With romance in the air this February Nick Churton of Mayfair International Realty takes a loving look at how we could fall head over heels with…a real estate agent.

Spring is round the corner and love is in the air. Yet spare a thought for poor real estate agents. These, often undervalued, creatures are amongst the least likely to receive a lot of affection from their clients on Valentine’s Day – or any other day for that matter.

But right at the moment, in this challenging economic climate, good brokers and agents are a bit like perfect sweethearts.  There are times in life when it is best to have someone by your side who really values you, who will fight for you, who won’t answer back – too much, who will only hang around your home when you want them to and has all your best interests at heart. Such a person may not make such a bad partner. 

Of course there are good partners and bad partners.  Selling real estate well rests heavily on the partnership built up between seller and agent.  A good agent will lovingly put your home on a pedestal and then negotiate fiercely to achieve the best deal for you.  On the other hand, a lesser agent may just put your property on the internet with all the others and then haggle to find the easiest deal all round.

There is a great difference between the two – often many thousands of dollars.  You could come to love the former but hate the latter.  The trick is finding the right one at the outset. It’s a bit like finding the best date.  They all may look roughly the same but in practice they each act very differently.

So if you are searching for the type of broker or agent you could come to love this spring invite a few around to give you some marketing advice and see how you get on. Then ask yourself which you would prefer, the flashy one who brags a lot and is cheap or the one who you feel most comfortable with to act in the most decent way: the one you can come to depend on.

Many of our readers ask us if appraisers use distressed properties (short sales and foreclosures) as comparables when doing an appraisal on non-distressed properties. We have posted on this issue on several occasions (examples: here and here). Last month, the Appraisal Institute issued a paper on the subject. In the paper, the Institute explained that:

“Foreclosures and short sales can provide important information for appraisers, who develop valuations based on market data and market forces.”

On whether an appraiser should use distressed properties as comparables, the Institute was very direct (all items in bold were shown as bold in the original paper):

“An appraiser should not ignore foreclosure sales and short sales if consideration of such sales is necessary to develop a credible value opinion.”
And they explained the possible differences between short sales and foreclosures:

“A short sale … might have involved atypical seller motivations and so might not be an ideal comp…

A sale of a bank-owned property might have involved typical motivations, so the fact that it was a foreclosed property would not render it ineligible as a comp.”

Bottom Line

Some will argue that distressed properties should not be used when appraising non-distressed properties. However, there is no longer any doubt that they will be.

http://www.kcmblog.com/2012/02/07/do-appraisers-use-distressed-properties-as-comparables/

There is a growing belief among many experts that 2012 will be the year housing turns the corner and starts heading in a more positive direction. Whenever we write a post like this, we unleash the hordes of critics who say we are again wearing rose colored glasses or are puppets being controlled by the National Association of Realtors (NAR) and other industry groups.

It is for that reason we will not be covering the projections of those groups. Instead, we want to share the beliefs of other organizations.

 

 

Washington Post:

“Housing Market and Economy Showing Encouraging Signs.”

The Wall Street Journal:

“From Bottom Up, Signs of Housing Recovery”

USA Today:

“Housing Outlook is More Upbeat”

CoreLogic:

“CoreLogic’s chief economist Mark Fleming says housing statistics and the duration of the downturn to date indicate 2012 may be the year the housing market begins to turn the corner.”

Freddie Mac:

“With the New Year comes a sense of cautious optimism. There are some positive signs in the job market and consumer confidence; housing is starting to raise hopes for continued gradual economic recovery.”

Fannie Mae:

“The housing sector will likely take incremental steps forward in 2012 …according to economists at Fannie Mae.”

http://www.kcmblog.com/2012/01/24/real-estate-2012-many-positive-outlooks/

There is no shortage of opinions as to where home prices are headed in 2012. From Clear Capital’s expectation that prices will show a ‘slight uptick’ this year to Fitch’s projection that prices ‘will fall another 13 percent’, there seems to be no consensus as to where real estate values are headed. How can there be such a disparity of opinion among industry experts? Prices are determined by the relationship between supply and demand and there are many unanswered questions regarding both of these components.

Questions about Demand

Will this be the year that the 5.9 million adults between the ages of 25 and 34 that are still living with their parents decide to purchase a home of their own?

With mortgage payments lower than rent payments in the majority of the country, will first time buyers finally decide it makes more financial sense to buy rather than rent?

Will the baby boomers take advantage of the great deals available and start purchasing vacation and retirement homes?

Will investors continue to purchase large quantities of distressed properties?

Will hedge funds negotiate a deal with the banks for bulk purchases of foreclosures?

Questions about Supply

Will 2012 be the year that builders again increase inventories of newly constructed homes?

Will baby boomers put their primary residences up for sale and relocate to their retirement destinations?

Will 2012 be the year that the shadow inventory of foreclosures finally makes its way to market?

If prices depreciate, it will force more homes into a negative equity situation. Will this create another surge in short sales and foreclosures?

Will the government put together a plan to convert large numbers of foreclosures into rental properties?

Bottom Line

With so many unanswered questions regarding both the demand for housing and supply of properties, it is very difficult to determine where prices will be at the end of the year. We suggest you contact a local real estate professional to help you determine where values are headed in your area.

Fiscal policy issues and political economic uncertainty will take center stage in determining the degree of consumer and business activity—key drivers of economic growth—during 2012, according to Fannie Mae’s (FNMA/OTC) Economics & Mortgage Market Analysis Group. The forthcoming presidential election, potential expiration of tax provisions for businesses and households, and the ongoing healthcare debate are among the uncertainties expected to keep the economy moving at a moderate pace with growth of 2.3 percent expected for the year. Moreover, contagion effects from the sovereign debt crisis in the euro zone, which appears to be slipping into recession, are expected to remain as a primary risk to growth in 2012.

Consumers seem to have gotten out of their summer rut due in large part to improving labor market conditions and improving attitudes toward employment prospects and future income. As consumer sentiment shows signs of improvement, so do recent housing indicators, which are trending in a positive direction with incremental improvement expected to continue throughout 2012 – albeit only modestly initially, and moving from historic lows.

“We’re entering 2012 with decent momentum, especially on the employment side, which is fostering positive household and consumer behavior. Unfortunately, we expect this momentum to slow as we move through the first half of the year,” says Fannie Mae Chief Economist Doug Duncan. “2012 will be replete with policy changes and challenges that involve the global economy, the domestic economy, and the housing sector. We expect the net effect will be a year of moderate growth edging away from the 2011 threat of a double dip.”

For more information, visit http://www.fanniemae.com

http://rismedia.com/2012-01-16/2012-is-the-year-of-the-political-economy/print/

Many believe that very few houses are selling and that almost no one can get a mortgage. We want to let everyone know that neither of these assumptions is true. Recently, the National Association of Realtors (NAR) released their Existing Homes Sales Report. According to the report there are, on average, 12,109 homes selling in the United States EACH and EVERY DAY! That means that approximately 12,000 houses sold yesterday, approximately 12,000 will sell today and approximately 12,000 will sell tomorrow. So the thinking that homes aren’t selling just isn’t true.

Another interesting fact in the report was that 72% of these transactions were accompanied by a mortgage. That means that approximately 8,719 people qualify for a mortgage on a daily basis in this country.

There are over 12,000 homes sold and over 8,000 mortgages granted every day. The real estate market is doing better than many believe.

Predicting trends during the most volatile housing market in American real estate history is no easy task. We strongly believe these are the five real estate items we should keep an eye on in 2012:

1. Buyers Will Return

In 2011, a lack of consumer confidence in the overall economy dramatically impacted the housing market. Buyers were afraid to make a purchasing decision on any big ticket item. By the end of 2011, consumer confidence began to return and sales increased. Economic conditions will continue to improve throughout 2012 and consumer sentiment will solidify. Once that happens, home buyers will realize that now is the time to buy.

 

2. Foreclosures Will Increase

The ‘shadow inventory’ of foreclosures which has been growing since the robo-signing challenges of late 2010 will finally be introduced to the market. Distressed properties sell at discounted prices. They will impact the housing values of the non-distressed homes in the area.

3. Prices Will Soften

As more and more foreclosures come to market, there will be greater downward pressure on the values of houses in the region. Foreclosures impact values of non-distressed properties in two ways:

• They will eat up some of the buyer demand in the market.
• They will impact the appraisal on ALL transactions in the area.

An increase in foreclosures will have a negative impact on values. This will cause more homes to be underwater.

4. Short Sales Will Increase

As mentioned above, we strongly believe that home prices will soften through at least the first half of 2012. Falling prices will force more homeowners into a position of negative equity. Negative equity is one of the triggers that cause people to strategically default on their mortgage obligations. If this happens, there could be an increase in the number of foreclosures. However, we predict that banks will take preventative measures which will help many of these homes avoid foreclosure by easing the requirements in the short sale process for both homeowners and real estate professionals.

5. Great Agents Will Be VERY Successful

Real Estate professionals who have invested the money, time and energy to truly understand what is happening and why it is happening will separate themselves from their competition and do very well this year.

Those who take that next step of learning how to simply and effectively communicate the market to their clients will be seen as industry leaders. These experts will dominate their markets.

This blog will help you with the what and the why. If you are looking for help with how to communicate this information to clients and customers, go here.