Scott MacDonald's Blog

Conversations with Platinum Group

Scott MacDonald, Scott MacDonald, Broker of REMAX Gateway (RE/MAX Gateway) — Wed, 14 Apr 2010 13:12:52 -0700

Our group met today for our regularly scheduled meeting and the conversations were lively as usual. Any time you get together with a group of movers and shakers in the industry with a history of production, sharing, and enthusiasm, how can you not get excited?

Here is what we covered:

What is happening in the market? Many of us are seeing a heightened level of activity - properties are selling but also inventory levels are increasing plus many of the agents are getting ready to put houses up for sale over the next few weeks. Overall in the Northern Virginia market our inventory level of active resales has gone from 4,421 houses for sale the last week in December to 6,666 for sale today - it is over a 50% increase in just over 3 months. In addition, this was the same level as what was available in July of last year.

We are seeing a lot of showings, but no contracts on some properties - a little slower, no urgency in the $500,000-$600,000, but the properties under $400,000 is still smoking hot.

Appraisals seem to be working out right now - agents were worried about achieving value but they still worked. It is important to educate sellers and have them be prepared their properties might not get the value and be ready to make adjustments.

Interest rates have increased slightly and will continue to rise through the end of year. Inflation is one reason they will increase along with the timing of the spring market and the fact that the government has gotten out of buying mortgage backed securities. More short sales will be affected by rising interest rates - won't qualify for HAMP and will go into HAFA. This is a good thing as many people will avoid foreclosure and the inevitable debacle that we have seen where yards deteriorate, appliances are taken, and values are decreased.

More healthy sales are on the market versus distressed sales which is good for the buyers. It appears as if that may change - stay tuned. Right now in the Northern Virginia area, only 21% of the market is distressed sales.

In a recent study of first time home buyers by SunTrust mortgage, only 10% bought because of the tax credit. April 30^th is impending date we have been speaking about but it doesn't appear as if it will have that much of a negative impact on the market because many people aren't aware of the credit, don't know if it impacts them so many haven't utilized it as they should or could have the second time around.

What's next? Concentrate on short sales - they are here to stay. Open house traffic is high so hold opens to increase your database and get more buyers. Advertise your open houses on Trulia, Postlets, Craigslist, MRIS and e-properties to get the most exposure. One agent has also had success with Washingtonpost.com and it is only $42 per month to advertise opens on for your sellers.

What are your activities scheduled to get more business this year? Working on real deals. Do more networking to build relationships. Continue to grow database. Be sure to reach out to agents with a history of working with in the past to become aware of potential new listings for your buyers. It is all about relationship building. Agents are utilizing Listingbook.com to educate sellers.

Other additional information was shared:

Please, please, please order HOA/condo docs for our buyers if seller or listing agent won't provide them when we are working with short sales - you have to protect our buyers. We have seen many instances where a high percentage of owners are in default on the association fees. Also, get condo questionnaire filled out prior to listing a condo to see that the new owners can get financing on the property.

Equator says to switch contracts and start from scratch on short sales that kick out - you can no longer substitute new buyer contract at the last minute.

Stay on top of the market, what is happening so you can give your clients the right advice whether they are buying or selling a house. Get it? Got it? Good!

Now, go sell something!

How is selling a house like rowing a boat?

Scott MacDonald, Scott MacDonald, Broker of REMAX Gateway (RE/MAX Gateway) — Tue, 06 Apr 2010 14:07:53 -0700

In a recent listing presentation I explained to the sellers that selling their home was like a crew team rowing down a river. Picture the scenario - a boat going down the Potomac River in front Georgetown and you have the team in the boat - in order to get from point A to point B, everything needs to happen in a logical order. The boat needs to be in tip top shape, the crew needs to be facing in the same direction, the strokes need to be precise and in sync and the captain needs to be able to give the proper commands at the right times in order for the team to achieve success whether they are participating in a race or if it is practice.

So what happens if the boat has a leak in it? What happens if the riggers are rusted and don't allow the proper swing motion for the oars? What if the team members don't stroke in unison and are out of sync? What if the captain improperly adjusts the rudder or gives the wrong command? What if the captain is inconsistent in his/her stroke calls? Any number of things could result, all of which are not productive to the team and in the end, the outcome is less than desirable.

How does this correlate to selling a house? If any one piece of the home selling scenario is out of place the sale will be difficult to achieve. If the house is not in the right condition and is in poor shape it will take longer to sell and the owner will "net" less in the end. If the house is not staged properly and doesn't show well the home will attract lower offers and in some cases, none at all. If the house isn't priced correctly, it may get lots of activity (showings) but no contracts and in the end, it will not sell. In addition, if the Realtor/captain does not convey the proper message about the condition of the house, the importance of staging, the correct pricing of the property and then implement the proper marketing strategy, or if they don't recognize changes in the market and inform the sellers to make the appropriate adjustments, the house will also have a more difficult time selling.

Selling a house is a "team" effort and in order to achieve the seller's goal of selling the property, it is critical that all the parties work together, have open lines of communication and react to the market conditions quickly so the sale occurs. The quote about team - Together Everyone Achieves More - is more relevant in today's market than ever before. If you are a seller, ask the right questions of your agent. If you are an agent, be the professional and give the right advice - or - move on to a better client. Get it? Got it? Good!

What's on the horizon?

Scott MacDonald, Scott MacDonald, Broker of REMAX Gateway (RE/MAX Gateway) — Mon, 05 Apr 2010 10:22:09 -0700

Inventory levels on active listings are creeping up and they have been consistently increasing since the beginning of the year. We have seen an escalation in the number of houses going on the market each week, week over week except one. This is definitely something to watch especially as mortgage rates begin to rise. We have seen a slight increase in interest rates - they have only increased 1/4% since last week this time but they are rising. The good news is it isn't as drastic as many predicted as the Fed eased out of buying mortgage backed securities but it is probably keen advice to give to your clients to lock in today and not play the waiting game here! The saying is "rates take the escalator down but the elevator up", don't wait.

Another key factor to watch as inventory rises is the pricing of your properties...how is the activity at your listing? Are you experiencing lots of buyers going through and have you had no contracts? Have you had little to no traffic going through the house? If so, the price may be high. Check comps again, look at inventory levels in competing price points and the surrounding area. How has the absorption rate been in and around your listing? Do the research and price it properly today so you aren't chasing the market tomorrow! Many sellers hear the market has rebounded price wise in our area because of the recent article in the Washington Examiner and the brisk pace of sales recently but remember to caution them that the market is local and in many cases hyper local so be careful on pricing it a little high for negotiations. Be the professional and let the numbers tell the story of the market.

So, what is on the horizon?

On Monday, upfront mortgage insurance on FHA loans goes from 1.75 to 2.25% - revise your buyer closing cost sheets as this will have an impact on their payments. Seller contributions are reduced from 6% to 3% and down payments on FICO scores 580 and below are increased to 10%.

The short sale process - in some cases may get better after April 5^th. Home Affordable Foreclosure Alternatives program affects home sellers with Freddie Mac and Fannie Mae backed mortgages. Not all properties qualify so check the websites of these GSE's and see if the seller's loan is with either one before proceeding or check www.makinghomeaffordable.com/contact_servicer.html to see who the loan servicer is on the property.

Here are the guidelines accompanying the program:

This program complements HAMP by providing a viable alternative for borrowers (the current homeowners) who are HAMP eligible but nevertheless unable to keep their home. HAFA alternatives are available to all HAMP-eligible borrowers who: 1) do not qualify for a Trial Period Plan; 2) do not successfully complete a Trial Period Plan; 3) miss at least two consecutive payment during a HAMP modification; or, 4) request a short sale or deed-in-lieu.
Property is principal residence.
Mortgage originated before Jan. 1, 2009.
Borrower is delinquent or default is foreseeable.
Borrower's total monthly housing payment exceeds 31 percent of gross income.
Unpaid principal does not exceed $729,750.
Homeowner demonstrates hardship.
The program utilizes the borrower's financial and hardship information already collected in connection with consideration of a loan modification. The borrower must have applied for and been denied a loan modification prior to entry into this program. Allows borrowers to receive pre-approved short sales terms before listing the property (including the minimum acceptable net proceeds).
Requires borrowers to be fully released from future liability for the first mortgage debt (no cash contribution, promissory note, or deficiency judgment is allowed).
Uses standard processes, documents, and timeframes/deadlines. These deadlines include: the borrower has 14 days from acceptance of services to return the Short Sale Agreement to their servicer in which they are granted 120 days to sell the house. Once an offer is received, the agent must provide a RASS (Request for Approval of Short Sale) within 3 business days of receiving offer along with new buyer preapproval and all lien information to the servicer. The servicer has 10 business days to accept the offer along with provisions to settle or deny the offer and they must provide an explanation of the denial. Settlement must occur within 45 days. The new buyers cannot "flip" or sell the property for 90 days and it must be an "arms length" transaction.
Provides the following financial incentives:
- $3,000 for borrower relocation assistance;
- $1,500 for servicers to cover administrative and processing costs;
- Up to $2,000 for investors who allow a total of up to $6,000 in short sale proceeds to be distributed to subordinate lien holders, on a one-for-three matching basis.
- Realtors cannot charge or receive commissions in excess of 6% and if the buyer or seller is a Realtor, they cannot receive a commission in connection with the transaction - including any side deals.
Requires all servicers participating in HAMP to implement HAFA in accordance with their own written policy, consistent with investor guidelines. The policy may include factors such as the severity of the potential loss, local markets, timing of pending foreclosure actions, and borrower motivation and cooperation.

There is opportunity here people...know the program and know the process and you can sell more houses! On Monday, April 5^th at 7:00pm Margret Kelly will be hosting a program with BOA on Equator and how the program works. Watch it on RE/MAX University.

Also, in an effort to assist with the HAFA and HAMP programs, many banks have agreed to participate in the 2MP program. The 2MP was designed to work in tandem with the Home Affordable Modification Program and is aimed at helping homeowners who have a second home equity mortgage. The Treasury estimates, up to 50 percent of at-risk mortgages also have second liens associated with them.

To qualify for the program, homeowners must successfully complete a trial modification on their first mortgage. Then, if the servicer of the borrower's second line in a 2MP participant, the servicer must offer to modify the second lien or accept a lump sum payment from Treasury in exchange for fully doing away with the second lien.

Here are the guidelines in which the 2MP program is designed to work:

Only second liens with corresponding first liens that have been modified under HAMP are eligible for a modification or extinguishment under 2MP.
Second lines originated on or before January 1, 2009 are eligible for a modification or extinguishment under 2MP.
A second lien may be modified only once under 2MP
A mortgage loan that is subordinate to a second lien (i.e.: third, fourth position loans, etc) is ineligible under 2MP. However, modification or extinguishment of such a subordinate mortgage lien in place of the second lien will not satisfy the servicer's obligation under 2MP to modify or extinguish the second lien.
If a second lien is modified under 2MP, it is not eligible for payment of extinguishment incentives under 2MP
A mortgage lien that would be in second lien position but for a tax lien, a mechanic's lien or other non-mortgage related lien that has priority is eligible under 2MP
A second lien on which no interest is charged and no payments are due until the first lien is paid in full (e.g., FHA partial claims liens and/or equity appreciation loans) is not eligible under 2MP
Borrowers may be accepted into the program if a fully executed 2MP modification agreement or trial period plan is in the servicer's possession on December 31, 2012.

All servicers of eligible second liens may participate in 2MP. A servicer need not service the related first lien or participate in HAMP in order to participate in 2MP.

Here are some helpful links:

https://www.hmpadmin.com/portal/programs/foreclosure_alternatives.html

http://www.realtor.org/government_affairs/short_sales_hafa

http://sccrealestateuncensored.com/2010/second-lien-modification-program-2mp/

Interest rates

Interest rates are expected to go up but luckily it is not at the pace or severity that many had speculated. The funds rate are set to stay at the 0 to .25% level to help keep mortgage interest rates low. Once again, we are relying on Wall Street to step up and help create the secondary market to buy mortgage backed securities and keep rates affordable to consumers. Let's hope this short trend continues!

In our conversation with Paul Muolo at the quarterly meeting last week, he mentioned that there had only been one big purchase of bulk loans, well....there has been another large purchase this week. To learn about the details, which is unbelievable to me, check out the article at http://www.dsnews.com/articles/print-view/fdic-finds-taker-for-490-million-in-home-loans-2010-04-01

As discussed before, today, more than ever, it is extremely important to stay educated on the market, what is coming down the road and know how to make the appropriate adjustments to thrive in any market. You gotta learn more to earn more. Get it? Got it? Good!

It's all so confusing...

Scott MacDonald, Scott MacDonald, Broker of REMAX Gateway (RE/MAX Gateway) — Fri, 02 Apr 2010 15:07:30 -0700

There is so much confusion in what is being reported about the real estate market it is understandable why so many people are unsure of what to do in regards to housing. Information recently reported from Standard and Poor's is just one reporting outlet where mixed signals are being sent out to consumers. In one report, they claim that housing prices have increased for 8 consecutive months - this is through Standard and Poor's and then through the Standard &Poor's/Case-Shiller pricing index they say prices have dropped for the 4^th consecutive month - absolutely insane. How can one agency say prices are going up and down at the same time and not believe they are sending a mixed message to consumers and in turn hurting the housing recovery?

For the record, The Washington Examiner reported that the Washington area was the strongest in the Nation as we have the right fundamentals in place. Low unemployment, and scarcity of land are factors they sight in their article - couple this with low inventory, low housing starts, great rates, the home buyer tax credit and relatively affordable prices and we have a better than average housing market.

We too have been hearing, reading and expecting rates to increase when the Fed eases out of and stops buying mortgage backed securities (which has been happening by the way) yet rates have stayed low - conflicting news, but good news none the less.

We watch the market very closely everyday here locally and it is important to understand from a professional what is happening in our market and why. We want to reiterate that our housing market in Northern Virginia is robust, resilient and is rebounding nicely today. Our absorption rate remains high, prices are increasing in some areas and we have buyers out looking to capitalize on the remaining days of the home buyer tax credit. To learn more about what is happening with your home or to learn how you or someone you know can take advantage of the tax credit, call us today!

Be Careful What You Read

Scott MacDonald, Scott MacDonald, Broker of REMAX Gateway (RE/MAX Gateway) — Tue, 09 Mar 2010 09:27:44 -0800

The Northern Virginia real estate market remains strong for both buyers and sellers. Although inventory levels have increased slightly over the last few weeks – more houses are selling as well! Our absorption rate remains steady at a 1.8 month supply of houses!

Be careful what you read. In a recent article, it was noted by Fox Business that new homes sales had dropped to record lows. In our area, builders are seeing robust sales and tremendous activity. We have said it before and will continue to say that we are in the best real estate market in the nation – take what you see and what you hear about real estate with a grain of salt because we are different and good news doesn’t sell! We put a condo on the market in Manassas on Friday of last week and it was sold by Sunday – the market is HOT!

For the best in real estate advice and news, please call us to hear the true information about our market. We want our clients to be the most informed and up to date with our local housing market. We have the most current stats, data and information on financing as well as the home buyer tax credit and how it can affect you so feel free to call today! We are here to help. The Results Realty Group – 703-652-5777.

Shopping for a Condo? Ask These 4 Questions Before You Buy!!

Scott MacDonald, Scott MacDonald, Broker of REMAX Gateway (RE/MAX Gateway) — Thu, 25 Feb 2010 11:49:21 -0800

Condominium homes have always been, and will likely always be, an efficient and economical route to becoming a first-time homeowner. They can offer the comfort, prestige, and even luxury appointments that apartment living may lack, often at a cost that is not much different than rent. With the current first-time home buyer tax credit and the deadline for the move-up tax credit fast approaching, I advise you move fast on any condo purchase you may be considering.

With my experience as Member of the Top 5 in Real Estate Network®, I am well aware that not all condominiums are the same, however, so make sure you ask the following four questions before you buy:

What will you own? Read the bylaws and be sure you understand what you will be responsible for and what belongs to the condo association. Will you own the boat dock at the back of your unit? Can you elect to build a spa on your patio? Generally, unit owners own and are responsible for the interior of their condos, while costs for outside maintenance including common areas and sewer lines are the association’s responsibility.

Who lives there? Are the majority of residents owners or renters? Owners generally take more interest in proper maintenance and are more willing than renters to serve on the association board and enforce complex rules and regulations–including the regular collection of homeowner dues.

How effective is the homeowner’s association? Do they have legal counsel, reasonable funds and a capable, caring volunteer board? One way to judge is to check with residents about restrictions, oversight and timeliness of repairs and upgrades. Another is to take a hard look at the grounds and be wary of signs of neglect.

What about special assessments? The association should have the power to special assess for needed, one-time large expenditures. Otherwise, things that need to be done may never get done at all, leaving the complex vulnerable to disrepair and lowered property values.

Don’t miss this great opportunity to become a homeowner or to downsize by buying a condo (remember, the move-up tax credit does not require you to move to a larger or more expensive home).

Notes from Scott's Desk

Scott MacDonald, Scott MacDonald, Broker of REMAX Gateway (RE/MAX Gateway) — Tue, 23 Feb 2010 12:18:04 -0800

There are houses selling…2 contracts per listing of late – and in different price points, $250,000 and $850,000. The contracts came in close to list price even though they were in competition.

Some agents like Equator, the new Bank of America short sale portal – because of their quick responses and live chat, but some still have repeated problems with acceptance of forms in particular formats. Once in the final stage of approval, it takes about 6 weeks to close, and they take precautions to stave off foreclosure.

Ask for 90 day short sale contingency approval – don’t pull contract in final stages of negotiation, swap out contracts with same terms to keep the ball rolling - you don’t want to have to go back to the beginning.

Short sale listings are finding agents – agents aren’t pursuing them as much, they are just coming in.

Go back to database – reach out and talk to your people to grow your business. We are in a relationship business – build those relationships deeper and your success will follow.

What will happen at the end of April when the tax credit is gone? No, what will happen at the end of March when the Fed stops buying MBS? The market will slow…buyers will be back on the fence…financing is tough enough – hopefully the restrictions on obtaining financing won’t get any worse…rates will increase – buyers will drop out of market – will prices drop? Message to send out: look at the positive side of things…rates are great, inventory is available, prices remain low, we know what loan programs are available…we need to list out true picture of the market, it’s our job.

How do properties not listed as short sales end up in hands of investors prior to courthouse steps? Are these investors negotiating directly with the seller or going to the trustee at the steps or are they going directly to the bank? This is a question our group would like to know the answer too.

Appraisers are asking to have snow removed from the roofs of properties…appraisals are coming in low…fewer sales make appraisals a problem this time of year…appraisers aren’t going into the house in some cases…on FHA loans, the lender has the option of using the first appraisal or ordering a second one, if you are caught in a low appraisal situation with FHA loans on your listings, switch lenders…

Housing starts rise in January 2.8% - RISMEDIA, February 22, 2010—Nationwide housing production hit its strongest pace in the last six months this January, posting a 2.8% gain to a seasonally adjusted annual rate of 591,000 units, according to figures recently released by the U.S. Commerce Department.

According to the latest indexes (Zillow and the Feds “flow of funds report) negative owner equity has dropped as prices have begun to increase and between the 1^st and 3^rd quarters last year, home equity rose by $1 trillion as a combination of increased home values and principal pay down. Although this news was good for a lot of the country, the sand states (FL, AZ, NM & CA) continue to be viewed as a high risk factor.

Josh Burruss of Potomac Mortgage Group mentioned the upcoming FHA financing changes and dates to keep in mind to create buyer urgency.

The following are some images from our monthly Real Estate Exchange in Gainesville.

Why Northern VA is the Place to Be in Real Estate

Scott MacDonald, Scott MacDonald, Broker of REMAX Gateway (RE/MAX Gateway) — Wed, 27 Jan 2010 08:47:25 -0800

Northern Virginia is fortunate to have the fundamentals to be one of the top real estate markets in the country. Residential real estate prices in the area had declined considerably in many areas over the past few years but have likely bottomed in 2009. The demand for real estate in Northern Virginia continues to be on the rise because of the strong job markets of Washington, D.C. and the surrounding areas. Many new corporate headquarters such as the offices of Northrop Grumman, SAID, Volkswagen, Hilton and Merck have recently moved to Northern Virginia bringing thousands of families to the suburbs. Contributing to the demand for residential real estate in Northern Virginia are the many students and faculty of several Colleges and Universities in the area, including; George Mason University, Marymount University, Northern Virginia Community College and the graduate and part-time student satellite campuses of Virginia Tech and the University of Virginia.

Now is a favorable time to invest in real estate in Northern Virginia. Property values are affordable relative to recent years and are expected to rise over the next several years as jobs continue to be created here locally. Additionally, mortgage interest rates are near all time lows which enable investors to capture higher returns on their investments. Inventory numbers are down as more homes are selling than are going on the market. The inventory levels are down this week 54% from the same week last year and are down 70% from two years ago. New construction home builders are also reporting increased activity and sales in recent months. There is currently only a 2.5 month supply of homes in all of Fairfax County, Loudoun County, Prince William County, Arlington County, Fauquier County, Alexandria City, Fairfax City, Falls Church City, Manassas City and Manassas Park. For rental properties in these areas, there is only a 2.1 month supply which adds to the housing demand.

In a recent Forbes article it was also noted that the premium for rent versus mortgage payments helps determine when an area is determined to be a good buying opportunity – well here is an excerpt from this article:

For people who want to own a home, the premium to buy—the spread between what they’d spend to rent and what they’d pay for a mortgage—is much lower than the 15-year average in many cities.

To determine what cities are smart buys, Forbes magazine computed the premium and also identified locales where economists predict home prices will go up the most over the next five years.

Here are the top 10 cities the magazine chose as the best places to buy right now.

Boston-Cambridge-Quincy, Mass.
Charlotte-Gastonia-Concord, N.C.-S.C.
Chicago-Naperville-Joliet, Ill.-Ind.-Wis.
Cincinnati-Middletown, Ohio-Ky.-Ind.
Denver-Aurora-Broomfield, Colo
Minneapolis-St. Paul-Bloomington, Minn.-Wis.
Philadelphia-Camden-Wilmington, Pa.-N.J.-Del.-Md.
Portland-Vancouver-Beaverton, Ore.-Wash.
San Francisco-Oakland-Fremont, Calif.
Washington-Arlington-Alexandria, D.C.-Va.-Md.-W.V.

As a “Top Ten City”, we are even more encouraged to recommend buying in Northern Virginia.

Two particularly “hot” areas of expected property value increase over the next few years are the neighborhoods of Herndon which are located within a two mile radius of the future Herndon-Monroe stop on the Silver Line of the Metro and the neighborhoods of Dumfries which are in close proximity to Fort Belvoir. The current Silver Line project was secured by federal funding in December 2008 and will be completed in two phases between 2013 and 2016. With easy access to public transportation, there will be more demand for housing in Herndon. In 2005, the Defense Department announced that it would be shifting 18,000 jobs to Fort Belvoir. This increase in jobs will cause more of a demand for rental properties which, in turn, will keep inventory rates down, force rental prices up and property values to rise.

We believe that investors with a long term outlook on real estate will be well served by investing today in Northern Virginia. If you have any additional questions or concerns, feel free to call …

The Market Is What the Market Is...

Scott MacDonald, Scott MacDonald, Broker of REMAX Gateway (RE/MAX Gateway) — Mon, 25 Jan 2010 07:40:21 -0800

AMSHI is charging $5,000 to buyers and $5,000 to sellers to negotiate short sales…short sales are getting tougher – for example, Bank of America is taking forever and in many cases sends you back to square one. Banks are setting unrealistic expectations for closing dates with approvals on their short sales. Banks aren’t up to speed on lending rules and regulations when giving the approvals. Employees at these banks are not educated – fresh from college, calls are often outsourced, and they have not been trained properly. Bank of America is now using Equator; therefore, there is no one person to speak with which makes the process even more frustrating.

Foreclosures are coming – it’s ground hog day – we keep hearing the same thing over and over. One agent has 6 in the pipe line; another has 5 in the pipeline and 6 under contract and is getting about 1 every 2 to 3 weeks. We are below the national average as far as default rates and our inventory level is 33% distressed.

We discussed “shadow” inventory that we just don’t see, but the media continues to talk about. If banks are going release foreclosures into the market, it will be a slow and steady release and not a “dump” on the market scenario. Foreclosure filings were down 26% in Prince William County in 2009 – stay tuned!

It’s tough to find properties under $400,000.

We are waiting on the FHA mortgagee letter to be released to hear about new guidelines – increase in down payment with credit scores under 580, increase in upfront mortgage insurance, reduced seller concessions, and the waving of the seasoning requirements for flips – we shall see…

VA’s max loan is now $758,000.

Inventory levels are slowly increasing which give the appearance of things being slow, but it really isn’t – especially in the lower price ranges.

Need to build urgency in buyers – prices are affordable, interest rates remain attractive, home buyer tax credit is still in place, and loan programs are in place today that may not be available in the future.

A Real Threat?

Scott MacDonald, Scott MacDonald, Broker of REMAX Gateway (RE/MAX Gateway) — Thu, 21 Jan 2010 08:31:29 -0800

The question surrounding our market lately is shadow inventory and how will it affect us. Well in my opinion, it is a very good question as it is a question I have been asking myself and our agents for several months. Over the past 18-24 months we have heard about foreclosure being released into the market – it hasn’t happened as of yet. The latest indication from asset managers is that properties will be released in the 2^nd quarter of this year. We shall see if it occurs.

The question I ask is for agents to look around their neighborhood for vacant properties not currently listed for sale, and ask their neighbors and friends if they see many unlisted vacant houses. The answer I typically get is no, there aren’t that many.

We ask how many of your friends or neighbors outside of real estate are unemployed locally. The answer, not many. We ask our agents if requests for BPO’s (broker price opinions) are on the rise, steady or going down – here you get a very mixed bag but mostly we hear they are going up, but only slightly.

We run MRIS numbers Friday mornings in Fairfax, Loudoun, Prince William, Arlington, Fauquier, Alexandria City, Fairfax City, Falls Church City, Manassas City and Manassas Park for resales only in the categories of actives, under contract, settled the last 30 days, vacant, and rentals to help us determine trends in the market. As of this past Friday, there were 4,727 active resales in these areas. 335 were listed as foreclosures, 931 were listed as short sales and 41 were listed as undisclosed (which are more than likely short sales) which represents 28% of the inventory. These numbers are below 2008 numbers when we experienced our foreclosure boom. And, our inventory numbers are down 54% from the same week last year and are down 70% from 2 years ago. Plus, we only have a 2.5 month supply of homes.

So where will the shadow inventory come from is the question and I believe it is foreclosures and unapproved short sales. What dictates foreclosures? Unemployment is one of the biggest factors. The job loss to foreclosure ratio is 6 – 1. I understand that unemployment in Northern Virginia is around 4.2% which is very low. Job relocation and subsequent inability to sell. Well national unemployment is over 10% and companies are relocating here so we are seeing fewer relocations out of the area. Divorce is another factor – it is my understanding that they are down because people are under water with values and can’t afford to finalize divorces. So it seems unlikely we will see a huge influx on inventory from these areas but we do have two real threats in our future – Prime loan ARM readjustments and the eventual unapproved short sales inventory being reentered into inventory. The only issue is we are unsure of the true number we have here in our area and if it will have any significant impact.

We will have “shadow” inventory but I don’t believe it to be a real threat to our market as our inventory level is low and we should be able to absorb it with the pent up demand we are experiencing with the home buyer tax credit expansion and extension coupled with low rates and reduced valuations of properties. Get it? Got it? Good!

Now, go sell something!

Time Flies

Scott MacDonald, Scott MacDonald, Broker of REMAX Gateway (RE/MAX Gateway) — Wed, 20 Jan 2010 09:00:08 -0800

Time flies – it’s an amazing phenomenon. As many of you are contemplating your plan for the New Year and what success is going to look like for you in it – think about this – 5% of the year is already gone. Have you attained 5% of your yearly goals? Are you working a specific plan or are you muddling through each day “hoping” things will come together for you this year? Each day that goes by without direction is a lost day in your life and before you know it, another valuable year is gone.

It is time to begin to live a purpose driven life with you as the pilot – not a passenger. Start to map out your daily activities, find an accountability partner to hold you and them to a higher standard, write down the objectives you want to attain, and set your course for success. One of the best ways to attain a goal that is a SMARTY (Specific, Measurable, Attainable, Realistic, Timeframe oriented and Yours) is to break it down into smaller, measurable and manageable pieces to help you achieve them. In order to help you better achieve your goals is to write them out on paper. This critical step cannot be overlooked!

As we all know, time is precious and once it is gone, you can’t get it back. So get busy getting busy and map out your pathway to success. We are here to help. Get it? Got it? Good!

Now, go sell something!

DISCIPLINE

Scott MacDonald, Scott MacDonald, Broker of REMAX Gateway (RE/MAX Gateway) — Mon, 11 Jan 2010 08:07:20 -0800

Recently we discussed change and in my opinion, one of the key ingredients to true change is discipline. Discipline is defined as conscious control over lifestyle - mental self-control used in directing or changing behavior, learning something, or training for something. Here is a breakdown of discipline to help you continue down the path or perhaps blaze a new trail to incorporate this quality characteristic into your daily habits.

Desire – you must want what you have written or listed as your goal or objective.

Initiate – you must initiate the proper behaviors or changes into your life.

Sacrifices – you must realize there are sacrifices necessary to implement in your life to achieve success.

Commit – you must commit to the changes you desire and stick with them to get the results you want.

Intentional – your actions must be intentional towards your new behavior and away from the old in order for true change to occur in your life.

Passion – you must have passion to achieve what lifestyle change you are implementing into your routine.

Learn – you must learn to accept the challenges you will face and fight through the “pain” of old habits.

Inspire – reward your new behavior to inspire yourself to stay on course and in the process, perhaps you will inspire others to do the same!

Numbers – it starts with small incremental changes, one by one that will add up to huge results. As the saying goes, you eat an elephant one bite at a time.

Excellence – is what you will achieve if you stick with your plan of action through discipline.

In order to effectively implement change in your life, you must embrace discipline. By writing your goals down, it will help you have focus, desire and the will to achieve, which will result in discipline becoming easier for you. Remember, it all starts within you. Get it? Got it? Good!

What Kind of Change Are You Looking For?

Scott MacDonald, Scott MacDonald, Broker of REMAX Gateway (RE/MAX Gateway) — Thu, 07 Jan 2010 12:38:47 -0800

As the New Year is upon us, it is the time many agents think about changing companies. Before you think about making a move consider the following thoughts you are about to read. A change of scenery is just that – a change in scenery. Rarely does a change for change sake work. Either does a change to “see what happens”. The only time a change works is when change happens from within. To truly change, you must change your habits, change your work ethic, change your desires, change how or who you are – not where you are. My grandmother used to say, “A leopard doesn’t change its spots”.

True change is a choice to change behavioral patterns and thought processes not a change in location. Rarely will success occur from merely changing where you are. A change for the best occurs when you take advantage of what is available to you and by instilling discipline into your life. Your attitude is typically one of the best places to start. Analyze where you are today and why. Do you have the discipline to set and achieve goals, develop a plan of action, setting a schedule, working that schedule, and growing you through education, accountability and coaching? Find a mentor to develop yourself into what you want to become – don’t just change companies…this is superficial and in the end will rarely help you and you will continue your search for the next company that offers lower fees, more leads or something else that won’t yield true results. The great Bob Marley sang – you’re running and you’re running and you’re running away but you can’t run away from yourself. Truer words have never been sung in regards to change. You can’t change others, changing companies doesn’t work – only changing you works.

Now at times, a change is required if you aren’t provided opportunities – training, coaching, the right atmosphere, leadership or potential to grow yourself and your business but when you are and you don’t take advantage of these opportunities – you only have yourself to blame and your success will be no greater at the new location. Lower fees won’t make a difference – the promise of leads won’t make you better – a salary won’t make you improve - only you can make you better.

It’s time to change you – not your location or company. Get it? Got it? Good!

Now, go sell something.

My blog has moved!

Scott MacDonald, Scott MacDonald, Broker of REMAX Gateway (RE/MAX Gateway) — Tue, 01 Dec 2009 12:42:00 -0800

Same blog, new posts, new location!

Check it out!

Another GREAT Real Estate Listing Exchange!

Scott MacDonald, Scott MacDonald, Broker of REMAX Gateway (RE/MAX Gateway) — Thu, 08 Oct 2009 12:24:46 -0700

It was a terrific turnout - we had 25 people attend. Thanks for all who came out to be educated! Here is a synopsis of what was discussed. Hope to see more of you next time!

Scott MacDonald:

Market Update...builders have said activity and contracts have been up. The summer lull is gone and activity is picking up. Great news for us! In talking to other agents, they are saying the same thing. It's important to tell your sellers that the market is still price sensitive. There is still activity, but it's important to get the house priced right to get it sold quickly. We are still seeing multiple contracts. BPO's are picking up as well.

Leslie Wish - SunTrust:

Rates continue to be great. Phones are ringing off the hook with buyers wanting to close by the end of the November. It is better to close prior to Thanksgiving and not wait.

Lenders are skittish on condo loans because of litigation against the condo association - any litigation no matter who is suing whom, no conventional loans - FHA loans will allow "some" litigation. Lender questionnaire will bring to light lawsuits and delinquencies.

Scott Mayhew - NuStart Credit Restoration:

Pull credit report to see what issues are with the report. Typical problem takes 90-120 days. Process starts with letter writing - it is a must. The letter must state name, address, loan number, discrepancy, timeframe to correct and expectations of resolution. Only way to dispute discrepancy is to state the loan is not late or not mine - this is the only way to get it removed. The letter must be signed in blue ink. Lender has thirty days to respond with exact amount owed and details of delinquencies. Consumer must write letter - not company. Proof of accuracy letter must be returned by lender - if not, need to send another letter stating they have violated. Paying off credit cards end of month doesn't give you a great credit score. Inaccurate data CAN be removed from credit report. If your mortgage is 30 days late, it will show up on your credit score is 100 point deduction, it used to be 40 points. Credit rating goes from M1 to M9. M5 is about a 40 point hit. Tell short sale clients to have bank say paid in full as agreed and not to rate short sale higher than an M3. Fee to correct is $395 one person $495 for two.

Keith Barrett - Champion Title

New HUD form is coming out January 1^st - you have to be prepared if you want to keep clients happy. Get caught up on all the changes at 4900 StoneCroft Blvd., Chantilly, VA 20151 on October 28 from 2pm to 4pm.

What in the world is going on in Northern VA real estate?

Scott MacDonald, Scott MacDonald, Broker of REMAX Gateway (RE/MAX Gateway) — Wed, 07 Oct 2009 08:12:45 -0700

Well, we are starting to see more activity lately at our listings, more homes are selling than are going on the market reducing our inventory levels, builders are seeing increased activity and sales as well, rates continue to fall, prices are remaining stable, and now is a fantastic time to be in the Northern Virginia real estate market whether buying or selling. What else could contribute to our market? We continue to have low levels of unemployment locally compared to the rest of the country - which is a huge positive for us. As a matter of fact, Virginia was ranked number 1 for the 4^th consecutive year as the best place to do business. Jobs drive the housing market - just look at Detroit as an example of how employment has affected their total real estate market.

What is on our forefront? There continues to be the threat of more foreclosures coming on the market but we haven't seen it here in our area yet. We have the impending expiration of the First Time Buyer $8,000 Tax Credit or do we? In speaking with the Former Governor, now Senator, Mark Warner, he indicated he was voting to extend the credit. Many others in support of this initiative believe this will keep momentum moving in a positive direction with our recovery from the recession as the Housing Market has such a large impact on our national economy. Interest rates may creep up - but they are so low, they have to increase at some point. Basically, as stated above, we are fortunate we have the fundamentals to be one of the top real estate markets in the country.

An enlightening weekend

Scott MacDonald, Scott MacDonald, Broker of REMAX Gateway (RE/MAX Gateway) — Mon, 05 Oct 2009 15:10:52 -0700

As a Realtor, you never know who you will run into to discuss our business. This weekend was no different for me. I was invited to attend a political function for an incumbent who is attempting to keep his seat as a delegate for our area. Of course, Chuck Caputo is the right candidate and the right person for the job and, for our area, we need him to be re-elected. His views on education, business and transportation for our area far exceed his competitor's opinions on how to continue to run our region and for us to stay the number one state to do business in 4 years in a row.

But I digress, at this function I had the opportunity to meet Mark Warner and we discussed our local real estate market. Our conversation included inventory levels, supply and demand challenges, trends in housing prices, profiles of our purchasers, as well as HVCC and the First Time Buyer $8,000 Tax Credit. Over the last several years, we have discussed the need to know your numbers, and know the trends in our business and to have them ready to discuss at any time. As a result of staying abreast in these areas, I was able to accurately convey why we need to address the HVCC issue but more importantly, the need to extend the First Time Buyer Tax Credit. In our discussion, he told me he was going to vote to extend the credit! It is a wise decision to keep the housing sector of our economy moving forward and to help continue to bring our country out of the recession. When it comes to making the right decisions about our economy, we need to knock down political affiliations and work together for the common good. Get it? Got it? Good.

Now, go sell something!

Social Media Training today!

Scott MacDonald, Scott MacDonald, Broker of REMAX Gateway (RE/MAX Gateway) — Thu, 01 Oct 2009 14:15:24 -0700

Please attend the free event at NVAR - rebarcampdc.com October 27, 2009 - 8:30 - 5. Please RSVP soon to make sure you get in!

Blogging is an important part of your internet presence - 73% of internet users have read a blog.

Google loves blogs - to get higher in the searches on various search engines - you've got to blog.

Blogs enhance your image on the internet.

Use http://technorati.com/ to "ping" your blog and get higher in search engines.

Incorporate videos and hyperlinks into your blogs.

Blogging allows you to present your internet presence to sellers in listing presentations.

Provide information on market, neighborhoods, and industry news to show your expertise in real estate.

Tips for blogging: www.davidrisley/2008/11/50-rapid-fire-tips-for-power-blogging/

Ed says - change or die! Remember when people complained about the new electronic lockboxes...

Here is the presentation from today!

As usual - THANK YOU Kendall and all of our attendees!

Now, go sell something!

Yesturday's Economic Summit at GMU

Scott MacDonald, Scott MacDonald, Broker of REMAX Gateway (RE/MAX Gateway) — Thu, 24 Sep 2009 10:24:37 -0700

Michael Fratantoni

-The true unemployment number is up to 13.3% (people who can no longer claim and still don't have a job) but is report as 9.7% - it will peak midyear next year to a reported 10.2 % similar to the early 80's

-No pressure on inflation -some deflation happening right now to keep it in check -as an example energy prices are down - a barrel of oil is in the $70's when a price of $90 to $100 is normal

-Stock market losses $6 trillion slight rebound in Q1 & Q2

- New home sales lowest on record in 50 yrs

-Housing prices nationally are not going to rise until 2011 and won't stabilize until mid 2010

-The Federal Reserve is largest buyer of MBS 60% currently and they hold $850 billion loans currently they have gone from 0% to 60 % this year and want to go back to 0% by year end. Will going to 0% add volatility to market? This is something to watch over the next 6 months when Fed leaves market increase in rates by .25 basis points - Just saw the Fed will buy MBS until March of 2010

-Theme things are looking up slightly but we have huge hole to climb out of

-FHA represented only 2% of loans in previous years. This year they represent 45%!

-National delinquency survey show 14% of borrowers are 90 day or more late 2.5 million loans

-Prime fixed rate loans 28 million and many of those are reaching seriously delinquency rates - more than 90 days

-Delinquencies & foreclosures are delayed or lag behind employment trends

-Delinquencies - we are up because of jobs being lost

-25% of option arms have been modified or foreclosed on not the problem media has mentioned and continues to mentions as the problem in mortgage market

-Watch bill HR 1728 - Barney Frank

-Allen Jones BOA SS expert is available to us about Short Sales and BOA

Allen.h.jones@bankofamerica.com

Frank Nothaft

-Its going to get worse much worse slower recovery than previous recessions

-After end of 1991 recession unemployment peaked 15 months later

-After end of 2001 recession peaked 19 months later

-Bernanke says we may be out of recession - the question is how long before we peak with unemployment after this recession

-$15-17 billion is the cost to extend tax credit. The challenge is too many politicians say they didn't approve of spending gov't funding to stimulate economy so even though they understood the need to extend they have politically painted themselves into a corner

-Freddie Mac National rebound of prices bottoms out in 2010 and it is 2011 before rebounding

-Lowest interest rate in 50 years

-Prime loans are performing worst since the 30's - the depression

-Subprime 8 to 10% of loans represent over 35% of foreclosures

-9% of all loans are subprime but they represent 35% of foreclosures

13% of all loans are FHA and they represent 10% of foreclosures

15% of all loans are Prime/Arms and they represent 28% of foreclosures

63% of loans are Prime and Alt-A Arms and represent 27% of foreclosures

-4.2 million seriously delinquent 90 days behind

-To determine if loan is owned by Freddie Mac check out - www.makinghomesaffordable.com or www.Freddiemac.com

Lawrence Yun

No housing bubble it was a credit market bubble

We are overshooting bottom & need stimulus to nudge further back to make our market "normal" again

-From typical NAR survey 3000 responses - HVCC appraisal survey resulted in 30,000 responses1/3 had properties not close due to appraisals

Prices are below fundamental values

All cash purchases are 20 % of market typically low single digits 8 %

Foreclosures will rise because of toxic issues of unemployment & underwater buyers

Full builder recovery not until 2011

Our prices locally are down 20 % were 33 %

Stock market is at 1 year highs

Support tax credit extension - Wall Street got $700 billion whole economic stimulus $800 billion extending the tax credit will only be $15 billion

NAR is on FB why aren't you?

See his presentation below!

Stephen Fuller

View his updated slides in the link below!

Look for collaboration amongst our peers share data share ideas work together get along

We in DC better at looking at bad news

Dr. Frank Nothaft

Dr. Michael Fratantoni

Dr. Lawrence Yun

Dr. Stephen Fuller

We've caught the 500 pound elephant...

Scott MacDonald, Scott MacDonald, Broker of REMAX Gateway (RE/MAX Gateway) — Mon, 21 Sep 2009 16:05:55 -0700

The economy isn't as bad as we think it is or as the media portrays it to be...especially in our Washington Metro Area. Dr. Stephen Fuller from GMU's Center for Regional Analysis spoke to our office today regarding the current economy in our area including unemployment and the state of the housing market...and of course his forecasts for the future.

The future is uncertain. It always has been and as it should be. We can only predict so much. So Dr. Fuller believes that in 2010 and 2011 the housing market in the Washington Metro area is going to be out of control good or in his words it'll go "gangbutsters"! That's pretty optimistic considering the last batch of Alt-A loans (5/1 and 7/1 ARMS) are due to adjust in 2011, but he did say to that end that the majority of those loans have already gone into foreclosure.

Unemployment in our area is down. It's up around the rest of the nation and according to Dr. Fuller will go up to 10.2 nationally by April of next year before we see it start to come down again. As of this last month, there is a 3.5 point gap between the national unemployment figure and the figure in our region. He noted that as a country we are losing 200,000 jobs per month and in order to keep employment where it is currently, we would have to accrue 100,000 jobs per month - again, we are losing 200,000 per month. Employment won't return to pre-recession numbers until 2014. That's a heck of a lot of jobs! And half of those job losses are in the retail sector. Thanks to amazon.com and all of the other internet retailers that offer goods for discounted prices. Store front retailers can't keep up, end up in bankruptcy and leave buildings and strip malls vacant along with any customer service that might have been associated with it. Big box retail shopping centers may get rezoned to accommodate housing short fall - stay tuned.

Dr. Fuller did comment on inflation and whether or not it will happen in the near future due to all of the spending our government has been doing lately. Will we have to endure a hard inflation period to "pay it all back"? His answer is not likely. Unemployment is a major factor affecting our economy, but it's not enough to put pressure on the economy to spark inflation. He noted that manufacturers are not struggling as hard as they would be during an inflationary period. This is in large part because of all the products you can purchase online. They costs of not having a physical store, employees, etc. allows for the lower cost product and thus more profit in the long run. Therefore, if they continue to produce the goods, they continue to sell, then inflation shouldn't occur...but that doesn't mean another recession won't occur. Dr. Fuller said another recession is inevitable, but when is the question.

A recession is defined as a period of an economic contraction, sometimes limited in scope or duration or as Wikipedia says it's when the GDP falls or when we have negative growth. We have experienced this negative growth for the past 18 months and things are finally looking upward. As is the housing market!

The real estate market in the Washington Metro area is hot and soon to get hotter! At Gateway our sales are up 4% over last year, but our volume is down by 5%, thus showing that prices have come down quite a bit from last year. Dr. Fuller predicted that builders will start building more spec homes about springtime of next year. He commented that we need to have 25,000 new homes (not resales) to accommodate just the new residents in the Northern Virginia area, compared to 1 million nationally. Currently in our Northern Virginia market, inventory is slowing decreasing. This week we see 5,984 active listings on the market...that's down 56% from this time last year. Just goes to show it's a great time to sell and with the $8,000 first time home buyer tax credit and low interest rates, it's also a great time to buy.

Prince William market update

Scott MacDonald, Scott MacDonald, Broker of REMAX Gateway (RE/MAX Gateway) — Fri, 18 Sep 2009 15:59:31 -0700

Jason Smith's comments:

Inventory levels up slightly but everything else is staying steady so the market is going strong! We are just under a 2 month supply of houses in

Prince William County. The active inventory has 36% of the market as distressed sales. Nationally, inventory levels are up 7.6% in July - here we are down - houses continue to sell which is great news for us. There was a home with 20 contracts on it in Piedmont priced under $350,000. It is still a very competitive environment for us in the first time buyer price range. New construction activity is up as well and KB Homes is coming back to our area - stay tuned on where as we haven't heard yet.

Loan modifications aren't working with a majority of the lenders - anywhere. The push to modify from the government hasn't yielded results from what we've heard.

There are very few FSBO's on the market as well. Auction activity only showed 3 houses on the "block" in October - other auctions previously featured 100's of houses...the tide is changing - inventory is getting absorbed prior to auction.

Scott's comments:

Career Night, September 24^th: Bring an agent and get into a drawing for a designation and your guest agent gets thrown into a separate drawing for a designation at the end of the night. We'd love for you to invite those agents that would be a great fit for our company.

Business planning retreat...Pat Cunningham is one of our wonderful sponsors. Friday starts with golf, spa, cocktail party, and business planning starts on Saturday. It's going to be a different format this year with tons of interaction to help jump start your 2010! The location is easy to get to and it's a beautiful resort - the Hyatt in Cambridge be sure to sign up today.

In today's Market Watch, our monthly market update you will see that there is not much to talk about this month. For the first time in a long time, there is nothing earth shattering. It's been relatively quiet. There is nothing new that we need to be concerned about - yet. There is a lot coming down the pike so stay tuned. So what's next? Is the loan limit going to stay $729,750 or is going to be cut back to revert back to $629,650. Is the first time buyer tax credit going to be extended or will it go away? When are rates going to go up and how high? When is the government going to dismiss the FED's advice to continue to purchase mortgage backed securities. If inventory levels go up by a thousand houses - BOA foreclosures in Northern Virginia - it's not going to affect the market too drastically.

Right now we are at May of 2005 inventory levels. We need more homes to sell!

Pat Cunningham agrees that there is not much has been going on the mortgage front. Rates are awesome - ARM's are coming more into favor because of better education and lower start rates.

A year ago I remember the mid September of last year and we were literally in a financial firestorm and one of the things I was thinking then is about the fact that that Fannie & Freddie were going out of the business and lending institution having a hard time making loan and wondering if there will there be a credit freeze.

Let's fast forward to today, its business as usual. We've gotten out of the toughest financial market of our time. Interest rates are at historic lows. PMI may require anti-flipping rules to be enforced and will be scrutinized heavily on 91-120 days be on the lookout for changes in this arena.

All is quiet on the Western Front

Scott MacDonald, Scott MacDonald, Broker of REMAX Gateway (RE/MAX Gateway) — Fri, 18 Sep 2009 09:32:37 -0700

All is the same over the last month or so - same issues with short sales, foreclosures, etc

Agents are being more demanding and asking for shorter timelines - short sales are bringing out the worst in other agents. Agent's frustration over short sales are carrying over into other transactions. Agents have an all gloves off mentality. Buyers and sellers are also frustrated because of timing of getting deals done, HVCC, TIL, etc.

Nip unprofessionalism behavior in the bud. Track all conversations in writing with agents.

First time buyers are antsy - wanting deals to be done so they get the tax credit, get rates locked in, and get closed.

Notice of trustee sales is at an all time high

The highest month of foreclosures were September of '08 - trustee sales today are 30% higher than that

Market is slowing - sales are down because inventory levels are down

Commercial market is about to tank - financing is gone - only sources are pension funds, insurance money and conduit lenders are the only avenues. No new construction can be financed either. Churches and schools are building but back log is diminishing. Commercial market is in directly opposite of residential market. Death, divorce and relocation are our salvation as well - people have to move!

Titanium is in control of 31,000 people in our area who are in one form of distress - not foreclosed on by the bank yet.

The attached article was also discussed.

Outlying areas are coming back strong - we are doing better than other counties - including Maryland.

That's it - go sell something!

Interesting market update

Scott MacDonald, Scott MacDonald, Broker of REMAX Gateway (RE/MAX Gateway) — Wed, 16 Sep 2009 13:45:10 -0700

It is an interesting time in the market right now. For the first time in a long time, there are not a lot of changes in our market to report - it is the same ole story - which is kind of nice. Over the last several weeks, we have reported shifts which were affecting our industry and we were on top of for our clients and agents alike. Last month we talked about short sales, foreclosures and those trials and tribulations. Right now everything is flat in terms of news. The inventory levels are down, buyers are still out looking for homes, the hot price ranges remain hot and we are ready to help!

What makes me wonder is, is now the calm before the storm? As we've been speaking about over the last several weeks, many questions have been raised that we cannot answer - yet. Many of our questions include the short sale process, inventory levels, release of foreclosures by banks, and other concerns over distressed properties still have not been answered. Additionally, we have impending issues we are dealing with such as the first times tax buyer credit coming to an end on November 30, ...will that be extended with all of the billions of dollars being spent by the government? When will interest rates rise...is looming on our horizon - how soon will that happen? Foreclosures are slowing being released...will they be released all at once and will that have an impact on our values? How much can the government spend to buy mortgage backed securities against the Federal Reserve's advice and how will this impact us going forward. There are a lot of questions that need to be answered and only time will tell what the outcome will be for the housing market. So, for now, there is nothing turbulent to write or speak about today. All's well that ends well I guess will be the theme of this month's update. Mortgage rates are great, buyers are buying, houses are selling, and we are still working to make it all happen for our clients. Let's hope we get more of the same going forward!

How to protect yourself from Mortgage Fraud?

Scott MacDonald, Scott MacDonald, Broker of REMAX Gateway (RE/MAX Gateway) — Mon, 14 Sep 2009 10:26:58 -0700

10 Ways to Protect Yourself from Mortgage Fraud

Many of the challenges homeowners and home buyers are confronting today are the result of unscrupulous mortgages extended over the past several years. Help protect yourself during the home buying process with these tips from the American Homeowners Foundation and the American Homeowners Grassroots Alliance, www.AmericanHomeowners.org, or in Canada, with tips found at www.genworth.ca:

1. Deal only with reputable mortgage bankers or mortgage brokers. Get recommendations from neighbors and friends who dealt with them as customers. Check on the mortgagor's record with the local Better Business Bureau and state licensing authority. As a Member of the Top 5 in Real Estate Network®, I can also provide you with many credible mortgage resources.

2. Ask how long they have been in the business, and be wary of working with someone with less than five years experience, no matter how reputable their employer may be.

3. Unlike professional real estate agents like myself, mortgagors owe you no fiduciary duty. While it is in the long-term interest of mortgage lenders and brokers to treat consumers fairly, for many, that doesn't stand in the way of charging higher fees or interest rates. Always get quotes from at least three mortgage lenders and/or brokers, and make sure each one knows you are doing so.

4. Since you'll be providing them the most comprehensive personal financial information you'll ever provide any company, ask the lender to describe their data security policies, both online and offline.

5. To reduce the likelihood of overpaying for a home, make sure that you review recent selling prices for similar homes in the same neighborhood before you make an offer. I can provide you with a detailed analysis of the homes in our communities.

6. Set aside some extra money for closing costs. One of the vexations of real estate financing are the differences in estimated settlement costs on the Good Faith Estimate (GFE) forms, and the actual settlement costs, which very often include several hundred additional dollars worth of previously undisclosed and creatively named fees.

7. Pick the right kind of mortgage. Interest rates are higher on 30 year fixed rate loans than on 15 year fixed rate loans. Adjustable rate mortgages are always a gamble. You may well save money over the first few years if interest rates are dropping, but predicting their direction further out is very speculative. Prepayment penalties can more than offset any savings if the rates go up after that and you want to refinance.

8. Get pre-approved for your loan. Even though there is a glut of homes for sale in most areas right now, a mortgage loan pre-approval is essential to many sellers, and gives a big negotiating advantage to buyers in almost all cases.

9. It is important to review loan documents in advance and understand all the terms. Don't be afraid to ask questions. Try to avoid loans with prepayment penalties if at all possible.

10. Save all the copies of all documents you receive and/or provide mortgage lenders or brokers.

For more advice on how to secure the best mortgage in today's challenging economic times, please e-mail me directly. I can help you make sense of the current mortgage landscape and the ever-changing credit standards. Also, if this information can be of benefit to your friends and family members, please feel free to forward this email to them.

How do you qualify to refinance?

Scott MacDonald, Scott MacDonald, Broker of REMAX Gateway (RE/MAX Gateway) — Mon, 14 Sep 2009 10:25:50 -0700

Do You Qualify for the Expanded Home Refinance Program?

The Home Affordable Refinance Program, or HARP, established by the Obama Administration, has been expanded, raising the maximum loan-to-value ratio from 105% to 125%. As a Member of the Top 5 in Real Estate Network®, many clients are asking me if they qualify for the HARP program. If you can answer "yes" to following questions, you may be eligible:

- Are you the owner of a one- to four-unit home?
- Do you have a loan owned or guaranteed by Fannie Mae or Freddie Mac?
- Are you current on your mortgage payments?
("Current" means that you haven't been more than 30-days late on your mortgage payment in the last 12 months.)
- Do you believe that the amount you owe on your first mortgage is about the same or less than the current value of your house?

Open to homeowners whose loans are owned or guaranteed by Fannie Mae or Freddie Mac, and covering first mortgages only, the HARP expansion means that an eligible homeowner with a $375,000 mortgage loan may now refinance if the house is worth at least $300,000.

The expansion is aimed at making refinancing available to more people whose homes are now worth less than the amount of their mortgages. As always, the borrower must meet income requirements and be able to afford the loan. Homeowners must also be current on their mortgage payments.

As a homeowner, you may be eligible if:

1. You obtained your mortgage before January 1, 2009
2. The home is owner occupied
3. The primary mortgage is less than $729,500

According to the Federal Housing Financing Agency, the higher loan-to-value refinancing will allow more homeowners to strengthen their finances by taking advantage of lower mortgage rates. HARP borrowers will be able to combine a lower mortgage rate with a faster amortization schedule, which will enable them to get "above water" on their mortgages more quickly.

The program also provides borrowers with an incentive to reduce the term of their loan from 30 years to a shorter-term, fixed-rate mortgage, enabling them to pay down the principal more quickly and reduce lifetime interest payments.

For more information on the HARP program, visit www.makinghomeaffordable.gov or e-mail me. If you know of others who can benefit from this information, please feel free to forward this email to them.