Pacita's Quick Bytes of Real Estate: April 2009

One of the first things I learned when I went through my e-PRO course is to get an email address that will come with me wherever or whichever brokerage and internet service provider I am with. I can change agency and ISP, but that email follows me (just like phone number portability).

So I chose an email address associated with my website.

And since my website is via Point2 with domain names from GoDaddy, it just made sense to point all emails going to those domain names/sites to come to the same email address.

My incoming mail server for this specific email address is set to pop.point2agent.com.

Everything is fine and dandy, as long as point2agent is working.

But tonight, something happened, and everything went down. I was getting error messages while trying to get my emails via Outlook. So I tried to go to the webmail at Point2, and that was down, too. Every link I have to, and with Point2Agent wasn't working.

So here I am....wondering what emails may have been lost because they had nowhere to go.

Paint me MIFFED!

Maybe I should enjoy a bit of peace and quiet with absolutely no emails (spam and all). But the type A in me isn't happy. This happens often enough that it drives me stark raving mad! Don't they know there are some night owls in the bunch?

It's interesting to see/hear about the disdain some folks have of people in our profession. So it makes me wonder when and why people decided to become Realtors. As kids, we wanted to be teachers, nurses, doctors, firemen, police officers. But as Realtors?

I was reading a local blogger's post and her readers' comments, and was dismayed to read where they thought it doesn't take much to be a realtor. (Viewing realtors as honest is another blog).

So I looked for information about Realtor profiles, etc.

And from the 2008 Member Profile of the National Association of Realtors, here are some gems:

• Real estate industry accounts for about 20% of the nation's gross domestic product, making it one of the largest sectors of the economy.
  

• EDUCATION
  • 34% are college educated (compared to 26% of the labor force as a whole)
    • 26% have Bachelor's degrees
    • 10% have graduate degrees and above
      
    • 
  • More than 1/3 of members have at least one professional designation (we have the thirst for knowledge!)
    • 19% have GRI (Graduate, Realtor Institute)
    • 14% ABR (Accredited Buyer Representative)
    • 10% CRS (Certified Residential Specialist)
• POLITICS
  • 95% are registered to vote
  • 91% voted in the last national election
  • 81% voted in the last local election
• CAREER
  • 5% say real estate is their first career (they're the ones who said, "Mommy, when I grow up, I want to be a Realtor"
  • 18% had careers in management, business or financial
  • 15% from retail
  • 10% from office or administrative support
  • 6% education
  • 5% homemaker
  • 77% report that they are full time realtors with no other profession
• WORK HOURS
  • 10% work fewer than 20 hours a week
  • 30% work 20-38 hours per week
  • 15% work at least 60 hours per week
  • $63K gross personal income by hours worked (median for 40-59 hours)
    
• LICENSE
  • 61% have a sales agent license
  • 24% have brokers' license
  • 16% are broker associates
  • 3% have appraiser license
• GENDER, AGE, NATIONALITY
  • 52% are women
  • Age
    • 14% are 65 years old or over
    • 5% are under 30 years of age
    • 6% are 20-34 years old
  • Nationality
    • 15% of Realtors are fluent in other language
    • 87% are Caucasian
    • 5% Hispanic
    • 4% African American
    • 3% Asian
    • 1% Native American
    • Note that responsdents could choose more than one category
• TRANSACTIONS AND SOURCES OF BUSINESS
  • 8 is the median number of transactions in 2007, down from 10 in 2006
    • Median Realtor income was $42,600 in 2007, down from $47,700 in 2006
    • Realtors in the business for 2 years or less earned a median of $10,500
    • Realtors in the business 3-5 years earned a median of $52,000
    • Realtors in the business 16 years or more earned $69,500
    • Typical NAR member has been in the business for 8 years
    • 30% of all Realtor's business is from referrals or repeat business from previous clients
      • 2% referral business for newcomers to as high as 47% for realtors with at least 16 years of experience
    • 1/3 of Realtors have clients who are foreign nationals
• BUSINESS
  • 18% of Realtors are in the business for 2 years or less, down from 23% of Realtors in 2006  (yes, we've had some new realtors drop out)
    • 7 out of 10 are compensated through a split commission arrangement
    • 18% receive all of the commission
    • 3% receive a commission plus a share of the profits
    • 7 out of 10 do not have any fringe benefits from their firm
    • 23% are covered by errors and omissions insurance
    • 93% must obtain health insurance on their own
  • 76% specialize in residential real estate
• TECHNOLOGY
  • 8% use blogs (the number doubled from the previous year)
  • 6 out 10 have a personal website they have maintained for a median of 4 years
  • 89% said their firm has a web site
    • 4 inquiries the past year from a personal website, that accounts for 4% of the business in 2007
  • Tools
    • 34% use smartphones with email and internet capability
    • 27% use digital camaras
    • 19% use GPS
    • 18% use instant messaging
• PROPERTY OWNERSHIP 
  • 9 out of 10 realtors own their own home
  • 41% own at least one investment home
  • 17% own at least one vacation home
  • 13% own at least one commercial property

 

So hooray for Realtors!

A few days ago, ABC Nightline presented a segment that was headlined "Truth in Advertising: One Realtor's Strategy to Sell Foreclosed Homes"

The announcer presented the story like it was so unusual to find a realtor who was telling the truth about a listing by shooting a video and running a commentary on what he was seeing.  This sounds like a video version of what we, in California, document as the Agent Visual Inspection where we discover, disclose and document what we see. This is no substitute for a property inspection, and neither is a videotape.

Then it was followed by a post in San Francisco Chronicle headlined:Stop the press: Agent tells the truth about his listings.  The writer said, "In a perfect world, a broker who tells the truth shouldn't be newsworthy."

I am obviously thin-skinned. But I think that many of us are doing the best that we can to improve the perception of our profession. Every little form and doument we ask the buyers and sellers to complete are designed to protect our clients' interests, as well as ours by disclosing pertinent information. Our Code of Ethics very clearly presents principles and standards to guide us in providing the highest level of care and service.

So when stories that tend to typecast and perpetuate the image of a realtor as less than honest make their way into the mainstream media, it takes us back another step. Have these writers never met a realtor they like and trust?

With the hundreds of thousands of people we have helped, surely there are voices out there who will and can come to the defense of the realtors who served them?

Maybe we should form a group and post all the testimonials we receive from our clients.  That will be our HAPPY PLACE!

 

 

 

 

 

I learned about a house that is about to go on sale.(It had a COMING SOON sign). Not an REO. Not a short sale. It's a regular sale.

So I asked the agent:

• Can my clients see it before it goes on the market? Yes.
• Has another agent previewed it? Yes
• Will you entertain an offer BEFORE it goes on the market? Yes, but it will be a few days before the seller can respond because she's from out of town. 
• How will you send the offer to the seller? By email.
• When I told her my client may submit a pre-emptive offer at list price, she said pre-emptive offers are always above list price. Huh?

Nonetheless, my clients were very interested. We went to see the property twice, and we immediately whipped up our offer to submit to the agent.

Monday, we submitted an offer for slightly above the list price.

Tuesday, the listing was activated.

Wednesday, she says they won't look at offers until the following Wednesday. WHAT?

Just when are you going to present my offer?

She said her client wants to wait until then to look at offers, so she was going to hold off on presenting my offer until then. This is totally different from what she said she and her client were going to do.

Aren't we supposed to present offers to our clients as expeditiously as possible (especially if there are no prior and explicit instructions for a specific offer date?)

When I relayed this to my buyers, they were so incensed that they decided to withdraw their offer, and we're going to look elsewhere.

Loss of face. Loss of faith. Loss of trust. Hopefully, not loss of client.

What an exciting time for real estate buyers and sellers!

We truly are living in interesting times. Here are some recent tax breaks to help stimulate the economy, give home buyers and sellers a break:

• California’s Mortgage Protection. On April 2, 2009, the California Association of Realtors announced, through the Housing Affordability Fund Mortgage Protection Program, that first-time home buyers who lose their jobs due to layoffs may be eligible to receive up to $1,500 per month, for six months, to help make their mortgage payments. 

 

• First Time Home Buyer Credit. A tax credit of up to $8,000 is available for eligible first-time home buyers purchasing a principal residence on or after January 1, 2009 and before December 1, 2009. Unlike the tax credit enacted in 2008, the new credit does not have to be repaid.

 

• Tax Credit for NEW Home Purchase. A tax credit of 5% of the home’s purchase price or up to $10,000 is available for qualified buyers who purchase on or after March 1, 2009 and before March 1, 2010, a principal residence that is new construction and has never been occupied. This is not a loan and does not have to be repaid as long as owner lives in the house for 2 years after buying the home.

 

• Mortgage Forgiveness Debt Relief Act of 2007 allows tax payers to exclude as income the discharge of debt through mortgage restructuring as well as mortgage debt forgiven in connection with a foreclosure. This applies to debt forgiven in calendar years 2007 through 2012.

And don't forget....some programs offer first time buyer discounts in loan fees, escrow fees, etc.

Several prospective buyers and investors have contacted me about properties they have seen---and thought ---- were foreclosures because of info they found online in sites like RealtyTrac, and recently in ForeclosureRadar (California)

However, it is important to tell prospective buyers and investors that not all properties in distress are for sale. The property owners may have received a Notice of Default, or even a Notice of Trustee Sale. But not all is lost.

This may be a good time to review what a property owner can do to keep her property:

• Forbearance. the lender may allow the property owner to pay less than the full amount of the mortgage payment during the forbearance period. Mortgage companies may consider forbearance when the owner can show that funds from a bonus, tax refund, or some other source to bring the mortgage current at a specific time in the future.
• Reinstatement. The owner pays mortgage company the total amount she is behind, in a lump sum, by a specific date.
• Repayment plan. The owner is allowed a fixed amount of time to repay the amount she is behind by combining a portion of what is past due with the regular monthly payment. At the end of the repayment period owner would have gradually paid back the amount of the mortgage that was delinquent.
• Loan Modification --- now one of the most popular ways to save the property. The owner and her mortgage company may agee to alter one or more of the original terms of the note to make the payments more affordable.
• Short Sale. And if nothing works, the seller may want to sell the property as a SHORT SALE (i.e., sell for less than what she owes). The owner is no longer the final decision maker because the lender will have to approve the sales price in order to “forgive the difference between what it actually sells for, and how much is left of the loan).

Compassion. Assistance. Understanding.

Now, more than ever, we should convey to our clients and associates that Realtors are not just in business to list and sell homes....rather, we are also here to help homeowners KEEP their homes. Let's show them the way.

Recently, I saw where one my clients was struggling and had in fact tried to work with her lender to get her loan modified. At that stage, because she was already served a Notice of Default, she can't do this alone without professional assistance.  So I put her in touch with a loan modification specialist.

When her loan modification was approved, it seems the burden of the world was lifted from her shoulders. Tears flowed. And flowed. And flowed. We were both overcome with emotion. What a fantastic feeling to know that we were able to  help.

Let us be the beacon of light to guide them.

Having been in multiple offers and counter offers situations lately for residential property listings, it is evident that something is happening. Buyers are stirring!

What's happening in Alameda?

SOLD

• Homes sold since January 1, 2009 to date: 70
• Highest price sold during this time: $1,995,00
• Lowest price sold: $150,000
• Average sold price according to the comparative market analysis: $553,973
• Average days on market: 60

PENDING TO DATE:

• Pending sales: 68
• Highest list price: $1,298,000
• Lowest list price: $168,000
• Average list price: $556,632
• Average days on market: 65

ACTIVE LISTINGS TO DATE:

• Homes actively offered for sale: 127
• Highest list price: $1,728,000
• Lowest list price: $199,900
• Average list price: $642,200
• Average days on market: 68

REOs AND SHORT SALES

SOLD since January 1, 2009: 21 of which 17 are bank owned, and 4 are short sales

• Highest  list price: $738,000 (REO or bank-owned)
• Lowest list price: $150,000 (REO)
• Average list price: $442,033
• Average days on market: 60

PENDING:  7 REOs, 15 short sales

• Highest list price: $899,000 (short sale)
• Lowest list price: $299,000 (short sale)
• Average list price: $502,886
• Average days on market: 68

ACTIVE:  6 REOs, 21 short sales or 16.5% of total active listings in Alameda to date

• Highest list price: $799,000 ( 2 short sales, same development in Bayport)
• Lowest list price: $199,900
• Average list price: 485,000
• Average days on market: 75

It's a bidding war. True or false?

According to HeraldTimesOnline.com, "Buyers' market seems imminent". And Washington Post says, "In a Buyer's Market, the message is: fix it, or else." 

Didn't we say this is a "buyer's market" and "prices have come down". NOT! At least, not in this case.

A really nice cottage came on the market in Alameda CA last Friday. I was the first to show it. And no sooner were we getting out of the house, there was a line of agents and their buyers outside the door.

During the open house Saturday and Sunday, the place was mobbed.

It's a bidding war! By Monday, there were several offers. More people said they would write, but passed when they were told they shouldn't write for less than list price which is what some buyers hoped to do.

So why are we bidding up? The property was really clean, was staged well, and the seller completed a lot of repairs. So it was a very "clean" property with a very low pest report.

Yes, it was priced aggressively. And yes, we knew it is going to sell quickly. Why? It's a detached single family house listed at $499K. Why is that important? It's under $500K!

Multiple Counter offers later, my client's offer was accepted. She is thrilled beyond words. And I am just as thrilled as she is.

True Market Value So this brings us to the true test of market value: it's whatever the buyer is willing to pay for it.

Or in InvestorWords.Com's Definition
The price that an interested but not desperate buyer would be willing to pay and an interested but not desperate seller would be willing to accept on the open market assuming a reasonable period of time for an agreement to arise.

Back in 2003 when I became a Realtor, I signed up for the free version of a website from Point2Agent.com. Since I didn't have any clients yet, I scoured the internet for useful information to populate my website. Thank goodness Point2Agent is so robust it reaches a lot of other websites.

Internet presence begins...

So I began by doing open houses for other agents with listings, and got their permission to post them on craigslist (some even asked me what Craigslist was). In 2003, I was the only one in my office posting open houses on craigslist. Now, nearly everyone does.

Fast forward. Tuned in to Zillow when it was just starting. Signed up for an account, Started posting my listings. Also answered some questions that I felt qualified tor answer.

Started using Postlets. Followed by VFlyer. I'm using both to create online flyers. Also creating my own Visual Tours.

Now Active Rain. Trulia. Facebook. Twitter. Thank goodness some of them allow inter-links.

Trying to be a good Active Rain member by commenting, giving feedback, sharing info, and yes, blogging.

Why I blog, why I post

I have to be on the internet. I have to keep going. Internet presence is a must. And based on my results last year where 30% of my sales were from leads generated from my internet presence, I know I have to keep going. Just need to know how to be more effective AND efficient.

It isn't just the social network like Active Rain, but also the general public outreach (and appeal) of Zillow and Trulia and Craigslist.

But I'm exhausted!

Am I the only one feeling like this? I know getting a web presence is extremely important. But how do you budget your time to do this and still be effective and provide good content?

 RELATED POSTS

Sources of my closed escrows in 2008 will dictate where I will focus my energy in 2009

10 Things to Do When Posting on Craigslist

 

Here's a quick and easy way to post a listing: put up a widget from Vflyer.com. I actually like it. Cute, to the point, provides links to another website that can give all the other information that won't fit in this widget, yet enables a rotating view of the photos. Sweet!

This is of a 2 bedroom/2 bath condo, just steps from the beach, and overlooks the pool and the lagoon. See it at 339 Broadway #205 in Alameda, CA

Waiting for the bottom of the market before buying. Newsflash: There won't be an announcement!

There are so many buyers who are still waiting, waiting, waiting for the bottom of the market. Just when is that bottom? Who's going to say when we've reached that point? Is the media going to trumpet that occasion and post that headline for everyone to know?

Here's a newsflash: There's not going to be an announcement. You'll know when the bottom WAS and AFTER we're already on the upswing.

So, what are people waiting for?

Interest Rates.  How much lower do they want it to be?

Mortgage Rates
U.S. averages as of March 26, 2009:

30 yr. fixed:   4.85%
15 yr. fixed:   4.58%
1 yr. adj:        4.85%

View current rates

Here's a great summary, as provided by one of my title reps.  This is only through February 2009. In April 2009, we're below 5%!

Market Price. Pick a city. Check out the stats. Use Zillow. Use Cybehomes. Use Trulia. The trends are the same. We're back to early 2000s price levels. Now that homes are within most people's reach, are investors going to be the only ones to recognize the potential here? Are they going to be the only one to make money in a down market?

Remember the adage: "Buy low. Sell high!"

Selection. There is a growing inventory of homes to choose from. Granted that some of them are foreclosures and short sales, that's where some of the best opportunities lie. When homes are in distress, there's room for negotiation.

First Time Home Buyer Discount. Depending on your situation, you may qualify for a first time home buyer discount on your title insurance. 

Tax Breaks. If it's a new construction, never been lived in, we have the New Home tax credit of up to $10,000 if the home is bought

Mortgage Protection Program. On April 2, 2009, via the new wires, the California Association of Realtors announced the Mortgage Protection Program "developed to help ease the anxiety of consumers who are concerned about potential job loss."

•  
  • Through the Housing Affordability Fund Mortgage Protection Program, first-time home buyers who lose their jobs due to layoffs may be eligible to receive up to $1,500 per month, for six months, to help make their mortgage payments.
  • A qualified co-buyer also can participate in the program, and receive a monthly benefit of $750 per month for up to six months. Program benefits also include coverage for accidental disability and a $10,000 death benefit.

Special incentives and programs

• FHA has loans granted to qualified buyers with a minimum of 3.5% downpayment
• Veterans may still be able to get 100% financing up to $417,000
• There are home buyer assistance programs offered by individual municipalities
• Builders are offering discounts, financing programs and/or upgrades to sell off their inventory
• Sellers are pricing their properties aggressively to compete with lower priced foreclosures and short sales in their neighborhoods

Here's a caveat. It isn't always true that "Now is the time to buy." That will always depend on the buyer's individual situation. But what is true is that there are opportunities and tax breaks that are available today that will make it attractive for the buyers to get off that fence.

On April 2, 2009, via the new wires, the California Association of Realtors announced the Mortgage Protection Program "developed to help ease the anxiety of consumers who are concerned about potential job loss."

I had to read and re-read this. According to this announcement:

Provisions:

Through the Housing Affordability Fund Mortgage Protection Program, first-time home buyers who lose their jobs due to layoffs may be eligible to receive up to $1,500 per month, for six months, to help make their mortgage payments.

A qualified co-buyer also can participate in the program, and receive a monthly benefit of $750 per month for up to six months. Program benefits also include coverage for accidental disability and a $10,000 death benefit.

Criteria. To qualify, applicants must:

• Be a first-time home buyer - someone who has not owned a home in three or more years
• Open escrow April 2, 2009, or later, and close on or before Dec. 31, 2009
• Use a California REALTOR® in the transaction
• Purchase the property in California
• Be a W-2 employee (cannot be self-employed)

To apply for the program, home buyers must request an application for the H.A.F. Mortgage  Protection Program from their REALTOR®.

It's making the rounds! And I'm going to send this information to my buyers who are on the fence. This gives them a bit of cushion should they fall. And I'm going to add this to my webpage, and other places where it needs to be shared! This is the help we need.

Related links:

Realtors launch mortgage protection program

And while we're on this topic, here's a program from CalHFA: HomeOpeners, a Mortgage Protection Program

Last Sunday, I received an online inquiry about my listing in Martinez (CA) a new home, never been lived in. I responded immediately, and made an appointment to show the house that afternoon. The buyer was forward-thinking enough to send me a copy of his preapproval from QuickenLoans.

Thinking positively, I printed a blank purchase agreement form --- hoping that if the buyer liked it enough, he'll write an offer. He did! I rushed the contract to the sellers, and they accepted the next day. YEEHA!

MORE GOOD NEWS: the house qualifies for Tax Credit for New Home Purchase

Some of the provisions per the California Franchise Tax Board:

Requirements of the credit

This tax credit is available for qualified buyers who on or after March 1, 2009, and before March 1, 2010, purchase a qualified principal residence that has never been occupied. The buyer must reside in the new home for a minimum of two years immediately following the purchase date.

• The home must be a "qualified principal residence" as defined under California Revenue and Taxation Code Section 17059(b)(1). The home must:
  • Be a single-family residence, whether detached or attached.
  • Never have been previously occupied.
  • Be occupied by the taxpayer for a minimum of two years.
  • Be eligible for the property tax homeowner's exemption under California Revenue and Taxation Code Section 218.
• For over three successive taxable years, the total credit allocated among owners that occupy the home must not exceed $10,000. (Multiple qualified buyers that occupy the home will be allocated credit based on the amount paid and their percentage of ownership.)
• Any credit that reduced tax on a tax return must be repaid if the buyer does not occupy the home for at least two years immediately following the purchase date.
• FTB may request documentation to ensure buyers have complied with the requirements of the credit.

Qualified buyer:
A taxpayer who purchases a single-family residence, whether detached or attached, that has never been occupied, that is purchased to be the principal residence of the taxpayer for a minimum of two years, and that is eligible for the homeowner's exemption under California Revenue and Taxation Code Section 218.

Qualified Principal Residence/New Home:
A qualified principal residence means a single-family residence, whether detached or attached, that has never been occupied and is purchased to be the principal residence of the taxpayer for a minimum of two years and is eligible for the property tax homeowner's exemption.

• Types of residence: Any of the following can qualify if it is your principal residence and is subject to property tax, whether real or personal property: a single family residence, a condominium, a unit in a cooperative project, a houseboat, a manufactured home, or a mobile home.
• Owner-built property: A home constructed by an owner -taxpayer is not eligible for the New Home Credit because the home has not been "purchased."

For the complete details, go to: California Franchise Tax Board site on Tax Credits for New Home Purchase