Apparent Phishing Attack Aimed at Facebook!

A Phishing attacked is apparently underway affecting Facebook users.  Since so many of us are participating in the Facebook and Social media phenomena, I thought this was a timely warning!!!  Be careful out there in cyberspace!

DON’T SIGN INTO Fbaction.net

As if the swine flu and the economy weren’t enough to worry about, now there are confirmed reports that a phishing attack is underway aimed at Facebook users.  It consists of an e-mail containing text similar to the message below.  Please be aware and don’t be lured into signing into a malicious site that will steal your information.  The message body will apparently read something like this (with YOUR FRIEND being replaced by the name of a friend of yours):

YOUR FRIEND sent you a message.

Subject:  Hello

“Visit http://www.facebook.com/l/4253f;http://fbaction.net/”

Do take the time to read and check the URL carefully before you sign into the bogus Facebook site and give away any information.

QUANTITY VS QUALITY

Are the old models of fancy, grand or impressive “brick & mortar” real estate companies a thing of the past? Will we see more and more unaffected and/or simplified offices or “virtual” offices as our real estate profession morphs into this new age of “cost-effective” business? The “Old Brokerage” model was forced to focus on recruiting to pay for the lavish accoutrements. It became a numbers game right? “The brokerage with the most agents wins”. The traditional brokerage models focus on recruiting as many people as they can into their brokerage. As they do this, they tend not to focus on the actual agent they are hiring but only on acquiring another body. When I began my career in the mid-80’s, there weren’t many agents and the offices were small. Then, I felt training was a priority and you had an opportunity for lots of personal attention from your Broker. We had weekly classes and the training Broker was always available to “brainstorm” problems and give advice. These days, both subconsciously and consciously, people know they don’t have to work hard to be part of brokerage. Every traditional brokerage in town allows any agent to hang their license with them if they have a pulse and a real estate license. I believe part of the new model of the new agent in our new world will be an emphasis on training, on reliable mentors and on experience. The advent of so much online information makes the role of the agent more as a “trusted advisor” rather than a dispenser of facts and figures. We should relish the onslaught of that kind information and the possibilities that our new role will be more engaged, more educated and more flexible.

The changes are already happening. The consumer is demanding more financial intuitiveness, more real estate opinion based on field experience and more disclosure. First, the brokerage will only focus on quality of agents. Second, the structure of how an agent works will change. Third, the service given to the consumer will be instant results, knowledge, and services. The consumer will also see the value of this “New Brokerage” because there won’t be inexperienced agents charging the same commission as the experienced agents. Would love to hear other thoughts on this

CHOOSING A REAL ESTATE AGENT IN THE PORTLAND, OREGON MARKETPLACE OR PARTS UNKNOWN! BEAM ME UP, SCOTTIE!!

I have a theory of business that “like attracts like”.  It’s no different when choosing a Realtor to help in the sale of your home whether or the purchase of a new home whether in Portland, Oregon or Timbuktu. I know the most successful business relationships come from referrals from my existing client base. But, every business relationship has to start somewhere. So, a second good way to establish a business connection is through “web relationships”.  Blogging & social media has replaced the conventional web site basically because it allows the buying public to feel a connection with the blogger or participant. An online relationship can evolve through an understanding of the personalities and core values.  A business mission should convey those core values. And, not just generic values like honesty, integrity….those should be assumed for any business relationship.  Convey your core values through your example!  I’m frugal, conscientious with my money, I always run the numbers. I own investment property and absolutely believe that over the long haul real estate is still definitely one of the most attractive investments.  Why is that?  A house is home & hearth for your primary residence, you can establish a budget based on an established mortgage amount (as opposed to rent which tends to increase) and it feels good.  An investment property is something you can drive by to look and touch, it’s a great write-off and someone else pays (at least most) of your costs.  There will be no pressure because you must determine how this investment will work for you (with any help I can give).

Anyway, I digress from how to choose an agent.  Choose based on your core values and needs. This is a business relationship with a lot of personal connection.  You will find that you will be speaking with your agent a lot more than you want to talk with anyone besides friends and family!  Make sure your core values are “heard and understood”.

April Showers Bring May Flowers AND Home Sales???

The latest market statistics for March 2009 are out and do we see a glimmer of hope?  Notice as compared to last year sales are down and prices are down (no big news there).  But, comparing month to month for 2009, home sales were up as well as pending sales!  Also, new listings increased.  That, of course, is typical for Spring-time.  Housing inventory dropped to the lowest point since October 2008.  I believe the $8000 first-time homebuyer credit for both 1^st-time buyers and those not having owned a home in three years (see my earlier blog on FAQ’s regarding the First-Time Home Buyer Credit) has contributed to this upswing, as well as short-sales and foreclosed properties reaching that “sweet spot” in the pricing continuum!!

Click here for the market stats:  http://www.rmlsweb.com/temp%2Fdocuments%2F1500-1699%20Market%20Action%20and%20Statistics%20Menu%2F1503%20Market%20Action%20-%20March%202009%2FPortland%20Market%20Action.pdf

JOBLESS CLAIMS DOWN!

Initial Jobless Claims Down:
Initial Jobless Claims were down by 20,000 last week.  While the overall numbers were still bad, this is the first time in quite a while that we have had any sliver of positive news in the employment numbers.

This is important because our housing markets have always been tied directly to employment levels.  As the employment picture starts to level out, consumer confidence will rise and will lead to increased interest in housing.  We could consider taking advantage of these great rates and large selection of homes on the market while home prices are still at bargain levels.

What happened to rates last week?
The Mortgage Backed Securities (MBS) market closed early on Thursday.  We ended up slightly for the week but we had a roller-coaster ride.

We saw a huge rally in Fannie Mae mortgage backed securities on Tuesday and Wednesday that caused 30 year fixed mortgage rates to fall.

But we gave it all back by Thursday’s market close which caused 30 year fixed rates to move back to their levels on Monday.

“PRICING, PRICING, PRICING” IS THE NEW “LOCATION, LOCATION, LOCATION”

“PRICING, PRICING, PRICING” IS THE NEW “LOCATION, LOCATION, LOCATION”!!

It’s true!  Though, location will always be an important component of real estate value, pricing has usurped its position as a stronger element for a successful sale.  It’s all about price!!  So, overpricing your home in this market is the “kiss of death”.  It is very difficult to determine pricing (and, no one wants to leave money on the table), but you almost have to run the comparable data and ignore it!  You should price below the competition and price to lure the reluctant buyer to the table.  The foreclosures and short sales are compromising the sale prices of homes in many areas and to be competitive the other sellers must respond.  Properties with the possibility of selling short of what is actually owed on the property are often utilizing formulas for price reductions.  The listing agent will consistently and incrementally drop prices until that property’s price hits that “sweet spot” in the market pricing continuum.  You know you’ve reached the sweet spot when the activity and interest suddenly increases and there are often even multiple offers.  Once a home has endured the actual foreclosure procedure, the banks are anxious to get them “off the books” and will try to price for a quick sale.  These factors, obviously, affects the pricing on homes that are not facing a short sale or foreclosure and must be considered in the market analysis. 

BUDGETING IN A “TEMPORARILY WORLD GONE MAD” FINANCIAL ENVIRONMENT!

First, just say “no” to fear!  Take control of your financial world and re-work your finances.  Don’t be afraid to reconnoiter with your budget on a regular basis.  But, you must have it in writing and it must be realistic.  Utilize some of the free on-line budget print-outs such as personal monthly budget templates from Microsoft:  http://office.microsoft.com/en-us/templates/TC300027201033.aspx or go to Suze Orman’s budget template at:  http://suzeorman.com/2009actionplan/expensesheet/index.html .  Think through any budget template (or combine them and create your own to give you a truly realistic picture of your finances).  Then, attempt to live below your “means”.  If there are credit issues, contact a good mortgage broker or financial planner and start with a program to repair your credit.  Start a saving program where you “save for a rainy day” just in case it starts “raining harder” (do we need further proof that “rainy days” do come?).  If you have a working budget, good credit and some money to work with; now is the time to make investments.  This too will pass…………….

TO BUY OR NOT TO BUY….

TO BUY OR NOT TO BUY….that is the question!

And, of course, the answer is as varied as the number of people asking the question.  It is always to be considered on a “case-by-case” basis.  As smart and considerate investors we want to attempt to “buy low, sell high” and that’s always a positive goal….not always completely possible but a goal, none the less.  I often use a tennis ball analogy to demonstrate timing the market:  it’s coming down, down and “boink”, it hits bottom and it’s on its way back up.  You know it was the bottom of any market only after it is recovering.  However, especially with real estate there are other components to the purchase:

1)      Tax benefits

2)      Emotional:  A house as “home and hearth”

3)      Long-term investment built on the premise that “everyone needs to live someplace”….a “buy and hold” philosophy

4)      Investing in yourself vs. paying someone else’s mortgage

5)      Establishing a fixed mortgage rate vs. anticipated and predictable rent increases

Interested home-buyers and investors ask, “are we at the bottom of the market?”.  I have attended two presentations by economists in the last two weeks in hopes of answering exactly that question.  Crystal balls are scarce these days but here’s what I’ve learned.  In the presentation by John Mitchell (principal of M & H Economic Consultants of Portland, past chairman of the Oregon Council of Economic Advisors and former chief economist of U.S. Bancorp), said (on a positive note) that “we have endured 32 recessions in our economic history and all have ended” and that he believe that our local market was “at or near the bottom” and he mused that he considered us “bouncing along the bottom”.   You can see more on my notes from that presentation at

www.portlandrealestateupdate.com .  A second presentation by Ted C. Jones, chief economist for Stewart Title Guaranty Co, delved into interest rates and their ultimate impact on perceived value.  He believes that due to the fact that interest rates are linked to the dollar and the impact of impending inflation, we will see interest rates rise by the end of the year (perhaps to 6.5% or 7%….still historically low, but not nearly the 4.5% to 5% we are seeing today). 

So, let’s run the numbers (you can go to www.bankrate.com or use the mortgage calculator at the bottom right hand side of this page and access an easy to use calculator if you want to play with these numbers).  Remember to use loan amount (the amount after your down payment).

Loan amount:  $250,000                                Loan Amount:  $250,000

Amortized over:  30 years                              Amortized over:  30 years           

Interest Rate:  4.5%                                         Interest rate:  6.5%

Principal & Interest payment:  $1266.71     Principal & Interest payment:  $1580.71

Loan Amount:  $300,000                                Loan Amount:  $300,000

Amortized over:  30 years                               Amortized over:  30 years

Interest rate:  4.5%                                           Interest Rate:  6.5%

Principal & Interest payment:  $1520.06     Principal & Interest payment:  $1896.20

Loan Amount:  $500,000                                Loan Amount:  $500,000

Amortized over:  30 years                               Amortized over:  30 years

Interest Rate:  4.5%                                          Interest Rate:  6.5%

Principal & Interest payment:  $2533.43     Principal & Interest payment:  $3160.34

Well, anyway you get the drift.  So, let’s say you purchase a home at $300,000 and the market continues to decline another 5% or $15,000 before starting a steady, albeit slow, appreciation again.  You would be still be saving approximately $376/month with the lesser interest rate or $4,514/year and if you multiply that by 30 years would equal a savings of $135,410 over the life of the loan!  A nice little “chunk of change”!!  We are in a very perplexing cycle, however, we’ve been through other difficult financial cycles.  And, also remember the big picture when it comes to real estate:

National data on housing appreciation:

1970-1979 = 142% appreciation
1980-1989 = 52% appreciation
1990-1999 = 45% appreciation
2000-2008 = 42% appreciation

Source: The National Association of Realtors

One should never underestimate the profound resiliency of the human spirit, nor how swiftly things can change for the better – often overnight.

SIX TIPS FOR YOUR NEW MORTGAGE!

6 TIPS FOR NAVIGATING TODAY’S MORTGAGE MARKETS!  With interest rates hovering just below 5%, high inventory, low prices and various incentives … it just could make sense to buy that first home, make that move up, down or around or pick up that investment property.  Think about the options and always run the numbers!

1)  Understand and Utilize the New Tax Credits!  The latest government stimulus package gives a special tax credit of up to $1,500 for making certain home improvements (mostly for energy efficiency).  Also, if you are buying a primary residence and have not owned a primary residence in the last three years, you may qualify for the new $8,000 first-time homebuyer tax credit.  It can be claimed on your 2008 or 2009 tax returns.  You do have to close by December 1^st, 2009.

2)  Consider Paying Points for your Mortgage Transaction or having the Seller Pay the Points.  Mortgage “points” are upfront fees that you pay in order to lower your mortgage interest rate.  One point is equal to 1% of the loan amount.  You can negotiate into your contract for the seller to pay points on your behalf.  In addition to the significant interest and payment savings you can enjoy, you will also receive a tax deduction this year for points paid by the seller for your loan.  If you are selling a home, you can offer to pay those points for potential buyers as part of your marketing efforts.  This will make your home more affordable for potential buyers and help your listing stand out from the from the other available inventory.

3)  Carefully Structure Your Real Estate Short Sale Transaction.  A real estate short sale is when a home owner sells their property for less than what they owe on the mortgages or lines of credit and the lenders involved give their permission to do this by forgiving the difference and/or releasing the mortgage lien on the property.  If you are selling a home as part of a short sale transaction, make sure to negotiate for a release and full satisfaction of the mortgage from your lender. 

4)  Utilize the Special Options Available for Seniors Age 62 and Older.  If you are 62 or older, you could use a reverse mortgage to buy a new home without making any monthly mortgage payments.  This is an opportunity if you are contemplating a move but are worried about trying to sell your current home in this market.

5)  Use a qualified Mortgage Professional.  With all the confusion and misinformation in today’s market, it is more important than ever for you to work with a Certified Mortgage Planning Specialist who has the training and experience to help with the home buying and/or refinancing.  Don’t hesitate to call for qualified referrals.

6)  Use an Experienced Real Estate Broker.  Use your real estate professional to brainstorm ideas and compare strategies.