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Southport Green’s original asking prices proved too steep — and that was before bad times hit the world economy.After unsuccessful efforts to find a buyer for the whole development, the residences at Southport Green are once again on the market.

Evelyn and Saul Kurzweil at a ballroom-dancing class at Sterling Glen of Roslyn, which like many similar communities has been affected by the weak housing market.Many potential residents of senior housing have been unable to move in because their houses won’t sell and their investment portfolios are down.

IDX Broker uses its custom IDX solution to provide a quick and efficient way for home seekers to search for real estate online.

A custom IDX solution speeds up and simplifies the online property search process, saving both realtors and their clients time and hassle.

Sunwest Trust, Inc. (www.SunwestTrust.com) over their 22-year history has been known for their diverse business interests. Sunwest Trust has offered the self directed IRA for years as one of their primary self directed products for individuals looking to truly diversify their investment portfolio on their own.

JD Power and Associates survey reveals importance of extra services increases as buyers and sellers seek value from real estate companies

RISMEDIA, July 31, 2009-Extra services provided by real estate companies-such as inspections, appraisals and legal and moving company recommendations-have become increasingly important to home buyers and sellers, according to the J.D. Power and Associates 2009 Home Buyer/Seller Study.

The study, now in its second year, measures customer satisfaction of homebuyers and sellers with the largest national real estate companies. Overall satisfaction is determined by examining three factors for the home-buying experience: agent (47%); office (28%); and package of additional services (25%). Four factors are examined for the home-selling experience: agent (34%); marketing (34%); office (17%); and package of additional services (15%).

For both buyers and sellers, the agent is still the most important driver of overall satisfaction. However, the importance of agents has declined substantially from 2008, while the importance of additional services has increased considerably-by 12 percentage points among buyers and 8 percentage points among sellers. In addition, actual usage of many of these services has decreased from 2008, likely due to cutbacks made by real estate companies in response to a depressed market.

“In a tight market, every aspect of service offered will be scrutinized very closely,” said Jim Howland, senior director of the real estate and construction practice at J.D. Power and Associates. “For this reason, it is critical for real estate companies to promote the value that they bring to buyers and sellers, not only in any additional services they offer, but also in their agents and operations.”

In the home-buyer segment, Keller Williams ranks highest for a second consecutive year, with a score of 806 on a 1,000-point scale. Keller Williams also performs particularly well in the agent factor. Following in the rankings are Coldwell Banker (801) and RE/MAX (798). Coldwell Banker performs particularly well in the office factor.

Among home sellers, Coldwell Banker ranks highest with a score of 815 and performs particularly well in all four factors. Keller Williams follows Coldwell Banker in the segment ranking with a score of 801.

The study finds that the proportion of first-time home buyers has increased considerably-to 56% in 2009 from 44% in 2008. Many of these first-time buyers may be attracted by improved home affordability and the perception of a strong buyer’s market. This presents both challenges and opportunities for real estate companies.

“The presence of more first-time buyers is encouraging, as it indicates that the real estate market is returning to more normal activity, with fewer speculators,” said Howland. “However, real estate companies and agents must carefully manage first-time buyer expectations. Although these buyers may believe otherwise, they must still overcome the traditional barriers to purchasing a home, such as being able to fund down payments, closing costs and monthly payments. Solid advice and service from agents may assuage these first-time buyers’ concerns and build customer loyalty.”

Additional noteworthy study findings include:
-Home sellers report that, on average, 3.2 open houses were conducted for their property in 2009, compared with 4.5 in 2008.
-Approximately 64% of home sellers used a website listing to market their home in 2009, up from 61% in 2008.
-The 2009 Home Buyer/Seller Study includes more than 3,100 evaluations from 2,801 respondents who bought or sold a home between April 2007 and June 2008. The study was fielded between April and June 2009.

For more information, visit www.JDPower.com.

RISMedia welcomes your questions and comments. Send your e-mail to: realestatemagazinefeedback@rismedia.com.

For more top stories on RISMedia.com, don’t miss:

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RISMEDIA, July 31, 2009-This week’s headlines from the NATIONAL ASSOCIATION OF REALTORS include: Articles and information offered as part of the Right Tools, Right Now campaign, marketing tools from NAR’s REALTOR Benefits Program Partners, and existing-home sale are up again.

Right Tools, Right Now – FREE July Articles & Information

Through NAR’s Right Tools, Right Now initiative, thousands have already benefited. Enjoy valuable FREE July offers including the “Field Guide to 1031 Exchanges,” which provides information on the advantages of tax-deferred exchanges and “Money-Saving Tips for You and Your Business,” a great resource for tips to help your business in any market. New tools are added every month so visit often.

Marketing Tools From NAR’s REALTOR Benefits Program Partners

Differentiate yourself in the marketplace and turn prospects into clients with high quality products and services from NAR partners in the REALTOR Benefits Program. Partner offerings include the Lowe’s FREE marketing system, access to fresh leads and mailing lists from Salesgenie.com®, printing and design services from PsPrint, neighborhood information from eNeighborhoods, discounts on Entertainment books, and more!

Existing-Home Sales Are Up Again

Existing-home sales rose for the third consecutive month with inventory easing and home prices declining less sharply in June, according to the NATIONAL ASSOCIATION OF REALTORS®.

For more information, visit www.REALTOR.org.

RISMedia welcomes your questions and comments. Send your e-mail to: realestatemagazinefeedback@rismedia.com.

To read last week’s NAR Pulse, click here.

RISMEDIA, July 31, 2009-(MCT)-When David and Penny Mann decided it was time to move to a retirement community, their real estate agent told them that in this rough market, it could take months to sell their downtown San Jose Victorian. So they were thrilled to receive back-to-back offers in the first week, and they accepted the first offer of $560,000, from an enthusiastic young couple buying their first home.

“Things were sailing through,” said David Mann, a retired minister.

But just days before the sale was to close, an appraisal required by a new federal code came in $100,000 below the sale price, torpedoing the deal and sending the buyers and sellers into an emotional tailspin. It’s just one example of the turmoil this new rule-intended to prevent fraud-has caused: Appraisers say it is forcing many of them out of business while pushing up fees and derailing sales, all at a time when the real estate market can ill afford such problems.

The new rule, which took effect May 1, forbids brokers from hiring their own appraisers and requires intermediaries-called appraisal management companies-to choose them instead.

The change was intended to reduce the possibility that brokers and lenders would pressure appraisers to raise house values to match sale prices, regardless of the true value. It affects all loans backed by Fannie Mae and Freddie Mac.

The rule meant the Manns’ first appraisal, which came in at the full sales price and was conducted before the rule took effect, was invalid, and they needed a new one. The second appraiser, based in Oakland and sent by an appraisal management company, told the Manns’ agent he had never worked in San Jose. When his appraisal came in $100,000 below the offer price, the lender wouldn’t approve the buyers’ loan.

“That’s when the drama began,” Mann said. “There is something so wrong in all this,” said Georgie Huff, president of Capital Properties in downtown San Jose, who represented the Manns. “And a lot of qualified buyers and sellers are being victimized.”

No one is tracking the precise results of the new rule, but Bill Hillestad, strategic director of Think Big Work Small, which provides resources for the real estate industry and is pushing to have the rule repealed, says his research offers some clues.

In his online poll of industry professionals, about two-thirds of respondents said they had had at least one appraisal come in under the purchase price since the new rules took effect, with the average difference being more than $13,000. And 90% of respondents said they had lost at least one transaction.

Hillestad said the code has the potential to kill the country’s budding real estate recovery by depressing prices even more than the foreclosure crisis. If willing sellers and buyers agree on a price, the appraisal shouldn’t scuttle the deal, he said.

“We are exactly the kind of sale which our country needs in order to begin getting housing sales moving again,” Penny Mann wrote in a letter to the lender for the couple who wanted to buy their home. As David Mann put it, the deal he struck “was a new stake in the ground to revive this neighborhood.”

The new rule, called the Home Valuation Code of Conduct, is part of the settlement of a lawsuit filed by New York State Attorney General Andrew Cuomo, who had accused Washington Mutual of pressuring appraisers to inflate home values.

Accurate appraisals are necessary to prevent fraud in home sales and to protect lenders in case a loan holder defaults and the property has to be sold. Washington Mutual, however, was accused of inflating values to make more money on higher-priced loans.

While the intent was noble, the policy has had devastating consequences for some appraisers, many of whom have signed a petition (www.hvccpetition.com) to try to repeal the rule-a cause taken up by U.S. Rep. Gary Miller, a Southern California Republican who is co-sponsoring legislation asking for an 18-month moratorium.

A Santa Cruz appraiser who used to have about 10 jobs a month says she is now lucky to get just one, as the management companies change the way work is doled out. And instead of being paid between $350 and $500, she might get just $200. The management company pockets the difference. “I’m sure there were a lot of crooked appraisals. But to put every appraiser basically out of business is not OK,” said the appraiser, who didn’t want her name used for fear that she would jeopardize future work. “After having my business for 20 years, I’m about to lose my house.”

Qing Jiang, a San Jose appraiser, said the new rule is also having a chilling effect as appraisers, “to protect themselves, to avoid being accused of pushing values up, are putting the value at the lower end. This will push the housing values down and have a huge effect.”

For traditional home sellers like the Manns-both retired clergy with the United Church of Christ-the rule nearly cost them their retirement. The couple were waiting to take a tour of their new Southern California bungalow, near their children and grandchildren, when their agent called with the news that the deal was unraveling because of the second appraisal. “We postponed the tour for an hour,” Mann said, “and went to a neighborhood park and cried.”

The buyers were equally devastated when their loan company balked at funding their mortgage. They had spent months looking for the perfect house, walking through at least 40 and viewing hundreds more online.

The Manns’ century-old Victorian was ideal for Michael Schlemmer, a lawyer. So the young lawyer was undeterred. “I’m an educated person. I’ve lived in the Bay Area my whole life,” he said. “I had no question it was worth $560,000-plus. Neither did my agent or the mortgage broker or the first appraiser who approved it.” Nor, as it turned out, did a third appraiser. After Huff insisted the management company send someone with a 408 area code, the value came in at the sales price. Early this month, after weeks of hand-wringing, the deal closed.

(c) 2009, San Jose Mercury News (San Jose, Calif.).
Distributed by McClatchy-Tribune Information Services.

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RISMEDIA, July 31, 2009-(MCT)-After lowering the $4.2 million asking price of their Lake Bluff estate three times and by more than $1 million, Mike and Marti Palmer flirted with the idea of trading the still-unsold custom home for something smaller.

They own 70% equity in the 9,700-square-foot home perched on a wooded ravine near Lake Michigan, and are by no means “distressed sellers.” But they have been forced to think creatively about how to market the 15-room, English-style manse- now going for $3 million- amid a recession that has hit the upper bracket especially hard.

“Unfortunately, we put it up just before everything tanked,” said Mike Palmer, a financial consultant who is pragmatic about the competition. “Everything is on the table.”

Real estate agents say they have never seen prices drop so precipitously when dealing with opulent, often empty high-end homes along the North Shore that cost a small fortune to maintain and keep secure. Though homes in the $400,000-to-$700,000 range have weathered the financial storm better than expected, the glut of eye-popping mega-mansions has owners competing for the attention of a select few.

“It is a phenomenon we’ve never seen in our lifetime,” said real estate agent Jason Hartong with Rubloff Residential Properties, who has seen some multimillion-dollar price tags cut nearly in half.

Nationally, the scenario is much the same. The pool of people wealthy enough to afford such luxury already represented a small sliver of the marketplace. Home transactions priced at $750,000 or more made up 4% to 5% of transactions before the recession, said Lawrence Yun, chief economist of the National Association of Realtors. Today, only 2% of housing transactions are taking place in the same upper-end price range, Yun said. “Many of the wealthier people have their wealth tied to the stock market,” he said. “Given that the stock market is down- even with the recent run-up- that has eaten into their financial resources.”

At the same time, lenders are hesitant to approve so-called jumbo loans that are necessary for some buyers to finance a million-dollar-plus property, said Terese Penza, president and CEO of the North Shore-Barrington Association of Realtors.

Developers, many now in bankruptcy, were caught by surprise, as well. Vacant and unfinished homes dot the Chicago suburbs, with for sale signs that tout the “New Price.”

For instance, a custom-built stone home in Winnetka priced at $5.5 million in November 2007 is going for $3.3 million. It’s enough to make builder Farhad Nikamal sick, as he describes the loving attention he paid to detail in planning the two-story reception hall with marble flooring, a Brazilian cherry staircase, hand-carved travertine marble fireplaces and a 1920s French chandelier. “This has cost me almost $3.9 million,” said Nikamal, leading a tour through the house, protected with wrought-iron gates and a security system.

He believes that many potential buyers are bargain-shopping and have been brutal in taking advantage of the poor economy. “People should understand, right now, this is beyond a bargain,” Nikamal said.

He is considering raffling off the 6-bedroom, 8-bathroom luxury home, which sits across the street from Lake Michigan. “You are not going to see this again,” he said, shaking his head.

Less than a mile away in Glencoe, a renter occupies a 15-room white-brick monolith. The home, owned by a developer and constructed in 2007, has dropped to $2.8 million from the original asking price of $4.3 million. Like many other properties in its price range, it features a wine cellar and bar, exercise room with access to a sauna, heated marble bathroom floors and stainless-steel appliances.

“It’s been tough to keep deals together,” said Matthew Schneider, a real estate agent with Coldwell Banker. “Buyers are really out for the best deal. There are definitely people taking advantage of the situation.”

The sluggish sales remind real estate agents of the last severe downturn in the 1980s, when inflation and interest rates that hit 16% contributed to a weak housing market.

Julie Morse with Griffith, Grant & Lackie Realtors views some leveling down of prices as a healthy adjustment after years of an upward spiral. “There has been a softness in the market coming up on two years,” she said.

The number of North Shore homes sold for $1 million or more dropped to 572 last year- down 39% from the 935 homes sold in 2005- a peak year- according to statistics provided by the North Shore-Barrington Association of Realtors. As of June this year, only 154 homes in that category have sold.

Another affluent community, Barrington, has seen 17 homes priced at $1 million or more sell through June this year compared with the 55 sold during the same period in 2005, the data showed.

Those dismal figures could be welcome news for Sheldon Good & Co., a Chicago-based auction house that deals in upper-bracket home sales. “As the market becomes more challenging, the sellers are more attracted to the auction,” said Michael Fine, executive vice president. High-end, custom-built homes already are difficult to price because they can’t be easily compared with neighboring homes, he said. During a recession, other factors make it even tougher for sellers to figure out what the market will bear.

Over the last month, he said, he has fielded inquiries from home sellers on the North Shore and in the western suburbs, as well as from such vacation communities as Door County, Wis. “I would expect we would do double or triple the numbers we have done the last few years,” Fine said.

As they try to sell their home in Lake Bluff, the Palmers are offering an added incentive- setting aside $20,000 for a buyer to help with the property taxes. The annual tax bill is now a whopping $60,000, but they believe that when the property is reappraised the taxes will be lowered, if appealed.

“Everyone is in the same boat,” said Marti Palmer, who has been looking at other homes. “You can’t buy if you can’t sell, so we’re open to ideas.”

Copyright (c) 2009, Chicago Tribune
Distributed by McClatchy-Tribune Information Services.

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