Miro Fitkova

The topic of foreclosure has been on the minds of many Americans as the market makes it way towards recovery.

According to the Mortgage Bankers Association, the mortgage delinquency rate declined in the third quarter.

They report that in the United States, it "declined last quarter amid hints of improvement in the job market, but headwinds from defaults and a rising rate of new foreclosure applications keep the housing outlook muddied."

Still, some experts say the winter will continue to be cold for many fearing default.

Zillow.com reports that foreclosure liquidations have reached a new peak, with over 1.17 of every 1,000 homes slipping into foreclosure.

Their analysts predict that this high rate of foreclosure will continue due to high negative equity rates which increased to 23.2% from 22.5% in the second quarter. And Zillow experts expect it "will be weighing on housing demand for the next few years."

And unfortunately, home values are fairing little better.

According to the latest Zillow Real Estate Market Reports, "Home value depreciation began to accelerate again in September, fueled by lower transactional volumes and increased inventory levels. Home values dropped 0.4% from August to September and 4.3% from September 2009. With home values 25% below their peak and 51 consecutive months of declines, the length and severity of the current downturn is fast approaching the length and depth of the Depression-era housing declines. From the end of 1928 to the end of 1933 (60 months), nominal home values fell 25.9% according to Robert Shiller's reconstruction of long-term home price appreciation in the United States."

The top five hardest hit cities in the nation are as follows: Las Vegas, NV; Miami, FL; Chicago, IL; Phoenix, AZ, and West Palm Beach, FL. (Realtytrac.com)

Realtytrac.com also reports that as of October, there are 2,171,120 homes in foreclosure, with an average foreclosure sales price of just $173,331.

30 year fixed mortgage rates have risen a quarter point this week to 4.25% on plummeting mortgage-backed securities prices. MBS prices drive mortgage rates in the opposite direction. Conventional 15 year fixed interest rates are also up a quarter of a percent and are at 3.75% currently for well-qualified borrowers who pay a standard .07 to 1 point origination. Both fixed mortgage rates are up substantially from last week and at an immediate risk to rise further.

FHA loan rates move with conforming mortgage rates and are also up this week. Today's 30 year fixed FHA loan rate is at 4.125%, up from 4%. Although the same note rate is available on an FHA 30 year fixed mortgage as a conforming 30 year fixed loan, MI and other fees charged by the Federal Housing Administration make APR higher on an FHA mortgage.

Jumbo mortgage rates are unchanged. The current jumbo 30 year fixed rate is 4.875%

Wells Fargo, the nation's number one originator by volume, adjusted their advertised 30 year fixed rate from 4.25% to 4.625% with an APR of 4.812.

Establishing your daily priorities will help you make each day a "10”. I am giving you a tool that I created a few years ago that really enables you to get maximum value from your time. It is our Real Estate Champions Daily Priorities Tool.

Step #1: List the activities that need to be done for the day.

When you are listing activities on the right hand side of boxes, you are brainstorming to get your thoughts down on paper. Just focus on what needs to be done … all of it. Do not let your mind think about importance or order of completion. If you do, that will stop the brain storming process.

Step #2: Categorize the activities that need to be done.

Most people, once they create a list of activities, number them or create an order. The Champion categorizes them to determine their level of importance. Assign each activity a category based on A, B, C, D or E.

A – Something that has a serious consequence if you don't complete it today

B – Something that has a mild consequence if you don't complete it today

C – Has essentially no consequence if it is not completed today

D – Can be delegated to another person on your Team or an Affiliate

E – Should be eliminated because it is unnecessary

Once you have categorized them all using the system above, you are ready for the final step.

Step #3 – Prioritize the categories.

Select the A category activities and determine which one is the most important. Number them and write them in the squares on the left hand side.

My belief is that, each and every day for the remainder of your sales career, A-1 and A-2 are already spoken for. A-1 is always prospecting and A-2 is always lead follow-up. You are really starting at A-3 each day. I believe the most significant penalty or consequence comes from not prospecting and doing lead follow-up daily.

The reason most of us don't think there is a penalty for that is the results of not doing it doesn't show up today. It appears in ninety days when we fail to prioritize those activities higher on the scale and do them. It is usually easy to place something else in the A-1 or A-2 slot. Usually, the Quadrant I activities or emergencies will try to crowd out the prospecting and lead follow-up. The most important activities in the A category are the Quadrant II activities. They are the activities that, if they don't get done, have a significant penalty. You just can't see it today.

Proceed down through the Bs, Cs, Ds, and Es. If you want to earn what a Champion Agent earns, don't waste your time on Ds and Es.

For me, during my sales career, and even today, the most important question is did I get my As done? If I got that done, I had a great day. There were times that, when I really looked at my priorities for the day, the only As were prospecting and lead follow-up. I would give myself a choice on those days to go home or head to the golf course early after prospecting was finished as my reward!

Time management is a problem that will never go away for any of us. I view time management as a muscle that needs to be trained and worked out to strengthen the skill. It is a series of systems or skills that we all need to acquire. I have shared with you a tool that really works to help you take your time management skills to the highest level. Make the commitment to start using it tomorrow.

There is a law called the Law of Diminishing Intent. The law says that the motivation and desire and emotion to change is high when you first recognize a change is needed. The farther you get from that moment, the lower the probability that you will actually do it. Don't allow the Law of Diminishing Intent affect your desire and need to change your time management plan and skills. For more information please visit: http://realtytimes.com/c/MiroslavaFitkova

Written by Dirk Zeller

The National Association of Business Economics' latest report has revealed that projections for GDP growth remains in the first quarter of 2001 remains "sub-par". Concern about federal debt, unemployment, and business regulation ruled the NABE panel, causing experts to forecast only moderate growth in 2011.

The NABE also reports that "consumer spending is expected to remain modest throughout the forecast horizon due to weak job gains, persistently high unemployment, and negligible growth in household net worth."

On the bright side -- the chances of the economy slipping back into recession are considered low.

The housing market, however, continues to struggle. The National Association of Realtors reports that existing home sales fell in October after two months of gains.

Lawrence Yun, NAR chief economist, said the recent sales pattern can be expected to continue, but may improve come Springtime. "The housing market is experiencing an uneven recovery, and a temporary foreclosure stoppage in some states is likely to have held back a number of completed sales. Still, sales activity is clearly off the bottom and is attempting to settle into normal sustainable levels."

The third quarter also saw levels of home value depreciation accelerate, this according to Zillow.com Real Estate Market Reports.

Their experts report that we have seen 51 consecutive months of declines, with values now 25 percent below their peak.

In comparison to Depression-era housing declines, "from the end of 1928 to the end of 1933, nominal home values fell 25.9% according to Robert Shiller's reconstruction of long-term home price appreciation in the United States."

In addition, foreclosure liquidations rose again, to a new peak for the third quarter. More than 1.17 out of every 1,000 homes was liquidated in September.

Yet, in almost contradictory news, the Mortgage Bankers Association reports that the mortgage delinquency rate in the U.S. declined last quarter "amid hints of improvement in the job market." Michael Fratantoni, the MBA's vice president of research and economics reported that "although the employment report for October was relatively positive, the job market had improved only marginally through the third quarter." Therefore, the delinquency rate may have declined, but it remains high.

The National Association of Realtors echoes this sentiment, releasing a statement earlier this month noting that the housing market recovery depends on jobs, as well as access to credit.

"Modest changes in mortgage rates are less important to a housing market recovery than the number of people who are able to obtain mortgages,” said NAR Chief Economist Lawrence Yun.

Helping this cause? Interest rates have dipped to the lowest in two decades, leaving housing affordability near its highest level nationwide for the seventh consecutive quarter.

For more information please visit: http://realtytimes.com/c/MiroslavaFitkova


Written by Carla Hill

1. Strong motivation

Motivation is simply the desire to do something. The stronger the desires on the part of the Buyer, the easier it will be for you to satisfy or even exceed their expectations. The stronger the motivation, the lower the expectations they will have for a property or your service. A low motivation prospect is willing to look for extended periods of time until they find the perfect home. In essence, they are looking for something that doesn't exist in many cases.

Do they want it? Do they have to have it? Those are the key questions to review in your head while talking with the prospect. If they are hoping for or would like something to happen, the likelihood of it happening diminishes.

2. Financial capacity

We can find people who have a desire or high motivation to live in a much nicer home. That certainly needs to be balanced with financial capacity: the availability of a down payment, credit score, steady employment, and sufficient income. Most people want more than they can afford. A Champion Agent finds out before they invest time on a prospect what their true financial capacity is.

If you show property before you know clearly their financial capacity, you run the risk of disappointing your client. The Buyer ends up seeing homes they want but can't afford, causing them to become frustrated with the properties, themselves, and you. This is a sure way to lose the client.

3. Authority to take action

Do they have the authority to make the purchase? Are they the only decision maker, or is someone else involved or influential in this decision?

Far too frequently, low producing agents find out late in the game that parents, friends, aunts, or uncles will have an influence on the decision. This can easily cause a blockage to the sale. The other party, which is usually a parent, will come in after the home is selected and talk the Buyers out of the home they want. Knowing who will have influence on the decision is critical.

4. Realistic expectations, willingness to compromise

Qualifying and the Buyer Interview have so much value in determining this area. We are in a compromise business. The Buyer has to be willing to have realistic expectations of their desires and budget. They have to be able to forgo things that might be luxury items in their budget. They might not be able to afford that 3rd garage space based on their budget. They might have to forgo it because the area they really want to live is older, and very few of the homes have 3 car garages.

Agents are better at determining the desire level of a client than the expectation level. We have to guide the client to identify their desires for their next home, then to prioritize these items. What are have-to-have items, and what are really like-to-have items? What is a non-starter item that knocks out the home and what is it that they can live without?

Let's go back to our garage example. If the house didn't have a 3 car garage but had room to add on that garage and was in the right location and had all of the other features you were looking for, would that be okay?

In the end, none of us will ever own the perfect home. We have to be willing to compromise. If we have a client without realistic expectations or with a lack of compromise ability, we will end up with either a large amount of time invested to generate a commission check or no commission check at all.

5. Willingness to understand the marketplace and market competition

This has been a difficult area in the past. Buyers have not liked the bidding war in real estate. They have felt taken advantage of by the Sellers. In some cases, they lost a few houses or had to pay 5%, 10%, or over 20% above asking to acquire a home.

For a prospect to become a client, they must understand the marketplace, whatever it currently is. In the end, the market is the market! All real estate agents and Buyers can do is respond to the market. One thing an agent should always know is the percentage of list price to sales price for the homes in the price range their client is trying to purchase.

This knowledge needs to be shared with the client, so they understand what it is going to take, at a minimum, to secure a property based on the facts of today. We need to clearly explain to the client that, if they are trying to be the exception, there will potentially be a high level of frustration for them.

6. Commitment to work with you exclusively

My position on exclusive commitment is that they sign a Buyer Agency Agreement. The Buyer Agency Agreement is becoming more commonplace in our industry. There was even an article on the increase in frequency and acceptance of Buyer Agency Contracts in the December 2, 2004 edition of the Wall Street Journal.

I would suggest you secure a copy of the actual article to use in your commitment discussion.

Few journalists provide a fair and balanced picture of our services. I want to highlight such an article, which was published in the Wall Street Journal by Kelly Spors, that raises awareness and dialogue on Buyer Agency Agreements.

In the article, Ms. Spors shared with consumers that Buyer Agency is increasing in use nationally. She cited a survey by NAR that 64% of Buyers using agents used Buyer's representation in 2004. That was a 17% increase from 2001 when it was 47%. That means that almost two-thirds of people using a Realtor® to purchase a home are using an exclusive Buyer Agent relationship.

This article would have some value to have in your portfolio of tools. It could be shown to a Buyer to prove that the norm in the industry is Buyer Agency and exclusive right to represent. That 64% clearly backs up your desire to get an exclusive right to represent agreement signed.

There are questions it raises, as well, that we will need to prepare for:

1. What happens if the Buyer is unhappy with your service?

2. Are Buyer Agency terms always negotiable?

3. Do you think you might want to buy a For Sale By Owner?

4. What are the terms of the contract?

As a professional, by reading this article, you will be more knowledgeable as to the concerns of the Buyer. It will enable you to prepare for the questions and apprehension that most Buyers are experiencing when we ask them for a Buyer commitment.

I have always believed that the best approach with a Buyer is the straightforward one. Explain to a Buyer that this is the way you earn a living to feed your family. Then bring it to their level by saying:

“You would not go to work for a week or two and work real hard with just a hope of getting paid in the end would you? Since my income is not guaranteed, I owe it to my family to ensure I get paid for the work I do, just like you do. This is the only way I have to get paid. You can understand that can't you?”

Each of us needs multiple arrows prepared for us. This article could be another arrow to use in the right situation. The real value is that it comes from the Wall Street Journal, an independent third party that's highly respected.

The exclusive relationship, at its core, is about a trade of commitments. We are committing to provide a certain level of service, skill, expertise, and time to ensure the client achieves their goals. The client, in turn, must trade exclusivity and assurance of compensation for the services rendered. Anything short of full trade of commitments is damaging to either party.

I know of many agents who have a strong enough presentation and presence about them that they can get away with not getting a Buyer Agency Contract signed, but I don't recommend that. They will get burned every once in a while because of not getting a contract.

Why take the risk? I think that if someone is intent or even tempted to take advantage of you, it will come out during this stage when you are qualifying them for an exclusive commitment. You could even use a short list of services that you provide and ask for a trade of commitment, based on that short list of services.

For more information please visit: http://realtytimes.com/c/MiroslavaFitkova


Written by Dirk Zeller