The National Association of Realtors (NAR) says that
existing home sales increased nearly 10% from August to September, and that sales
activity is at its highest level since July 2007. September is the fifth
month to post a month-over-month gain out of the last six months. September’s
9.4% increase brings existing sales to a seasonally adjusted annual rate of
5.57 million units, up from 5.1m in August. September 2009’s rate is 9.2%
higher than the same month a year ago. July 2007’s rate was 5.73 million.
NAR’s chief economist Lawrence Yun said the increase in market movement is due
to low prices and mortgage rates and a surge in first-time homebuyers.
“Much of the momentum is from people responding to the first-time buyer tax
credit, which is freeing many sellers to make a trade and buy another
home.” But Yun warned that the market is still underperforming, and while
there are indications of price stabilization, there is a need for more buyers
in the market.
Hafa confirmed
Herb Allison, the assistant secretary for Financial
Stability, in testimony before the Congressional Oversight Panel (COP),
confirmed the US Treasury Department’s plans to develop a foreclosure
alternatives program with funds from the Troubled Asset Relief Program (TARP).
Under the Home Affordable Modification Program (HAMP), the Treasury allocates
capped incentives to servicers that modify qualifying loans on the verge of
foreclosure, but the new program will provide incentives for short sales and
deeds-in lieu of foreclosure when borrowers are unable or unwilling to complete
the HAMP process. “We are aware that there are many borrowers whose
modifications under HAMP will not be sufficient to keep them out of
foreclosure,” Allison said. The Foreclosure Alternatives Program can help
prevent foreclosures and minimize the damage on borrowers, financial
institutions and communities, Allison said. Laurie Maggiano, the chief of
the Homeowner Preservation Office at the Tre asury, released information
on the forthcoming initiative, which she called the Home Affordable Foreclosure
Alternatives (HAFA) program.
Debt ceiling approaching
By Friday, after another week of massive debt sales by
the Treasury Department, Roughly $211 billion will separate what the country
owes from its self-imposed credit limit. The $12.104 trillion debt
ceiling could be breached by the end of November, and it is also expected that
lawmakers will raise the ceiling, as they have done more than 90 times since
1940. If they don't, the government could be forced to shut down. But
that's not the worst that could happen -- the reason lawmakers will eventually
approve an increase is because without one ultimately the value of U.S. bonds
would sink, jeopardizing the portfolios of countries and investors around the
world who invest in U.S. debt.
But if they don't do it before the ceiling is reached,
"the U.S. Treasury must engage in some legerdemain to create additional
headroom," wrote Standard & Poor's managing director John
Chambers. And that option is bad all round, since the government will
have to draw from either government securities currently held in a 401(k)-type
plan for federal employees, a Civil Service Retirement and Disability Fund, or
by selling $16 billion worth of the government's dollar holdings in a special
currency stabilization fund.
Jobs looking better than atrocious
The National Association for Business Economics (NABE)
says the number of employers planning to hire workers over the next six months
exceeded the number expecting job cuts for the first time since the recession
began in December 2007. The survey of 78 NABE members also showed more
companies increased capital spending during the third quarter of 2009 than cut
spending. It was the first time that happened since October 2008. NABE
said job losses "appear to be slowly abating" with the percentage of
firms cutting payrolls falling to 31% in the quarter from 36%. The percentage
of firms adding jobs doubled from an all-time low of 6% to 12% in
October. Unemployment stands at a 26-year high of 9.8% in the United
States. Economists surveyed by Briefing.com expect another 175,000 jobs were
lost in October after employers shed 263,000 jobs in September.
Home prices up
According to Radar Logic’s Residential Property Index
(RPX) housing market report, home prices and home sales in 25 metropolitan
statistical areas (MSAs) increased 1% and 1.9%, respectively, from July to
August. The average price change from July to August for the past 10
years is 0.1%, but Radar Logic said the first-time homebuyer tax credit, which
nears expiration, is adding demand in the market. The real estate data and statistic
firm applied the same explanation to an increase in home sales volume, which
for the past 10 years averaged a 2.4% decline between July and August.
Radar Logic president and CEO Michael Feder said, “Pending sales and mortgage
applications for purchase suggest that strength in the RPX could continue for
the next few months, though given the expected seasonal decline in activity in
the fall, that strength could take the form of a modest price gain or a
milder-than-average price decline through the winter. The threat of pending
foreclosures to the housing market is, in our view, overstated and we
believe there is strong evidence that housing supply and demand are returning
to more normal levels.”
Now on to our real estate investing educational arena...
The Keys to Unlocking Hidden Homes & High Profit
Opportunities
Like most hidden treasures there is opportunity for huge
reward for those willing and able to persevere in short sale but you will need
a treasure map and key; otherwise, it’s easy to lose your way and spend years
stumbling about without anything to show at the end. Depending upon your area
and income, you probably have a “wish list” in mind when it comes to properties
you would like to purchase and the resulting profit to be made.
Unfortunately, the traditional real estate sales system
isn’t likely to help; not because they don’t have a process in place – most
brokers and agents have a system in place for buying and selling real estate –
but they don’t have the RIGHT process in place. Dealing with short sales is
different. Using the wrong tools or “map” will actually work against you rather
than in your favor.
Key #1 – Banish the idea of a smoothly run, perfect
lender application and approval process. While banks would love to have you believe
they are the picture of perfection, the sad truth is something a little less
complete chaos especially with months of back-logs, quotas, lost paper trails
and other problems that have plagued the industry. Don’t get discouraged – this
is pure opportunity for those that are prepared to make their jobs easier!
Key #2 – Finding the best homes is a numbers game…and
competitive. The MLS and other popular foreclosure websites are not the best
sources for finding short sale opportunities. Remember, only a small fraction
of potential short sale homes are actually listed…and those may not be the
prime properties. Keep in mind, 100% of short sale properties are “hidden” at
some point and time so learning how to find them before they become listed or
in the public awareness is a tremendous advantage.
Key #3 – Approval tracking systems are designed to spit
you out. Think of it like job hunting; the first round of applications and
resume’s are not reviewed in order to find the right candidate but rather to
weed out those that are clearly not the ‘right type’; likewise, short sale
offers are quickly reviewed for fit with the weak links rapidly removed from
the pending work load. Make sure your system works to stay on the top of the
list rather than be eliminated in round one.
Key #4 – Savvy short sale investors begin by
circumventing the “traps and pitfalls”. Right or wrong, lenders are just like
anyone else; they need to maximize time and efficiency so use a series of steps
in an attempt to eliminate poor candidates and discourage those that would
otherwise waste their time. Unfortunately, many novice short sale investors do
indeed become discouraged and quit long before ever having time to taste
success. Again, it’s important to find a system that works so you cut through
the path of obfuscation and instead go directly to the real route that gets
results.
Key #5 – Identify your suspects, prospects, opportunities
and targets. For novice short sale investors attempting to go it alone, it will
be important to track all your efforts for several months in order to determine
your close rate. For example, let’s assume you select a specific neighborhood
and identify 1000 “suspects” which you make initial contact with. Of those, 100
“prospects” respond (or 10% response rate). From those 100 prospects, you
identify 10 actual opportunities where the homeowner is properly position to
accept and offer and you have a reasonable expectation of closing on the deal.
From those 10 opportunities, you select 1-2 targets for acquisition.
Of course, results will vary tremendously depending upon the area, offer,
process used etc…but this provides exactly the information required to hit your
target short sale goals each month or quarter. Simply determine in advance how
many suspect you will start with in order to achieve the desired number of
acquisition targets then work the system you have in place.
