American Trust Escrow

Multifamily Real Estate Sector Expected to Have Banner 2013

According to Fannie Mae and the National Association of Home Builders, the multifamily real estate sector is expected to have a banner 2013. Vacancy rates and higher rents continue to permeate the landscape, which has given both groups cause to believe that the multifamily housing sector is poised for growth this year.

Fannie Mae says that asking rental rates are expected to climb 2.5% this year, while vacancy rates should increase to 6%. The improvement in this sector is expected to benefit the overall real estate recovery that still continues to take shape.

Both Fannie Mae and the NAHB say that a boom in multifamily housing is expected, and after years of stagnation, new construction will also come to fruition. In general, experts are calling for a balanced multifamily market without the peaks and valleys of previous years. Of course, as is the case with any recovery, there will still be some hurdles to overcome, including the lack of available capital that has given developers around the country pause.

In 2012, the multifamily sector vacancy rate was 5.5% in the fourth quarter, falling into the low end of historical data. Couple that with rent growth that exceeded Fannie Mae’s projection of 3%, and there’s reason to agree that the multifamily housing sector will continue to make strides in 2013.

 

Trends To Boost Your Mobile Marketing

The structure in which you build your real estate marketing campaigns is rapidly changing.  One such form of marketing is taking place not so much in your office or home, but in the palm of your hand.  That’s right, your smartphone is beyond capable of helping you reach the audience that you deserve.

The 1 billion global smartphone users are setting their sights on a few different options for 2013:

 1. Mobile video – Real estate pros have quickly embraced the role that video plays in showcasing homes and communities, and they understand that video will lead the progression from the desktop browser to the mobile device.

2. Responsive Web design - The seamless flow of information from desktop to mobile and back will be highly expected in 2013, as 81 percent of users prefer mobile sites to apps for researching prices.

3. HTML5 app development - With the high resource cost for developing apps that run on specific platforms, expect a variety of powerful Web apps created with HTML5, CSS, and JavaScript in 2013.

4. Mobile advertising - It is predicted that mobile advertising will rise 180% this year.  With Facebook, Twitter, and Google mobile ads already solidified, these channels provide Realtors the opportunity to leverage a mobile marketing strategy.

5. Mobile wallets - Mobile wallets are an emerging technology that allows you to purchase services and goods using specific applications installed in your smartphone, such as Apple’s Passbook or Google Wallet.  Digital coupons and other digital transaction applications will become more and more prevalent this year.

A Look at Freddie Mac’s New Short Sale Process

Freddie Mac’s new Standard Short Sale program has been underway for three months, but the program is finally gaining in notoriety. The GSE has been working overtime to get the word out about the program in order to grow it and bring attention to the variety of options available to borrowers.

The onus has been transferred to loan servicers, giving borrowers a bit more freedom to pursue short sale properties. The new program aims to reduce short sale timelines by 50-75%, and lenders now must stay within a 30-day timeline when issuing a decision on a short sale application. In order to do this, lenders are now being given more autonomy to review potential client applications and make decisions.

The entire program is possible because of Freddie Mac’s involvement. They obtained approval from nine mortgage insurers who said they would allow servicers to skip the normal approval process in order to reach a quicker decision about short sales. As such, lenders can now approve short sales without consulting mortgage insurance companies. Of course, this doesn’t mean they can skip determining an applicant’s financial hardship; that is still very much a part of their responsibility.

If a lender should need more time to arrive at a decision, they will be given 30 more days at most. Mooney adds, “A final decision is required by day 60.” And if a mortgage servicer runs past the initial 30-day window, they are required to stay in consistent communication with the applicant, issuing weekly updates.

What You Can Expect During a Home Inspection

Whether you’re purchasing a home for the first time or the fifth time, your inspection is one of the most important parts of the transaction. There are a number of things a real estate inspection covers, including reviewing the home in its entirety to shield you from any future problems down the line. Here’s a look at what you can expect during your home inspection, who is involved, and more.

You–the Buyer: Your home inspection will point out things that you wouldn’t otherwise notice. Still, it would be wise to review the seller’s property disclosures, and have them top of mind for inspection day. Also, make notes of any questions you have for the inspector. That’s what you have hired them for, and they will be able to address your inquiries and explain everything before you release your inspection contingency.

Your Real Estate Agent: Your real estate agent will clear their calendar to be by your side during the inspection. They’ve been through this a time or two before, and realize the importance of the home inspection. What’s more, they’re experts when it comes to real estate; so let them point out anything that comes to mind.

The Seller’s Agent: More often than not, the seller is not around during the inspection. Their real estate agent will be, however. If you have any questions or concerns that come up during the inspection, they will be there to address and answer them. After all, their goal is to help see this transaction through for their clients.

The Inspector: So, who is the inspector? As previously mentioned, it should be someone who is licensed by the state where you live. It’s your job to hire the inspector, but that doesn’t mean you can’t ask for referrals. Your real estate agent is a great place to start! On inspection day, you will sign the agreement and pay the inspector after they have reviewed your new home’s systems and the overall condition. Walk around your new home with them, and go wherever they go. This way, you will understand things first-hand versus reading them in the detailed report they will provide you with at the end of the inspection.

U.S. Consumers Fail to Review Credit Reports, New Report Finds

According to a new report, most U.S. consumers fall short when it comes to reviewing their credit reports on an annual basis. When it comes to purchasing a big-ticket item like a home or a car, most people realize just how big of a part their credit score plays with regard to financing. So, it’s a wonder that so many people overlook this critical aspect of their finances.

The Consumer Financial Protection Bureau (CFPB) recently found that many Americans overlook their credit score altogether, while only one in five people actually obtain a copy of their credit report annually. Adds Richard Cordray, CFPB’s director, “Credit reports on a consumer’s financial history and behavior can determine eligibility for credit cards, car loans, and home mortgage loans – and they often affect how much a consumer is going to pay for that loan.”

There were between 32 and 38 million items disputed on consumer credit reports in 2011, most of which were in regard to debt in collections. The CFPB notes, “The most effective way for consumers to identify errors in their reports is to obtain copies and review them.”

Approximately 200 million Americans have credit reports on file with the three biggest credit reporting agencies, Experian, TransUnion, and Equifax. But only about 44 million people take the time to review their credit report each year. If you’re considering purchasing a home, taking a look at your credit report should be step one.

 

CFPB Releases Anticipated Qualified Mortgage Rule

The Consumer Financial Protection Bureau’s (CFPB) recently unveiled their new qualified mortgage (QM) rule, which was created to protect both consumers and lenders. The Ability-to-Repay rule goes into effect in January 2014 and specifies that all new mortgages must comply with basic requirements that protect borrowers from taking loans they can’t repay.

Under the revised rules, all borrowers provide supporting financial information and banks must verify it prior to approving a loan. Examples of supporting financial information include income and assets, current debt obligations, credit history, employment status, and more. This information will be reviewed by the lender in order for them to make a fair judgment on the borrower’s behalf.

Adds CFPB director Richard Cordray, “When consumers sit down at the closing table, they shouldn’t be set-up to fail with mortgages they can’t afford. Our Ability-to-Repay rule protects borrowers from the kinds of risky lending practices that resulted in so many families losing their homes. This common-sense rule ensures responsible borrowers get responsible loans.”

There are other possible amendments to the new Ability-to-Repay rule that could come down the line, and if passed, these proposed amendments would be finalized this spring. The CFPB says they’re looking into specific exemptions for non-profit creditors that work with low- and moderate-income consumers, along with those for consumers who are trying to refinance from a risky mortgage to a more stable one.

A Look at 2013’s Real Estate Trends

2012 is a thing of the past, but the end of the year brought good news with regard to the real estate industry. And the general mood is a good one. When asked about how home prices in their local market might rise as part of a survey by Trulia last summer, 61% of respondents said they believe prices will rise in 2013, while 58% believe prices will take 10 years or less to return to pre-recession peaks. Additionally, 80% of renters said they plan to buy a home someday.

As 2013 gets underway, here’s a look at the real estate trends that have people talking this year!

Rising home prices: With inventory levels suppressed around the country, prices are going up. This trend is expected to continue in 2013.

Rents Rising: So many young people have been waiting for the real estate market to return to a healthy state, which drives up rent prices. There’s a pent-up demand for rentals, so finding that perfect place is going to be a challenge this year.

Reduced Foreclosure Bargains: Has the foreclosure ship sailed? Perhaps. Sales of foreclosed upon homes were down 28% from March 2011 due in part to the Federal Housing Finance Agency (FHFA), the Federal Deposit Insurance Corporation, and banks who have been bulk-selling foreclosed homes to purchasers who agree to work with the original borrowers rather than simply foreclosing.

More Short Sales: More banks are agreeing to go this route instead of proceeding with the foreclosure process, which is expensive and time-consuming foreclosure.

Increase in First-Time Buyers: Growth in demand for single-family homes this year is expected to be a driver by first-time buyers. According to an NAR survey of buyers and sellers released in November 2012, 39% of borrowers were first-time homebuyers, an increase of 37% from their 2011 survey.

Large Real Estate Brokerages Move Away From National Portals

Some large real estate brokerages are moving away from national real estate portals who use advertisements to help pay the bills. With so much going on for the consumer on these sites, brokerages are getting fed up and want to give their customers a better experience. Some believe their listings are getting lost in a sea of advertisements, and as a result, brokerages have pulled listings from portals like Trulia and Realtor.com.

According to Realtor.com, Edina Realty and ARG Abbot Realty Group out of San Diego are the only two brokerages currently withholding data from their site. But now, real estate agents are in the same predicament. The decision to pull listings from these large real estate portals is a big one, but some are finding it’s giving them a chance to break off and focus on their own websites.

Edina Realty, the first large real estate brokerage to break free of listing on national portals, says their decision has been a good one. They cut off their flow of listings to Trulia in November 2011 and Realtor.com in May of the same year. According to Edina Realty’s website, visits increased 21.7% between July 2011 and July 2012, and unique visitors were up 17% at the same time.

But to some critics, pulling back from popular sites like Zillow, Trulia and Realtor.com could handicap home shoppers. By not posting to these sites, consumers will no longer be able to see a snapshot of the market with listings missing. Adds Realtor.com President Errol Samuelson, “I believe that consumers are using a variety of mediums to learn about real estate and that restricting information to a single channel will not modify consumer behavior.”

Rising Prices Assist Homeowners With Negative Equity

Home prices have continued to climb over the past year, helping some homeowners with negative equity finally bring their heads above water. Economists are hopeful that negative equity will continue to shrink in the coming months. In a recent report by Capital Economics, they said, “The negative equity problem is still crippling many home owners and the wider economy.”

According to the report, 25% of homeowners still owe more than their home is worth, and nearly half fail to meet the 80% loan-to-value (LTV) ratio that is required to take advantage of a standard refinance. But despite these numbers, Capital Economics says they still see the potential for approximately 3.5 million homeowners to rise above their negative equity issues in the coming year.

Rising prices will continue to drive this aspect of the recovery. In the past year, CoreLogic reports that prices have risen 5%, and many industry experts say that the biggest price gains are being realized in places that were hit the hardest by the downturn in the economy. Arizona and Florida are two examples where about 40% of homeowners are underwater.

Any increase in housing prices is good news for those with negative equity. If home prices were to increase by 10%, nearly 3.5 million borrowers would be helped out of negative equity, while about 6 million would be eligible for standard refinancing. Adds Capital Economics, “The faster prices rebound, the quicker the negative equity problem will be resolved.”

Home Sales Increase While Builder Confidence Continues to Rise

A surge in demand has helped to drive prices higher, but has also diminished the supply of homes. In October, inventory was down 1.4% from the previous month, and 2.14 million homes were listed for sale. Many sellers are realizing that the market has shifted in their favor because of the increase in demand and the short supply of homes. Home owners are now getting more for their homes and are entertaining multiple offers.

In addition to existing home sales, builder confidence is also on the rise thanks to improvements in the economy and housing sector. According to Barry Rutenberg, a home builder and chairman of the builders group, “Builders are reporting increasing demand for new homes as inventories of foreclosed and distressed properties begin to shrink in markets across the country. In view of the tightening supply and other improving conditions, many potential buyers who were on the fence are now motivated to move forward with a purchase in order to take advantage of today’s favorable prices and interest rates.”

The National Association of Home Builders/Wells Fargo Housing Market Index, a survey that measures home builder confidence, rose five points in November, marking the seventh straight monthly increase.