Four Ways to Spice Up an Open House

Open houses are a great way to meet potential clients, and showcasing the home in an attention-getting way can cement potential sellers’ confidence in the Realtor.

1. Take advantage of branding opportunities.

Water bottles on hot days with a custom label can be a great source of advertising. A picture of the house with contact information on the bottle is not only fun, but a way to keep both the home and the Realtor in the mind of the visitor after the open house.

2. Go beyond the basics with food.

You may have heard the age-old technique of baking cookies in the home to infuse it with the scent of homemade treats. However, food at an open house can be another way to stand out. It can encourage people to stay longer and strike up a conversation. Think outside the box – ice cream, chocolate fountains with strawberries, or lattes from an espresso machine.

3. Don’t forget the music.

Having music softly playing enhances the atmosphere and detracts from an empty feeling in the home and makes it more inviting. Soft jazz or other non-lyrical music can be played from an iPod and dock system. Have it centrally located so the music is heard throughout the home.

4. Consider the early evening

A recent Realtor Magazine article suggested holding open houses not only on Sundays, but during twilight hours. This way, people can visit the home directly after work, expanding the potential buyer pool.

The Power of Bona Fide Pre-Approval

While most mortgage lenders offer a form of “pre-approval” for a loan, Mortgage California is one of the few lenders anywhere that can do an actual fully underwritten loan pre-approval. With our banker and broker business model, pre-approvals for loans are not conditional on multiple minutiae of a transaction.

It is difficult to overestimate the power of a real loan pre-approval and its role in a successful real estate transaction. Pre-approvals make the seller of a house more comfortable about the offer, and in a competitive market, this can make all the difference.

According to Bay Area Realtor Larry Miller of Coldwell Banker, standard practice in the area is that a loan pre-approval accompanies the offer on a home. When the pre-approval comes from Mortgage California, he is able to give the seller complete confidence that the buyer is, in fact, qualified and the transaction will be able to close.  Not so with many other pre-approvals, which are not fully underwritten and thus are only worth the paper they’re printed on.

“If a seller is looking at two different offers, they can feel much more confident with the Mortgage California one,” said Miller.

The difference between the loan pre-approvals the real estate agent sees from other loan companies and from Mortgage California is the reliable commitment of the latter that the buyer does indeed qualify.

Looking over pre-approval letters from three diffferent companies, one of which being Mortgage California, Miller pointed out the extensive conditions on the other letters – one of which included more than eight conditions under which the”pre-approval” was not guaranteed.

“How much confidence can this give you?” asked Miller, in reference to the extensive conditions and lack of guarantees on one pre-approval letter.

A true pre-approval from Mortgage California gives homebuyers a huge competitive advantage when making an offer on a home, because sellers can be completely confident that the buyer is indeed able to purchase the home, speeding up the transaction and ensuring its success.

This Week’s Market Commentary

This week is extremely active with seven relevant economic reports in addition to another FOMC meeting and two fairly important Treasury auctions. The economic reports range from low importance to extremely high importance with the majority being in between those two.

There is relevant economic data being posted each day of the week, making it likely that we will see a fair amount of movement in mortgage pricing over the next several days.

March’s New Home Sales will be released late this morning. It gives us an indication of housing sector strength and mortgage credit demand, but is the week’s least important report. Unless it varies greatly from analysts’ forecasts, I am not expecting the data to cause much movement in mortgage rates. Analysts are currently forecasting a sizable increase in sales of newly constructed homes.

The Conference Board will post April’s Consumer Confidence Index (CCI) late Tuesday morning. This index is a key indicator of future spending by consumers. The group surveys 5000 consumers from across the country about their personal financial situations. If sentiment is strong or rising, it is believed that consumers are more apt to make large purchases in the near future. However, if they are concerned about issues such as job security and investments, they will probably delay making large purchases. The latter is better for the bond market and mortgage rates because the expected slowdown in spending would keep inflation and economic growth concerns to a minimum. But, a sizable increase could hurt the bond market, pushing mortgage rates higher Tuesday. It is expected to show a reading of 64.4, which would be an increase from March’s 63.4 reading. The lower the reading, the better the news for mortgage rates.

March’s Durable Goods Orders will be released early Wednesday morning. This report gives us an indication of manufacturing sector strength by tracking orders for big-ticket items at U.S. factories. These are products that are expected to last three or more years, such as appliances and electronics. Current forecasts are calling for an increase in new orders of 1.9%. This would be a sign of manufacturing sector growth, but this data can be quite volatile from month-to-month. Therefore, a small variance between forecasts and the actual results will not heavily influence the markets or mortgage rates. A decline would be considered good news, while a large increase would indicate manufacturing sector strength. A sign of solid manufacturing growth could lead to higher mortgage rates Wednesday.

This week’s FOMC meeting will begin Tuesday but will not adjourn until Wednesday afternoon. It will likely adjourn with an announcement of no change to key short-term interest rates, but we may see some volatility in the markets following the 2:15 PM ET post-meeting statement. There appears to be more and more discussion about when the Fed will have to start raising key interest rates to prevent inflation from strengthening. If the statement gives any hint of when that may be, or there is a change in the regular canned portions of the statement, we could see a sizable change to mortgage rates Wednesday afternoon.

In addition to this week’s economic reports, there are two relatively important Treasury auctions that may also influence bond trading enough to affect mortgage rates. There will be an auction of 5-year Notes Wednesday and 7-year Notes on Thursday. Neither of these sales will directly impact mortgage pricing, but they can influence general bond market sentiment. If the sales go poorly, we could see broader selling in the bond market that leads to upward revisions to mortgage rates. However, strong sales usually make bonds more attractive to investors and bring more funds into bonds. The buying of bonds that follows usually translates into lower mortgage rates. Results of the sales will be posted at 1:00 PM ET each auction day, so look for any reaction to come during afternoon hours.

Thursday has the single most important data of the week. That would be the preliminary version of the 1st Quarter Gross Domestic Product (GDP). This is arguably the single most important report that we see on a regular basis. The GDP is the sum of all products and services produced in the U.S. and is considered to be the best measurement of economic growth or contraction. I expect this report to cause major movement in the financial markets Thursday and therefore the mortgage market also. Analysts are expecting it to show that the economy grew at an annual rate of 1.7%, which would be a sizable drop from the final quarter of last year. A smaller increase would be considered good news for mortgage rates. But, a stronger than expected reading would almost certainly cause stock prices to rise and bond prices to fall, leading to higher mortgage rates Thursday morning.

The week does not close quietly with three reports scheduled for Friday morning. March’s Personal Income & Outlays is the first of them, coming early Friday. It helps us measure consumers’ ability to spend and current spending habits, which is important to the mortgage market due to the influence that consumer spending-related data has on the financial markets. If a consumer’s income is rising, they are more likely to make additional purchases in the near future. This raises inflation concerns and has a negative impact on the bond market and mortgage rates. Current forecasts are calling for a 0.4% increase in the income reading and a 0.5% rise in spending. If we see smaller than expected readings, the bond market should open higher Friday morning, making an improvement to mortgage rates a good possibility.

The second report of the day is the 1st Quarter Employment Cost Index (ECI), which tracks employer costs for wages and benefits. This gives us a measurement of wage-inflation. If it shows a large increase, we may see wage inflation concerns cause the bond market to fall and mortgage rates to rise. A smaller than expected increase would be good news for the bond market and mortgage pricing. Current forecasts are showing a rise of 0.5%.

The last piece of a data is the University of Michigan’s update to their Index of Consumer Sentiment for April. This report gives us an indication of consumer sentiment. I don’t expect it to have a significant impact on bonds and mortgage pricing unless it varies greatly from forecasts. Current forecasts are calling for little change from the preliminary reading of 69.6. This means that surveyed consumers were just as optimistic about their own financial situations as they were earlier this month.

Overall, look for plenty of movement in the financial markets and mortgage rates several days this week. Wednesday will likely be the most important day of the week with the FOMC adjournment and the fairly important Durable Goods data, but we may also see noticeable changes to rates Thursday after the GDP is posted. If this week’s reports reveal weaker than expected economic conditions, the bond market should extend its rally and mortgage rates should fall for the week.

Homes Sales in Santa Clara Country Hit 4-Year High

This past March has seen the most home sales in Santa Clara and San Mateo counties in four years. According to an article in the San Jose Mercury, sales were up 4 and 5% in the respective counties since March last year.

However, prices remain lower in these counties. “The median price for a single-family home in Santa Clara County was $528,000, down 4 percent; the median sales price in San Mateo County was $595,000, down 15 percent from a year ago,” said the Mercury.

South Bay sales were greater than Bay Area sales as a whole, with a 1.9% increase in home sales.
Foreclosure sales made up 31.5 percent of Bay Area resale transactions. Short sales — at prices less than the value of the mortgage on a home — made up 17.6 percent of the market.

The president of Dataquick, which measured these results, said “The housing market has certainly moved well back from the abyss of two years ago… [but] The big issue continues to be mortgage financing, which is still problematic for many potential borrowers.”

How to Get Finances Back on Track After Being Unemployed

If you are back in the workforce after a layoff, you might be wondering how to address financial issues.
For many re-employed people, a new paycheck might not solve all money problems. According to a survey by CareerBuilder, among workers who were laid off in 2010 and found new jobs, 61 percent took pay cuts.

With money tight, pay attention to urgent expenses first.

Attend to maintenance on your home and car. If you put off medical care for yourself and your family, that should be attended to. Advisors for Money magazine say it’s important to get the basics back on track.

The next priority is paying off credit card debt you have accumulated, paying more on the card with the highest interest rate first. Big credit card debt can harm your credit rating.

Paying off a home-equity line of credit is less urgent. The interest is tax deductible. Since the debt is secured, it won’t affect your credit score very much.

Since you have probably used all or most of your cash reserves, it’s important to rebuild them at the same time. If you have $500 a month in discretionary money, advisors recommend that you put $300 toward debt and $200 toward savings.

Next comes your retirement fund. Even if you can only manage a very small amount, contribute to your new company’s 401k plan right away.

If you don’t have enough cash to save and pay down debt, plus put a small sum into your retirement plan, it might be wise to refinance your mortgage. Especially if you have significant home equity, it will be easier to do now that you are employed.

Once you have met these goals, you will have more money to put into living life instead of playing catch-up.

Big Banks Penalized by Fed for Foreclosure Practices

Last week U.S. regulators penalized fourteen of the country’s biggest banks for improper foreclosure practices, according to a recent Wall Street Journal article. The banks were ordered to revamp their methods for handling troubled borrowers.

While no fines were issued, officials say they are coming to the 14 banks. This regulatory action occurred “as Obama administration officials and representatives of state attorneys general met with the bank representatives in an ongoing effort to reach a broader deal over alleged mortgage-servicing abuses, which brought foreclosures to a near halt last fall.”

This action would not interfere with possible civil fines and settlements. The banks have 60 days under the order to clean up their system, preventing documentation errors and ensuring they have the proper staff to handle home foreclosures, along with other changes.

In addition, an independent consultant must review the foreclosures from 2009 and 2010 to ensure fairness.
To read the full article, click here.

This Week’s Market Commentary

This holiday-shortened week is pretty light in terms of economic news scheduled for release. There are only three economic reports scheduled and none of them are considered to be highly important to the financial or mortgage markets.

Accordingly, there is a decent possibility of seeing a relatively calm week in the mortgage market, assuming that the stock markets do the same.

There is nothing of importance scheduled for release today. March’s Housing Starts is the first data, coming early Tuesday morning. It gives us a measurement of housing sector strength and mortgage credit demand by tracking starts of new home construction and the number of permits issued for future starts.

This data usually doesn’t cause much movement in mortgage pricing unless it varies greatly from forecasts. It is expected to show an increase in construction starts of new homes. Good news for the bond market and mortgage rates would be a decline in home starts, indicating housing sector weakness.

Wednesday’s only data is March’s Existing Homes Sales numbers from the National Association of Realtors. This report also gives us an indication of housing sector strength and mortgage credit demand. It is considered to be moderately important to the markets, but can influence mortgage pricing if it shows a sizable variance from forecasts. Ideally, the bond market would like to see a drop in home resales because a soft housing sector makes a broader economic recovery difficult. Analysts are expecting to see an increase in sales between February and March. The larger the increase, the worse the news for bonds and mortgage rates.

The third and final report of the week will be posted late Thursday morning when the Conference Board releases their Leading Economic Indicators (LEI) for March. This data attempts to measure economic activity over the next three to six months. This is considered to be a moderately important report, so we may see a slight movement in rates as a result of this report. It is expected to show an increase of 0.2%, meaning it is predicting slight growth in economic activity over the next several months. A smaller increase, or a decline would be considered good news for the bond market and could lead to slightly lower mortgage rates.
The bond market will close early Thursday and will remain closed Friday in observance of the Good Friday holiday. The stock markets will be open Thursday for a full day of trading, but will also be closed Friday.

The markets will reopen for regular hours Monday morning. The early close and Friday holiday may lead to some volatility in bonds Thursday afternoon as investors protect themselves over the long weekend. I don’t believe that this volatility will necessarily impact mortgage rates, but the possibility does exist, especially if the preceding days were active.

Overall, it is difficult to label one particular day as the most important of the week with no key economic data or other events scheduled. A good part of the week will likely be heavily influenced by the stock markets. If the major stock indexes rally, bonds will likely suffer and mortgage rates will move higher. If stocks fall, we could see mortgage rates move lower the next few days. There is nothing on the agenda that is of much concern, but keep an eye on the markets and maintain contact with your mortgage professional if still floating an interest rate as conditions can change at any time.