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RISMEDIA, December 1, 2009—Now that the first-time home buyer tax credit has been renewed and improved, it’s time for you to pick up some of this low lying fruit and to profit from it.

Some agents report that up to 60% of their transactions this year have been these first-time tax credit buyers. Now is the time to start positioning yourself to attract these buyers and to prosper from the credit. Fifty-nine percent of all homes are purchased using a federal benefit, today.

VA, FHA, or other financing—coupled with the tax credit – gives a powerful incentive to a large section of the marketplace. With a conforming loan only requiring 3% down (in many cases), this credit can literally put people in a home with no out of pocket money down—and that makes it far easier to get first-time (and even move up) buyers into the home buying process. Veterans who are buyers have a great opportunity today: low interest rates, depressed home prices and the first-time homebuyer tax credit combine to put these buyers in a place where everything lines up in their favor—and with FICO scores of 550 rumored to be adequate to obtain financing for them, you need to be courting them.

We’re not going to list all the reasons the first-time homebuyer tax credit is a great incentive to purchasers as just about everyone has that figured out. We’re going to give you some pointers on where you can find prospects and develop them into buyers. There are two very simple places to find prospects: 1) the Internet; 2) every apartment building in your territory (and any renters you might personally know). Let’s take them one at a time.

How to find first-time homebuyers on the Internet
You must add optimization for these buyers to your existing website. That means that you should add a page and a tab on your navigation bar for “First-time tax credit” or “First-time homebuyers” on your homepage. The page should recite information about the final specifics of the program, who is eligible, and an actual illustration of the benefits or the page should tantalize the visitor to sign in and ask you for a packet you produce or obtain containing that specific information. (Remember: your website is not only about giving information, it’s for collecting information. A good virtual assistant can put something together for you for about $500 if you are too swamped to get this done, and it is well worth the effort, provided your site can be found by Internet buyers on the search engines).

At the same time you are modifying your site with this information, you must add the specialization to your description and keywords tags (remember the geographic identifier; without it, the effort is futile. The popular booklet “SEO Secrets for Realtors” tells you the right way to write these phrases and you can obtain it here.  No one will call you). Once this is done, you should start seeing real leads show up in your inbox in about a month or two, provided you have proper lead capture installed on the new pages you install. (If all this sounds like too much technical work, you can hire someone to do it all. Doing so is well worth the investment).

How to find first-time homebuyers in your town on the ground
Eighty-seven percent of homebuyers begin online these days and most people who are Internet shoppers have heard of the first-time homebuyer’s tax credit; however, a high percentage of renters aren’t even tuned in to this great program. They also don’t know about the 3% down availability on conforming loans. They surely don’t know that the tax credit can actually be that down payment on a $264,000 home or condo. How are you going to let them know this?

1. Think inside and outside the box
Here’s the thing: your local small town newspaper wants local business to succeed. How about calling the editor and suggesting a feature on this fabulous program? Better yet, if you are so inclined, write a chatty column about it and bring it down to the local editor. If you can tie the credit into a homecoming from duty overseas, so much the better. “Returning Veteran makes home in Smallville thanks to Homebuyers Tax Credit” would be a great story line. Chances are good that your hometown paper will run a story such as this. If not, take out a small classified ad in the real estate section, inviting renters to contact you for information about a fantastic federal program that might put them in a home for less than they are paying now in rent and with a minimum down payment, if any. If you are in a bigger metro area, place a small classified ad in CraigsList that makes the same offer. Give your Web address (but don’t do that unless you have lead capture on your site—without it, the prospect can’t register with you) and your phone number and name. You’ll be surprised, but only if you call these leads immediately upon receiving them.

2. Go directly to the prospects
Mail or drop off a flyer offering classes in “the thousands of reasons you should attend our first-time homebuyers class” at every apartment complex in your town. Schedule a class and have your loan officer attend (they might even pay for your promotional efforts—including your online marketing services for Realtors subscription) and give a good presentation to those who show up. Do it several times on different days. (Richard Beckman, an agent in Washington, has used this method to his benefit—about 60% of his transactions come from this approach, and you can see how he promotes it on his basic website at http://www.washingtonrealestateresource.com/.) Please do not contact Richard, but feel free to view his site and check out his method—he’s a hard working fellow who can’t spend all day talking to agents who want to succeed like he does—for tips on what you should do.

Consider hiring a high school kid looking for a little extra spending money to do this every Saturday for you at every apartment complex in town. Don’t be shy about doing it at your supermarket parking lot, either. Post your flyer in every community posting availability. Put it on the bulletin board at your church. Make sure the flyer contains your Web address, your name and phone number, and if possible, a smiling photo of you. Welcome these people into the tent and you will sell quite a few of them. Remember, they don’t think they can afford a home. You are here to show them they can.

This isn’t 2005—you need to find your own leads
Walk-ins, referrals, move up buyers—they are all getting harder and harder to find. (The first-time homebuyers’ tax credit now can also be used by move-up buyers). Fancy print advertising is going the way of the dinosaurs and newspapers and magazines aren’t the place to find your new clients anymore. The Internet is a great place to make a presence and succeed. Likewise, get out there with those flyers before everyone else in town does. Only by actively seeking out buyers will you find enough to keep you financially viable. Those who can’t or won’t effectively prospect might not find enough clients to earn a decent living in 2010.

Although it is possible to do your own work on your website and to make it perform for you, often, professionals can help you do this better than you can do it yourself. How you do it is your choice; I’m simply telling you that you must do more than just think about doing it. Your time is money, and learning how to do all the necessary things to succeed online is not an overnight thing. Another factor is that when you use professionals to help you, your success can be subject to a written guarantee and the price can be quite reasonable. There will not be a better time to get positioned to take advantage of real estate trends with first-time homebuyers. Even better, many of these people will be thrilled to learn that they can actually afford a home, possibly for even less money each month than the rent they spend now. Get after them and get your share of these buyers, because the thinking is: this tax credit is G-O-N-E for good when it expires later in 2010. This program amounts to an invitation to succeed for real estate professionals. The question is: will you take it?

Mike Parker (www.theblackwatercg.com) advises thousands of agents and brokers on the subject of online marketing services for Realtors. If you’d like to investigate having professional help with first time homebuyers or any online marketing, click here and fill out the form for a confidential free evaluation of your online marketing and to find out if your website is set up to deliver buyers to you.

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

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RISMEDIA, December 1, 2009—Back in the day, predatory lending was pretty much confined to grifters combing poorer neighborhoods looking for elderly or ignorant homeowners with substantial equity. Oh, they’re still out there.

But, the securitization of mortgages brought a level of sophistication to predatory lending that has allowed it to go on virtually undetected. If you got a loan in the last few years, it was probably packaged with a pool of other mortgages and sold off to an investor seeking a long term revenue stream. But, it doesn’t stop there.

What if a borrower pays his loan off early, killing the revenue stream? Not an unlikely occurrence, particularly given the refinancing activity that took place while prices were rising.

In one way or another, that risk and others, such as default rates, were factored into the business model and can actually contribute to profitability.

Risk exists.

In the retail industry, one of the risks is “shrinkage” or theft. In preparing a budget for a retail business, there is an anticipation of a certain percentage of loss due to theft. The projected profit margins must be sufficient to absorb the losses. Other risks are insured against.

It is important to keep in mind that mortgage securitization makes up only a small percentage of the much larger business of securitizing debt. If you occasionally drive by a stalled strip mall or an abandoned subdivision, the money probably came from investors buying securitized debt.

Auto loans, student loans, business loans, credit cards, and just about any kind of debt you can think of have been sold as investments.

All of which illustrates two important points: there was a very high demand for these investments, and meeting the demand is very, very lucrative.

The entire compensation scheme, from street level mortgage reps all the way up through the highest levels of Wall Street, rewards volume, not quality. It’s a very simple premise; reward the behavior you want and you’ll get more of it.

That is simple enough and easy to understand, but as counterintuitive as this may seem, in the world of high finance, there is more money to be made in bad lending than there is in good.

Business model based on failure, not success.

When I was growing up, a Horatio Alger story was a metaphor for someone who overcomes obstacles to achieve great success. Horatio Alger, Jr. (1834-99) was a prolific writer of dime novel stories for boys. With uncommon courage and moral fortitude, Alger’s youths struggle against adversity to achieve great wealth and acclaim. They demonstrate the values of hard work and perseverance.

But, that’s fiction and the world has changed. Success is hard, failure is easy. Success comes at a price. For those unwilling to pay the price, there is always failure. If you are good at creating failure, you can bet on it.

For example, if I flood the market with phony shares of Bear Stearns, I can destroy its share value. If I buy a Credit Default Swap to pay me in the event of its failure, as in the case of one mystery investor who in March of 2008 did bet on Bear Stearns collapse, I would get $270 million. See how rewarding failure can be?

What does all that have to do with predatory lending? In part, it helps explain the eagerness to lend money to anyone. That is what they get paid for; matching people with money. Money was looking for you.

Wall Street touted mortgage backed securities as investment grade, and money poured in from all over the world. More money, in fact, than there were good investments. Beneath the surface, the economy has been essentially stagnant and this might normally be fatal for Wall Street.

But, with some ENRON-esque accounting tricks allowing liabilities to be reclassified as assets, leverage, tranching, and rating agencies willing to label debt “triple “A” investment grade”, there was something to trade. And, without debt to sell, a lot of high paying jobs would go away.

And, bad loans are more profitable than good ones. Armed with FICO scores and sophisticated research into a borrower’s behavior, they were able to track down exactly the borrowers they wanted. By definition, that is predatory, but they call it marketing.

Types of Predatory Lending

Sub-prime steering

Perhaps the easiest and most common type of predatory lending is moving a highly qualified borrower into a more expensive loan. Most people are intimidated and confused by the mortgage process and have no real way of verifying what they are being told.

Who really knows what those credit scores mean when it comes to loan terms?

Promise one thing, deliver another

“Our underwriting standards have changed.” Who can argue with that? Not even the street level mortgage reps as it turns out, who are always the ones who have to go back to the borrower and try to explain why they have to pay another half-point and a quarter percent higher interest rate.

The 2/28 loan

Designed to implode.

According to bankrate.com, “A 2/28 subprime ARM has a low initial rate that lasts two years. After that, the loan resets; this means that the rate is adjusted upward or downward. At the first jump, the rate can conceivably climb 2 to 6 percentage points, causing monthly payments to skyrocket. (In practice, the first rate jump is usually on the smaller end of that scale, but it can keep rising every six or 12 months after that.)”

Why risk default when you can make it a certainty by developing a loan with a really high failure rate? And, you can hedge the bet further by knowing approximately when the loan will default.

The closing table surprise.

This could be virtually anything that will increase the profitability of the loan or the likelihood of a default. This isn’t much of a gamble on their part as most people do not sit at the closing table and read the actual loan documents.

Simply by doing any of these activities, they are able to increase the fees and the interest rate and maximize the profitability of the loan origination process. But, it doesn’t end there. The lenders also made side bets (Credit Default Swaps) that a substantial number of these loans would fail based on the credit profiles of the borrower or the type of loan.

Research is now revealing that a large number of securitized loans have both Truth in Lending or RESPA violations.

There are many other types of predatory lending, and if you have been a victim or suspect you may have been a victim of predatory lending, you’ll need an experienced attorney.

George W. Mantor is known as “The Real Estate Professor” for his wealth building formula, Lx2+(U²)xTFP=$? and consumer education efforts. During a career that has spanned more than three decades, he has amassed experience in new home and resale residential real estate, resort marketing, and commercial and investment property. He is currently the founder and president of The Associates Financial Group, a real estate consulting firm.

Mantor can be reached at GWMantor@aol.com.

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

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RISMEDIA, December 1, 2009—(MCT)—Sales of new homes rose 6.2% in October 2009 on strong results in the South, the Commerce Department estimated recently.

The rise in U.S. new-home sales to a seasonally adjusted annual rate of 430,000 was well above the 390,000 pace that economists surveyed by MarketWatch had expected.

Sales rose 23.2% in the South. By contrast, monthly sales fell by 20% in the Midwest, and by 5.1% in both the Northeast and the West.

“On the surface, one would have assumed that the surge in sales activity was induced by the rush of first-time home buyers trying to get ahead of the originally scheduled end of the first-time homebuyers’ tax credit at the end of October,” wrote Millan Mulraine, economics strategist with TD Securities, in a research note. “However, given the lopsided regional dimension to the increase in home sales, we are not entirely convinced that this was the only story.”

The government cautions that its housing data are subject to large sampling and other statistical errors, with large revisions common. It can take up to six months for a trend in sales to emerge.

The pace of new-home sales in September also was revised slightly higher, to a level of 405,000. New-home sales are up 5.1% compared with a year ago, the government’s data showed.

The supply of homes on the market fell to 239,000 in October, representing a 6.7-month supply.

The median sales price in October hit $212,200, compared with $213,200 in the prior year.

(c) 2009, MarketWatch.com Inc.

Distributed by McClatchy-Tribune Information Services.

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RISMEDIA, December 1, 2009—Ed Blackwell’s been in real estate for 15+ years—all with Keller Williams Realty—but is still fairly new to the Lowe’s REALTOR® Benefits Program. And even though he’s one of 12,000+ Realtors in the Houston area, Blackwell believes that the Lowe’s program will eventually make him stand out from the rest.

“I use the Lowe’s REALTOR® Benefits Program home-seller cards,” says Blackwell, based in Spring, Texas. Thus far, Blackwell, who’s only been using the Lowe’s program for about eight months, is very excited about the plan.

The cards are custom-designed with the Realtor’s photo on them, which Blackwell says is a big distinguisher for him because it adds credibility by showing his affiliation with Lowe’s. “Lowe’s is a very prestigious name and these pieces are so professionally done—the entire concept is great.

“I am so impressed by the design and look of the direct mail pieces—they’re very eye-catching,” he adds. “If I were a seller, they would immediately catch my attention.”

To date, Blackwell says he’s already sent out home-seller cards to all of his clients and plans to continue doing so. “It’s like anything else—the key is consistency,” he says. “You have to keep going and eventually people will catch on.”

Additionally, Blackwell believes that the slow market pickup will have a large effect on his business as well as how often people take advantage of the Lowe’s coupon provided on the home-seller cards he’s mailing.

“The market here is starting to rebound,” he says. “That in itself will help in the responses I receive. More people will be interested in selling their homes and, therefore, more people will be interested in taking on more home improvement projects that we typically see come along with a home sale,” he believes.

Moving ahead, Blackwell says that once sellers begin to associate him more with Lowe’s, other agents will most likely begin to notice. However, he doesn’t plan on sharing his secrets any time soon.

“Each person has their own way of marketing and doing things,” he says. “I certainly don’t plan on sharing my secrets for success with anyone else.”

The Lowe’s Program for Realtors is free for Realtors and offers personal marketing tools from Lowe’s and the National Association of REALTORS®.

To schedule a presentation about the Lowe’s

REALTOR® Benefits Program with one of Lowe’s specialists, please call 888-913-6060.

For more information, visit www.lowesrealtorbenefits.com.

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

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RISMEDIA, December 1, 2009—The Florida Association of REALTORS 2010 President Wendell Davis confirmed the appointment of Rei Mesa, President and Chief Operating Officer of Prudential Florida Real Estate Services, for a second term as the Chairman of the Florida Real Estate Services Committee.

“On behalf of Wendell and 2010 President-elect Pat Fitzgerald, we thank Rei for agreeing to volunteer his time to serve the Florida Realtors® in a leadership capacity for the Realtor/Attorney Joint Committee, Chairman of the Strategic Planning Committee, Public Policy Committee, Executive Committee, and the Florida Real Estate Services Committee in 2010.” – Jeanette Chech, Director Leadership Services, Florida Association of REALTORS®

In a letter to Mesa, Davis wrote:

“The Florida Realtors, its members and all Floridians are presented with unprecedented challenges and opportunities in 2010. Your help and time is needed to build on the efforts of local boards and associations, to provide the information and tools our members need to succeed, to advance Florida’s real estate industry and to shape public policy on housing and real estate related issues.

“Together, we can protect the rights of property owners, be recognized as the leading voice for the real estate industry and make every effort to improve the quality of life for all in the Sunshine State.

“As we move our Association forward into the future, please remember the following: Vincent Lombardi once said, “The achievements of an organization are the results of the combined effort of each individual.”

For more information, visit www.prudentialfloridarealty.com.

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

RISMEDIA, December 1, 2009—Realtors® are giving back during the Triple Play REALTOR Convention & Trade Expo, which is scheduled for December 8-10, 2009 at the Atlantic City Convention Center. For the second year in a row, the New Jersey, New York State and Pennsylvania associations of Realtors will host a food drive for the Atlantic City Rescue Mission (ACRM), which is dedicated to caring for the poor and homeless in southern New Jersey. Convention attendees are encouraged to bring non-perishable food items, canned goods or monetary donations.

Located across the street from the Convention Center where Triple Play is being held, the ACRM has been serving the homeless since 1964. It serves approximately 647 meals per day, houses 194 men, 39 women and nine mothers with 13 children each night, and provides clothing for the working poor and homeless. The Mission also provides an average of 124 emergency food baskets each month to local families in crisis. More than 3,000 people are assisted by ACRM each year.

During this year’s convention, a drop-off box will be located at the Messages & Information Desk at the Trade Expo entrance (Level 2, Hall B). Donations can be dropped off during the following hours: Tuesday, December 8, between noon and 6 p.m.; Wednesday, December 9, between 9 a.m. and 6 p.m.; Thursday, December 10, between 9 a.m. and noon.

The Mission needs the following items: Non-perishable food items, Canned goods, sugar (white and brown), Coffee, Salt, pepper and other spices, Disposable diapers (all sizes), Tooth brushes and tooth paste, Shampoo and conditioner, Toilet tissue, Tylenol, aspirin or ibuprofen, cough, cold and flu medications (for adults and children), Cash donations are always appreciated.

For more information, visit www.realtorstripleplay.com/ACRescue.htm.

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

RISMEDIA, December 1, 2009—Homebuyers looking for the right home at a great price will now be able to search through more than a million foreclosed properties and access agents specializing in short sales and foreclosures, all in one location.

RE/MAX International, Inc. is the first national real estate franchise to offer U.S. foreclosure listings on its highly-trafficked website, www.remax.com.

Remax.com visitors can now access more than 1.3 million Real Estate Owned (REO) properties in the U.S. through RealtyTrac.

“We strive to provide consumers with the most information, properties, videos, articles and resources to help them navigate today’s market,” said Kristi Graning, Senior Vice President, Information Technology and eBusiness for RE/MAX International. “Remax.com is now the perfect combination of resources on one website, where visitors can search for foreclosures and connect with a uniquely trained RE/MAX agent who specializes in short sales, REOs and foreclosures.”

Homebuyers across the country, including those looking to take advantage of the recently enhanced Homebuyer Tax Credit, can search foreclosures by accessing the foreclosure tab in the featured property search box on remax.com.

“We are very pleased to be working with RE/MAX, one of the world’s leading real estate brands, and we’re excited to give consumers another way to access foreclosure data,” said Rick Sharga, Senior Vice President for RealtyTrac. “We believe we can have a positive impact on the national housing market by providing consumers with vital foreclosure information and giving homebuyers an opportunity to find the perfect home with the right agent.”

For more information, visit www.remax.com.

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

RISMEDIA, December 1, 2009—Delta Media Group, a leading real estate website and lead management developer of more than 32,000 broker and agent sites, announced the launch of PropertyPursuit.com, a broker and agent-centric national real estate portal.

PropertyPursuit.com is unique in that it drives all leads from the site directly to the respective broker or agent. With easy-to-search tools and more than one million listings at the time of debut, PropertyPursuit.com will provide homebuyers a highly user-friendly experience in finding their next home.

“It’s extremely gratifying that a company of the caliber of Delta Media Group has decided to launch a broker and agent-centric global portal that is so easy to use for today’s buyers and sellers,” said Chad Ochsner, president of RE/MAX Alliance in Denver. “It is refreshing to see a company like Delta Media Group build this national portal. The organization is comprised of extremely well-known, highly qualified experts in the real estate website, lead management, SEO and SEM industries, and we are confident that PropertyPursuit.com will quickly become the REALTOR site of choice in the real estate industry.”

According to the company, PropertyPursuit.com provides home searchers with the most comprehensive online real estate search tools available. Beginning with a unique Internet Protocol (IP) address look-up that displays the visitor’s city at log-in, the site offers distinct search functions including an easy search, advanced search and search map, as well as the abilities to search by address, zip code, listing features and more.

“PropertyPursuit.com will enable website visitors to experience single-click access to local listings and in-depth search options for specific criteria for desired real estate properties and features,” said Mike Minard, president of Delta Media Group. “Visitors additionally have access to an abundant amount of the most up-to-date property listings on the market. PropertyPursuit.com provides the users with the options they desire and accommodates all the various methods consumers prefer to use when searching for real estate.”

For more information, visit www.PropertyPursuit.com.

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

You will want to find foreclosed homes that fit your budget and your lifestyle. After all, you will want a home that you can afford and one that is pleasant to live in. Luckily, foreclosures are a perfect way to ensure that your home shopping experience is positive. Foreclosures are priced below market value and are therefore easy on the budget. It is also possible to find foreclosed homes that fit just about every lifestyle, since foreclosures come in every size and style, from new condos to historic estates.