Austin Property Talk

Back to School

I spent the better part of last week in class with 40 other central Texas Realtors, taking the first step toward earning my GRI designation.  You may have seen those funny little 3 or 4 letter acronyms on Realtor's business cards or email signature blocks and wondered to yourself what the hell they were.  

Well, GRI stands for Graduate Realtor Institute.  I equate it to graduate school for Realtors.  Its a step toward gaining extra expertise and knowledge to further help me guide and consult with buyers and sellers.  It is geared mainly toward agents who have been in the business for 3 years or more.  There are many other designations that professional Realtors pursue over time (hence the acronyms) but the GRI is where most start the extra education process.  

To achieve the GRI designation, a Realtor must attend and complete 3 separate 30-hour courses.  Yep, that makes for a long 4 days. However, in my opinion, you cannot go wrong with investing in continuing education, especially if you plan on sustaining success in any given career path. 

Given the time of the year and the typical slow down of business right before the big Holiday, I figured it would be a good time to get the first class under my belt.   What I didn't know was that I was going to gain 3-4 pounds in the process.  Each day, there are 2 breaks (morning and afternoon) and a lunch break.   These breaks are all "sponsored" by local businesses who want to partner with Realtors.  And, they all bring their little goodies - I'm talking cookies and ice cream and brownies - you name it.   Those things are hard to resist, especially when you are trying to stay awake and need a little sugar fix.  

I was joking to Kristin that an unintended benefit of attending this course was that I remembered how extremely thankful I am that I have chosen a career that provides me with freedom.  This past week I felt like I was stuck in corporate America.  I had to sit at a desk and follow instructions for 8.5 hours a day.  I couldn't use my cell phone, I got a short break in the morning, an hour and lunch, a short break in the afternoon, all the sweets I could handle in the "break room," it was dark when I left and I had to fight rush hour traffic.  

All in all though, I really enjoyed the course and I look forward to attending the next one.  Id really like to get all of the course work knocked out in the coming year.  

December Newsletter

It's the time of the month again.   My December 2009 Newsletter is printed and posted.  If you haven't yet been introduced to my newsletter, its a mix of interesting tidbits, short stories, personal stories and the occasional Austin Real Estate article.  Mainly it's just a fun top keep in touch with friends, family and clients on a regular basis. 

I always post a copy of my newsletter on my Blog by the middle of the month.  However, I make sure to mail out a copy the first week of the month to an exclusive list of subscribers (wink).  If you are not a subscriber to my newsletter and would like to be, shoot me an email - ryan@stonehavenrealty.com. 

Or, you can access my Newsletter Archives.  Enjoy!

From the Good News Department

From the Good News Department . . . .

Anyone who has been involved in a short sale knows how frustrating and stressful the entire situation can be on all involved.  Obviously the most stress falls on the shoulders of the seller.  But, the frustration part usually falls in the buyer's lap.   Reason being, to date short sales can take anywhere from six weeks to six months for lender approval. 

A lot depends on what stage the proposed "short sale" sale is in.  For instance, if a responsible homeowner has been in consistent contact with the lender and a short sale package has been completed, the house may be an "approved" short sale and has a better chance of closing sooner.  On the flip side, and where most short sales wallow, is the "short sale - subject to lender approval" category.  

Depending on the lender, these unapproved short sales can last months and months.  Oftentimes they end up falling out of contract for a couple different reasons.  Either the homeowner or Realtor assisting has little to no idea about what "net number" the lender will be willing to accept and so the property is marketed well below the realistic sales price.  Or, the approval process takes so long that prospective buyers who may have a deadline decide to withdraw their offer and look elsewhere. 

Want to know exactly what a Short Sale is? 

You are waiting for the good news, right?  The government recently announced improved short sale guidelines.   Here is the Information on the New Short Sale Guidelines taken directly from the press release through the National Association of Realtors. 

This is encouraging news and should help a number of families avoid foreclosure which is the biggest detriment to future credit implications.   

Underwater Homeowners Continue to Struggle

The government is ramping up its foreclosure prevention plan.   As part of the President's $75 billion foreclosure modification program, eligible borrowers who are at risk of default are being allowed (upon approval of course) to lower their monthly payments on a trial basis for several months to make sure that they can handle the adjusted payments.  

Trouble is that so far only 4% of the trial adjustments have been made permanent after 3 months.   The reason:  well depends on who you ask.  The mortgage companies claim that only 33% of the homeowners currently involved in the "trial" have submitted all of the necessary paperwork to make the adjustment permanent.  In fact, 20% have not submitted anything.   On the other hand, frustrated homeowners say that the financial institutions are repeatedly losing their paperwork.  

The bottom line is that to this point the program that was supposed to have a widespread affect on stemming the foreclosure trend has not lived up to its billing.  

Last week the government again stepped its game up and send what they called "SWAT" teams into these financial institutions to determine what the biggest hold up may be.  The banks are now responsible for submitting progress reports on their modification files twice a day during the month of December as a means to speeding up the conversion process.   

The goal has been to shift 375,000 borrowers from temporary status to permanent status by years end.  A benchmark that is quickly appearing quite unrealistic. 

Positive Connection

On the first Tuesday of each month, I've been attending Positive Connection which is a monthly lunch and fellowship with Lewis Timberlake.  Lewis Timberlake is an author and one of the nation's top motivational speakers as well as a management consultant to many of the nation's largest corporations.

I thoroughly enjoy great speakers - motivational, inspirational, informational - you name it.  I especially enjoy listening to those who have good stories to tell.  Lewis always has some great stories to share.  The topics rotate each month but they usually revolve around goal setting and reaching one's maximum potential.  

This month's topic was When Bad Times are Over for Good.

Interesting stories of note:  RH Macy failed 7 times before he finally built the Macy's Department Store empire.  Milton Hershey went bankrupt 3 times before he built Hershey Candy Company.  And of course, the truest story of persistence is that of Abraham Lincoln - chronicled here.

According to Mr. Timberlake's presentation, there are Four Causes of "Bad Times"

• Cynicism - expecting negative outcomes
• Cowardice - letting fear get in the way
• Compromise - settling for less than your best
• Confusion - lack of clarity, purpose and direction

A good story that he shared about Compromise.  Mickey Mantle is considered by some to be the most dynamic athlete to ever play professional baseball.  Despite having a Hall of Fame career, it is also well known that his lifestyle and lack of work ethic kept him from being the best of all time.  Someone once asked him if could be any other baseball player that ever played the game, who would he be?  His answer: The player that Mickey Mantle could have been.  

3 Ways to kick the Bad Times for Good:

• Decide what you Want (to do or to have)
• Decide you Deserve it
• Decide you are Going to Succeed (success depends largely on how you see yourself)

The "Bad Times" are only temporary and often, unbeknownst to us, prepare us for the good times.  

In closing, a quote that I found interesting:  "On the plains of hesitation bleach the bones of countless millions who at the Dawn of Victory, sat down to wait, and in waiting - died." - George Cecil.

Decide you are Going to Succeed:  Select your Goal.  Unlock your Potential.  Cancel the Past. Change the way you See Yourself.  Expect to be a Winner.  Example for others around you.  Do it Now. 

10 Ways to Get a Down Payment

Nicole Lahti with United Lending here in Austin Texas recently published a blog post detailing 10 Ways to Get a Down Payment.  

With the new expanded tax credits available to home buyers between now and April 2010, mortgage rates hovering around or below 5%, the market is ripe with opportunity. 

However, with first time buyers especially, the question can often be, "Id like to buy but where would I come up with the down payment?" 

Currently, the least amount that you can put down would be with a FHA loan which requires 3.5% down on a qualified purchase.   

But you might be surprised about some of these creative sources for a down payment that may not have crossed your mind.  Take a look at this list.  

Option ARMs - What a Mess!

About a month after I got my real estate license in 2006, I had a meeting set up with a lender acquaintance of mine for a brief seminar on some of the "hot" loan programs.  One of the first things he was so anxious to tell me about was option-ARMs.  I distinctly remember him telling me, "you need to push this on all of your investor clients. It's really the way for them to go."

If you aren't familiar with the term option ARM (option adjustable rate mortgage), basically it is/was an exotic loan program that allowed the borrower to decide whether he/she was going to pay principal and interest, interest only, or a minimum amount less than the interest amount due.  And this decision was made on a monthly basis.  Not only that, but the program also allowed the purchaser to come to closing with little cash and in some parts of the country allowed 40 year loan terms.  

Now you don't have to be a rocket scientist to figure out that was probably a bad idea.   According to a recent report released by Standard and Poors, over 93% of option arm borrowers selected the option of paying an amount each month that was less than the interest amount due on the note.  So in addition to not gaining any equity in the property, the unpaid interest was also being tacked back onto the original loan amount.   

Thankfully, the last year that this loan program was issued was in 2007.  The default rate for borrowers issued an option arm in 2007 alone has reached almost 25%, and the projected default rate has already been labeled a possible "housing recovery killer." 

Its no secret that the option arm program was most popular in the "bubble markets," where house prices soared in the middle of the decade.  These same areas have been hit the hardest in the past two years as once lofty property values have fallen rapidly, sending the financial industry into a tailspin.  

In the last quarter alone, California, Florida, Arizona and Nevada represented 44% of all homes beginning the foreclosure process.  Nationwide, almost one in four (23%) of people with mortgages owe more than their home is worth.  

As borrowers across the country are falling behind in record numbers, the government has ramped up its efforts to help struggling homeowners.  Just this past week, President Obama and the treasury department have tightened the screws on mortgage firms who are largely in responsible for implementing the $75 Billion Home Affordable Modification Program aimed toward modifying existing loans to keep borrowers out of foreclosure.   

Are you Protected?

To further elaborate on my last post, here is some information on making sure that your internet passwords are strong enough to discourage tampering.  I've seen recently a handful of email accounts and Twitter profiles get hi-jacked. 

A few months ago 30,000 passwords for Hotmail and Gmail accounts were stolen.  We no longer live in a world where we can use a simple string of numbers or the same password on multiple accounts.  After these passwords were stolen, the security group analyzed the passwords and they found that the most common password was 123456!  Followed closely by 123456789.  Hard to believe isnt it?

The problem is that we have so many passwords these days that most people try to use something simple that they can remember or use the same password on all sites.  Guilty on my end.  When I had to spend some time the other day re-doing all of my passwords, it was difficult to come up with multiple variations.  That being said, my passwords are much stronger now than before the theft. Here are a few ideas to help you avoid the most common password pitfalls . . .

1.  Use a random string of characters.  Avoid sequential letters or numbers.

2. Make it long.  The longer the better - even as much as 10-14 characters if space allows.  Switch things up.  Use a combination of upper and lower case letters, along with a few numbers mixed in the middle or end. 

3. Don't use substitute symbols in common words.  Using "@" for an "a" or "1" for an "I" may look good to you, but most hackers are smart enough to break those substitutes rather quickly when the passwords consists of a common word.  

4.  Avoid easy targets since as words straight out of the dictionary or things likst family names and birthdays.

5.  Dont rotate the same 2-3 passwords on all acounts. All of you accounts will be vulnerable if even one account is compromised. 

6.  Make it unique.  A password is only really unique if you use it for one account and one account only. 

Lesson Learned

The other day at lunch, my car was vadalized and my bag with laptop (among other things) was stolen.  After having some time to reflect on the situation as well as my loss, Ive put together a list of recommendations for securing private and important information.  Luckily, I was already taking some of these precautions, but others I wish that I had.

1. Never leave anything of significant value in open sight in your car.  Either put it in the trunk when leaving or take it with you.  Common sense, I know, but I cant tell you how often Ill leave to run an errand and leave my bag, or camera, or IPOD sitting in clear sight. 

2.  If you carry a briefcase or bag with you to and from the office or somewhere else, only bring the essentials.  I have a habit of throwing everything that I might possibly need into my bag each morning.  There were a couple of things that I had no use for on that day that I put in my bag anyway and those are the things Im most disappointed I lost.

3.  Password protect your computers.  If the computer is password protected, it is harder to get into the files and less valuable to the average thief who may try to re-sell it.

4.  Back up all of your important files twice - either online, with a portable hard drive or flash drive.  I shudder to think about what position I would be in if all of my files had been on that laptop.  I back them up, but not as consistently as I should.  I lost about a month's worth of data.

5.  Don't bookmark financial and personal use websites in your web browser.  Hard lesson learned.  I had some bank information, email accounts, and a lot of other sites tagged as bookmarks.  Thus, I had to spend half the day changing passwords and calling all of my financial intitutions. 

6.  Don't carry unnecessary personal information in your bag or purse (i.e. financial, addresses, photos etc..)  I had personal photos and some home information on the flash drive that was also lost when my bag was stolen.  There is really no reason for me to carry that on a daily basis.

7.  Finally, record the serial numbers and product information for all of the valuables that you carry with you regularly.  This is the best way to track stolen goods.

Moral of the story is that you can never be careful enough when it comes to protecting your personal information.   Take these precautions and you won't have to learn the hard way.