More pot pouri

I promised some good news in the last blog, and we have some, but not exactly as I had hoped. Effective right now we are offering to place a photo and description of for sale by owner properties on our web site, free, no obligation. To the home owner this can be a very good deal since we get a lot of traffic and it's traffic looking for homes in our market area. Inquiries are directed to the home owner, we do not collect data, we make it clear we are not listing the property. Is there a quid pro quo? Well sure, but really painless. Home owner gets additional exposure to aid in the sale of their home. We get some really good feelings about our company, probably referrals should their buyer need a mortgage, maybe referrals to buyers, and possibly if the for sale by owner thing doesn't work out, first consideration for listing the property should it become necessary. This is a classic win/win opportunity for us and for you. We are naturally restricting this offer to our market areas, Glenn, Butte, and Tehama counties generally. Our legal counsel advises we get written permission from you to put your home on our site, so we will need that. Legal counsel also, in a carefully researched 4 page opinion, shot down our other good idea. We were going to offer to do the paperwork for your private sale for a very modest fee, but the chances for crossing the line into the "practice of law" are too great and developing an "agency" relationship simply for that purpose is not a practical solution. We suggest you get a book from Nolo, link on our site, and for about $30. you can have the legal requirements in your possession. We're doing all this because we think it's wrong to erect barriers to make it difficult for people to sell their own home. We don't feel threatened by this and certainly don't view this as competition. If we can help you we will. Our feelings mainly come about because we are absolutely certain our offices provide the best economic and marketing power choice should you decide to hire someone to sell your home.
On a mortgage note, we are going to be offering reverse mortgages beginning in May. We have been approached in the past by companies encouraging us to become originators of this type of mortgage, but the fees have been excessive and I'm not convinced it's the panacea they claim. We will offer these programs only after significant consultation with the senior borrowers, and with family members as well should that seem appropriate. The company we'll be working with is a major national mortgage bank and this is a new program for them.
On a local note, our Orland office is laying there like a lump. All of Glenn county, some 19 broker offices, did 1/3 the business in March this year compared to last year. Chico on the other hand is moving very nicely, about the same sales this year as last for March, and our own office can be described as hot. Only 20 geographic miles separating the two towns but a world apart economically. I've mentioned before that we have stat counters on the hits on our listed properties, and Chico runs between 4-5 times the hits on comparably priced property. A sobering factoid and maybe an indication that Orland prices have to come down some. Reading statistics is easy, accurately interpreting them is not.
Running long-
As usual, thanks for visiting

Mortgage News

Really soon for another blog, but the news tonight carried some significant "testimony" in Sacramento before the legislature by some self appointed experts. Finger pointing is perhaps entertaining but the fingers were otherwise engaged while the problem was growing and was largely ignored by the owners of the fingers. The problem is variously laid at the feet of investors, mortgage brokers, lenders and real estate salespeople. Appraisers were not mentioned in the news segment I watched. We have said previously that the problem is caused by a pervasive greed, no different from the greed that afflicts the likes of Enron, Worldcom, Tyco, political lobbyists and those they lobby. The ability to take advantage of those greedy impulses in the real estate business arose from the substantial and largely artificial escalation of home prices. Like tulip bulbs, Ponzi investments or the dot coms without substance, eventually the Emperor shows up in his birthday suit. The current viewing with alarm is hypocritical at least, and productive of nothing. Market forces which became badly skewed in the race to be first at the trough will right themselves and only people who should be homeowners will be homeowners. The folks in our industry are rightfully burdened by a load of guilt for putting their interests ahead of their clients, but while the shame is certainly there, caveat emptor has always been a good guide, and those who ignored it share a portion of the blame. After the fingers have been returned to their holsters and the politicos have turned their blather to some other cause, those of us with a serious interest in the sale of real estate and the provision of mortgage money will continue to serve. There are good guys out there waiting to help you. A little diligence on your part will make for a satisfying experience.
As usual, thanks for visiting.

Pot Pouri

The real estate news for the past two weeks has been pretty tightly focused on the faltering or collapse of some big players in the sub-prime lending arena. This naturally follows from making loans to people who have no demonstrated capacity to repay them or any track record of paying anybody on time for any type obligation. There will be more foreclosure activity from the next level of credit-worthiness, generally referred to as Alt-A. This is the level at which most of the option ARM programs originated, and were the result of people buying beyond their means, hoping for a continuation of the surge in home values to cover the increasing balance on their loans, or hoping to use refinance money to buy out of the loan when it rolled into a more realistic pay schedule. Urged on by real estate agents and lenders these people put themselves at substantial risk. Now those chickens are heading home. Whether any of the above is of interest most likely depends on viewpoint. Spectator or participant?
In the face of all the publicity about mortgages, let me tell you that every day my e-mail traffic from lenders indicates a huge amount of available mortgage money, almost all of the old programs are still available, and the only difference is that credit restrictions have tightened a bit. If you should be buying a house, you can be buying a house.
The local market, Butte and Glenn counties are seeing buying activity, Butte more than Glenn of course. Our listed properties are getting offers and our commercial loan activity is up. $300,000+ properties in Orland are tough to sell, easy in Chico. We have our listings on over twenty national real estate web sites and the number of hits on Chico properties are running 4-5 times those of Orland in all price ranges. The number of hits overall is encouraging, but if your home for sale is in Orland, not such good news.
We've had a couple of bright ideas to help sellers who want to do their own thing instead of listing with a real estate office. As soon as legal counsel gives us the ok we'll share them with you. Seems that there are laws we need to observe to keep out of trouble. The laws are presumably under the heading of consumer protection but really are for real estate people protection. When we find the way to get this done I promise you'll like it. The consumer response to our marketing program is growing, people quite simply are tired of squandering their equity on commissions. We appreciate the support. We also need, almost desperately, a licensed agent for our Chico office. Must have highest integrity and customer focus and should be willing to learn mortgage lending. Team environment, high income, and a real sense of making a difference. There may be laws about this too, but for a good referral I will spring for lunch.
Thanks for visiting.

When you're a hammer

When you're a hammer everything looks like a nail and as real estate people we see the world through a distorted lens. Some of the news of late has implications that are broader in consequence than simply affecting real estate and mortgage people and companies. We're talking about the apparent decline and fall of the sub prime mortgage market as we have come to know it. The media is keeping people pretty well informed about the demise of many major players (lenders) in the sub prime business, and for those of us in the mortgage business it's obvious that it's worse than the reports in many respects. The immediate public impact will only concern those who are candidates for that type of financing, and many of those shouldn't be trying to buy homes anyway. The broader consequences are sociological and economic. Realtytrac.com, a foreclosure reporting company, just sent me an email describing January 2007 as reporting more notices of default filings than at any time in their reporting history. Bad news for the people involved. Bad news for the housing markets. How did this come about? Simple greed. Greedy real estate people pushing for whopping commissions, greedy appraisers stretching to accommodate the greedy real estate folks and the equally greedy mortgage brokers and bankers, and the greedy mortgage lenders, concealing the weakness of the loans they were making and putting into the investment pool. The clucking noise we hear is simply the sound of those chickens coming home to roost. The actual blame probably lies mainly with the lenders. If they had adhered to reasonable underwriting standards none of the other issues could have reached such proportions. Appraisals should have been reviewed, loan applications should have been carefully validated, and a great number of loan programs should never have been promulgated, programs designed to reach out to those who could not qualify under conventional guidelines. No responsible person could have believed that the price of homes was going to continue on an upward spiral forever, yet many sales and lending strategies used that premise as a supporting argument. "Buy this today and even if the payments are too high you can refinance in 6 months with the increase in value for bail-out." "Take this loan today and refinance when the interest rates become variable and home values have gone up." These strategies were used by supposed professionals on the naive and unwary, frequently first time home buyers. Here's a link to a site for some realistic reporting on the mortgage market situation, http://mortgageimplode.com. Suggest reading link by Pollack.
Just so this doesn't come off as a negative view of the world, some other thoughts. Chico sales are moving along nicely, ahead of last year. Listing inventory is fairly high, but off it's maximum by considerable. Interest rates are very favorable, and all things considered it's a very good and very healthy real estate market for most of us. Just had a business expo in Orland and the turn-out was good, attitudes generally seemed to be up-beat. Keep noticing that the predominate advertising strategy in print media is lots of pictures of agents, lots and lots of agents. There is some mention of properties, but mostly pictures of agents. We're going to keep on treating the sale of homes and the negotiation of mortgages as a business. It's not that we don't photograph well, we just don't think anybody cares.
As usual, thanks for visiting.