Tiered Real Estate

Way to Save Housing and the Economy Quickly

2009-02-06T11:13:00.000-08:00

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

2008-11-13T11:40:00.000-08:00

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?

2008-10-29T12:06:00.000-07:00

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%!

2008-10-24T12:29:00.001-07:00

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?

2008-10-21T20:50:00.001-07:00

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

2008-10-06T11:35:00.001-07:00

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

2008-10-01T06:52:00.000-07:00

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.

The 1st Bailout Failure & 2 Perspectives

2008-09-30T11:00:00.000-07:00

The first bailout has been voted down by the House of Representatives and now we are faced with what to do next. In all of the discussions, I found an interesting article from the Los Angeles Times that offers two points and at least one possible avenue of proceeding.

Something is likely to happen and it is likely to happen soon because no one wants to face the political fallout of doing nothing while the economy collapses (or playing fiddle while Rome burns). Regardless of how we got here, we are here and something has to happen (and if it is really to be the most effective and helpful, politics and greed will have to be cast aside).

We welcome all of your thoughts on the current financial crisis. Feel free to leave comments or e-mail directly to Webmaster@TieredRealEstate.com

Real Estate Offices Unnecessary in 21st Century

2008-09-25T07:31:00.000-07:00

I was reading an interesting article written by an agent in Minnesota. This article really was written for real estate agents and discusses how real estate offices stand in the way of buyers and sellers communicating with agents. Also it discusses how agents work out of their home and car anyway.

For the consumer, there is a very important line that is mentioned: "Having ... offices costs money, and those costs get passed onto agents and consumers." Yes, that means that part of that commission that the consumer pays (and the split that gets taken from the agents) is to cover the cost of an obsolete office. The amazing thing is that although offices generally slow down communications and highly inflate the rates that companies charge, a very popular question that I get is "Where is your office?" The truth is that we all have home based offices, but in the 21st century the need for the storefront, brick and mortar building is gone. The internet and cell phones have replaced the need to congregate in one place. Over 85% of buyers research on the internet. That is where the focus should be.

Don't misunderstand the opinion given here. The real estate company and its agents and brokers should be part of the community. We routinely get involved in local activities whenever we can. What happens to the person that isn't a part of the community? Then they have no roots or loyalty. They could easily get up and move away. They could get up and be gone. Without ties to the community, without demonstration of care for all of those around, then maybe that person or company isn't the one that you want to deal with.

Ultimately, if you are a person who thinks that a brick and mortar storefront is required to sell your home, then I suggest re-evaluating your position because the times, they are a changin'.

Ask The Expert - Q: What is the MLS?

2008-09-19T06:12:00.000-07:00

MLS is an acronym for "Multiple Listing Service." It is a database where the area real estate agents enter their listings for sale to share with all of the other agents. The MLS in the Chicago area is the largest in the country with over 50,000 agents and brokers and covers an area from Wisconsin to Indiana and past Ottawa and Dwight. Any agent who goes into the MLS can see any home for sale by any agent in that entire area. It is this network that allows most homes to be sold (over 50%). In addition, the MLS provides information to Realtor.com so that your home can appear there as well.

If you want your home in the MLS or are looking for a home, don’t hesitate to contact the experts at Tiered Real Estate!

NAR's comments on Fannie/Freddie

2008-09-13T04:25:00.000-07:00

the National Association of Realtors' (NAR) Chief Economist Lawrence Yun has commented on the Fannie Mae/Freddie Mac takeover. You can read his comments here:

http://blog.thehill.com/2008/09/09/federal-govt-had-no-choice-in-fannie-freddie-situation/

He has some good comments and wraps it up by mentioning four areas that the 'restructuring' needs to address (or at least consider).

Your thoughts?

Short sale requirements

2008-09-09T14:12:00.000-07:00

There are still many people facing short sales. If you are one of them, then this generic list of commonly required items may be helpful:

Hardship letter - A letter to the lender/mortgage company explaining why you need to sell for less than you owe
Bank Statements - Copies of all recent bank statements
Pay Stubs - Copies of all pay stubs for at least the last two months
Tax returns - Copies of your tax returns for the last two years
3rd Party Authorization letter - A letter to the mortgage company where you give the lender permission to discuss your loan with your real estate agent. Be sure to give your agent's name, company and contact info on the letter

You will need to provide your agent:

Mortgage/Loan number
Any contacts (names/phone numbers) that have already been given to you
Any payoff letters that you may have received
The date/information concerning a sheriff sale
You may need to provide the last four digits of your social security number (which the lender will use to verify your account. Do not give anyone else these numbers and do not give more than the last four digits!)

Your agent will have to provide to your lender/mortgage company:

Copy of your listing agreement
Copy of the purchase contract
Copy of a pre-approval letter for the buyer
An Estimated Settlement statement (also called a HUD-1)

Please note that all of these documents will have to be submitted to all lenders/mortgage holders and that all documents need to be signed. For specific details, be certain to call your lender right away.

If you are facing a potential of foreclosure, do not wait to receive sheriff sale information. Let your real estate agent know immediately and do your best to sell your house. It is much better to have a short sale on your credit than a foreclosure!

Welcome to Socialism!

2008-09-07T09:03:00.000-07:00

Effective this morning (Sunday, September 7th, 2008) we now live in a Socialist country. Our government owns over 50% of all the homes in the United States. This is a result of the government's takeover of Fannie Mae & Freddie Mac who backed over $5 TRILLION in mortgages (more than 50% of the total in the US). This US takeover is only supposed to last until the end of 2009, if the two giants can get their acts together and the housing industry can rebound. As American citizens, it is crucial that we make certain that the givernment relinquishes their hold on the housing market in a year and a half. Otherwise, we don't live in the same America of our forefathers.

I hope that we (i.e. the industry, the government) learn from this mistake and prevent the bubble bursting that we have watched for the last couple of years and next time work on an ounce of prevention and hopefully pass on the pound of cure.

Have a blessed week!

Housing Prices

2008-09-05T03:04:00.000-07:00

I came across an article about housing prices and the possibility that the decline could be worse than the great depression. There are two things that strike me about this brief article.

First, it hints that we may be near the bottom as far as the decline in home prices is concerned. While it does say that we could drift down some more, it gives us an indication that the crash, and the most difficult decline, is over. It does dispel the myth that prices will jump right back up. The rate of increase in housing prices in a normal market is slow and steady. As we proceed through the cycles we have adjustments (most not as severe as this one) but historically, real estate is a slow and steady march upward. When we hit the bottom, it will take several years for prices to start going up and they will not recover all of their losses for many years.

Second, even though prices may have plunged on a level equivalent to the great depression and our debt ratio is so extremely high (which is a concern for the overall economy), we still haven't had a repeat of the changes in the landscape of the American public like we did in the 20's & 30's. We don't see the Joad family. We don't see millions of people crossing the country looking like the Beverly Hillbillies searching for that elusive job. Yes, we see millions losing or giving up their homes, but the impact has been different. These people have shifted from owning to renting. They have shifted from spending lavishly to being forced (largely by not having access to enormous amounts of credit) to spend conservatively. They have shifted from one income to two and not raised their nose at that minimum wage job that the business owner had trouble filling a couple of years ago.

Yes, the housing correction has been extremely painful, but more and more indicators are that the worst is over and while the glory days will not return in the near future, we do know that they will return. They always do.

Death to Big Commissions

2008-08-27T09:13:00.000-07:00

So I was reading a posting about how big real estate commissions should survive and keep going and I say "death to big commissions!"

First, why do consumers accept big commissions? We live in a Wal-Mart world. A world where you can get everything for cheap. They demand some sort of value, but if they wanted to pay top dollar then places like Wal-Mart wouldn't control our economy (and if you don't think they control our economy you should look at their sales vs. GDP). What we are finding is that consumers don't want to pay the huge commissions, but they have trouble finding quality companies (like Tiered Real Estate) who are willing to do a good job for less money.

Next, why do agents need to charge huge commissions? They don't. Real estate companies need them to. If you think about these big real estate commissions, ask yourself 'how much does the agent actually receive?' In the example placed in this posting, the person was arguing for 6% commissions. Of that 6%, less than 3% makes it into agent pockets. Split that in half (one half for buyer and one half for seller) and each agent is fighting for just over 1% of that commission. So where does the other money go? Into the franchise/corporate/big business/office pockets. So agents don't need to charge the big money, companies do. Any agent who broke down what they actually made would look for new alternatives.

Finally, why do these big commissions continue? A lack of consumer education. No one wants consumers to know how it really works. They don't want to be transparent. They want to push consumers to a point of no return and then they 'can't' turn back. Sounds cruel, but I have watched it happen (on the other side) much too often. On the other side is fancy sales pitches or advertising. I have talked to many people who "didn't pay any commission" but paid to list their home for sale. Wow! Would you do that? What if it doesn't sell? You just lost a LOT of money and the company doesn't care! It already has your money. I am amazed.

So do yourself a favor. Get all of the information. Talk it over. Question it. Don't be pressured into doing something that isn't right. Death to big commissions. Life to honest commissions. If you are an agent, find or start a Tiered Real Estate company. If you are a consumer, find a Tiered Real Estate company to help you. If you are like Tiered Real Estate, join our network. If you are one of those 'other guys' then I would run. Consumers want companies like Tiered Real Estate and you can only put them down for so long until a revolution takes place. Viva la revolution!

Another Call For The Bottom of The Housing Market

2008-08-27T06:43:00.000-07:00

Jim Cramer, during his "Mad Money" TV show, predicted the bottom of the market. The interesting thing about Cramer's prediction is that it is focused on stocks (particularly the stocks of builders) and not specifically on housing. Obviously, an investment person like Cramer would focus on that side.

There have been a great many predictions about the market. So far, they have all been pretty bad. When the market was turning down, there were a great many people telling you to look up. When the market started its freefall, the doomsdayers talked about 1929 and the Great Depression. If you believe many of the big real estate organizations (you know who I am talking about), then you would have believed, for about two years, that it is turning around 'next month'/'next quarter'/'next minute'/etc. Any length of time at all so that you wouldn't feel there is a panic. Obviously, they have a stake in the market (i.e. our jobs) so they don't want anyone to feel bad about it.

The amazing thing is that this is just a correction like free markets make. They happen on a regular basis. They always happen. The market always bounces back. The other interesting thing is that the market never goes to 'zero'. We never have a month where no one buys or sells a home. Even in the 1980's, when interest rates went to 18% and beyond!, people still bought and sold homes. There are still millions of people who are moving their families from place to place. In fact this sales market has turned into a boom in the rental market. People have to have a place to live. You may have been foreclosed upon or gone through bankruptcy and lost your home, but you can't move your family into a cardboard box and most families cannot handle the burden of taking in another family. So what happens? They rent. And the market and the cycle continue.

In 3-5 years, when these bad credit renters have cleaned up their credit reports, increased their credit scores to a decent level, shown that they are good risks for banks and they have grown very tired of renting, they will start talking about buying again. And then guess what? The market will boom right back up because all of these people (who have no home to sell) will come back in the market and start buying up available homes. And the cycle goes on...

Can I take a light fixture with me when I sell my home?

2008-08-21T07:16:00.000-07:00

Yes, you can take a light fixture with you when you sell your home. First, be certain to tell your Realtor so that they can let prospective buyers understand that particular light fixture will not be staying with the home. An even better idea is to change the light fixture before you have showings. That way prospective buyers can look at the home and see exactly what they are getting. Ultimately, everything concerning your home is a negotiation point and can be worked out with the prospective buyer. If you want help buying, selling or renting a home, call the experts at Tiered Real Estate.

Homes For Almost Free?!

2008-08-20T04:12:00.001-07:00

Have you seen these ads, commercials and/or websites that advertise homes for next to nothing? I have to admit that I am always skeptical. These are set up NOT to actually sell you a home, but to sell you some information to "help you find and buy" a home. They are selling something. You have to be cautious of what and for how much.

The interesting thing to me is that they are not completely wrong. Wow! That is almost scary to say. As I sit here right now, Wednesday morning, August 20th at 6 am central time, there are 29 homes for sale in the Chicagoland area that are LISTED at $10,000 or less (this information comes from the Multiple Listing Service. You can also do a search of your own at Realtor.com). Now you probably know what you get for that much and/or the kind of neighborhood that it is in. Yet, you have to think of the investment...

Maybe it is worth buying and tearing down. (Maybe the land is worth it, or will be worth it in 5-10 years.)
Maybe it is worth buying and just sitting on it for a while.
Maybe I can fix it up and put a renter into it and get cash flow.

My point is that there are homes for sale for virtually nothing. If you are truly interested, do your homework. Try asking a real estate agent what is available. They usually work for free (and get their commission when the sale takes place), so why not? It is worth considering... especially if it doesn't cost anything to ask.

Have a great day and keep the faith!

Housing Starts Way Down

2008-08-20T03:35:00.000-07:00

It was reported on Tuesday that housing starts in July dropped 39% which is the most in 17 years. My question is: who was still building in the first place? Two or three ago, when things started to plummet from its peak and the handwriting was on the wall, shouldn't most builders have curled up into the fetal position, gone into hibernation and weathered the storm? I am not saying that you should turn paying customers away, but all of the speculation should have ended. Immediately. That way the industry wouldn't plunge further and builders wouldn't be exposed even more.

Apparently, not everyone could read the writing on the wall and some kept building. And some ended up like Neuman homes (bankruptcy). I am sure that not everyone is through.

So, it does not surprise me that housing starts are down. It surprises me that almost 1 million people want to build in this economy. I do realize that there are some benefits to building right now. One of those is hungry/starving/laid off construction workers. I have heard a great many stories of construction workers who have been laid off and are looking for any sort of work to put food on the table. Usually this involves working for less than scale which saves a home builder money. (This can work out well for home improvement projects too! You might want to check with a business or two to see if the cost of your home improvement project has recently gone down!) However, I find it surprising that there are a million new homes that can be built based on these cost savings. With consumer confidence way down, it seems odd to me.

What is the good news? The good news is that many of the builders who were smart and went into hibernation have started building again. Why is that good? If the smart ones saw the decline coming and virtually stopped building, then by returning to building it may indicate that they see that the end of this market is in sight and it is time to start returning to work (cautiously of course). In the Midwest (where we are located) we have had encouraging sales numbers and increase in phone calls that correspond to this return to building. While it has not been a very pleasant few years, we are optimistic that we are at or near the turn back upwards.

Have a great day and keep the faith!

Do Real Estate Agents Work With Rentals

2008-08-16T21:44:00.000-07:00

Absolutely! As real estate agents we have the ability to share rental listings with thousands of other agents through the multiple listing service and to millions of monthly visitors to Realtor.com. We are able to use all of our real estate agent tools to help you not only find a renter, but to help renters find a place to rent. If you are looking to rent or have a place that you would like to have rented, give us a call at 866-904-TIERED and let Tiered Real Estate put our tools to work to help you!

Ask the Expert - Curb Appeal

2008-08-16T11:48:00.000-07:00

“Curb Appeal” refers to the impression that your home gives when someone drives or walks by. If potential buyers are turned off by the exterior of your home, they may never come inside to see the beauty within. Before you go to work ‘fixing’ your curb appeal,you should evaluate it. Stand by the street (not in the street) and look at your home. What stands out? Are your gutters overflowing or hanging off? Do you need to paint? Are you missing shutters, shingles or pieces of siding? Is your home dirty? Do you still have that bush that died two years ago in front of your home? Attracting the right buyer starts with a good first impression and that impression starts the first time they drive by. So take advantage of nice days by cleaning up the outside of your home. If you would like the assistance of a real estate professional to help you evaluate your “Curb Appeal,” call Tiered Real Estate at (815) 521-9102.

Ask the Expert - For Sale Signs

2008-08-16T11:35:00.000-07:00

Yes, it is important. A study taken by the National Association of Realtors reported that 1 out of every 10 sales was due to the sign! Especially in today’s market, you don’t want to eliminate 10% of your buyers. If you are concerned about the neighbors, you shouldn’t be. The neighbors that like you will want to help you out of kindness. Those that don’t like you will help you because they want to get rid of you. Either way, you win! If your concern is the number of homes for sale on your street, why should you let them get the extra exposure? Don’t give them a reason to fall in love with someone else’s home because it had a sign up and they could call for information from their car. Is it time for you to buy, sell or rent? Call Tiered Real Estate and let us help you.

Ask the Expert - What is a Lockbox And Why Do I Need One?

2008-08-16T11:19:00.000-07:00

A lockbox is a device that is placed on your door to allow Realtors to easily show your home. There are several different styles of lockboxes but each one is designed for the same function, to securely store your house key. They allow you to have showings when you are not home. It is a good idea to not be home for showings so that the buyers will feel more comfortable discussing and viewing your home. This will enable the Realtor to provide feedback even if the buyer decides not to make an offer. If you are interested in buying, selling or renting a home, call one of the outstanding agents at Tiered Real Estate.