Commercial Lending Heading for another Credit Crunch?
July 28, 2009
An article in the Wall Street Journal is saying that when it comes to the commercial real estate market, history may be repeating itself based on the latest earnings reports from many U.S. banks. Mounting losses from loans for office space, housing complexes, strip malls, etc are heading towards record levels.
The current trend is reminiscent of the saving and loan crisis under the Reagan/Bush administration. According to RBC Capital Markets, late stage delinquencies on commercial real estate loans peaked at 6% at the height of the S & L crisis. And only a little more than 2% of outstanding loans became losses. Currently banks that have a significant portion of capital tied to properties in hard hit foreclosure areas are feeling the pinch in their portfolios.
With so many banks on the edge of trouble, commercial financing may be harder to come by. Some banks have already started to reduce their exposure in the market, while others are just starting to experience trouble in their commercial accounts. Could this be the start of a self imposed credit crunch in the commercial market?
Video Email a Must for Internet Marketing
July 22, 2009
Emails are boring. We get thousands of them every day and we ignore most of them unless there’re really important or we come across them by accident. With Internet marketing, emails can be very impersonal and are usually thrown into the recipents spam box. But there is a new way you can make emails personal and grab the attention of whomever you are trying to contact.This is through the use of video emails. Video emails are easy to setup. There are several different networks you can use such as Helloworld or Eyejot that you can use. In order for video emails to work for you is to make them as personal as possible. Mention the clients name. Reinforce what it is there looking for. Don’t make a generic message that you send out to all of your leads. It shows a lack of effort on your part. Believe me your clients will notice. The message doesn’t have to be long. It can be 30 seconds to a minute. Keep it short and to the point. You can also set up a link to your website or any attachments you want sent with the message. Video emails will set you apart from your competitors since most people still don’t utilize them. Why is beyond me. But that doesn’t matter. Internet marketing is all about building relationships and video emails will show your clients that you’re paying attention to there needs.
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How Brokers Can Increase Exposure to Foreign Buyers
July 15, 2009
In Florida, low prices and a large number of bank-owned distressed properties are attracting more international investors. The Florida Association of REALTORS® offers a two-part article on how real estate brokers can attract and work with overseas clients interested in investing in U.S. properties.
Key points include:
- Know the basics about the real estate systems in the countries you want to work with
- Network with brokers and buyers of those countries at local, national and international meetings, conferences, trade shows, etc.
- Understand the cultural differences that can make or break relationships with foreign contacts
- Know how to communicate U.S. real estate terms in the terminology used in those countries
- Take the time to build relationships with professional contacts and potential buyers in those countries
- Form a team of specialists, such as a CPA and immigration attorney, to prepare information for potential clients about tax and other major issues.
Read tips for working with buyers and brokers from the United Kingdom and Asia and South America, France and Germany
. For more information visit the National Association of REALTORS® International real estate services
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Thailand’s Global Business Attractiveness Improves
July 15, 2009
Thailand is now ranked 13th for “ease of doing business” by The Doing Business Study of the World Bank and International Finance Corp. The study ranks 181 economies, with 1 being the top rank. A high ranking means the regulatory environment is conducive to the operation of business.
Among the factors that gave Thailand its attractive rating are the ease of paying taxes, trading across borders and registering properties. The study also cited Thailand’s efforts to protect investors, improve bankruptcy procedures and strengthen the legal rights of creditors and borrowers.
Global business investors also benefit from the country’s skilled workforce, strong supply chain, dependable infrastructure and strong investment support. English-speaking investors enjoy the added benefit of English being Thailand’s second language. NAR maintains three organizational alliances there for Realtors seeking cooperative business development.
In comparison, Singapore ranked No. 1 and the United States ranked No. 3. Thailand’s “ease of doing business” improved this year from 19th in 2008.
Remax Sues Las Vegas Realtor
July 14, 2009
It was only a matter of time before suits like this one would appear, given the rising popularity of internet marketing. According to the Las Vegas Sun, Cristine Lefkowitz a Las Vegas real estate agent with Prudential Americana Group, Realtors has been sued by RE/MAX International Inc. The company is accusing Lefkowitz of trademark infringement and “cybersquatting” for registering several Internet domain names using the RE/MAX name.
The suit details that Lefkowitz and her company, C. Rosa Inc., registered 50 domain names containing the Remax name like “remaxsouthkorea.com” and “remaxbrazil.com.”
Ms. Lefkowitz was surprised at the lawsuit and has stated that all but one of the domain names have already expired. You can read the rest of the article here The Man from Earth .
While still rare, lawsuit over domain names have been going on for quite some time. Last year Sarasota real estate agent Marc Rasmussen was sued by his own local real estate board
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Book Describes Impact of Global Demographics on Real Estate’s Future
July 14, 2009
Global Demographics 2009: Shaping Real Estate’s Future Suspiria video Amusement hd explores how demographic trends are affecting real estate investment and development decisions worldwide. The publication, the second in an annual series from the Urban Land Institute, examines major factors that affect land use, namely population growth, urbanization, aging and migration.
Some of the book’s highlights include:
- The greatest population increases worldwide in the next 40 years will occur in China, India and the United States.
- The population of Europe will decline between now and 2030.
- Mature but still growing economies, including the U.S., Canada, U.K., Ireland, Australia and New Zealand, will offer attractive real estate investment and development prospects once the recession subsides.
- The developed world’s large workforce is aging rapidly while the young labor pools in the Middle East, Africa and South Africa are expanding.
- Fertility rates have dropped globally, even in developing countries.
The report states that demographics are the foundation of real estate decision-making. Population, household and income characteristics, along with the direction of future trends, determine whether demand will exist for new housing or retail space. Growth in the labor force and its composition strongly influence the success of office and industrial properties.
Several Countries Make Property Purchases Easier for Nonresidents
July 14, 2009
To stimulate their local economies, many governments are loosening or temporarily suspending foreign property ownership restrictions, reports Christina S.N. Lewis of the Wall Street Journal
. Among them are Australia, the British Virgin Islands, the Cayman Islands and China.
For example, last January Beijing issued a one-year suspension of a one-year residency requirement for foreigners to buy a house. BVI announced a new 90-day automatic approval for a landholder license. And the Cayman Islands temporarily lowered rates on their real estate transfer “stamp duty” taxes, including a reduction of up to 7.5 percent on waterfront property. The country’s real estate brokers association announced a 20 percent rebate on commissions through September 30.
India and Turkey already made significant changes in recent years to loosen their foreign investment restrictions. Numerous other countries, including the Philippines, are currently considering measures to stimulate foreign investment in real estate.
Restrictions on foreign ownership exist primarily in emerging property markets. Most Western European countries do not restrict foreign nationals from owning real estate. Notable exceptions are Austria and Switzerland.
Bigger, Better Home Buyer Tax Credit Taking Shape
July 13, 2009
If the $8,000 first time home buyer has proven to bring reluctant first time buyers into the market then the recently proposed $15,000 tax credit to all buyers Tapioca
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The idea behind the most recent bill, introduced in mid-June 2009 and referred to the Committee on Finance, would be to increase the current home buying credit from $8,000 to $15,000 and to release the restriction that the home buyer must be purchasing their first home in order to be eligible for the tax credit. The bill, S. 1230: The Home Buyer Tax Credit Act of 2009, was originally introduced by Sen. John Isakson [R-GA] and is currently co-sponsored by 15 Senators.
The bill is unlikely to see much face time until the current first time home buyer credit runs its course and expires on December 1, 2009. As unfortunate as it may be, delaying the passing of an increased home buyer credit until the expiration date passes on the current incentive makes perfect sense. Rather than first time buyers holding off on their purchases in anticipation of an even greater credit they will continue purchasing homes through November 2009.
That said, should a $15,000 home buyer credit eventually come to fruition for buyers in 2010 the potential for an increase in the sale of luxury and new homes is significant as more buyers and current homeowners are able to take advantage of the new credit.
Have you seen a dramatic increase in home buyers eager to take advantage of the current $8,000 tax credit or has it been business as usual? Will a $15,000 tax credit make a difference? Tell us what you think in the comments below!
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Technology and Real Estate
July 8, 2009
For many years Real Estate agents used traditional methods of advertising to promote their business. Post cards, bus benches, cold calling, etc. However times have changed. Agents are dropping out of the market like flies for many reason. The obvious one is that it’s a difficult market out there. People are losing there homes and obtaining financing isn’t what it used to be. But another reason is because the old ways of doing business are obsolete. Cold calling FSBOS and expired listings just doesn’t work anymore. Why? Because people are tired of the car salesman type. They don’t want to be forced or coerced. This is why most consumers flock to the Internet for most of there Real Estate needs.
Buyers can go online and search through thousands of homes with just a few clicks of a mouse. Because of the Internet, buyers and sellers are smarter and more up to date with current market trends. Because of the popularity of the Internet, Internet marketing is a must if you want to survive in this business. Facebook, Twitter, Wordpress, these social networks are designed for you to interact with thousands of people. People that you would have never meet if you just cold called all day. But just starting a Facebook account and letting it sit there won’t do the trick. In order for Internet marketing to work. You have to build relationships with people. When your at a party, do you just hand people your business card and say, “Hi, I’m a Realtor”? Of course not. Wouldn’t you rather do business with your friends then complete strangers?
This is the beautiful thing about internet marketing. Your getting people to come to you rather then the other way around. As far as your website, it doesn’t have to be perfect. But it needs to be user friendly and full of content that buyers and sellers want. As a whole, if you want to make it in this market, internet marketing is a must. If you ignore this fact, you it at your own peril.
Beazer Homes Agrees to Settle With Feds for $55M
July 8, 2009
A little over two years ago a news story broke out of The Charlotte Observer’s investigation The Prisoner movie
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The story continues by detailing how Beazer Homes’ mortgage division allegedly used FHA loans with falsified applications to get buyers into homes they couldn’t afford. Fast forward two years later and Beazer Homes finds itself with a new $55 million dollar tab to pay with $50M of it to go to restitution for homeowners that suffered/went into foreclosure because they were unable to afford their new home. The remaining $5M is due to hit HUD to help resolve their investigations into the possible predatory lending and loan fraud. In addition to the financial settlement, Beazer’s Mortgage arm has been greeted by the Reaper and several executives fired.
Towards the end of Builder Magazine’s article on Beazer’s settlement
with the government they mentioned how many government agencies and offices were involved in the investigation: Over seven in total including HUD, the FBI and the North Carolina Real Estate Commission.
Though five of the agencies/offices issued stern statements declaring the settlement a win for wronged consumers, I’m left wondering if they set the right precedent by merely accepting the settlement and throwing the potential criminal activities to the wayside. The running joke about Corporate America is that if you have enough money you can buy your way out of anything. Did the U.S. Government prove that with their acceptance of this settlement?
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