It’s October already! Where did the year go? Although 2012 is and has been a “better” year for real estate practitioners, most are still working very hard to keep that positive trend going.
A couple of things are working in our favor. Inventory is very low, meaning that decent properties will sell. In much of our market area, properties priced under $200,000 are flying off the shelf after multiple offers. The media is now conveying the message that this is the time to buy.
The media is also finally beginning to convey the message that this may be the time to think about selling with such pent-up demand and relatively little competition. Add to that the fact that the agent population is down significantly, making for less competition for each listing and/or buyer client. And interest rates are low, making mortgages a real deal for those buyers and properties who can qualify.
The low mortgage rates, however, are a double-edged sword. Lenders seem to be looking for reasons to deny loans. Why would they want to lend money at 3% or below when they can hoard it and wait for the rates to double or redirect that money to more lucrative investments? Risk is a four-letter word to mortgage lenders.
Ken Trepeta, who follows what’s happening in Washington, D.C. for NAR just reported, “Respondents to the NAR survey report that 53 percent of loans in August went to borrowers with credit scores above 740. In comparison, only 41 percent of loans backed by Fannie Mae had FICO scores above 740 during the 2001 to 2004 time period, while 43 percent of Freddie Mac-backed loans were above 740.
In 2011, about 75 percent of total loans purchased by Fannie Mae and Freddie Mac, which are now a smaller market share, had credit scores of 740 or above.
There is a similar pattern for FHA loans. The Office of the Comptroller of the Currency has defined a prime loan as having a FICO score of 660 and above. However, the average FICO score for denied applications on FHA loans was 669 in May of this year, well above the 656 average for loans actually originated in 2001.”
And the Fed has announced that they intend to keep rates low through 2015, so we can forget about spikes in the interest rate incenting indecisive buyers to “get off the fence”. Add to this the impact of low appraisals.
Appraisals are so low that it may behoove sellers to begin dismantling their houses and selling the parts and pieces for more than the total is seemingly worth! Low appraisals mean that the lenders can risk less of their money on a loan or even deny it altogether. When an appraisal comes in higher than the sales price, you would think the lender would rejoice to be making such a prudent loan! But, no, that is reason to order a second appraisal (but certainly not at the lender’s expense) to “make sure” the value is there.
That second appraisal is usually bad news, a much lower value. And why not? How can an appraiser from Macon and another from Conyers agree on a property value in Alpharetta? Don’t even get me started on the negative impact the appraisal industry is having on our real estate market and economy as a whole.
Keys to Building Your Business
Aside from the low mortgage rates and draconian appraisal system, which we can do little about in the immediate future, what CAN we affect that will build our business? Plenty.
- Get reacquainted with your Sphere of Influence (you know, the people who know you, like you and would love to see you succeed). A top agent recently shared her “Thank It Forward” idea with me. She mails (NOT email) a beautifully worded Thanksgiving greeting to everyone reminding them that friends and family are what we are truly thankful for. She includes a blank “Thank You” card with a pre-stamped envelope for the recipient to use to tell someone else “thank you”. How empowering for the recipient!
- Wear your nametag, always, everywhere. Bling it up if that is your style. They do get noticed and will spark conversations you would not have otherwise had. So simple.
- Commit to hosting one Open House a month. Make it a pretty house in a nice neighborhood in the price range of buyers you would like to work with. If that means driving to the other side of town, do it. Be like Jesse James; go where the money is.
- Take a morning to work on your personal website (for Metro Brokers agents, this means your new, free Agent Websites!), especially the part where you tie it to all your social networking presence. Get excited about the changes you made, and tell everyone about it! Enthusiasm is a great magnet for business.
What are you going to do to gear up for 2013? Share in the comments section below!
Tags: 2013, ann bone, atlanta, atlanta real estate, Better Homes and Gardens Real Estate Metro Brokers, FHA, georgia, marketing, Metro Brokers, NAR, open house, Real Estate, real estate agent, real estate career, Realtor, sphere of influence, success, Tips