REO, preforeclosure properties selling at a larger discount

RealtyTrac: Share of distressed real estate sales dips in Q2

By Inman News, Thursday, August 25, 2011.

Inman News™

The share of bank-owned homes and homes in some stage of foreclosure dropped 5 percent from the first quarter to the second quarter, falling from 36 percent to 31 percent, but was up from 24 percent in second-quarter 2010, according to a report released today by foreclosure data provider RealtyTrac.
And distressed properties are selling at a larger discount these days, RealtyTrac reported:

• The average sales price of a bank-owned (also known as real estate owned or REO) home was $145,211 in the second quarter, which was about 40 percent below the average sales price of a nonforeclosure home. That compares with a 36 percent discount in first-quarter 2011 and a 34 percent discount in second-quarter 2010.
• The average sales price of a preforeclosure home (preforeclosures, which are homes in default or scheduled for sale at public auction, are often sold in a short-sale process) was $192,129 in the second quarter, which is 21 percent below the average sales price of a nonforeclosure home. That compares with a 17 percent discount in first-quarter 2011 and a 14 percent discount in second-quarter 2010.

There were 162,680 sales of bank-owned homes to third parties in the second quarter, RealtyTrac also reported, roughly flat compared with the 162,900 reported in the first quarter and down 10 percent from second-quarter 2010. REO sales accounted for 19 percent of home sales in the second quarter, compared with 23 percent in the first quarter and 15 percent in second-quarter 2010.
There were 102,407 sales of preforeclosure homes to third parties in the second quarter of this year, up 19 percent from the first quarter but down 12 percent compared to second-quarter 2010. These sales accounted for 12 percent of sales in the second quarter of this year, flat with the first quarter and up 10 percent compared to second-quarter 2010.

Lessons from a master negotiator

 

Ward Lowe | Consumer columnist

Jul. 15, 2011

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Are you a good negotiator? My cousin thinks he is and put an offer on a house last week. The house was listed for $355,000, and he offered $315,000. I asked why his offer was so low, and he said, "That's how you negotiate."

Don't make up a number

I asked if there was something wrong with the property or if it was overpriced. He said, "No, it doesn't need much work, and my REALTOR® determined it was priced in line with the neighborhood. But you have to start low if you're ever going to get a good price."

I hope you have time

I called him today to see if he'd gotten a response from the seller, and he said, "Yeah, the guy came down to $350,000 and said it was his final offer. I'm not paying that."

Did I mention that my cousin's been looking for a new house for almost two years?

Be reasonable

It's a good idea to ask for a price reduction when buying a house, but your offer should have some basis in the reality of your real estate market—unless you enjoy wasting time with fruitless negotiations.

More by Ward Lowe Congratulations: You won What to ask the sellers after closing How splitting the difference can cost you Don’t let little flaws scare away buyers

 

Five of 10 best housing markets in Texas

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According to Fiserv, Inc.’s recent analysis of home-price trends, five of the 10 best-performing housing markets in the last five years are in Texas. The two best, Midland and Odessa, saw housing prices grow 42% and 30.3%, respectively from the first quarter of 2006 to the first quarter in 2011. Read more at the Odessa American.

Small Miracles

When love is strong and runs deep, it pulsates with an energy that cannot be stopped, not even by death's grip.  When two souls are connected and one departs from this world, the separation may seem final, but in truth the relationship transcends time.  Love, like a river, flows eternal, and it embraces all those who swim in its streams.

Texas School Rankings

Texas Public K-12 School Rankings are based on data from the Academic Excellent Indicator System (AEIS) provided by Texas Education Agency. There are two sets of rankings:

• Standard Rankings are based on the following:
  
  
  • Elementary Schools: The percentages of Third graders who passed both Math and Reading Tests, the percentages of Fourth graders who passed All Three (Math, Reading, and Writing) Tests, and the percentages of Fifth graders who passed both Math and Reading Tests.
  • Middle Schools: The percentages of Seventh graders who passed both Math and Reading Tests, and the percentages of Eighth graders who passed All Five (Math, Reading, Writing, Science and Social Studies) Tests.
  • High Schools: The percentages of Tenth graders who passed All Three (Math, Reading, and Writing) Tests, the percentages of students who took the AP/IP Tests, and the percentages of students who took the SAT/ACT Tests.
  You have the option of (i) Ranking all schools in the State of Texas (choose "All Regions" in the toolbar to the left), (ii) Comparing individual regions (choose "Region Vs. Region"), and (iii) Comparing all schools in a given region (choose, for example, "Austin" Region). To view FREE public school rankings from a prior year, simply click on the "Rank" button on the toolbar to the left. The most recent rankings are available for subscribers only. Subscription fee is $8.33/month (1-year term). Sign up here.
• Customized Rankings (Subscribers Only) are based on the following:
  
  
  • Elementary Schools: Can choose any or all of the followings: Percent passing in: Third Grade Reading, Third Grade Math, Third Grade All Tests, Fourth Grade Reading, Fourth Grade Math, Fourth Grade Writing, Fourth Grade All Tests, Fifth Grade Reading, Fifth Grade Math, and Fifth Grade All Tests.
  • Middle Schools: Can choose any or all of the followings: Percent passing in: Seventh Grade Reading, Seventh Grade Math, Seventh Grade All Tests, Eighth Grade Reading, Eighth Grade Math, Eighth Grade Science, Eighth Grade Social Studies, Eighth Grade Writing, and Eighth Grade All Tests.
  • High Schools: Can choose any or all of the followings: Percent passing in: Tenth Grade Reading, Tenth Grade Math, Tenth Grade Writing, and Tenth Grade All Tests. Also, Percent Taking and Percent Passing End-of-Course Exams in Biology, Algebra, English II, and US History. Also, Percent Taking the AP/IB/SAT/ACT Tests, the Percent above criterion in AP/IB Tests, and the Average scores in SAT/ACT Tests.
  With the Customized Ranking, you can choose any or all of the regions. Subscription fee is $8.33/month (1-year term). Sign up here.

Notes:

• Grade level distributions are not consistent throughout Texas. For example, fifth graders are in Elementary Schools in some areas; but in other areas, they are in Middle Schools. This site classifies Elementary Schools as those with third, fourth, or fifth graders; Middle Schools as those with seventh or eighth graders; and High Schools as those with tenth graders. As such, some schools may be classified in more than one category. Likewise, schools that do not include all grades are not ranked appropriately.
• Results presented on this site are for All Students; we do not break down the results for different racial/gender/economic groups. Also, the results are for the English (not the Spanish) version of the standardized tests.
• Results for AP/IB/SAT/ACT Tests are delayed by one year.
• For the 2002-2003 and 2003-2004 academic years, schools with more than 99% passing are listed as 99% passing. Apparently, this was done to comply with federal privacy requirements.

provided by:
PSK12.com

RE/MAX & J.D. POWERS

New Marketing Will Focus on RE/MAX No. 1 Standing

Supported by two major consumer studies that add even more layers to the network’s industry-leading position, RE/MAX will aggressively market itself as the No. 1 brand in real estate,  Chairman and Co-Founder Dave Liniger told a crowd of almost 1,000 RE/MAX brokers at the 2011 RE/MAX Broker Owner Conference in Los Angeles a few days ago.

“Do you like this logo, combining the No. 1 and the RE/MAX balloon?  We are going to put it on everything,” Liniger announced at the conference’s Opening General Session, noting that RE/MAX was already the clear leader in transactions, advertising, professional education and many other metrics.  “We are No. 1 and we ought to be saying it.”

The excitement is fueled in part by the recent J. D. Power and Associates announcement that RE/MAX ranked highest in customer satisfaction among both buyers and sellers.  Dave and Gail Liniger received matching trophies during the session.  “We accept this on behalf of all RE/MAX Sales Associates, whose high level of service made this recognition possible,” Dave Liniger said.  “This honor belongs to them.”

A second study, conducted by national research firm Synovate, adds even more weight to the idea that RE/MAX is No. 1 in the eyes of consumers.  In this survey, buyers and sellers ranked RE/MAX highest, by a large margin, in top-of-mind awareness, recalled advertising, firm most likely to work with, firm most likely to recommend, and many other categories.

When asked what real estate company came to mind, 34% of the respondents across the United States said RE/MAX, easily outdistancing Century 21 and Coldwell Banker.  Prudential and Keller Williams hardly even came to mind among consumers.  Overall, 95% of the participants were aware of RE/MAX.

This type of power brings business to RE/MAX Sales Associates, Liniger said.  And when they combine their individual skills and talents with the “800 pound gorilla” of RE/MAX brand marketing, they have an unbeatable edge.  “Advertising doesn’t cost; it pays,” said Liniger.  “It brings more customers to our agents, makes things easier and generates business for them.  And when they follow through with excellent service, they create repeat clients and referrals for life.”

“We are very excited about the new marketing program,” notes Mark Wolfe, president of RE/MAX DFW Associates.  “It will bring additional clout and prestige to our agents.  We are up 35% in August over one year ago, and we were up 36% in July.  The strengthening of the RE/MAX brand is certainly one reason why our agents are excelling in this market.”

RE/MAX DFW Associates has offices in Carrollton, Coppell, Flower Mound, Frisco, Irving and Plano.  The firm is the largest RE/MAX franchise in the Southwestern region of the United States.

For more information, visit the firm’s Facebook page or the website at http://www.rmdfw.com/.

Rules of thumb for judging investment home, cash flow

By Tom Kelly | Investment columnist

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Let's assume home values are down in the area where you like to vacation. Truth be told, you wouldn't mind retiring there one day.

If you bought an investment home now and rented out, is there any way of knowing if it will appreciate?

And, is there a break-even formula to use when considering annual cash flow?

One of the better second-home rental formulas now used was developed by Christine Karpinski, author of How to Rent Vacation Properties by Owner. Karpinski's definition of the break-even point is when all of the income (rent) from your vacation rental property is enough to pay all of the bills associated with ownership of the property. In other words, your vacation home should not cost you another dime after your downpayment.

According to Karpinski, if your monthly mortgage payment is equal to or less than one "peak" week rental rate, and if you rent for 17 weeks, then you should be able to achieve positive cash flow.

Consider a property that rents "by owner" for $2,000 per week during the peak season with a monthly mortgage payment of $2,000. There are 12 peak weeks, most or all of which are generally occupied. Then 12 weeks rented equal one year's mortgage payments.

In addition, you'll need to rent five other weeks to pay for incidentals such as power, phone, association dues, minor maintenance etc. If you handle the rental yourself and have 17 weeks booked (33% occupancy), you will have a break-even cash flow. Rent more and you have positive cash flow, according to Karpinski, who serves as the director of HomeAway.com's owner community.

When analysts look at stocks, they often focus on the price-earnings ratio as a measure of whether the stock is overvalued or undervalued. The higher the number (especially relative to either the market as a whole or to historical averages), the more likely the stock is to decline in price over time.

UCLA professor Edward Leamer proposed that real estate be considered in a similar light. In this case, though, the ratio is the price of the investment property to the annual rental it will earn. This calculation will give you a standard by which you can judge the relative potential for appreciation of different properties in different neighborhoods and even in different cities. In other words, it helps to make sound investment decisions by giving you a tool to measure alternative investments against each other. Here's how it works …

Suppose you're looking at a $255,000 property that will rent for $1,500 per month, or $18,000 per year (We can assume no vacancy, but you can figure in whatever you deem to be reasonable.) You are also looking at a $120,000 property that will rent for $850 per month, or $10,200 per year. The price-earning ratio for the first property is approximately 14 (255 divided by 18), and the second is approximately 12 (120 divided by 10.2). The second property appears to be a better candidate for appreciation since it has the lower price-earnings ratio.

For a truly effective comparison of the two properties, you need to make a second calculation. You need to look at the price-earning ratio average for both properties relative to those properties in the same neighborhood. If the ratio for the neighborhood of the first house is 20 while the ratio for the second house is 10, then the first property might be the better buy. It is underpriced relative to its surroundings, while the second property is overpriced.

Although all this might appear complex, it's really quite simple. After all, you already know the prices being asked for the properties you are evaluating, and you should know what rent you can charge once you own them.

All that's needed is to find out the averages for prices and rents in the immediate neighborhood, and you're done. Check county records, or ask a local Texas REALTOR® or property manager to help you out with these two numbers. This is a helpful research process that could propel you to financial success.

 

 

Small Miracles

In a society driven by the work ethic, we sometimes find it hard to concede that a major component of success is sheer "luck" or "divine providence."  In a way, though, it's a relief to accept that there's just so much we can do, and the rest is up to God.

Small Miracles ~

What Are We Missing in Life?

THE SITUATION
In Washington , DC, at a Metro Station, on a cold January morning in 2007, this man with a violin played six Bach pieces for about 45 minutes. During that time, approximately 2,000 people went through the station, most of them on their way to work. After about 3 minutes, a middle-aged man noticed that there was a musician playing. He slowed his pace and stopped for a few seconds, and then he hurried on to meet his schedule.
About 4 minutes later:
The violinist received his first dollar. A woman threw money in the hat and, without stopping, continued to walk.
At 6 minutes:
A young man leaned against the wall to listen to him, then looked at his watch and started to walk again.
At 10 minutes:
A 3-year old boy stopped, but his mother tugged him along hurriedly. The kid stopped to look at the violinist again, but the mother pushed hard and the child continued to walk, turning his head the whole time. This action was repeated by several other children, but every parent - without exception - forced their children to move on quickly.
At 45 minutes:
The musician played continuously. Only 6 people stopped and listened for a short while. About 20 gave money but continued to walk at their normal pace. The man collected a total of $32.
After 1 hour:
He finished playing and silence took over. No one noticed and no one applauded. There was no recognition at all.
No one knew this, but the violinist was Joshua Bell, one of the greatest musicians in the world. He played one of the most intricate pieces ever written, with a violin worth $3.5 million dollars. Two days before, Joshua Bell sold-out a theater in Boston where the seats averaged $100 each to sit and listen to him play the same music.
This is a true story. Joshua Bell, playing incognito in the D.C. Metro Station, was organized by the Washington Post as part of a social experiment about perception, taste and people's priorities.

If we do not have a moment to stop and listen to one of the best musicians in the world, playing some of the finest music ever written, with one of the most beautiful instruments ever made . . ..
How many other things are we missing as we rush through life?
Enjoy life NOW… it has an expiration date!!!
MAKE IT A GREAT WEEK!

Mark Wolfe - My Broker

Texas top-ranked entrepreneur state

Aug. 9, 2011

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According to the State Entrepreneurship Index, which evaluates how states stack up in terms of business formation and innovation, Texas is ninth in the nation for entrepreneurial activity. The Lone Star State moved up 25 spots from its ranking at No. 34 in 2008. Read more at the Houston Business Journal.

Tips To Selling Your Home

Twelve tips to sell your home

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There are few things more frustrating to a seller than a home that sits on the market. It's stressful to keep a house in showing condition, and not selling can cost you lots of money.

Use these tips as a quick guide to better your chances at selling your house in a timely fashion.

1. Sit down with your Texas REALTOR® and evaluate your listing price. Visit open houses in your neighborhood. Are similar homes priced lower? An overpriced home is destined to sit on the market too long.
2. Do whatever it takes to be away from your home during showings and
   open houses.
3. Ask your Texas REALTOR® for feedback on how your home shows, and ask him to solicit other agents' advice. Feedback from their clients can really help.
4. If you intend to hold an open house, consider doing so on a weeknight. Competition may be lower, and you'll attract the interest of buyers who may not be available on the weekend.
5. Help promote your property. Talk about your home to everyone you know. Look for other ways to get the word out, too, even if your agent is doing a lot to promote your house.
6. If you're really motivated, you can offer perks to buyers, such as a cash bonus or help with closing costs.
7. Neutralize your color scheme. Most buyers prefer neutral colors that make it easier to imagine a new home as their own.
8. Consider offering an increased commission or a bonus for your listing agent as extra incentive. If you do so, amend your listing contract to reflect the change, and be sure those details are added to the multiple listing service (MLS). Buyer agents will also be inspired to give your house extra attention.
9. If your REALTOR® has a video tour of the house, watch the tape as if you were a prospective buyer … you may be surprised at what you see.
10. Fix lingering problems, such as the dripping faucet or the door that doesn't quite close right.
11. Clean and de-clutter—neat, organized houses sell faster than those that look too lived-in.
12. It's not about you. Buyers want to imagine their family in the house. If your house shows an abundance of your personality, it may dissuade the buyer.

There are many other things you can do to hasten the sale of your property, no matter the condition of the housing market. Make sure you consult with your Texas REALTOR® first.

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Moving To Texas

Moving to Texas

Get legal

As a new Texas resident, you have 30 days to register your vehicle and get your Texas driver's license. Before you register your vehicle, though, it must pass the state inspection process. In order, here are the three steps to follow:

1. Take your vehicle to a state inspection station. You can find a list of what types of inspections are required in your county and an inspections-station locator at the Department of Public Safety Web site. When you go, make sure you take your current driver's license and proof of insurance. If your insurance policy wasn't issued in Texas, you may need to show proof that you carry the minimum coverage required by the state: $20,000 bodily injury or death to one person; $40,000 bodily injury or death to two or more persons; and $15,000 injury or destruction to other property.

2. When your vehicle passes inspection, the inspection station will give you a verification form to bring to the county tax assessor-collector's office. This is where you obtain a Texas vehicle registration sticker and license plates. You'll need proof of ownership, such as registration or title from your previous home state, as well as proof of insurance. Again, you may need to show that you carry minimum coverage amounts.

3. Apply for a Texas driver's license at the Texas Department of Public Safety (DPS) office in your area. Bring an ID, proof of Social Security number, proof of liability insurance, and proof of Texas vehicle registration. Expect to provide a thumbprint and surrender any valid out-of-state license you currently have.

More tips Selling your home Buying your home

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