Wednesday, October 22, 2008

Are there good results from the take-over of Fannie Mae and Freddie Mac?

Do you feel there are positive results from this recent take-over or is this a situation bound for failure in the end?

The failure had already happened with both companies. This will hopefully put some corrective measures in place, and ultimately lead to a positive result.

James did an excellent job spelling out the details of the changes that have recently occured by the Government. These are measures that, along with others, needed to happen to establish a floor in housing prices, and create the potential for more loans to be made...in the near future.

You will see the possibility of positive results in a short period of time...but I would not say the results would be relevant right now. We need several things in motion to help change the psychological thought process of the general public around housing...

If we relied on this one move by the Government to have significant effects, we would wait a long time...and probably never see a positive result.

Fannie Mae and Freddie Mac were a single step...combine them with the following, and we should see some positive measures:
1. Gas prices falling/Oil too
2. Supply of homes coming in check
3. Election soon to be behind us (we will accept whoever and move forward knowing the outcome)
4. Interest rates low
5. $700 Billion Bailout to stimulate more lending, and stop housing prices plummeting
6. Builders not building many homes at all (lowest # since early 1990's)

Pent up demand does exist...once the factors listed above are moving together, then we should see the engine moving in a positive direction...and one of the items that will have corrected the situation will be the takeover of Fannie Mae and Freddie Mac...when this happens, we will all embrace the takeover in a positive light.

Tuesday, October 14, 2008

Calling All Realtors in North Atlanta!

Calling All Realtors…
I guess the real title should read “Calling on 30% of the Realtors!”

It is time to rev your engines, and get FIRED UP about what is going on with our economy! That is right! The Government is relying on YOU to turn the economy around, and it is yours and other taxpayers money that is on the line…are you ready?!

I have talked with a lot of Realtors in the Alpharetta, Forsyth, and Gwinnett areas, and the overall message is NOT GOOD! There are about 30% of the Realtors I speak to that are revved up about what is going on, and have been having very solid months in the most recent activity.

You must read the articles and understand the potential implications of what they mean and how they could change the overall environment…never look at things as Doom and Gloom…see the challenges today as OPPORTUNITY to learn, grow, and be one of the people that others aspire to be like!

The Bailout is going to change a lot of potentials. It has the opportunity to quickly:
Level Housing Prices
Stimulate more lending
Have a positive effect on attitudes for buyers
Seal the hole so the bottom is established
Increase the number of potential buyers interest

Get into what is going on. Don’t be nervous…GET EXCITED!

Here is what you need to do:
Improve your understanding of what is going on and why it is going on
Improve your language about the market
Improve your thoughts about the market
Start doing more open houses! The RIGHT ones!
Get passionate about talking the Supply and Demand issues
Get excited about the RIGHT listings, and firing the wrong ones!
Go to classes and take away ONE thing you can apply to be better in your business
Feed your energy and knowledge to other agents that are sucking wind right now!

Seven Hundred + BILLION DOLLAR Bailout…Everyone states if they can’t get the housing market corrected, nothing else matters…the bet is on YOU! What are you going to do about it?!

Monday, October 6, 2008

Wholesale vs. Retail

There are several different types of buyers in the pool today for the North part of Atlanta. There are true investors, and there are people that are trying to take advantage of the market conditions...and trying to act like investors.

There are two different types of sellers as well. We will call them Wholesale or Retail.

The problem is that many of them are colliding, and only causing frustration for each other vs. the ultimate goal of creating a sale.

The true investor will stick to the fundamentals that allowed them to earn the title of "true investor". They will typically only look at opportunities that would fall under the Wholesale Seller. In this type of arena, the true investor knows there will be inherent risk, and usually the homes will be in less than acceptable condition. They will need improvements, and also need to be brought up to today's standards of specifications. They will also be priced for the "deal" to be made.

The buyer trying to think like an investor, but intending on buying a home for their family at an investor's price, is the one that is causing frustration. The reason they tend to be causing frustration is that their expectations are typically off-base.

This person has heard about all of the foreclosures, and the deals that are out there. They begin the search, at first, out of curiosity...then with a sense of passion. A passion for "giving someone a blood-bath".

Now, there is no harm with someone wanting to get a deal, but the homes they are falling in like with do not measure up to the ability of getting "the deal". They tend to be attracted to the Retail Sellers home that has been updated some, and is in great condition.

These Retail Sellers have taken better care of their home (because they knew they were not behind in payments, and needed to get what they could out of the home), and in many cases, have updated the interiors unlike most of the Wholesale situation homes.

So this presents a big gap...and tends to lead to angst, and a lot of emotions...on both sides!

The Retail Sellers expect to get close to what they are asking for their home. After all, they would not have kept it in the condition and added things if they would accept Wholesale Pricing.

The buyer trying to think like an investor gets frustrated because he/she has heard of all the deals that are 40% below market value.

The best question to ask a buyer: "Mr./Mrs. Buyer, are you interested in buying a Retail Home, or a Wholesale Home?"

They will probably ask what you mean, and then you can use the examples listed above to educate the buyers as to the reality of buying today:
The best POTENTIAL deals usually require the highest level of risk, and work to get them to where you would want to live in them. They are typically owned by a Bank, Company, or Institution that wants to dump them off their books.
The Retail Homes are usually in move-in condition, and have much of today's decor and features...they are still extremely attractive VALUES, but may not have you feeling like you gave someone a "blood-bath".

It may help you educate them and have a much more fulfilling process...for everyone involved!