Monthly Archives: June 2016

Confidence tumbles

Consumers are less confident about the economy in October than last month, citing that, among other things, business conditions are bad, according to the Consumer Confidence Survey conducted by The Conference Board by Nielsen, a provider of information and analytics around what consumers buy and watch.

The index decreased to 98.6, down from September’s post-recession high of 103.5. The Present Situation Index decreased from last month’s 127.9 to 120.6, and the Expectations index decreased from 87.2 last month to 83.9.

In 1985, the index was set to 100, representing the index’s benchmark. This value is adjusted monthly based on results of a household survey of consumers’ opinions on current conditions and future economic expectations. Opinions on current conditions make up 40% of the index, while expectations of future conditions make up 60%.

“Consumer confidence retreated in October, after back-to-back monthly gains,” said Lynn Franco, The Conference Board director of economic indicators. “Consumers’ assessment of current business and employment conditions softened, while optimism regarding the short-term outlook retreated somewhat.”

“However, consumers’ expectations regarding their income prospects in the coming months were relatively unchanged,” Franco said. “Overall, sentiment is that the economy will continue to expand in the near-term, but at a moderate pace.”

Consumers who say business conditions are good decreased from 27.7% to 26.2%, and those saying conditions are bad increased from 15.8% to 17.7%.

They are also less optimistic about the labor market, with 24.3% saying jobs are plentiful, compared to 27.6% last month. Those who said jobs are hard to get, however, declined slightly from 22.3% to 22.1%.

Looking ahead, consumers were not very optimistic about the market in the short-term. Those saying they expect business conditions to improve over the next six months decreased from 17% to 16%, and those saying conditions would worsen increased from 10.8% to 12.2%.

Those saying more jobs will come in the months ahead decreased from 15.7% to 13.1%. On the other hand, those saying there will be fewer jobs in the months ahead also decreased from 18.1% to 17%. Those saying they expect an increase in income held steady at 17.5%, but those saying they expect a decrease in income declined from 10.4% to 9.8%.

“The drop in the expectations index may be a sign that the presidential election, which is now only two weeks away, is finally starting to worry some households, but it is clearly only a minor concern,” Capital Economics Economist Andrew Hunter said.

This decrease falls in line with other measures of consumer confidence.

The Index of Consumer Sentiment decreased to 87.9 at the beginning of October, its lowest level since last September and the second lowest level in the past two years, according to the Survey of Consumers conducted by the University of Michigan.

Consumers are taking a more cautious approach to their view of the economy, according to the latest Fannie Mae Home Purchase Sentiment Index.

Motivated Is Your Seller

When purchase prices for homes escalate into the hundreds of thousands of dollars, sometimes a $10,000 difference in an offer price can seem like a small variation, but $10,000 is $10,000. As you go through the process of making mortgage payments, you will no doubt wish you could shave a few months off of your payment term, which is exactly what shaving $10,000 or more will net you.

One of the prime ways of doing so is to locate a seller that is truly motivated to sell a property, sometimes at a minor expense in return for a speedy, smooth transaction. Making low offers is something all realtors have probably done in the past, though it can sometimes seem like a slap in the face to send a below-list offer.

The prospect of saving $10,000 or more should take that embarrassment out of the equation and motivate you to explore all avenues for saving money. There are a few ways to spot motivated sellers that might be more apt to accept an offer below list price than they otherwise would.

Everyone Sells For A Reason
One of the best ways to investigate the motives of your seller is to simply ask. That might seem like a common sense approach, but people often go through entire real estate transactions without asking even the most simple questions about who they are purchasing a very expensive item from.

Your realtor or the seller’s realtor may have that kind of information at hand and while they might have reason to guard it, more often than not they will make polite conversation about what a seller’s plans are. At open houses especially, realtors may make the effort to chat with you, sometimes answering such questions, in hopes of getting you interested in the property. Let that eagerness work for you and get the information you need that might help you.

There are quite a few situations that might result in a motivated seller, but perhaps the most common are relocations, divorces and financial troubles. As you can imagine, if a seller is involved in any of these three situations, it is probable that speed is an issue and sometimes that speed is worth a bit of a discount on the list price of the real estate property.

Relocations especially can split a seller’s attention between two locations, greatly motivating the seller to quickly get rid of an old property to focus on a new one. That split focus can be your gain with a big of a discounted offer that nonetheless represents a quick chance to be done with the real estate.

Each Property Has Its Own Traits
More than just investigating a seller, you can investigate a particular property as well to perhaps indicate a seller that is tired of a particular piece of real estate. For example, properties that are not kept up as well, rental properties especially, could indicate that a seller is tired of dealing with a property and is more motivated to sell quickly, even if at a small discount.

If you want to go the extra mile and go through county tax records, it is entirely possible to find properties where sellers have home addresses far away from the property in question. In those cases, sellers that live far away are usually selling property that they can no longer maintain from a distance and have grown tired caring for. These are perhaps the best candidate to accept an offer below list price as they are tired of the hassle of maintaining a long-distance piece of real estate.

No matter your tactic, there are sellers out there that want desperately to sell you a piece of real estate. Do your homework and investigate just why a seller is doing so and why a particular property is on the market. Those two bits of information could produce the difference between a list-price offer for a piece of real estate and an accepted offer below list price.

Property Connection In The City

Buying a new home is an exciting prospect that consists of purchasing not just a place to live but in some cases a whole new way of life. A fresh lawn, a new place to call home, all of it comes with a home purchase. However, the purchase entails more than just building materials and pavement.

Like it or not, buying a piece of property ties a home owner into the city, both in a social and financial link. As the financial state of the city around your property changes, so to does the potential equity level of your property. If a builder surrounds your high value property with low value developments, that can have an irrevocable effect on your significant investment.

Using that knowledge can help you as you go through the process of picking a home and picking an area to live in. As you look at homes, inquire to either your real estate agent or other expert what the surrounding environment is like. Has the commercial fate of the surrounding area improved lately? Have homes decreased in value over time? These are extremely valuable questions to ask.

Current Trends
Understanding the current state of the neighborhood around your potential home is a crucial part of the real estate process. While many people spend time investigating things like the quality of the school district or cleanliness of the neighborhood, not everyone investigates the financial state of the surrounding area and the general flow of population in and out of the region.

Are the businesses in the area of a potential home faring well? Have commercial developments seen a lot of turnover? While it may seem like an unrelated development, if businesses start migrating away from a potential area, the prospect of an eye sore abandoned strip mall increases. An abandoned strip mall may seem like a small portion of an entire local economy, but it is a symptom of economic decay that potential buyers are constantly reminded of as they drive to showings.

Just as this enters into your own determination, so too will it enter into the determinations of potential buyers as they research homes in your area. As buyers are deterred from your area, prices will have to be lowered to attract new residents and that decrease will affect the value of your property.

Future Development
While the current economic state of your area certainly plays a role, the future value of your property is even more important as it will dictate the sale price of your property when it comes time to sell. In addition, future development can be very difficult to forecast, leading to a lot of uncertainty over how a home will fare.

There are a few things you can take into account when you try to forecast the economic future of your investment. Population statistics are available for the United States that can tell you the amount of people that have come to and left a particular area. If people are leaving, an area is likely to see an economic downturn and that can affect your property value. Your realtor can also be a good resource in this regard as time spent buying and selling properties can build up a high level of expertise in pinpointing when areas are beginning to hit a downturn.

So, as you go through the process of choosing a new home for you and your family, keep in mind that when you pick a home, you pick its immediate neighborhood too. With the considerable amount of money you are likely to pour into a mortgage, you need to protect your investment as best you can. To do that, understanding what might be the financial future and financial present of the surrounding area can give you valuable information as you choose your new home.

The mortgage business

“Motto Mortgage will open mortgage franchises throughout the U.S. increasing competition in the industry, resulting in more choice and a better experience for consumers,” the company said Tuesday. “Its loan originators will work with real estate offices so that agents can help homebuyers obtain the mortgage loans that best fit their individual needs.”

According to RE/MAX, the Motto Mortgage brokerages will be located within RE/MAX offices.

“Pairing a Motto Mortgage franchise with a real estate brokerage means homebuyers can work with a real estate agent to find a home and with a Motto Mortgage loan originator to secure financing in offices at one location,” the company said.

RE/MAX claims that placing Motto Mortgage franchises within RE/MAX offices, it creates a true “one-stop shop” for homebuyers.

“RE/MAX disrupted the real estate industry when it was created more than four decades ago. We did it by empowering real estate agents and ultimately giving consumers a better home-buying and selling experience,” RE/MAX CEO, Chairman and Co-Founder Dave Liniger said.

“The RE/MAX model remains unique and continues to thrive because we have the best agents in the business who deliver exceptional service,” Liniger continued. “Today we are extending our core competency of franchising into the mortgage origination market by introducing Motto Mortgage.”

Lingier said that RE/MAX “obsesses” about ways to improve the real estate experience for consumers, and sees this as a way to help mortgage brokers and consumers alike.

“We know that independent mortgage brokers’ share of the mortgage origination market dropped significantly following the economic downturn, falling from a 15-year average of 22%– with a high of 35% in 2006 – to 10% in 2015,” Liniger said. “Mortgage brokers bring choice and service to the consumer and Motto Mortgage will work to expand the market share of mortgage brokers and bring better mortgage choice and service to consumers as a result.”

Motto Mortgage President Ward Morrison, who has been with RE/MAX for 11 years and most recently served as vice president, region operations and business opportunities, said the company will look to bring mortgage brokers and “skilled” loan originators back to the market.

“Our priorities will be educating, training and supporting our franchisees so that they can provide exemplary customer service to their clients,” Morrison said.

“Because choice and service matter, Motto Mortgage will offer a variety of mortgage options while promoting honesty and complete disclosure, making it extremely consumer friendly,” Morrison said. “It’s the one-stop shop homebuyers want and the experience they will soon come to expect.”

RE/MAX’s move into the mortgage brokerage space comes at interesting time, as theNational Association of Mortgage Brokers, the association of mortgage professionals, and United Wholesale Mortgage recently announced a new initiative that aims to grow the mortgage broker channel.

Mat Ishbia, president and CEO of UWM, told HousingWire earlier this year that mortgage brokers took a major hit after the financial crisis, leaving their individual businesses behind and moving to the security of working for a bigger company.

And Motto Mortgage could prove to provide that security for mortgage brokers.