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Today is our nation's birthday. We are 237 years old. We are a baby compared to nations with cultures that reach back thousands of years.
Happy Birthday USA - blow out the candles!
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Who Puts 20% Down on a House?
According to Lending Tree, the average downpayment has fallen since May 2011. It is now 16% nationwide, down 9.4%. Here are the top and bottom five states:
Top - New Jersey, California, New York, Massachussets, Hawaii. They average 19-20%.
Bottom - Wisconsin, Idaho, Tennessee, Indiana, South Dakota. They average 12-14%.
Why is this happening given the market's recent difficulties? The logic, Lending Tree says, is that with rising home prices and interest rates, putting less down today with a locked in interest rate will actually cost a borrower less over the lifetime of the loan.
Comment: Since most people don't keep their loans till maturity and the housing "recovery" has not yet been deemed sustainable for the long term, the jury might be out on this one.
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Caveat Vendit
We all know the Latin saying Caveat Emptor - Let the Buyer Beware.
How about Caveat Vendit? - Let the Seller Beware.
It certainly applies to the world of seller carryback. In my experience, too many sellers are carrying back a note without "vetting" their buyer. They just don't know enough about him "before" they make the deal.
Here is a good example. A seller called me and said he had a commercial note in a town close to where I live. He wanted to know how the process of selling a note worked and what the pricing was. He had never sold a note before. Before I asked any questions, I explained the process to him. I also told him that the price offered fell into a broad range - roughly 60-85 cents of the current balance. The bigger the downpayment, the more equity, the stronger the seasoning, the better the credit, etc., the closer we are to the top. If we have little or no downpayment, little seasoning, missed payments, etc., the closer we are to the 60 cent number.
He said " I would never sell for a 20% discount."
I asked him to tell me about the commercial note. He was evasive. So I asked how much downpayment he received."Zero", he said. I asked if he was getting principal and interest payments. "No, interest only", he replied. He then volunteered "I'm getting ready to take the property back." "Why?", I asked. He answered "Because he's not making the interest payments."
With every question the news got worse.
He admitted he had a sorry situation, and said he wanted to know the good news in selling a note before he told me all the bad news. Fair enough.
He told me he offered these terms because back property taxes were owed on the building, and the buyer agreed to pay them as part of the deal. He felt it was a fair tradeoff. He did not check the man's credit, credit history, or ability to keep his promise under the note.
Caveat Vendit - lesson learned - hopefully!
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Unclaimed Property Tax Refunds
A neighboring county has 1844 refunds for a total of $1.9 million dollars. The refunds range from $10 to $36,000 and have been unclaimed for 5 years!
You may want to check with your county to see if they are holding any of your money.
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"I always say if you want to make God laugh, tell him your plans for tomorrow."
Shane Battier, Miam Heat NBA veteran, on his possible retirement in 2014.
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Small Businesses Cut Jobs
According to a Wells Fargo/Gallup Small Business Index survey, more small businesses were giving employees the boot in the past year than were hiring. Dennis Jacobe, Gallup chief economist, said " Small business owners' self reported net hiring over the past 12 months remains anemic. It is hard to see how the recent surge in economic optimism - at least on Main Street - can continue to increase without increased small business job growth."
Top CEO's Expect Only Modest Pickup in Hiring
CEO"s of the Business Roundtable, amongst the largest companies in the USA and employing about 16 million people, see just a slight improvement in economic activity over the next 6 months, with a small pickup in sales and hiring. 32% envision an increase in hiring, but 26% forecast a decrease. The rest see no change. Jim McNerney, CEO of Boeing Co. and Roundtable Chairman, attributed the weak hiring to "some skill mismatches, and continued political inaction on longer term budget issues, such as taxes and spending for healthcare and social security. I think it remains constrained until we get some certainty."
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Corvette
Most guys have a sport car fantasy. I lived mine years ago. I bought a brand new 1990 Polo Green Corvette Convertible, with a tan top and interior. Beautiful, sexy car. It went faster than I would allow myself to drive it! Lots of fun.
GM has just announced it will produce 500 Premiere Edition Corvette Stingray's. The car will be Laguna Blue with a tan suede interior, 460 horsepower, and go from zero to 60 mph in 3.8 seconds.
It can be yours for $75,000. If you have not lived your car fantasy yet, why not check it out?
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Gates the Richest
After a 6 year slump, Bill Gates has once again become the world's richest person. Bloomberg Billionaires Index says he has a net worth of $72.7 billion dollars. Carlos Slim fell to 2nd place at $72.1 billion!
Gates' fortune increased $10 billion in the past year, primarily due to Microsoft's stock hitting a 5 year high. Gates is co-founder of Microsoft.
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Marriage
"Just because you can does not mean you should."
My daughter, Kelley, cautioning gay couples not to rush into marriage, citing the 50% divorce rate amongst heteresexuals in the U.S.
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More Economic Grimness
Last month, UCLA economists in their quarterly Anderson Forecast, said, in part, " Jobs are growing, but not rapidly enough to create good jobs for all. It's not a recovery. It's not even normal growth. It's bad."
The report laments the country's educational system. It says we are not adequately developing the workforce of the future.
"Regrettably we reward teachers if their students regurgitate the information on standardized tests."
Also, "Outstanding student loans have tripled since 2004. Never before have so many young people been saddled with so much non-mortgage debt, and that burden will keep them out of the home buying market for years to come."
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GOOD NEWS
Prices being offered on notes today are the highest they have been in years. Buyers are being aggressive when a particular note fits their niche.
If you have been thinking about selling your note, now may be the time. Call me and lets get some pricing options for you to consider.
Enjoy your 4th!
Denny Stanz
CA Broker # 01915404
760-245-5366
760-245-5367 fax
dennystanz@verizon.net
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