Towards the end of 2010, several of us at the Talon Group decided to survey over 100 local real estate professionals in King, Pierce, and Snohomish County. We asked specific questions regarding the real estate market, the recession, and their thoughts on 2011 and beyond. The thoughts and opinions varied a bit when we looked at various local Puget Sound areas, but there were some common themes throughout.
A majority of those surveyed believe we are at the bottom of the recession. However, the group was divided on whether or not real estate prices had bottomed out. The consensus is that it will be 2 years before the market reflects significant improvement.
Most feel that potential sellers are in a holding pattern waiting for prices to recover.
A bulk of our sample also predicts that the average homeowner will move every 6-10 years, up from what was on average 3-5 years.
Half of the group felt that Baby Boomers were the target market for future business, while the other half were focusing on first time homebuyers.
No one had a success story to tell regarding a loan modification for home retention.
When asked to break down their market area in percentages of who is buying and selling in 2011, here is what we found on average:
We'd love to hear your feedback on our results, and a big thank you to everyone who took the time to participate and share their knowledge and expertise!
Recent state and federal laws have drastically reduced the number of short sale coordinator/negotiator services available for distressed sellers and listing brokers. These regs will likely result in more brokers shouldering this task for their sellers...at no extra charge. All this when new HAFA changes (Home Affordable Foreclosure Alternatives) are making it easier for servicers to steer distressed sellers towards short sale rather than foreclosure. Some expect HAFA's new program will increase short sales by as much as 50% in 2011!
Given the above scenario, real estate professionals should be asking themselves "what tools are available for making my life easier when dealing with short sales?". A big part of negotiating with underlying lenders is the constant tinkering and resubmitting of the HUD-1 settlement statement. Talon's EZ HUD makes this task a snap!
We wrote about how to utilize this tool several months back and have continually improved it's functionality. As matter of fact, our own closers depend on it for kicking HUDs out by the dozens. For more information on Talon's EZ HUD, please contact your local Talon representative for a demonstration...it's as EZ as...
Our last blog post regarding buying a bank owned property generated a lot of discussion, including a lot of "off line" discourse. We liked one particular email so much that we wanted to answer it in it's own blog post.
Here's an excerpt from their email:
"Different types of deeds seems like a complex situation... should an agent be concerned about this if a Title Insurance Policy is issued, then what does a Title Policy guarantee the buyer of the property? I guess this can go round and round but today's real estate business involves a high percentage of homes on the market that are bank repos and short sales. These are difficult questions and there is no simple answer but as agents we should be better equipped and knowledgeable on this matter."
There are a lot of ways I'd like to answer this, but the easiest way, I think, is to write about what we DO cover. Keep in mind, this will be a generalization of title insurance coverage. For more specific questions on details of a particular transaction, we encourage you to call 425-635-2100 or email our title unit.
Title insurance differs from most other forms of insurance. While auto and home insurance function with risk assumption through the pooling of risks for losses arising out of unforeseen future events, title insurance tries to eliminate risks and prevent losses caused by defects in title arising from past events. Such events are either eliminated prior to the issuance of the title policy, or their existence is excepted from coverage.
A title search is done to determine 3 main things. First, that the person who is selling the property actually has the right to sell it. Second, the buyer is purchasing the correct parcel of land. Third, we look for potential defects in title. Once the title search is complete, the file is reviewed by an examiner who determines if the chain of title shows that the party selling has the right to do so, the status of taxes, and whether there are any unsatisfied judgments against the sellers, previous owners, or purchasers.
Title insurance is assurance that any defect in title to the land you are purchasing (which can be discovered from the public records) has been called to your attention and corrected before your transaction closes. Should there be a claim, it is the title companies obligation to protect you by defending your title in court if necessary, and bearing the cost of settling the claim if it proves to be valid in order to perfect your title and keep you in possession of your property. This is why it's important to review your title commitment!
There are different levels of coverage. There is the Standard, Extended, or the ALTA Homeowners Policy. Note that the ALTA Homeowners policy is not available on certain properties, nor may it be necessary for your transaction.
The statements above provide an outline as to the purpose and scope of title insurance. The Owner's Policy coverage's offered by the title insurer provide different levels of coverage for the buyer. It is important that any or concerns that the buyer's) have be directed to the title company, so they can answer the important question, "I'm I covered if...?".
Some of this will be old hat, but it's always good to broach the subject once in a while so that we can all be reminded to be careful online. Here's something that happened recently to a friend of mine on Facebook:
"A 'friend' that I actually know in person popped up in my 'chat' window saying he was mugged in London and asking for my help in the form of money for a plane ticket to return home."
Luckily, my friend called this 'friend' and got them to change their password quickly.
Facebook is an open source system, meaning that anyone has access to Facebooks source code. Rogue applications are going to be an on going threat because of that philosophy. Now, I don't want to alarm anyone with this news but it's good to be careful when we navigate through Facebook, and any other site for that matter.
One of the new security features in Facebook is adding full HTTPS support to its site. To enable this feature, click "Account Settings" and go to "Account Security". According to Whitson Gordon, "whenever you connect to Facebook, it will default to an SSL-encrypted connection, keeping you safe on open Wi-Fi networks from Firesheep-like attacks." Good stuff.
There are other things to look out for as well. Phishing is making a comeback. Phishing really is someone sending you an email asking for some type of information, like to verify your password or to alert you that you have something going on with your account with a link to put in your username and password. Many times these emails will have sites that look exactly like your bank site or your Facebook page. Be careful when you see these come through. Instead of clicking on these links, I usually go to their main site myself or call in to a customer service rep with that company.
Keylogs are another way to gain access to your information. The best way to thwart this malware is to prevent it from getting on your computer in the first place. I've known of some that have downloaded it from advertisements on the side of certain websites (I haven't heard of Facebook ads), or they've exploited loopholes in Adobe. Make sure your computer's anti-virus program, anti-malware, and anti-spyware (or a combination of a few if you like) are all up to date along with your operating system having it's downloads up to date. On my personal PC, I've downloaded the free version of malwarebytes that runs in conjunction with my anti virus and anti spyware program. It's a little surprising seeing each program pick up and block different things.
So next time your friend is asking for money for a plane trip home after being mugged, or your come across a Facebook post reading "This Video Freaked Me Out", or "I can't believe he did this to his daughter, you might might want to think twice about clicking on them.
Property tax season is upon us once again, and we've starting to get more and more questions about property taxes in general. I'm going to list some links that people can find their information readily, along with some random thoughts and videos that I think will be helpful.
King County now has local area data showing what the average improved valuation changes were YOY. You can go back historically til 2004 if you like. If you're a stat geek like me, you'll find these stats interesting. I'm not sure when they introduced this feature, but it's good stuff once you drill down a bit to the more local areas.
If you're wondering what your 2011 tax amounts will be, they should be posted mid month in February. Pierce County and Snohomish County should follow the same timeline and have their tax amounts posted mid month. First half tax payments are due at the end of April.
King County has some good FAQ's regarding how property taxes are done and calculated.
People often times ask why their taxes go up, but their assessments have dropped. For an answer to that, here's a Talon Video that we did in 2009.
Lets face it, short sales are not going away. With the current economic climate, along with worries of rising interest rates and further risk of declining home values, short sales could likely remain a factor in our real estate market for the next couple years.
With this in mind, The Talon Group would like to share some information from a short sale presentation given by a local tax attorney last fall. It's hard to argue with the statement that any homeowner considering selling via short sale should gather as much information as possible about the process and what impact it could have on their future financial situation.
Besides providing some basic information about shorts sales, clips two and three lightly cover judicial vs. nonjudicial foreclosures and deficiency judgements. If you or someone you know is considering being involved in a short sale, we recommend you watch all three and, as always, consider talking to an attorney before making your final decision. More to come...
We're getting more than a few questions regarding deed types nowadays, and what they mean to the buyer. This is especially true when dealing with currently bank owned properties, or someone reselling a home that they purchased from a bank. Thats because the deeds associated with these transactions are not warranty deeds, but either trustees, special warranty, or bargain and sale deeds.
When a home goes through the foreclosure process and eventually goes back to the bank, typically a trustees deed will be used. When the bank sells this property, it is common that a bargain and sale deed or a special warranty deed is used to convey ownership. These deeds all convey different warranties than statutory warranty deeds, which are used in the majority of resale transactions.
Here are some of the most common deed types you'll come across, with a description of each.
Statutory Warranty Deed: A conveyance of fee simple to the grantee, heirs and assigns with covenants on the part of the grantor that:
at the time of the deed, the grantor had the lawful and indefeasible estate and the right to convey the same
the property is free and clear of all encumbrances
the grantee shall have quiet and peaceful possession
the grantor will defend title thereto against all persons making a lawful claim
Special Warranty Deed: A deed that limits the liability of the grantor to defending the title from claims arising from himself, his heirs, and assigns.
Bargain and Sale Deed: A deed which warrants only ownership and the right to convey.
Deed of Trust: a security instrument which imposes a "lien" on the real property of the debtor.
Trustees Deed: Deed executed by the Trustee under the Deed of Trust when defaulted property is sold at Trustee's Sale
What does that all mean? Well, a trustee's deed conveys only the interest in the property which the grantor in the deed of trust had at the time of execution. Conveyance language on the trustee's deed is grant and convey, without warranty. A bargain and sale deed also only warrants ownership and the right to convey. It doesn't include the warranties associated with a warranty deed.
So should you be worried? Well, not before you review the title report. Know that it is important to read the title report on the property that you're buying. A title report will tell you whether or not the chain of title shows that the party selling the property has the right to do so, the status of the taxes, and whether there are any unsatisfied judgments against the previous owners and sellers. Make sure to ask questions as well if you don't understand what you're reading.
December 2010 presents an interesting case study with regards to calculating rescission time for refinance transactions needing to close by year end. Rising interest rates may apply added pressure on both lenders and escrow to close transactions this month-end. Not closing could mean lock expiration/extensions that can prove costly to both homeowners and lending professionals. Here are a few white elephants to consider when scheduling month-end closings:
Many if not all escrow and title companies will be closed Friday, Saturday and Sunday in recognition of the Christmas holiday and the weekend. This can put a real pinch on getting refinance transactions signed that need to close by year end.
Given that Christmas falls on a Saturday, there is much confusion surrounding how the 3-day right of rescission period is defined for December and when the last signing day truly is. The statute reads three "business" days excluding Sundays and Federal Holidays, including Saturdays.
Finally, nobody will be closing their transactions on December 31st due to the county recorder's office (and virtually everyone else) being closed for business that day!
Is Friday December 24th a Federal Holiday? No, The United States Postal Service is referring to Saturday, December 25th as a holiday. So is the Federal Reserve. However, the U.S. Office of Personnel Management has published a list of 2010 Federal Holidays that shows Friday, December 24th as a holiday. If you read closely, this website also includes the disclaimer:
"December 25, 2010 (the legal public holiday for Christmas Day) falls on a Saturday. For most Federal employees, Friday, December 24, will be treated as a holiday for pay and leave purposes."
Even though most all offices (including the county recording offices) are closed on the 24th, it is still considered an official business day as far as the 3 day right of rescission period is concerned.
When is the last signing day for refis needing to close by year end? The absolute drop dead last signing date of the month is Sunday, December 26th. While The Talon Group is officially closed on December 24th we will have signings available on that day and on the 26th for your clients who must sign. Loan documents will need to be in escrow prior to the 24th for work up and scheduling purposes. The earlier the better! Let's work together to make this month end as smooth as possible for our borrowers!
I had a conversation yesterday with a client who had the perspective that social media was, well, a fad. The thinking was that all the new technology out now is "cute", but it won't generate business. They mentioned that there was an "agenda" behind all of the social marketing discussions going on.
My initial reaction is that this was some emotional hangover from the political season. In honest disclosure though, there is a push to educate and encourage clients to use social media. I hate the word "agenda", since it's used in political arena's in a negative connotation, but there is a push to get people involved no doubt.
Why? In my opinion, SM works for a variety of reasons. It allows you to stay in front of a new generation of clients who have different consumer behavior patterns than those in the past. It allows you to stay, and be perceived to be, relevant in the current marketplace. When you build your social marketing platform, you can stay in touch with your sphere in an easy and free way that isn't available without these tools. So, in a nutshell, there are plenty of benefits. I have a hard time defending the position of not doing it.
Their response?
That's all well and good, but their experience in the real world dictates that person to person referrals and recommendations always trumps what they find online. They don't believe that the consumer will shift to the point where people will get online, find the agent with the best reviews, and go with them. People will trust who their friends refer and trust.
There is validity to what they believe in, but what I told this client is that they're missing the point of what social media really is. Did they know that they could do all of that using SM tools? Did they know that they could quickly and easily refer out or get referrals on basically anything by getting their sphere involved? SM tools are there to enhance their ability to do exactly what they were trying to do.
Social media, in today's market, doesn't replace many things that were done in the past. Traditional marketing and prospecting still work, which many clients are beginning to abandon unfortunately. Or forgetting.
At my house, I've gone from getting 10-12 postcards, schedules or flyers in the mail from agents or lenders down to roughly 1 or 2. And yes, my Mariners magnet schedule is on my fridge. This still works.
I had a chat with another agent who has a phone call campaign which is very successful. He mentioned he would do at least 1 personal touch to each member of his sphere quarterly. He gets the local community involved by sending out local information or special discounts to businesses in his area. This still works.
More traditional types of marketing are successful and won't stop being successful just because of social media tools. Abandoning these methods would be a mistake in my opinion. It isn't an either/or proposition, and the two schools of thought are not conflicting. You can do both successfully.
It's a common conversation really, since many people I run into are struggling with the "idea" of social media. They're in fear of writing code, or generating content that is of interest to people. To be fair, it is outside the comfort zone of many.
What I've found most often is that once people get started, they start to realize how easy it really is. And once they figure that out, they embrace it.
A special thanks to all title and escrow heroes everywhere. TITLE HEROES is dedicated to those special people in the industry who faithfully serve their communities. When times are good you're more than busy and when markets are down and times are challenging, you're even busier.
Thanks for being there and taking care of the client... Thanks for your expertise and dedication to a job done right. Thanks for doing everything possible and caring enough to get the deal done and closed as it should.
Be safe out there these wintery days… Have a great Thanksgiving and be warm with family, friends, and loved ones.
From all of us at The Talon Group, Happy Holidays…
For more videos from The Talon Group, visit our YouTube Channel: TalonNW
