Tuesday, February 23, 2016

How To Give Yout Clients Wht They Need #realestate #news #houaing #foreclosure #reo

Both seasoned and novice investors need to understand one concept above all else: the real estate industry is all about the people.  Without clients, investing would be a rather fruitless feat. This isn’t groundbreaking news.  Entrepreneurs are constantly striving to figure out what their customers want.  While knowing what they want isn’t a bad place to start, understanding why they want it will be far more advantageous for your business’ bottom line.
Want vs Why
Suppose your are selling a home to a woman and her child.  You can ask the basic questions: “what is your price range?”, “where is your ideal location?”, “how many bedrooms will you require?”, and so on.  Although these questions are valuable – and come with answers you will ultimately need to have – their answers are less significant than answers to “why” questions.  “Why” questions reveal your clients’ motivations behind their purchase, helping you to better understand their needs and retain them as loyal, profitable customers.  Your clients will feel respected and appreciate the fact that you care more about their specific sale.
Phrase your first question as follows: “what made you decide to start looking for a new home?” By asking a “why” question, you will appear more considerate, and those “what” answers – that you are truly trying to obtain – will fall into place.  Make sure to ask a follow-up question to come across as empathetic.  Something as simple as “tell me more about that” or “how can we make this process run more smoothly for you,” shows your client that your sole purpose is to support them, not to help yourself land another deal.  Lastly, gage their emotions by asking how they feel about everything thus far in the transaction.  Are they happy, sad, anxious, or scared? Once you know this, you can alter your game plan and more easily devise a solution if necessary.
The same concept holds true for investors.  Most people don’t consider investors “salespeople,” but in a way they are – with themselves being the product.  For example, If you plan to invest in a rental property, you’ll need to acquire capital.  To acquire capital, you have to secure a lender.  In order to secure a lender, you’ll need to present yourself as a reliable, trustworthy, and capable candidate.  To do so, it will be necessary to hash out the many previous investments you have completed successfully.  However, separate yourself from the competition by remembering the “why” questions and, in this case, “why” answers.  Ask why the property initially went on the market.  Ask why the seller is looking to dispose of it quickly.  Perhaps you will find out that the foundation has been damaged beyond repair or that the roof has a bad leak.  You might learn that the owner is experiencing family difficulties, and is therefore willing to sell at a lower price.  If you are all about the “what,” you might miss out on important details that would have otherwise made you rethink the deal.  
The Importance Of Why  
ask why
Never underestimate the power of excellent customer service.  Small business owners should place a heavy emphasis on delivering a great consumer experience.  While great customer service has positive ramifications (companies that make customer service a priority make 60 percent more profits than their competitors), bad customer service can make an even bigger impact. Negative interactions spread to two times as many people as positive interactions, and 91 percent of unhappy customers will never willingly do business with you again.  According to a study conducted by the White House Office of Consumer Affairs, it takes 12 positive experiences to make up for a single bad experience.  If those stats don’t shock you into exhibiting some customer appreciation, you are not ready to enter into the world of real estate investing.
Changing your motto from “what?” to “why?” is comparable to what George Debb, contributor for Entrepreneur Magazine, considers selling widgets versus selling wisdom.  A widget implies a thingor a product, while wisdom implies insights and understanding.  There is a limit, a shelf life so to speak, for things, where as acquiring wisdom has no boundaries.  You can’t put a price on something infinite, which makes you less likely to be subjected to price competition.  Your clients will appreciate that they can come to you for answers on everyday questions and will therefore be more likely long-lasting, likely to return clients (according to research, repeat customers spend 33 percent more than new customers with every new transaction).
It can be hard for startups and entrepreneurs to concentrate on customer service.  Not because they are inept, but because they are focused on all other aspects of the business.  But treating clients any less than above par can lead to a variety of catastrophes:
loss of customers
1. Loss Of Current Customers
Even your most forgiving clients will refuse to deal with poor customer service, especially if they were one of your first.  Consider instituting special benefits for recurring and loyal clients.
2. Loss Of Potential Customers
If a new lead comes your way, treat them as though they are the only thing in the world that matters.  You never know how much business they will want to do with you down the line, or if they might be your next highest paying client.  
3. Loss Of Future Customers
It is likely that if a customer experiences bad service, they are going to tell their friends and family.  In fact, a client who is dissatisfied will tell nine to 15 people about their bad experience, and 13 percent of people tell 20 people about their bad experience.  As you can see, this can lead to a bad reputation that will go viral.
Ultimately, treating your clients as though they are walking dollar signs will actually cause you to lose profits.  Because 70 percent of people’s buying experiences are based on the way they feel they are being treated, it is just as important – if not more so – to invest in prioritizing customer service as it is to purchase that new laptop.
So stop being like the thousands of other real estate investors who drone on about their accomplishments and closed deals, and go from asking “what?” to asking “WHY?”

justin lee thayer

Residential Investment Market is on the Rise. #realestate #market #housing #news

market in the last two years has led to an increased number of SFR homes built for the expressed purpose of renting. The market for detached SFR homes built-for-rent is on the rise despite a falling market share in the last three years, according to Robert Dietz, Vice President for Tax and Market Analysis for NAHBFor the fourth quarter of 2015, built-for-rent SFR homes accounted for about 3.5 percent of all SFR starts, according to data from the Census Bureau (Quarterly Starts and Completions by Purpose and Design) and analysis from the National Association of Home Builders. While that market share is higher than the historical average of 2.8 percent, it is more than 2 percentage points lower than the market share at the start of 2013, just three years ago (5.8 percent).
Meanwhile, the number of SFR homes built for the purpose of renting ticked up from 25,000 in 2014 to 26,000 in 2015, according to NAHB.
“The market for single-family for-sale homes is growing faster,” Dietz saidnoting that this was also the custom home market was also experiencing similar movements. “The 2014-2015 volume is higher than, for example, prior years, but market share is falling as the for-sale segment expands.”
Dietz continued, “With the onset of the Great Recession, the share of built-for-rent homes rose. Despite the current elevated market concentration, the total number of single-family starts built-for-rent remains fairly low in terms of the total building market.”
2-22 NAHB graphThe share of built-for-rent SFR homes comprises a considerably smaller share of the total SFR portion of the nation’s stock of rental housing. According to a report from John Burns Real Estate Consulting in August 2015, about 12.7 million households rented a single-family detached home, which made up about 29 percent of the 44.3 million total renters nationwide.
Burns noted in his report that the SFR market has traditionally been a “mom and pop” business (with about 54 percent of SFR landlords renting out only one house, according to data from RentRange), institutional investors were beginning to take note of the more than 12 million SFR detached home renters. He said he believes the competition of single-family rental homes with the detached resale and new home market has created a need for new homes to be built for single-family rentals.
“Clearly, there is a subset of renters who will pay a premium to rent new, as evidenced by the 200K+ apartment units that are built and leased every year,” Burns said. “If it works for apartment developers, why has there not been much attempt to build single-family homes for rent? Those days are now ending.”
2-22 NAHB graph

justin lee thayer
Justin Lee Thayer 541 543 7287

Legacy HELOC Borrower Default / Foreclosure Risk #realestate #housing #market #news

The payment shock facing homeowners who originated a Home Equity Lines of Credit (HELOCs) between 2004 and 2007, known as legacy HELOCs shock once they reach the end of their 10-year draw period might not be as big a problem as originally thought, according to a white paper titled “Home Equity Lending Landscape” issued byCoreLogic on Monday.
the mortgage industry originated approximately 12.2 million HELOCs during the three-year-period between 2004 and 2007, often with loose underwriting standards. Some in the industry have expressed concern that a large number of borrowers with legacy HELOCs will default because they cannot handle the payment shock that awaits them when they reach their end-of-draw period, which is the point at which borrowers must start repaying their balances with fully amortized payments (as opposed to interest-only) and cannot borrow funds from their lines of credit any longer.

Many of the riskiest legacy HELOCs issued during those housing bubble years have defaulted and gone into foreclosure, but millions of those HELOCs remain active, according to CoreLogic.
About 39 percent of the 4.1 million residential homes that had negative equity, or were “underwater,” as of Q3 2015 had both first and second liens (computing to about 1.6 million properties). The average mortgage balance on those properties was $307,000, and they were underwater by an average amount of about $83,000. By comparison, borrowers with only first liens were underwater by an average of about $58,000, CoreLogic reported.
Despite warnings that the HELOCs reaching the end-of-draw period could potentially result in another round of losses, the problem may be under control.
2-22 HELOC
“While there has been some increase in late payments and delinquencies tied to conversions, so far the problem appears to be manageable,” the white paper stated. “The average monthly delinquency rate (30+ days overdue) for HELOCs was 2.0 percent in 2015 through November—the lowest level in eight years.”
Many lenders have been proactive about offering legacy HELOC borrowers options to refinance that will allow them to continue the interest-only payments, and many older HELOCs have been extinguished by first mortgage refinances that incorporated the outstanding HELOC debt, according to CoreLogic.
“As a result, the number of active legacy HELOCs has significantly declined,” CoreLogic stated in the paper. “Having said that, the smaller cohort of active legacy HELOCs that haven’t been refinanced because of equity, credit, or income issues will be very susceptible to default in the event of a payment shock.”
Click here to see the complete white paper.
2-22 HELOC

justin lee thayer
Justin Lee Thayer 541 543 7287

First-Time Buyer Mortgage Risk, #Team Thayer #realestate #housing #mortgage #news #eugeoregon

The risk on Agency first-time buyer mortgages is rising while the disparity in risk between Agency first-time buyers and repeat buyers is growing wider, according to the AEI International Center on Housing Risk’s First-Time Buyer Mortgage Risk Index (FBMRI) for January 2016 released Monday.
The Agency FBMRI provides an estimate of the share of Agency first-time buyer mortgages that would default if the economy were to suffer adverse conditions similar to those during the 2007 and 2008 financial crisis. In January 2016, the FBMRI increased over-the-year by 0.7 percentage points up to 15.7 percent and is 6 percentage points higher than the Agency risk index for repeat buyers. The gap between the two continues to grow wider, according to AEI.
More than half (54 percent) of first-time buyer loans in January were high risk, meaning they had an MRI higher than 12 percent. That share jumped by 2 percentage points over-the-year, up from 52 percent in January 2015.
Risk layering is largely responsible for the higher risk for first-time buyer mortgages, according to AEI. In January, 70 percent of first-time buyer mortgages had a combined LTV ratio of 95 percent or higher and 97 percent of the mortgages had a 30-year term. The combination of a low down payment and slow amortization assures that these first-time buyers will have little equity for many years, barring substantial home price appreciation.
“The gap between first-time buyer and repeat buyer mortgage risk levels now stands at 5.92 percentage points compared to 4.91 and 4.64 percentage points in December 2014 and 2013 respectively,” said Edward Pinto, codirector of the AEI International Center on Housing Risk. “In a seller’s market, risk layering artificially pushes up prices, particularly for entry-level buyers; the result is a wealth transfer from buyers to sellers of these homes.”
Another contributor to riskier first-time buyer mortgages is the fact that one-fifth of first-time buyers had a credit score lower than 660, which is the traditional definition of subprime mortgages. Also, one-fourth of first-time buyers had total DTI ratios higher than 43 percent, which is the limit set by the Qualified Mortgage rule.
Mortgages taken out by repeat buyers were less risky because a much smaller share of repeat buyers had a CLTV higher than 95 percent, and a smaller share of repeat buyers had a FICO score lower than 660.The Agency First-Time Buyer Share Index (FBMSI), which measures the percentage of primary owner-occupied home purchase mortgages with a government guarantee, increased by only 0.1 percentage points over the year in January, from 56.0 percent to 56.1 percent. AEI attributes this largely to delayed closings brought on by the TRID rule, which went into effect on October 3, 2015.
“On a year-over-year basis, the first-time buyer share increased only modestly in January, with the rise likely suppressed by the implementation of TRID,” Pinto said.  “Once this impact abates we expect the housing market, particularly at the entry-level, to exhibit strong demand, in combination with shortness of supply, which will continue to drive home prices up faster than incomes and inflation.”

Monday, February 22, 2016

Mortgage rates continued their trend lower, #RealEstate #news #eugene #oregon

Mortgage rates continued their trend lower over the past week, but the path was not smooth. Shifts in demand for risky assets, such as stocks, and also safe assets, like mortgage-backed securities, caused mortgage rate volatility. Not even higher inflation levels could keep rates from ending the week at better levels.
The outlook for future inflation plays a major role in setting mortgage rates. Higher inflation causes investors to demand higher yields. There are many components captured in inflation reports, and their costs change at different rates. Of note, there has been a large divergence between the cost of goods and services in the U.S. A stronger dollar and the large decline in commodity prices have helped hold down the cost of goods over the past year. The service sector, however, has remained strong and costs have been rising somewhat rapidly. Shelter and medical costs stand out as significant sources of inflation.
The most recent readings show that inflation is on the rise. The consumer price index (CPI), releasedon Friday, is the most widely followed monthly inflation indicator. January readings were higher than expected. CPI was 1.4% higher than a year ago, which was the highest level since October 2014. Core CPI, which excludes the volatile food and energy components, was 2.2% higher than a year ago (the highest level since June 2012). Investors will be closely monitoring the upcoming release of the core PCE price index for a similar trend. Core PCE is the Fed's preferred inflation indicator.
Source: MBS Quoteline

justin lee thayer
Justin Lee Thayer 541 543 7287

Mortgage Defaults / Foreclosures Rates Into 2016 #realestate #eugene #oregon #market #investing

First mortgage default rates started the new year exactly where they left the old one, according to the latest S&P/Experian Consumer Credit Default Indices (a.k.a. SPICE Indices), released Tuesday.
According to the report, first mortgage and auto loan default rates were unchanged for January, with default rates of 0.84 percent and 1.04 percent, respectively. Three of the five major cities, Los Angeles, Chicago, and Dallas, did see their default rates increase in January over December, however. Los Angeles reported a default rate of 0.72 percent, which is up seven points from December; Chicago increased two points to 1.02 percent; and Dallas rose one point to a default rate of 1.11 percent.
Of the remaining major cities on the SPICE Indices, New York recorded a default rate of 1.04 percent in January for the second consecutive month, while Miami showed a huge decrease of 27 points in January, reporting a default rate of 1.17 percent for the month.
Tuesday’s report answers recent speculation about whether national default rates would remain as steady as they were in Q4 of 2015. Last year was up-and-down for default rates, though Q4 finished with three consecutive months of slight increases. David Blitzer, Managing Director & Chairman of the Index Committee at S&P Dow Jones Indices, cautioned at year’s end that a quarter does not a trend make and said that there were “no seasonal patterns or other concerns that stand out” about Q4’s numbers.
Blitzer was similarly levelheaded (and optimistic) about the newest numbers, and reminded that indices, despite the turbulence, are still low and that things generally are running smoothly.
“The series established a new low point in November and remains quite low compared to its recent history,” he said. “Moreover, the small decline in first mortgage defaults offset any damage in bank cards.”
2-16 S and P graphOn a regional basis, Blitzer said, the five cities noted in the release “bounced around, but none appeared to be warning of future difficulties. The economy is taking on something of a split personality.”
Blitzer cited falling prices and volatility in the market so far this year, when the stock market is down about one percent, interest rates remain low in spite of the Fed raising rates in December, and concerns about corporate earnings and credit are widespread.
But on the upside, he said, “home prices continue to climb, new homebuilding is rebounding, and auto sales have been quite strong. The unemployment rate ticked down to 4.9 percent in January.”
Overall, he said, consumers do not appear to be overly worried about the stock market and consumer spending patterns haven’t collapsed.
“Given further modest job growth and contitinued low inflation,” he said, “there is no basis for near-term worries over consumer spending.”

justin lee thayer
Justin Lee Thayer 541 543 7287

Homebuilders play catch-up in Eugene-Springfield area Median home price in metro area hits record high #realestate #market #oregon

By Brooks Johnson, Columbian Business Reporter

Homebuilding is soaring to catch up with the post-recession market rebound in the Portland-Vancouver metro area, while the median home sale price in the region is now at a record high.
A new report by the RealtyTrak research firm noted that the median home sale price in the Portland metro area reached an all-time high of $294,000 in June 2015. By December, the region’s median home sale price had climbed to $320,000, according to the Market Action report produced by the Portland-based RMLS real estate listing service.
Home sale prices in Clark County also hit a new high in 2015, with the $272,200 median in September exceeding the pre-recession peak of $267,500 in September 2007. But home sale prices in Clark County have held steady since September, ending the year with a median sale price of $272,500 in December.
The median sale price increased 8.6 percent in Clark County between 2014 and 2015.
In its report, RealtyTrak said that 38 percent of major markets it analyzed recorded new all-time home price peaks in 2015, and more than 90 percent of markets saw home price increases for the year.
“With some local market exceptions, the 2015 home sales data paints the picture of a properly functioning U.S. housing market where homeowners can once again count on real estate as an appreciating asset,” wrote Daren Blomquist, vice president of industry analysts RealtyTrac, in the company’s report.
Clark County’s housing market remains tight, with a shortage of homes partly responsible for driving prices back up to pre-recession levels.
“We’ve been catching up to where we should have been,” said Terry Wollam, managing broker with Vancouver’s ReMax Equity Group Wollam & Associates. “We’re not above where we should be. We’ve had a sharp increase, but it’s only because of how far we dropped.”
Sales across the country are reaching pre-recession levels — RealtyTrac said U.S. home sales in 2015 saw their biggest price gains since 2007.
The country’s median home price rose 10 percent to $206,500 last year, as 79 metropolitan areas saw prices rise — and 33 of those saw new record highs.
That’s good news for homeowners and brokers, but not so much for those entering the buying market.
“Wages still have some catching up to do for what home prices and rents have increased to,” Wollam said. “Ideally, (price) increases would have been a little more gradual.”
He said the rate of price growth is likely going to look the same for the next few years as the housing supply slowly catches up with demand.
“For the foreseeable next couple of years, new construction will continue to make up a greater percentage of homes on the market,” Wollam said.
Once that happens, prices could “plateau” in the area by 2018 before climbing a little less sharply, he said. Any increases in interest rates could affect prices as well.
“It’s partly inventory levels catching up and partly the expectation of interest rates to increase,” Wollam said. “They balance each other out.”

justin lee thayer
Justin Lee Thayer 541 543 7287

Death can really kill your home value, #realestate #market #investment #advice

"When you have an image that someone was murdered, it can be uncomfortable when you are living there."
He's consulted on the valuations of homes involved in some high-profile deaths, including O.J. and Nicole Brown Simpson's condo and the home of Adam Lanza, the gunman at Sandy Hook Elementary School.
The Lanza home in Newtown, Connecticut, ended up being demolished. "Some circumstances are so horrific...that the property loses all value," Bell said.
Disclosure rules vary by state and some are more strict in what buyers need to be told about a home's history. Bell said about half of states require a homicide be disclosed and that New York and California tend to be the most strict about disclosures.
murder home
Finding buyers willing to pay list price for a home with a dark past can be a struggle.
"Some buyers are completely fine with it," said luxury real estate broker Samantha DeBianchi in Southern Florida. "It depends on the personality. Some won't even step foot into the home."
In 2014, DeBianchi had a luxury listing where a high-profile suicide had occurred. The home got some verbal low-ball offers, but it was eventually taken off the market.
"At the end of the day, there was nothing I could do about [its history]. The fact was the house was gorgeous, on the beach, it needed a little work, but it still had a good energy."
The home is now back on the market for sale, but has rented in the past for around $25,000 a month.
Living close to a funeral home, crematorium or cemetery can also have a negative impact on a home's value, according to data from Trulia that controlled for other factors that could impact home values.
Houses in the South and Midwest that are near cemeteries, funeral homes and crematoriums tend to have the biggest difference in value, according to Trulia's Chief Economist Ralph McLaughlin. He added that of the top 10 markets with the largest negative difference, eight are in located in these two parts of the country.
In Omaha, Nebraska, home sales were reduced by 3.9%, which would be $5,812 discount on the median home value there. The impact was almost double in Little Rock, Arkansas, where a funeral home or cemetery reduced a home's value by 8.6% or $11,050.
A home close to a cemetery could be an easier sell -- especially if it's an older and less active cemetery.
DeBianchi has a client considering purchasing a property on a street that backs up to a cemetery. "The buyer likes the quiet. There is something tranquil about it."
Ambulance sirens coming in and out of a hospitals are not as calm, and living close to a hospital hurt home values in just over half of the 100 biggest housing markets.
Close proximity to a hospital impacted home values in Charleston, South Carolina, the most, shaving 3% off home values.
But in some markets, living close to a good hospital can boost a home's value.

justin lee thayer
Justin Lee Thayer 541 543 7287

U.S. homebuilder confidence slips, #realestate #market #investing #news #eugene #oregon

The Associated PressBy The Associated Press 
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on February 16, 2016 at 10:13 AM
U.S. homebuilders are feeling less confident about their sales prospects ahead of the spring home-selling season, though they remain positive overall that the housing market will continue to improve this year.
The National Association of Home Builders/Wells Fargo builder sentiment index released Tuesday slipped to 58 this month, down three points from a revised reading of 61 in January.
The index had been hovering in the low 60s since June. Readings above 50 indicate more builders view sales conditions as good, rather than poor.
Builders' view of current sales conditions and a measure of traffic by prospective buyers declined. But their outlook for sales over the next six months edged higher.
The latest readings come as the annual spring buying season ramps up. Typically, the season sets the pattern for residential hiring and construction for much of the rest of the year.
Several factors have builders feeling less optimistic this month, including heightened concerns of late about a slowdown in the global economy and its potential impact on the U.S., and rising costs for labor and ready-to-build land parcels.
Even so, the builders' trade association continues to forecast modest growth for housing this year.
"Historically low mortgage rates, steady job gains, improved household formations and significant pent-up demand all point to a gradual upward trend for housing in the year ahead," said David Crowe, the NAHB's chief economist.
Sales of new homes surged 14.5 percent last year to 501,000, marking the strongest year for this segment of the housing market since 2007.
Steady job growth that cut the unemployment rate to an eight-year low of 4.9 percent has given many homebuyers increased confidence, while relatively low mortgage rates improved affordability. Builders have responded to the demand by increasing construction. Over the course of 2015, ground breakings rose 10.8 percent to 1.1 million.
And yet, construction has yet to rebound fully from the housing bust nearly a decade ago, while sales of new homes continue to run below the 52-year historic average of 655,200. January's new home sales figures are due out next week.
Whether that progress continues this year will depend largely on the U.S. economy continuing to improve.
That's come increasingly into doubt in recent weeks as faltering growth in countries like China, the world's second-largest economy, and financial market turmoil have heightened concerns that the U.S. economy could be in for a stumble.
This month's builder index was based on 344 respondents.
Builders' view of current sales conditions for single-family homes fell three points to 65, while their gauge of traffic by prospective buyers fell five points to 39, the lowest level since May last year. Builders' outlook for sales over the next six months rose one point to 65.
Though new homes represent only a fraction of the housing market, they have an outsize impact on the economy. Each home built creates an average of three jobs for a year and generates about $90,000 in tax revenue, according to NAHB data.
-- The Associated Press

justin lee thayer
Justin Lee Thayer 541 543 7287