TEAM EMPOWERMENT MORTGAGE CHATTER: March 8; Short Sales and Realtors; Homeownership: What Americans Think; Tips to Segment Your Online Audience; 5 Factors That Affect Home Values

“This is the time. This is the place. This is the vastness. Right here is paradise. Always. Always.” — Byron Katie: Speaker and author of self-inquiry



Four out of 10 California Realtors say the last short sale they handled didn’t close, and most are frustrated at how long it takes lenders to respond to offers and other inquiries.

The California Association of Realtors says a survey of 2,150 members highlights the lack of standardization among lenders, long approval timelines, and a reluctance on the part of lenders to approve short sales.

Asked in December whether their most recent short-sale transaction closed, 57 percent of California Realtors said it did, and 43 percent said it did not.

Once Realtors had submitted a short-sale agreement to lenders, 63 percent said it took more than 60 days to get a written response approving or disapproving the sale. Only 4 percent said they received a response in less than 14 days.

Nearly half (44 percent) said it took more than five business days to get a response to other types of inquiries about a short-sale property, with only 14 percent saying lenders responded within one day.

Some 64 percent of Realtors surveyed reported that they were “not satisfied” or “not at all satisfied” with how long it took to hear back from lenders. About one in five (22 percent) said they were “satisfied” or “extremely satisfied” with the timeliness of lenders’ responses.

The survey was delivered to 20,000 Realtors, and 94 percent of those who filled it out said they handled a short-sale listing or participated in a short sale in 2010.

The Obama administration has relaxed some requirements for short-sale incentives that the Treasury Department provides to borrowers and lenders through the Home Affordable Foreclosure Alternatives program (HAFA), and said it would hold lenders to stricter timelines for approving or rejecting transactions.

CAR President Beth Peerce wrote the Treasury Department and the heads of Fannie Mae and Freddie Mac in December, saying HAFA short-sale approvals “are not only few and far between, but also generally unworkable.”

When the Nevada Association of Realtors in August surveyed homeowners who’d been in foreclosure, 61 percent said they’d never heard of the HAFA program. While 10 percent of those surveyed said they’d used HAFA, only 2 percent said it did any good.

Loan servicers working for Fannie Mae and Freddie Mac signed off on 107,953 short sales in 2010, nearly double the 55,447 approved in 2009.

But the robo-signing controversy may have helped put a dent in the pace of short sales in the final three months of the year. Fannie and Freddie’s loan servicers signed off on 25,734 short sales during the fourth quarter of 2010, down nearly 13 percent from the previous quarter.


There is a growing number of people debating whether the government should continue its level of support for homeownership. Mortgage assistance is being pulled back and even the mortgage-tax-deduction is now up for debate. We want to look at how the people of this country view owning a home and the reasons they buy. Last week, Fannie Mae released the National Housing Survey. Here are the survey’s more interesting findings.

Belief in Homeownership

96% of all homeowners said homeownership has been a positive experience.

84% of Americans still believe that owning a home makes more sense than renting. Even 68% of renters believe owning makes more sense.

64% consider buying a home as a safe investment. Buying a home was considered safer than buying stocks by over three times the number of people (64% vs 17%).

2 in 3 Americans believe that lifestyle benefits of homeownership (65%) are superior to the financial benefits (32%).

Top Non-Financial Reasons to Buy a Home

Lifestyle Benefits: The broader security and lifestyle benefits of homeownership, such as providing a good and secure place for your family and children, where you have the control to make renovations and updates if you want, and in a place that’s in a community and location that you prefer.

It means having a good place to raise children and provide a good education

You have a physical structure where you and your family feel safe

It allows you to have more space for your family

It gives you control over what you do with your living space (renovations & updates)

It allows you to live in a nicer home

It allows you to live in a location that is closer to work, family, or friends

Top Financial Reasons to Buy a Home

Financial Benefits: The financial benefits of homeownership: its value as an investment (especially compared to paying rent), its value as a way to build up wealth for retirement or to pass on to your family, and the tax benefit.

Paying rent is not a good investment

Buying a home provides a good financial opportunity

Owning a home is a good way to build up wealth and pass it along to my family

It is a good retirement investment

Owning a home provides tax benefits

Owning a home gives me something I can borrow against if I need it

Bottom Line

The people of this country have always seen great value in owning their own home. They still do. We believe we should never underestimate the importance of homeownership as a crucial piece of the American Dream.


In the chatter of online marketing tools — buy this, get that, need to have, gotta have — the purpose is often unclear. Sure, I suppose having all the newest tools might make you seem … newer? Cooler? More on top of trends? Who knows.

What matters is how you reach customers and homebuyers. Another thing that matters: how you communicate with those groups. This week’s column is about some old technology that easily gets forgotten in the hype and buzz: e-mail.

E-mail has been the workhouse of the Internet for ages. It predates the Web and chat rooms and bulletin board systems. It is, in technological terms, older than dirt. And it’s a fundamental part of so many of the hip new technologies.

Want a Facebook account? Your e-mail address is your login. Want a Twitter account? They want your e-mail address. Want all the Google goodies? They want your current e-mail address and then they want you to switch to one of their e-mail addresses.

E-mail in real estate

How do real estate professionals use e-mail? Certainly it’s important to open that very important communication channel with customers and use it effectively.

Some property search sites require visitors to register in order to see the search results. What happens with that e-mail address?

Some real estate blogs let you subscribe to the posts via e-mail. What happens with those e-mail addresses?

What about e-mail addresses you gather in the course of your real world networking or even your online networking? What happens to those addresses?

And the biggie: past customers. I bet most real estate professionals have the e-mail addresses of their past customers. What happens to those?

Making sense of online audiences

One of the common issues I see when I talk with real estate professionals is the tendency to group sets of e-mail addresses based on channel: “This is my list of people from my blog and this is my list of people from Facebook and this is my list of people from an open house I did last weekend.”

This can lead to confusion for both the real estate professional (“What message should I be sending to this list?”) and the customer (“Why am I getting this open house announcement for a house that’s 1,000 miles away?”).

If you currently group your collection of e-mail addresses based on the channel or source where you gathered them, try this instead:

1. Make a group of e-mail addresses that contains just people who are interested in your geography, but not necessarily interested in real estate.

These people might be ready to buy a house, but probably not. Places where you got their e-mail address might be your community-news focused blog or a Facebook page that’s more about what happens in your town than about the real estate market.

This group might be composed of locals but it could just as easily contain people who are considering relocating to your area or people who vacation in your area.

This is your “general community” group. It’s a list to focus on sharing your community and brand-building activities.

2. Make another group of e-mail addresses that contains only people who have expressed interest in buying or selling property in your geography.

These people might have registered on your property search. Or maybe they’ve contacted you directly via your blog or other social media channels. Either way, the people on this list are all explicitly interested in real estate in a geography that you serve.

This group, again, could be composed of locals or people relocating or people who are interested in buying or selling vacation property.

This is your “real estate specific” group. It’s a list to focus on your service and results.

Consider how the people move from one list to the other

Your general community group will probably be bigger. There probably will be more people interested in your community in general than in buying real estate in your community.

You will send these people information about your town and likely make mention of the fact that you do real estate, and so on. If you hammer hard on real estate, people will leave this list.

If you include a simple method for them to get into a different list that focuses on real estate, then when they’re ready they will flow into your real estate-specific list.

Once someone moves into your real estate-specific list, hopefully you will work with them and help them buy or sell a house. Once that’s happened, the person really doesn’t need to be on the real estate-specific list. Provide an easy way for them to migrate back to the general community group.

If you focus on these two groups: people interested in your community and people interested in real estate in your community, then you can untangle the mess of communication. Remembering that someone may be a member of both at the same time and that people will naturally flow their attention from one group to the other is important.

Oh yeah, and stating the obvious: Don’t send e-mail to someone who didn’t specifically ask you to send them e-mail.


Location has long been touted as the most important variable affecting the value of residential real estate. Recently, the S&P/Case-Shiller Home Price Indices suggested that location is still a front-runner in terms of determining valuation.

In October 2010, four cities in the 10-city composite index registered price gains from the previous year: Los Angeles (3.3 percent), San Diego (3 percent), San Francisco (2.2 percent) and Washington, D.C. (3.7 percent). In many cities around the country, like Las Vegas and Detroit, home prices continue to decline.

The front-runners listed above are coastal port-of-entry cities. Three are in California. However, the inland cities of California — Fresno, Merced, Bakersfield and Riverside, to name a few — are not experiencing the same relatively good price performance. They are still plagued with a surplus of foreclosure inventory and high unemployment.

A large number of foreclosures and short sales in an area can bring the overall price of homes down. It’s difficult for appraisers to find nondistressed comparable sales to support higher prices because of the lack of conventional, nondistressed sales. However, if there are only a few distressed sales in an area, the distressed sales will probably not have much if any effect on the valuation of conventional sales.

Location within an area can also influence home values. Some market niches in an area are doing better than others. A niche need not be a physical location. It could be a price range. For example, well-priced listings in the $1 million to $1.4 million price range in Piedmont, Calif., have been selling relatively quickly, sometimes with more than one offer. The $3 million and above price range has not been doing as well.

HOUSE-HUNTING TIP: Today’s buyers are usually willing to pay more for homes that have a good “walk to” score. That is, they are within walking distance of shops, parks, cafes and transportation. Buyers with children often prefer a location close to schools. However, the value of a home might be diminished if it is located too close to a school — such as across the street.

Proximity to a major metropolitan area usually has a positive impact on prices, particularly when combined with a good public transportation. Employment opportunities in the area also boost home prices.

Supply and demand are up there with location in terms of impact on price. A surplus of unsold inventory gives buyers choice and a lack of a sense of urgency. Too little inventory relative to demand has the reverse effect. This usually puts an upward pressure on prices. Sellers in sought-after neighborhoods who put their homes on the market when there’s little for sale often sell for more than they anticipated.

Buyers take the condition of the property into account before they make an offer to purchase. A home with a lot of deferred maintenance might put off buyers altogether, particularly in the current market. If buyers make offers on homes that have been neglected, they will factor work that needs to be done into their price.

Deferred maintenance can be corrected. Incurable defects can put a bigger damper on price, particularly in a down market. An incurable defect, like being located next to a freeway or on a busy street, is something that can’t be corrected. You’ll have to live with it.

In a hot market, buyers often overlook these defects because prices are rising and buyers are more willing to make compromises. In a slow market, with no urgency to buy immediately, buyers are pickier. They take their time and buy when they find the right house.

THE CLOSING: Price accommodations need to be made to overcome buyers’ objections to incurable defects.

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