Relocating residence can be a very stressful and anxiety ridden process if not planned systematically. The easiest way to get most of the work out of your hands is to hire the help of a professional movers company. The primary idea is to plan well ahead of time. The following moving checklist can help you plan things and chores well before the moving day is due and help prevent last minute panic and confusion.
# Most moving companies expect you to schedule a day for the move at least 30 days in advance.
# It is helpful to chalk out a week by week moving checklist.
# Start planning about four weeks before the move.
# Start with discarding things which you would not need in the new house- damaged furniture, clothes that you don't wear anymore.
# You also need to check homeowner's insurance policy to see if they cover the moving process. Ensure coverage, like theft, fire and other personal property insurance for your new place. Arrange transfer of school records for your kids.
# Three weeks to go means that you should start using up perishable items which wont survive the journey, like packaged and frozen food materials.
# Take care of your pending bills, tax assessments etc. moving companies do not allow transfer of flammable materials and aerosol cans and sprays as change in temperature and pressure can cause them to burst or catch fire. Use them up or discard them before the move.
# Get your tools and electronic appliances repaired and discard what is non- functional.
# It's a good idea to arrange for travel tickets for you and your family about two weeks before the move. Remember to notify the post office and service providers like gas, electricity about the impending change in address.
# Start returning stuff that you have borrowed from those around you or libraries and start collecting things that you gave out.
# Dispose of cleaning liquids, acids etc. to protect your goods from damage during transportation. One week before the move would be a good time to arrange for disconnection of cable TV, and transferring bank accounts. Also arrange for domestic supplies at your new home.
# Getting a floor plan of the house would not only help you to pre-decide the arrangement furniture but help you to figure out what can fit and what can not.
# Keep important things like medicines and documents on your person or in the car if you are going to travel by one.
# Leave alone stuff that is to be packed by the movers company. Start packing other things and your suitcases.
# A day before the move would be a good time to clean and dry your refrigerator and finish packing your suitcases.
# On the moving day you should be forever around to give required directions, answer questions and sign documents like the bill of lading etc.
# Before leaving make a final check to ensure nothing has been left behind and all the doors and windows are secured.
# A moving checklist would help you systematize your move and ensure that things run smoothly.
http://searchwarp.com/swa241124.htm
Monday, August 20, 2007
Realtors and Sellers - Your Five-Star Home Staging Solution To Successful Selling!
As a professional Home Stager in Orlando, Florida, I see hundreds of homes each year and am acutely aware of what sells, and what does not! Through the art of effective home staging, I have learned that the increased perceived value of a home will also increase the selling price, and decrease the amount of time a home is on the market.
The following is a list of Five-Star Home Staging solutions, giving you an exclusive peek on ways to make your home staging take 'center stage' to successfully sell in a slower market:
Start With Curb Appeal - Create an unforgettable first impression that will prompt your buyer to want to cross the threshold. Having manicured landscaping, an impressive front door, and proper and up to date lighting are no longer considered to be optional, but are a necessity for todays savvy buyer. Many potential sales are made, or aborted from curbside!
Enchanting Entrance - Make it grand! Once across the threshold ,you have only 10 seconds to create the initial WOW factor response in your buyer . . . making them want to experience more of what your home has to offer! Create some excitement with the addition of an oversized mirror or dramatic piece of Art. And of course, fresh cut seasonal flowers and strategically placed lighting are always a nice way to greet your guests.
Refresh, Rearrange and Replace - Update worn attributes. Arrange the furniture so that the feel and flow of each room is warm and inviting. Clean or replace tired carpeting, upholstery and window treatments. Replace out-of-date light fixtures and hardware. Sand, refinish and buff hardwood floors, pressure wash stone, polish the silver . . . remember, company is coming and you want to present your home in 'showcase' condition!
Upgrade - For example, stainless Steel appliances add a commercial look of perceived value, along with a sense of brilliance and success to a home. Also, whenever possible, throw in a glass-front wine cooler for even more "sell appeal"!
Simply Sophisticated Five-Star Treatment - Give your bathrooms and bedrooms the 'luxury suite' attention that you only find in the finest hotels! Soft whisper colored walls, plush white towels, sheets, comforters and duvet covers, scented reeds and candles, a tray with a couple of good best selling books to curl up with . . . a spa robe casually draped over the arm of a lounge chair. . . remember, you're not only selling a home, but a five-star lifestyle!
Get Organized - Clear the deck and remove the clutter. Closets should both look good, and smell good! Rack or drawer your shoes and accessories, leaving nothing on the floor. Add cedar blocks for scent and invest in matching wooden hangars to project a successful lifestyle.
Be Soothingly Entertaining - Add a soundtrack of Soft Jazz to play in the background. Install a plasma TV tuned to an eye catching, replaying, high density disc of panoramic scenes. You want to present your home as modernized and updated.
Addition of Smoke and Mirrors - Accentuate and add the illusion of square footage by dramatically and strategically placing mirrors in small areas, using special effect lighting techniques, and incorporating and including the increasingly popular outdoor retreat areas in your overall design theme.
Home Staging is a dynamic, fast way to provide for your guests the "MAJOR WOW" factors needed to create an increased perception of brilliance, success and value . . . thus, setting the stage to bring your home to its finest potential, increase the sale price, and reduce the time your home is on the market!
Jeannene H. Edwards, owner of INTERIORS DEFINED,INC. is a highly sought after professional home stager and licensed interior designer in Orlando, Florida. She has merged with DAVID EDWARDS CONSTRUCTION to now offer complete architectural design and building services to further meet the needs of her clientel. Jeannene, known for her dynamic and informative seminars, is available to speak for sales meetings and group events. Her award winning designs and 'how-to' articles have been widely published in newspapers, magazines and trade manuals nationally. INTERIORS DEFINED, INC. is a five-star full service interior design and staging company, specializing in classic design and casual sophistication. To show you how to avoid the guesswork and save thousands of dollars and aggravation to get your home sold in today's challenging market, or further information regarding the many additional design, remodeling and building services being offered, please contact Jeannene Edwards or David Edwards at: [http://interiorsdefined.com/]http://interiorsdefined.com/, [http://idihomestaging.com/]http://idihomestaging.com/,
http://searchwarp.com/swa243226.htm
The following is a list of Five-Star Home Staging solutions, giving you an exclusive peek on ways to make your home staging take 'center stage' to successfully sell in a slower market:
Start With Curb Appeal - Create an unforgettable first impression that will prompt your buyer to want to cross the threshold. Having manicured landscaping, an impressive front door, and proper and up to date lighting are no longer considered to be optional, but are a necessity for todays savvy buyer. Many potential sales are made, or aborted from curbside!
Enchanting Entrance - Make it grand! Once across the threshold ,you have only 10 seconds to create the initial WOW factor response in your buyer . . . making them want to experience more of what your home has to offer! Create some excitement with the addition of an oversized mirror or dramatic piece of Art. And of course, fresh cut seasonal flowers and strategically placed lighting are always a nice way to greet your guests.
Refresh, Rearrange and Replace - Update worn attributes. Arrange the furniture so that the feel and flow of each room is warm and inviting. Clean or replace tired carpeting, upholstery and window treatments. Replace out-of-date light fixtures and hardware. Sand, refinish and buff hardwood floors, pressure wash stone, polish the silver . . . remember, company is coming and you want to present your home in 'showcase' condition!
Upgrade - For example, stainless Steel appliances add a commercial look of perceived value, along with a sense of brilliance and success to a home. Also, whenever possible, throw in a glass-front wine cooler for even more "sell appeal"!
Simply Sophisticated Five-Star Treatment - Give your bathrooms and bedrooms the 'luxury suite' attention that you only find in the finest hotels! Soft whisper colored walls, plush white towels, sheets, comforters and duvet covers, scented reeds and candles, a tray with a couple of good best selling books to curl up with . . . a spa robe casually draped over the arm of a lounge chair. . . remember, you're not only selling a home, but a five-star lifestyle!
Get Organized - Clear the deck and remove the clutter. Closets should both look good, and smell good! Rack or drawer your shoes and accessories, leaving nothing on the floor. Add cedar blocks for scent and invest in matching wooden hangars to project a successful lifestyle.
Be Soothingly Entertaining - Add a soundtrack of Soft Jazz to play in the background. Install a plasma TV tuned to an eye catching, replaying, high density disc of panoramic scenes. You want to present your home as modernized and updated.
Addition of Smoke and Mirrors - Accentuate and add the illusion of square footage by dramatically and strategically placing mirrors in small areas, using special effect lighting techniques, and incorporating and including the increasingly popular outdoor retreat areas in your overall design theme.
Home Staging is a dynamic, fast way to provide for your guests the "MAJOR WOW" factors needed to create an increased perception of brilliance, success and value . . . thus, setting the stage to bring your home to its finest potential, increase the sale price, and reduce the time your home is on the market!
Jeannene H. Edwards, owner of INTERIORS DEFINED,INC. is a highly sought after professional home stager and licensed interior designer in Orlando, Florida. She has merged with DAVID EDWARDS CONSTRUCTION to now offer complete architectural design and building services to further meet the needs of her clientel. Jeannene, known for her dynamic and informative seminars, is available to speak for sales meetings and group events. Her award winning designs and 'how-to' articles have been widely published in newspapers, magazines and trade manuals nationally. INTERIORS DEFINED, INC. is a five-star full service interior design and staging company, specializing in classic design and casual sophistication. To show you how to avoid the guesswork and save thousands of dollars and aggravation to get your home sold in today's challenging market, or further information regarding the many additional design, remodeling and building services being offered, please contact Jeannene Edwards or David Edwards at: [http://interiorsdefined.com/]http://interiorsdefined.com/, [http://idihomestaging.com/]http://idihomestaging.com/,
http://searchwarp.com/swa243226.htm
A Great Time to Buy Real Estate?
I am a great believer in owning real estate. It’s the best way the average family has of accumulating wealth. In fact, for many people who are at or nearing retirement age, the equity in their homes may be larger than their 401(k) balance. The secret, of course, is that our wonderful mortgage credit system has allowed you to purchase over a long period of time.
Imagine what our economic system would be like if you had to accumulate the entire purchase price of whatever you bought, be it a home or car or another large asset. Paying for such things over a period of time makes the whole system work. Equity build up is slow but dependable. For homes, unlike other assets, the value increases over time.
For people who already own their homes, there are terrific potential wealth benefits of owning rental property. It may be the difference between a really comfortable retirement and one that’s not quite so comfortable. Again, the trick is to buy a property and have a succession of renters pay off the loan over time. If you plan it properly, when you retire the mortgage will be paid off and the entire rental income minus operating expenses will come to you. And you’ll have a significant asset to your name!
Many real estate fortunes have been helped significantly because home investors have been able to purchase when values are at some cyclical low point, as they are now in many markets. You can certainly buy properties “at market value” and still make money over time. But you can do even better if you are able to buy at a discount. Effectively that means you can lock in a profit.
You can also choose when to take that profit, maybe never if you hold onto the property and it becomes part of your estate.If you buy at a lower price, you can get a lower mortgage which requires less of a monthly payment and can be paid off faster than if the purchase price were higher. You can make money when other landlords are just breaking even.
How do you get started? Well, as a writer, I suggest that you buy a couple of books on buying, owning, and managing income property. The one I recommend you start out with is Property Management for Dummies by my friend Robert Griswold. There are a number of other books on the topic, but this one will get you familiar with the process.
This is a complicated field that has more than its share of pitfalls. There are sellers who want too much for their property who may disguise what might be wrong with it or who may be untruthful about rental income and expenses…. and on and on.
There are tricks that the professionals know but which the amateurs don’t. Here’s one: Statistics demonstrate that properties, particularly small apartment complexes, on busy streets have a higher occupancy rate than those on side streets. You might think that people don’t want to live on streets that might be noisier or busier, but when the FOR RENT sign goes up out front, more people see the sign and the properties rent faster. A week or two more rent every year can really add up over the years.
Everyone who has ever managed rental properties will tell you stories about the bizarre things that renters do, from lying about their likelihood of paying rent on time to intentionally destroying property when they leave. For example, I managed an apartment complex during a time in the 1970s when the price of beef skyrocketed. One of our tenants tried to raise a calf in his bathtub, where he permanently tethered the poor animal. We evicted him, but not before the calf had ruined the tub.
Investing in a home -- and doing it right -- consists of learning about the process and then aligning yourself with professionals in your market area who can help you. Ideally, you’ll create a partnership that will last a long time. When you are successful, you’ll be a repeat client for these professionals.
Let me also suggest what not to do, which is to spend $500 going to a weekend seminar on how to become a millionaire. For a classic case of how not to do it, read this story of a young flipper.
Now, having read that, don’t be scared. Just realize that success can be yours if you don’t go about it the way this fellow did.
http://www.credit.com/credit_information/mortgages/A-Great-Time-to-Buy-Real-Estate.jsp
Imagine what our economic system would be like if you had to accumulate the entire purchase price of whatever you bought, be it a home or car or another large asset. Paying for such things over a period of time makes the whole system work. Equity build up is slow but dependable. For homes, unlike other assets, the value increases over time.
For people who already own their homes, there are terrific potential wealth benefits of owning rental property. It may be the difference between a really comfortable retirement and one that’s not quite so comfortable. Again, the trick is to buy a property and have a succession of renters pay off the loan over time. If you plan it properly, when you retire the mortgage will be paid off and the entire rental income minus operating expenses will come to you. And you’ll have a significant asset to your name!
Many real estate fortunes have been helped significantly because home investors have been able to purchase when values are at some cyclical low point, as they are now in many markets. You can certainly buy properties “at market value” and still make money over time. But you can do even better if you are able to buy at a discount. Effectively that means you can lock in a profit.
You can also choose when to take that profit, maybe never if you hold onto the property and it becomes part of your estate.If you buy at a lower price, you can get a lower mortgage which requires less of a monthly payment and can be paid off faster than if the purchase price were higher. You can make money when other landlords are just breaking even.
How do you get started? Well, as a writer, I suggest that you buy a couple of books on buying, owning, and managing income property. The one I recommend you start out with is Property Management for Dummies by my friend Robert Griswold. There are a number of other books on the topic, but this one will get you familiar with the process.
This is a complicated field that has more than its share of pitfalls. There are sellers who want too much for their property who may disguise what might be wrong with it or who may be untruthful about rental income and expenses…. and on and on.
There are tricks that the professionals know but which the amateurs don’t. Here’s one: Statistics demonstrate that properties, particularly small apartment complexes, on busy streets have a higher occupancy rate than those on side streets. You might think that people don’t want to live on streets that might be noisier or busier, but when the FOR RENT sign goes up out front, more people see the sign and the properties rent faster. A week or two more rent every year can really add up over the years.
Everyone who has ever managed rental properties will tell you stories about the bizarre things that renters do, from lying about their likelihood of paying rent on time to intentionally destroying property when they leave. For example, I managed an apartment complex during a time in the 1970s when the price of beef skyrocketed. One of our tenants tried to raise a calf in his bathtub, where he permanently tethered the poor animal. We evicted him, but not before the calf had ruined the tub.
Investing in a home -- and doing it right -- consists of learning about the process and then aligning yourself with professionals in your market area who can help you. Ideally, you’ll create a partnership that will last a long time. When you are successful, you’ll be a repeat client for these professionals.
Let me also suggest what not to do, which is to spend $500 going to a weekend seminar on how to become a millionaire. For a classic case of how not to do it, read this story of a young flipper.
Now, having read that, don’t be scared. Just realize that success can be yours if you don’t go about it the way this fellow did.
http://www.credit.com/credit_information/mortgages/A-Great-Time-to-Buy-Real-Estate.jsp
What Real Estate Really Needs Right Now Is Some Certainty!
What we really need right now is some certainty. There are just toomany question marks in the minds of buyers today. The housing market isdown and no one is sure where the turnaround is, the stock market islacking direction, interest rates are uncertain and people are worriedabout fuelprices. Unfortunately, the media does a very good job of highlightingbad news and reinforcing uncertainty.
Anyone who has read my report for a while knows that I am not one tospin the data. But I would like to take this month's report to lookat the positive facts.
So lets look at what we know.
Unemployment in the state for the first quarter was at 3.7% and onlyslightly worse than last year (3.5%). Much better than our neighbor tothe south, Massachusetts, at 5%. Employment has been fairly consistentover the past couple of years. Although the figures are nice to lookat, I think at times it is better to consider how people feel abouttheir job situation. Based on the people with whom I havespoken, I would say that not many are worried about their job. That'spretty positive.
To illustrate the strange effect we are seeing in this market where jobsecurity is high, we can look at what is happening withprices. The average price per square foot of a home sold wasdown 4% from last year yet the average selling price wasdown only 1% from a year ago. So it seems that as the prices of homescome down, people are buying more house. Perhaps it is a slightlylarger home (The average size of a home sold in Q2 was 2,333sf, the highest of any quarter since 2001!) or it has morefeatures. The fact is, buyers are able to afford homes and show awillingness to spend the money to get what they want. Again, this wouldnot happen in a poor economy!
We also know that the time that a sold home was on the market came downthis month (128 days) and sold closer to its asking price (within2.5%). Sellers seem to have adjusted to the real estate situation andhave lowered their asking price. The homes that are well priced areselling.
I find it hard to look at this market and be pessimistic. True, we areclearly in a buyers market with a 9.6 month supply of homes. (a 6 monthsupply is considered balanced) But we had a very hot market up untillate 2005. Though it was a lot of fun while it lasted we are only justgetting backto a more realistic and, hopefully, sustainable market. Now if we couldonly get the news media to report more realistically I think we wouldbe in muchbetter shape.
http://searchwarp.com/swa244182.htm
Anyone who has read my report for a while knows that I am not one tospin the data. But I would like to take this month's report to lookat the positive facts.
So lets look at what we know.
Unemployment in the state for the first quarter was at 3.7% and onlyslightly worse than last year (3.5%). Much better than our neighbor tothe south, Massachusetts, at 5%. Employment has been fairly consistentover the past couple of years. Although the figures are nice to lookat, I think at times it is better to consider how people feel abouttheir job situation. Based on the people with whom I havespoken, I would say that not many are worried about their job. That'spretty positive.
To illustrate the strange effect we are seeing in this market where jobsecurity is high, we can look at what is happening withprices. The average price per square foot of a home sold wasdown 4% from last year yet the average selling price wasdown only 1% from a year ago. So it seems that as the prices of homescome down, people are buying more house. Perhaps it is a slightlylarger home (The average size of a home sold in Q2 was 2,333sf, the highest of any quarter since 2001!) or it has morefeatures. The fact is, buyers are able to afford homes and show awillingness to spend the money to get what they want. Again, this wouldnot happen in a poor economy!
We also know that the time that a sold home was on the market came downthis month (128 days) and sold closer to its asking price (within2.5%). Sellers seem to have adjusted to the real estate situation andhave lowered their asking price. The homes that are well priced areselling.
I find it hard to look at this market and be pessimistic. True, we areclearly in a buyers market with a 9.6 month supply of homes. (a 6 monthsupply is considered balanced) But we had a very hot market up untillate 2005. Though it was a lot of fun while it lasted we are only justgetting backto a more realistic and, hopefully, sustainable market. Now if we couldonly get the news media to report more realistically I think we wouldbe in muchbetter shape.
http://searchwarp.com/swa244182.htm
Subprime Mortgage Madness
In previous articles, we’ve talked about creation of Yield Spread Premiums, the relaxation of underwriting standards, the dramatic expansion of the industry, and the egregious compensation being made by loan originators.
While loan originators made out like bandits, the Wall Street sources that packaged the loans also made a bundle, and the holders of the MBS were making that handsome yield of 8.5%. You can see why they were all so eager to keep the ball rolling.
Where were the regulators? Ahhhhhh! Good question. The answer is that they never are anywhere to be seen, that is until the stuff hits the fan. Everyone in the mortgage business -- hundreds of thousands of people -- knew what was happening. I have been writing about the abuses for over two years but no one cared. Even the Comptroller of the Currency, who ought to have SOME clout, gave a speech in late 2005 in which he warned of some danger. Resultant action? Zip! The FDIC got concerned about 9 months ago and didn’t do much more than write memos.
The Ameriquest debacle raised plenty of eyebrows after they were sued by Attorney Generals in almost every state. They settled, paying a $300 million fine. You’d think that someone at a regulatory agency would have said, “If all this bad stuff was going on at Ameriquest, why don’t we look for similar abuses at other lenders?” Because it was going on there too.
But it didn’t happen. Bottom line: They seem NEVER to be around when they ought to be REGULATING. They only come out after the damage has been done, pick over the wreckage, and say, “Tsk Tsk.” No one will get reprimanded and nothing will change.
Were there other early warning signs? You bet there were. New Century Financial, the latest high profile news target, had notices in their SEC filings that now look like warning flags. You can now read about them and all of the early-default loans they recently had to repurchase. Their actions caused their short-term credit providers to cut off funding which, in turn, caused New Century to abort funding operations themselves.
In their 330 page 10-Q, the quarterly filing to the SEC for the quarter ended Sept 20, 2006, almost 200 pages were devoted to things like AMENDEMENT TO RESTATED TRUST AGREEMENT and AMENDMENT NO.1 TO FOURTH AMENDED AND RESTATED MASTER REPURCHASE AGREEMENT. These were mostly agreements with their lenders and those purchasing the loans.
Get the whole report and other quarterly filings
Knowing what we do today, it would appear that all of those lenders and securities companies were CLEARLY seeing potential problems way back then and were moving to “perfect” their positions in the event of a meltdown, something that has now occurred. I guess Wall Street analysts missed interpreting those filings because one stock analyst was recommending New Century’s stock as recently as a month ago. Ooooops!
The justice in this is that some of the Wall Street sources that were buying loans and packaging mortgage-backed securities also had equity positions in these firms. There is some likelihood that these equity positions will be wiped out if the meltdown continues.
On the other hand, as usually happens, the final chapter in meltdowns is usually the appearance of vultures who come and pick through the ashes seeing if they can find something of value that someone in charge will sell them for 50 cents on the dollar. That is likely to happen here. In fact, one large lender, Accredited Home Mortgage, just announced the sale of some $2.7 billion of loans in their efforts to stay afloat. The company said, “The $2.7 billion of loans held for sale will be sold at a substantial discount in order to alleviate recent pressures from margin calls.” The company is also apparently in default under other credit agreements and is seeking “waivers” from those creditors.
It was also announced this week that many banks were grabbing loans out of New Century’s portfolio in exchange for some of the debt that they were owed. These lenders were apparently concerned about New Century’s ability to liquidate the loans and pay off their debts so they took the loans themselves and are auctioning them off. Morgan Stanley took 13,200 loans, canceling almost $2.5 billion in debt.
These loans are currently on the auction block and it will be VERY interesting to see what they go for. Auctioning them all off at one time will likely bring substantially less than if they sold them over time. Most of these loans are already in default, which is why New Century had to buy them back. How much money the buyer of those loans will make won’t ever be known, as the profits will be buried in the results of some huge company. But you can bet that it will be a lot more than you are making in your money market account.
So with all of this bad news, is there anything good that happened? I think there is. It appears that something like 45% of subprime loans done in the last year or two were purchase money loans. Assume that subprime loans were 20% of the total market. 45% of 20% equals 9% of all purchases. A good percentage of those people would not have had an opportunity to buy their homes without the availability of subprime loans.
Even if it turns out that 20% of these get foreclosed upon (unlikely, but possible), that still leaves 7% who kept their homes. That’s more than 1 million homeowners who got their shot at the American Dream of homeownership.
Those people will be better citizens with a greater stake in democracy and a far better shot at accumulating wealth in their lifetimes. I believe that is a good outcome, but if this was the only good part, it sure came at a great expense to society as a whole.
A lot of unsavory people made an unconscionable amount of money working for companies whose operating practices varied from unsupervised to unethical to illegal. Even those borrowers who survive this current mess will carry the scars for quite a long time to come.
It does not seem to have occurred to any regulator yet that they completely missed the boat. Had they jumped into this situation a lot sooner and instituted damage control, the carnage would have been substantially reduced. Will they learn from this? I’m not holding my breath.
I wrote my first book in 1997 and included a chapter that contained my thoughts on the need for reform in the mortgage business. That was ten years ago! I’m not sure I had all the answers. But I had SOME of the answers. If I could see this ten years ago, why couldn’t the regulators? I sent a copy to every secretary at HUD, but I’m pretty sure the books never got through the bureaucratic red tape to anyone in power.
When historians write their books, perhaps they will uncover more positive news from which to take comfort. I hope so. In the meantime, there will be a lot of unpleasantness and a lot of hurt families.
http://www.credit.com/credit_information/mortgages/Subprime-Mortgage-Madness.jsp
While loan originators made out like bandits, the Wall Street sources that packaged the loans also made a bundle, and the holders of the MBS were making that handsome yield of 8.5%. You can see why they were all so eager to keep the ball rolling.
Where were the regulators? Ahhhhhh! Good question. The answer is that they never are anywhere to be seen, that is until the stuff hits the fan. Everyone in the mortgage business -- hundreds of thousands of people -- knew what was happening. I have been writing about the abuses for over two years but no one cared. Even the Comptroller of the Currency, who ought to have SOME clout, gave a speech in late 2005 in which he warned of some danger. Resultant action? Zip! The FDIC got concerned about 9 months ago and didn’t do much more than write memos.
The Ameriquest debacle raised plenty of eyebrows after they were sued by Attorney Generals in almost every state. They settled, paying a $300 million fine. You’d think that someone at a regulatory agency would have said, “If all this bad stuff was going on at Ameriquest, why don’t we look for similar abuses at other lenders?” Because it was going on there too.
But it didn’t happen. Bottom line: They seem NEVER to be around when they ought to be REGULATING. They only come out after the damage has been done, pick over the wreckage, and say, “Tsk Tsk.” No one will get reprimanded and nothing will change.
Were there other early warning signs? You bet there were. New Century Financial, the latest high profile news target, had notices in their SEC filings that now look like warning flags. You can now read about them and all of the early-default loans they recently had to repurchase. Their actions caused their short-term credit providers to cut off funding which, in turn, caused New Century to abort funding operations themselves.
In their 330 page 10-Q, the quarterly filing to the SEC for the quarter ended Sept 20, 2006, almost 200 pages were devoted to things like AMENDEMENT TO RESTATED TRUST AGREEMENT and AMENDMENT NO.1 TO FOURTH AMENDED AND RESTATED MASTER REPURCHASE AGREEMENT. These were mostly agreements with their lenders and those purchasing the loans.
Get the whole report and other quarterly filings
Knowing what we do today, it would appear that all of those lenders and securities companies were CLEARLY seeing potential problems way back then and were moving to “perfect” their positions in the event of a meltdown, something that has now occurred. I guess Wall Street analysts missed interpreting those filings because one stock analyst was recommending New Century’s stock as recently as a month ago. Ooooops!
The justice in this is that some of the Wall Street sources that were buying loans and packaging mortgage-backed securities also had equity positions in these firms. There is some likelihood that these equity positions will be wiped out if the meltdown continues.
On the other hand, as usually happens, the final chapter in meltdowns is usually the appearance of vultures who come and pick through the ashes seeing if they can find something of value that someone in charge will sell them for 50 cents on the dollar. That is likely to happen here. In fact, one large lender, Accredited Home Mortgage, just announced the sale of some $2.7 billion of loans in their efforts to stay afloat. The company said, “The $2.7 billion of loans held for sale will be sold at a substantial discount in order to alleviate recent pressures from margin calls.” The company is also apparently in default under other credit agreements and is seeking “waivers” from those creditors.
It was also announced this week that many banks were grabbing loans out of New Century’s portfolio in exchange for some of the debt that they were owed. These lenders were apparently concerned about New Century’s ability to liquidate the loans and pay off their debts so they took the loans themselves and are auctioning them off. Morgan Stanley took 13,200 loans, canceling almost $2.5 billion in debt.
These loans are currently on the auction block and it will be VERY interesting to see what they go for. Auctioning them all off at one time will likely bring substantially less than if they sold them over time. Most of these loans are already in default, which is why New Century had to buy them back. How much money the buyer of those loans will make won’t ever be known, as the profits will be buried in the results of some huge company. But you can bet that it will be a lot more than you are making in your money market account.
So with all of this bad news, is there anything good that happened? I think there is. It appears that something like 45% of subprime loans done in the last year or two were purchase money loans. Assume that subprime loans were 20% of the total market. 45% of 20% equals 9% of all purchases. A good percentage of those people would not have had an opportunity to buy their homes without the availability of subprime loans.
Even if it turns out that 20% of these get foreclosed upon (unlikely, but possible), that still leaves 7% who kept their homes. That’s more than 1 million homeowners who got their shot at the American Dream of homeownership.
Those people will be better citizens with a greater stake in democracy and a far better shot at accumulating wealth in their lifetimes. I believe that is a good outcome, but if this was the only good part, it sure came at a great expense to society as a whole.
A lot of unsavory people made an unconscionable amount of money working for companies whose operating practices varied from unsupervised to unethical to illegal. Even those borrowers who survive this current mess will carry the scars for quite a long time to come.
It does not seem to have occurred to any regulator yet that they completely missed the boat. Had they jumped into this situation a lot sooner and instituted damage control, the carnage would have been substantially reduced. Will they learn from this? I’m not holding my breath.
I wrote my first book in 1997 and included a chapter that contained my thoughts on the need for reform in the mortgage business. That was ten years ago! I’m not sure I had all the answers. But I had SOME of the answers. If I could see this ten years ago, why couldn’t the regulators? I sent a copy to every secretary at HUD, but I’m pretty sure the books never got through the bureaucratic red tape to anyone in power.
When historians write their books, perhaps they will uncover more positive news from which to take comfort. I hope so. In the meantime, there will be a lot of unpleasantness and a lot of hurt families.
http://www.credit.com/credit_information/mortgages/Subprime-Mortgage-Madness.jsp
Do-it-Yourself Real Estate Services
The TV show 60 Minutes recently did a segment on homebuying using what I will call “low-advice services.” These are discount real estate service providers that reduce the cost of buying and selling homes by reducing the commission structure from the traditional 6%. The question is, “Do these services make sense for homebuyers and sellers?”
I don’t want to defend or criticize the traditional real estate brokerage industry because there is no simple answer to the question stated above. The bottom line is that sometimes these services are a bargain and sometimes they are a rip-off. Your goal, dear reader, is to figure out the answer for yourself.
America is well into its love affair with the concept of do-It-yourself. As American manufacturers have produced better tools and packaged easy solutions to home-improvement projects, the do-it-yourself industry has taken off. Go to Home Depot today and you’ll notice the huge variety of products; this selection simply was not available twenty or thirty years ago.
Ever since Charles Schwab pioneered discount stock brokerage back in the 1980’s, the financial services industry has been on a similar kick. One big discount brokerage firm talked about do-it-yourself investing with the motto, “You can do this!”
Well, can you do this? I think it turns out that a small few can, but for most people, do-it-yourself investing was a disaster. How did YOU do with the tech boom of the late 1990’s? You may not have suffered as badly as others, but I’ll bet you know people who lost most of the money in their 401(k).
John Ruskin, 19th Century English philosopher, said, “There is no product some man can’t make a little worse and sell a little cheaper, and the buyers who consider only price are this man’s lawful prey.”
The same can be said of services too, and that includes real estate brokerage where commissions have traditionally been 6% of the purchase price, typically split equally between the seller’s agent and the buyer’s agent. Home prices when I bought my first home almost 40 years ago were in the $50,000 range in my area, so the real estate commission was a mere $3,000. Today, that same home would sell for $1,000,000 and the brokers would split $60,000.
Forgetting the fact that you could buy a brand new car for $3,000 back then, the question is whether buyers and sellers would get $60,000 of value for their money today. Stated another way, if you were to choose not to hire an agent with the traditional compensation, what would you gain and what would you lose?
Let’s discuss a few realities here. The first is that there are a lot of differences between people. If you have lived in your neighborhood for years and are familiar with the schools and all the things that make the homes in one area worth more than those in another area, you are probably better equipped to do your own research and make your own decisions.
If you keep records of sale prices, you will have a pretty good idea when a bargain shows up. Compare that with someone moving to town from some other area or maybe from out of town. How much do they know? Zip! Zilch! Nada! For them to try to do it themselves is beyond silly. What’s more, it could have potentially tragic consequences.
Then there’s the question of who gets to keep whatever savings occur. A FSBO (For Sale By Owner) seller thinks he’s saving 6%. But the buyer thinks that he ought to get the benefit. Assuming each side knew EXACTLY what the home was worth, it would be easy to discount the price EXACTLY 3% and give each side half of the savings.
Does it happen that way? Probably not. Neither of these folks knows the EXACT value. If they are off much on the price, and let me assure you that it’s easy to be off more than 3%, one side will make out like a bandit. Real estate agents always get to laugh up a storm on FSBO transactions because the prices rarely represent the market. Someone sold too low or paid too much because he or she was ignorant.
The fact is that good real estate agents who specialize in an area know what the values of homes are. When you hire an agent, you get his/her expertise. That keeps you from doing something dumb. They will guide you to the right price to offer, or urge you to move on to the next house.
Finally, if you have done a transaction recently, you know that there are a ton of forms to sign. Each one exists for a reason. Some are only CYA forms for the brokers, but there are others that are really important, like ones that give legal protection. If a form is missed, buyer or seller may find himself in an expensive “situation” down the road.
I know it seems as if a real estate broker sticks a sign in the front lawn and then collects a huge commission. But there is a lot of hard work between those two actions. Most of that hard work benefits a client. I’ve been a party to something approaching 2,000 purchase transactions. I can assure you that if you work with a good agent, one who is dedicating to really helping you, you will end up a lot happier and will know without a doubt that what the agent gained in the transaction was well earned.
http://www.credit.com/credit_information/mortgages/Do-it-Yourself-Real-Estate-Services.jsp
I don’t want to defend or criticize the traditional real estate brokerage industry because there is no simple answer to the question stated above. The bottom line is that sometimes these services are a bargain and sometimes they are a rip-off. Your goal, dear reader, is to figure out the answer for yourself.
America is well into its love affair with the concept of do-It-yourself. As American manufacturers have produced better tools and packaged easy solutions to home-improvement projects, the do-it-yourself industry has taken off. Go to Home Depot today and you’ll notice the huge variety of products; this selection simply was not available twenty or thirty years ago.
Ever since Charles Schwab pioneered discount stock brokerage back in the 1980’s, the financial services industry has been on a similar kick. One big discount brokerage firm talked about do-it-yourself investing with the motto, “You can do this!”
Well, can you do this? I think it turns out that a small few can, but for most people, do-it-yourself investing was a disaster. How did YOU do with the tech boom of the late 1990’s? You may not have suffered as badly as others, but I’ll bet you know people who lost most of the money in their 401(k).
John Ruskin, 19th Century English philosopher, said, “There is no product some man can’t make a little worse and sell a little cheaper, and the buyers who consider only price are this man’s lawful prey.”
The same can be said of services too, and that includes real estate brokerage where commissions have traditionally been 6% of the purchase price, typically split equally between the seller’s agent and the buyer’s agent. Home prices when I bought my first home almost 40 years ago were in the $50,000 range in my area, so the real estate commission was a mere $3,000. Today, that same home would sell for $1,000,000 and the brokers would split $60,000.
Forgetting the fact that you could buy a brand new car for $3,000 back then, the question is whether buyers and sellers would get $60,000 of value for their money today. Stated another way, if you were to choose not to hire an agent with the traditional compensation, what would you gain and what would you lose?
Let’s discuss a few realities here. The first is that there are a lot of differences between people. If you have lived in your neighborhood for years and are familiar with the schools and all the things that make the homes in one area worth more than those in another area, you are probably better equipped to do your own research and make your own decisions.
If you keep records of sale prices, you will have a pretty good idea when a bargain shows up. Compare that with someone moving to town from some other area or maybe from out of town. How much do they know? Zip! Zilch! Nada! For them to try to do it themselves is beyond silly. What’s more, it could have potentially tragic consequences.
Then there’s the question of who gets to keep whatever savings occur. A FSBO (For Sale By Owner) seller thinks he’s saving 6%. But the buyer thinks that he ought to get the benefit. Assuming each side knew EXACTLY what the home was worth, it would be easy to discount the price EXACTLY 3% and give each side half of the savings.
Does it happen that way? Probably not. Neither of these folks knows the EXACT value. If they are off much on the price, and let me assure you that it’s easy to be off more than 3%, one side will make out like a bandit. Real estate agents always get to laugh up a storm on FSBO transactions because the prices rarely represent the market. Someone sold too low or paid too much because he or she was ignorant.
The fact is that good real estate agents who specialize in an area know what the values of homes are. When you hire an agent, you get his/her expertise. That keeps you from doing something dumb. They will guide you to the right price to offer, or urge you to move on to the next house.
Finally, if you have done a transaction recently, you know that there are a ton of forms to sign. Each one exists for a reason. Some are only CYA forms for the brokers, but there are others that are really important, like ones that give legal protection. If a form is missed, buyer or seller may find himself in an expensive “situation” down the road.
I know it seems as if a real estate broker sticks a sign in the front lawn and then collects a huge commission. But there is a lot of hard work between those two actions. Most of that hard work benefits a client. I’ve been a party to something approaching 2,000 purchase transactions. I can assure you that if you work with a good agent, one who is dedicating to really helping you, you will end up a lot happier and will know without a doubt that what the agent gained in the transaction was well earned.
http://www.credit.com/credit_information/mortgages/Do-it-Yourself-Real-Estate-Services.jsp
Real Estate Agent and Brokers
Buying a home is an exiting and confusing event!
Area of investment that is always fair is Real Estate!
Real estate agent and real estate broker give their hands to newbie’s in selling and buying market. Broker hire agents, there may be one or dozens of agents depending upon business size. An agent converts all his deals to best ones.
Real estate home buying has become very easy!
Real estate buyers make use of internet for their home search because it puts a wealth of information at your fingertips. In addition mortgage calculators, real estate news, agents, and brokers made the work simpler. Real estate seller sells his home/property due to urgent need of money. Afford shorter selling time by offering one or more unique benefits to buyers. Be inventive and enjoy faster sale!
Joint venture in real estate development! Gives a good payback for you... Whatever you lack is usually the reason for entering into a joint venture.
http://www.real-estate-investment-information.com/Real_Estate_Agent_and_Brokers.php
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