Wednesday, December 28, 2011

Why Use a Realtor?

Many people, in an effort to avoid paying commissions to a Realtor, go the For Sale By Owner route. While this may seem like an exciting challenge to homeowners, the reality can be a little bit darker. True, real estate is an exciting market to be in, but it is also one fraught with legal complications. Buying and selling can be quite stressful, especially if you don't know exactly what you are doing.

First of all, a Realtor is trained in all legal matters involved in the sale of real estate. Sometimes, these sales go smoothly, but sometimes, clauses, liens, and contingency contracts can make them very complicated. I recently heard about a couple that sold their own home. They entered into a contract with a couple that ended up having serious trouble getting financing. They ended up missing the opportunity for a quick sale while they waited in vain for the couple that made the original offer to get a mortgage loan. Once the potential buyers finally admitted defeat the couple were exhausted, and still had to deal with selling their home. It is hard to know when life is going to through you curve balls. The best thing to do is be prepared, and a Realtor comes not only trained in theoretical real estate cases, but, ideally, with a whole history of experiences from which to draw from. This makes them extremely helpful when negotiating the legal aspects of buying or selling.

Even if your home sale goes off without a hitch, all the paperwork involved can be overwhelming. What are you signing? Sometimes it's hard to tell when the language is full of legal and industry terms that the average person just isn't familiar with. A Realtor can translate these forms, helping you understand what each step in the transaction is all about.

A Realtor is connected to a whole network of other Realtors. This means that weather you are buying or selling, a Realtor can help. They have a network of other professionals to market your home to. They have clients waiting to buy homes, and colleagues with more clients, waiting to buy more homes. Some homes barely need to be marketed because there are buyers already waiting to purchase just that type of home.

When it does come time to market, a savvy Realtor has numerous tools at their disposal that the average citizen does not. Sure, there are a lot of web sites out there where real estate can be advertised, however only a Realtor can post a home on the Multiple Listing Service. Once a home is posted there, buyers from all over the world can see it, as can even more of those Realtors with clients waiting to buy.

Many people think that they can only find what they need themselves, but a good Realtor will be able to listen to your needs. A good Realtor knows the market, and knows the area, and may be able to suggest places you didn't even know existed. They are also familiar with local services, and can recommend lawyers, notaries, inspectors or even contractors that they personally know do good work.

Overall, an experienced Realtor may cost a little bit in commission, but the service they provide is worthwhile. If someone can help you not lose money, or save you a lot of time, aren't they worth what you paid them?
For more advice or for a referral to some excellent Realtors, feel free to contact me.

Wednesday, December 21, 2011

Mortgage Market Guide Vol. 9 Issue 51

Last Week in Review: Several reports brought good news to the Markets, plus there was news on inflation.

"Whistle while you work." Snow White. That's something more people have been able to do lately, as Initial Jobless Claims have now fallen below 400,000 - a level that historically is associated with an improving job market - for five out of the last six weeks. And that wasn't the only bit of good news the markets saw last week. Read on for details.

Not only was last week's Initial Jobless Claims reading of 366,000 the lowest level since May of 2008, there was a double dose of good news in the manufacturing sector, as both the Philadelphia Fed Index and the Empire State Index were both well above expectations. Normally, good economic news causes money to move out of Bonds and into Stocks as investors like to take advantage of gains...and this would typically hurt home loan rates, as they are tied to Mortgage Bonds.

However, the continued uncertainty out of Europe helped keep Bonds and home loan rates on an improving trend, as the US Dollar and US Bonds (including Mortgage Bonds, which home loan rates are based on) are benefiting from safe haven buying. Ultimately, Europe needs to provide a large financial backstop for their banks and sovereign debt in order to fix their problems longer-term. Until this happens, uncertainty should benefit the US Dollar and US Bonds, and keep home loan rates relatively low.

One factor that we can't ignore, though, is inflation. Despite the Fed stating again last week that inflation is moderating, core consumer level inflation has continued to inch higher every month. Also, last week's Producer Price Index showed that inflation at the wholesale level was slightly higher in November. Remember 
inflation is the arch enemy of Bonds and home loan rates, because if inflation rises, investors in Bonds demand a higher yield to offset the lost buying power inflation imposes on a fixed payment. And as home loan rates are tied to Mortgage Bonds, this would mean home loan rates move higher.
The bottom line is that while the uncertainty out of Europe should continue to help Bonds and home loan rates, both inflation and continued good economic reports here in the US could temper these improvements. With home loan rates still near historic lows, now remains a great time to purchase or refinance a home. Let me know if I can answer any questions at all for you or your clients. 

Forecast for the Week: The Bond Markets may be closing early Friday, but there will be plenty of reports on the housing market, inflation, and the state of the economy 

The Bond Markets will be closing early at 2:00 p.m. on Friday for the Christmas holiday, but the week will be busy before then.
  • Housing Starts and Building Permits (Tuesday), Existing Home Sales (Wednesday) and New Home Sales (Friday) for November will be reported.
  • Weekly Initial Jobless Claims will be delivered on Thursday, and the Markets will be looking to see if the reading remains under 400,000.
  • Also on Thursday, we'll see the Consumer Sentiment Index for December as well as the final reading on Third Quarter Gross Domestic Product (GDP) for 2011. The second reading came in at 2%, down from the first reading of 2.5%.
  • Finally, Friday the markets will see reports on Personal Income and Personal Spending along with the inflation indicator Core Personal Consumption Expenditure (PCE). Durable Goods will also be reported.
In addition to those reports, the National Association of Realtors (NAR) will announce downward revisions for Existing Home Sales over the past 5 years - and the revision is expected to be "meaningful."
Finally, the Treasury Department will sell a whopping $99 Billion in 2-, 5- and 7-year Notes on Monday, Tuesday, and Wednesday.

Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve, while strong economic news normally has the opposite result. 

 Want to give a gift that keeps on giving? Check out this great idea below.  

Give the Gift of Charity this Holiday Season!

It's a Snap with THE GOOD CARD® - a Gift Card for Charity
Network for Good has a fresh angle on gifting this holiday season: The Good Card® - a gift card for charity - is perfect for everyone on your list. Good Cards have a stored value that can be redeemed as a donation to any of more than 1.2 million charities based in the US. Good Cards can be distributed via email or physical mail, or can be private labeled to meet your brand needs. Learn more at Network For Good.

A gift card for charity is an ideal reward for employees or thank you gift for customers and vendors that links their passion for a cause to your company's brand. A new study by researchers from Harvard Business School, the University of British Columbia and the University of Liege that was recently highlighted in the Washington Post confirms that a bonus employees get to spend on others is more motivating than a bonus they get to spend on themselves. A Good Card recipient can redeem their gift card as a donation to any of more than a million nonprofits, an easy way for employees to share their personal rewards with others.

Good Card purchases, including fees, are tax-deductible to your company and are a creative way to spend funds earmarked for philanthropy. In addition, because Good Card purchases are charitable donations, they do not fall under the IRS gift limit or policies around corporate gifts with cash value. Network for Good's charity gift card program is turn-key, customizable and easy to implement - even at the last minute. The program is recommended for any company looking to put a special spin on their gift-giving this year. What's more, the person GIVING the gift (i.e., the card purchaser) gets the benefit of a tax advantage for charitable donations as well.

The Good Card is a creative and constructive way to honor partners and prospects, friends and neighbors during the holiday season and throughout the year. Visit Network For Good for more details. 

As your mortgage professional, I am sending you the MMG WEEKLY because I am committed to keeping you updated on the economic events that impact interest rates and how they may affect you.


Tuesday, December 20, 2011

New Bill Could Spell Trouble For Homebuyers!

The David Vitter bill could dramatically raise the FHA fees for our homebuyers. Become aware then become vocal to our leaders. Realtors, Mortgage Lenders, Appraisers, Title and Escrow officers, we need to become more active to stop more bills that could slow down, stop or even reverse any possible housing recovery.

Please share with others and post any comments or concerns you have below so we can become one voice.

Tuesday, December 13, 2011

Mortgage Market Guide Vol. 9 Issue 50

Last Week in Review: Good news on the economic report front, while the uncertainty continued out of Europe.

They say that no news is good news. And while that may be true, last week two economic reports were good news. Read on to learn what happened…and how home loan rates were impacted.

Last Thursday, Initial Jobless Claims come in at 381,000. Not only was this lower than expectations, the number was a nine-month low, signaling that the labor market is slowly improving. Then on Friday, Consumer Sentiment reached a six-month high, rising above expectations to 67.7. These aren't the only economic reports here in the US that have improved in recent weeks, which gives us reason for some optimism when it comes to our economy. But how the Eurodrama plays out may determine which way the fragile US economy goes next.

And it was a big week in Europe, with the European Central Bank (ECB) holding a policy meeting on Thursday and the two-day European Union Summit on Thursday and Friday. Before the Summit even began, rating firm Standard & Poor's put 15 of the 17-nation Euro currency bloc on a downgrade review, citing "continuing disagreements among European policy makers on how to tackle" the Euro debt crisis.

So what were the results of the EU Summit? Leaders agreed to a new, tighter "fiscal integration" across the Eurozone. This means that a new treaty will be drafted, setting guidelines such as annual budget deficits being limited to three percent, and failure to meet guidelines like these would automatically spark disciplinary procedures. As expected, Germany was the winner in this negotiation as they demanded a tighter fiscal union in
lieu of firing up the printing press and buying troubled sovereign debt.

So what does all of this mean for home loan rates here in the US? It's important to remember that when our economy is struggling and economic reports are less favorable, our Bond Market usually benefits as investors seek a safe haven for their money. And since home loan rates are tied to Mortgage Bonds, our home loan rates are sometimes at their best when our economy is struggling. In a way it makes times of economic struggle, good home loan rates can help kick start our economy in other areas.

Though our economic reports have been improving of late, our Bond markets - and therefore home loan rates - have continued to benefit from the uncertainty in Europe, as investors have been staying put in the relative safe haven of US Bonds. That's why now remains a great time to purchase or refinance a home, with home loan rates still near historic lows. Let me know if I can answer any questions at all for you or your clients.

Forecast for the Week: A full slate of economic reports is ahead, with news on inflation, manufacturing, retail sales, and more.

This week's calendar is packed full of data that will impact the capital markets as 2011 winds down.
  • The Retail Sales report for November will give the markets some insight as to how the holiday shopping season is treating retailers when it is reported on Tuesday.
  • Weekly Initial Jobless Claims will be delivered on Thursday and the markets will be looking to see if the number remains near last week's nine-month low.
  • Inflation will be reported on the wholesale level in the form of the Producer Price Index (PPI), which will be released on Thursday. That report will be followed by the Consumer Price Index (CPI) on Friday. Inflation has remained relatively low in the past year and the Federal Reserve feels that it will remain stable in the longer-term.
  • Manufacturing reports from the Empire State Index and the Philadelphia Fed Index will also garner attention when reported on Thursday.

In addition to those reports, the Fed will hold its FOMC meeting on Tuesday - and it's the last meeting for 2011. No change is expected to the benchmark Fed Funds Rate.

Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve, while strong economic news normally has the opposite result.

View: Still have some holiday shopping to do? Check out these three great ideas.

3 Easy Gift Ideas

Shopping for the people who are close to you isn't very difficult. But shopping for a business associate, a party host or hostess, or your boss can be more difficult. In those cases the following gift ideas can help.

The Gift in a Basket. While they may seem passé, gift baskets are the ultimate in unique gifts. One reason is that a gift basket can include almost anything. The trick to making it great as well as unique is to find out the recipient's favorite hobby - whether it's golf, cooking, jogging or whatever. Give the basket a personalized theme by filling it with a variety of inexpensive items relating to the hobby.

The Gift of Greenery. While freshly cut flowers make for a very nice host or hostess gift, potted plants can be even better. Every time the recipients look at their plant, they will most likely think of you.

The Gift of Relaxation. We all work hard. That's why the gift of relaxation is so appreciated. And a prepaid massage is a great way to go. Beneficiaries of this gift can experience incredible relaxation, while also allowing their overworked muscles to receive a little TLC. Better still, this gift works for both men and women. And, it can fit into almost any budget - depending on whether you want to purchase a massage for a half hour or an hour.

Happy holidays to you and yours this season. And remember to give yourself a gift by spending time with the ones you love.

What’s Your Share Of The Secret $7.7 Trillion Bailout?

It is very concerning when the Federal Reserve is sending over 7.7 Trillion in what equates to bailout money to the European Countries that have proven they cannot manage their money. The part that makes it unsettling is the fact this is done with out any over sight. The President and Congress either don't know about it or are choosing to ignore it. Which is worse? With the state our Country is in right now, do you think that money could help stimulate the economy here? It makes me think about what the flight attendants say, put the mask on yourself before your child. Why? Because if you pass out then you both with be in trouble. Makes you think. 7.7 Trillion. Now, the Fed can't just send everyone in the country the 7.7 Trillion but it makes you wonder if there could have been something better done with some funds invested in these other Countries. They claim it is our Mortgage backed securities that brought them down so if we fixed our foreclosure mess, wouldn't that help turn those struggling Countries debt problems around?

Please click on the video below to start raising some questions and prepare yourself for these up coming elections. Change needs to happen.

Tuesday, December 6, 2011

Mortgage Market Guide Vol. 9 Issue 49

Last Week in Review: Big Jobs news was reported, plus the uncertainty out of Europe continued.

Forecast for the Week: The economic calendar is light, which means news out of Europe could make it a volatile week in our markets.

View: There's a great holiday gift that doesn't cost a dime. Check out the details below.

Last Week in Review

It's been said that "slow and steady wins the race." And when it comes to the Jobs Report for November, it seems that the labor market continues to improve at a gradual pace. Read on for the details...and what they mean for home loan rates.

There was good news, as the headline number for job creations in November came in at 120,000, with 140,000 private jobs offsetting government losses. What's more, some upward revisions to the two previous readings added 72,000 more jobs than had been reported.

Perhaps even more important, Hourly Earnings grew by just 0.1% - a number that suggests no threat of wage-based inflation. Remember, inflation is the arch enemy of Bonds and home loan rates because when inflation rises, investors in Bonds demand a higher yield to offset the lost buying power inflation imposes on a fixed payment. And as home loan rates are tied to Mortgage Bonds, this would mean home loan rates move higher. So the Hourly Earnings number was good news for Bonds and home loan rates.

Catching the markets by surprise was a rather sharp decline in the unemployment rate to 8.6%, the lowest unemployment rate we've since March of 2009. While this is good news on the one hand, part of the decline stems from the fact that 315,000 people were removed from the workforce because they totally gave up looking for work. And with 13.3 million Americans still out of work, more improvement is certainly needed here.

Similarly, the labor participation rate (which is currently hovering at a 30-year low at 64) needs to move above 66or it will be difficult for the economy to grow fast enough to lower our budget deficit. In fact, last week Bond ratings firm Fitch issued a stern warning to the US, saying that our AAA rating will be in jeopardy if we don't soon do something to rein in our own ever-growing budget deficit.

It is good news that we're seeing some slow and steady improvement in the labor market…and coupling this with other recent positive economic signals, means we are not near a recession at the moment. But our economic health remains fragile, and any external shock from Europe could easily disrupt the economic improvement we are seeing.

The bottom line is that the uncertainty out of Europe - and the prospect of additional Mortgage Bond buying (QE3) from the Fed - should continue to support Bonds and home loan rates as they will benefit from investors looking for a safe haven for their money. However, it is also unlikely that Bonds and home loan rates will improve much further. Inflation, while not yet a problem, is still elevated…and if it continues to creep higher, this will limit any improvement home loan rates may see. With home loan rates still near historic lows, now remains a great time to purchase or refinance a home. Let me know if I can answer any questions at all for you or your clients.

Forecast for the Week

In the absence of data and with earnings season over, Stocks and Bonds will battle over investing dollars and trade off the geo-political headlines out of Europe.

  • The ISM Services Index will be reported on Monday. This report gives investors a gauge as to how the service sector is holding up in this economy. Individuals employed in this sector produce services rather than products. Service sector jobs provide a significant number of jobs in the US - including housekeeping, messenger services, tax preparation, nursing and teaching.
  • Weekly Initial Jobless Claims will be delivered on Thursday. This week's report comes after last week's report showed that claims rose above the 400,000 level for the first time in four weeks.
  • Consumer Sentiment will be delivered on Friday to cap off the week.

In addition to that news, here's something to keep an eye on in the weeks ahead. Stocks may be set for another jump. That's because of something that's become known as the "Santa Claus Rally." The Santa Claus Rally is usually a surge in Stocks in the week between Christmas and New Years.

Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve, while strong economic news normally has the opposite result.

Mortgage Market Guide View

Holiday Spending Without an Extra Cent

Time is a precious commodity, but it's even more treasured because it is fleeting. As soon as a day, an hour, or even a minute passes, it is gone forever.

While that might be stating the obvious, it's an important concept to reflect on during the often-hectic holiday season. So this holiday season - regardless of which holiday you celebrate or if you celebrate any - remember to focus on and spend time with the people around you, including family, friends, and even coworkers or clients.

When TV personality and kid expert Art Linkletter was asked about the idea of spending time with loved ones this is what he said:

"I once asked a five-year-old what he would take with him if he were going to Heaven. He replied, 'I would take my parents because I think that up there they would have more time with me'... nuff said."

The good news is, it's actually possible to slow time down in a way that seems to lengthen special events like a day of fishing with your child or a special dinner with a good friend. The key is to consciously honor the person and the event as you experience it. To be in the moment.

In the days and weeks ahead, remember to recognize the people you care about. You don't need to do or say anything specific, nor do you need to spend any money. You simply need to spend time with them. So consider setting aside two hours one day for coffee with a friend. Or if you have children, make special plans to take each one out individually for their own dinner. You can even set aside a short amount of time each day to call some of your special clients to see how they're doing and personally wish them a happy holiday. And when you do, avoid distractions like technology or worries about what else you need to do that day.

After all, once the moment passes, you can go back to that checklist of things to do. But you can never go back to that moment in time.

As your mortgage professional, I am committed to keeping you updated on the economic events that impact interest rates and how they may affect you.