RISMEDIA, October 12, 2009-Recently, there's been a fair bit of anecdotal discussion around the assertion that foreclosures, once a problem just for the sub-prime segment of mortgages, have been moving up-market. That is, people are suggesting that we're seeing more foreclosures in the mid- to high-end segments of the market.
Turns out, there's a lot of truth to this idea. In 2006, at the height of the real estate bubble, homes in the bottom one-third of home values made up almost 55% of all foreclosures. Homes in the middle one-third of home values made up almost 29% of foreclosures and homes in the top one-third represented just 16% of foreclosures. In the accompanying chart, you can see the dramatic changes in the distribution of home values among foreclosed homes. In July 2009, the bottom one-third made up 35% of foreclosures, compared to 35% and 30% for the middle and top one-thirds, respectively. Those are shocking numbers: Thirty percent of foreclosures are homes in the top tier of local home values. That means that top-tier homes make up almost twice the proportion of foreclosures as they did just three years ago.
High delinquency rates in Prime, Alt-A and Option ARM mortgage products and declining cure rates (the rate at which borrowers resolve their delinquency status) are resulting in many more foreclosures among borrowers outside of the sub-prime mortgage market (and in higher priced segments of the market). Amherst Securities Group recently provided some data showing the higher delinquency rates for these products and the strong relationship between increased negative equity and decreased probability of resolving delinquency status (see their Exhibit 9, which shows, of borrowers who are 30 days delinquent, the percentage who become 60 days delinquent by their current loan-to-value ratios, where values greater than 100 indicate negative equity). As of the end of the second quarter of this year, Zillow estimated that 23% of single-family homes with mortgages are underwater on their mortgages, so expect cure rates to stay lower than they would be otherwise.
Methodology Looking at the distribution of foreclosures by home value can be significantly distorted by the variances in home values across the country. For example, it might appear that high-end homes as a percentage of all foreclosures is quite high nationally, but the reality is simply that areas with lots of foreclosures happen to be areas where home prices are higher. In order to better isolate the distribution of foreclosures by price segment without introducing the geographic variability of home prices, we have examined home prices while controlling for the local price level of all homes.
Specifically, from all homes in the Zillow database with valuations (~70 million), Zillow computed the ratio between the current house value and the current level of the Zillow Home Value Index for the county in which the home is located. We then computed the 33rd and 66th percentiles of this ratio and assigned all homes to three price tiers: bottom (homes where the ratio was less than the 33rd percentile), middle (homes where the ratio was between the 33rd and 66th percentiles) and top (homes where the ratio was greater than the 66th percentile). We then extracted all foreclosures since 2000 and computed, by month, the percentage of foreclosures in the month represented by homes in each price tier.
RISMEDIA, October 12, 2009-Trulia, Inc announced that 25.6% of homes currently on the market in the U.S. as of October 1, 2009 have experienced at least one price cut. More than one in four current listings on Trulia have been reduced in price for the fourth straight month. The total amount slashed from home prices is $28.4 billion, a $967 million increase from June 2009. The average discount for price-reduced homes continues to hold steady at 10% off of the original listing price.
Northeast with Most Homes Reduced; West Sees Biggest Cuts Five of the 10 states with the highest percentage of homes with price reductions are in the Northeast- Massachusetts, Rhode Island, Connecticut, New Hampshire and New Jersey. One in three homes in these states has cut their list price at least once.
Seven of the 10 states leading the country with the biggest listing price cuts are in the West, where heavy foreclosures have taken their toll. In Nevada, Idaho, Arizona, Wyoming, Hawaii, Utah and California, cuts are an average of 13% off the original list price. Of the $28.4 billion slashed nationally, New York, California and Florida account for 35% of the total value of reductions.
Report Findings For the first time in four months, Jacksonville no longer holds the top spot for highest level of home-price reductions: Memphis replaced Jacksonville with 36% of current listings experiencing at least one round of discounts. Several cities continue to see high levels of cuts on home prices with Indianapolis, Milwaukee, Minneapolis, Portland and Raleigh, all earning a place in the top 10 for the third consecutive month.
"Interest in real estate typically wanes at the end of the year, which means that sellers who didn't aggressively price their homes may find themselves making difficult decisions to reduce their prices or delay the sale until interest piques again in January," said Pete Flint, Trulia co-founder and CEO. "We are seeing the beginning of this trend in the Northeast and Western United States with discounting happening at all price points, and expect it to continue."
Cities experiencing significant increases in percentage of listings with price reductions from June 2009 to October 2009 include: -Kansas City, MO - 50% increase in price reductions -Colorado Springs, CO - 32% increase in price reductions -Louisville, KY - 27% increase in price reductions -Indianapolis, IN - 27% increase in price reductions -Portland, OR - 25% increase in price reductions -Oklahoma City, OK - 24% increase in price reductions -Memphis, TN - 24% increase in price reductions -Tulsa, OK - 23% increase in price reductions -Milwaukee, WI - 22% increase in price reductions -Arlington, VA - 22% increase in price reductions
Cities showing the highest percentage of declines for listings with price reductions from June 2009 to October 2009 include: -San Antonio, TX - 37% decrease in price reductions -Las Vegas, NV - 36% decrease in price reductions -Oakland, CA - 17% decrease in price reductions -San Jose, CA - 16% decrease in price reductions -Los Angeles, CA - 14% decrease in price reductions -Honolulu, HI - 11% decrease in price reductions -Long Beach, CA - 11% decrease in price reductions -Dallas, TX - 11% decrease in price reductions -Washington, D.C. - 10% decrease in price reductions -New York, NY - 9% decrease in price reductions
Luxury Market Not Immune Luxury homes (those listed at $2 million and above) continue to bear the brunt of discounts being offered with an average of 14% being slashed from the original asking price compared to the national average of 10%. Additionally, luxury homes represent less than 2% of all current listings on Trulia, but are responsible for 25% of the $28.4 billion in home price reductions.
RISMEDIA, October 8, 2009-(MCT)-Green living in a down economy has become a concern for many Americans, but while adopting eco-conscious practices may seem challenging at first, it's simple to make an impact.
"It's easy to be planet-friendly and human healthy," said eco-expert Kim Carlson, founder of EarthSmart Consumer Certified, a retail product certification program that collaborates with leading environmentalists to ensure the products we buy don't damage our planet. "You just have to kind of know your way around that world and once you do-it's easy. It's just changing a few behaviors."
Minor modifications such as using power strips for your electronics and switching out your old light bulbs for compact fluorescent ones will reduce your carbon footprint and save some money, but you can always do more.
"We're hitting and bumping up against the limits of the resources here on the planet," she said. "Wise use of those resources is the whole point of being green."
Below are a few tips Carlson, author of "Green Your Work: Boost Your Bottom Line While Reducing Your Carbon Footprint" suggests to help others develop healthier lifestyles, become more aware of the environment and eat with green in mind.
Choose products with reduced packaging As consumers, most of us don't pay attention to the packaging of the products we buy, and with all the distractions (long lines, free samples, etc.), it's understandable why.
-Tip: Pre-packaged goods are convenient but they could be packaged differently, so stick to the perimeter of your grocery store for non-processed foods, including fresh fruits and vegetables, dairy products and meats, which are both minimally processed and minimally packaged. Then hit the bulk aisle for rice, cereal, pasta and nuts. You'll have more space in your cabinets and fewer packages to toss out later. -Reminder: Buying dry goods over wet products will result in lighter trucks using less fuel and fewer emissions released into the atmosphere.
Shop with reusable grocery bags "Any time you can reuse something, you're ahead of the game because you don't have anything to throw away," Carlson said about the widespread use of the popular reusable shopping bags. "You don't have to worry about composting or what to do with it; you just keep using it until it wears out."
-Tip: Take advantage of new technologies when you can. "There's bags that are being produced out of bioplastics like corn and switchgrass," Carlson noted. "Things that can biodegrade." -Reminder: Most reusable bags cost about $1, so stock up-every bag makes a difference.
Buy locally raised ingredients Purchasing local products instead of their commercial counterparts will keep your dollars close by and guarantee fresher and more nutritious foods.
-Tip: Pay a visit to the nearby farmer's market. Buying produce such as lettuce, eggplant and potatoes from neighborhood vendors is a great way to invest in your community and purchasing in-season products will assure you of quality and lower prices. -Reminder: Ask the sellers where the items come from at each stand to ensure they were grown in your area.
Select sustainable seafood Fishing practices worldwide have destroyed habitats, depleted fish populations and polluted the oceans, but smarter shopping could offset the consequences of over-fishing.
-Tip: Pick up one of the Monterey Bay Aquarium's Seafood Watch pocket guides, which are handy region-specific booklets full of suggestions for favorable seafood purchases. Also, eat at your favorite restaurants that recognize the issue and work to serve quality, sustainable dishes. -Reminder: Ask for "ocean-friendly" seafood: Arctic char, bay scallops and rainbow trout, among others, are "abundant, well-managed and caught or farmed in environmentally friendly ways," one guide states.
Green night out It's one thing to buy local ingredients and products with reduced packaging for your meals at home, but if your family frequents restaurants several times a week, broaden your scope.
-Tip: Choose environmentally cognizant restaurants-typically non-chains-that serve locally grown cuisine, recycle waste and conserve energy resources. -Reminder: When you come across a great eco-friendly restaurant, spread the word!
Other ways to make an impact Eating is a social bonding experience; it should be a carefree occasion, not a chore.
-Tip: Plant your own garden, replace meat with wheat or introduce unusual grains into your diet to mix things up a bit. -Reminder: When cultivating a garden, you can choose to go all-organic with soil, plants and fertilizer, or low-impact, by abstaining from using pesticides.
RISMEDIA, October 8, 2009-With the First-Time Home Buyer Tax Credit deadline quickly approaching, the Internal Revenue Service recently reminded potential home buyers they must complete their first-time home purchases before Dec. 1, 2009 to qualify for the special first-time home buyer credit. The American Recovery and Reinvestment Act extended the tax credit, which has provided a tax benefit to more than 1.4 million taxpayers so far.
The credit of up to $8,000 is generally available to home buyers with qualifying income levels who have never owned a home or have not owned one in the past three years.
The IRS encouraged all eligible homebuyers to take advantage of the first-time home buyer credit but at the same time cautioned taxpayers to avoid schemes that help ineligible people file false claims for the credit. Currently, the agency is investigating a number of cases of potential fraud and is using computer screening tools to identify questionable claims for the credit.
Because the credit is only in effect for a limited time, those considering buying a home must act soon to qualify for the credit. Under the Recovery Act, an eligible home purchase must be completed before Dec. 1, 2009. This means that the last day to close on a home is Nov. 30.
The credit cannot be claimed until after the purchase is completed. For purchases made this year before Dec. 1, taxpayers have the option of claiming the credit on their 2008 returns or waiting until next year and claiming it on their 2009 returns.
For those considering a home purchase this fall, here are some other details about the first-time home buyer credit:
-The credit is 10% of the purchase price of the home, with a maximum available credit of $8,000 for either a single taxpayer or a married couple filing jointly. The limit is $4,000 for a married person filing a separate return. In most cases, the full credit will be available for homes costing $80,000 or more.
-The credit reduces the taxpayer's tax bill or increases his or her refund, dollar for dollar. Unlike most tax credits, the first-time home buyer credit is fully refundable. This means that the credit will be paid to eligible taxpayers, even if they owe no tax or the credit is more than the tax owed.
-Only the purchase of a main home located in the United States qualifies. Vacation homes and rental properties are not eligible.
-A home constructed by the taxpayer only qualifies for the credit if the taxpayer occupies it before Dec. 1, 2009.
-The credit is reduced or eliminated for higher-income taxpayers. The credit is phased out based on the taxpayer's modified adjusted gross income (MAGI). MAGI is adjusted gross income plus various amounts excluded from income-for example, certain foreign income. For a married couple filing a joint return, the phase-out range is $150,000 to $170,000. For other taxpayers, the range is $75,000 to $95,000. This means the full credit is available for married couples filing a joint return whose MAGI is $150,000 or less and for other taxpayers whose MAGI is $75,000 or less.
-The credit must be repaid if, within three years of purchase, the home ceases to be the taxpayer's main home. For example, a taxpayer who claims the credit based on a qualifying purchase on Sept. 1, 2009, must repay the full credit if he or she sells the home or converts it to business or rental use at any time before Sept. 1, 2012.
Taxpayers cannot take advantage of the credit even if they buy a main home before Dec. 1 if:
-The taxpayer's income is too large. This means joint filers with MAGI of $170,000 and above and other taxpayers with MAGI of $95,000 and above.
-The taxpayer buys a home from a close relative. This includes a home purchased from the taxpayer's spouse, parent, grandparent, child or grandchild.
-The taxpayer owned another main home at any time during the three years prior to the date of purchase. For a married couple filing a joint return, this requirement applies to both spouses. For example, if the taxpayer bought a home on Sept. 1, 2009, the taxpayer cannot take the credit for that home if he or she owned, or had an ownership interest in, another main home at any time from Sept. 2, 2006, through Sept. 1, 2009.
For most people, each and every day involves some type of financial decision. So how do you feel about your financial decision-making skills? If you think you are making sound choices, ask yourself this: Have you weighed the consequences of your choices against their apparent benefits? In many cases, the answer is no.
Let's take a look at six common financial choices that sound like smart moves, but could leave you scratching your head wondering where you went wrong.
Applying for a Line of Credit Advantages: Starting a line of credit will diversify your credit sources, which is good news for your credit score. It also allows you to access funds you may need for large purchases, like buying a car, without having to scramble to arrange the funds when you decide to buy.
Consequences: A line of credit is too often treated like free money. In many cases, such easy access to funds leads borrowers to rack up consumer debt for things they don't really need. And there's nothing free about this cash injection: borrowers have to make minimum payments on the line's outstanding balance. In addition, a balance will limit borrowing power on other loans, such as a mortgage.
Withdrawing From Your 401(k) or Retirement Savings to Pay Down Debt Advantages: If you have a big debt to pay off, you may choose to either put off contributing to a retirement or savings fund, or to withdraw money from an existing fund. The upside to this is that paying down debt is a good thing, and the sooner it is paid off, the greater the savings in interest expenses for the borrower.
Consequences: By withdrawing funds set aside for retirement, you are robbing yourself of the benefits of compounding. Also, pulling the money out of your savings could leave you in a very bad position should something unexpected, like a job loss, happen. The earlier you start saving, the more money you will be able to accumulate for retirement. If properly invested, money saved now is almost always better than more money saved later. (For more on the power of compound interest, see Compounding Your Way To Retirement.)
Choosing Only the Safest Investing Vehicles Advantages: If you invest in risk-free or nearly risk-free vehicles, the risk of losing your hard-earned cash is extremely low. This can be a viable option, especially if you are nearing retirement.
Downside: However, you are again missing out on the opportunity to have your money work for you. Take into consideration your age and stage of life when deciding your risk level. Although everyone's risk tolerance is different, generally speaking, the younger you are, the riskier you can afford to be. This is because you have the time to make up any losses, and also because the higher risk may be warranted because it helps combat the effects of inflation on your portfolio's gains. The closer you are to retirement (or to whatever goal you are saving for) the more conservative you should be in order to protect your investment. (To learn more about risk, see Determining Risk And The Risk Pyramid.)
Avoiding Debt Altogether Advantages: "Debt free". It sounds good, doesn't it? And it can be. Living debt-free is a wonderful goal and is more achievable than you might think.
Downside: However, debt can also be a tool. If, in your quest to remain debt free, you are turning down "good debt", that is, debt that allows you to leverage your investments, you are doing yourself a disservice. Examples of good debt include taking out a mortgage to buy a house. This is because houses and property tend to appreciate over time, and owning your home can lower your living expenses compared to renting. Another example would be taking out a student loan for post-secondary education. While student debt can be a huge responsibility, it is also an investment in yourself that boosts your potential earning power.
Cutting Your Variable Spending Advantages: If you are looking to cut your spending, this suggests that you have a budget to modify. That's great! Often variable expenses (expenses that are not fixed, such as entertainment, dining out and personal spending) are out of line with the amount we earn. An honest appraisal of where your money is going is a great step to getting your budget in fighting shape.
Downside: This seemingly great idea is only great if you include the second part of it: sticking to your new budget. Unrealistic expectations, or treating your budget goals as "guidelines" rather than rules, could leave you spending more than ever. (For more tips, see Get Emotional Spending Under Control.)
Paying Off a Major Loan in One Payment Advantages: You've been working hard and saving - smart! Before your loans start accumulating interest, or even if they have, you decide to pay them off in one payment. That's a wonderful accomplishment that will save you months', or years' worth of interest.
Downside: If you choose this route, make sure you take a look at your interest rate. Some loans have such a low interest rate that you'd be better off putting your money in a savings account that earns you a higher return and paying off your debt monthly. Keep in mind this is only a good idea if 1) your savings interest rate is higher than your debt interest rate and 2) you are disciplined enough to pay the debt off on time, every month, and not to spend your hard-earned cash on luxuries instead. The bonus? Responsibly paying off monthly debt helps you to establish a good credit history. This is especially helpful if you don't have a credit history (or you are trying to rebuild a bad one).
There's nothing worse than making a choice you thought was conscientious only to find out it had hidden consequences. Make sure you do your homework and your financial situation will be the best it can be.
RISMEDIA, September 26, 2009-(MCT)-Back in the good old days, before the crisis of 2008-09, many experts suggested that all you needed to do was withdraw 4% per year, adjusted for inflation, from your nest egg. That strategy, experts said, was a near-guarantee that your nest egg would last a lifetime.
Well, go tell that to the guy selling apples and pencils on the street corner. Yes, conventional wisdom has proven to be more conventional than wise. And now everyone is trying to figure out the best way to turn a nest egg into an income stream that will last throughout retirement. And that includes AARP, which recently released two tip sheets that "challenge conventional thinking and offer general guidance about how to make the best decision for you and your circumstances."
One of the tip sheets, "Making Your Nest Egg Last a Lifetime," which was written by Anthony Webb of the Center for Retirement Research at Boston College, suggests the following:
1. Delay claiming Social Security. Retirees and would-be retirees need to consider matching their fixed and best-case, inflation-adjusted sources of income against their fixed expenses. And one way to create the best inflation-adjusted source of income at the moment is to delay taking Social Security for as long as possible, certainly at least until your full retirement age if not longer, said Janet McCubbin, director of financial security at AARP's Public Policy Institute.
At the moment, many people claim Social Security-even though it means a reduced benefit-at age 62, using the faulty logic that they may not live past the so-called break-even point. The break-even point is the date at which the sum of your reduced early benefits no longer exceeds what you would have drawn with the heftier, delayed benefits.
There are plenty of Wed-based calculators to help you figure your break-even age, but such calculators fail to address at least three issues. One, the calculators typically don't address married couples. As is well known, husbands tend to die before their wives. And that means husbands who take a reduced Social Security benefit ultimately reduce their surviving spouses' benefit as well. Two, predicting your life expectancy is nearly an impossible task. And three, creating the largest Social Security benefit is fast becoming a basic component of a sound retirement-income plan.
"Delaying is like buying extra income that lasts a life time," said McCubbin. "For most it's optimal for the husband to wait to collect till at least full retirement."
2. Consider purchasing an annuity. It's not right for everyone, said McCubbin. But for those who are retiring with a large nest egg and who don't have enough fixed and guaranteed sources of income to match their fixed expenses, an annuity might fit the bill. In essence, you want a fixed and dependable stream of income that covers your basic living expenses, she said.
According to AARP, an annuity would not, however, be appropriate for someone with little in savings or someone with a large share of preretirement income already replaced by Social Security or by a traditional pension plan. Annuities are not without their problems at the moment. Pricing is affected by adverse selection, for instance. But McCubbin said much is going on in the way of product development that could make annuities more widely accepted over the next few years. Such developments include in-service annuities, trial annuities and security-plus annuities, as proposed by the Aspen Institute.
3. Pay down your mortgage. Many would-be retirees should enter retirement debt-free, owning their home free and clear, according to McCubbin. Unfortunately, many would-be retirees pay little attention to their homes as an integral part of their retirement-income planning process. In fact, most people age in place until they become sick or a spouse dies and then they decide to sell their home, according to AARP.
Instead, homeowners should analyze far in advance their living arrangements and whether they want to have a mortgage in retirement. According to AARP, some retirees might also want to consider whether a reverse mortgage is appropriate as well. A reverse mortgage is a complicated and sometimes expensive transaction so it's wise to get a handle on the pros and cons of such products before signing any contracts, AARP said.
4. Allocate your assets wisely. Many retirees place large portions of their nest eggs in investments that provide a guaranteed return on capital. According to conventional wisdom, retirees should rebalance their nest eggs in favor of bonds as they age. But AARP's view is that retirees should build portfolios that are broadly diversified and based on one's tolerance for risk.
5. Withdraw funds carefully. And that brings us back to the place we began. Conventional wisdom suggests that you should withdraw no more than 4% of your savings during retirement. But now, at least according to AARP, retirees need to be a bit more thoughtful and flexible about this.
"In tough economic times, you may want to withdraw a smaller percentage of your savings, if possible," AARP said. "When the returns on your investments improve, you can increase your withdrawals. Given the fluctuating nature of this income stream, consider pairing this changing income stream to variable or lifestyle expenses, such as gifts, vacations, etc."
What's more, AARP suggested that the amount retirees ultimately withdraw should be based on realized returns, not rules of thumb. It's not easy to make your nest egg last a lifetime and the process is only likely to get harder. But AARP's five suggestions are certainly a step in the right direction.
RISMEDIA, September 17, 2009-According to recent announcements by the U.S. Treasury Department, another wave of foreclosures is on the way in 2010. For over a year, now, we've been digesting foreclosures and distressed properties and it looks like we'll all be doing it for another year or so. It's too large a market segment to ignore: in some parts of the country, distressed properties account for about 65% of sales these days. While some agents sniff imperiously and decline to partake in such unpleasant things as foreclosures, short sales, and Bank Owned Properties, others are laughing all the way to the bank.
They are not laughing at the plight of their sellers, they are laughing because -broken down to its simplest truth, the foreclosure craze breaks down to this -everyone wants a bargain, and it is a fact that a great many people who rise to the bait of foreclosure properties are simply looking for a bargain. Nothing drives investors like smelling bargains, and there are bargains aplenty in most markets these days. Do you have any properties in your inventory you consider a bargain? Then you should adjust your website to include foreclosures, because - to Internet buyers-"Foreclosures" and "bargains" are interchangeable.
Why you need to target Foreclosures and Bank Owned Properties
People are searching online for "Foreclosures" and "Bank Owned Properties" in your marketing area right now, regardless of your location. Will they find you when they do so? As we said above, many investors are prowling these channels looking for bargains. One such investor found Melanie Ross, the top agent with Coldwell Banker in Benicia, CA (and top-ten agent for CB in all of California) and Vallejo, CA. This one investor purchased nine homes through Ross early this year. In just the last quarter, Ross sold 15 homes with the help of her website and she has plenty of transactions pending for this quarter.
Frequently, agents who know what they are doing can make multiple sales to one client. These clients are not investors, just people that need help and who are grateful to receive it when up to their necks in alligators. For example, here's another real-life example that happened as I was writing this article: Joyce Tietz of Altera in Antioch, CA, received a call from a woman going through a divorce who was facing foreclosure and who was desperate to do a short sale. "I never look down on people having problems," Tietz says. "I just try to do my job that can help them, and the results are really gratifying." In this case, not only was Tietz able to stop the foreclosure proceedings and find a buyer for the property, she also was able to find a more reasonably priced property for the woman to acquire: One client, two sales. Opportunity is lurking in distressed situations.
What you can do to position yourself online to participate
The first thing you must do is adjust your attitude. There is no shame in helping people; whether it's helping someone eager to unload their home, or someone looking for a home they can afford. Anyone who says otherwise is just plain wrong.
Second, there are some basic technological things you can do to help yourself be found when people go online looking for foreclosed or bank-owned properties.
These include:
-Adding the terms "foreclosures" and "bank owned properties" to your html tags and something about them on your homepage; -Adding pages and tabs on your site to include those subjects, along with a full explanation of what makes a short sale and how it works for the homeowner; -Compile a list of such properties by towns in your marketing area and offer them at no cost to people who contact you; -Advise people never to pay for such a list as you will provide it to them once you have their contact information. Then, call them and chat about it for a moment before telling them you're sending the list. Perhaps something good will develop from that brief chat, perhaps not; but you'll be talking to people interested in bargains, and that's never a bad thing in a bargain-filled marketplace.
What you should NOT do
Many agents want to implement all sorts of high-tech mapping solutions and other goodies to show prospective buyers every possible thing about every possible foreclosure in their state. It may be cool to give away all that information, but it will not be even 20% as effective as having the visitor contact you for a foreclosed properties list in the town they want to look for a home in. Ninety-five percent of agents and brokers fail at Internet marketing. They fail for different reasons, but a constant major reason is that these agents haven't figured out that the purpose of your website is to help you sell and list more homes, it is not to inform the world about everything they might ever want to know; conversely, your website exists to help you sell what you have and to bring you a source of prospects you would otherwise never engage.
To put it even more simply, it's not about giving information away. It's about collecting information from real people who want more of it-information that you make your living providing professionally. Do not give away information without getting some in return and you will have plenty of interested prospects to call on every day. Give them information they want, like lists of foreclosed or bank owned properties, and they will allow you to engage with them.
The suitcase and the handle effect
It is easier to be found on the Internet under "foreclosures" than under "real estate." However, one of the great things about the Internet is that as you are found under ANY description more, you begin to be found under all descriptions pertaining to real estate more. Thus, you will also start getting more leads from regular buyers and sellers. (We call this "the suitcase and the handle" and you can read about how it works here: http://www.theblackwatercg.com/what_we_do.html). Also, a beautiful thing about the Internet is that once it starts working for you it gets stronger with time.
In response
A few people write me from time-to-time and chide me for not going into more detail on these matters in these articles. To some of them, it appears that more could be explained. Folks, all I can say is that it is not easy to communicate complex ideas in 1,500 words. This article is meant to get you thinking about what you can do to partake of the coming resurgence in foreclosures and if you will think about what you can do and do just a few simple things, you will do better online. Thus, I invite you all to visit that site above and download any booklet you see there. Just go to "Success Stories" and hit the "Success Guides" button. These booklets are popular and filled with useful information and far more detail as to what it takes to succeed at online marketing for Realtors. They are also totally without cost, no one will call you, and you'll get our complimentary online marketing tips newsletter each month automatically.
Remember; it's not about foreclosures, it's about bargains. In the case of "foreclosure" seekers, they're really looking for "bargains." So, get smart and give the people what they want in your online marketing: access to lists of "bargains."
If you are in a marketplace where a large percentage of transactions involved distressed properties, why would you not want a piece of that marketplace for yourself? Bargain properties exist today in all price ranges-luxury to basic. I assure you that the commission checks on bargain properties cash just as smoothly as those for conventionally priced properties, but they come far more frequently, and at full commission, too.
Mike Parker has written more than 200 published articles about online marketing services for Realtors. For help in making your site effective for foreclosures or to request a free review of your website to determine if it can be found by Internet buyers and if it is set up to be effective for you, click here and we'll review it for you at no cost or obligation.
RISMEDIA, June 26, 2009-So many real estate professionals today are wondering, "How can I stay positive in today's market?" Like any discriminating real estate professional, you realize the value of a positive mental attitude. Here are eight ways that you can create and maintain a positive mental attitude in today's market:
1. Avoid toxic people. What does this mean? Who are the toxic people? Toxic people can be well-meaning people but when they talk to you, they are coming from a negative attitude about money, finances, and especially about the current real estate situation.
They may be fellow real estate professionals who want to gather around the water cooler, they may be relatives who are just trying to protect you; they may even be friends and family.
You will know if you've been around a toxic person, because you will begin to feel deflated.
Here's your job: either change the subject or walk away. Better yet, speak up for yourself and mention that you want to think positively about yourself and about your business.
If you see one of them coming your way find a way to avoid the interaction because it does not serve your highest good (or theirs).
2. Set an internal boundary. If you've tried everything and exhausted ways to avoid toxic people, then you may have to set an internal boundary. You can do this very simply by having your own inner conversation if someone is saying something negative to you on the outside.
A great example of an inner conversation when someone is complaining about their business or about the marketplace is to say to yourself, "that may be true for you but it's not true for me." This can become your inner mantra.
3. Avoid the media. Why? Remember that the intention of the media is to sell newspapers and magazines. The more they can paint a negative and fearful picture, the more their sales go up. Why subject yourself to negative spins on the economy when you can find just as much information to point to the positive?
4. Successful real estate professionals do well in any market. Were you aware of that? Knowing that fact, none of us can continue to use the excuse about the market being bad. In fact, I am coaching several clients right now who in the last six months have doubled and tripled their incomes. In addition to the right marketing strategies and regular lead generation activities, you could help yourself with this empowered belief:
"I now draw clients to me who are ready, willing and able to make a transaction in the next 30 days."
5. Look for the opportunity in today's marketplace. There are many opportunities in today's market and successful real estate professionals are taking advantage of them.
Did you know that Donald Trump is buying up as much property as he can? Why do you think that is? He is a smart businessman, to say the least, and knows that this is the best time to buy.
Let your prospective clients know this and then say to them, "Let's get you a deal." Few could resist this invitation.
6. Remember that your success depends on your mindset, not on the outer conditions of the market. "If you believe you can or you can't, either way you are right," Henry Ford.
What mindset do you choose to nurture inside yourself? Do you want to believe, "I can "or "I can't". Your beliefs create your reality so whatever you choose to believe will become true for you.
7. Remember to engage the Law of Attraction as one of your most powerful tools. The law of attraction states that you get what you focus your attention on. Furthermore, your beliefs create your reality so choose your beliefs carefully. Here's a tip: instead of saying "I can't possibly succeed in today's market," choose instead to focus one of these beliefs:
- "I achieve whatever I set my mind to" - "I am a money magnet in any situation" - "I attract clients who appreciate and respect my expertise" - "My success depends on my attitude, not on any outer circumstances"
8. Be proactive. In any marketplace there are always people wanting to buy and sell homes. They need your help and they need your expertise. Your job is to become visible to them. In today's market, they are not likely to fall in your lap. However with a good system of lead generation, you can contact them and use your intention to attract your ideal clients.
Clear out any self-limiting beliefs that stop you from picking up the phone. Follow the suggestions mentioned above and you'll be happy to notice that are only are you staying more positive, but also your income is increasing as well.
Dr. Maya Bailey, author of Law of Attraction for Real Estate Professionals, integrates 20 years of experience as a psychologist and 12 years as a business coach with her expertise in the Law of Attraction. Get Bailey's free report, 7 Simple Strategies For More Clients in 90 Days, by visiting www.90DaystoMoreClients.com.
RISMEDIA, September 1, 2009-(MCT)-Even the most responsible borrowers slip up sometimes. Maybe a utility bill went unpaid after you moved and the missed payment went into collections. Or, perhaps there are unpaid library fines or parking tickets in collections that are hanging onto your credit history and affecting your FICO credit score, which is widely used by lenders to evaluate your ability to repay a debt. With the newest version of the FICO credit-scoring system, however, minor delinquencies are now overlooked in calculating creditworthiness. Under the updated scoring model, called FICO 08, small, missed payments lingering in collections with original amounts of $100 or less will no longer do damage to your credit score. Consumers also are less likely to be penalized for any single delinquency if it occurred two or more years ago-and if their credit history is otherwise unblemished, says FICO, formerly Fair Isaac Corp., which developed the FICO scoring system.
"There's more flexibility with missing a payment," said Careen Foster, director of global scoring product management for FICO. "If you have a more habitual pattern of paying accounts late, you're more likely to get penalized for that." If a consumer's credit usage is high, that will be more likely to hurt his or her score with FICO 08. But getting close to your credit-card limits-even if you always pay on time-is penalized in some way in every FICO score, not only the recent edition, Foster said.
The new system has been available at all three credit bureaus-Experian, TransUnion and Equifax-since last month. The changes were made to provide lenders with a better risk assessment of borrowers, said John Ulzheimer, president of consumer education for Credit.com, a consumer education and advocacy site. FICO decided that one small library fine didn't really predict whether a consumer was likely to default, for example.
With the changes, individuals who pose a low credit risk will probably see their scores rise a bit, and those who are high risk could see their scores drop, he adds.
FICO 08 also addresses "piggybacking," a practice used by credit-repair companies to help people improve their scores, Ulzheimer said. In piggybacking, an individual pays to become an authorized user on a stranger's account. The account holder gets paid for allowing the person to be associated with the account, and the new authorized user is able to improve his or her credit score.
"It was a practice to misrepresent what your credit looks like to your bank," Foster said. FICO 08 aims to single out individuals who are named as authorized sources through deceptive means, Ulzheimer said. Those people won't see their credit scores rise as a result. But the scores of legitimate authorized users will be treated as they always have been.
Borrowers shouldn't expect their credit to be graded by this new scale on every loan they now apply for. Not all lenders have adopted the new model, though more than 400 lenders are using or testing FICO 08, the company said. In a statement, Equifax said, "Currently, many lenders and businesses are validating the new score within their systems, and adoption will vary by financial institution based on business requirements and market need."
Many credit-card companies, auto lenders, regional banks and credit unions may have already adopted FICO 08, Ulzheimer said. But for mortgages, lenders doing traditional conforming loans backed by Freddie Mac and Fannie Mae likely haven't made the move yet, he said. That's because they're waiting for Freddie and Fannie to approve its use. Freddie Mac and Fannie Mae "are essentially the lender, they're the ones that set the underwriting criteria," he said. Ulzheimer said he expects Freddie and Fannie to adopt FICO 08 by the end of the year. Fannie declined to comment on FICO 08; Freddie wasn't able to provide a comment prior to publication.
While FICO 08 will help consumers' credit scores in some cases, people still should take steps to improve their credit. Granted, it's impossible for consumers to calculate their FICO scores themselves, said Rodney Anderson, of Rodney Anderson Lending Services in Plano, Texas. "It's almost like the Coca-Cola formula. No one has access to the Coca-Cola formula, no one has access to the FICO formula," he said. But by being proactive, you can start to work toward a higher score, something that will serve you well every time you apply for a loan.
Some suggestions for improving your credit score:
-Monitor your credit reports and correct errors. Look not only for negative events on your record, but also examine the credit limits to make sure they're accurate. If the credit limits appear lower on the report than they actually are, that has the potential to hurt your score.
-Pay bills on time and keep card balances low. Your payment history, and the amount you owe on your accounts as a ratio of the amount of credit you have access to, are important components of your score. FICO 08 is more sensitive to high credit usage, and consumers may see a lower score if their reported balance on one or more cards is near the account's limit.
-Take on new credit only when you need it. Some credit cards come with great offers, including a percentage off your bill if you sign up for one at the cash register. If you accept, make sure you're getting a big enough benefit to make it worthwhile-taking on additional credit could end up dinging your score.
RISMEDIA, September 1, 2009-The Dow Jones Economic Sentiment Indicator (ESI) reached its highest level in a year rising to 35.5 in August, the sixth consecutive monthly increase. The ESI's continued improvement lends guarded support to the growing view that the U.S. economy may be moving out of recession and into a period of recovery.
"In addition to the ESI's positive trend, we've seen several months of positive movement in the Leading Economic Index and industrial production which have in the past signaled a move to economic growth," said Dow Jones Newswires ‘Money Talks' columnist Alen Mattich. "The continued improvement of the ESI coupled with the gains of other leading indicators is a sign that the U.S. economy continues to steer a course towards recovery."
Mattich points out, however, that it would be premature to call an end to the recession. "It will be months before the National Bureau of Economic Research determines the timing of the recession's trough and a return to growth. We continue to wait for the ESI to reach the upper 30s before anticipating an end to the recession and thereafter for it to reach the upper 40s before sentiment suggests the recovery is sustainable," Mattich said.
The National Bureau of Economic Research (NBER) is the official arbiter of U.S. economic cycles, identifying the dates of peaks and troughs that frame economic recession or expansion. On December 1, 2008, the NBER announced that it had determined the current recession began a full year earlier, in December 2007. The NBER's determination that November 2001 marked the end of the U.S. economy's previous recession was announced on October 21, 2003, 23 months after the economic recovery had begun.
The Dow Jones Economic Sentiment Indicator aims to predict the health of the U.S. economy by analyzing the coverage of 15 major daily newspapers in the U.S. It uses a numerical scale from 0 to 100 to express the balance of sentiment in articles about the economy. The ESI represents one of the most comprehensive and far-reaching examinations of media coverage as an economic indicator. The ESI's back-testing to 1990 shows that the ESI clearly highlighted the risk that the U.S. economy was sliding into recession in 2001 and 2008 and suggests the indicator can help predict economic turning points as much as seven months in advance of other indicators. Unlike some other indicators where 50 is a clear break-point between recession and recovery, the ESI needs to be read with reference to longer trends. Based on the ESI's performance since 1990, previous recoveries have been marked by substantial month-to-month gains, with a jump of three points seeming to be a sign of significant improvement. A drop below 50 marks the point at which there is a clear risk of a slowdown.
Disclaimer: ActiveRain Corp. does not necessarily endorse the real estate agents, loan officers and brokers listed on this site. These real estate profiles, blogs and blog entries are provided here as a courtesy to our visitors to help them make an informed decision when buying or selling a house. ActiveRain Corp. takes no responsibility for the content in these profiles, that are written by the members of this community.
;)
;)
