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Down 36% from April: New Residential Sales in May 2010

FOR IMMEDIATE RELEASE WEDNESDAY, JUNE 23, 2010 AT 10:00 A.M. EDT

http://www.census.gov/const/newressales.pdf

NEW RESIDENTIAL SALES IN MAY 2010

• Sales of new single-family houses in May 2010 were at a seasonally adjusted annual rate of 300,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development.
• This is 32.7 percent (±9.9%) below the revised April rate of 446,000 and is 18.3 percent (±13.0%) below the May 2009 estimate of 367,000.
• The median sales price of new houses sold in May 2010 was $200,900; the average sales price was $263,400.
• The seasonally adjusted estimate of new houses for sale at the end of May was 213,000. This represents a supply of 8.5 months at the current sales rate.

Here is the raw data of the ACTUAL new homes sold without any ‘adjustments’:

• 28,000 new homes sold in May, a decrease of 36.4 percent from April’s 44,000 new homes sold and also a 17.6 percent decrease from May 2009 when there were 34,000 new homes sold.
  • 53.5 percent (15,000) of the new homes sold were in the South region- a decrease of 34.8 percent from April.
  • the west region had 5,000 new homes sold, a decrease of 50.0 percent from April
  • the Midwest had 5,000 new homes sold, a decrease of 16.7 percent from April.
  • The Northeast had 3,000 new homes sold, a decrease of 25.0 percent from April.
• YTD – In the first four months of 2010 there have been 159,000 new homes sold, an increase of 6.0 percent from the same time last year.
• Median sale price of new homes in the US in May was $200,900, a 0.9 percent decrease from April’s median new home price of $202,900 and a 9.6 percent decrease from a year ago when the median new home price was $222,300.
• New Homes in the US in May have been for sale for a median time of 14.2 months since the homes were completed, slightly less than April’s revised figure of 14.3 months.

Based on this data, I continue to believe that the housing market is still volatile and home values are not on the ‘upward trend’ that we are all hoping for.  This is especially true for new home sales where consumers appear to be quite cautious. May is normally a good month for home sales however, this report shows that sales have languished this month.  I’m sure that some of the buyers that would normally be buying now may have pushed up their time-line to get the credits, so this lull could be a result of that, however, time will soon tell.  YTD home sales are running just slightly ahead of last year, so the sales numbers for June and July are going to reveal a lot. If new home sales for those months pops back up to the 37,000 – 38,000 range like they were at this time last year then that would be encouraging and a sign the new home market is stabilizing. However, if new home sales for those months stay in the 20-30,000 range, then I think we are in for more pain.

Bottom line, for homeowners hoping for good news, the wait could be long.  For those looking to get a short sale to avoid foreclosure, now is the time to take action.

Here to support your success,

Donna Sanford

Phone: 888 381 8654
Email

Real Estate Investor,
Short Sale Professional,
Real Estate Transaction Negotiator,
Real Estate Investing Servicer

Your Solution 4 Real Estate, Inc
Bauer Hill & Associates, LLC
Area Short Sale Pros, LLC
Tri-County Capital Partners, LLC

Twitter

Area Short Sale Pros, LLC negotiates short sales on behalf of homeowners, Realtors and buyers/investors and we act as a neutral third party in the transaction. We have partnered with the best short sale negotiators who have over 50 years of combined industry experience and focus specifically on Short Sales. What makes us unique is our extensive contacts with lenders who know we are working for both buyer and seller as a third party negotiator and this gives us the “edge” over others. We service customers in all 50 states and work with all lenders and mortgage servicers.  We are professionals with a proven track record for achieving positive outcomes for our clients.  Call us now at 888-381-8654.

_______________________________________________________________________________________________________________________________________________________

About: Donna Sanford holds a BSE, MBA and has been an Executive Director of Engineering and Plant Manager in the Automotive Industry, both in the US and Europe.  She is a passionate business owner, real estate investor and entrepreneur focused in the Real Estate area

Supply of Foreclosed Homes on the Rise

James Hagerty, of the Wall Street Journal, wrote today that the supply of foreclosed homes that banks need to sell is rising again, signaling further downward pressure on home prices in some parts of the U.S.  Mortgage analysts at Barclays Capital in New York estimated that banks and mortgage investors held a total of 645,800 foreclosed homes in January, up 4.6% from 617,286 a month earlier.  According to Barclays, the supply peaked at around 845,000 in November 2008 and then declined through 2009.

Even though the number of people behind on mortgage payments kept rising last year, the flow of homes into bank ownership slowed markedly because of time-consuming efforts to figure out which distressed borrowers could qualify for programs that attempt to avert foreclosures by reducing monthly payments. Meanwhile, brisk demand from investors and first-time home buyers helped banks unload many of the homes they held.

Now the supply is rising again because banks are determining that many homeowners don’t qualify for loan modifications and are completing more foreclosures. Home sales also have slowed in recent months.

Barclays projects that the supply of foreclosed homes will rise to about 733,000 in April, then begin to decline again gradually. Foreclosed properties now account for roughly a fifth of all homes listed for sale nationally.

The outlook for sales of foreclosed homes depends heavily on whether the economy continues to heal and manages to create enough jobs to boost demand for housing. It also depends on how many distressed borrowers can be rescued from foreclosure through loan modifications. Nearly eight million households, or 15% of those with mortgages, are behind on mortgage payments or in the foreclosure process. Foreclosures are heavily concentrated in a few states, notably Florida, Arizona, Nevada, California and Michigan.

Estimating the number of homes owned by banks and mortgage investors isn’t an exact science. Barclays uses foreclosure-related data from mortgage securities packaged by Wall Street and extrapolates from that to estimate the entire market.

John Burns, a real estate consultant in Irvine, Calif., projected that home prices as measured by the S&P/Case-Shiller national index will fall an additional 6% before leveling off later this year.

While he expected many lower-end homes to show price increases this year, he said that would be offset by steep declines on some luxury homes. He assumed mortgage rates would rise to about 6% by year end and job growth would resume in the second half.

Foreclosure is NOT the only option available to the many homeowners who are being denied loan modifications.  A short sale should be the option of last resort before being subjected to foreclosure and the associated ramifications to credit scores, etc. The problem is that many homeowners can’t get an offer that the bank will accept. This is where we have a strong track record for success.  Call us if you or someone you know wants to avoid foreclosure so we can explain why our process works.

Here to support your success,

Donna Sanford

Phone: 888 381 8654
Email

Real Estate Investor,
Short Sale Professional,
Real Estate Transaction Negotiator,
Real Estate Investing Servicer

Your Solution 4 Real Estate, Inc
Bauer Hill & Associates, LLC
Area Short Sale Pros, LLC
Tri-County Capital Partners, LLC

Twitter

Area Short Sale Pros, LLC negotiates short sales on behalf of homeowners, Realtors and buyers/investors and we act as a neutral third party in the transaction. We have partnered with the best short sale negotiators who have over 50 years of combined industry experience and focus specifically on Short Sales. What makes us unique is our extensive contacts with lenders who know we are working for both buyer and seller as a third party negotiator and this gives us the “edge” over others. We service customers in all 50 states and work with all lenders and mortgage servicers.  We are professionals with a proven track record for achieving positive outcomes for our clients.  Call us now at 888-381-8654.

_______________________________________________________________________________________________________________________________________________________

About: Donna Sanford holds a BSE, MBA and has been an Executive Director of Engineering and Plant Manager in the Automotive Industry, both in the US and Europe.  She is a passionate business owner, real estate investor and entrepreneur focused in the Real Estate area.

Who Gets Paid First?

When buying a home with lender financing, the lender automatically creates a lien on the property, that makes the property ‘collateral’.  This allows the lender to sell the home to get their money back, if the homeowner does not make the payments for some reason.  There is often more than one lien on a property at the same time.

So who gets paid first? Lien priorities are established based on the date each lien was recorded.

Let’s say that Mary buys a home and the lien for the first mortgage – the main loan from the bank – is recorded in January, 2001.  Subsequently, Mary took a second mortgage – a second loan on the property – and the lien is recorded in November, 2001.  In addition, there is also a judgment against Mary’s property for some work that was done but not paid for, and it was recorded in July, 2005.

Now, let’s say that Mary has been having financial difficulties over the past couple years and she is behind on the first mortgage by $23,000.  She is also behind on the second mortgage by $6,000, and she still has the judgment for $2,500 to deal with.

The property is going into foreclosure.  Who has the priority?  Let’s look at the recording dates.  The first mortgage was recorded in January, 2001, so they have rights to their full amount before any other liens get paid.  If there is enough money left, it would go to the second mortgage since it was recorded in November, 2001. If somehow there is still money left over, it would then go to the judgment, which was recorded in 2005.  If there were other judgments, IRS liens, etc., those would be satisfied in order of when they were recorded, as well. 

If there is any money left after all liens are paid (and this is very rare these days), it would go to the homeowner.  More often, the first lien holder will agree to a short sale and accept less money than they are owed.  They often will not agree to any other party getting paid since they have first right to full payment and there isn’t enough money for them to be paid in full. The problem often occurs that the second will not agree to a short sale because the first won’t allow them to get anything at all.  The second wants to get something.  None of the lien holders will agree to allow the homeowner to get any money.  This is why a short sale is the option of last resort for the homeowner to avoid foreclosure and the subsequent damage from a foreclosure.

One of the many advantages of having Area Short Sale Pros negotiate your short sale is that we can help cover the ‘gap’ between the first and second lien holders.  We also negotiate the short sale at no cost to the homeowner or the realtor.  Call us today or check our website to see the many other advantages of having us negotiate on your behalf.

Here to support your success,

Donna Sanford

Phone: 888 381 8654
Email

Real Estate Investor,
Short Sale Professional,
Real Estate Transaction Negotiator,
Real Estate Investing Servicer

Your Solution 4 Real Estate, Inc
Bauer Hill & Associates, LLC
Area Short Sale Pros, LLC
Tri-County Capital Partners, LLC

Twitter

Area Short Sale Pros, LLC negotiates short sales on behalf of homeowners, Realtors and buyers/investors and we act as a neutral third party in the transaction. We have partnered with the best short sale negotiators who have over 50 years of combined industry experience and focus specifically on Short Sales. What makes us unique is our extensive contacts with lenders who know we are working for both buyer and seller as a third party negotiator and this gives us the “edge” over others. We service customers in all 50 states and work with all lenders and mortgage servicers.  We are professionals with a proven track record for achieving positive outcomes for our clients.  Call us now at 888-381-8654.

_______________________________________________________________________________________________________________________________________________________

About: Donna Sanford holds a BSE, MBA and has been an Executive Director of Engineering and Plant Manager in the Automotive Industry, both in the US and Europe.  She is a passionate business owner, real estate investor and entrepreneur focused in the Real Estate area.

9 Networking Tips

Last month I wrote about the importance of Networking and I was surprised by a phone call from a reader who felt that the article was both timely and relevant to him.  As I pondered the topic further, I came across a short article with tips for ‘connecting’ by Maribeth Kuzmeski. She offers the following:

1. Set a goal to increase your list of important business connections.  Once you’ve compiled your list, reach out to each of them.
2. Share something personal and seek a common interest.  When it’s not just about numbers and the bottom line, clients will be able to personally identify with you.  Rooting for the same sports team or volunteering at the same charity makers you relevant.
3. Scrap the memorized-sounding pitch in favor of more natural conversation that still covers the pertinent points about you and what you do.
4. Resist the urge to be a one-upper. It ruins communication.
5. An open-ended question is better than one requiring only a yes or no answer.
6. Know your audience. Once you know what a person wants, is interested in and responds to, you will be better equipped to deliver that.
7. Be energetic and passionate about what you do.  People will notice.
8. It’s not about you. Learn to ask, “What’s in it for them?”

I would like to add one more:

     9.   Be conscious of your handshake, eye contact and body language because they can speak louder than your words.  Handshakes should be full-handed and comfortably firm. Eye contact is essential when listening or speaking to someone. Be sure your posture is confident and your arms are not crossed and your hands are not in your pockets.

Practice these tips with family members and get their feedback. A mirror is always helpful to see if you have any ‘bad body language habits’ that you can improve on. Finally, SMILE! I have always found that when I smile at the world, the world smiles back at me.

Here to support your success,

Donna Sanford

Phone: 888 381 8654
Email

Real Estate Investor,
Short Sale Professional,
Real Estate Transaction Negotiator,
Real Estate Investing Servicer

Your Solution 4 Real Estate, Inc
Bauer Hill & Associates, LLC
Area Short Sale Pros, LLC
Tri-County Capital Partners, LLC

Twitter

Area Short Sale Pros, LLC negotiates short sales on behalf of homeowners, Realtors and buyers/investors and we act as a neutral third party in the transaction. We have partnered with the best short sale negotiators who have over 50 years of combined industry experience and focus specifically on Short Sales. What makes us unique is our extensive contacts with lenders who know we are working for both buyer and seller as a third party negotiator and this gives us the “edge” over others. We service customers in all 50 states and work with all lenders and mortgage servicers.  We are professionals with a proven track record for achieving positive outcomes for our clients.  Call us now at 888-381-8654.

_______________________________________________________________________________________________________________________________________________________

About: Donna Sanford holds a BSE, MBA and has been an Executive Director of Engineering and Plant Manager in the Automotive Industry, both in the US and Europe.  She is a passionate business owner, real estate investor and entrepreneur focused in the Real Estate area.

Bank Of America boosts Loan Mod’s

Bank Of America, Corp. added nearly 8,000 customers to the ranks of borrowers modifying mortgages under the government’s Home Affordable Modification Program in February, 2010.

The giant bank said 20,666 of its customers had a permanent Home Affordable modification as of the latest monthly report, up from 12,761 that had been completed a month earlier. Bank of America said another 22,303 permanent modifications are pending, which means final loan terms have been approved and are waiting for customers’ signatures.

“We are in a position to show strong results in completion of permanent HAMP modifications as we move into spring,” said Jack Schakett, loss mitigation strategies executive for Bank of America Home Loans. “We have a strong pipeline of modifications in the trial payment period, under review for conversion to permanent status, and out for final signature.”

HAMP is a government program designed to lower monthly mortgage payments for homeowners who can no longer afford to make those payments.

To qualify for a permanent loan modification, a borrower with a trial modification is required to make three consecutive monthly mortgage payments and complete the documentation. There has been concern that many applicants wouldn’t be able to meet the requirements because of the amount of paperwork and additional training and processing required by lenders.

If homeowners cannot qualify for the loan modification, a short sale ends up being their last resort.  We are pleased to negotiate the short sale at no cost to the homeowner or their listing agent, while ensuring the agent gets their full commission.

Here to support your success,

Donna Sanford

Phone: 888 381 8654
Email

Real Estate Investor,
Short Sale Professional,
Real Estate Transaction Negotiator,
Real Estate Investing Servicer

Your Solution 4 Real Estate, Inc
Bauer Hill & Associates, LLC
Area Short Sale Pros, LLC
Tri-County Capital Partners, LLC

Twitter

Area Short Sale Pros, LLC negotiates short sales on behalf of homeowners, Realtors and buyers/investors and we act as a neutral third party in the transaction. We have partnered with the best short sale negotiators who have over 50 years of combined industry experience and focus specifically on Short Sales. What makes us unique is our extensive contacts with lenders who know we are working for both buyer and seller as a third party negotiator and this gives us the “edge” over others. We service customers in all 50 states and work with all lenders and mortgage servicers.  We are professionals with a proven track record for achieving positive outcomes for our clients.  Call us now at 888-381-8654.

_______________________________________________________________________________________________________________________________________________________

About: Donna Sanford holds a BSE, MBA and has been an Executive Director of Engineering and Plant Manager in the Automotive Industry, both in the US and Europe.  She is a passionate business owner, real estate investor and entrepreneur focused in the Real Estate area.

Strategies for Buying Even Lower

Buy Low, Sell High.  Though very true, the fact is that it’s easier said than done!  When it comes to investing in real estate our goal is to buy as low as possible and sell as high as possible, but how do we accomplish this?    In the book “Buy Even Lower”, by Scott Frank and Andy Heller, the authors developed Six Golden Keys to buying rental property and making a profit. These are not new concepts, but I think they summed it up clearly:

Six Golden Keys to Buy Even Lower

GOLDEN KEY 1 – Determine Your Minimum Investor Discount

GOLDEN KEY 2 – Define Good Properties

GOLDEN KEY 3 – Find Good Properties

GOLDEN KEY 4 – Determine Maximum Purchase Price

GOLDEN KEY 5 – Write Strong Offers

GOLDEN KEY 6 – Negotiate Well

In the book, they give many ‘real-life’ examples so you can learn from their mistakes. As my mentor, JT Foxx, always says, “A wise man learns from his mistakes while a genius learns from everyone else’s mistakes!”  They will show you how to profit from foreclosure sales and the drawbacks to pursuing them, and why you should concentrate on buying preforeclosures and post-foreclosures, called REOs (Real Estate Owned by the bank), as opposed to purchasing foreclosures on the courthouse steps.

Buying foreclosuers is complicated because of the unknowns, such as various liens that could be attached to the home.  The easiest to find are tax liens which is accessible public information, usually found on-line.  If you don’t have Internet access, you can call the assessor’s office and inquire.

The authors also include sample forms and sample verbiage in the book that you could use as a guideline to draw up an offer to purchase. When using other people’s forms, however, I recommend that you have a local real estate attorney review them to ensure compliance in your area.  It’s generally best to use a standard form that is acceptable in your locale or ask a real estate lawyer or Realtor to draw up a contract for you. Forms can contain verbiage that is not acceptable in all states, such as clauses to hold the earnest money deposit in an interest bearing account. In some states, maintaining interest-bearing accounts for good faith deposits at a brokerage are against the law.

There are definitely variances from state to state that you should be aware of. For example, Frank and Heller say that “most loans allow you to lock in the terms for 60 days,” and they advise locking your loan before locating the property. My experience is most loans do not let you lock in a rate before you name the property, and they don’t do it for 60 days without an additional fee to the borrower.

While buying even lower is important, the other half of the equation is understanding your exit strategy. It’s important to have more than one viable exit strategy before buying a property.  The 3 best known strategies for investors are:

1. Buy and Lease Option Strategy

• This employs the ‘rent to own’ method.  
• You receive a initial option consideration fee
• You receive a monthly cash flow, beyond the mortgage, insurance and taxes.
• All repair and maintenance is covered by the purchaser, as they practice being a homeowner
• The purchaser tends to take better care of the house since they are planning to buy it.
• You get the appreciation when you sell.
• There is a large number of buyers with bruised credit who will be interested in this option

2. Buy and Hold

• Cash flow is the name of the game.
• You are looking for a long-term renter
• Useful for long-term profits.

3. Buy and Flip

• Buying distressed homes that can be fixed up and sold to a downstream home buyer.
• The investor is responsible for the rehab and carrying costs.
• Currently, there are many REO homes to choose from Useful for long-term profits.
• My experience with the last two homes that we flipped was that new home buyers want their house to look ‘perfect’ and they are willing to pay for this.

I agree with the authors when they say that you should develop a plan and stick to your plan, no matter what. Plans can evolve over time based on new information, but you must focus on a strategy, else you will end up with scattered efforts that don’t lead to success.  The overall quality of the advice and information in this book is very good and I recommend the book.

Here to support your success,

Donna Sanford

Phone: 888 381 8654
Email

Real Estate Investor,
Short Sale Professional,
Real Estate Transaction Negotiator,
Real Estate Investing Servicer

Your Solution 4 Real Estate, Inc
Bauer Hill & Associates, LLC
Area Short Sale Pros, LLC
Tri-County Capital Partners, LLC

Twitter

Area Short Sale Pros, LLC negotiates short sales on behalf of homeowners, Realtors and buyers/investors and we act as a neutral third party in the transaction. We have partnered with the best short sale negotiators who have over 50 years of combined industry experience and focus specifically on Short Sales. What makes us unique is our extensive contacts with lenders who know we are working for both buyer and seller as a third party negotiator and this gives us the “edge” over others. We service customers in all 50 states and work with all lenders and mortgage servicers.  We are professionals with a proven track record for achieving positive outcomes for our clients.  Call us now at 888-381-8654.

_______________________________________________________________________________________________________________________________________________________

About: Donna Sanford holds a BSE, MBA and has been an Executive Director of Engineering and Plant Manager in the Automotive Industry, both in the US and Europe.  She is a passionate business owner, real estate investor and entrepreneur focused in the Real Estate area.