Archive for
March, 2009
Posted by Annalisa Burgos | March 27, 2009
I’m about halfway through my 75-hour New York state real estate licensing course, and each class gets more and more amusing. It’s like any other classroom setting — you’ve got the students who ask random questions (“why do we need to learn about property insurance?”), students who act like they know everything (“I’m a property manager so I already knew that”), and students who just observe and take it all in (that’s me).
Literally anyone can get a real estate license. All you need is to be at least 18 years old, pay about 500 bucks for 75 hours of training, and pass a school exam and a state exam. No high school or college education required. No hundreds of thousands of dollars in tuition fees. No experience necessary. All you need is the dedication to get deals closed.
The housing boom may be over, but you can’t tell with how many people are clamoring to be real estate agents. And from talking to some of these people, many are looking to capitalize on one of the hottest buying markets in history. Obviously, this is the best time to be an industry insider.
When I lived in Knoxville, my husband and I wanted to buy a house and went house hunting several times a week. Being investors, we were often surprised to find that many of the homes on the market were owned by real estate agents. It seemed like the agents were buying properties from sellers, making superficial fixes and then putting them on the market at a higher price to make a profit, in one word — flipping.
In a recent class, the teacher said flat out, “This business is not about showing houses. It’s about investing in properties and building your wealth. That’s where the real money is.” And true enough, many of the students agreed that that’s why they’re getting their licenses – to get first dibs on bargains and position them for personal gain.
As we continued to talk about things like ethics and good business practices, I’m concerned about the ethical implications. Personally, I think there’s nothing wrong with agents who are in the biz to flip houses. Heck, if I find a bargain, I may do it as well. But where it gets murky is when an agent’s true intentions are hidden behind promises to be true consumer advocates. Like when a seller says he wants X amount for the house but the agent knows it’s worth more and buys it so he can flip it himself. Or when a buyer is looking at a house and the agent tells him it’s a great buy, though he knows it’s a flipped property. Agents who don’t make their intentions clear are at risk when the public gets wise.
The best way for consumers to protect themselves is to arm themselves with their own research and information. That way, they can tell the difference between a true agent and someone who’s just in for the flip. Ask friends and family for referrals and interview at least three agents before choosing one. Get to know the buying process with FrontDoor’s First Time Home Buyer’s Guide, which gives easy-to-follow, step-by-step information from evaluating your finances to closing escrow. We also offer tools to research homes for sale, cities and neighborhoods, recent sales prices, how much mortgage you can afford and more. It’s all incredibly empowering!
With all this information, today’s smart consumer wants a trustworthy, dedicated real estate agent. Even if an agent has his/her own investments on the side, quality customer service is still the benchmark of this profession.
Posted by Annalisa Burgos | March 26, 2009
Now that Twitter is mainstream — with politicians and former naysayers now regularly tweeting (moi, for one) — every industry is trying to figure out how to use this tool to its advantage.
The news industry, for one, is finding it very useful when reporting and finding sources, especially during breaking news events like the terrorist attacks in Mumbai.
Real estate, meanwhile, is still trying to figure it out. Most real estate professionals have a Web site (maybe with a blog) and a Facebook profile, but many will tell you that they are too busy to Twitter or don’t see the value in doing so. After all, if you Twitter four or five times a day about yourself or your brand, don’t you risk diluting your brand, or even worse, turn off people with your constant self-praise?
Yes, and that’s the problem. Companies — real estate and otherwise — shouldn’t be thinking of social media networks like Facebook, LinkedIn and Twitter as straight-up advertising and marketing vehicles, where you plaster your name and expect clients to flock to you. Most people are like me — they’re not going to scour Facebook for a Realtor. But I may tell a friend of a friend that I’m looking to buy a house, and if you (the Realtor) have a relationship with that friend, I may get referred to you.
Think of it this way — you’re at a networking event and you meet that guy who is pushing his business card in your face as soon as you say hello. No one likes that guy. On the other hand, you’re more likely to reconnect with the guy who explained the ebb and flow of mortgage rates to you.
So think broad reach and long-term — think of these social networks as bridges to a ginormous audience, bridges that never existed before, but have the huge potential of helping you build relationships. They are called “social networking” services, not “marketing” services, after all.
Millions of people are on these networks having genuine real estate conversations. Whether it’s a person complaining about the buying process or a seller trying to hawk his home that’s been on the market for 8 months, people are talking about real estate.
And some agents are generating leads by joining these conversations and sharing their expertise, without the in-your-face marketing tactics. Find out how they did it in FrontDoor’s article “Twitter Your House and Friend a Realtor on Facebook.”
Speaking of social networking, you can follow FrontDoor.com on Twitter at www.twitter.com/HGTVFrontDoor and join our fans on Facebook at www.facebook.com/pages/FrontDoorcom/18669721826.
Posted by Annalisa Burgos | March 24, 2009
It looks like it’ll be a promising Spring for real estate. Buyers are back in the market, drawn to falling home prices, low interest rates, potential bargains in the form of foreclosed homes and short sales, and incentives like the $8,000 first time buyer tax credit. In fact, first-time buyers bought half of the homes sold in February, says the National Association of Realtors.
Of the existing homes sold in February, distressed sales — which involve a foreclosure property or a homeowner doing a short sale — accounted for 40 percent to 45 percent, pushing overall activity up 5.1 percent but dragging median home price down more than 15 percent, according to NAR. Sales are still down 5 percent year-over-year.
Distressed homes typically sell for 20 percent below normal market price, so it’s not surprising to see first-timers drawn to these properties, especially if they are move-in ready or require minimal repairs.
If you’re one of the many bargain hunters out there, check out FrontDoor’s Foreclosure Guide for tips and advice on buying a distressed property. Did you know foreclosure homes sold at auction are typically sold “as-is” and require a 10 percent to 20 percent cash deposit upfront?
The bad news is that sellers are competing with these heavily discounted properties. So even if you have a well-maintained property, you may have a hard time selling it, even if it’s priced reasonably.
Market value is just that — value dictated by the market, i.e. what a buyer is willing to pay for your home. It’s not what you paid for your home. It’s not what you paid for your home and all the wonderful home improvements you made.
The reality is that if your home is competiting against foreclosures and short sales, finding a buyer may end up coming down to price.
Posted by Annalisa Burgos | March 20, 2009
Happy first day of Spring! In celebration of the traditional kickoff to the busiest season for real estate (and this one will definitely be busy, what with interest rates as low as 4.3 percent!), FrontDoor.com is bringing you helpful tips to make the most of your homebuying and selling experience.
Sellers, we know this may be a challenging market, but the good news is that you have the potential to showcase your home to a large number of buyers who are out in force trying to take advantage of low interest rates. If your home is in great shape and priced competitively, you’ll have every buyer’s attention. You may even spark a bidding war. Get your home ready with our Staging Tips for Spring and be sure to visit FrontDoor’s Home Selling Guide for more tips and advice on selling in a buyer’s market.
Buyers, you’re in a wonderful position! There are great deals out there. But before you start looking for houses, call at least three lenders, compare rates and terms, and get a preapproval. It’ll help you determine how much house you can afford. Check out our Home Finance Guide for more tips and advice on shopping for a loan.
If you’ve never owned a home, check out FrontDoor’s First Time Homebuyer’s Guide. We’ve broken down the entire process in simple terms, complete with checklists and worksheets, so you’ll know exactly to expect. Did you know there are cities suited for first time homebuyers?
And buyers and sellers, consider going green in honor of spring. FrontDoor’s Green Real Estate Guide is chocked full of information on how to make affordable green updates and how to find a “green” home.
Happy house hunting and selling!
Posted by Annalisa Burgos | March 18, 2009
After months of doom and gloom headlines, the housing market finally had a positive one: “Housing Starts Leap a Surprising 22.2% in February.” That’s the biggest gain in nearly two decades. Stocks of homebuilders Toll Brothers and Pulte Homes and home improvement retailer Home Depot shot up on the news, leading a nice market rally. And news outlets even started using the word everyone wants to hear — recovery.
But hold on. This”positive” housing news isn’t exactly the miracle turnaround we’re waiting for. Dig deeper and you’ll find that the new home construction market is simply stabilizing after a 17% plunge in January and three straight months of double digit drops. Housing starts were at a record low in January, so this recent surge is just the market gaining back some ground. Even the National Association of Home Builders downplayed the news in their press release:
“Nationwide housing starts turned upward for the first time in eight months this February, posting a 22.2 percent gain that was due primarily to a big bump on the often-volatile multifamily side, according to numbers released from the U.S. Commerce Department today.
“While welcome news, this gain only reflects a modest rebound from January, which was the worst month in history for new-home production,” said National Association of Home Builders (NAHB) Chief Economist David Crowe. “The majority of the gain was due to characteristic volatility on the multifamily side, while single-family housing starts were up just over one percent for the month.””
Year over year, new home starts are down 47%, so the industry has quite a long way to go before we can even think “recovery.” Market analysts and economists expect the housing market to continue to hurt through next year, with people losing their jobs, foreclosures flooding the market and inventory growing.
The good news is that homebuyers can great deals on the new homes already on the market. Builders are offering enticing financial incentives and upgrades to unload their excess inventory.
Posted by Annalisa Burgos | March 14, 2009
I never would have dreamed of buying real estate in Manhattan. But somehow in today’s market, I can actually afford it. And I’m not talking about million-dollar properties. I’m talking 1-bedrooms going for as little as 350K. What!?! Granted these are tiny co-ops/condos relative to the rest of the country, but still! When I first moved here in 2003, buying in “the city” was totally unheard of. I was resigned to life as a renter.
The tricky thing though is not finding a place, but finding a lender who’ll give me the loan terms I want. I know the process, but in today’s market, things are constantly changing. One minute, the Bank of America rep is saying I need to put 10 percent down, the next minute, I have to put 15 percent down. Mortgage officers are still trying to figure things out.
The great thing is you can educate yourself as much as you can. FrontDoor’s Home Finance and Home Value Guide features tips and advice on everything from getting a loan to refinancing to buying investment properties. See the 5 strongest housing markets in the country and find out which remodeling projects actually add value to your home.
Buying in Manhattan is different from other markets mainly because buyers at my level are typically limited to cooperative housing. Unlike condos, in a co-op, you’re buying a share of the building, which is legally owned by a corporation. Most co-ops require approval from a board before you can buy in the building. You also are required to pay monthly maintenance fees that cover the building’s mortgage payment, property taxes, a property manager and any amenities. Learn more about the process in FrontDoor’s Co-Op Buying Guide.
So this weekend, I’m hitting the pavement and looking for a Manhattan apartment. Who knew?!
Posted by Annalisa Burgos | March 12, 2009
With foreclosures instantly at the top of the news again, we’ve pulled together tips and tools for homeowners struggling with their mortgages. For one, contact your lender immediately and ask about your options, whether it’s a refinance or loan modification.
Also, investors looking for opportunities should check out our 10 steps to buying a foreclosure. Did you know properties can be in one of three stages of foreclosure? Find out which one is right for you. Plus, search for available foreclosures on FrontDoor.com.
According to RealtyTrac, the foreclosure picture remains bleak, with February foreclosure filings in the U.S. up 30 percent year-over-year. Among the top 10 hardest hit metro areas, in order: Las Vegas, Cape Coral-Fort Myers, Stockton, Modesto, Merced, Riverside-San Bernardino, Bakersfield, Reno-Sparks, Phoenix and Vallejo-Fairfield. The news comes amid President Obama’s $75 billion dollar efforts to keep struggling homeowners from losing their homes.
FrontDoor Insider Rick Sharga of RealtyTrac predicts even more challenging times this year. Several analysts and economists have said that Obama’s refinancing and loan modification programs aren’t enough to buoy an economy plagued with an 8.1 percent unemployment rate and lagging consumer confidence.
And with foreclosures sure to make headlines again, FrontDoor is working on a new foreclosure resource center, with more helpful guides and tools. Stay tuned!
Posted by Annalisa Burgos | March 10, 2009
Barbie's Malibu home oozes contemporary style.
So Barbie just turned 50 (and looks fabulous might I add). Mattel went all out for its blond bombshell — renting out a real 3,500-square-foot Malibu mansion to pose as her dream home. (I wonder what the going rent rate is for the neighborhood.) It’s on a cliff overlooking the Pacific Ocean. And of course, it’s decked out in pink by interior decorator Jonathan Adler.
Some of the unique features: A chandelier made out of 30 blond wigs, an Andy Warhol portrait of Barbie, and a wall mirror of 64 dolls. Apparently, she loves to make cupcakes, since she’s got all the ingredients ready in her kitchen.
By the looks of it, her house seems to be ultra contemporary, with lots of windows to blend seamlessly with its breathtaking environment.
But contemporary houses aren’t for everyone. What style is right for you? Find out with FrontDoor’s Home Styles guide! Learn about 18 unique styles and share your style with our online community.
Inside, the design is undoubtedly over the top. In the real world, in this market, she probably wouldn’t be able to sell the home as is, since the style is so taste-specific that it may put off potential buyers in the future. (The blond wig chandelier in the living room freaks me out.) But then again, someone buying Barbie’s home would be buying it as a fan, not necessary for the house.
Should Barbie sell her home, her living room is too taste-specific for most buyers.
If anything, it would be cool just to live near her. And if you can’t afford to live in Malibu, there are other
great neighborhoods in L.A.
Posted by Annalisa Burgos | March 6, 2009
A lot of news this week focused on Obama’s $75 billion foreclosure prevention plan, which involves refinancing Fannie Mae and Freddie Mac loans and setting an industry-wide standard for loan modifications.
But while it may be a challenging time for many homeowners and sellers, it’s a great time to be a buyer, especially one with a strong credit score.
If you’re currently renting, now may be the right time to buy. Consider the advantages of homeownership: not only are home prices falling and interest rates at a historic low, you can benefit from huge tax breaks.
In this month’s Top 10 feature (www.frontdoor.com/top10), we break down the 10 things home buyers, sellers and owners need to know about taxes. New this year: If you’re a first-time homebuyer who closes on a home in 2009, the fed will give you a $8,000 tax credit on your next tax return. And there are more perks to look forward to…
So hit the pavement this weekend, explore a neighborhood you may want to live in and check out some open houses. Browse homes for sale online. It doesn’t cost anything to look. And who knows? You may find your dream home.
Posted by Annalisa Burgos | March 4, 2009
Starting today, homeowners can apply for a loan modification with lenders under Obama’s $75 billion refinance and mortgage modification program. The Treasury Department says the “Making Home Affordable” program will help up to 9 million homeowners avoid foreclosure.
Lenders will receive financial incentives to modify mortgages of at-risk borrowers who have not yet missed payments and to remove second liens on loans. You can modify through Dec. 31, 2012.
Eligibility:
* Loans originated on or before Jan. 1, 2009
* First-lien loans on owner-occupied properties with unpaid balance up to $729,750. No investor-owned, vacant or condemned properties.
* Borrowers must show a recent tax return and two pay stubs and sign an affidavit of financial hardship.
The plan sets industry-wide standards for modifying a home loan, including using a “net present value” (NPV) test to determine the benefit of a loan modification. This test includes ways to determine property value, assume home price appreciation and estimate foreclosure costs.
Under the plan, a borrower’s monthly payment must be reduced to no more than 31 percent of gross monthly income.
To do this, the lender must go through a series of steps:
1) reduce the interest rate, at a floor of 2 percent
2) extend the life of the loan for a maximum of 40 years
3) forbear principal (i.e. offer interest-free forbearance on part of the principal)
Check with your lender to see if you qualify.
And don’t forget that borrowers with mortgages held by Fannie Mae and Freddie Mac are also eligible to refinance through June 2010.
Stay tuned for more exclusive real estate news, only on FrontDoor Unlocked!
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