By Robert Freedman, Senior Editor, REALTOR® Magazine
The upcoming vote in Congress to increase the federal debt ceiling is one of those procedural matters that takes on a new importance in this age of high budget deficits. Ordinarily, members of Congress would vote to increase the debt ceiling without too much controversy, which isn’t to say lawmakers enjoy casting their votes. No one likes to increase the amount of money the United States can borrow. But in the previous hundred or so votes since the early 1900s, when Congress first raised the debt ceiling, this was a painful but necessary bipartisan move. This time, however, some lawmakers are saying they won’t vote to raise the debt ceiling.
Sen. Mark Kirk (R-Ill.), for example, told reporters this past weekend that he was keeping his options open to see what budget cuts would be made part of the deal. “I will vote no on that debt ceiling unless we have comprehensive, dramatic, effective, and broad-based cuts to federal spending,” he told reporters. His quote was included in the April 25 Washington Post. Continue reading »
By Robert Freedman, senior editor, REALTOR® Magazine
Yin Bihr, CIPS, CRS, broker-associate, Masters Realty
REALTOR® Magazine Managing Editor Kelly Quigley and Features Editor Katie Tarbox joined me in creating an information-packed video on working with Asian buyers, one of the fastest growing—and wealthiest—populations of non-U.S. home buying households in the country today.
We talked with half a dozen sales associates and brokers in the San Gabriel Valley area near Los Angeles, where Asian households make up almost two-thirds of the population in some parts.
To work in that area (or any area where many households are from outside the United States), you have to know the culture. What was surprising when we spoke with the industry professionals there was how important just good business sense is to succeeding. That’s a universal that never changes.
Ling Chow, CIPS, SRES, broker-owner, Jonson Global Investments
Even if you’re working with people who don’t have a good command of English, what’s important to the success of the relationship is your straight-forward, common-sense approach to finding the right house, negotiating, and communicating. It all starts with listening to what they want and understanding the norms of their culture. Adherence to the NAR Code of Ethics was also key, because foreign buyers more than anything are looking for professionals on whom they can depend.
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Although Asian households are growing throughout the United States, in the San Gabriel Valley, their strong numbers and, in many cases, deep pockets (many households pay cash), helped the area avoid the big downturn that hit so many parts of the country three years ago. Although sales in the area dipped, the market remained relatively strong throughout, and much of the market was fueled by buyers from outside the country wanting to get a piece of the home ownership dream here in the United States.
In the short video above, you’ll find prospecting and marketing tips from the sales associates and brokers we talked to, and there’s a legal caution about how to tailor your approach to foreign households while adhering to federal non-discrimination requirements.
NAR President Ron Phipps and NAR President-elect Moe Veissi will talk with three Bank of America Home Loans executives on the state of home finance, credit standards, and the latest on short sales in a free, hour-long webinar on Monday, May 9, at 3 p.m., Eastern Time.
Participating BofA executives:
- Matt Vernon, senior vice president of retail sales
- Vijay Lala, senior vice president of product management
- David Sunlin, senior vice president of short sale and real estate management
By Robert Freedman, Senior Editor, REALTOR® Magazine
After Maine lawmakers in 2009 approved tax increases on goods and services and voted to convert the state mortgage interest deduction and other itemized deductions into a tax credit, the Maine Association of REALTORS® helped push through a ballot measure that repealed the tax increases and preserved the state MID.
“That tax increase was the last straw” for Maine households, says Chris Philbrook, government affairs and communications director for the Maine Association of REALTORS® (MAR). Voters, taking MAR’s side, approved a ballot referendum in 2010 to repeal the tax changes on a 60-40 basis.
Maine 2010 ballot issue
But the battle was expensive, with MAR using close to $100,000 of its political advocacy funds to test and then mount a campaign that included media ads and a website, among many other components to the all-out effort. NAR helped with a $100,000 infusion of money from its issue mobilization funds.
NAR also helped bring MAR together with a media company to test and craft the ads that Philbrook says were critical to framing the debate for voters. “We did polling, and with a subset of people, we watched what messages resonated, and we based our ads on those,” he says. Continue reading »
By Brian Summerfield, Online Editor, REALTOR® Magazine
When I wrote a story in REALTOR® Magazine a couple of years ago about the realities of doing business in social media, I interviewed Jay Thompson, a.k.a., The Phoenix Real Estate Guy. Jay’s been blogging for years, and has generated a ton of business from it.
Back then, he described to me how his former broker didn’t take blogging seriously, dismissing it as playing around instead of conducting real business. While many real estate pros have since come around on the value of blogging, there is still a sense among many of them that it’s not a worthwhile activity, said Chris Smith, co-creator of Tech Savvy Agent, at Inman’s Agent Reboot in Chicago this morning.
“People tell me all the time, ‘I don’t have time to blog, and I don’t know how. I’m going to go be a REALTOR®,’” he said.
Part of the problem is the word itself. “Blogging” tends to conjure up impressions of amateurish writers getting online to flame a politician they don’t like, or provide updates on their cats, or post photos of their vacation to Branson, Mo., with a detailed account of how great Andy Williams was.
If that’s your hang-up, Smith said, just ditch the term. “Lose the word ‘blogging,’” he explained. “I want you to think of it as marketing your business on the Internet.” Continue reading »
By Stacey Moncrieff, Editor in Chief, REALTOR® Magazine
Wendy and John Rocca are used to getting thank you letters from U.S. service men and women who’ve received “cheer boxes” via their Operation American Soldier campaign. Every letter is cherished, say the Roccas, real estate practitioners from Watertown, Mass. “Receiving letters from the men and women in harm’s way is rewarding to all our volunteers,” says Wendy Rocca.
But the couple will never forget the letter they received this week: It’s from General David H. Petraeus, commander of the NATO International Security Assistance Force and U.S. Forces in Afghanistan.
“Please know I appreciate all you and your team do for our Soldiers, Sailors, Airmen, Marines, and Coast Guardsmen,” Petraeus wrote in the letter dated in December 26, 2010, but just received by the Roccas via e-mail April 18. “I also send you special thanks for your family’s service to our Nation. Two sons and a daughter who have served our country during a time of war—amazing.”
The Roccas started Operation American Soldier in 2004 when their daughter Tracy, serving a tour of duty in Kuwait and Iraq, told them some of her fellow soldiers hadn’t received any mail at all. Since then, Operation American Soldier has sent thousands of care packages, enclosing personal letters as well as essentials and treats that soldiers can’t easily get while on active duty. Continue reading »
By Robert Freedman, senior editor, REALTOR® Magazine
A banking reform rule proposed by the FDIC and Federal Reserve earlier this month to require 20 percent minimum down payments on residential mortgage loans is based on the idea that loans with higher down payments perform better than those with lower down payments. As recently as last week, FDIC General Counsel Michael Krimminger told a House Banking subcommittee that his agency’s studies show “a significant relationship between higher loan-to-value ratios and increased risk of default.”
The Fed and FDIC’s 20-percent minimum-down proposal isn’t for all residential mortgages; it’s just for mortgages that get included in securities and sold to investors. If lenders don’t want to require a minimum 20 percent down, they just need to hold at least 5 percent of the value of the loan on their books. If they don’t want to retain that 5 percent, then they would have to require that minimum 20 percent down.
Source: Community Mortgage Banking Project
It’s hard to argue with the regulators that, in an ideal world, households would put down 20 percent when taking out a mortgage to buy a house. And indeed, the FDIC isn’t the only entity to find a relationship between high down payments and loan performance. The Community Mortgage Banking Project, a coalition of independent mortgage bankers, points to its own work showing a small correlation between down payment amount and performance—but with the emphasis on small.
In an analysis of the performance of loans made between 2002 and 2008, loans on which the down payment is increased from 5 percent to 10 percent showed improvement of between 0.1 percent and 0.5 percent. No, those aren’t typos. The gains are that small.
There was a little bit better improvement when down payments were increased from 5 percent to 20 percent. Performance improved between 0.3 percent and 1.6 percent.
Any time you can improve loan performance it’s a good thing, but to get these small levels of improvement, the market for home sales would have to shrink enormously, between 6.6 percent and 14.7 percent in the case of requiring a minimum 10 percent down, and between16.7 percent and a whopping 28.8 percent in the case of requiring a minimum 20 percent down. The market would shrink that much because requiring those higher down payments would drive huge numbers of households out of the market.
In other words, what the FDIC and Federal Reserve want to do is lop off almost a third of the home sales market to get up to 1.6 percent improved loan performance.
By Robert Freedman, Senior Editor, REALTOR® Magazine
It’s difficult to know where to turn your attention when there are so many areas in which REALTORS®’ livelihoods are challenged. Financially strapped governments are proposing transfer fees and other taxes on real estate to shore up depleted revenues. Some lawmakers and business interests are trying to put control of the mortgage secondary market exclusively in the hands of private banks. And big Wall Street financial interests and other corporations are pouring unprecedented amounts of money into political advocacy efforts to advance their agendas since the U.S. Supreme Court last year opened the floodgates to unlimited corporate spending in elections when it overturned 100 years of legal precedent in its Citizens United decision, which effectively gives corporations the same political speech rights as individual citizens.
Answering members' questions. From right, Vince Malta, NAR vice president and liaison to government affairs, James Helsel, Jr., past NAR treasurer, and Elizabeth Mendenhall, NAR vice president and liaison to committees
Pointing to this backdrop, NAR President Ron Phipps told thousands of REALTORS® Wednesday at a virtual town hall meeting that “we are at a threshold. Housing is under attack in a way we’ve never seen before.”
Phipps hosted the virtual town hall in Chicago and broadcast live to thousands of REALTORS® around the country to explain and take questions on one of the association’s biggest and most controversial proposed initiatives ever: the REALTOR® Party Political Survival Initiative, which would inject almost $200 million into local, state, and national political advocacy efforts over the next five years to give REALTORS® resources to fight the assault on home ownership. Through a live feed, REALTOR® associations in Washington State and the District of Columbia participated and were invited to ask questions of Phipps and members of his leadership team, as well as former NAR President Cathy Whatley, who chaired a presidential advisory group, or PAG, that developed the proposal.
“The situation, frankly, is serious, not merely because our livelihood is at stake, but because home ownership in an absolute sense is at stake,” said Phipps. “Since World War II, our country has made home ownership a priority, but that’s changing. The privileges our grandparents, parents, and we have are being eroded, and we don’t want them denied to our children. Our initiative is about an agenda way beyond us. It’s about our purpose as a country.” Continue reading »
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