Bob Bendat
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  • First Team Real Estate

  • September7th

    No Comments

    FHFA sues 17 firms to recover losses to GSEs

    Posted in: Bob Bendat, Economic News, First Team Real Estate, News, Real Estate, Real Estate Market News, Yorba Linda

    The Federal Housing Finance Agency (FHFA), as conservator for Government Sponsored Enterprises (GSEs) Fannie Mae and Freddie Mac, has filed lawsuits against 17 financial institutions, certain of their officers and various unaffiliated lead underwriters. The suits allege violations of federal securities laws and common law in the sale of residential private-label mortgage-backed securities (PLS) to the GSEs

    Complaints have been filed against the following lead defendants, in alphabetical order:
    1. Ally Financial Inc. f/k/a GMAC, LLC
    2. Bank of America Corporation
    3. Barclays Bank PLC
    4. Citigroup, Inc.
    5. Countrywide Financial Corporation
    6. Credit Suisse Holdings (USA), Inc.
    7. Deutsche Bank AG
    8. First Horizon National Corporation
    9. General Electric Company
    10. Goldman Sachs & Co.
    11. HSBC North America Holdings, Inc.
    12. JPMorgan Chase & Co.
    13. Merrill Lynch & Co. / First Franklin Financial Corp.
    14. Morgan Stanley
    15. Nomura Holding America Inc.
    16. The Royal Bank of Scotland Group PLC
    17. Société Générale

    The complaints seek damages and civil penalties under the Securities Act of 1933. In addition, each complaint seeks compensatory damages for negligent misrepresentation.

    Certain complaints also allege state securities law violations or common law fraud.

  • July20th

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    Harmful Effects from Changing the Listing Price?

    Posted in: Bob Bendat, First Team Real Estate, News, Real Estate, Yorba Linda

     

    Posted: 20 Jul 2011

     

    We are again honored to have Ken H. Johnson, Ph.D. — Florida International University (FIU) and Editor of the Journal of Housing Research as our guest blogger. To view other research from FIU, visit http://realestate.fiu.edu/. – The KCM Crew

    The Research

    Are there any negative effects from changing the listing price of a property?  This question haunts Brokers/Agents as well as sellers of property every day.  At present, there does not seem to be a consensus answer to this question within the professional real estate community.  Fortunately, this question was scientifically investigated by John R. Knight. Unfortunately, few know the results of Professor Knight’s research.

    In Knight (2002)[1], the impact of changing a property’s listing price is investigated.  Additionally, the types of property that are most likely to experience a price change are also estimated.  The findings from this research indicate that, on average, properties which experience a listing price change take longer to sell and suffer a price discount greater than similar properties.  Furthermore, bigger price changes are found to experience even longer marketing times and greater price discounts.  Finally, as for which properties are most likely to experience a price change, Knight finds that the greater the initial markup; the higher the likelihood that any given property will experience a listing price change.

    Implications for Practice

    Sellers as well as Brokers/Agents should therefore be aware of the critical necessity of getting the price correct from the start.  Sellers wanting to over list will ultimately take longer to sell and will sell their property for less, on average, according to Knight.  Brokers/Agents’ desire to take a listing and get the price right later will ultimately lead to their working harder according to Knight, and they are not doing their sellers any favors.  Thus, an initial and detailed analysis of the proper price is much more critical than many originally thought.

    Interestingly, I have found in my own research that the direction (up or down) of the listing price change does not matter.  A listing price increase and decrease both lead to similar results found in Knight’s work – longer marketing times and lower prices.  Therefore, get the price right from the beginning.  It is best for all.

    Endnotes
    [1] Knight, John, R.  (2002).  Listing Price, Time on Market, and Ultimate Selling Price: Causes and Effects of Listing Price Changes.  Real Estate Economics.  30:2, 213-237.
    To all KCM Crew members (subscribers to www.KeepingCurrentMatters.com):

    We

    will cover this research in detail and help you simply and effectively explain it’s impact on your sellers in the August KCM edition which will be available in the first week of August

  • June6th

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    CoreLogic: Home Price Index increased 0.7% between March and April

    Posted in: Bob Bendat, Economic News, First Team Real Estate, Information of Interest, interest rates, Real Estate, Real Estate Market News, Yorba Linda

    Forex – CoreLogic: Home Price Index increased 0.7% between March and April
    By: Calculated Risk on June 1 11 1:55 EDT
    Notes: Case-Shiller is the most followed house price index, but CoreLogic is used by the Federal Reserve and is followed by many analysts. The CoreLogic HPI is a three month weighted average of February, March, and April (April weighted the most) and is not seasonally adjusted (NSA).

    From CoreLogic: CoreLogic® Home Price Index Shows First Month-over-Month Increase since mid-2010

    CoreLogic … today released its April Home Price Index (HPI) which shows that home prices in the U.S. increased on a month-to-month basis by 0.7 percent between March and April, 2011, the first such increase since the home-buyer tax credit expired in mid-2010. However, national home prices, including distressed sales, declined by 7.5 percent in April 2011 compared to April 2010 after declining by 6.8 per cent in March 2011 compared to March 2010. Excluding distressed sales, year-over-year prices declined by 0.5 percent in April 2011 compared to April 2010.
    …
    “While the economic recovery is still fragile and one data point is not a trend, the month-over-month increase based on April sales activity is a positive sign. …” said Mark Fleming, chief economist for CoreLogic.
    I was expecting the CoreLogic index to increase over the summer because it is not seasonally adjusted, however the seasonal increases usually start in June (when the Spring home purchases start to closes). This is just one data point, but it is possible this index will have small increases all summer.

    I’ll have more later (and hopefully a graph).

    ——————————————————————————–

  • June1st

    No Comments

    Should I Buy or Should I Rent in This Market??

    Posted in: Bob Bendat, Economic News, First Team Real Estate, Information of Interest, interest rates, News, Real Estate, Real Estate Market News, Yorba Linda

    Should You Rent or Buy in this Market?by The KCM Crew on June 1, 2011 · 1 comment

    in For Buyers,Pricing

    Many families are trying to determine whether or not now is the time to buy a home. Some are advising these families to sit out the current real estate market and instead rent for the next year or two. We do not agree with this advice. Homeownership means a lot to a family. We also realize that the financial aspects of purchasing a home today can be a concern. The challenge is any advice given by someone in the real estate community is immediately dismissed as self-serving.

    For this reason, we want to give you the advice of three entities not involved in real estate sales:

    Citigroup“When we examine the relationships between mortgage payments and income and mortgage payments and rent, we see that these relationships have also reverted back to or below equilibrium points. In some cases, particularly when mortgage payments are compared to the cost of renting, home prices actually appear cheap.”

    JP Morgan“JPMorgan analysts said ‘the continuation of falling rental vacancies and rising rental demand will make home buying increasingly attractive’, especially as rental prices increase.”

    Business School professors Eli Beracha and Ken H. Johnson“Fundamental drivers now appear to be in place that favor homeownership over renting in the near term future…

    The second finding might seem unwise to many given the recent crash in the real estate markets around the country. However, rent-to-price ratios now seem to be in place along with other fundamental drivers that favor ownership over renting…

    Conditions (historically low mortgage rates and relatively low rent-to-price ratios) now seem in place to favor future purchases.”

    Bottom Line
    Is it better to rent or buy? According to those quoted above, it seems it may be becoming a no-brainer.

  • May27th

    No Comments

    Why You Need a True Professonal to Sell Your Home

    Posted in: Bob Bendat, First Team Real Estate, Information of Interest, interest rates, News, Real Estate, Real Estate Market News, Yorba Linda

    by The KCM Crew on May 27, 2011 · 3 comments
    Why You Need a True Professional to Sell Your Home
    in For Sellers

    Many people ask whether they should hire an agent to sell their home or whether they should first try as a For Sale by Owner (FSBO). In today’s volatile market, I believe this is an easy decision: you need an experienced professional!

    You need an expert guide if you are traveling a dangerous path
    The field of real estate is loaded with land mines. You need a true expert to guide you through the dangerous pitfalls that currently exist. Finding a buyer willing to pay fair market value for your home at a time that there are mass inventories of foreclosures and short sales will take a true real estate professional. Finding reasonable financing can also be tricky in today’s lending environment.

    You need a skilled negotiator
    In today’s market, hiring a talented negotiator could save you thousands, perhaps tens of thousands of dollars. Each step of the way – from the original offer, to the possible re-negotiation of that off after a home inspection, to the possible cancellation of the deal based on a troubled appraisal – you need someone who can keep the deal together until it closes.

    Realize that when an agent is negotiating their commission with you, they are negotiating their own salary; the salary that keeps a roof over their family’s head; the salary that puts food on their family’s table. If they are quick to take less when negotiating for themselves and their families, what makes you think they will not act the same way when negotiating for you and your family? If they were Clark Kent when negotiating with you, they will not turn into Superman when negotiating with the buyer or seller in your deal.

    Bottom Line
    We believe that famous sayings become famous because they are true. You get what you pay for. Just like a good accountant or a good attorney, a good agent will save you money…not cost you money.

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