Fall is coming and the season is set to change.  Housing information is changing as well.  Potentially driven by the 8,000 tax credit and backed by a slowly rebounding economy, the housing market is working it's way back to pre-collapse status.  It's not a huge adjustment upward, but the trending supports a forecast of reducing inventory and correcting back to a seller supported market. With the deadline for the tax credit quickly approaching, it's indicative of the trend continuing through the end of the year.  It will be interesting to see how the market will reactif the Fed decides not to extend the tax program. 

The charts below are provided by Altosresearch.com and are viewable on www.lendingdfw.com.  They give an up to date view of property values and inventory. 

Trending of both inventory is decreasing, median price increasing (ironically, Plano has seen minimal disruption from the housing market bursting), and average days on market taking a major down turn.  Not to say we are out of the housing dilema, but with rates perched at a high 4% again and a backed up market starting to move, it should equate to a strong finish in 2009.

After multiple discussions with realtors, insurance agents, and other mortgage lenders, it has become evident that all areas of the real estate industry are involved in a cloak and dagger style buyer.  Whether they are driven by the insatiable need of getting the best price, cheapest costs, and largest house, is dependent on the individual scenario.  What remains constant is the amount of effort professionals are having to put forth to gain the confidence and commitment of their clients.

Is information becoming a real estate professionals enemy?  The immediate (sometimes inaccurate/incomplete) information available on the internet can become the clients best resource, or create the indecision that leads to deals falling apart over time.  Personally, I believe it's our responsibility to channel this information in a beneficial way to the client.  Snuffing out inaccurracies and providing honest answers with documentation to support.  Finding level ground on the oasis of rapport can bring them in from the storm of confusion.

However, this does not solve the initial issue.  How do you keep from getting voted off the island?  How can you gain the trust of your client?  Is it always cost related?  Personally, I would say no.  As a estimated percentage 75% of the potential buyers are looking for professional representation with reasonable costs associated.  The 25% (which now seems to be growing) who are after the deal of a lifetime are tying up properties, agents, and lenders by placing low bids and wanting to play "Let's Make a Deal".  When door #1 is opened to "No such deal Johnny" the buyers are left with remorse and either move to another "bargain" or become dis-illusioned and quit the process.  Real scenarios which impact the commission of all professionals involved and create a waterfall effect of wasted time through persons/employees involved.

The importance of pre-qualifying the client has risen dramatically.  Realtors are heavily reliant on a solid pre-approval letter.  Validation of assets and income are critical.  Cash shortages to close are a common issue due to lack of due diligence at time of approval.  Conditional approvals are typical, but the conditions should be fully disclosed, with a path of resolution. 

Not getting voted off the island is almost a political game.  Realtors not voting off lenders in favor of their personal contacts.  Lenders not referring buyers to other Realtors due to relationships.  It's an integral part of our industry that should be reconveyed and discussed openly.  There are enough obstacles keeping deals from funding table, let alone a surprise veto after qualifying your candidates.

It's no secret that the first time home buyer tax credit program ends Dec 1st.  But let's review the anticipated chain of events that will begin to happen...starting Oct 1st.  Be prepared, the scenario is slightly cynical.

Oct 1 - "Oh, wow, no worries...once we get the candy passed out for Halloween, we will start to look at properties on the internet.  No big hurry, we have over 90 days to get this dealio knocked out.  Besides, everyone is looking to dump their foreclosed and short sale properties.  Just imagine me, king of negotiators taking on the desparate home owner."

Oct 15 - Slight twinge in the back of my mind...what's that again?  Oh yeah..the home.  No prob, plenty of time.

Nov 1 - "Wow...that was some late night candy action.  Can you believe they let kids dress like that?  I'll get to the home searching tomorrow."

Nov 2- Hours spent online looking up hot words like...foreclosure, shortsale, local homes, cheap houses, desparate owner, craigslist, and free home....total...1 hour. Steal of a deal homes identified..0.

Nov 3- Hours spent online looking up hot words like...foreclosure, shortsale, local homes, cheap houses, desparate owner, craigslist, and free home....total...4 aggravating hours.  Steal of a deal homes identified..0.

Nov 4 - Call wife in as research wingman...Hours spent online looking up hot words like...foreclosure, shortsale, local homes, cheap houses, desparate owner, craigslist, and free home....total...0...instead, end up on Facebook, Twitter, YouTube, American Eagle and chatting online.  Steal of a deal homes identified..0.

Nov 5- Wake up...slightly sweaty...oh yeah...25 days to locate my house.  Hold the personal "I gotta get serious about this" talk with myself.  Motivating..not so much.  Anxiety building..very much.  Forgot about the financing piece and I should probably just call a realtor.

Nov 6- 2am...darn.. forgot to call a realtor and do how much money do I need to close?  4 am..why does my wife keep kicking me in her sleep.. funny part is she sounds like ET when she says "new home" in her dreams.  9 am, finally make call to realtor.  What do they mean they are out of office showing homes?  There's a recession and from the news, nobody's buying all the foreclosures.  Request call back and begin to get a touch nervous.

Nov 7 - Call back from realtor went ok...until they asked for a pre-approval letter?!?  Once again...nervous.  Realtor refers a lender.  I make the call and overall the conversation is good.  Until the question regarding closing time comes.  I say...in a way that came out as a cough and answer..end of the month.  Was that a giggle?!? The loan officer puts me on hold. When we are connected again, I think the phone's on speaker..not sure.  Again comes the question...when would you like to close...I answer and it's like the laugh track from Seinfeld echo's in my earpiece.  Putting the phone down, the thoughts come like bullets from a revolver...why did I wait...what can I do...how can this get done..once again..very nervous.

So how does it end? Unfortunately, not well. I don't get the 8,000 credit due to procrastinating. My wife mutters strange names at me when walking by...and is that the stink eye?  Never seen that look before.  Not to mention the kids...playing dodge rock in our new unlandscaped yard, singing the "8K My Daddy Gave Away" song. Which, by the way, is not very becoming.  Who would have thought that the entire family was counting on the rebate?

Start to put a realistic timeline to the home purchase process.  The loan process takes 20-90 days, truly dependent on the lender you choose.  Identifying the right house normally takes a couple weeks. Waiting until 60 days before deadline is a bad decision, if your counting on the rebate.  When the down payment assistance program ended, a quick close couldn't be shoehorned in.  It's going to be much larger this time since the attention is more widespread.

So, start now.  there are approximately 100 days remaining.  Subtract 30 days for underwriting and natural sales process, which leaves 70.  Allowing ample time to be pre-approved by a good lender and also allow for time to find the right property with your realtor of choice.  Don't forget the negotiation over price can take a week and if your looking into short sales/foreclosure...add..add..add a little more time....and carry a good luck charm!

Remember the days when a 700 credit score would get you the red carpet treatment and a 5% interest rate would line up so many clients the carpet would be threadbare?

Not so in today's real estate arena.  A 700 credit score gets you past the 1st step of qualifying, then comes the next step in what can be a gauntlet of qualifying parameters.  The 5% rate is appealing to those who recognize it for what it is....a 30 year low...while others wait for the pending rate implosion that may never take place.

The point is that lending parameters are ever changing and it's never going to be "The Ultimate Time to Buy".  Instead we need to recognize it for what it is.  A huge opportunity for the 1st time home buyer.  From buying at a low price, add the bonus of great interest rates, and then top it off with a $8,000 tax credit.  Just do your homework and understand what the local market is doing.  A good real estate agent is key and back it up with a strong mortgage lender.  Flying solo without an agent and chasing the lowest rate quoted will lead you to down the green mile, while wishing...."If only I'd taken a professional's advice."

Refinancing today is a similar situation.  The calculations never change as far as cost return.  The sickness lies in never pulling the trigger, holding off until..yep...opportunity is gone.  Your mortgage lender should be stuck to the market and an expert in the field.  Every day is not the best day to lock the rate, so beware if you expected to lock..today...without supporting information from the lender.  Rates do improve as well as degrade, sometimes in short time spans.  Ask for the collaborative info, which the lender should be able to provide...since it's what they are basing their locking strategy on.

Be careful Lone Rangers.  Get support and advice from your trusted advisors. Even the experts are having a tough time keeping up with the ever changing market.  Trends and forecasts are unpredictable when the floor isn't stable.  Reasearch, ask questions, find your threshold, and lock the rate!

The last month has been interesting in the Dallas/Fort Worth area.  Pre-qualifications to secure financing has held steady, but pulling the trigger on the home of choice has been painfully delayed.  Odd considering rates are still at 30 year lows.  Odd considering property values seem to have hit the bottom of the depreciation valley.

One theory is that due to lack of positive press, buyers are lining up, pre-qualification letters in hand, waiting...and waiting....and waiting for the starting gun to be fired.  If and when the gun finally echos through the newly renovated Home Stadium, it will be more hectic than 4 am pre-christmas sales. 

Question is, who will be firing the gun.  Answer is that the lender or real estate agent needs to be pulling the trigger and waking the buyer from their comatose stance.  There are signs that interest rates will increase.  As the economy takes it's first steps out of the starting blocks, they are slow, almost painfully slow.  But the signs of recovery are showing promise.  This will lead to increased interest rates as well as increased home prices.  The Dallas market is already reflecting the trend.  Multiple offers, seller strength returning, and quick contracts are all showing the road to recovery.  As one of the least impacted markets in the US, it makes sense that it would also be the first to rebound.

Real Estate professionals need to ask themselves whether they are still in the victimized state of mind, or on the attack.  The new home buyer deserves the strength of a professional who recognizes opportunity.  Pull the trigger and give them the proper advice.  Find your voice and opinion by researching the facts.  There has never been a more opportune time to buy. 

It's been a while since headlines have leaned in a gracious manner towards the housing industry.  Texas has earned a spot in the top 5 places to purchase per an article on CNN Money.  Good news to the local DFW market and an indicator of things to come.

Surprisingly, the news is flooded with above projection reports in multiple levels of housing.  Rates are not just good, they are spectacular.  Existing home sales were above projections and inventory declining.  5 of the major home builders are aggressively taking new market share as competition has been eliminated over the last 18 months. 

The question is have we finally hit the bottom of the financial crisis?  Concern has to be shown toward the availability of funds to those who want to secure financing.  Unfortunately lenders have raised credit restrictions in the last 30 days.  This piece could be the dampening of the flame which is thawing the housing industry.  As incremental credit qualifications are added, it impacts a large number of potential home buyers.  Mostly the first time home buyer.  It's not without reason these restrictions are taking place, but a visionary stance shows promise to the lenders that have tightened, but not bound their first time home buyers.

Spring and summer of 09 should be strong as contracts are being stacked on the short sale market.  Lenders need to be keeping an eye on staffing as most have reduced headcount due to lower application volume.  The tell tale signs are there, 45-60 day closing times are evident industry wide.

Is it possible to be passive-aggressive in today's environment?  Answer has to be yes.  Secure market share while others are still watching the ice melt and the summer will be very, very hot.

Link to CNN Money article : http://money.cnn.com/galleries/2009/real_estate/0903/gallery.Defying_the_slowdown/index.html?section=money_realestate

Ever wish you could get someone to pay your rent for a year?  Well..if you purchase a house this year, your wish may just be reality.

Think of it this way. If you take the new $8,000 stimulus money for new home buyers and divide by 12, you are receiving a credit of $667 per month.  That's if you divide by twelve.  Realizing that if you start the process today, the closing would take place in April....and the first payment due in June....it changes the game dramatically.  A first payment in June, with full $8000 (if qualified) received equates to a monthly credit of $1333....or equivelant to free rent for the rest of the year. 

Of course, it's not that simple once closing costs and down payment figure in.  But manipulate the numbers in any way, add the  bonus of 30 year low mortgage rates...and it equals a great time to purchase a new home.

Britney Spears gets coverage for shaving her head.  Starbucks gets top headlines for scheduling to close 600 stores. But the consolidation of America's #1 mortgage lender by Bank of America goes without barely a mention on the national news wires. 

Guess the question is........why?  The ramifications of this consolidation will effect a majority of our population from a competitive banking stand point, as well as on the mortgage front.  So how could this be a silent transition. 

Without getting into a conspiracy frame of mind, it does raise major questions on news coverage and the underlying truth of coverage.  But I digress in the fact that since there is minimal news being released, speculation remains king.

The ripples will become evident in the near future.  Potential layoffs for Countrywide employees are hovering as duplicate positions could be eliminated.  Unfortunately for the lending giant, profits have been hard to post and the absorption into the banking leader may impact our colleagues still employed at CW.  Concerns for the general public and those employed in the industry should be leveled on program, pricing, and credit qualification changes.  Any drastic tightening in these areas could once again, put the industry in turmoil.

Keep an eye on the major news outlets, as well as the smaller internet based networks.  Between the two, hopefully we can get a better picture of how this will effect the mortgage/banking industry.

What a great move in an environment where selfishness seems to be dominant.  Looking beyond the obstacles of the current market, Tucker Hill reaches out to the community by offering truffles made by the homeless shelter to prospective homebuyers. 

Not just a good marketing ploy, the underlying message of what their community is about comes through.  If all involved in the real estate industry, from lenders to agents, took the a page from this book, it could help stimulate and protect our industry.

Kudos Tim Downey and Tucker Hill representatives!

For the complete article, please use the link below.

http://www.ntxe-news.com/artman/publish/article_45569.shtml

April 17 - April 23 This week, nearly half of the panelists believe mortgage rates will rise over the next 35 to 45 days. The rest are split evenly among those who think rates will fall and those who believe rates will remain relatively unchanged (plus or minus 2 basis points).   Panel: Up: 46% Down: 27% Unchanged: 27% Source: Bankrate.com

  Have a successful weekend and remember, in today's market, there are still ways to qualify borrowers who are outside the standard box.  It's a cooperative approach from broker/banker, real estate agent, and borrower that gets them to the closing table.