Advanced Seller Data Services ( www.notesellerlist.com) provides intriguing and interesting information for those of us in the note business. Essentially, we get an idea of the volume of seller carry back transactions being done and where they are being done.
I keep repeating that we are in a niche market in the real estate industry. The statistics illustrate the point.
Based upon a survey of 2124 counties across the United States( not all the US counties), there were in excess of 116,000 1st position owner carry back sales in 2014. This is truly a niche market. So, we have a handful of note buyers offering their services to a relative handful of potential note sellers. Compare our numbers to the number of real estate agents and the several million real estate transactions that occur every year.
Texas is far and away the most active state, with close to 24,000 transactions closed in 2014. My state, California, was second with 11,412 sales followed by Florida with 10,137. No other state approached 5,000 sales. South Dakota was the least active state with only 12 closed owner carry back sales. Not surprisingly, most of my business is in Texas and California.
I share these numbers because I think that you and many others may not have a true understanding of our industry. Many times I hear from a seller " I have received tons of letters from people who want to buy my note." Because of this mail activity, it is easy for a seller to believe that our business is flooded with note buyers; and, if it is flooded with note buyers, it's probably flooded with folks that are holding a note just like him.
Not true.
We don't know the actual number of transactions done annually because we don't have data from every county in the country. Regardless, the truth for you to understand is this - there are only a few of you and a few of us!
One of the reasons I write this Newsletter is to remind you that I have been in this business for a while and will continue to be in it as long as good health allows. People come and go in every business, and ours is no exception. But for the folks who do this business for a living every day and are committed to doing the best job possible, we try to help drive our niche industry and serve the relative few who are constructing owner carry back notes. We can provide guidance in designing your notes and cash in selling them. That's our job!
"I have wondered at times about what the Ten Commandments would have looked like if Moses had run them through the U.S. Congress ."..... Ronald Reagan.
Where 1% Equals One Million Homeowners
Renters v. Owners. I have this ingrained feeling that everyone wants to own a home. Then I have conversations with folks in their 30's and 40's and discover that some of them are happy being renters. They don't have to worry about cash for big down payments, property taxes, home maintenance, etc. I'm surprised, I wasn't brought up this way.
Evidently, this feeling is shared by millions of others who are happy to be renters. Read an interesting article that illustrates the point.
www.multifamilyinsight.net/2015/02/15/where-1-equals-one-million-home-owners/.
"Take care of your thoughts when you are alone," and "take care of your words when you are with people."..... Inspiring and Positive Quotes.
Zillow- Use it Carefully
Everyone in the real estate industry - or looking for a home - knows Zillow. Zillow is the most popular on line real estate information site, with millions of people visiting it daily to find home listings and basic information on a property, such as square footage, number of bedrooms, etc. Zillow may have internal and external pictures of the home as well.
I use Zillow every day - it's a must in our business to get some idea of what a property looks like. It can also provide a brief "Price History" and "Tax History."
One of the most controversial tools provided by Zillow is something called Zestimate. You plug in a property address and you will be given a current "market value" - Zestimate. Zillow uses a proprietary formula to determine this value. This is an easy and convenient tool for all of us to use.
The problem-sometimes- is the relationship between the Zestimate and the actual sales price. Some sellers will use the Zestimate as "their" number to sell their home, no matter what their real estate broker may tell them about the reality of their neighborhood- i.e., your home is worth less! If the seller remains stubborn, the broker may lose a deal.
I bring this up because maybe you are like me when you visit any website. I never learn about everything I could use on the site. I have certain things I am looking for, I get them, and I move on.
But Zillow has an interesting tool I discovered that can provide a little more perspective to the Zestimate.
Next time you are on Zillow, on the Home page scroll all the way down to the bottom. In small print you will see the word"Zestimate." Click on it. Scroll down again until you see "How accurate is the Zestimate?" Click on it. Move down to the "Zestimate Accuracy Table." Look that over to get an understanding of error margins. Under the table you will see a sentence that says "click here to download an excel spreadsheet of this data." Click on it. You will see a state by state and county by county chart of "median Zestimates error margins." So, if you have a house that Zestimate says is worth $200,000 and your county has a 15% error margin, that means the value estimate could be off $30,000 - either up or down!
It appears the more rural the property or the less data Zillow has, the larger the error margin, some up to the 50%-70% range. That would be a shocker for any potential seller relying on his Zestimate to convince a broker "this is my price."
Zillow says their "median national error margin is 8%", but as everyone tells me all the time, their market is "different." Real estate is local.
If you do not know about this tool, check it out the next time you are on Zillow. You also may want to visit www.eppraisal.com or www.city-data.com. Then once you get confused by the differing values, you can call your broker and let him/her earn their money by telling you what your property is really worth!
These sites are valuable educational tools, a good starting point. No more, no less.
"Don't worry so much about how long this good thing will last. You make it last longer when you honor it with your best efforts."...Aries Horoscope, March 21-April 19.
Wine Exports Up
2014 was the 2nd highest revenue year ever for the American wine industry, with $1.49 billion in revenue. 2013 was the highest at $1.55 billion, according to the Wine Institute.
90% of these exports came from my home state of California. I love wine, especially a nice, soft and mellow red, typically a Merlot.
If you like red wine, may I suggest you buy a California red. And, may I recommend Los Osos Estates, J.Lohr, Paso Robles Merlot.
Enjoy!
Lenders Are Easing Loan Rules
There is a lot of chatter about mortgage loans becoming easier to qualify for. Here are a few things the Mortgage Bankers Association is saying:
1. Fannie Mae will resume buying mortgages with as little as 3% down payment.
2. Freddie Mac will begin a similar program in late March.
3. Wells Fargo will move away from its 660 FICO minimum on conventional loans. If Fannie or Freddie accept with a lower score, Wells won't say no solely because of the low score.
4. On FHA loans, Wells will now accept FICO scores down to 600 from its previous standard of 640.
Stay tuned - it will take a while for the word to get out, but this could be good news for lots of folks and the housing market as a whole.
If you are coming to California for at least 1 month and would like a nice place to rent, check out the Palazzo di Amore. A nifty $475,000/month and it is home for a while!
abc7.com/realestate/photos-$195million-mansion-is-the-most-expensive-in-the-US/384332.
If you enjoy this Newsletter, please pass it on to a friend.
If I can make it better, please tell me how.
Thanks for reading.
|