudices against many other things. In order to make things better, people need to open the lines of communication and be willing to recognize and discuss these injustices. As individuals, each person needs to be the best that they can be, bringing passion and spirit to the world like Dr. Martin Luther King Jr. did.

    The process of trying to overcome injustices will unite the common good. Solutions to every problem will not happen overnight, but progress can be made by advancing one step at a time.

    I can try and help by inspiring one person, who in turn will hopefully inspire someone else, creating a chain affect until the passion and spirit touches many people.

    Happy Martin Luther King Jr. Day.  Enjoy your day off!

    Friday, January 14, 2011

    More Agent Tech Week: Your Website and Lead Gen

    For today's post, I consulted with my marketing team, experts in website marketing and lead generation techniques.  Below are their ideas.  While reading, don't forget that my marketing team is ready and able to create your property websites with lead gen built in - all you have to do is call or email me to get started!

    "Let's talk about the Internet, websites, and how leads are generated. How is it done now, how do the big players seem to be addressing it, and what we believe is a better way for:

    • Agent recruitment and retention
    • Assuring the success of agents
    • Leveraging the local nature of real estate
    "Real estate is local." How many times have you heard it, or said it? It isn't going to change, unless they find a way to move land. Then, we look at the Internet, and its global reach. How do these two factors influence each other, and how can we make them work together for success?

    The big player brokerages and franchises are furiously creating huge websites at corporate/franchise level. They are driving visitors to the site, and in a variety of ways generating leads that are passed down to the local offices, there divided again, and passed finally to an agent.

    And, this strategy might work in the long term. However, the consumer who is searching the Web for local real estate information will have a lot to say about it. Will they get lost in the big sites? Will they get there first if there is not a lot of hyper-local content to catch their search?

    True, you can buy traffic with PPC(pay-per-click), but the cost is high and the content on the landing page needs to be about the local area on which they searched. That is, it should be if you want them to stick around.

    We see the most successful Internet real estate website lead generation to be less top-down, and a lot more broad-based. Whether with regular sites or blogs, the large brokerages and franchises need to create web presence at agent level in the local markets. They need to train agents and solicit their input of content for these sites.

    The net result of these mini-local presences will be far greater than the huge "we have all of the listings" sites.

    Real estate will always be local, and the more local a website is in content, the better its ultimate lead generation. The franchises and big players need to look into how to build an Internet lead generation pyramid with the base being a huge number of hyper-local sites.

    Wednesday, January 12, 2011

    Helping Your Buyers Spot a Bad Framing Job

    This post just illustrates that when purchasing a property, never assume anything.  It underscores just how important it is to hire the right professional property inspector.   

    Thanks to Closer Look Property Inspections for this fascinating post.  This story happens to be about a commercial property, but the same principles can be applied to housing.

    And remember, I work with a list of great inspectors, so please give me a call if you need a referral for a client. Thanks and enjoy today's post.

    Via Eric Middleton (Closer Look Property Inspections Inc.):
    Any time I do an inspection I always ask my clients if they have any concerns in and around the property, that way I could pay special attention to their particular concern and explain its condition carefully and clearly.  On this commercial property, the buyer stated his most urgent concern is the sagging floors on the west side of the building. 

    During my brief interview, I asked him if he knew of any damage or repairs done to the property in recent months or years. Speaking with clients and especially sellers who are willing to give information is very helpful to home inspectors when diagnosing problems on and around the property.  This commercial property is a five thousand foot single story structure.  My client said the entire floor was re framed in the crawl space done by the owners who are a construction company.  So right away I'm thinking termites or water damage was likely the cause of the re framing and the problem has reoccurred.
    I learned a long time ago in this business to never do an inspection with preconceived ideas, even after gathering information.  The inspection of this property is one reason why.  True to the buyers concerns the floor on the west side had some significant sags in various areas, particularly toward the exterior walls, and a very weak spot in an area about a foot away from an interior wall.  I just knew it was termites, especially since the foundation walls was in good shape on the exterior, and looking at all the impressive and expensive tools,  I figured this construction company must have done a good job. Then again, maybe not.
                                                                      Bad Framing!

    As the subheading states above,  thats simply what the problem was, bad framing.  Take a look, a good look at the pictures below.  The floor joist is not supported at all, and this is the case along the whole length of the west side wall.  If you take a closer look you can see a hump at the top of the floor joist. Plus there were many cracks that you see in the picture on the right.

    unsupported floor joist
    crack in floor joist

    Then it gets worse. Remember the weak area I mentioned above? notice how they fixed that as shown in the picture on the left.  That's right they just stuck a piece of 2 by 12 through the floor sheathing and kept it moving.  Then they continued the practice of the unsupported joist as shown in the picture on the right.

    Bad framing
    Bad framing

    All floor joist should be properly supported so they can perform its job of evenly supporting the finished floor above. Even for commercial buyers,  a property inspection is helpful.  Imagine the cost of re-framing this property had he bought it without a quality inspection. This is only the half of the framing problems, but at least he did not have to make the repairs himself.

    Closer Look Property Inspections Inc.

    Tuesday, January 11, 2011

    Three New Mobile Apps for Real Estate Agents

    Agent tech month continues!

    Online real-estate search portals such as, and continue to have among the most popular software that can be downloaded to your phone. But even homebuilders and Better Homes & Gardens Real Estate have become mobile believers.

    The selections are great for iPhone/iPad users, but more limited for shoppers with other types of phones and handsets powered by the Google's Android or Microsoft's Windows mobile operating system.

    Still, just about any Web-enabled phone can now be used to search for real-estate listings these days, although the experience is still more satisfying on phones that link their GPS functions with the Web.

    Here's a brief look at three new apps and their features:

    Better Homes and Gardens Real Estate:
    This application helps buyers categorize open houses they visit. Users can jot down notes on a house they're viewing and take photos, which can be uploaded through the app to Facebook. The app also uses the iPhone's GPS feature to compile housing-market data, such as median home-sale prices. Currently the application is only available for the iPhone, but versions for BlackBerry and Droid phones will be out early next year.

    KB Home:
    Homebuilders are vying for homebuyers' attention, too. KB Home, which builds homes in 10 states and Washington, D.C., launched a search site in December designed to work better on mobile Web browsers.
    Users can tailor searches down to a specific KB community. The no-frills portal shows basic details, including number of rooms, price range, address, photos or renderings, floor plans and contact information. The site also lets users dial up the sales office directly from the browser.

    Smarter Agent: Agent was one of the pioneers with a mobile application in 2006 that helped buyers find information on recently sold homes. Last year, it rolled out an app called Homes for Sale, versions of which are now available for virtually all phones offered by all U.S. wireless carriers. The app also lets users search for properties for rent. The software can be viewed on mobile-phone browsers, so users don't necessarily have to have a fancy smart phone to use it. The firm culls listings from publicly available data from the local Multiple Listing Services and individual brokerage firms in the local markets that they are in. Next year, the firm plans to add interactive ads offering discounts from retailers.

    Monday, January 10, 2011

    My EZ Start Program Helps Your Buyers Lower Their Monthly Payment

    Today's real estate remains a buyer’s market which is good news for your buyers. Prices are good, and there are plenty of homes available.

    Still, because of economic hardships everywhere we turn, the monthly payment on a new home may be too high for your buyers. If this is the case, there’s a tried-and-true method available to solve that problem for them.

    It’s called the EZ Start Program and it suits today’s real estate market very well.

    Here’s how it works: For a small fee paid by the seller, the lender lowers the interest rate for you in a stair-step fashion for one to three years.

    It’s done in this fashion:
    In the first year of the mortgage, the interest rate is 2 percentage points below market. In the second year, the interest rate rises to 1 percentage point below the rate at the time the loan was made. After two years, the rate rises to the original interest rate for the life of the mortgage.

    As you can see, this method leaves more money in your buyers pocket those first two years of the loan. But those aren’t the only benefits they'll receive from the program.

    All of the mortgages in this program are fixed-rate, 30-year mortgages. For the buyer, this brings the security of knowing exactly what their interest rate will be for the life of the loan. They won’t experience any of the “sticker shock” that comes with Adjustable Rate Mortgages (ARMs).

    And here’s another advantage they’ll appreciate – FHA, VA, and Fannie Mae all participate with my EZ Start Program.

    This means they will have several channels through which to obtain that mortgage, making it easier to get a loan.

    Below is an example to demonstrate specifically, how the EZ Start Program works for your buyer:

    Let's assume that the seller has a $165,000 asking price on their home. Let’s also assume that your buyer puts up $16,500 in cash as a down payment. This means that they would then have to finance $148,500. At 6 percent, the payment for principal and interest would be $890 a month.

    But, let’s assume that the seller agrees to pay the cost of the EZ Start Program. That means the buyers monthly principal and interest payment at 4 percent for the first year would be $709. This is a difference of $181 a month or $2,172 a year.

    In the second year, the payment would rise to $797, but that's still a savings of $93 a month or $1,116 for the entire year.

    In the third year, the payment would go back to the original $890 for the remainder of the loan. However, over the two years, their total savings is $3,288!

    So, as you can see, lowering the interest rate is to the advantage of both your buyer and the seller.

    For example, assume that the seller decides to cut the asking price by $4000 (the cost approximate cost of participating in the program). The monthly payment at 6 percent would be $869. That means there’s only a $21 monthly savings versus the $181 in savings from EZ Start.

    Now your buyer still has to qualify for the loan at the $890, but a $3288 savings over two years is a lot! In fact, it would take you 13 years of saving $21 per month to equal the savings of that two years.

    So, as you can see, the EZ Start Program has distinct advantages for your buyer. They get the home they want faster and at a lower monthly payment for the first two years.

    There are several different channels through which to obtain a loan. And your buyer will have the security of a fixed interest rate for the life of the loan.

    I hope you’ve found the information in this free report valuable. To learn more about the 2-1 Buy-Down program, please contact me at 919-676-1111.

    We look forward to helping all your buyers get into their new homes!

    Friday, January 7, 2011

    Check out Global Real Estate Index -

    Global Real Estate Index
    It's Mobile Technology Month for our realtors - and to follow suit I was researching the top places agents can learn about new technologies to help them be a better agent and grow their business.

    In my search this morning, I came across 1000 Watt Consulting, a company which has aggregated all of the top real estate technology vendors into one place on the web for easy access. Their product is called Global Real Estate Index, and it houses categories like CRM, WordPress Plugs, Mobile Tools and IDX Solutions.  It is easy to navigate and are even broken down by country in which the technology is available.

    The companies whose products are housed there have all been evaluated by the owners of this company personally so you know before you click through to check them out that they have been looked at with eyes arguably more discriminative than your own.

    In addition they do not profit financially from the companies featured in the index so you know you are not being sold, rather being educated on what to buy or look further at.   Some categories look brand new and are not yet populated (hmmm. more exposure for you!), while some offer the best mobile apps and more.

    If I were a vendor I would want my product there. If I were a Realtor I would want to be listed in their best agents area, and also would bookmark the page and leverage it as a resource before pulling out my credit card.

    Have a great weekend everyone!

    Thursday, January 6, 2011

    Your Website Doesn't Work on Mobile and That's NOT OK

    By 2015 the mobile web will out pace the regular web. Ok, that's four years, you say, I've got time.  Well, no you don't...the time to "Go Mobile" is right now, so you have plenty of time to work out any bugs and perfect a new marketing plan using mobile media. 

    Rather than get on a soapbox about how many agents are missing the boat here (about 95% of them), i'd simply rather suggest a few options for you to research in creating a mobile-friendly website:

    1. WPTouch. WPtouch is a mobile theme for your WordPress website. Modeled after Apple’s app store design specs, it loads lightning fast and shows your content beautifully, without interfering with your regular site theme. WPtouch automatically transforms your WordPress blog into a web-application experience when viewed from an iPhone, iPod touch, Android, or BlackBerry Storm touch mobile device.

    2. MoFuse. MoFuse is currently being used by over 23,000 blogs for their mobile versions. Some notable “big-name” sites are Mashable and Read Write Web. MoFuse gives you tools to promote your content, build and measure your audience, and even make money.

    3. Mippin Mobilizer. Mippin Mobilizer helps you get your site mobilized in just a few quick steps, and give you full control over the branding and logo. It also give you the ability to monetize your mobile site through advertising.

    4. Mobify.  Mobify gives you full control over the layout of your mobile site with CSS, and it supports over 5000 mobile devices. It also gives you tools to manage mobile advertising and analytics.

    5. Wirenode. Wirenode currently hosts nearly 40,000 mobile webpages, and include in those are some popular brands like Reebok and Ford. With Wirenode it takes about 5 minutes to get a mobile version of your site up and running, and it gives you features like mobile widgets, RSS mobilization, and mobile polls and forms.

    6. mobiSiteGalore
    . mobiSiteGalore is a mobile website builder that allows you to easily build, publish & share a full-fledged mobile website that is guaranteed to work fine on any mobile phone. Design templates allow you to completely customize the colors, fonts and layout on the page to create a unique looking mobile version of your website.

    This is by no means an exhaustive list and new technologies are being released all the time.  Do yourself a favor and be sure your website is mobile-friendly. 

    And oh, by the way, if you want mobile friendly listing sites, you can always just call me to learn more about my free marketing program for the real estate agents who choose to work with me.

    Until tomorrow...

    Wednesday, January 5, 2011

    Can You Borrow from Your 401K for a Downpayment?

    Mortgage underwriting has gotten a lot stricter since the subprime meltdown, and it's fairly difficult to get approved for conventional financing with less than 20 percent down. So how about borrowing the downpayment from your 401(k)?

    Coming up with a downpayment is considered by many the greatest roadblock to getting a mortgage and buying a home. That makes sense if you consider that the average price of a home in the U.S. in February 2010 was $290,900, making an average 20 percent downpayment $58,180. If you put $500 a month into a typical savings account paying 2 percent, it would take nine years to come up with that downpayment! By then, the average home may be even more expensive. Then there are closing costs to consider -- typically 2 percent or 3 percent of the sales price. That's another $8,727.

    If you want to take advantage of the buyer's market (cheap real estate and low mortgage rates), you may be able to borrow up to $50,000 from your 401(k) account.

    How borrowing from your 401(k) works
    If your employer allows you to borrow from your 401(k) plan (most do), you can take the lesser of 50 percent of your vested balance or $50,000. You are typically granted up to five years to pay the loan off, unless you are borrowing the downpayment for your first home; in that case, you get more time.

    You have to pay interest on the loan, but you are borrowing from yourself, so you're paying interest to yourself. Getting the loan is relatively easy; you just have to complete a short form or make a phone call.

    Is borrowing from your 401(k) a good idea?
    That depends. First off, you forgo the earnings on that money while it's not in your account. You repay it with after-tax dollars, so you lose some tax deferral advantages. The biggest risk with borrowing against your 401(k) is that if you lose your job or change employers, you have to repay the loan in as little as 60 days. Otherwise it is treated as an early withdrawal and subjected to the tax on ordinary income plus a 10 percent penalty. On a $50,000 withdrawal, that's a $5,000 penalty plus $12,500 in taxes at 25 percent. Pricey!

    If borrowing from your 401(k) keeps you from making your normal contributions, your cost increases substantially, and if you miss out on employer matching contributions, the loan could get extremely expensive.

    Yet if you can continue making your regular contributions while repaying the loan, you aren't losing much. If you aren't paying mortgage insurance, you may be able to take advantage of property appreciation by buying sooner rather than later (assuming that the real estate market shakes off its doldrums and resumes normal appreciation, which HUD defines at 4 percent).

    Assuming that you'd otherwise have mortgage insurance in force for five years, you'd be paying about 1 percent per year (ballpark that at $10,000 for five years). Assuming 4 percent annual property appreciation on a $290,900 home, in five years that's over $60,000.

    Other options
    You have a few alternatives to saving for the next decade before you can buy a home or risk your retirement. One is to look into an FHA mortgage. You only have to put 3.5 percent down, which is $10,182 (if you're buying a home worth $290,900). You'd also have to pay an initial and an annual mortgage insurance premium, but they can be rolled into the new home loan.

    Your other option is to buy a home with 5 percent or 10 percent down (cutting the savings time to 2.25 to 4.5 years), and pay monthly mortgage insurance (MI).

    Keep in mind that you'll need excellent credit scores to qualify for MI; one major mortgage insurer requires minimum scores ranging from 680 to 740, depending on the property type and use. You can also get the seller to pay your closing costs and save some time.

    The third option is to apply for down-payment assistance (in most cases, you need to be a first-time homebuyer and meet income eligibility guidelines). The fourth option is to buy a VA or USDA mortgage, which requires no down payment.

    In summary...
    If borrowing from your 401(k) saves you from paying mortgage insurance, if you are confident that you'll be with your employer long enough to repay the loan and if you earn enough to repay the loan and the mortgage while keeping up your retirement contributions, your decision to borrow your downpayment from your 401(k) could probably be a "yes." 

    You should consult a tax accountant for help with the financial analysis if you are considering this as an option; and of course  - I am always here to help you get the loan you deserve!

    Tuesday, January 4, 2011

    How to Price A Home

    Pricing your home is an art -- not a science.

    Achieving the optimal price is the result of both objective research into similar properties and instinct in determining how much a buyer will be willing to pay for your home. The right price will attract showings, which will generate offers.

    The unfortunate fact is that price is the number one factor that most homebuyers use to determine which homes they want to view. It’s also important to remember that although you and your client set the asking price, the selling price is determined by the buyer.
    The Correct Price Will:
    • Result in a quicker sale, with less inconvenience to the seller
    • Expose the property to more buyers
    • Increase agent response
    • Generate more ad calls
    • Prevent your listing from getting "stale" or "shop worn"
    Typically homes that sell more quickly, sell closer to or sometimes over asking price.
    Some Common Reasons for Overpricing
    • Over-improved property
    • Original purchase price too high
    • Desire for "negotiating room"
    Overpricing Pitfalls
    • Most of the activity on your client's home will occur in the first few weeks. Pricing a home properly creates immediate urgency in the minds of buyers and agents.
    • There is a pool of buyers who have seen most available homes in their price range and are now only waiting for new listings or price reductions. A buyer that has been waiting, may fail to see your clients home if it is priced too high.
    • Sometimes, a price reduction may be too late, as interest by both buyers and agents may have waned.
    • Buyers and their agents are very aware of the length of time on the market, the most common question continues to be: “How long has it been on the market?” Often buyers are reluctant to make an offer on a home that has been on the market for “awhile” thinking that there is something wrong with the home.
    • Unfortunately, overpriced listings frequently help you to sell your client's neighbor’s reasonably priced home, making it appear that their home is priced very well.
    The Role of a Real estate Agent in Pricing
    • Provide the client with a comparative market analysis, which is a comparison of recent homes with similar amenities that are available, in escrow and sold.
    • There is no “exact price”; your client's home is worth what a buyer is willing to pay.
    • The market determines value; together you and your client determine asking price.

    Monday, January 3, 2011

    Can't Sell Your Home? Is it Possible to Refinance When You’re Upside Down in Your Mortgage Loan?

    And if so, how do you advise your clients to go about it? 

    A while back, I heard a statistic that said 12 million homeowners were upside down in their mortgage loans (meaning they owe more on their mortgages than the home is worth in the current economy). I would venture a guess that this number will grow in the coming months. That’s because home prices are still falling in some areas of the countries, and the bottom of the market might not come until sometime in 2011.

    What Does Upside Down in a Mortgage Mean?

    If you’re not familiar with the term “upside down” in a loan, or how the situation arises in the first place, here’s a quick overview. Let’s say you purchased a $400,000 home in 2005, in a city that was experiencing a big real estate bubble (fast rising prices). In 2008, we saw the beginning of a housing crash that is still rippling through our entire economy.

    Four years later, you find that your home is only worth $215,000 in the current market. The problem is, you still owe $320,000 on the house. You owe more than the home is worth in the current economy — so you are upside down in your mortgage loan. This is also referred to as being “underwater” in the loan. They both mean the same thing.

    Can You Refinance In this Condition?

    Many of these same homeowners are trying to refinance their mortgage loans in order to take advantage of low interest rates. Many people are also hoping to refinance away from their adjustable-rate loans and into a more predictable fixed-rate mortgage. But they are hitting roadblocks because they are upside down in their loans.

    Generally speaking, lenders will require you to have a certain amount of equity (ownership) in your home, before they’ll approve you for a refinancing loan. But when you are upside down, you actually have negative equity — you owe more than the property is worth. This is why so many people are being turned away when trying to refinance. They lack the equity needed to get approved.

    So, are there any ways to refinance when you are upside down in in a mortgage loan? Yes, but it depends on how much you are underwater. If you are only slightly underwater in your home, you might qualify for refinancing assistance. The federal government recently announced the Making Home Affordable program, and part of it is designed to provide refinancing options for upside down homeowners.

    There’s another caveat to this government program. Your mortgage loan must currently be owned by Freddie Mac or Fannie Mae. You can ask your lender about this, or you can look up your loan through the Fannie or Freddie websites. This is the page for a Fannie mortgage search, and this is the Freddie look up.

    You can also check out this guide to government mortgage programs to learn more about them. 

    If you are underwater by more than 5% or so, you might be out of luck. Despite my efforts, I’ve not yet been able to find any refinancing options for people with severely negative equity.  But I’ll certainly keep you posted. 

    We will keep you posted on new developments as they arise.  Check back often, or bookmark this blog for future reference.

    What is your biggest challenge when listing a new home?

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