By Susan L. Johnson, on October 29th, 2010 The Branch Team | Real Estate Broker 0547597 | RE/MAX Dallas Suburbs
 Copyright 2010 - Imaged2Sell 3 Bedrooms | 2 Baths | 2-Car Garage | 1520 SF/Tax
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Source: NTREIS
By Tom Branch, on October 27th, 2010 I was interviewed yesterday evening by Bob Morrison with the Broadcast News Service concerning the general state of the housing market.
 Licensed from iStockPhoto Today’s release of September New Homes Sales data is expected to show a modest increase. With interest rates at all-time lows and prices being slashed, one would expect to see much more activity.
According to Lawrence Yun, chief economist at the National Association of REALTORS®, “A housing recovery is taking place but will be choppy at times depending on the duration and impact of a foreclosure moratorium.”
Based on what I see locally in the greater Dallas Real Estate market, I would agree that the next few years are going to be “choppy” but not simply because of the impact of the foreclosure moratorium. I think there are some larger issues at work.
The two bigger issues are the general state of the economy and the tightened mortgage lending standards.
People are not rushing out to purchase big-ticket items because they’re not secure that they will have continued employment. The economy is still very weak and until we get Main Street back to work, I don’t see people purchasing homes on Main Street in large numbers.
I’m often asked, “How low do rates have to go to get people back in the market?” I think that’s the wrong question! Rates are at historic lows with rates on a 30-year fixed rates mortgage below 4 percent with some lenders. Many people who can qualify have already refinanced their mortgage and plan to stay put for a while. The lending industry did a “180” on underwriting standards and many people who are making their payments on-time simply cannot qualify to refinance or purchase a new home.
The other elephant in the room is the massive balloon of adjustable rate mortgages coming due in 2011. As long as interest rates remain low, the impact in 2011 should be minimal. However, the bubble does not go away, it slides in 2012 and later years. Granted it gets smaller each year, but it will take five years or so to disappear.
Much of what happens in the next few years depends on getting Main Street back to work and for the lenders to let the mortgage underwriting pendulum swing back towrds center.
By Leslie Ebersole, on October 25th, 2010 Hey there, Tech Savvy Listing Agents! I’m showing your listings! Your steady flow of clever blog posts helped lure the transferee to our great area, your website had nifty interactive maps, and you displayed attractive photos of the home on 1,000s of websites. Your charts and reports convinced your sellers to price competitively and then to lower the price as we head into fall. And you’ve marketed to the local agents as well…how could I miss your listing popping up on Google in every search? Your unique property websites are impressive. You’ve sent out snazzy e-flyers to all the local agents with each price change. Really great work and you got my client’s attention.
And now, after all your work over so many months, if you get us to the door, will you get us to the table?
I worked with two families this week who are transferring to the area. There are so many houses to choose from that you’d expect sellers would roll out the red carpets.
But we didn’t see many red carpets at the showings. In fact, a lot of houses looked a little sad. Even if the seller is discouraged, it is the listing agent’s job to create a great showing experience every time someone drives up to the house.
As the gardens turn brown, the dead plants should be cut back. At the front entry a few mums and pumpkins look nice and the front porch should be swept of dead leaves.
And please, brush away the spider webs. “We never use the front door” is not an excuse. A buyer comes though the front door.
This time of year the lights should be turned on for a showing, especially on a dreary day. Maybe you could turn on some soft music. Warm cookies are a wonderful way to entice a buyer to stay a little longer and enjoy the home.
The dog needs to be somewhere other than the laundry room. Barking dogs scare little kids and their parents. And a buyer needs to see the laundry room.
If the weather is cold and the house is vacant, someone should come over and turn on the heat. One house I showed yesterday had the air conditioning set at 58 degrees. Perhaps the agent hadn’t been there since summer, which probably explains the bugs. As the weather grows colder, vacant houses here in the Midwest get bugs. Someone needs to vacuum up dead bugs before a showing. Hundreds of dead box elder bugs are not warm and inviting. Dead bugs are creepy to little kids who crunch them under their little sneakers. Teenage girls flounce out and go sit in the car, announcing that they aren’t moving into that house.
Houses for sale need brochures in the house. Yesterday I showed fifteen houses in six subdivisions and only four had multi-page brochures with good photos. A 4,000 square foot house priced at $600,000 deserves a nice brochure.
The showing experience starts when a buyer sees the photos on the internet. Driving up to the house is the start of “show time”. Walking through the door should be a “wow”. A buyer should be reluctant to leave and move onto the next house. A buyer, especially a transferee, wants to collect nice looking materials to remind them of their favorite homes.
So to my colleagues, I ask: after all the work you’ve done, if you get us to the door, will you get us to the table?
By Tom Branch, on October 25th, 2010 The Associated Press is reporting that Kathy Chen, a California real estate broker, was sentenced to 68 years. Ms Chen was convicted for using stolen identities to purchase 35 homes and then intentionally defaulting on the mortgages to steal $17.5m.
 Licensed from iStockPhoto The 49-year old Chen was found guilty on 136 felony counts including conspiracy, grand theft, and forgery. Warrants have been issued for her boyfriend and brother who authorities believe have escaped to Mexico.
The crimes were committed between 2005 and 2007. I don’t think that 3 to 5 years of living the high-life is worth spending the rest of her life in prison.
Crime doesn’t pay.
By Tom Branch, on October 23rd, 2010 There’s some good economic news for Plano and Collin County, Texas.
 Licensed from iStockPhoto Phil Dyer, Plano City Mayor, recently told a group of real estate professionals that the city cut $14m from the 2011 city budget for fiscal year 2011 beginning October 1, 2010. Even better was that this was done without raising local taxes.
In other good news, economic development is alive and well in Plano and Collin County. Collin County is on the short list for a number of corporate moves:
- Cigna facility opening bringing in 1000 new jobs
- Tech Tronics – 450 new jobs
- Wallway Tech – leasing 1.3m square foot facility in plano
- Pizza Hut World Headquarters – 600 new employees
- Danbury Resources – 300 new jobs moving here from Ft. Worth
By Tom Branch, on October 21st, 2010 The biggest bubble of adjustable rate mortgages comes due for adjustment in 2011. As I talk to people they often breathe a sigh of relief knowing that the end is near.
 Licensed from iStockPhoto I wish I could share their relief but I don’t believe that 2011 will be the end of it.
In order for the bubble to dissipate all the adjustable rate mortgages need to be paid-in-full, modified, refinanced, short sold, or foreclosed. While we will see a number of foreclosures and short sales, the vast majority of these borrowers cannot sell or refinance their adjustable rate mortgages.
Why? There are two major reasons.
First, their property values have declined to the point where they cannot refinance. Even if they can qualify for a new mortgage, the lack of equity and lower appraised values will prevent them from being able to refinance.
Second, because of the tightened lending standards many borrowers who are making their mortgage payment on-time cannot refinance. Many of these current mortgages were given to self-employed individuals and were done as stated-income loans. So while, they’re paying on-time, they cannot refinance.
This will cause the bubble to go into 2012 and later years. Granted, it will get smaller with each passing year, but the bubble will take years to dissipate completely.
If lenders want to work on reducing the size of the bubble quickly, they need to consider allowing borrowers with stated income loans and who are paying on-time to refinance into fixed rate loans. It could easily be set up like a VA interest Rate Reduction Loan (IRRL). People with multiple mortgages could combine them into one new loan and opt to pay private mortgage insurance given the higher Loan to Value (LTV). LTVs over 80 percent would be required to set up an escrow account for their taxes and insurance as well.
Where we go from here is in the hands of the lenders.
By Tom Branch, on October 20th, 2010 It doesn’t happen every day but every now and then someone will do, say, or write something that makes working Short Sales worth all the headache and extra work.
This morning a little package and note card were delivered to my office. When I picked it up I had no idea what it was, who delivered it, or the impact it would have on my day.
I opened the card and read the kind words. The card was attached to a small box with a necktie in it.
While I’ve saved 20 or more families from foreclosure this year alone, I’ve only received a thank-you card twice.
It’s the simple handwritten acknowledgement that the work I do is appreciated that renews my faith in working Short Sales. I saved another family from foreclosure and they realized the extra work that goes into it without any additional compensation.
Tomorrow is a fresh day and I have more families to help!
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