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Tag Archives: buyers

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Buyer Beware: Sophisticated Email Scams Targeting the Real Estate Industry:

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Buyers need to be aware with all of the sophisticated email scams!

Criminals are hacking into the email accounts of real estate agents or other persons involved in a real estate transaction and using information gained from the hack to dupe a party into a fraudulent wire transfer. The hackers often send an email that appears to be from an individual legitimately involved in the transaction, informing the recipient, often the buyer, that there has been a last-minute change to the wiring instructions.  Following the new instructions, the recipient will wire funds directly to the hacker’s account, which will be cleared out in a matter of minutes. The money is almost always lost forever!

This is a busy and hectic time for real estate professionals, and many millions of dollars will be sent and received via wire throughout the year. This is exactly the environment in which online criminals seek to operate.

The National Association of REALTORS® urges its members and state and local REALTOR® associations to be on high alert for email and online fraud.

In May 2015, NAR issued an alert regarding a sophisticated email wire fraud hitting the real estate industry.  Since then, the incidents of online scams targeting practitioners have continued to rise but the advice is the same.

Bottom line: Do not let your guard down!  Start from the assumption that any email in your inbox could be a targeted attack from a criminal.

Prevention

Follow this guidance to avoid becoming a victim:

  • Immediately contact all parties to all of your upcoming transactions and inform them of the possibility of this fraud.  Attorneys, escrow agents, buyers, sellers, real estate agents, and title agents have all been targeted in these scams.  You can also download and distribute NAR’s online fraud prevention handout, accessible here.
  • If possible, do not send sensitive information via email.  If you must use email to send sensitive information, use encrypted email.
  • Immediately prior to wiring any money, the person sending the money must call the intended recipient to verify the wiring instructions.  Only use a verified telephone number to make this call.
  • Do not trust contact information in unverified emails.  The hackers will recreate legitimate-looking signature blocks with their own telephone number.   In addition, fraudsters will include links to fake websites to further convince victims of their legitimacy.
  • Never click on any links in an unverified email.  In addition to leading you to fake websites, these links can contain viruses and other malicious spyware that can make your computer – and your transactions – vulnerable to attack.
  • Never conduct business over unsecured wifi.
  • Trust your instincts.  Tell clients that if an e-mail or a telephone call ever seems suspicious or “off,” that they should refrain from taking any action until the communication has been independently verified as legitimate.
  • Clean out your e-mail account on a regular basis. Your e-mails may establish patterns in your business practice over time that hackers can use against you. In addition, a longstanding backlog of e-mails may contain sensitive information from months or years past. You can always save important e-mails in a secure location on your internal system or hard drive.
  • Change your usernames and passwords on a regular basis, and make sure your employees and licensees do the same.
  • Never use usernames or passwords that are easy to guess. Never, ever use the password “password.”
  • Make sure to implement the most up-to-date firewall and anti-virus technologies in your business.

Damage Control

If you believe your e-mail or any other account has been hacked, or that you or a client has otherwise been a victim of online fraud, you should take the following steps:

  • If money has been wired via false wiring instructions, immediately call all banks and financial institutions that could possibly put a stop to the wire.
  • Contact your local police.
  • Contact any clients or other parties who may have been exposed during the attack so that they take appropriate action. Remind them not to comply with any requests from an unverified source.
  • Change all usernames and passwords associated with any account that you believe may have been compromised or otherwise made vulnerable by the attack.
  • Report any fraudulent activity to the Federal Bureau of Investigations via their Internet Crime Complaint Center. More information can be found by clicking here.
  • Brokers should report any fraudulent activity to their state or local REALTOR® association so that the associations can send out alerts or take other appropriate action, including contacting NAR.

This advice is not all-inclusive, and real estate practitioners should work with Information Technology and cybersecurity professionals to ensure that their e-mail accounts, online systems, and business practices are as secure and up-to-date as possible.

Be aware that these emails are extremely convincing.  Many sophisticated parties have been duped. No one should assume that they are “too savvy” to recognize the fraud.  In addition, no one should assume that they are “too small a target” to be on these criminals’ radars. This fraud is pervasive, convincing, and constantly evolving.

For more information on this and other cyber scams, as well as further information on cyber security best practices, visit these resources:

http://speakingofrealestate.blogs.realtor.org/2015/05/19/alert-wire-fraudsters-targeting-real-estate-transactions/
http://www.realtor.org/law-and-ethics/protecting-your-business-and-your-clients-from-cyberfraud
http://www.realtor.org/articles/request-to-redirect-funds-should-trigger-caution
http://www.realtor.org/topics/data-privacy-and-security
http://www.realtor.org/topics/risk-management
http://www.realtor.org/articles/internet-security-best-practices
http://www.realtor.org/topics/realtor-safety/articles

 

It’s a jungle out there so please stay safe!!!  May the force be with us…JB

 


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Prices & Mortgage Rates Going Up in 2016

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The monthly mortgage payment on a home is determined by two elements: the price of the house and the interest rate you pay on your mortgage. Recently released reports are revealing that the experts expect both elements to increase in 2016.

HOME PRICES

CoreLogic has projected a nationwide 5.2% home value appreciation for the next twelve months. Here is their breakdown by state:

Forecasted Prices | Simplifying The Market

MORTGAGE INTEREST RATES

All four of the entities that provide projections on mortgage interest rates agree: they’re going up in 2016. Here are the predictions over the next four quarters:

Interest Rates | Simplifying The Market

Bottom Line

With both home values and interest rates projected to increase over the next twelve months, buying (or moving-up), sooner rather than later, makes sense.

Source: Simplifying the market


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The Impact of Higher Interest Rates

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Last week, an article in the Washington Post discussed a new ‘threat’ homebuyers will soon be facing: higher mortgage rates. The article revealed:

“The Mortgage Bankers Association expects that rates on 30-year loans could reach 4.8 percent by the end of next year, topping 5 percent in 2017. Rates haven’t been that high since the recession.”

How can this impact the housing market?

The article reported that recent analysis from Realtor.com found that –

“…as many as 7% of people who applied for a mortgage during the first half of the year would have had trouble qualifying if rates rose by half a percentage point.”

This doesn’t necessarily mean that those buyers negatively impacted by a rate increase would not purchase a home. However, it would mean that they would either need to come up with substantially more cash for a down payment or settle for a lesser priced home.

Below is a table showing how a jump in mortgage interest rates would impact the purchasing power of a prospective buyer on a $300,000 home.

Buyers Purchasing Power | Simplifying The Market

Bottom Line

If you are considering a home purchase (either as a first time buyer or move-up buyer), purchasing sooner rather than later may make more sense from a pure financial outlook.

Source: Simplifying the market


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Distressed Property Sales Hit New Low

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The National Association of Realtors (NAR) just released their Existing Home Sales Report revealing that distressed property sales accounted for 6% of sales in October. This is down from 9% in 2014 and the lowest figure since NAR began tracking distressed sales in October 2008.

Below is a graph that shows just how far the market has come since January 2012 when distressed sales accounted for 35% of all sales.

Percentage of Distressed Property Sales | Simplifying The Market

Existing Home Sales Up Year-Over-Year

Mortgage interest rates remained below 4% in October prompting existing home sales to stay at a healthy annual pace of 5.36 million. Year-over-year sales were up 3.9%.

Inventory of homes for sale remain below the 6-month supply that is necessary for a normal market, as they fell 2.3% to a 4.8-months supply. The shortage in inventory has contributed to the median home price rising an additional 5.8% to $219,600.

NAR’s Chief Economist, Lawrence Yun had this to say about the lack of inventory:

“New and existing-home supply has struggled to improve so far this Fall, leading to few choices for buyers and no easement of the ongoing affordability concerns still prevalent in some markets.”

There is good news though, as Yun went on to say:

“As long as solid job creation continues, a gradual easing of credit standards even with moderately higher mortgage rates should support steady demand and sales continuing to rise above a year ago.”

Bottom Line

If you are debating putting your home on the market this year, now may be the time. Buyers are still out there looking for their dream home. Let’s get together to determine your best course of action.

Source: Simplifying the market


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Existing Home Sales Up 3.9% [INFOGRAPHIC]

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Existing Home Sales Up 3.9% [INFOGRAPHIC] | Simplifying The Market

Some Highlights:

  • The annual adjusted sales are currently at a 5.36 million pace.
  • 14,684 homes sell every day in the United States.
  • October marked the 44th consecutive month of price gains.

You might also enjoy reading…

Existing Home Sales Up 3.9% [INFOGRAPHIC] Simplifying the market

Source: Simplifying the market


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Millennials: What FICO Score is Needed to Buy a Home?

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In a recent article by the Wharton School of Business at the University of Pennsylvania, it was revealed that some Millennials are not looking to purchase a home simply because they don’t believe they can qualify for a mortgage.

The article quoted Jessica Lautz, the National Association of RealtorsManaging Director of Survey Research, as saying that there is a significant population that does not think they will be approved for a mortgage and doesn’t even try. The article also quoted Fannie Mae CEO Tim Mayopoulos :

“I do think that there’s a sense out there in the marketplace among borrowers that credit may not be available, especially for people with lower credit scores.”

So what credit score is necessary?

A recent survey reported that two-thirds of the respondents believe they need a very good credit score to buy a home, with 45 percent thinking a “good credit score” is over 780.

In actuality, the FICO score on closed loans (as reported by Ellie Mae) is much lower and has been dropping over the last several months.

FICO Score Requirements | Simplifying The Market

Bottom Line

If you are one of the many Millennials who are considering a home purchase you may be surprised how much the requirements for a mortgage have eased. Let’s get together to discuss your options!

Source: Simplifying the market


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Equity Matters A LOT… Just Ask Freddie Mac

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There are many reasons, both financial and non-financial, that homeownership remains an important part of the American Dream. One of the biggest reasons is the fact that it helps build family wealth. Recently, Freddie Mac wrote about the power of home equity. They explained:

“In the simplest terms, equity is the difference between how much your home is worth and how much you owe on your mortgage. You build equity by paying down your mortgage over time and through your home’s appreciation. In a nutshell, your money is working for you and contributing toward your financial future.”

They went on to show an example where a person bought a home for $150,000 with a down payment of 10% ($15K), resulting in a loan amount of $135,000. The buyer secured a 30-year fixed-rate mortgage at 4.5% with a monthly mortgage payment of $684.03 (not including taxes and insurance).

The chart below demonstrates the home equity built after 7 years of making mortgage payments and assuming the historic national average of 3% per year home appreciation:

Home Equity | Simplifying The Market

And that number continues to build as you continue to own the home.

Merrill Lynch published a report earlier this year that showed the average equity homeowners have acquired by certain ages.

Average Home Equity | Simplifying The Market

Bottom Line

Home equity is important to building wealth as a family. Referring to the first scenario above, Freddie Mac explained:

“Now, if you continued to rent, and made the same payment of $684.03 per month, you’d have zero equity and no means to build it. Building equity is a critical part of homeownership and can help you create financial stability.”

Put your housing cost to work for you and your family. Let’s get together to explore your options.

Source: Simplifying the market


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Selling Your Home? The Importance of Using a Real Estate Professional

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When a homeowner decides to sell their house, they obviously want the best possible price with the least amount of hassles. However, for the vast majority of sellers, the most important result is to actually get the home sold.

In order to accomplish all three goals, a seller should realize the importance of using a real estate professional. We realize that technology has changed the purchaser’s behavior during the home buying process. For the past three years, 92% of all buyers have used the internet in their home search according to the National Association of Realtors’ most recent Profile of Home Buyers & Sellers.

However, the report also revealed that 95% percent of buyers that used the internet when searching for a home purchased their home through either a real estate agent/broker or from a builder or builder’s agent. Only 2% purchased their home directly from a seller whom the buyer didn’t know.

Buyers search for a home online but then depend on an agent to find the actual home they will buy (53%) or negotiate the terms of the sale & price (48%) or understand the process (60%).

The plethora of information now available has resulted in an increase in the percentage of buyers that reach out to real estate professionals to “connect the dots”. This is obvious, as the percentage of overall buyers who used an agent to buy their home has steadily increased from 69% in 2001.

Bottom Line

If you are thinking of selling your home, don’t underestimate the role a real estate professional can play in the process.

Source: Simplifying the market


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Slaying Myths About Buying A Home [INFOGRAPHIC]

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Slaying Myths About Buying A Home [INFOGRAPHIC] | Simplifying The Market

Some Highlights:

  • Interest Rates are still below historic numbers.
  • 88% of property managers raised their rent in the last 12 months!
  • Credit score requirements to be approved for a mortgage continue to fall. The 723 average score is the lowest since Ellie Mae began reporting on scores in August 2011.
  • The average first-time home buyer down payment was 6% in 2015 according to NAR.

Source: Simplifying the market


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The Importance of Home Equity to a Family

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There has been much written about how dramatically home values have increased over the last several years. With the increase in values, comes an increase in the equity each home owning family now has. The Joint Center of Housing Studies at Harvard University recently reported that, after taking inflation into account, aggregate home equity has increased 60% since 2010. And home equity is the major component of most family’s overall wealth.

Why is this so important?

Throughout history, families have tapped into their homes for many important reasons. Perhaps it was to get seed capital to start a new business; perhaps to help finance their children’s college education; perhaps to get needed medical attention not covered by insurance.

Up to ten years ago, families were able to use the equity in their homes to better the living situation for themselves and their family. More small businesses were created. College students weren’t forced to take on massive student debt. People could get needed medical care.

This hasn’t been the case over the last ten years as families found themselves in a position of having zero equity or, even worse, negative equity post the housing collapse. However, that is about to change.

Using your home as an ATM is not a good idea.

We realize that there are inherent risks to tapping into the equity in your home especially if you do it for the wrong reasons. Back in 2005-2007, homeowners were using their homes as their own personal ATM machine to buy depreciating assets like cars, boats and jet skis. This reckless behavior should never be repeated.

However, using your equity (aka family wealth) to invest in yourself, your children or other family members that could use help still makes sense. And the good news is that more and more families can do this as home values continue to increase.

Bottom Line

Home equity gives families an additional financial option when money is needed. The proper use of this family wealth can be used to grow generational wealth.

As Julián Castro, U.S. Secretary of HUD, recently explained:

“Generation after generation, the primary vehicle to create wealth in our country has been through homeownership. In the U.S., homeownership has provided an opportunity for one generation to hand over to the next that opportunity and that wealth.”

Source: Simplifying the market


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