Greg's Blog

Maintaining Success in the New Real Estate Industry

Greg Polashock (Cherry Creek Mortgage) — Sat, 15 Sep 2007 11:58:56 -0500

As you are aware, the upheaval in the Mortgage Lending industry has necessitated a change of strategy throughout the entire Real Estate Industry.

The prior dynamic within the industry was that the professional attached to the client or property was the "hub of the wheel", so to speak, and all other individuals were, while necessary, incidental.

That still remains true to a degree, but with one major change. The new Real Estate Industry MUST put the mortgage financing process at the center of the wheel, or, alternatively, as step one in the process. Any time a prospect approaches a Realtor or Builder for a home-buying transaction, the first statement needs to be, "You need to get qualified with a Lender with whom I am acquainted. I'm not saying you have to use my lender, but in the present market you need to be verifiably pre-qualified before we go any further." The response you get to this statement will quickly tell you how serious the prospect is. Because of the increased chance of fallout on Home Purchase transactions, I advise that you spend the majority of your time with clients who are pre-qualified with a lender whom you know and trust. Put the others into an incubation system for later business down the road.

According to a national survey of mortgage brokers released at the end of August, approximately 33% of contracted purchase transactions scheduled in August did not close. Again, a 33% failure rate in August on purchase transactions! This was due to a failure in ability to put together financing for the prospective buyer. This is HUGE!

However, it is easily avoidable. The first step, again, is to require that your buyer prospects get pre-qualified, up front, with a lender whom you trust. The second step is to NOT fall into the trap of continuing working through the purchase process with those who are not, or will not pre-qualify with your lender.

There is another aspect that is central to your success in this new business model. The current hype naturally creates fear and uncertainty for the uninformed. As part of any initial consultation, you must be able to convey the reality of the situation, backed by accurate statistics, and when possible, convey why now is a time for people to buy. This can be done in any market. In a down market geographic, odds are foreclosures are up, allowing buyers to obtain properties for pennies on the dollar. In stable or improving markets, (yes, they are out there still,) now is the time to buy because we WILL come out of this lackluster market and home prices will escalate once again, so buying low is key to financial success for the Buyer.

I am noticing a disturbing trend lately. Too many professionals seem to be a little gun-shy of late, as if concerned with making a mistake. Let me be clear - it's one thing to make a mistake; it's an entirely different matter to commit fraud. Let me give an example: I recently dealt with an appraiser who, because there were not enough comps in the subject neighborhood, went to a nearby, yet inferior neighborhood for additional comps. He came back with an inaccurate appraisal that eventually killed the deal because he placed more weight on the inferior comps. He simply wanted to take a very conservative approach because he really did not understand the micro-local market. (I say this because I happen to live in the subject neighborhood and know well the values of properties.) My point is this - appraisers, like all of us in the Industry, happen to be under the gun lately. Fear is not the way to react.

By getting on top of the Real Estate Industry, as opposed to getting mired in the conventional hype, seeing what's really there and the opportunities within, and then being able to calmly, professionally, and accurately convey the real assessment of the situation to your prospects, you will instill confidence in them. They will be more apt to move forward properly and you will have established yourself as a beacon of reason in a world otherwise filled with reactionary, knee-jerk oriented individuals, and you will come rolling through this new real estate market with great momentum.

Greg Polashock is a Real Estate Home Mortgage Loan Consultant and Certified Mortgage Planning Specialist with Cherry Creek Mortgage and resides in Castle Rock, in Douglas County Colorado. He can be reached via email at Greg@GregIsFinancingSolutions.com, by phone at 303-887-0672 or on the web at http://www.gregisfinancingsolutions.com/.

The Mortgage Market – Week ending 9/14/07

Greg Polashock (Cherry Creek Mortgage) — Wed, 12 Sep 2007 15:21:43 -0500

Recently, the August Report of the Case-Shiller S&P Housing Survey stated that housing prices, nationally, declined at an annual rate of 3.2%. What the local headlines in the Denver Area missed is that Denver is now in its third month of appreciation. Denver is poised to move into one of the top spots of twenty metro areas tracked in the report.

So, what is happening with rates? Conventional rates are actually doing OK. They are staying steady in the low to mid sixes without much fluctuation. I will come back to this when I discuss Treasury movements. Nonconforming products continue to take a beating with rates in the upper sevens. I expect Nonconforming rates to continue to stay high until the market gets its head on straight. Having said this, some investors are beginning to segment the nonconforming market to reward good borrowers.

Mortgage (Treasury) rates recently dropped recently to a point where, in my opinion, the bonds that are supporting those rates are now overbought. If my inclination is correct, compounded by my instinct that the Fed will lower the prime rate next week, I think mortgage rates will soon start to increase. So, if you are considering buying or refinancing, I recommend a "sooner rather than later" plan of attack.

Because the music has stopped in many pockets nationally, many areas are seeing real decline. This is, in my opinion, only going to get worse, as many borrowers in the wrong mortgage product will a) not be able to continue making their payments, leading to b) have to vacate a property creating a glut of additional homes on the market. This will serve to drive prices down further.

And, it gets worse. As this happens, economies will slow down and the nation could move into a recessionary period where jobs and incomes will be reduced. You can see where this is going.

However, locally, I continue to see good things on the horizon. Denver has a good, growing jobs market; housing prices are reasonable, especially compared nationally; foreclosure rates are declining compared nationally; housing inventories are declining; and new housing starts are down substantially. This all creates a lower supply side on an economic scale and, with a stable to increasing demand side, housing prices should go up.

Current Home-Owners… What to do Now?

Greg Polashock (Cherry Creek Mortgage) — Wed, 12 Sep 2007 15:06:01 -0500

There are four actions possible for current home-owners: Do nothing, Sell, Refinance, or Convert the Current Residence to an Investment.

Do Nothing: This is for those individuals who are either happy and content in their present situation and don't want to take any chances, or those who are so caught in the current perceived uncertainty of the real estate market that they simply aren't equipped to make a decision. (I mean absolutely no slight at the latter; it's simply a truth that some people don't really know what's going on and don't have the information to equip them to make a decision.)

Sell: Lots of people can fit into this category, but I'll break them down into two general groups - those who see opportunity and want to grab it, and those who simply have no choice but to liquidate the current holding.

Refinance: This group also falls into two basic camps - those with equity in a property and see a benefit to repositioning that equity, and those who are currently in unfavorable financing terms with the ability and inclination to take advantage of better financing terms.

Investors: This group is who I'll call the opportunists. They see a value in holding the current residence because they can either make money renting it, or they foresee the value of the property increasing in the future and are so confident that they want to leverage their position by getting into another property where the same will happen. (Or, perhaps they might have otherwise been a seller, but just see the value in holding real estate as a strong suit in their overall investment portfolio.)

So, what to do?

The mortgage market currently requires that you come to the table with a fairly strong hand - good credit, financial reserves, good future income potential, etc. If you fall into this category (and if you're unsure, consult a trusted mortgage professional for some guidance), now may be a great time to consider a buy and hold strategy.

I am often asked about the fix and flip market. In my opinion, now is probably not the best time for most to try their hand at this. If you're asking if now is the time for fix/flip, you probably are not well-versed in this market niche and there is a big learning curve. And, for the inexperienced, there is enough uncertainty so that your exit strategy cannot be confidently guaranteed.

But for the buy and hold purchaser, there are opportunities, whether you are in an appreciating market, or in a market that will rebound nicely due to economic longterm fundamentals, or a market where foreclosures allow you to buy a property at a substantial short-term discount.

Again, if you are considering buying or refinancing, your first step should be to consult a knowledgeable mortgage consultant. Opportunities abound! In the new real estate industry, seeking guidance from a trusted advisor is essential.

Finding Success in the Current Real Estate Market

Greg Polashock (Cherry Creek Mortgage) — Wed, 12 Sep 2007 15:02:45 -0500

I live in Castle Rock, Colorado, on the south side of the Denver Metro Area. This article will cover both local and national (general) trends. Let me start nationally.

Over the past five or so years, most of the nation has seen rapid increases in real estate values. I won't go into the "why" of all that, it just is a fact... for most places. However, recently, just about anyone who's watched the News, been on the Internet, or read a Newspaper, knows that the party is over.

The most recent Case-Shiller S&P Housing Index Survey (from August) indicated that housing values are down nationally by, (I'm going from memory here,) 3.2%. So, this is bad, right? Well, I guess it depends on how you look at it and how you react.

I was talking recently with a professional acquaintance who told me someone on her team had recently lost a relocation client because housing values had started to decline in the market where his current home is located. This is kind of like someone saying, "I'm on the Titanic, we just hit an iceberg, the ship is starting to go down, so I think I'll stay on board." Professionals in our industry MUST react calmly to such situations and be able to explain the reality of the situation to the client.

I personally think now is a great time for the relocation market in most pockets in the country. If housing prices are starting to decline, the play-book should read something like, "OK, you have an opportunity to get out of here. You've made twenty percent over the past five years; the market is now down 5%. Sell now before it gets worse, make 10-15% and move to a market that did not ride the wave where prices, comparatively, are more reasonable, appreciation is more likely to occur, and where jobs are good."

Conversely, in markets that did miss the boom, like my own in the Denver Area, the inbound script is more like, "We did not participate in the nationwide frenzy; housing prices in our area are now in line with, and even a bit below the current national average; our jobs market is growing; housing inventories are declining (indicating a future appreciating market); and we are actually now three months into a housing appreciation cycle."

What I'm driving at, for industry professionals, is to see the opportunities and don't fall into the current media-hype that is inappropriately scaring the wax out of consumers. Fear breeds inaction. Confidence, which you can instill, will enhance your professional standing and, more important, create value to your clients.

Now... a word for home-owners: Because interest rates have dropped, there is a segment of the population where the current housing situation creates great opportunities. They're everywhere! In down markets, there are a higher number of foreclosures. In markets that did not participate in the rapid appreciation of the past five years, there is a higher chance of housing appreciation over the next five to seven years. Now is a time to leverage equity from a current home, liquidate the home, and buy up in a market that is currently favorable.

I love the position of the Denver Area market especially. In my opinion, because of a wide variety of economic fundamentals, the Denver Area will be a great place to buy real estate for the next six to twelve months because we are on the very front-end of what I foresee as a five to seven year appreciation cycle. I will go so far as to say that housing in my area should appreciate by 20-25% over the next five to seven years. When you combine that type of increase with a 10% down-payment, the return on investment would be somewhere around 100-150%. In other words, an investment of $50K would be worth $100-150K.

The current market is not only creating opportunities for housing sales and purchases, it is also creating opportunities because of favorable interest rates. See the "glass half full" side of the equation and you will be able to capitalize on real opportunities that the "panic-driven" will miss.

Now is the Time to Understand Mortgage Structure

Greg Polashock (Cherry Creek Mortgage) — Wed, 12 Sep 2007 14:56:45 -0500

We've been hearing a lot lately about a "meltdown" in the mortgage industry. First, this is a media-hyped gross exaggeration of what's really going on. The best thing to do is remain calm and get professional advice from somebody you know and trust, who is really equipped to explain the situation.

Let me explain how all this works, then what I foresee as happening in the future.

First, the life-cycle of a mortgage loan:

A customer decides s/he needs a loan. The loan is prepared by a loan originator. That loan is underwritten by an investor (the bank.) The loan closes and is funded by that bank. Now, the bank holds the debt. The bank then packages that loan, along with a bundle of other loans recently closed and goes to Wall Street (generally) to sell that bundle. The Street buys it and resells it to other interests... say, a foreign country, an insurance company, etc. Those entities then basically sell it back to investors (could even be you or me.) That's how the process works.

The problem:

Because the banks became so lax in underwriting standards that recently, when the music finally stopped, Wall Street decided not to buy any more nonconforming bundles. THAT is what left the investor/bank with a lot of debt, unable to sell, with all cash now tied up, and created what we hear as "the liquidity crunch."

Solutions:

First, you need to understand the difference between conforming and nonconforming loans. Let me oversimplify. Conforming is, first, a loan of $417K or less. It is also one where the borrower has good credit, verifiable repayment capacity, assets, down-payment (or equity)... a fully documentable transaction. EVERYTHING else, generically, is nonconforming. This includes Stated Income, Subprime, Jumbo (anything greater than $417K), 2^nd mortgages, etc. Obviously, this nonconforming thing is a big chunk of the market.

With that, I think the market will soon react by learning how to properly segment nonconforming products. As a case in point - Jumbo loans are typically given to fairly well-to-do borrowers who have good income, assets, etc. Right now, those loans still get jumbled in with all the other "higher risk" loans. This doesn't seem right. In fact, I would almost think that fully documented Jumbo loans are perhaps even a better market investment than many conforming loans. I think we will see a breakout in jumbo pricing for those good borrowers. The market just has to figure out how to package and resell it. Some banks/investors are already showing signs of figuring this one out.

The next issue is interest rates. Recently, interest rates on conforming loans have been going down. This is because of the uncertainty in the economy and how it has affected Wall Street investment. Wall Street Equities and the Bond Markets compete for the same dollar. As money moves away from equities and into bonds, interest rates on mortgages tend to go down. The opposite is also true. The other thing that will affect mortgage interest rates is the direction of the Fed Prime lending rate. This one is not as easy to understand. Currently, the market is anticipating a drop in the Fed Prime next week. If this happens, it will send a comforting message to the Equities market and money will most likely want to move there... from bonds. In this case, this would mean upward pressure on mortgage rates.

So, there you have it. To learn more about how all this may affect you, either as a consumer, or as a professional in the industry, please check out my other recent blogs or contact me.

The Real Estate Industry is Three Months Old

Greg Polashock (Cherry Creek Mortgage) — Fri, 17 Aug 2007 18:15:51 -0500

We all need to understand the reality of this statement.

In the real estate market, the mortgage part of the industry is of vital importance. And the mortgage world has changed recently in a way that is rewriting the rules of the entire industry.

Let me start by saying that the core essentials required in the real estate industry now are absolute professionalism and decisiveness. In my blog about the Law of Attraction, I touched on loyalty, fear, and uncertainty. Those character traits will be the kiss of death in the new Real Estate Industry.

In this new world, there are a few preeminent keys to success. The foundational key is knowledge. Knowledge of the ins-and-outs of the marketplace sets the stage for everything else.

Following from knowledge is the key of having a solid, fact-based opinion. The marketplace, and the average consumer, is filled with uncertainty and requires guidance. You don't want to do the "well, what do you think?" thing. In this new industry, you need to be authoritative and have a professional opinion that provides clear direction.

The third key is recognize the need to incubate clients and understand that the incubation process may take six to twelve to eighteen months to culminate in a transaction. This also requires commitment, follow-through, and systemization.

Next, to earn the loyalty of that prospect, you must provide value on an ongoing basis. This is NOT just sending postcards or newsletters, but is a process of getting to know the prospect on a personal basis and offering items/services that speak directly to their individual wants or needs.

And finally, you simply have to get the result! It is not about price. It is a final grade where the culmination is a "Wow!" experience from the client's point of view.

Despite all the loud voices, the industry is not about lowest costs, cheapest price, etc. It is, instead, about the best bang for the buck. If your compensation is not the lowest in the area, but your services are the best to be found, you will a) obtain the kind of clients you want, and b) avoid the kind of clients who don't appreciate the value of what you bring to the table. (There are enough people in the industry who work from the transactional mindset of cheap price that those clients will find someone else. And those agents are worth what they get paid.)

Now, there are many other keys to success - professional attire, good business planning, etc., but by now those should be basic carry-overs from the old Real Estate Industry.

Yes, The New Real Estate Industry is three months old. You need to jump in quickly and decisively and gain mastery of the new skills required, or, I assure you, you will get left behind.

Now is a Great Time to Buy!

Greg Polashock (Cherry Creek Mortgage) — Thu, 16 Aug 2007 17:55:42 -0500

The market is panicking; home values are declining; stocks are plummeting... how can this be a great time to buy?

The simple adage, buy low, sell high, is an economic basic. We've seen how high high has gone in recent months, days, or years, depending upon what investment you're looking at, whether it's been oil, stocks, bonds, or real estate. For purposes of this article, I'm talking about real estate.

In some sectors, real estate has begun to take a pounding (and rightfully so); in others the market has merely softened; and almost nowhere has real estate continued to move up unscathed by recent events. I'll call this last scenario "santa claus" because I just don't think many of us have seen the real thing.

In areas where the housing market as imploded, my word is this - foreclosures! You've already seen them and there will continue to be more, so get ready for the opportunity to purchase for pennies on the dollar. Be careful, there can be some real lemons however.

In markets such as my own in Denver and Douglas County Colorado, the housing market has just been a bit soft. This is, as far as I can tell, an ideal situation. There isn't an air of panic that is forcing prices into a deflationary cycle, but there are good deals to be had. Especially in the Denver area, I also see how, by sitting on the sidelines while the rest of the country was going real estate nuts, we will now be the beneficiaries of appreciation while the majority of the country licks its wounds. Soft but not clobbered markets will, in my opinion, see the best appreciation in upcoming years. Now is the time to get in on a ground floor.

Whatever you do, please do not try to "time" the market, or interest rates, or anything else. For goodness sakes, if you're thinking that that's what you want to do, all I can say is, "Haven't you learned anything over the last eight years?" As my Dad says, "Pigs get fat, hogs get slaughtered." Be happy with "almost" timing it perfectly. Otherwise, one of these days, you'll be telling "fish" stories about how you almost hit it big way back when.

If you are considering buying in or moving to the Denver Metro area, I encourage you to contact me as one who will serve and assist you professionally in these tricky times.

Denver Metro Area – Now is a Great Time to Buy or Sell!

Greg Polashock (Cherry Creek Mortgage) — Thu, 16 Aug 2007 17:48:53 -0500

Huh? How can that be?

We are so used to the terms "Seller's Market" and "Buyer's Market" that we forget there is a point in time where there is equilibrium. I like the Denver Metro housing market right now because I think we are on the very cusp of what I'll call a long-term equilibrium. Let me explain -

Currently, compared nationally, the Denver home real estate market is very reasonably priced. Homes are neither cheap, nor are they over-valued. Many factors go into this, but the thing to remember is that the Denver area did not participate in the sky-rocketing home appreciation market of the past five years that most of the rest of the country experienced. And, likewise, Denver is not participating in the hangover to the degree that the majority of the country is now experiencing, either. The fundamentals in Denver are very sound and some of you have already read previous statistics I have used regarding employment, appreciation, job-growth, income levels, etc., so I'll not bore you with it again.

For those who are considering selling - now is a great time to sell - with one caveat: get real about pricing! We are not in a seller's market and if you overprice, not only will your house sit and sit and sit, but you will eventually be forced to lower the price and then you will set yourself up for a negotiating nightmare. So - set a realistic price and sell sooner. Also, with the instability of the mortgage market right now, if you turn your nose up at a reasonable offer (thinking you can get more) from a well-qualified buyer, you may pay a hefty price by not accepting it. 98% of something is far better than 100% of nothing. By the way, one admonition - if you are in the Denver metro market and seeking to sell, please contact me for a referral for a competent real estate professional to represent you. You will not be best-served in most cases by trying to sell it yourself, nor using the services of a discount broker. We are in a time where you either play with the big dogs, or stay on the porch. I know that's blunt, and maybe a bit crass, but as a knowledgeable professional, I'm less concerned about hurting sensitivities at the expense of not telling you what you need to know for your best interests. Long and short - work with a professional!

Now - if you are a buyer (or a seller who will then buy), you also need to be realistic. This is not a buyer's market. You cannot expect to go in and low-ball, or expect a lot of seller concessions. The home sellers who are professionally counseled already are priced right. If you play games, especially with the mortgage market the way it is, you may wait yourself right out of contention. This is not a time for gamesmanship. It is a time for people to act with purpose and intelligence!

Continuing with the market equilibrium - I foresee the Denver area housing market as averaging 3-5% annual growth for the next 5-7 years. This will probably start off a bit slow (and has actually already begun) and will pick up some steam within a couple of years. You might be thinking, "How can appreciation mean equilibrium?" The answer is that 3-5% growth is very responsible in much the same way as inflation under 2% (but inflation nonetheless) is a good thing. Over seven years, 3% annual appreciation means an increased home investment value of 23%. And, if you put down 10% on a home (which can still be done), you will triple your cash investment. Not a bad deal!

Whether you are buying, selling, or moving into the Denver market, I encourage you to contact me as one who can provide a guiding hand during these turbulent times. You need knowledgeable, expert advice and I am in a position to provide for your real estate needs.

The Mortgage Market – Week ending 8/17/07

Greg Polashock (Cherry Creek Mortgage) — Thu, 16 Aug 2007 17:46:06 -0500

Wow!! Every day seems to be more exciting than the last. Just today (8/16). The headlines warned that Countrywide could end up in bankruptcy (I don't necessarily subscribe to that), and even the institutions Fannie Mae and Freddie Mac could have solvency issues. What is important about this is not that it could happen (I just don't think it will), but that it's being bandied about. This kind of talk creates panic and, as a result, markets overreact, creating more panic.

What opportunities this creates! It's actually very exciting in a good way.

So, what is happening with rates? Conventional rates are actually doing OK. They are staying steady in the mid sixes without much fluctuation. I will come back to this when I discuss Treasury movements. Nonconforming products continue to take a beating with rates in the upper sevens. I expect Nonconforming rates to continue to stay high until the market gets its head on straight.

Now - Treasuries: This is where you really need to pay attention if you are a real estate industry professional or a consumer. If ANY lender talks to you about rates and associates it with Treasuries, run away as fast as you can. You are obviously talking to someone who has no business being in this business. And, I'll say this bluntly; if they go so far as to say Treasury "Bonds", just go ahead and push them off a cliff please. Why is this clarification so important? Connecting mortgage rates to Treasuries is like someone asking, "How is Yahoo stock doing?" and getting an answer back of, "Well, Google is up 3%." They both offer online search engines, but they are, in fact, two different companies and will not always move in tandem with each other. Get it? In mortgages, Mortgage-backed securities is where rates are determined; NOT in the Treasury Markets.

Why am I ranting about this? Right now, as I write, evidence that the two are not the same is evident. Today, Treasuries are up currently over 100 basis points while mortgage-backed securities are actually down 6 basis points. What I am really driving at is that conventional rates are staying steady because there has not been a lot of movement in mortgage-backed securities, and if someone is giving advice based on tracking the Treasuries, they are not only misinformed, they are misleading the person they are counseling by creating a belief that rates should be improving.

I don't expect you to know every aspect of the mortgage market. Heck, nobody does. But it is important to know that the person who is advising you is armed with proper intelligence. A highly qualified mortgage professional is well worth what they will earn and you will be best-served by working with a knowledgeable professional as opposed to someone who has, in effect, a .22 caliber intellect walking around in a twelve-gauge world.

Realtors® - Serving Your Clients in the Current Market

Greg Polashock (Cherry Creek Mortgage) — Thu, 16 Aug 2007 17:43:06 -0500

There's a Rudyard Kipling poem that starts, "If you can keep your head when all around you are losing theirs... and blaming you...."

That seems to be the current state of the Real Estate market. A lot of people are panicking and it can be seen almost daily in the Stock Exchange/Equities markets. But here's the thing that consistently seems to separate the successful person from the rest of the crowd - the ability to keep a cool head and to see things for what they really are. I hear a lot about how "quiet" it's gotten lately in the marketplace. This is a sign of opportunity because it means the typical consumer is currently experiencing a bit of a "deer in the headlights" syndrome. What these folks need is the calm, experienced guidance of a professional, and those of us who can lead RIGHT NOW are the ones who are currently in a state of knowing calmness.

So, how does this relate to the real estate industry? - In my opinion, this is not a time for panic but for opportunity. (Panic is an emotional state that will keep someone from seeing clearly.) As I see it, we are on the front-end of what I'll call reality. Here's what I mean - the past several years in our industry have been marked by sky-rocketing real estate values and very liberal home mortgage loan practices. That might have been "reality" but it certainly isn't realistic. The corrections now taking place in both of those sectors are a return to real "reality" and those of us who see it know what opportunity there is.

Here's the meat - I will use my local market in the Denver and Douglas County Colorado area as an example. Home prices are slightly soft; there are an elevated level of foreclosures; listing inventories are slowly declining; and the national market is bumpy. So, if you are a Listing Agent, and calm, cool, and professional, you can explain to your sellers why now is the opportune time to list at a realistic price. The client will get the sale; they will, in some form or another, improve their present situation; and they will set the stage for their next acquisition or otherwise prudent move.

If you are representing a Buyer, the very same advice holds true. Gone are the days in Denver where there are lots of selling concessions, deeply discounted prices, etc. So, home buyers must be given the lesson in reality as well. From a buy side, the Denver market is absolutely poised on the cusp of an appreciation cycle and this will benefit home-owners.

What I have left out of this article is the need for a command of local market facts and statistics. As a professional, you must first have absolute command of your facts and only then will you be able to develop a professional opinion based upon those facts. This is not the time to "dabble" for anyone who seeks a profession anywhere within the Real Estate Industry. You will need to commit to a high degree of professional expertise, or, quite simply, get out of the way. I am not saying this to be hard; I am saying it because, especially in times like this, the marketplace will demand it or will crush you otherwise.

Seek to be the best! Know the facts, keep your head, provide a credible opinion, be a person of action, and move with purpose!

Updated Mortgage Underwriting Requirements - A MUST READ!

Greg Polashock (Cherry Creek Mortgage) — Tue, 14 Aug 2007 00:46:32 -0500

This one sort of falls under the "gotcha" column, but in the midst of all the mayham going on right now, I thought it might be a bit of a comic relief.

Happy Reading!

Very Important- Guideline Changes Effective August 13, 2007

* All borrowers must have one blue eye and one brown eye to qualify.

* LTV > 65% SIVA requires minimum credit score of 849.

* For all LTV > 65%, 360 months of payment reserves are now required.

* Borrower's must have no previous bankruptcies in their family history going back three generations.

* A minimum of 25 years self-employment history (at same location) now required for all NIV Programs.

* Minimum credit score for Subprime Loans raised to 720.

* All non-arm's length transaction borrowers (mortgage, real estate professionals, family members) will be required to provide full-documentation, subject to criminal background checks, wire tapping, strip-searches, and a minimum of 12 hours of interrogation by the Department of Homeland Security.

Please note that these changes will go into effect within the next five minutes. So please lock your existing loans immediately. All existing loans in your pipeline must fund by noon tomorrow, sorry no exceptions.

We apologize for the inconvenience. We realize these are tough times in the mortgage industry for all of us. We ask for your continued understanding and cooperation.

Greg Polashock is a Real Estate Home Mortgage Loan Consultant and Certified Mortgage Planning Specialist with Cherry Creek Mortgage and resides in Castle Rock, Colorado. He can be reached via email at Greg@GregIsFinancingSolutions.com, by phone at 303-887-0672 or on the web at http://www.gregisfinancingsolutions.com/.

And on a very rare occasion, he displays a sense of humor! ;-)

A special thanks to my friend Sheila, at Countrywide, for providing this moment of levity.

The Federal Reserve Simplified - It Affects YOU!

Greg Polashock (Cherry Creek Mortgage) — Tue, 07 Aug 2007 19:45:51 -0500

I put up a post yesterday that generated a slew of response. I got a question from an ActiveRain member that I thought was worthy of responding to. In general, it was, "What's the Fed gonna do today?"

This is a great question and one you should have a high degree of knowledge about in order to dialog with clients and prospects at a level most in our industry still can't grasp.

Here is the content of my response -

I'm responding to your question about which way the Fed would move. Hmmm... no rate change? (That's a joke, of course.... By now, you know the Fed did not move rates.)

I would've gotten this one right though. And your question is worthy of detailed explanation. As a past Commercial Banker, I have been studying the Fed since the days of Paul Volker. There is a telltale trail of crumbs that can help us all predict with a fairly high degree of accuracy what the Fed will do.

Here's some things to remember:

Bernanke is NOT Greenspan. That said, Greenspan did a fine job overall
Bernanke is an open book and so far he has not played games. He says his overriding focus is on inflation and the Fed uses the Core PCE (Personal Consumption Expenditures) as it's favorite gauge.
The Fed, for a long time, has shown no inclination to move rates just because of stuff that is happening in the equities markets or elsewhere on Wall Street.

Some things to watch:

PCE - already covered that one - the Fed wants this to be under 2%, which it is... barely (that "barely" actually provides an upside risk to Fed rates. Keep an eye on it.)
Jobs Creation - new monthly jobs created, say, greater than 150K/mth could be seen as a sign of an economy growing too fast. That'd result in upward interest rate risk.
Unemployment - currently at 4.7% I think. This just moved up 1/10% and is a good sign. Anything under 5% is a bit of a risk, as it could create wage inflation, which then leads to inflation, which then leads the Fed to raise rates.
ALWAYS... read the Fed Comments after a meeting - today's comments tipped a hat to what is going on in the equity and housing markets, but reiterated the Fed's continuing concern is the threat of future inflation. They think the economy is moving at an acceptable pace and that the global economy is good.

Now, two things to note: 1) The more you pay attention to what's going on, the better you'll be at predicting what will happen in the Fed and the overall economy and 2) As you read below, learn to "connect the dots" on how the Fed's moves will and will not affect our industry.

Here's what I see in my crystal ball with regard to our industry and the Fed - I think the shift in the mortgage markets in recent weeks, and especially in the past week, will really put a crimp in housing. Two reasons: 1) Fewer people will be able to purchase homes because of new lending restrictions and 2) as Adjustables continue triggering and people see the payment shock (and there will be shock), a lot of people will end up losing their homes. These two factors will serve to soften the housing market, cap appreciation, limit equity refinances (which has been funding our national economy in recent years) and will lead to an economic slowdown.

Now, that's just my opinion. My crystal ball has fallen on the floor a couple of times and I've had to patch it with band-aids. That said, and if my prognostication is correct, I foresee two to three more Fed Mtgs with no interest rate change, then early to mid 2008, a very slight move to rate decreases.

In closing, don't confuse the Fed Rates with Mortgage Rates. This is a very common misnomer and the two are not axiomatically connected. If you look at the past couple of years, as the Fed increased, then stabilized rates, mortgage rates did not run in tandem. In fact, mortgage rates occasionally ran opposite. Of final note - the current dynamic in the markets highlights the disconnect between the Fed and Capital Markets. Understanding what is really causing the current disconnect is something I will probably write about soon. Stay tuned... and add me to your associate list to learn more.

I hope this information helps you polish your own crystal ball so you can speak with your own clients and prospects with a degree of knowledge that requires them to think, "We've GOT to use this person because s/he understands things on a level no one else can even come near!" My goal is for you to be as wildly successful as you possibly can!

URGENT: The Current State of the Market Should be a Wake-up Call to All

Greg Polashock (Cherry Creek Mortgage) — Tue, 07 Aug 2007 08:15:52 -0500

Please read this post with careful attention.

As you may be aware, the Bond and Equities Markets have been getting battered lately. I'm not going to go into detail as to reasons why or ripple affects through Wall Street or anything like that.

However, as Real Estate Professionals, you need to be watching this situation as it unfolds with eyes wide open.

The "NoDoc" financing option has all but dried up in the mortgage market. Now, daily, investors are even running away from "Stated" style loan financing. It is critical that you tend to your clients and make sure you understand fully the financing being used. It is NOT ENOUGH that your clients have a loan approval and/or a rate locked. Investors are pulling the rug out from under products for which there is no longer an appetite in the secondary and tertiary markets.

This information is not just for Selling Agents to be aware of. Listing Agents, if you are not as knowledgeable about the prospective buyer's financing as can be released to you, you need to be thinking about your seller's well-being and understand that closing could collapse at the last minute if the buyer's financing is at risk of not funding.

I recommend that, whether you are a Listing Agent or a Selling Agent, you have your client talk to a preferred lender with whom you are quite familiar and have a good working relationship. Selling Agents, please understand that Listing Agents will need to put your clients through this for the sake of the integrity of the transaction. All Agents, please explain to your client that they are not under obligation to use your lender, but, again, for the sake of the transaction, you must obtain a professional opinion from someone you know and trust. Clients who come in saying they already are pre-approved with their own lender are not typically equipped to understand what could happen. It no longer matters if the lender is XYZ Mom and Pop Mortgage or a market standard like Wells Fargo or Countrywide. This situation is moving through the industry like wildfire and the home financing market is markedly, let me reiterate that, MARKEDLY different than it was even one week ago.

Folks, this is BIG! It WILL have major impact throughout the housing industry for the foreseeable future and, if you are not diligent to the highest degree, will bite you at some point. For the sake of your professional image and reputation, please consider the recommendations I have made.

Please understand the urgency of implementing the discipline of requiring qualification with your lender into your business model for dealing with all clients.

I wish you much success as we move through this period of change and I encourage you to educate yourself on what is going on in the mortgage side of the transaction.

Why the Colorado Foreclosure Market Makes NOW the Time to Buy

Greg Polashock (Cherry Creek Mortgage) — Sun, 05 Aug 2007 23:55:26 -0500

You've heard all the hype - the sky is falling... foreclosures, foreclosures, FORECLOSURES!!

I would like to take some time to differentiate between what is happening in residential real estate in Colorado versus the rest of the Country. Colorado is experiencing the third highest foreclosure rate in the Country by some accounts. While that sounds scary, let me explain why this will actually be good for our local market.

Let me first say that I personally hurt for anyone who has lost, or will lose real estate to foreclosure. It must be an extremely painful, humbling experience to have to endure. There is much blame to be shared for these tragic events.

Colorado has, overall, experienced a very soft residential real estate market for the past five years. During this time, many pockets of the rest of the Country saw unsustainable appreciation, even in the midst of very soft economic times. The contrast between the Colorado residential real estate market and the rest of the Country is important to understand because it served to bring Colorado much more in line with national housing prices. During this time there was, in fact, much money made in the national housing market. Savvy home-owners understand economic fundamentals and know when to get out of a topping market. (I'm sure there were many people who cashed out as the NASDAQ was approaching 5000 several years back.) Those people who are knowledgeable enough to not get left standing without a chair will be looking for a good place for their next real estate investment.

You see, the key to making money in any investment is in being able to foresee the future. This is not "crystal ball" stuff. Markets leave leading clues. The art is simply to be able to see those nuances that are there. In any investment, you buy before a market goes up and you sell when it is about to top out. All markets have cycles.

Some leading clues - Colorado has a good supply of foreclosures and a few good deals are to be had. However, most foreclosures are going at about 90% of the going market price for homes. Considering that this market makes up less than 2% of Colorado's housing market, this will not have a substantial impact on the local economy. In fact, the more foreclosures that get purchased, the stronger the housing market will get. What is more important is that Colorado's economy as a whole, and the job market in particular, is strong and getting stronger. This will provide for an influx of people, and because of the types of jobs being created, will result in a solid percentage of new home buyers. The local commercial real estate market is already very strong, setting the stage for the influx of good jobs. Separately, the local new home construction market has diminished substantially recently. All this will create not only a good opportunity for home sales, but will begin to serve to boost home values.

I think many people have learned a valuable lesson with regard to housing recently and while I see growth in local home values, I see the marketplace moving forward very responsibly, say at a 3-5% appreciation rate for the next 5-7 years. This moderate growth, barring any unforeseen calamities in the economy, will then be sustainable for a long period of time.

Nationally, I think we have a good guy, Ben Bernanke, at the helm of the Federal Reserve. His controlled-growth model will serve to stabilize the national economy and that will be good for everyone.

My recommendation to investors seeking "deals" through the acquisition of foreclosures is to consider a buy and hold strategy. Not many properties will be ripe for fix and flips.

Remember this - money is made when the investment is purchased, not when it's sold. In other words, buy smart on the front-end and the back-end sale will take care of itself.

So, don't worry about the Colorado residential real estate market. In fact, since I project that we here in Colorado are at the very beginning of our upswing, I foresee that now is the time to start buying.

If you want investment property, now is the time. If you want a second home, now is the time. If you want to sell and move up, you got it, NOW is the time!

And if you need advice on how to most effectively finance a home purchase so it best fits your overall financial goals and life plan, please contact me.

Current Market Update

Greg Polashock (Cherry Creek Mortgage) — Fri, 03 Aug 2007 14:15:48 -0500

Real Estate Home Mortgage interest rates seem lately to be "a tail of two cities." Recently, FNMA Mortgage-backed bonds have been seeing a bit of a nice run. This bodes well for rates. It also is most applicable to what is known as Conventional Conforming rates. However, Nonconforming, Jumbo, Sub-prime and other type rates are seeing some risk.

The main player in the risk for alternative loan types continues to be the implosion within certain elements of the mortgage industry itself. Because of the liberal lending standards of the past few years, a lot of people who could not qualify for "normal" mortgages obtained financing through non-conforming or alternative financing.

Welcome to Econ 101! The lesson the mortgage industry should learn is that if someone cannot qualify for a standard mortgage, shoving him or her into alternative financing may not be the best thing for anyone. Too many people have now suffered payment shock and/or foreclosure, the housing market is now burdened on a national level, financial institutions are hemorrhaging, home-owners are seeing slow, no, or negative appreciation, many good professionals are seeing a slowdown in their livelihood, and the overall economy is slow.

And the lenders who did these bad things, while making a buck at the time, have betrayed the trust of their clients who thought they were doing the right thing at the time.

Mortgage interest rates recently have stayed very steady in general after bumping up a ½% in recent months. The two predictable factors that continue to affect rates are 1) Economic Data Releases and 2) the performance of the Stock Market.

Locally, here in Colorado, we appear to be setting the stage for some good economic prosperity. Unemployment is very low in many areas and some large organizations are ramping up hiring for high-paying jobs. Real Estate prices appear to continue to be stable with most pockets seeing slight to moderate appreciation, but certain areas (typically a bit on the lower end of real estate) are continuing to struggle and seeing a slight decline in value. Overall however, the local real estate market looks promising for the foreseeable future.

For more information and other topics, please browse my blog. If you have questions, or if I may be of service to you or anyone you know, especially in the Douglas County markets of Castle Rock, Castle Pines, Lone Tree, or Highlands Ranch, please feel free to contact me.

Greg Polashock is a Real Estate Home Mortgage Loan Consultant and Certified Mortgage Planning Specialist with Cherry Creek Mortgage and resides in Castle Rock, Colorado. He can be reached via email at Greg@GregIsFinancingSolutions.com, by phone at 303-887-0672 or on the web at http://www.gregisfinancingsolutions.com/.

Time to Move?

Greg Polashock (Cherry Creek Mortgage) — Fri, 03 Aug 2007 14:10:26 -0500

Residential Real Estate, or your primary residence, is NO place to store cash! Your home is not a bank. Over time however, whether you have paid down on a mortgage, or simply seen appreciation in the value of your home, it may be time to take that latent value that is not earning you a rate of return and capitalize on it.

There are a variety of ways to do this. If you have been in your home for, say, seven years or longer, you may wish to consider moving. "Why would I want to do that?" you may ask.

Some reasons include:

Avoiding a capital gain if the property has significantly appreciated
Leveraging equity from the current property to diversify into other investments outside of real estate
Move up in residence to leverage future wealth opportunity through larger asset appreciation
Converting current residence into a real estate investment asset
Acquisition of a "second" home
Currently a great time to buy Real Estate

As a Certified Mortgage Planning Specialist, my interest is in creating, maximizing, and protecting personal wealth through the proper integration of the home mortgage investment into the overall financial goals and objectives to match with the client's life plan.

Real Estate can be one of the most powerful tools for wealth creation, however, the strategy much be handled professionally. There are many, many facets that are more involved than most people realize. Unfortunately, this often leads to missteps by the consumer that truly can have the consequence of costing hundreds of thousands of dollars in wealth opportunities.

If you are located in the Denver Metro Area, Douglas County, or Castle Rock, Colorado areas, you may wish to contact me to discuss options for your best interests. I specialize in wealth creation, enhancement, and protection for move-up and affluent home owners.

Greg Polashock is a Real Estate Home Mortgage Loan Consultant and Certified Mortgage Planning Specialist with Cherry Creek Mortgage and resides in Castle Rock, Colorado. He can be reached via email at Greg@GregIsFinancingSolutions.com, by phone at 303-887-0672 or on the web at http://www.gregisfinancingsolutions.com/.

For Personal Success, Surround Yourself with a Team of Professional Advisors

Greg Polashock (Cherry Creek Mortgage) — Fri, 03 Aug 2007 14:01:47 -0500

My grandfather used to say something like, "When money stops coming through the door, love goes out the window." Now, that may seem a touch cynical, but just try having money issues in your own household and you will see what a strain it puts on a relationship. Professional Marriage Counselors will tell you that money issues is one of the biggest strains on a relationship. Personally, I view financial stability and wealth planning that is integrated into an overall family life plan as a critical leg of balance right up there with spirituality, mutual respect, and proper rearing of children.

I have to admit, I get frustrated sometimes being called a Mortgage Lender. My industry has done a great job of degrading itself through a failure of professionalism and expertise to the point where most consumers see little value in our services. And, unfortunately, too many people in my profession deserve the reputation.

I am on a mission to educate even those who believe that they are competent enough to determine their own home financing needs. Without being arrogant, I view my ability on a level par with a lawyer or doctor. Who, in their right mind, would get advice from either of those two professionals and then turn around and say, "No, that really wasn't a good recommendation. I think I'll diagnose myself"?

For personal financial success, people should rarely attempt to go it alone. I am currently planning a financial venture of my own and I am in the process of surrounding myself with a team of professionals to help ensure my success. For financial success, the team should include a Financial Planner, an Accountant, an Estate Planning Attorney, and, for a typical consumer, a competent Mortgage Planning Professional. (In my case, I will use someone other than myself for that - it's the old "He who acts as his own lawyer has a fool for a client mentality.) In my venture, my team will also include a Building Contractor, a Structural Engineer, a Realtor®, an Electrician, a Plumber, and an Equity Investment Partner.

No doubt there will be an expense associated with utilizing such a team, however, such a team should more than pay for itself in the financial success I expect to see. It's sort of the "you get what you pay for" mentality. And the partners selected will NOT be based on price! I have, for example, seen people who use "institutional" Financial Professionals and, you know what, the results they got are in line with what they paid. I would rather pay $1,000 extra for a highly professional Financial Planner who, as a result, creates an incremental $50,000 in wealth for me.

For your financial well-being, surround yourself with a team of professionals. You will find that the benefits you receive as a result will go a long way to keeping "money coming through the door" and will add much to your overall happiness in life. Money may not buy happiness, but it sure does act as a great hedge against unhappiness!

If you live in the Metro Denver Area, Douglas County, or Castle Rock, Colorado, and ever need a referral for a good partner, please contact me. My relationships with the type of individuals mentioned above are hand-selected and have been very carefully obtained based upon knowledge, expertise, and past results.

Greg Polashock is a Real Estate Home Mortgage Loan Consultant and Certified Mortgage Planning Specialist with Cherry Creek Mortgage and resides in Castle Rock, Colorado. He can be reached via email at Greg@GregIsFinancingSolutions.com, by phone at 303-887-0672 or on the web at http://www.gregisfinancingsolutions.com/.

Reading for Professional Success

Greg Polashock (Cherry Creek Mortgage) — Fri, 27 Jul 2007 15:34:50 -0500

Do you read often?... regularly? Reading, is essential for those of us related to the Real Estate industry. I am amazed at how often I talk with people and learn that they don't read often.

Here's the thing - as industry professionals, we have to convey to our target that we are knowledgeable. Ultimately, what will seal the deal for us getting business is the value proposition that we have something nobody else can offer. Deep knowledge is core to that premise.

It is a given that a client would expect me to know about home mortgage interest rates or that you, if a Real Estate Professional, know about home values. That's expected. We are not going to "wow" anyone by our in-depth knowledge in those disciplines.

Where reading comes into all this is in becoming knowledgeable along, as I call it, the periphery. As a real estate professional, are you expected to know about interest rates? Maybe yes, maybe no. But if you are, wouldn't it just blow your client away if, when asked the question, you could also spout off something like, "Well, here's the current rate, but the reason I'm encouraging you to find a home sooner rather than later is because the Fed has been saying recently that inflation is a concern, corporate earnings have been exceeding expectations, and the housing supply is starting to decline. What all this does is put pressure on Mortgage-backed securities and the end result is interest rate pressure. That, combined with the fact that the housing market has been soft tells me two things - first, the real estate market is poised for future appreciation and, second, that interest rates could start going up. With that, my recommendation is that you buy before you have to pay more for a home and that you do so with a low interest rate so you can get that home for a lower payment each month. If you wait, the home will 1) cost more and 2) you'll pay more each month for the money you borrow."

Now, I know that's a little long-winded. But if you were a consumer listening to a real estate professional talk like that, you'd probably be thinking, "Wow, this person really has some inside information!"

Let's take this a step further. Getting farther out on the periphery, if you have educated yourself by reading so that you can talk to an affluent prospect in a language of finance - assets, liabilities, income, expenses, leverage, cash-flow, etc., and be able to do so without "bluffing" it, you would potentially position yourself right into a favorable market demographic. To gain such knowledge, you have to read books that are not necessarily directly related to the industry of real estate.

Reading for other purposes is also important. I'll be the stereotypical "guy" for a moment. I'm not a huge sports fan, but I know that sports is a general "guy" topic and I must at least be somewhat conversant. If I just glean the newspaper periodically and am able to "speak the language," I can build a degree of personal camaraderie on, let's call it, a psychological level.

So, get outside the box a little. Definitely keep abreast of the basic essentials related to your profession. At the same time, start reading regularly along the periphery so you can elevate your conversations to a level the competition just can't compete in. And then go to the next step - read along the lines of other interests of your target audience. If you sell "horse property," wouldn't it be good if you knew a thing or two about horses? That, of its nature, is not related to the real estate industry, but your clients will love you if you can speak their language.

Reading is a discipline. For the betterment of your career, take time to read regularly. You'll become more confident in yourself, your clients, prospects, and partners will be able to see that confidence, and they'll be more inclined to work with you.

Greg Polashock is a Real Estate Home Mortgage Loan Consultant and Certified Mortgage Planning Specialist with Cherry Creek Mortgage and resides in Castle Rock, Colorado. He can be reached via email at Greg@GregIsFinancingSolutions.com, by phone at 303-887-0672 or on the web at http://www.gregisfinancingsolutions.com/.

The Conventional Failure of Wisdom with Regard to Home Investments

Greg Polashock (Cherry Creek Mortgage) — Tue, 24 Jul 2007 17:56:28 -0500

The general public believes that their home is an asset. "Assets" are within the realm of investing, finance, accounting and business administration. That said, a primary residence is almost never, let me repeat that, almost NEVER an asset. Surprised? In disbelief? Think I'm an idiot? Keep reading!

In business, there are assets and there are liabilities. Assets are things of value that, for lack of a better way of saying it, create income. This is important to understand. I like to think in the mindset of a business owner, as the vast majority of wealth in our Country is created and held by business owners. For a business owner, an asset is something used to generate income. Liabilities represent debt. Most often, that debt requires a periodic outflow of funds called expenses. So, there in a nutshell is the relationship between Assets and Liabilities, and Income and Expenses.

Now, back to the primary residence - Even when the home is without a mortgage (liability/debt), it is still not "owned." Let me say it this way; in professional parlance, a home is known as Real Estate. Real Estate does not mean an estate that is real. The term "real estate" comes from a Spanish derivative meaning "royal estate." This is to say that the property was "owned" by the royalty. Today, it is our government who really owns the real estate. Even if you don't have a mortgage, just try getting away with not paying the taxes on it. The taxes are the government's charge to us for using its land and whatever is on it and they will make it plainly clear who really owns the real estate if the taxes go unpaid. So, even without a mortgage, the primary real estate is never owned, and is therefore not a real asset.

However, real estate can become an asset if it creates income that offsets the expense. The simplest example of this is rental real estate. Rental real estate generates income through rents. If the rents exceed the expenses, then the net result is income, tied to an asset. By the way, if the rents do not exceed the expenses, then you've still got a liability on your hands.

The same can hold true for a primary residence. Let's assume a residence is purchased 100% for cash. First, we know that this still does not make it an asset. However, cash is an asset. If the home investor holds onto the cash and purchases the property by taking a mortgage (liability) instead, then there is something of an offset. But since mortgages require an interest expense, the net would most likely be an expense, which comes back to a liability. To turn this situation into an asset/income scenario, the cash that is held must be invested in a real asset that generates income in some form or another. For most people, this income would be in the form of interest or yield, otherwise known as Return on Investment.

So, the simple solution is to invest cash that would have otherwise been placed into a liability (the home) and instead put it where it will generate an income greater than the expense associated with the mortgage. This is actually easier than one might think. I often use the S & P 500 as an example for ease of understanding. Historically, over the past 85 years or so, the S & P has generated an average annual return of a bit over 10%. A mortgage, by comparison, will carry a charge of, let's just say 7%. For someone in a combined (state and federal) marginal tax bracket of 33%, the real interest charge associated with the mortgage is 4.7%. This means that the money invested in the S & P would, historically, net a ROI of 5.3%. In this scenario, the home real estate is now part of an asset-generating plan that goes further to create incremental wealth.

Let me close by giving an example. Suppose a home is purchased for $200,000. Using the information above, the client could invest the money, take a mortgage, and through the differences between interest expense and income, create incremental wealth of over $151,000 in 15 years.

The investor would end up with over $835,000 in investments, pay off the debt and still have over $635,000 left. This does not even include the benefits of the interest tax write-off which, if invested, would have boosted the overall wealth to over $1MM ($800,000 after paying off the mortgage). Conversely, with no mortgage, the money not spent monthly on mortgage expense, if invested, would have generated only $484,000 in income.

The home investment, while not an asset, can be a vital part of a wealth-creation plan if funds are reallocated prudently into a real asset. If not utilized effectively, a home could not only be a liability, but the ineffective infusion of cash into it could be gravely detrimental to future wealth enhancement.

Greg Polashock is a Real Estate Home Mortgage Loan Consultant and Certified Mortgage Planning Specialist with Cherry Creek Mortgage and resides in Castle Rock, Colorado. He can be reached via email at Greg@GregIsFinancingSolutions.com, by phone at 303-887-0672 or on the web at http://www.gregisfinancingsolutions.com/.

MAGAZINE RANKS CASTLE ROCK, CO AMONG 10 BEST IN NATION FOR FAMILIES

Greg Polashock (Cherry Creek Mortgage) — Mon, 23 Jul 2007 12:29:51 -0500

Town of Castle Rock, Colorado residents stood up to take a collective bow on Tuesday, July 10, the day that Family Circle magazine unveiled its "10 Best Towns for Families."

That's because the Town of Castle Rock made Family Circle's list - the first of its kind for the national magazine celebrating women and families.

The magazine's 10 Best Towns for Families article appears in the August edition, which hit newsstands nationwide on July 10. The article shares the results of the magazine's quest to identify "the best communities across the country that combine big-city opportunities with suburban charm" and "an ideal blend of affordable houses, good jobs, top-rated schools, wide-open spaces and a lot less stress."

"That describes Castle Rock perfectly," Castle Rock Mayor Randy Reed said of the results of Family Circle's investigation. "If you asked 100 people why they moved to Caste Rock, 95 percent of them would probably cite the community's small-town charm and family friendliness."

Reed said while it's great to be recognized nationally as a great place for families, it's reward enough to experience family life in Castle Rock. "Every time I walk out my front door I think about how fortunate I am to have landed here 20 years ago with my wife and two daughters."

To come up with its 10 Best Towns for Families, Family Circle partnered with On Board, a New York City research firm providing real estate and demographic data to assemble a list of 1,850 places with populations between 15,000 and 150,000 and a high concentration of households with an average income of $65,000. That list was pared to 800 based on criteria such as cost of living, jobs, schools, health care, air quality, green space and crime rate. Family Circle assessed which towns best met those standards and ranked them according to state. The winners were selected from the highest-rated towns in the top 10 states nationwide. The other nine "10 Best Towns for Families" are:

·  Diamond Bar, California
·  Morton Grove, Illinois
·  Cedar Park, Texas
·  Derby, Kansas
·  Kennesaw, Georgia
·  Cooper City, Florida
·  Madison, Mississippi
·  Franklin, Massachusetts
· Chanhassen, Minnesota

Family Circle Magazine's "10 best Towns for Families" honor is the latest in a string of national rankings awarded Castle Rock in recent years. In 2006, BusinessWeek magazine named Castle Rock No. 9 of the top 25 "best and most affordable suburbs in the United States." In a 2005 CNN Money Magazine report on the best places to live, Castle Rock ranked No. 1 in job growth.

About the Town of Castle Rock, Colo.

· Home to slightly more than 42,000 people

·  Located midway between Denver and Colorado Springs on Colorado's Front Range

·   Encompasses 33 square miles

·   Elevation 6,202 feet

· More than 1,000 acres of open space

·  16 neighborhood and community parks

·  30 miles of paved trail, 13 miles of soft-surface trail and 104 miles of connector

·   Founded 1874, incorporated 1881, celebrated 125^th anniversary in 2006

·  Our climate is among the nation's best, with more than 300 days of sunshine.

·  Web Site: www.CRGov.com

About Family Circle
Published 15 times a year by Meredith Corporation, with a circulation of 3.9 million and 20 million readers, Family Circle is one of the most widely read monthly magazines in the world. Family Circle provides smart, relevant advice, sensible solutions, and inspiration in a voice that encourages and celebrates success in its pages and online at www.FamilyCircle.com. Family Circle has always been committed to women's issues and in 1973 became the first women's magazine to fully underwrite a professional women's sporting event, the Family Circle Cup, an annual women's tennis tournament held in April in Charleston, S.C., at Family Circle Magazine Stadium. Family Circle also partners with CBS Television's The Early Show for a monthly on-air segment with Hannah Storm called "In the Family Circle."

Reprinted with Permission by Elaine Stucy

Greg Polashock is a Real Estate Home Mortgage Loan Consultant and Certified Mortgage Planning Specialist with Cherry Creek Mortgage and resides in Castle Rock, Colorado. He can be reached via email at Greg@GregIsFinancingSolutions.com, by phone at 303-887-0672 or on the web at http://www.gregisfinancingsolutions.com/.

Leads – Your First, and Primary Job

Greg Polashock (Cherry Creek Mortgage) — Fri, 20 Jul 2007 13:15:00 -0500

Real Estate Business Modeling - adapted from The Millionaire Real Estate Agent) - Part II

Ya know, we're pretty much all in Sales and most people would give the "Duh!!" answer when the subject of Lead Generation comes up. It's almost like they're implying, "Obviously, leads is important to being successful." And those folks are absolutely right. But Leads, as described in The Millionaire Real Estate Agent, is much more than just knowing that Leads is important. In our industry, having not just enough leads, but MORE than enough leads is critical.

The discipline of obtaining Leads is more than just the old, "Who do you know..." question. The Leads concept begins with the general premise that we are professionals in the sales industry and that, as professionals, we must have a solid Lead Generation system. "System" is the word here I want to hone in on. If we are to really be in business, we must utilize systems in everything we do.

The emphasis in Lead Generation is two-fold; it is on Prospecting and Marketing. What's the difference, you may ask. Prospecting is that part where you address the question, "Who do I need to get to know?" It is the "get out there and meet people" part of the equation. Marketing is the "to the masses" advertising. You can do both at the same time. For example, if you are a Realtor®, you may conduct First-time Home Buyer seminars. You are providing a service and you are also marketing AND prospecting simultaneously. Marketing is also marketing in the old fashioned sense. It may include yard signs, newspaper/magazine advertising, just-listed/just-sold post cards, internet marketing, etc. The real difference between Prospecting and Marketing is that Prospecting is more one-to-one and marketing is like throwing out a net and hoping you bring in some fish.

One of the most overlooked aspects of Lead Generation is in maintaining a formal system for follow-up. Think about it this way. How many people you have come across in the past month who may have indicated a need for the services you provide. (Not necessarily right now, but just indicated a need at some point.) Did you make note of each of those people? Have you followed up with every one of them? Do they all know, without any doubt, that YOU could serve their need? Final analysis: How many slipped through the cracks; how many are you following up with currently, and for the ones you are not working with currently, do you have them placed in a system whereby you can market to them and incubate them for a period of time longer than three months.

That's where most of us miss the bus in our business. We see that "hot prospect" and we go all out because that's going to put a check in our pocket in the near future. The fact is, most of the people who may have communicated a need for our services are quite possibly between six and twelve months away from actually being in a position to take advantage of our services. And if we are not building a pipeline with those prospects in mind, we are potentially missing out on a huge leap in our own business.

With that in mind, a central part of your business should be in scheduling and then protecting your Lead Generation focus time. It should be a core discipline that, no matter how busy you are, you are taking time regularly to tend to the continual pursuit of Lead Generation.

The final part of Lead Generation is in discovering what works and what doesn't. Now, let me go real slow here - In my experience, most people will try something for a few months and, if it isn't working, will drop it and move to the next Lead Generation idea du-jour. This is NOT good business. Statistically, it may take twelve months or more for an idea to take root. Beware of the trap of reinventing your business so often that after five years of experience, all you really have is three months of experience twenty times over. While being patient with yourself is important, it is equally important that you determine what works for you and what does not. Take time to track your results.

Ask questions: "How did you hear about me?" is a great one. By understanding from where, exactly, your leads are coming, you can begin to hone in on those Prospecting and Marketing activities that provide the best bang for the buck. Additionally, you will keep yourself from getting spread too thin, becoming the "jack of all trades, master of none." Also, taking time to be honest with yourself about what activities you are comfortable with and which just aren't you will also help you let go of the ones that just simply don't motivate you to go out and seek new business.

Finally, Lead Generation is the number one job of a Sales Professional. It is not a light switch; you don't turn it on or off based upon the present level of business you have. It is a water faucet; always running, but one that you can turn the spigot higher or lower as your production mandates.

Leads is the first essential discipline of The Millionaire Real Estate Agent. This does not only apply to Real Estate agents, but to anyone who wishes to be successful in Sales.

Greg Polashock is a Real Estate Home Mortgage Loan Consultant and Certified Mortgage Planning Specialist with Cherry Creek Mortgage and resides in Castle Rock, Colorado. He can be reached via email at Greg@GregIsFinancingSolutions.com, by phone at 303-887-0672 or on the web at http://www.gregisfinancingsolutions.com/.

Real Estate Mastery – The Millionaire Mindset

Greg Polashock (Cherry Creek Mortgage) — Sat, 07 Jul 2007 18:39:37 -0500

Creating an Effective Business Model is the Cornerstone of Your Practice

I could really make this blog short - but that just wouldn't be me. The simple solution for Real Estate Business Planning and Modeling can be found in the book The Millionaire Real Estate Agent by Gary Keller. This is one of those books that EVERY Realtor® should read, reread and put into practice. I'm not a Real Estate agent, but I've read it myself four times. One of the most fascinating things I've learned from the book is that it is not just for Realtors®, just about any professional involved in selling can benefit. It has helped me tremendously!

The Millionaire Real Estate Agent philosophy focuses on four models and some basic principles. The four models are Economic, Organizational, Lead Generation and Budget. Likewise, there are three foundational principles: Leads, Listings and Leverage.

I will cover them in brief here and will write future blogs discussing each in detail.

The Millionaire philosophy starts with the principle of Lead Generation. This principal is basic and something that any successful sales person knows: Until you have enough Leads, you have no other task to focus on.

As a Real Estate professional, Listings is the next key. This isn't to say that you shouldn't work with buyers. In fact, effectively leveraged Listings should yield at least one bona fide buyer, making the business mix 50% Buyers and 50% Sellers.

The other core principal is Leverage. Leverage simply says that you utilize a resource to make something more out of it. (Yeah, I know... read an upcoming blog to get the clearer picture.) For now, just think - one plus one equals three.

The first pillar of the business model is Economic. This pillar is kind of fun to work with and is the one that encourages you to dream about the future of your business. Your Economic Model will become the cornerstone of your business.

The second pillar of the business model is Lead Generation. As mentioned above, until you have enough leads to sustain your business, you have no other job but lead generation. Lead Generation goes deeper though and involves prospecting and marketing, and database management.

The third pillar is the Budget Model. This part of the Millionaire Real Estate Agent concept focuses on business management and requires that you do what you really should be doing anyway, and that is to see your Real Estate practice as what it is... a business. I personally like the Budget Model. When I see that one of my prospective Real Estate partners has the budget model concept down, I know I'm dealing with a professional and that is always very reassuring.

The fourth pillar is the Organizational Model. This model covers team-building and effective use of your time.

I hope you will check my blog frequently. I will be writing several articles covering the important details of Business Modeling.

In the meantime, RUN!, don't walk, to your nearest bookstore and get a copy of The Millionaire Real Estate Agent

Real Estate Mastery covers many facets. Business Modeling is an absolute must in order for your Real Estate practice to have maximum potential.

Greg Polashock is a Real Estate Home Mortgage Loan Consultant and Certified Mortgage Planning Specialist with Cherry Creek Mortgage and resides in Castle Rock, Colorado. He can be reached via email at Greg@GregIsFinancingSolutions.com, by phone at 303-887-0672 or on the web at http://www.gregisfinancingsolutions.com/.

Real Estate Mastery - Develop a Compelling "Why!"

Greg Polashock (Cherry Creek Mortgage) — Mon, 02 Jul 2007 11:12:22 -0500

Leveraging Knowledge and Expertise in Your Real Estate Specialty

WHY?

That's the big question that must be answered in any real estate industry related profession. Why should someone do business with you or partner with you? The ability to effectively answer the "why?" question is in the knowledge and expertise you possess that sets you apart from everyone else.

I heard a friend recently say that in order to set yourself apart, you must develop a market opinion that people are willing to pay money to get. Part of the beauty of this philosophy is that it requires that you possess special knowledge. In order to have a valid market opinion, you must have a high level of command of facts. And in order to get facts, you must educate yourself to a degree that nobody else does.

Why does having a valued opinion matter? It's simple - people listen to people who have valid opinions. Your opinion is one of the few things that can really set you apart. In the Realtor® community, everyone has access to the MLS, everyone can put up yard signs, everyone knows the general range a house can be bought or sold for, everyone can market through the internet, etc. Whatever your specific line of work, your level of knowledge is what will differentiate you.

In my profession as a Real Estate Home Mortgage Planner, I have become very focused on the end-client whom I wish to serve. Any halfway decent lender can put together a loan for someone. In my home town of Castle Rock, Colorado, the client base whom I serve is very savvy. They require more than just low mortgage rate and fees. I have taught myself very sophisticated aspects of finance in order to serve my chosen client base, which is move up and affluent home buyers. (By the way, if you are still in the "I'll take whatever business I can get" mode, you may want to take some time to read my other blogs on Real Estate Mastery - Parts I, II, and III.)

I have learned to take facets of people's lives that are affected by their mortgage that they may not even realize are so affected and integrate those elements as part of my service. Let's start easy; the mortgage affects taxes. But home mortgage financing also affects financial planning, college education, estate planning, retirement, unemployment issues, life insurance, and many other facets that people may NOT realize. I gain my clients and partners by educating and integrating as many facets as are relevant into the consultative process. As I address these factors with them, they quickly begin to realize that I 1) have a level of expertise that they don't have (or, in the case of partners, allows me to complement them professionally), 2) that I have a level of expertise that a typical lender doesn't have, and 3) because of those two things, they'd better do business with me.

Every day, we hear, see, or read things that impact our business. There are two facets of this that are important. First, learn to discern - daily we hear things from the media about our business and we tend to accept those things as facts. The housing bubble is a recent example. But where does this hype come from? - the answer is the media. To call a spade a spade, the media is made up of journalists. Since when do they possess expert levels of knowledge about the economy, housing, or the price of tea in China? Please know that I am not disparaging the media industry; all I'm saying is that if you're getting your cues from that medium, you are looking at it all backwards. That leads to facet #2 - They are not the expert in the Real Estate industry; we are. If you are not as knowledgeable as you should be, start setting aside one hour a day, EACH day, to become knowledgeable. Get facts from proper sources, not just the media. Whenever you hear something, question it. Find the real resources from which to gain factual knowledge.

Knowledge and expertise is power. And learning and discerning are the keys to gaining that power. In the end, your clients and partners will work with you for that reason and your business will improve as a result.

Real Estate Mastery covers many facets. Knowledge, expertise, and an opinion worth paying money for are of vital importance.

Greg Polashock is a Real Estate Home Mortgage Loan Consultant and Certified Mortgage Planning Specialist with Cherry Creek Mortgage and resides in Castle Rock, Colorado. He can be reached via email at Greg@GregIsFinancingSolutions.com, by phone at 303-887-0672 or on the web at http://www.gregisfinancingsolutions.com/.

Real Estate Mastery – Leveraging Relationships

Greg Polashock (Cherry Creek Mortgage) — Sat, 30 Jun 2007 15:20:38 -0500

Partnerships and Affiliations are Essential to Effective Business Modeling

There's an old adage that says, "It's not WHAT you know, but WHOM you know." Well, don't believe it! Times have changed and "connections" will only get you so far.

I have come to understand that WHOM you know is what gets you in the door - WHAT you know is what really keeps you on the inside.

This article is devoted to the WHOM you know aspect of the Real Estate industry.

Just like when investing money, diversification in relationships is of critical importance. And, just like when investing money, diversification of itself is not enough - your investments must be in QUALITY investments. And... yes... you guessed it; this is critical in the Real Estate Industry as well.

Key partners are the third pillar of a well-balanced business model. Let me use myself as an example. I specialize in residential Real Estate Home Mortgages in Castle Rock, Colorado. My demographic is the move-up and affluent home owner/home buyer. I can target where they are, but if I go OUT to them, I am "one of many." You've seen it. How many solicitations and marketing pieces do you see coming in to you from "cold-calling" Lenders and Realtors®? Wouldn't an inbound lead referred by a partner be much stronger?

In my business model, I have identified that the client base with whom I would prefer to work also works with Accountants, Estate Planning Attorneys, High-end Realtors®, Custom Home Builders, Lawyers, and Financial Planners. So, instead of marketing in an outbound sense to a neighborhood inhabited by the affluent (just like the average Lenders), I partner with influencers instead.

Now to the "knowledge" aspect; In order for me to earn my partnerships, I must be knowledgeable in their area of expertise. I must be able to communicate to that Custom Home Builder, for example, who, by partnering with me, can provide an added value to their client, not only by producing a fine product for the client, but also by advising the client that the mortgage process is a key element in the home-building process and that, if done improperly, may cost the client hundreds of thousands of dollars in future wealth. (That is not an exaggeration by the way.) Finally, the builder recommends that the client talk with me since I am a Certified Mortgage Planning Specialist.

I also want to convey to my partners two key elements of my association with them. First, humility is a must - Given that the leads I receive will be coming from the partner, I understand, in the mind of their valued client, I am an extension of the partner. I am not the center; the partner is. I represent the partner when working with their client in a manner of the highest professional standard. Second, I need to reaffirm the status of my partner with the client. I will say something as simple as, "Mr. Jones, I want you to know how fortunate you are to have Mr. Smith as your Building professional. I have been familiar with him for years and I have seen the unparalleled results of his craftsmanship on many occasions. You are in very good hands. In fact, his understanding of quality and service is part of the reason he recommended that you and I touch base. Mr. Smith always keeps his clients' best interests at the top of his priority list."

Think about it, how would you like to have a business partner talk about you like that with your clients?

As you begin to think about prospective business partner relationships, know that it's OK to be a little selfish. Be clear about how you do business and what your expectations of a good partner are. Also, be clear about what it is that you will be able to bring to the relationship. The key is to recognize that the standards you set and the partners you choose will determine the clientele you work with.

After identifying a prospective partner, interview him or her. Do what is necessary to make sure that that individual is a good fit for you. Don't force yourself into a partnership just because that person could be a source of leads. Chemistry and a mutually beneficial business relationship are essential. Finally, keep your key partnerships limited. Don't, for example, partner with eight different builders. Pick two or three and then develop a deep, reciprocal, trust-based relationship.

You will find that by developing key partnerships that match your geographic and demographic model will diversify your lead-generation sources and will be of value in a wide variety of markets.

Real Estate Mastery covers many facets. Effective Partnering is of vital importance.

Greg Polashock is a Real Estate Home Mortgage Loan Consultant and Certified Mortgage Planning Specialist with Cherry Creek Mortgage and resides in Castle Rock, Colorado. He can be reached via email at Greg@GregIsFinancingSolutions.com, by phone at 303-887-0672 or on the web at http://www.gregisfinancingsolutions.com/.

Greg Polashock Earns Certified Mortgage Planning Specialist (CMPS) Designation

Greg Polashock (Cherry Creek Mortgage) — Fri, 29 Jun 2007 00:42:35 -0500

Press Release

Castle Rock, CO - Greg Polashock, a home mortgage consultant with Cherry Creek Mortgage Company, has passed the qualifying exams to earn the Certified Mortgage Planning Specialist (CMPS) designation granted by the CMPS Institute, Ann Arbor, Michigan, a training, certifying and ongoing membership organization created to help mortgage professionals integrate financial planning concepts into the mortgage process. CMPS designees can offer clients strategies that encompass mortgages, debt, home equity and real estate investment. There are only approximately 3500 mortgage bankers and brokers nationwide, representing less than 1% of all mortgage originators, who have obtained this prestigious certification

"My focus is to help my clients build and protect wealth by better managing their home asset and to assist my business partners to help do the same for their clients," says Mr. Polashock.

Many homeowners have become frustrated and confused with the myriad choices in today's mortgage market and the lack of both ethics and financial knowledge among many mortgage providers. The CMPS Institute is a joint effort by leaders in the mortgage and financial planning industries to raise professional standards among mortgage professionals and integrate sound financial planning advice into the mortgage process. CMPS certification focuses on tax, estate, investment and financial planning, as well as fiscal literacy and understanding of macro-economic theory as they relate to the mortgage profession.

Today's mortgage market can be a dangerous place for some consumers with certain real estate markets experiencing signs of a "bubble," and "exotic" mortgages representing a greater market share than ever before. These signs point to the fact that homeowners and buyers need expert advice on how to manage their mortgage, cash flow and home equity.

"A mortgage professional who dedicates the time and effort to learn about these financial concepts is much more qualified, committed and equipped to serve the complex needs of today's home owner and buyer," says Gibran Nicholas, Chairman of the CMPS Institute.

The CMPS curriculum incorporates five essential skill sets including:

•· Financial market and interest rate analysis

•· Cash flow analysis

•· Debt analysis

•· Real estate equity management

•· Real estate investment analysis

Greg Polashock can be reached at Greg@GregIsFinancingSolutions.com, or by calling

303-887-0672.

For more information on the CMPS Institute go to http://http://www.cmpsinstitute.org/, or call

888-608-9800.