Way to Save Housing and the Economy Quickly

Recently there has been a lot of talk about ways to save the economy by giving money directly to Americans. It is a very intriguing discussion that has many possibilities. By giving money directly to Americans it removes the control that the government would have over the money or business who receive the money. It could be used for fixing a home's financial situation. It could be used for investing. It could be gambled away at a casino or spent on drugs. There is no way that the government can know how it will be used. Most of the time, it will impact where needed and it most definitely will get money flowing in our economy.

If most homeowners used it to pay down debt, creditors would have a huge influx of cash. Mortgage companies could see billions of dollars hit their books while finding mortgages brought back into good standing. In addition, this flow of capital will make banks and other creditors more willing to offer loans again. First time home buyers will have down payment money. Economically stable families will have investment and vacation money. Spending will increase. Hiring will increase to fill the demand placed on our increasing consumption. Some potential retirees will get enough money to leave the workforce and create jobs for younger workers. The economy will start moving and it should start moving in a very short period of time.

What about the down side? The US government says that there are about 116 million households in the U.S. If every household was given $25,000 it would cost almost $3 trillion. Wow! A staggering cost. In addition, what happens with inflation and the value of our currency if the government passed out $3 trillion? It would be rough.

There are ways to reduce the cost. Offer the money to those who file income taxes and limit it to U.S. citizens. Only offer the money if your household income is under $250,000.

Another option is to offer the money to individuals instead of households. If the amount was $10,000 it could still cost $3 trillion if everyone received their money. However it would give more money to families who are larger and need more money and less to those who are smaller and need less money. Again, limiting to U.S. citizens and tax payers would reduce the overall cost.

A third option is to restructure the housing market and let the trickle-down work from there. Under one option, all loans would be reset to 4.5%. This would reward those who do pay their loans and save from foreclosure those who don't while still putting money in the pockets of banks and largely eliminating the number of foreclosures. An alternate plan involves putting together local teams of real estate agents and appraisers who make independent valuations on homes. Then they work with the assessor and the banks to correct the amount of the loan and the taxes. The shortfall could then be made up by the federal government in one of their 'bailout' packages.

What do you think? This is an important topic that affects every one of us and will shape our economy for the foreseeable future. Post your opinions, ideas, suggestions and comments.

Foreclosure Increase For October

Nationally, the media is reporting a 25% increase in foreclosures over 2007. The Tiered Real Estate headquarters is in Illinois where foreclosures jumped 31%. Part of the reason the national rate had "only" a 25% increase was due to some states restricting the foreclosure of some properties which artificially surpressed what could have been an even larger number. It was reported that by years' end, there could be a record 1,000,000 foreclosed properties for sale in the United States.

Why is this rate increasing so dramatically if the bail out was supposed to help? There is much speculation to the reasons. Much of the information from the banks themselves is confusing. We have worked with many buyers and sellers who are trying to avoid foreclosure and while some banks are eager to work with homeowners, there are just as many who refuse. Are they trying to foreclose? Do they want to take the properties before the governement tells them that they cannot foreclose and so they lose money from non-payment as well as not being able to foreclose? Are they so mismanaged and filled with beauracracy that they don't even realize when they shoot themselves in the foot? No one can tell.

What we do know is that the baseline hasn't changed. Banks are not in the business of possessing homes or being landlords. They are in the business of taking in and giving out money for a profit, and ultimately, that is what they want to do.

If you are struggling, please talk to your bank to see if they will work with you. If not, call one of the experts at Tiered Real Estate so we can help you sell your home and save some of your credit in the process.

Can I still get a mortgage in today's market?

Thanks to Mike Vrba from Cherry Creek Mortgage who is distributing a free video that talks about getting a mortgage in today's market. It is interesting and may answer many questions that buyers (& some sellers) may have. Click Here to watch the video.

If you have any further questions or if you are interested in buying, selling or renting, contact us at Tiered Real Estate and we will gladly help you with all of your real estate needs!

Home Sales Up 5.5%!

Wow! Existing home sales are up 5.5%! That is the most since a 5.6% increase in July 2003, during the housing boom. While largely overlooked by the plunging markets, this is great news. This means that despite all of the doom and gloom in the media and the economy, buyers came out. Why would buyers come out? Because they are starting to feel that they cannot wait any longer. They are afraid that if they wait, then they will miss their opportunity. They feel that this is the bottom, or as near to the bottom as they can safely achieve.

Many of these buyers are investors. I can't tell you the last time I saw so many cash transactions in real estate. Yet, what does that matter? In fact, that might be even better news. If investors are not willing to wait on the sidelines any longer, doesn't that mean that they will force a bottom or that they see this as the bottom? I think so.

So while the markets stumble, buyers are telling us that the bottom is close at hand or already here. This is the kind of encouragement that we were waiting for. Don't miss it yourself and don't let the media dictate your reality. If it is time to buy, sell or rent, contact Tiered Real Estate and see how we can help you!

God bless us every one!

The Bottom of the Market?

Another article about the bottom of the market. This one says that it is coming in 2009 and then the market will wallow through 2010. I have found a couple of very interesting details about the market discussions. First, no one is kidding us any longer. Throughout 2007 we kept hearing about how it really wasn't that bad... and it really wasn't that bad... and no, really it wasn't that bad. Unfortunately, we were headed down, but no one wanted to talk about it or consider what was going on. Those days are gone. Everyone talks about how we are down and how we came crashing down.

Second, a lot of the analysts are talking about how the market will do some wallowing, maybe for a season, maybe for a year and some say, maybe for two years. What this implies is that we have either come to the bottom or we are very near to it. It takes time for the entire market to shift gears and it will struggle with the changes that have already taken place and those that will emerge over the winter.

"Business as usual" doesn't appear to be anywhere on the horizon (and that is a good thing) but business as it was before the lending madness is still here. While there is talk of wallowing and struggling and financing difficulties and crashes, there are still people (and hundreds of thousands of them) out there, in the market, buying and selling homes. When the stock market bubble burst in 1999 there were a lot of hurt portfolios and feelings but the market never turned off the lights and went home. It came down and kept going, and real estate is doing the same thing.

Great News For Illinois Homeowners

I just came across an article about Bank of America/Countrywide. As a result of a lawsuit, they are going to give breaks to up to 400,000 homeowners to help them keep their homes. This is great news for those homeowners who have their mortgage with Countrywide.

Two small notes: 1) It should not take a lawsuit for this to happen. 2) Other lenders should follow suit.

Why do lenders want to keep driving foreclosures and taking homes? Isn't that just going to keep driving the economy down? Why not agree to take less money now, so the homeowners can stay in the home and then recover the money later? It is much better to make less money than to end up with foreclosures and lose money. I understand that many of them are acting desperately because they need cash NOW, but all that does is destroy the housing market, and in turn, the economy, which leads to a biger spiral, etc.

What do you think? I think that this is the first step and makes more sense for an economic recovery. I hope to report that other lenders will voluntarily follow suit, but only time will tell.

Tiered Real Estate the ethical way of doing business

I stumbled across an article this morning that discussed the "idea of tiered real estate commissions" and how taking advantage of a consumer's unwillingness to negotiate the commission "needs to stop." He (James Kimmons) proceeds to lay out a plan where having a tiered real estate commission plan is "the only ethical thing to do!"

I take this as a ringing endorsement that at Tiered Real Estate, we have the real estate model of the future and we are acting in the most ethical manner possible. Our actions show that we go above, and beyond, to help our home owners, home sellers and renters get the most that they can out of the market. The fact that we have put over half of a million dollars back in the pockets of buyers and sellers is a testament to that fact. If it is time for you to find a new place to live, whether it be buying, selling or renting, then contact the highly ethical, hardworking professionals at Tiered Real Estate. We know you will be pleased.