RE/MAX: Agents Taking Action – Associates Learn, Adjust and Expand to Stay Successful

Posted by – July 1, 2010

RISMEDIA, July 2, 2010—Gayle Henderson spent more than a decade building her real estate business and becoming one of the top luxury-home specialists in Arizona. Her hard work was handsomely rewarded—in 2007, she earned more than $500,000 in commissions.

But then the bottom dropped out of her Scottsdale market. Suddenly surrounded by foreclosures and underwater homeowners, Henderson, a sales associate with RE/MAX Excalibur, had a decision to make in early 2008: Adjust her approach to fit the times or wait it out and hope for the best. In reality, she says now, it wasn’t a choice at all.

“I’m not a passive person, and I felt an obligation to my clients and my sphere of influence to learn how to provide the types of services they needed,” says Henderson (ABR, CLHMS, CDPE, CRS, e-PRO), a 17-year real estate veteran who joined RE/MAX in 1998. “I’ve always believed in being more like a speedboat than an aircraft carrier.”

Henderson took action. She soaked up everything she could about short sales. She earned the Certified Distressed Property Expert designation—becoming the very first CDPE in Arizona—and attended mastermind workshops. She talked to consumers, lenders, servicers and colleagues who shared their insights and experiences. She taught her team every detail of the process. She developed an avoiding-foreclosure website and created bold new marketing materials. And she dove in and started doing short sales.

These days, Henderson is one of the top distressed property specialists in the Phoenix area. She has an 85% success rate in short sales and has grown adept at leading troubled sellers through the long, and often frustrating, process. She remains at a high level of commission earnings and is helping her community, one sale at a time, find its way through the crisis.

“Without a doubt, this is the most rewarding work I’ve ever done in real estate,” Henderson says. “It can be exhausting, but I have a real passion for what I’m doing.”

An agent like Henderson was born to be with RE/MAX. The network, founded by Dave and Gail Liniger in 1973, has flourished because it’s filled with similar go-getters who care deeply and take their careers very seriously.

“We made it clear from day one that RE/MAX was created to be the best possible place for real estate’s most productive agents. We’re not all things to all people, and we don’t try to be,” says RE/MAX Co-Founder and Chairman Dave Liniger (ABR, CDPE, CRB). “Competitors’ offices usually have a few strong agents and many others who are doing very little business at all. That’s not our culture. RE/MAX affiliates are experienced, high-energy and busy, so our offices are lively and action-packed. There’s a winning environment, with agents constantly sharing referrals, ideas and information. It really keeps everyone at the top of their game.”

In its network of about 93,000 affiliates and 6,500 offices in more than 75 countries, RE/MAX offers agents and brokers high levels of independence and support at the same time. Its credo of “in business for yourself, but not by yourself” allows individuals to make their own choices while enjoying the significant competitive benefits of being aligned with the most recognized name in real estate.

‘Distressed Homeowners’
Like Henderson, many RE/MAX associates in the United States have been forced to confront the mounting problem of defaults, lost equity and foreclosures. Some have completely changed their business model to meet the growing wave of short sales and REOs. Others have merely expanded their skill sets to include those sectors. The key for all is avoiding the trap of inaction.

The need for skilled real estate professionals has never been greater, Liniger says. Consumers, especially those facing foreclosure, are desperately seeking guidance and expertise.

“We’re not dealing with distressed properties here; we’re dealing with distressed homeowners,” Liniger says. “Some people are in default because of bad decisions, but for a lot of them it’s just bad luck—a job loss or something else beyond their control. When they simply can’t afford to stay in the home, we need to help these distressed sellers leave with their dignity intact.”

Liniger, who in March was named one of Bloomberg Businessweek’s “50 Most Powerful People in Real Estate,” has been a leading, vocal advocate for systemic improvements in the way short sales are processed. He and other RE/MAX senior officers spent a great deal of time in 2009 championing short sales as the second-best option, after loan modifications, for all parties involved.

Meetings were held with leaders at Wells Fargo and Bank of America, as well as with officials at the FDIC, the FHFA, Freddie Mac and Fannie Mae. A pivotal sit-down in August with Senate Majority Leader Harry Reid (D-Nev.) moved the process forward and led to a private meeting last September 9 in Washington, D.C., between Liniger and three of the nation’s top housing officials—HUD Secretary Shaun Donovan, FHA Commissioner David Stevens and Laurie Maggiano, director of policy for Treasury’s Office of Homeownership Preservation.

“Throughout these discussions, people were very receptive to our ideas about short sales,” says Mike Ryan, a RE/MAX senior vice president who joined Liniger at the Washington meeting. “They agreed that the short sale process was slow, inconsistent and problematic, and that something had to be done about it. When the HAFA (Home Affordable Foreclosure Alternatives) guidelines came out, they included many of the provisions we had recommended. That was very good to see.”

Call to Action
While Liniger worked tirelessly behind the scenes to improve the short sale process, he also endeavored to get his people ready for the resulting shift in perception.

During a frank, heartfelt address at the annual RE/MAX Convention in March 2009, he acknowledged the worsening conditions in many markets and encouraged affiliates to abandon their aversion to short sales and learn to work them effectively. Specifically, Liniger introduced the crowd to the CDPE designation, which he called “essential training for these times.”

By the end of the year, more than 10,000 RE/MAX associates had answered the call to action and become CDPEs. The total has since grown to nearly 11,000, which is 10 times greater than any competitor. Counting the Five Star Institute’s “Five Star Professional (FSP)” and NAR’s “Short Sales & Foreclosure Resource (SFR)” programs, over 15,000 RE/MAX associates have taken advanced courses in the distressed property arena.

Short sales are gaining momentum and consumer visibility. They accounted for 17.9% of U.S. home sales in April, and the number is trending upward, according to a study by Campbell Communications. RE/MAX agents, in large part because of their training and experience, are closing many of these difficult transactions.

“RE/MAX associates are leading the way in distressed properties just as they always have in traditional home sales,” Liniger says. “Our brokers and managers have shown tremendous leadership in helping agents prepare for this. It’s possible only because of the quality of people within our network. Organizations filled with beginners and part-timers simply can’t match us on this.”

Relevant Training on Demand
The No. 1 position in CDPEs continues a longtime trend. More than 50,000 affiliates have taken advanced courses through RE/MAX University, and for good reason—year after year, statistics show that agents with professional designations earn significantly more than those without them.

RE/MAX has a wide lead in virtually every major professional designation. The network is No. 1 in credentials related to buyers (ABR), residential sales (CRS), seniors (SRES), luxury homes (CLHMS), global real estate (CIPS), relocation (CRP) and bank-owned properties (FSP).

RE/MAX University makes it happen. Since 1994, with the advent of the industry’s only proprietary satellite training network, RE/MAX has enjoyed a tremendous competitive advantage in education. This edge grew even more pronounced in March with the unveiling of a broadcast-quality, on-demand video platform through which sales associates, brokers and managers around the world can access more than 1,000 totally-free programs at any time, 24/7.

RE/MAX University on Demand offerings include short, three- to four-minute “Quick Hit” clips from trainers, such as Brian Buffini and Richard Robbins, as well as multi-hour classes for most of the major designations. Virtually everything is free except the accredited courses, which are heavily discounted from industrywide prices.

More Leads, More Business
The RE/MAX University video player is just one component of the network’s suite of online tools, which also features a members-only extranet, a Design Center of marketing templates, and one of the industry’s most powerful business-building tools: LeadStreet.

LeadStreet has delivered more than 8 million leads—with no referral fee—directly into the hands of RE/MAX associates. The system debuted in 2006 when RE/MAX took the unprecedented step of putting the listings of all companies onto remax.com through an elaborate set of IDX agreements. The key to the system is swift, effective action once the lead is received.

“I feel a sense of responsibility to act on the leads quickly and professionally,” says Shara Martineau (QSC, SFR), a Hall of Fame agent with RE/MAX All Stars in Corona, California, an office that has closed more than 40 sales through LeadStreet. “It’s important to follow up with the person right away. You never know what might come from it.”

LeadStreet is fed by the unmatched amount of traffic on remax.com which, by any measure (Hitwise, ComScore, Compete.com), is the most-visited website of any national real estate franchise brand. On average, roughly 1.7 million unique visitors come to the site each month, and many of them subsequently become clients or customers of a RE/MAX associate.

Promotional Powerhouse
This traffic doesn’t happen by accident. A strategic mix of national promotions—via TV, radio, print, the Internet, social media, sponsorships, partnerships, cause marketing and more—combines with the marketing efforts of individual regions, offices and agents to create billions of RE/MAX impressions each year. These constant reminders make consumers think of the individual offices and agents they know personally.

On national TV, RE/MAX has an overwhelming “share of voice,” generating more than 70% of the total impressions among real estate brands during 2009. Instead of cutting television advertising during the downturn—as some competitors did—RE/MAX altered its message to better reflect the times, producing a series of ads featuring straightforward comments from CEO Margaret Kelly. The widespread exposure provides a critical advantage on the local level.

“The national advertising—especially with the new messages from Margaret—sets me apart from all of my competition,” says Jay McHugh (CBR, CRS, CDPE), a top-producing sales associate with RE/MAX Unlimited in Brookline, Massachusetts. “My clients know the brand and what it stands for, so when I couple that with my own professional reputation and image, they feel they’re being represented at the highest level possible. It really helps me in my listing presentations.”

Some in the industry downplay the competitive advantages of having the most recognized brand in real estate. Liniger is not one of them.

“People say brand doesn’t matter only when they have no brand power themselves,” he says. “Every RE/MAX associate contributes to, and benefits from, our brand’s credibility. They are the brand. And because of what the brand represents—the best in the business—a consumer who contacts a RE/MAX agent does so with high expectations. It works only because our people have the ability to deliver on that promise.”

High-Level Performance
The numbers bear that out, supporting the claim first made in 1998 that nobody in the world sells more real estate than RE/MAX. In study after study, RE/MAX associates are much more productive than the agents of any other national brand.

In RISMedia’s 2010 Power Broker Report, for instance, which ranked the top 300 U.S. brokerages based on 2009 transaction sides, RE/MAX placed 69 brokerages on the list, 46% more than anyone else. Even more telling, the 13,505 RE/MAX associates within those brokerages closed 203,392 transaction sides last year, an average of 15.1 each. That figure easily eclipsed the per-agent production of all other national brands.

The high-quality, high-performance model extends beyond the U.S. as well. A recent ranking of top offices in Canada—where RE/MAX has been No. 1 nationally since 1987 and where, in April, Reader’s Digest named RE/MAX “the most trusted brand” in real estate—generated similar results. RE/MAX filled 130 slots (65%) in the REAL Trends Canadian Top 200 rankings. The RE/MAX per-agent average of 17.9 transaction sides was 20% higher than any competitor.

Such industry-leading performance, both inside and outside the United States, illustrates the soundness of the RE/MAX model and its focus on top-producing professionals. It works in every market, building solid, lasting connections based on business and success.

Even during these tough economic times, more than 5 million home sales will take place in the U.S. this year. Action-minded RE/MAX pros like Gayle Henderson want their fair share, and they understand how much is riding on their skills and professional dedication.

“I’m a big believer in paying it forward,” she says. “I like to think that if I influence someone in a positive way, that person usually carries it on to someone else. We’re all playing a huge role in stabilizing the market, and the more we help and support each other, the more we can be proud of what we do each day. If you’re not fully committed to that, you’re really not in the game at all.”

For more information, visit www.remax.com and www.joinremax.com.

RISMedia welcomes your questions and comments. Send your e-mail to: realestatemagazinefeedback@rismedia.com.

Copyright© 2010 RISMedia, The Leader in Real Estate Information Systems and Real Estate News. All Rights Reserved. This material may not be republished without permission from RISMedia.

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HomeGain Releases Second Quarter 2010 Home Prices Survey Results

Posted by – July 1, 2010

RISMEDIA, July 2, 2010—HomeGain, one of the first websites to provide free online instant home prices, announced the results of its 2010 second quarter home prices survey based on the responses of over 900 real estate agents and brokers and 3,500 homeowners nationwide.

Real estate professionals and homeowners continue to differ on the current values of homes and the direction of home prices. According to surveyed agents and brokers, 75% of homeowners think their homes are worth more than the recommended agent listing price. Forty-seven percent of real estate agents and brokers and 49% of homeowners think that home prices will remain the same in the coming six months.

Twenty-eight percent of homeowners think that the values of their homes will increase over the next six months vs. just 20% of agents and brokers who think the same. Thirty-three percent of agents and brokers and 23% of homeowners think that home prices will decrease over the next six months.

Sixty-one percent of surveyed agents and brokers indicated that their home buyer clients think homes for sale are overpriced.

“It is not surprising to see that homeowners are slightly more optimistic about the direction of home prices than real estate professionals and that neither group is predicting a rise in home prices over the next six months,” stated Louis Cammarosano, General Manager at HomeGain. “Real estate industry watchers tracking the direction of home prices will continue to focus on the impact of the expiration of the home buyer tax credit, the direction of interest rates and unemployment, foreclosure and shadow inventory data.”

For more information, visit www.HomeGain.com.

RISMedia welcomes your questions and comments. Send your e-mail to: realestatemagazinefeedback@rismedia.com.

Copyright© 2010 RISMedia, The Leader in Real Estate Information Systems and Real Estate News. All Rights Reserved. This material may not be republished without permission from RISMedia.

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Why Don’t My Credit Scores Match?

Posted by – July 1, 2010

RISMEDIA, July 2, 2010—The economy is looking up and you want to take advantage of some great home-buying opportunities before they disappear. Interest rates are still low for people with excellent credit, so you update your records and purchase your credit report from a reputable credit report provider. Your credit score on the report is 920. Next you apply for a home loan to get pre-approved for a specific amount of money before you start shopping for a home. Your lender calls you back and your credit score had dropped to 801 overnight!

What Happened?
First, you need to understand a little about credit scores. Your credit score is a three-digit number that helps lending institutions assess their risk associated with lending you money. Credit scores are used for home loans, auto loans, personal loans and credit cards. However, it doesn’t end there. Your score may also be considered for non-lending purposes, such as new utility services, cell phone services, renting an apartment, a lease, auto insurance and even to assess your character as part of a new job background check. People with lower credit scores may pay higher interest rates or may not be approved at all. Whereas, those with higher, less-risky credit scores often qualify for lower interest rates and special options. Credit scores are calculated based on computer “predictability” models. These models are designed to compare and analyze credit information and credit utilization patterns from your credit report against thousands of other consumers. The data is then evaluated using a complex mathematical algorithm that generates a credit score the moment a report is ordered. There are literally trillions of score combinations used in the calculations. Most credit scores are calculated and provided individually by each credit bureau, including the three major ones in the U.S., which are Experian, Equifax and TransUnion. Additionally, many lenders use third-party credit scoring systems, such as FICO, NextGen, CE Score and VantageScore. For consumers, the variations in scoring models and score ranges can create some confusion.

In 2006, the three major bureaus joined forces to create a single credit scoring system called the VantageScore. The VantageScore and FICO model lead the industry as competitive rivals in credit-scoring systems.

VantageScore provides a standardized universal mathematical formula to create a credit score from data found on reports from the three major bureaus. Your VantageScore may not be exactly the same if your lender only orders a credit report from one of the bureaus. This is because the data each bureau receives may be slightly different.

As an example, if your auto loan lender does not report your payment history to Equifax but does report it to Experian and TransUnion, it will create a difference in scores. In theory, the VantageScore should be more consistent across all three bureaus since the mathematical formula is the same.

Unlike FICOs traditional 300-850 credit score range, the VantageScore ranges from 501-990. There is no true way to compare the results of the VantageScore to a FICO score especially when the formulas are constantly changing. However, to put some perspective in place, a 650 FICO score approximately compares to a low, 800-range VantageScore.

Although the exact formulas and algorithms for calculating credit scores are closely-guarded secrets, FICO and Vantage do provide general key characteristics that drive their credit scoring models. The one constant for both scoring systems is that paying your debts on time will typically be the primary factor that positively impacts your credit score.

Please contact ApprovalGUARD at www.approvalguard.com with any questions or any assistance with more effectively self-managing your credit.

Jeff Mandel is president and Marlin Brandt is COO of ApprovalGUARD.

For more information, visit www.ApprovalGUARD.com.

RISMedia welcomes your questions and comments. Send your e-mail to: realestatemagazinefeedback@rismedia.com.

Copyright© 2010 RISMedia, The Leader in Real Estate Information Systems and Real Estate News. All Rights Reserved. This material may not be republished without permission from RISMedia.

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Today’s Featured Listing: Disney Unveils Unique Residential Resort Community at Walt Disney World

Posted by – July 1, 2010

RISMEDIA, July 2, 2010—Disney recently unveiled Golden Oak, a one-of-a-kind luxury residential resort community offering the unprecedented opportunity to purchase a home at Walt Disney World Resort in Florida. Especially designed for resort living, Golden Oak will provide an entirely new way for families to connect with the world’s best known family destination and entertainment brand.

Golden Oak will offer a limited collection of single-family custom homes priced between $1.5 and $8 million, with fewer than 30 home sites available for sale this year. Designed by Disney’s famed Imagineers, the gated community will feature intimate neighborhoods and amenities created with everyone in the family in mind. Disney’s well-known attention to detail is visible in every park, pathway and the custom-design of the proposed private clubhouse. Expansive conservation areas comprise almost half of the entire 980 acre footprint.

The proposed private clubhouse, concierge services and collection of Walt Disney World Resort benefits will bring Disney’s guest service culture directly to Golden Oak residents. Golden Oak is planned to include Four Seasons Resort Orlando at Walt Disney World Resort, combining Disney’s renowned service and hospitality with Four Seasons’ defining standard of excellence. Golden Oak plans to offer residents access to select Four Seasons’ future amenities including the full service spa, restaurants, golf course and event space.

Initially, Golden Oak will consist of three types of single-family homes. Village Homes will capture the romantic look of a Mediterranean village on home sites up to one-quarter acre. Estate Homes, on approximately one-half acre home sites, will offer a variety of architectural styles including Tuscan, Spanish Revival, Venetian, Italianate, Dutch Colonial and Island Colonial. At up to three-quarters acre in size, Grand Estate Homes will include architectural styles consistent with Estate Homes and will accommodate the needs of large families. Homeowners will use one of Golden Oak’s select custom homebuilders to build the home of their dreams.

For more information, visit www.disneygoldenoak.com.

To submit your Featured Listing, send 300-500 words on the property, surrounding area, and how you’re marketing it to Paige@RISMedia.com. Don’t forget to submit photos and an accompanying URL!

To see last week’s Featured Listing, click here.

Zillow.com Reports Record Visits and Activity in First Half of 2010, Amid Surge in Mobile Usage

Posted by – July 1, 2010

RISMEDIA, July 2, 2010—Despite a mixed housing market that continued to struggle during the first half of 2010, real estate website Zillow.com announced it broke multiple records for site traffic and user activity over the past six months. Zillow consistently broke traffic records during the past six months with an average of 10 million unique users visiting Zillow each month during this period, up 20% year-over-year. In June 2010, 10.7 million visitors came to Zillow, up 26% from a year earlier.

The Zillow Mobile App has been downloaded 1.75 million times, making Zillow the clear leader in mobile real estate. Zillow has apps on the iPhone, as well as on Windows Mobile, iPad and Android, the latter three of which launched in May, April and March respectively. Zillow is one of the most popular real estate apps in the iPhone App Store and in the Android Market.

Zillow offers information and services for every stage of homeownership–for homeowners, buyers, sellers and renters–and for all types of real estate professionals, including agents, brokers, lenders and more. Approximately 63% of Zillow’s visitors, or 6.5 million in June were actively buying or selling a home now or in the near future.

Additional milestones during the first half of 2010 include:

-4.4 million for-sale, rental and Make Me Move listings are posted on Zillow today, up 23% year-over-year.

-Zillow forged new partnerships with several large real estate brokerages in the first half of 2010, including Howard Hanna Real Estate Services and John L. Scott Real Estate. Zillow now has partnerships with virtually every major real estate brokerage in the country, many of whom are represented on Zillow’s Broker Advisory Board.

-Zillow began offering rental listings in December and will soon be adding additional rental listing feeds, as it has already done with for sale listings feeds.

-Zillow Mortgage Marketplace continues to revolutionize the way borrowers connect with lenders, offering consumers an anonymous way to compare unlimited customized rates by verified and rated lenders. During the first half of 2010, borrowers submitted 356,000 loan requests through Zillow Mortgage Marketplace, up 35% year-over-year. During the same period, lenders responded with more than 4.7 million custom loan quotes, up 31% from the first half of 2009. Lenders compete with one another in the transparent marketplace, and each loan request is generating an average of 16 loan quotes to help borrowers thoroughly shop and find the best loan for them. With the industry’s first lender-rating system, participating lenders have an average of four reviews each.

-The Zillow Directory of real estate professionals continues to grow and now includes more than 262,000 real estate agents, more than 19,000 lenders and 25,000 other professionals.

“As volatility in the housing market continues unabated, information is power now more than ever,” said Spencer Rascoff, Zillow’s chief operating officer. “In just a few short years, the Zillow brand has become well-known as the leading source for real estate information online. We’re pleased that in 2010 our product has successfully expanded beyond the desktop and onto mobile devices, such that Zillow is now readily accessible wherever and whenever people want to access it.”

For more information, visit www.zillow.com.

RISMedia welcomes your questions and comments. Send your e-mail to: realestatemagazinefeedback@rismedia.com.

Copyright© 2010 RISMedia, The Leader in Real Estate Information Systems and Real Estate News. All Rights Reserved. This material may not be republished without permission from RISMedia.

Point2 Technologies Launches Highly Anticipated Point2 Agent IDX

Posted by – July 1, 2010

RISMEDIA, July 2, 2010—Point2 Technologies announced the release of its highly anticipated Point2 Agent IDX (Internet Data Exchange) search solution. Seamlessly integrated into the Point2 Agent (www.Point2Agent.com) listing syndication and website platform for real estate brokers and agents, the tool enables consumers to search local MLS listings directly on their real estate agent’s Point2 website, easily and conveniently.

Point2 Agent IDX is developed and offered under a technology and marketing agreement with Wolfnet Technologies, Point2 announced in early May 2010. Wolfnet is one of the industry’s leading providers of IDX for real estate, with MLS channels reaching more than 80% of real estate brokers and agents in the United States.

Nearly 75% of real estate practitioners in the United States who operate their own websites, including brokers and listing agents, as well as buyers’ agents who do not represent listings of their own, today use IDX, according to Point2 estimates. IDX delivers a number of important benefits to the sales professional including an expanded inventory of listings prospective buyers can browse directly on their website.

“Especially in today’s market environment, Point2 Agent IDX will play an important role in the success of our customers as it delivers content and feature sets as well as cost savings on a recurring, nearly inescapable expense for many real estate professionals today,” said Saul Klein, Chief Executive Officer, Point2 Technologies. “We are constantly investing in research and development to give our users unique advantages in the marketplace. IDX is one of those indispensable tools that are critical to success and that we’re excited to bring to our members.”

Built right into the widely used Point2 Agent platform, Point2 Agent IDX now puts critical technology at the fingertips of Point2 users, enabling them to conveniently and more easily add MLS listing search on their Point2 agent websites, saving them valuable time, effort and unnecessary frustration.

MapTracks, an optional component of Point2 Agent IDX, enables an advanced map-based search interface to the Point2 Agent IDX system, and has been shown to significantly increase visitor engagement and prospect conversion rates.

For more information, visit www.point2.com.

RISMedia welcomes your questions and comments. Send your e-mail to: realestatemagazinefeedback@rismedia.com.

Copyright© 2010 RISMedia, The Leader in Real Estate Information Systems and Real Estate News. All Rights Reserved. This material may not be republished without permission from RISMedia.

Responsible Homeowners Drown in Debt With No Offer of Help

Posted by – June 30, 2010

RISMEDIA, July 2, 2010—(MCT)—Scott Katzer owes about $200,000 more than his Fort Lauderdale home is worth. Unable to sell anytime soon, he wants to reduce his monthly mortgage payment by refinancing to a lower interest rate. Katzer doesn’t qualify under a government refinancing program because the value of his home is so much lower than what he owes. Private lenders turn him down for the same reason and he’s ineligible for assistance from a state-run program because he has a job and can pay the mortgage.

Katzer, an engineering consultant, is one of thousands of homeowners who are underwater, the term applied to those whose homes are worth less than the mortgages. Many of these people are not in immediate danger of foreclosure, but their finances have been hammered by the housing crash and their pleas for help rejected because other borrowers are considered more desperate.

Katzer could do what some have done—walk away from his house and the loan. But he doesn’t think that’s appropriate. “I’m stuck in the middle,” he said. “I want to do the right thing. It’s incredibly frustrating.”

Mike Larson, a housing analyst with Weiss Research in Jupiter, Fla., said the government largely has failed to address the plight of homeowners who still are paying on underwater mortgages. “The reality,” Larson wrote, “is that many of these borrowers just can’t be helped under the current structure, and that’s why some people are just throwing up their hands and walking away.”

The problems facing underwater borrowers across Florida are hurting the state’s economy, said Sean Snaith, a University of Central Florida economist. Homeowners don’t want to spend money when their personal balance sheets take a hit. “It’s a negative wealth effect,” Snaith said. “It’s a pretty big burden that these people face, and it’s endangering the pace of our recovery.”

Participation in the Obama administration’s Home Affordable Refinance Program is limited to borrowers who owe up to 125% of the current value of their homes. But plummeting home prices over the past several years have left many owners owing more than that. Katzer bought his home for $460,000 in 2006, but he estimates it’s now worth somewhere in the $250,000 range.

For the most part, individual lenders won’t refinance if the homeowner isn’t eligible under the terms outlined by Fannie and Freddie, which together own more than half of the nation’s mortgages.

While government and lending officials sympathize, they say aid must go to homeowners who need it most.

In its most recent program for struggling homeowners, the federal government is committing $2.1 billion to 10 states hit hardest by the housing downturn. Florida is getting $418 million to fight foreclosures, and the Florida Housing Finance Corp. is sending more than $73 million of that to Broward and Palm Beach counties as part of a so-called Mortgage Intervention Strategy expected to begin by the end of the year.

At the end of the first quarter, about 44% of single-family homeowners in Palm Beach, Broward and Miami-Dade counties owe more than their properties are worth, said Zillow.com, a Seattle real estate research firm. Borrowers in hard-hit markets like Florida may not be able to break even in a home sale until at least 2020, according to California research firm CoreLogic.

Florida Housing Finance will use the federal money to make loans that will cover up to nine months of mortgage payments for eligible homeowners. It hopes to find lenders or investors willing to forgive another nine months of payments. Once homeowners resume making their mortgage payments, the loans can be forgiven after five years as long as the borrowers make payments on time and live in the residences.

But to qualify for the program, homeowners have to be out of work or in jobs with salaries that don’t let them meet basic living expenses. That excludes underwater borrowers who can make their mortgage payments.

“It made sense to us that most of the people at risk of foreclosure are without jobs or are underemployed,” said Cecka Green, spokeswoman for Florida Housing Finance. “This program is not going to help the majority of the people who need it. We understand that. But we wanted to target some of the people considered to be the most vulnerable.”

The Mortgage Intervention Strategy could help neighborhoods like Dave Rakszawski’s near Lantana, Fla. At least two houses on his block alone have fallen into foreclosure in recent months. He’d like to see owners get the aid they need so the community of split-level homes can recover. But he questions whether borrowers qualifying for the state mortgage payments will be motivated to find jobs that allow them to leave the program after 18 months. “Is that person going to benefit by it, or a year and a half from now are they going to say, ‘I still can’t afford it anyway?’” he asked. “Even if they’re given more time, some people really will have no intention of making it work. It’ll just be a free place to live for 18 months.”

Rakszawski, who manages an art glass company, said the government would be better off helping homeowners who live responsibly and are committed to repaying their debts.

Analysts say the only meaningful help for underwater borrowers still making their mortgage payments is principal reduction.

Banks want to avoid the financial hit, so the practice is not widespread across the industry. Bank of America did announce a mortgage forgiveness plan for some borrowers earlier this year.

Dianne Mattiace, a real estate agent in Lighthouse Point, Fla., co-sponsored a workshop recently to explain options available to struggling homeowners. She realizes it’s impossible to help everyone who needs it, but she also said it’s important for the government and lenders to reach out to underwater borrowers and give them hope.

Without it, she said, the housing market could tank again, as another wave of homeowners abandon their properties.

(c) 2010, Sun Sentinel.

Distributed by McClatchy-Tribune Information Services.

RISMedia welcomes your questions and comments. Send your e-mail to: realestatemagazinefeedback@rismedia.com.

Copyright© 2010 RISMedia, The Leader in Real Estate Information Systems and Real Estate News. All Rights Reserved. This material may not be republished without permission from RISMedia.

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House Extends Home Buyer Tax Credit Closing Deadline

Posted by – June 30, 2010

RISMEDIA, July 1, 2010—(MCT)—The House of Representatives introduced and passed a proposal to extend the original June 30 closing deadline for home buyers who want to get up to $8,000 in tax credits.

The Home Buyers Assistance Act of 2010 would push the deadline to midnight September 30, 2010 on contracts that were signed by the midnight April 30 deadline. The vote was 409 to 5, with 18 not voting.

First-time buyer Juan Martinez of Hicksville had prayed for such a reprieve. “That’s awesome,” said Martinez, whose chosen home in Hempstead Village is ready to close except for one thing—a delay in up to $110,000 in down payment assistance grants. He added, “It’s like a roller-coaster ride until the bill is signed. I’d rather not get too excited about it.”

The bill will now be forwarded to the Senate, where the Democrat-controlled chamber had attached the same proposal to versions of the jobs and economic stimulus bill, which failed twice this month due to lack of support from Republicans expressing concern about the deficit.

The National Association of Realtors estimated that up to 180,000 people would bust the existing deadline, including almost 9,200 in New York State. A spokesman for the trade group said the proposal might not have to go through the usual House-Senate talks over bill differences.

“We think this has a good chance, but I don’t want to build up too many hopes,” spokesman Lucien Salvant said with a laugh, “because anything can happen in the hallway between the House and Senate.”

Veronique Bailey, a Brooklyn, N.Y. resident and teacher, had signed a contract for a six-bedroom Amityville, N.Y. house in September, but was delayed by, among other things, permit and code problems in her chosen home. “It makes you vulnerable and it’s not in your control.”

Even with an extension, some home closing deals might fall apart. Some contracts say the deals must close by the end of June 30. That gives sellers a chance to walk away.

But financial consultant Greg Rende of Massapequa, N.Y. has no worries, even though he’s busting the deadline. The developer of a new Amityville condo complex has not finished his unit, he said, but Rende got a backup clause in the contract. “If we weren’t closed by June 30 and the builder was not ready,” Rende said, “he would have to pay me the $8,000 I don’t get for the first-time home buyer credit.”

In normal times, two months to close would be doable. But these are not normal times, and Rende thinks Congress did not consider how swamped lenders and lawyers would be.

Copyright (c) 2010, Newsday, Melville, N.Y.

Distributed by McClatchy-Tribune Information Services.

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Copyright© 2010 RISMedia, The Leader in Real Estate Information Systems and Real Estate News. All Rights Reserved. This material may not be republished without permission from RISMedia.

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With New Media, the Same Marketing Principles Apply

Posted by – June 30, 2010

RISMEDIA, July 1, 2010—Measuring the success of your marketing efforts is always critical, but some media is built to be measured in the short term, while others are more structured for brand building, to be measured long term.

This is the case with social media. It is being utilized successfully today to augment the building of powerful brands of any size. The effect of regular, brand-building posts and interaction can create more transparency between you and your potential clients, and give them a feel for what you are all about. One of the beauties of this media is that you can use it to help build a local business brand or an international one.

When used properly, social media will accelerate the buying process, the speed at which you can go from awareness to sale. However, it’s more difficult to track and measure this type of benefit on your own. One way is to watch where new referrals are coming from. You may find a pattern of more referrals from those you engage with on social media.

There are tools you can enable in social media now to measure initiatives, such as recruitment and tracking links you can create between platforms, which can be helpful depending upon what you want to achieve. And remember, social media is a great research tool, too. This alone is extremely valuable to growing your business.

Keep in mind that timeless marketing rules also apply to social media. One in particular is, good media always works; it’s your campaign that failed. What can fail? Your message, delivery, frequency or follow up, and finally expecting an outcome from the media that it wasn’t designed to deliver. Social media is not free, so treat it like other media you use. It is a time commitment, and you only get out of it what you put into it.

Are you using social media too much, not enough, sending inconsistent messaging? If so, re-think your goals, strategy and the time you spend on it. Do more listening than participating to learn from those who are successful. Then, once you’ve learned how to manage this media to your benefit, your participation shouldn’t have to be exhaustive to build your brand. Finally, set expectations that make sense for the media and you.

Chris Kaucnik is marketing director for Home Warranty of America, Inc.

For more information, visit www.hwahomewarranty.com.

RISMedia welcomes your questions and comments. Send your e-mail to: realestatemagazinefeedback@rismedia.com.

Copyright© 2010 RISMedia, The Leader in Real Estate Information Systems and Real Estate News. All Rights Reserved. This material may not be republished without permission from RISMedia.

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As Stimulus Funds Run Out, Economic Fears Rise

Posted by – June 30, 2010

RISMEDIA, July 1, 2010—(MCT)—With home sales sliding, employers reluctant to hire and world stock markets gyrating wildly, the U.S. economy is in danger of stalling. Now one of its only reliable sources of fuel is running out: federal stimulus spending.

Funds flowing from the $787 billion legislation passed last year have helped create hundreds of thousands of jobs and propped up social programs such as unemployment benefits. But with much of that money spent and lawmakers reluctant to approve another big round of spending, concerns are rising about what will replace it in the short term to keep the economy moving.

Jitters about a global slowdown pounded world markets recently after an index forecasting Chinese economic activity was revised downward and Greek workers walked off the job to protest government budget cuts. In the U.S., the Dow Jones industrial average plunged 268 points on news from the Conference Board that consumer confidence fell in June after three straight months of gains.

Economists worry that the weak labor market will spook U.S. consumers, whose spending fuels the economy. Dwindling federal stimulus funds are only heightening those fears.

California’s $85 billion share of stimulus funding has repaired bridges and highways, built barracks on military bases and renovated crumbling infrastructure. Disabled veteran Bill Vaughn says his biggest job this year was a stimulus project repairing a pipe at the VA Greater Los Angeles Healthcare System. Since that job ended in January, he hasn’t found work for his firm, BCV Construction. “My company’s on the verge of closing,” said Vaughn, who lives with his in-laws in the Northridge section of Los Angeles.

In addition to infrastructure improvement, about $18 billion of California’s share of stimulus funds has been spent on social programs such as Medicaid, unemployment insurance and food stamps. Billions more flowed to schools and job centers. But with those funds now gone, officials are preparing for another round of belt-tightening.

“It was unbelievable feast one year and famine the very next,” said Blake Konczal, director of the Fresno Regional Workforce Investment Board, which used stimulus funds to help more than 2,000 unemployed people attend job retraining. The office’s budget doubled thanks to $16.4 million in stimulus funds but will contract again in the new fiscal year, which begins July 1.

The American Recovery and Reinvestment Act has been contentious since Congress approved it in February 2009 to aid an economy mired in a deep recession. Republicans have been particularly critical of the program and its price tag, and the final bill was billions of dollars smaller than the one President Barack Obama had originally proposed.

But seventeen months later, those stimulus jobs, along with temporary government positions created for the 2010 census, are among the few bright spots in a dismal employment market. The nation’s unemployment rate is 9.7% and companies have shown little willingness to hire. Private-sector employers added just 41,000 jobs in May, out of a total of 431,000 jobs created.

The government has few levers left to pull to produce quick growth. Interest rates are already at rock-bottom levels. Concerns about swelling U.S. deficits have many on Capitol Hill opposed to the idea of another stimulus. That has some economists worried.

“There’s an uncomfortably high probability that we slip back into recession,” said Mark Zandi, chief economist of Moody’s Analytics. “If we slip back, there’s no policy response. We won’t have the resources to respond.”

To be sure, there are still thousands of ongoing stimulus projects and billions of dollars to be spent. The Obama administration is calling this “Recovery Summer” and will spotlight dozens of stimulus projects in the coming weeks. But many important programs are losing funding.

Among the most crucial is unemployment insurance. Benefits vary from state to state, but the federal government has helped pay for five extensions that have boosted the duration of payments in states including California to as much as 99 weeks from the standard 26 weeks. Stimulus funds have also helped subsidize health benefits through the Consolidated Omnibus Budget Reconciliation Act, or COBRA, which gives jobless workers an opportunity to continue their coverage at group rates for a limited time.

Efforts to extend those provisions are stalled in Congress. The National Employment Law Project estimates that 1.63 million workers will exhaust their benefits by the end of this week, and at least 140,000 workers will lose COBRA coverage.

In California, which has the nation’s third-highest unemployment rate at 12.4%, the Employment Development Department estimates that 205,000 unemployed workers will not receive further benefits without congressional action. About 2 million Californians are unemployed; nearly half of them have been out of work for 27 weeks or more.

“There’s nothing out there,” said Jennifer Tilt, a resident of Bloomington, a town in San Bernardino County, whose unemployment benefits will expire soon. Tilt, who has a bachelor’s degree, said she’s applied for jobs at fast-food restaurants to no avail. She’s dependent on her two grown children and her mother’s Social Security check to pay the bills.

Other programs are in jeopardy as well. The federal government temporarily increased the amount it contributed to state Medi-Cal payments by 11.6%. Without further congressional action, those contributions will end Jan. 1, halfway through the state’s fiscal year. The state will have to find the money for Medi-Cal elsewhere, probably through $1.8 billion in further cuts, according to the governor’s office.

“The human impact of requiring us to find another $1.8 billion in spending cuts to replace federal funding that was designed to help states avoid deep cuts is both cruel and counterproductive,” Gov. Arnold Schwarzenegger wrote to the state congressional delegation earlier this month.

Republicans say extending benefits and other provisions of the stimulus bill will add to the country’s trillion-dollar deficit. “Here’s another idea Democrats should consider, one that Americans have been proposing loudly and clearly: Stop spending money you don’t have,” Republican leader Mitch McConnell of Kentucky said last week on the Senate floor.

But Democrats—and some economists—say that spending money now to create jobs and fund unemployment benefits is the only way to stave off another recession.

“What worries me the most is this idea that austerity is going to be helpful,” said Michael Reich, a professor of economics at the University of California-Berkeley, who said that ending unemployment benefits could drive more people to file for disability and hamper long-term growth. “When you make an economy shrink, it makes it harder to pay back debt in the future.”

The nation’s construction industry provides a window into the tough choices facing lawmakers. Federal tax credits have helped drive home sales while stimulus spending on infrastructure has put laborers back to work. Such subsidies are unsustainable in the long run. But when to pull the plug?

New-home sales dropped 33% in May 2010 as home buyer tax credits ended. Construction employment declined in 25 states that same month, according to the Associated General Contractors of America.

“In the next few months, unless some other kind of work comes along, we’re not feeling very optimistic,” said Ken Simonson, chief economist for the contractors trade group.

(c) 2010, Los Angeles Times.

Distributed by McClatchy-Tribune Information Services.

RISMedia welcomes your questions and comments. Send your e-mail to: realestatemagazinefeedback@rismedia.com.

Copyright© 2010 RISMedia, The Leader in Real Estate Information Systems and Real Estate News. All Rights Reserved. This material may not be republished without permission from RISMedia.

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