Unfortunately, the real cause of this lady’s mortgage crisis is the unspoken truth

http://www.nytimes.com/2008/02/12/business/12credit.html?_r=1&scp=1&sq=mortgage+crisis&st=nyt&oref=slogin

The lady in the video associated with the link above said several things that I believe is the unspoken truth. When she first took out a loan of $385,000 with a 3% down payment on a pay option arm program, she was allowed to pay less than the required prinicipal and interest payment for a a two year period.  By her own admission, she had a monthly affordability of $2500, which was the amount she paid on the option. If $2500.00 is what she could afford, she should have been looking at homes in the $325,000 (maybe more or less-depending on taxes).

The unspoke truth is that the pay option program is meant for someone who maybe receives a annual bonus; a short term investor, or someone who expects their income to significantly increase over a few years.

It is not a bad program. It was just given to the wrong person. Now, whether or not she was aware of the implications of the program is a different story.  

It’s Confirmed! The Fed Cuts Rates. . .What does it mean to you?

Today’s rate cut marked the fifth time that the Fed has cut the funds rate since it started with a half-point cut on Sept. 18 in response to the severe credit crisis which hit global markets in August. In plain English, it’s getting cheaper to borrow money. If I was a buyer in this market, I would be jumping for joy. I can get a deal on a house NOW and pay less money monthly to live it. I was a buyer in 2006 and I couldn’t afford a 2 bedroom condo. It was priced at $260,000, which was way above my price range. Here we are: a year and a half later and the same condo is now asking $230,000, ergo my price range.  I don’t reject buying. Even if I would have gone to up $230,000, I would have over extended myself, especially since my fiance lost he’s job the second day of home-ownership. So, we were conservative and brought what we needed.

We’ve experienced tax benefits and peace of mine of having a place of our own to call home. That’s what home buying is all about. Finding somewhere to call home.  

If your home hasn’t sold, what should you do?

I get this question a million times a day. . .ok maybe not a million times, but sure feels like it. If your home is on the market, with a professional realtor who is trying to sell it to everyone and their mother, the obvious thing to do is adjust the price. Sometimes staging or depersonalizing the home might help, but in this market, the buyers are motivated by deals.

In other words, they have to see the value in the property. The property may have been home to you, but for buyers they see it as a product initially and they have to be able to see themselves living there before they consider making an offer. Absent of a deal, the market will not move and that can be bad for everyone. The housing market makes the economy go round and round and the sellers have the power to make it happen.

I know what you’re thinking. I can wait. Well, yes you can. That wait might be longer than your intended goal. If you are a seller and a buyer at the same time in this maket, just think of your difference in profit as an exchange. You might lose out on the sale side of your home, but you’ll make up for it on the purchase of your next home, which could mean more to now now that its cheaper to borrow many to buy.

 Keep a eye out for the Feds and wait to see what they do with interests rates.

To all the New Agents Just Getting Started.

Let’s face facts: the real estate market is stabilizing (not declining-stabilizing) and interests’ rates aren’t exactly climbing up the wahoo. So, what does that means for you? People are still going to buy houses. You just have to work smarter not harder. In fact, if you’re a realtor in this market and you haven’t been in the business for more than 3 years, let me tell you how it’s going to be for the next 2-3 years. This is my advice for newer associates and seasoned agents, who now have to sell houses.

First: There are 4 things that keep the market going:Birth, Marriage, Divorce and Death; as long as these things continue to happen, you should be fine.

Second: You have inventory to sell houses. If you just got into the business, you gotta act as if. This means find one house that shows well and if it’s reasonably priced to sell, sit at it every other Sunday. Rotate houses until you get your own listing. Conducting an open house is one great way to network. You have the product and interested parties, whether they are 9 months or 9 days way from buying, they will follow the balloons and stop by especially if the house is new to the market.

Now that you have the client in the door, you might say to yourself, “now what?” Well, keeping with the act as if mentality, introduce yourself as the neighborhood specialist; get their accurate contact information. Find out what motivated them to come in and find some reason to call them the very next day. You have to respond to them at least 4 times within 1 month to establish buyer loyalty. Don’t forget that buyers are not the only people that come through open houses. You might have a noisy neighborhood who is thinking about selling in a couple of months, or a pissed off seller, who’s agent hasn’t contacted them in three weeks. The opportunities are endless. You just have to create an atmosphere of urgency. I’ll talk about that later.

Third: Accept that not everyone is going to turn into a client.

I’m a strong believer that open houses can jump start your career. It did for me and when I was acting as if, my leads had no idea I had gotten my real estate license two weeks prior to being in front of them telling them I was the neighborhood specialist. And after a couple of years in the business, guess what? I am the neighborhood specialist. I’ve seen the same house sell twice in my short career as an agent. I can tell them about the wall paper the previous owners had or the red carpet that they apparently had on sale in 1981.

Even still, if you have 7 guests at your open house, one person or couple should want to work with you. Buyers are not only shopping open houses. They’re shopping agents and they trying to find someone they trust and someone they won’t kill in the car. I’ve ridden around with couples I didn’t care for and the car rides were painful. This business is time consuming. If you’re going to spend your time with people, at least do it with people that you like. With the same breath, I realize that not everyone likes me. People buy People before they buy product or service. If the buyer can’t see the value of having you as their agent, walk away and work on another lead.

Fourth: You have to create urgency at the first open house. If it’s your first listing, you should naturally scream off the top of your lungs that you have a property to sell and you should tell everyone you know even if they’re not buyers. Call everyone in the neighborhood. Ask them if they know someone that wants to move in. Tell them there’s no better way to choose a neighbor other than recommending one. Ask them to come to the open house and give feedback on price and condition. Remember you’re there to network. You might be thinking that I’m forgetting the obvious reason why you are even at the house. Yes, sell it to the serious buyers. Have a contract out on the dinning room table or stable it to the wall (not literally). Give out those calendars with your picture on it. Some buyers go home and stick it on the refrigerator and call you 4-6 months down the road because you’ve been in contact with them once or twice within that 4-6 month period.

Fifth:

Get some type of contact management system in place. Document everyone you meet; names, addresses and phone numbers. These people become your network and will give you referrals i.e. business you didn’t have to prospect for.

Don’t turn into a know it all. If you have some success in this business, pat yourself on the back. A large percentage of the people that become real estate agents leave within the first two years not because they can’t cut it, but because they don’t want to cut it anymore. It’s hard to manage people when your mortgage or car payment is on the line. Just follow the golden rule no matter how large that commission check might be. The real estate Gods are always watching and Karma is a B14C8.

Seventh bit of advice and the most important one: Don’t count the dollars. Count the success stories and if at all possible, stir clear of grumpy agents. They have a funny way of bringing you down.

I hope this helps. Look for more stuff on real estate from me. I find myself with more time on my hands now that I’m home all the time . . . just kidding!

Lessons I have learned: Investment Education

There are many different types of real estate investors. This section is devoted to individuals who want to become a small-midsized investors of 2-4 residential unit properties. These snap shots will be about lessons that I have learned from being in the business and from investing in real estate education. I encourage you to post your comments if the information I have provided is useful to you or if my segments need clarification. Thank you for viewing! 

The Invisible Hand Is Working

What happens in January, affects all of 2008. There are two distinct, yet equally important events that are taking place now that will regenerate the housing market in 2008. If and when President Bush resets, bails out, backs, or shows support for homeowners with ARM’s, fewer homes will go on the market. When president Bush makes home ownership affordable again for people on the brink of foreclosure, people will decide not to sell, which means current sellers will have less competition; less short sales.

Whether or not this is the infamous invisible hand at work is debatable. The reality of is all is that the market is correcting itself. Traditionally, less of something means prices will go back up again (we hope, but they will more than like appreciate at a crawl). Ironically, or I should say fortunately, interest rates are not raising as speculated and are in fact about the same as what they were 6-12 months ago. Two weeks ago, they fell slightly, but are now edging up. Lower rates are what motivates buyers and the lower the rate, the more house a buyer can afford.

It’s going to be a whirlwind of a first quarter; reminiscent of 2004. There are plenty of good deals to be had (since some sellers have realized that to sell in this market, they have to price it right) and now the buyers know it. There’s no better time for a buyer to be in the market then now, especially when home builders are giving away free upgrades, paying your closing cost, waiving your maintenance fees.

Grab hold of your calendars and start planning away. It doesn’t matter who you are in the market: buyer, seller, Realtor, mortgagor, real estate attorney, home inspector, etc. The world will go on as planned and people will pay their taxes. All is good in the world of house hunting and selling.  

Do Adults Ever Really Grow Up? The Workplace Is the Extended Classroom

Folks, let me warn you ahead of time; even though I have many different types of work experiences, I’ve done two things with my life since college: teach 5 and 7th grade and sell houses. So I relate back to these two experiences often because they have shaped me into the person that I am today.

As I was in the office today, checking my email or more like processing it, and I received at least 6 forwards with seasonal jokes and cartoon captions. Now, they were funny and even though I knew these emails had nothing to do with business, I couldn’t help but open them.

As I was reading and laughing, I found myself thinking about how much time is wasted throughout my business day skimming these hi-tech notes from my classmates, huh, excuse me, co-workers. The difference now is that it’s easier to hide these notes; you don’t have to ripe it up into little pieces or stick the note to the underside of a desk or chair with the gum you weren’t suppose to be chewing. As adults, we have the luxury of hitting delete or minimizing the window as our boss or nosey co-worker passes (you know the type: one that’s just itching to catch you doing something wrong).

Honest to God. I must spend at least an hour a day going through these emails and it’s a bit like the forbidden fruit syndrome.  ”Should I, or shouldn’t I?”

American workers, on average, spend 45 hours a week at work, but describe 16 of those hours as “unproductive,” according to a study by Microsoft. America Online and Salary.com, in turn, determined that workers actually work a total of three days a week, wasting the other two.

Time on task was a category I rated my 5 and 7th graders. If I had to rate myself, I would give me a satisfactory. I meet my quota on a regular basis and make up the hours some way, some how, which leads me to another topic. What’s the incentive these days for doing the right thing, other than the income that I am already promised through my contract with my employer?

The workplace is slowly, but surely becoming another battleground.  More and more Americans are putting in longer hours (70 hours per week is becoming the norm) and they’re taking work home with them, which could quite possibly be a direct result of procrastinating on the job.  I’m one of the 18 percenters who takes calls and responds to emails in the bathroom; fortunately, I’m never in there long enough to make it a habit, but I did drop my phone in the toilet once, which is a whole other soapbox session. Needless to say, what’s happening in corporate America is influencing the our overall quality of life.

Businesses that do not give enough recess or extrinsically motivate it’s employees, have a lot to answer for and ironically, as a teacher, I was against extrinsic motivation. I felt that my students should naturally want to do the right thing: keep on task; learn; do their homework. But the reality is that we all need a little materialistic push to keep on track no matter what stage in life we are at. What motivates us at 12 years old continues to motivate us at 30 and so on. So, if you’re employer was like me and forgot to do something nice, dust off that old suggestion box and start typing. If you don’t have a suggestion box, make one.  If you don’t ask, you will not receive.

Stats in the above post were publish in the NY Times Life Work’s Column by Lisa Belkin entitled: Time Wasted? Perhaps It’s Well Spent. http://www.nytimes.com/2007/05/31/fashion/31work.html 

Infomercial Backlash!

As is often the case, I have trouble sleeping at night. So, I do what every other person does at 1:30 a.m. I flip through channels and long and behold, I came across an infomercial about eliminating debt.

The product: A book by Kevin Trudeau. “Debt Cures They Don’t Want You To Know About.” Apparently, it’s a tell all type of read disclosing secrets credit card companies and banks don’t want you to know about, etc. So, I’m motivated to call after about 10 minutes of watching the program. The author of the book was animated and believable. I was thinking, “A book for $29.99; not a bad price. I can spend that on one outing.” So, I get on the line with the salesperson; she takes my contact info; billing address, blah, blah, blah, then SMACK. I get bombarded with other offers: Try this for free; apply for this; do you want to purchase other books as gifts for half the costs, free shipping, etc. 

I got so infuriated with the call, that I couldn’t complete the order. Here is a guy preaching that people can get out of debt if they know “the secrets” companies don’t want you to know about and yet his sales people are plugging away at more ways for people to spend money. Typical pitch: “Try it for free and cancel in 30 days.” Oftentimes, people are too busy to make that follow-up call or simply forget, and get charged for a service or product that they didn’t even have a chance to use or like for that matter, which is a scam within itself. “They” bank on you forgetting to following up. Hey Kevin, is this one of your secret? Case in point: Avoid specials you are not interested in, even if they sound good.

I did like one of the offers. Apparently, you could buy other copies of the book at like $11 you get free shipping. The beauty of it is that I suspect people are going ahead and getting the other books because I see a lot of Debt Cures books for sale on ebay for more than the original price. Hmm, that’s one way to cure debt.  

The Perfect Market

I know everyone knows about the perfect storm, which is a series of simultaneous events which, taken individually, would be far less powerful than the result of their chance combination. As a professional in the real estate industry, I’m calling all buyers and letting them know that this is the perfect market.

There’s been a substantial amount of bad press for the real estate industry in the news, online and just about any place where a soapbox could be positioned. I’m not down playing the current state of affairs. There are plenty of people who are victims of predatory lending practices from well known lenders like Countywide and there are plenty of people who should have known better i.e. if you couldn’t afford the home traditionally, why did you buy it in the first place type of people? It’s not a perfect market for those people (excuse the sarcasm), but if you’ve been on the fences about buying, you have a decent down payment (3-20%) and good credit, what are you waiting for? The next 30 days are as good as any to buy and to buy with confidence.

Continue reading at: http://www.associatedcontent.com/article/454618/the_perfect_market.html

The Story Behind My Name

When I get married and the priests says, “Do you Audeliz take Juan Maldonado to be your lawfully wedded husband”, my family may question just who is that girl standing at the alter. My birth name is Audeliz, which is pronounced, ou-del-lease. My older brother, who was four years old at the time when I was born, apparently disagreed with my mother’s name choice and decided that it would be “better” to call me Angie, which was the name of an actress on a tv show that he liked. So there it is. I have gone through many years of schooling explaining why my familiar name has nothing to do with my real name. And, I’m telling the story here so that I can refer my aunts, uncles and cousins to this site and avoid the awkward stares or giggles when I’m up at the alter taking my vows. I’ve been Angie for so many years that the name Audeliz fell to the wayside. I even have Angie printed on my business cards.       

So for future reference, don’t call me Audeliz, unless you’re mad at me. My name is Angie Perez and welcome to my blog.