TEAM EMPOWERMENT MORTGAGE CHATTER: Nov 28; Rent or Buy? The Research Is In!!; Understanding The Impact of Shadow Inventory; 4 Tips to More Successful Negotiations; Freddie Expands REO Winter Sale to More States; ‘Green’ Holiday Gift Ideas for Your Clients

“A resourceful person can see opportunity when others only see obstacles.” – Garrett Gunderson: is an entrepreneur and author




Should individuals buy or rent? What is the evidence on this question? What is the present condition of the U.S. housing market? Relatively speaking, how affordable is housing today? Is the market turning around or are we headed for another dip? These and other questions are answered in the attached PowerPoint presentation.

This is recently shared information at the National Association of REALTORS® annual conference in Anaheim, CA. If you are a practitioner, the presentation should assist in your daily practice. If you are a consumer (buyer, seller, renter or landlord), the information contained within should prove to be very informative. If you are a policy maker, the presentation presents several findings that should influence current housing policy.

The goal is to create an aware and thinking market place. To download the presentation, go to



What is shadow inventory?

It is an inventory of houses that will come to market as a distressed properties at a discounted price. Each of the data companies define shadow inventory in slightly different ways. Standard & Poors defines it this way:

“We include in the shadow inventory all outstanding properties for which borrowers are 90 days or more delinquent on their mortgage payments, properties in foreclosure, and properties that are real estate owned (REO).

We also include 70% of the loans that “cured” from being 90 days delinquent (loans that once again became current) within the past 12 months because cured loans are more likely to re-default. Our calculation of the months to clear the shadow inventory is the ratio of the total volume of distressed loans to the six-month moving average of liquidations.

Is this inventory increasing?

The report shows that shadow inventory is decreasing in many parts of the country as banks are starting to release distressed properties to the market. From the report:

“We estimate that it will take 45 months to clear the national shadow inventory. This is seven months below our peak estimate but three months longer than our estimate a year ago. Twelve of the top 20 MSAs recorded declines in months-to-clear during the quarter, while eight reported increases.

What impact will shadow inventory have on real estate?

One of two things will happen:

  1. The inventory will continue to mount and be a hindrance to a housing recovery
  2. The inventory will be placed on the market and impact prices

As the report states:

“Despite the recent stability of our months-to-clear estimates and liquidation rates, these distressed loans continue to loom over the housing market and threaten to further depress home prices. Though fewer additional loans are currently defaulting, the overall volume of distressed loans remains huge. Low liquidation rates over the past two years allowed the shadow inventory to grow as distressed homes have remained tied up in foreclosure proceedings.

The shadow inventory will continue to jeopardize the housing market’s recovery until servicers are able to improve liquidation times. However, if and when that happens, an influx of homes will likely enter the market, increasing supply and driving prices down further.”

Bottom Line

We believe the inventory will come to market impacting prices now but bringing about a housing recovery in a much shorter period of time.



Negotiations are increasingly becoming a big part of a real estate agent’s job. Arthur Wylie, author of “Only the Crazy and Fearless Win BIG!: The Surprising Secrets to Success in Business and in Life,” offered some of the following basics to becoming a better dealmaker at Realty Times:

Know your value. Understand what your offer can do for the other party. You want them to understand the benefits of your offer, such as whether it may solve a problem, increase earning potential or make their life more convenient. “You want the other party to feel like you understand their needs and that you structure the agreement in their best interest too,” Wylie notes.

Articulate your ideas clearly. Once you’ve identified the value for both parties, be able to convey your vision of the offer in a way that the other party will want the same outcome. Rely on the “what’s in it for me” factor to present your position clearly.

Be humble, but firm. Respect the positions of the other party, regardless how bad of deal it is. “It’s important to be fair and honest about the negotiation and to keep your intentions pure,” Wylie notes. “At the same time, you must express genuine respect and appreciation for what the other parties, what they have done and who they are–even if they’re, well, jerks.”

Have some swagger. Wylie describes swagger as having “commanding and authoritative disposition and demeanor but without being pretentious or arrogant.” You want to be able to hint at what you’re capable of without coming across as bragging, he notes.



Six more states — now bringing the total to 33 — will participate in a winter sales promotion as Freddie Mac’s HomeSteps looks to unload its high REO inventory.

The six states added are Alaska, Kansas, Kentucky, Missouri, Oregon, and Washington. To view a complete list of all states participating in the winter promo as well as eligibility requirements, visit

“We’re expanding our winter promotion to focus additional incentives to encourage strong sales activity in our ‘cold weather’ states over the next several months.” HomeSteps executive Chris Bowden said in a statement.

HomeSteps’ Winter Sales Promotion for buyers includes paying up to 3 percent of the final sales price toward a buyer’s closing costs for offers received between Nov. 15 and Jan. 31, 2012. (To qualify, escrow must be closed on or before March 15, 2012.) Selling agents may also be eligible for a $1,000 selling bonus through the program.


Save your clients money on their utility bills by giving an energy-saving gift this holiday season. The South Florida Sun-Sentinel recently highlighted several Earth-friendly holiday gift ideas, including:


  • Faucet aerators and low-flow shower heads: Help your clients reduce how much water they use and the amount of energy required to heat it. You can find these for under $10 and $25.
  • Pressure cookers: Pressure cookers can use up to 70 percent less energy than a conventional pot and you can cook your food faster, according to Energy Smart.
  • Artistic energy-efficient light bulbs: Give those CFLs an upgraded look. Hugler, a London-based company, makes a CFL called Plumen that can be used without a lamp shade. CFLs can last up to 25 times longer than incandescent bulbs.
  • Ecobuttons: You can attach these to your computer so you can instantly put your computer on energy-saving mode with one press of a button. The ecobutton also displays how much energy and money was saved.
  • Solar lawn gadgets and art: Help your home owners decorate their lawns by using energy-efficient products, such as solar-powered water fountains, bird feeders, mosquito zappers, and lanterns.
  • Energy tester: Give your clients an energy tester, like the hand-held Kill A Watt energy meter for about $20, which will reveal what home and office appliances are the biggest energy wasters.


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