Flat Fee MLS, For Sale By Owner, Home Buyer Rebates

According to the National Association of Realtors (NAR), the Pending Home Sales Indexrose 0.1% during the month of May. The index was up 6.7% compared with May 2008. It was the first four-month run up in the pending sales measure since October 2004. But the rise in sales contracts may not yield a like increase in completed sales, according to Lawrence Yun, chief economist for NAR. “Closed existing-home sales have improved but are coming in lower than expected because some contracts are delayed or falling through from the application of new appraisal rules for many transactions,” he said. Many industry insiders have complained that home appraisals are being too often based on values of foreclosed properties, which sell for significantly less than the homes of ordinary sellers.

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The housing affordability index rose to 174.8 in April from an upwardly revised 171.9 in March, and was the second highest monthly reading on record after peaking at 176.9 in January of this year. According to Lawrence Yun, NAR chief economist, the total number of home sales is expected to improve but with dramatic local market variation in the timing of the recovery. “The market has already bottomed in some areas, but this is an unusual housing cycle with some areas improving rapidly while others languish or decline,” Yun said. On the flip side, the Adversity Index from MSNBC.com and Moody’s Economy.com reported signs of a turnaround in 33 of the nation’s metro areas. While that’s less than 10% of all metro areas, it’s still significant, says economist Andrew Gledhill of Economy.com. He also feels there are signs that builders are growing modestly more confident about their prospects.

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After the excesses and misconduct within the mortgage industry leading up to the collapse of the housing market, the Obama administration has come up with a plan to create a Consumer Financial Protection Agency. Chief among the duties for the new agency would be to enforce safeguards to ensure that consumers are protected when dealing with mortgage loans and other financial products. The Treasury Department issued a press release statement entitled ‘Administration’s Regulatory Reform Agenda Moves Forward: Legislation for Strengthening Consumer Protection Delivered to Capital Hill’ with President Obama stating that the new agency would “have the power to set standards so that companies compete by offering innovative products that consumers actually want - and actually understand.” Treasury Secretary Geithner said, “Consumer protection will have an independent seat at the table in our financial regulatory system.”

The press release goes on to blame many of the worst abuses in the mortgage industry on a lack of oversight. “Had the new agency existed, its examiners could have gotten inside the operations of these unregulated mortgage companies and detected unfair, deceptive, and abusive lending practices that so damaged the markets.”

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The U.S. Government has made close to $6 billion available for the ‘Neighborhood Stabilization Program’, in order to reduce the number of foreclosed homes on the market. The money authorized last summer will go to state and local housing authorities and non-profit organizations involved in providing housing for middle- and low-income families.

Most of the NSP funds come from the $3.92 billion that was approved as part of the Housing and Economic Recovery Act of 2008 passed in August. These funds must be spent in communities with the highest numbers of foreclosures. They’ll go to assisting families earning no more than 120% of the median income of the local area, with 25% of the money going to families earning less than half the median.

Now a second round of NSP funding has been approved. As part of the Recovery and Reinvestment Act of 2009 that was made law in February. It provides $1.93 billion to be allocated on a competitive basis. Potential grantees will be non-profits like community development organization certified by the U.S. Treasury Department.

Another $50 million is availalbe to pay for technical assistance in running programs funded by the first two rounds of funding.

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Existing home sales rose 2.4% in May to a seasonally adjusted rate of 4.77 million, from a downwardly revised pace of 4.66 million in April according to the National Association of Realtors®. The median sales price nationally was pulled down to $173,000 by the fact that 1 out of every 3 sales was a foreclosure or distressed sale. However, housing inventory continues to decline as the number of unsold homes listed for sale decreased to 3.5% to 3.8 million signifying a 9.6 month supply at the current sales pace. This is generally good news for home sellers with the caveat that proper pricing has become more important than ever. For more information on pricing your home to sell, visit www.bloomkey.com.

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As treasury rates continue to head up the average 30-year fixed rate climbed precipitously to 5.95% from 5.45% last week, according to a weekly national survey from Bankrate.com. Mortgage rates are often influenced by treasury rates which have themselves climbed to 4% from 2% just six months ago. Although they have risen so quickly, mortgage rates are still quite a bit lower than they were a year ago when the average 30-year fixed rate was almost 6.5%.

What does this mean for home sellers in the current market? Typically, as rates climb, buyers begin to get off the fence regarding home purchases. Locking in a rate when rates are heading up could mean a savings of thousands of dollars over the life of a mortgage loan. Coupled with other recent good news in the real estate industry it appears that the recovery for the housing market, while still in its infancy, is beginning to at least gain some traction. In May, foreclosure filings fell 6% from April and new construction housing starts boosted production in May at an annualized rate of 532,000, up 17.2% from the revised estimate of 454,000 in April.

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In remarks before a special session of the NAHB Board of Directors on May 29, HUD Secretary Shaun Donovan announced new actions that his agency is taking to help ensure that consumers can use the $8,000 first-time home buyer tax credit at the closing table.

http://www.nahb.org/generic.aspx?genericContentID=117642&hp=yes

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According to the National Association of Realtors® Confidence Index Survey, the real estate market is currently divided along two segments. 1) Distressed property, selling at a significant discount in the neighborhood of 10 to 20% in recent months and 2) Non-distressed property, selling “at market.”

NAR research shows that in April ’09, 44 percent of sales were distressed property, down from 49 percent in March. In March ’09 distressed properties sold at a discount of 20 percent to market, declining in April ‘09 to a 9 percent discount relative to market. The narrowing of the discount is consistent with numerous reports of distressed property being subject to bidding competitions actually resulting in prices higher than the initial listing price.

Everyone knows that distressed property sells at a discount relative to non-distressed property. The problem being reported by Realtors® is that buyers assume that all properties are distressed properties even ones not in foreclosure or under short sale. Buyers think that they can get a discount of 20% or more from the list price, and tend to make offers of approximately 40 percent of the mortgage balance.

Buyers making these unrealistic offers may be affecting the current existing home sales market. While distressed properties that need work are indeed selling for a significant discount relative to the market, sellers who are not distressed are simply refraining from accepting, or perhaps, even countering lower than market offers.

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According to the National Association of Realtors survey of what For Sale By Owner’s said were the most difficult tasks associated with selling home:
Most Difficult Tasks for FSBO Sellers:
Getting the right price . . . 15%
Understanding paperwork . . . 18%
Preparing/fixing up home for sale . . . 15%
Attracting potential buyers . . . 9%
Having enough time to devote to all aspects of the sale . . . 7%

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A little known secret about the real estate industry* (*outside the industry) is that real estate agents love to ‘double end’ a real estate sale. ‘Double ending’ is the practice whereby agents keep the entire 6% commission rather than splitting it with a buyer’s agent. In fact, most practicing real estate agents rely on the fact that they will sell their own listings a least a few times each year and earn double the amount of money that they would normally make when splitting the commission with a buyer’s agent. It’s what helps make ends meet in an industry where the average agent, according to salary.com, makes about $35,715 a year.

Why it’s such a secret is that if the truth about this practice got out to the public consciousness and into mass media conversation, most people would be appalled by the fact that supposed ‘professionals’, with fidcuiary responsiblities if you will, are being paid for a service that is inherently flawed and completely unjustifiable. Here’s why…

First of all, it’s difficult, if not impossible, to provide professional services as someone’s ‘agent’ on a commission basis. By law, when someone says they’re going to be your ‘agent’, that means they are going to represent your interests as if they were you - put your interests above the interests of everyone else including themselves. The real estate agent is in effect promising to the seller, I’m going to make my best efforts to get you the highest price and the best possible terms. etc. even if it means they might make a little less, take longer to sell the property or even have to invest more into advertising and marketing the property. However, when you tell someone they’re only going to be paid (be able to put food on their families tables, pay their utilities, mortgage, car payment etc.) when they actually make a sale, you often put them in the untenable position of 1) having to violate their agency/fiduciary responsibility or 2) neglect their responsibilities to their families. So a credibility gaps began to creep into the real estate industry as soon as real estate professionals began to call themselves ‘agents’. Human nature is at odds with their professional responsiblity.

The gap widens further in the ‘double end’ situation. When an unrepresented buyer comes along, these folks initially have no ‘agent’. They may be shown the property by the seller’s agent and the seller’s agent wanting to a) sell the property and b) make twice the amount of money, will offer to prepare a purchase offer for them representing both the buyers and the sellers. At this point, the agent has become a ‘dual agent’. This mythical hybrid (allowed only in the real estate profession because of some pretty effective lobbying of legislators by Realtor organizations) means that now the real estate agent is ‘faithfully’ representing the interests of two opposing parties to a transaction. Hysterically perhaps, they are now attempting to obtain the best price and terms for BOTH parties, buyer and seller! It would be similar to an attorney representing both sides of a divorce proceeding, or even being the prosecutor and the public defender at the same time in a murder trial.

Some states have even tried to dance around the implicit conflict of interests by creating another mythical creature called ‘designated representative’. Still a form of dual agency, this is a practice whereby agents within the same brokerage firm will represent the opposing parties to a transaction. This is a tightrope for the agency whereby the seller and buyer are supposed to believe that two agents within the same office aren’t sharing information about the other party’s motivation, financial capacity, etc. in order to ‘make the deal’ so that everyone can get paid.

What seems so obvious to impartial observers is that the system is inherently flawed. Why don’t real estate agents do as other professionals, like attorneys, do and charge for their time or on a ‘flat fee’ basis rather than continuing to foist this implausible system, fraught with confilct on the public? The answer seems to be enertia. There are still over a million agents in the U.S. most of whom have only known one way of providing real estate services - the traditional, commission-based agency method that’s been handed down from time immemorial. Changing direction of such a large ship is an enormous task that would obviously take time, (if not intervention by a federal agency like the Federal Trade Commission and Department of Justice as well as an informed public to pressure legislators to outlaw the practice of ‘dual agency’.) But until we do, consumers will, as annual surveys suggest, continue to view real estate professionals as trustworthy as they used car salesmen.**

Editor’s Note: (**Maybe that’s more insulting to the used car salesmen than it is to real estate agents. At least the used car salesmen aren’t calling themselves ‘agents’.)

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According to a A-P Re/max poll April sales increased from last year in four of the Southern metro areas covered by The Associated Press-Re/Max Housing Report Washington D.C. and the Florida cities of Miami, Orlando and Tampa. Throughout the South, low prices mean good deals for buyers and a strategy change for sellers. In Miami, April sales increased an eye-popping 56 percent compared with the same month last year. Sales are rising in areas with the greatest price declines, the same cities that were at the center of the earlier housing bubble. Transactions have increased for three straight months in the four cities, and the real estate market likely has hit bottom in terms of sales there.

Boosted by sales of foreclosed homes and incentives for first-time buyers, sales of pre-owned homes rose 2.9% to a seasonally adjusted annual rate of 4.68 million in April, a real estate trade group reported Wednesday. Lawrence Yun, the National Association of Realtors’ (NAR) group chief economist, said most of the sales were lower-priced homes, the entry point for first-time buyers. First time buyers made up about 40 percent of the national market, lured by low mortgage rates and an $8,000 tax credit for first-time buyers that’s set to expire Nov. 30.

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Been waiting for the right time to buy or sell? Now that school’s about over for most of us, the summer bug to buy that next home is beginning to bite. Plenty of available inventory makes for a buyer’s market which is actually good news for everyone. Even if you have to sell at a discount from a couple of years ago, you will more than make up for the loss on your next home purchase as long as you’re moving up in price range.

For example, say you take a 10% reduction in sales price on your $200,000 home, or $20,000. The seller of the next home you buy will likely be having to make the same concession. So if you’re buying a $350,000 house, you’ll save $35,000 - a net gain of $15,000. Take into account the fact that most costs associated with moving are experiencing downward pressures as well in the current economy and the net savings can be even greater!

Remember, if conventional wisdom tells you to wait for a better market, there’s a good chance the smart money is heading the other way. You don’t need to be Warren Buffet or Donald Trump to make money this season. Get started today.

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If you’re planning a move the best advice is to plan ahead. Even if the market is a little slower than normal, as soon as you put your home on the market you should be thinking about what you need to do to make a smooth transition to your new home. This includes interviewing movers, making an inventory of your possessions and a checklist of what you’ll need to do to complete the process. Once you’re home is under contract you’ll need to set up a moving date, line up a moving company (or order a PODS or similar moving/storage unit) and make a list of utilities that will need to be transferred. Don’t forget the change of address forms at your post office (www.usps.com).

You’ll need boxes, of course, and other moving containers for valuable/breakable items. Before you pack, make sure to keep out a few toiletries, bedding, towels, etc. and other items you’ll need before you’re able to get into your new home and unpack. Also set aside clothes for a couple of days during the moving week(end). Arrange to pick up keys to the new home before the movers arrive. On moving day you’ll want to coordinate with your movers to have someone at your new home to let them in. Do a thorough walk-through of your old home to make sure nothing gets left behind.

Moving can be a stressful time, but with a little bit of planning you can take most, if not all, of the stress out of the occasion and begin to enjoy your home a lot sooner.

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Bloomkey today announced the beta-launch of a new online MLS data entry system for its Internet customers. The one-of-a-kind system allows users in selected markets to select their MLS system and complete the data fields for their MLS entry based on the selections available for that particular MLS.

The problem faced by customers of online ‘flat-fee’ and ‘mls entry-only’ companies is that the data fields and selections vary significantly between Multiple Listing Services. For instance, online companies that service many MLS areas are faced with a wide variety of home ’styles’ that may be available for selection in the MLS data input forms. What one MLS calls a ‘ranch’ style may be a ‘rambler’ or ‘1-story’ in another. Some MLSs have selections for ‘Georgian’ or ‘Victorian’ while others may not. There can be as few as 10 or as many as 50 of these input fields, depending upon the MLS with each MLS having its own set of selections available for a particular home.

Until now, most online MLS ‘entry-only’ or ‘limited service’ providers have forced customers to download PDF or MS Word document files, complete the forms by hand and then fax or mail the forms back into the broker for entry into the MLS system. Alternatively, a very few provide online generic, static forms that attempt to cover the most widely used fields and selections, but which, invariably, leave out many of the possible selections and features.

The Bloomkey system allows for the rapid entry of additional MLSs to the system and provides an easy to use format for home sellers to quickly and easily enter and select ALL of the features for their particular home. If customers need to save their information and come back to complete their property information at a later time or date, they can simply click the ’save’ button and logout.

MLS data entry personnel are saved the time and effort required to hunt and search for fields as the Bloomkey system displays the data in the exact order in which the particular MLS requires it be entered. Customers can rest assured that ALL of the information about their home or property allowed by their local MLS is available to potential buyers. One more way, Bloomkey is the Smarter Way to Buy or Sell Your Home!

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