‘Tis the Season to Stay Connected With Clients

‘Tis the Season to Stay Connected With Clients

The period between Thanksgiving and Christmas can be a challenging time for real estate agents, as families focus their attention on traveling, entertaining, and other family activities. But that doesn’t mean property deals grind to halt.

Sending out newsletters or holiday greeting cards, e-mailing clients the newest properties on the multiple listing service, and emphasizing the great deals out there are all good ways to keep home buyers and sellers engaged during the holiday season.

Prospective buyers and sellers who may have a sliver of time here and there need to know that their agent is available to them.  It is important, therefore, to emphasize that even if a phone call is not answered at once, text and e-mail are other options of reaching out and any communication will receive a prompt response.

It also would benefit practitioners to show some flexibility during the holidays in terms of where, when, and under what circumstances a client can meet with them.  If that means they must bring along a young child, for instance, the agent may want to have an assistant baby-sit as a courtesy.

Source: “Sell During the Holiday Season” Realty Times (11/21/12)

First-Time Home Buyers Being Shut Out?

First-Time Home Buyers Being Shut Out?

First-time home buyers are a shrinking pool, making up less of the housing market. Typically, they represent about 40 percent of buyers, but today their numbers have dropped to about 31 percent of buyers, according to housing data by the National Association of REALTORS®.

First-time home buyers are the only group of buyers whose share of home purchases have not increased over the last five months, CNBC reports.

FHA mortgages, with low down payment requirements, are a popular choice among this group of buyers, but the recent rise in FHA mortgage insurance premiums is hampering first-time home buyers. Some sellers are also even refusing to accept offers from first-timers that include FHA financing, real estate agents report. What’s more, FHA announced it would raise premiums again next year, another 10 basis points.

“Financing of first-time home buyers with low down payments threatens to become a significant problem in the U.S. housing market,” Thomas Popik, research director for Campbell Surveys, recently wrote. “Fifty percent of first-time home buyers use FHA financing, but FHA insurance premiums are increasing and underwriting is becoming more strict. Private mortgage insurance has started to fill the gap, but the long-term status of private mortgage insurance is in question pending the publication of the Qualified Residential Mortgage regulation resulting from Dodd-Frank.”

First-time buyers also face steep competition when targeting lower priced properties. Investors have flooded the market, snagging lower priced properties in all-cash deals that first-time buyers would typically be drawn to.

Source: “Housing Recovery Is Leaving Behind First-time Buyers,” CNBC (Nov. 26, 2012)

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5 Popular Markets for First-Time Home Buyers

Home Prices what’s really driving them?

Home Prices what’s really driving them?

The Wall Street Journal recently cited five significant factors behind the rise in home prices, as numerous markets see significant year-over-year gains. The big price drives are:

1. The rise in housing affordability – which is drawing more buyers out into the market who are looking to cash in on low mortgage rates and fallen home prices compared to a few years ago.

2. The rise in household formation – which is expected to hit 1 million new households this year. That is up from an average of 570,000 over the last five years, according to data by Bank of America Merrill Lynch.

3. The rise in rents – which has prompted more investors to purchase properties to rent out and more renters to second-guess why they are paying so much in rent when they could buy.

4. The decline in distressed sales and foreclosures – which has fallen significantly this past year. While distressed sales are still high by historical standards, they have fallen from their peaks in most markets, helping to alleviate the downward pressure on home prices in many areas.

5. Inventories of homes for-sale are at their lowest levels in nearly 50 years – and builders have cut back on construction and many home owners are waiting to sell until they can recover some equity on their properties.

Source: “Five Reasons Home Prices Have Been Rising,” The Wall Street Journal (Nov. 27, 2012)

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Where Asking Prices Are on the Rise the Most

Real Estate Agent Bonuses Offered on Freddie Mac REO Sales.

Real Estate Agent Bonuses Offered on Freddie Mac REO Sales

Freddie Mac announced that it is offering $1,000 bonuses to real estate agents representing buyers of one of its HomeSteps REO properties. Listing agents may be eligible for $500.

The agent bonus program applies to 20 states.

To receive the bonus, offers must be received between Nov. 15 and Feb. 28, 2013. Closing must occur on or before April 15, 2013.

Investor purchases, auction sales, and bulk sales are not eligible for the program.

The bonus program, known as HomeSteps Winter Sales Promotion, is to help HomeSteps unload some of its REO inventory, which stood at 50,919 homes at the end of September. About two-thirds of the properties were located in the 20 states taking part in the agent bonus program.

Those states are Alabama, Colorado, Iowa, Illinois, Indiana, Kentucky, Louisiana, Massachusetts, Michigan, Minnesota, Missouri, North Carolina, Ohio, Oregon, Pennsylvania, South Carolina, Tennessee, Virginia, Washington, and Wisconsin.

Source: HomeSteps and “Freddie Mac Offers Agent Bonuses on REO Sales,” Inman News (Nov. 15, 2012)

Mortgage Rates Fall into Record-Breaking Territory

Mortgage Rates Fall into Record-Breaking Territory

Mortgage Rates Fall to new all-time lows this week, pushing homebuyer affordability even higher for those who can qualify.

“The Fixed Mortgage Rates Fall to record lows on indicators of higher consumer confidence and wholesale prices,” Frank Nothaft, Freddie Mac’s chief economist says.

The following are the national averages of the Mortgage Rates Fall as reported by Freddie Mac for the week ending Nov. 15:

• 30-year fixed-rate mortgages: averaged a new low of 3.34 percent, with an average 0.7 point. The previous record low was 3.36 percent, set the week of Oct. 4. A year ago, 30-year rates averaged 4 percent.
• 15-year fixed-rate mortgages: averaged a new low of 2.65 percent, with an average 0.7 point. Its previous record low was 2.66 percent, set during the week ending Oct. 18. A year ago, 15-year rates averaged 3.31 percent.
• 5-year adjustable-rate mortgages: averaged 2.74 percent, with an average 0.6 point, rising slightly from last week’s 2.73 percent average. Last year at this time, 5-year ARMs averaged 2.97 percent.
• 1-year ARMs: averaged 2.55 percent, with an average 0.3 point, dropping from last week’s 2.59 percent average. A year ago, 1-year ARMs averaged 2.98 percent.

Source: Freddie Mac

Federal Housing Administration may require bailout money.

Federal Housing Administration may require bailout money

Will the Federal Housing Administration Need a Bailout?

The Federal Housing Administration may require bailout money from the federal government to stay afloat, media outlets are reporting. The FHA insures mortgage lenders against losses.

A high number of mortgage delinquencies is at blame, according to sources.

“The Federal Housing Administration insures nearly 739,000 loans that were 90 days or more past due or in foreclosure at the end of September, an increase of more than 100,000 loans from one year ago,” The Wall Street Journal reports. “That represents around 9.6 percent of its $1.08 trillion in mortgage guarantees.”

The Federal Housing Administration is expected to report later this week that it has run through its reserves and will require a government bailout, The Wall Street Journal reports. If this takes place, it would be the first time that the FHA has ever needed a government bailout.

Regardless, the government would not decide whether to grant Federal Housing Administration a bailout and for how much until February.

Source: “FHA Nears Need for Taxpayer Funds,” The Wall Street Journal (Nov. 14, 2012)

Where Do Home Buyers Look the Most on the Web?

Where Do Home Buyers Look the Most on the Web?

Today’s Home Buyers are no stranger to using the Internet when home shopping. In fact, most Home Buyers find the house they eventually buy first by searching on the Internet, according to buyer surveys.

So where do they turn most frequently for their information?

Home Buyers their local multiple-listing service Web site is the top place home buyers look for homes, according to the National Association of REALTORS(R)’ 2012 survey of home buyers and sellers.

The following are the most popular Web sites used in a home search by Home Buyers, according to the survey:

1. MLS Web site: 54 percent
2. Real estate agent Web site: 51 percent
3. Realtor.com: 47 percent
4. Real estate company Web site: 39 percent
5. Other listing Web sites: 27 percent
6. Search engines: 19 percent
7. Mobile or tablet apps: 13 percent
8. For-sale-by-owner sites: 13 percent

Source: “MLS Most Used Internet Resource for Homebuyers,” Inman News (Nov. 14, 2012)

Fannie and Freddie what’s in store for them?

Fannie and Freddie what’s in store for them?

There were more questions raised than answers provided about the future of government-sponsored enterprises (GSEs) Fannie and Freddie and their continued role in the secondary mortgage market at the Regulatory Issues Forum Friday during the 2012 REALTORS® Conference & Expo in Orlando.

Today, the GSEs have too much market share, said Timothy J. Mayopoulos, Fannie Mae president and CEO, who spoke at the session. However, as he pointed out, “More than four years after the financial crisis, we see little private capital available to meet the demand for single-family housing.”

Lenders are very reluctant to engage in home loans now because of concerns such as potential repurchase requests and regulatory uncertainty. Mayopoulos acknowledged that more transparency is needed around these issues to coax private capital back into mortgage lending.

Mayopoulos and Dr. Wanda DeLeo, deputy director of the FHFA—which currently holds Fannie and Freddie in conservator-ship—and another presenter at the forum, said there’s a broad consensus about what needs to be accomplished over the next few years with respect to the GSEs. A new secondary mortgage market infrastructure needs to be created, the GSEs’ share of the market needs to be reduced, and home owners in distress need to be helped, they explained.

To that last point, Fannie continues to explore new ways to assist borrowers, Mayopoulos said. For instance, to speed up short sales, his organization recently instituted a 60-day deadline for short-sale decisions from lenders. Fannie also waives documentation for hardship in some cases.

However, an agreement on a specific plan for creating a new secondary mortgage market and shrinking the GSEs’ share of home loans has not been reached. Mayopoulos demurred on a question about whether Fannie and Freddie would eventually be phased out and how that might impact mortgage lending.

“We’re in a time when we have to have a debate about what the secondary mortgage market is going to look like, but I’m going to leave that debate to the policymakers,” he said.

Still, whatever happens to Fannie and Freddie and the secondary mortgage market, Mayopoulos expressed a hope that the valuable services those institutions deliver—such as setting standards and making home ownership more accessible for millions of Americans—would be integral to whatever system replaces them.

“This system should not be too big to fail, but it should be big enough to matter,” he said.

—Brian Summerfield, REALTOR® Magazine