Bill Barnett NOW

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Real Estate NOW! with Bill Barnett - July 24, 2011 Seg. 1

  Broadcast in Real Estate

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Transcript

0:00
Bill Barnett

Welcome in the Hot Talk 5:60 AM. It is Sunday morning you are listening to Real State now with Bill Barnett, glad you are part of our audience today. You know this is the show about success, your world, your wealth, your success. This is where you come to get the information so that you can sift through all that well, misinformation, disinformation, sheer glut of the information that happens on main stream media about the real state market and this is where you want to be helped sift through that so that you can make the right investing decisions for yourself. Now, when you are getting all that glut of information, one of the things is that you have to learn how to do. Well quite frankly, you should just have to learn how to ignore some real state market reports so that you can focus on your market, so you can focus on your house, your subdivision right where you are. Now, it does not happen very often, but we are going to be doing something today to help us all improve our attitude about the economy. Now, it is hard to find something that I can share with you. This is going help improve your attitude about the economy, but it is not as bad as we have been led to believe that it is and here is a few numbers that backed that up and you see why I get joyful and excited about these things happening. I was ready to just stop a few months ago just reading housing reports altogether and just focus on the properties that I am selling. We have investment property and we just paid in different markets so this uptake in the attitude for the economy is a big step because what it means is that I am going have to quit complaining and worrying about the big piece of the real state market and just focus on the things that I can control and handle.

2:00
Bill Barnett

The secret is to focus on this year's numbers not to read or hear the comparison to last year projections for next year because you know quite frankly - and look we share a lot of the stuff with you here, but quite frankly those things just do not matter because it is not last year and it is not next year, it is right now. So, in the sense of your report last month that the seasonally adjusted annual sales for new home construction started about 319,000 houses, that is for May as of through May, so what does that mean? Is that good news? Is that bad news? Is that great news? Well, we cannot really tell without comparing them to last year's number as quite likely you all hear from some people say and that really just leads to more and more issues. When it comes to real state now, we have to live in the moment. Next year projections are not going to make your house payments, are not going to make you summer vacation paid for, are not going to put profit in your property from an investment stand point. Last year's numbers can do anything, but cause hardening of the attitude as zigzag or has said many times. And quite frankly, next year's numbers can be discouraging because most of the numbers that we see in this national report, you just said there are national numbers. So, let us say, there is a new real state agent out there and is going to be averaging about one transaction out of every 10 prospects and who comes in and actually registers with their office and so if 319,000 new homes are being sold for 2011, that equation means that about 3.19 million people will shop for new homes this year and I do not know what the sales, number of sales appointments to an actual close is for most real state agents, but that would be very discouraging.

4:00
Bill Barnett

Because if there are only going to be 319,000 sales, there are substantially more real state agents than that according to the National Association of Realtors so they would get really freaked out now. Here is what you have to look at when you look at that that is a new home sales. That is a scant piece of the market when it is compared to existing home sales and by the way the number for National Association of Realtors is that there are about one million realtors around the country so that means a whole lot of them would be going hungry. Okay, so if you start finding yourself in a conversation about the economy, look at the things that you can control, what is it that you can control? You can control, am I marketing my property and am I doing everything I possibly can if I got a house for sale to market it. This is one of the single most frustrating things that I ran across because when I talk to folks on a regular basis and all our dream house is not selling okay, well, have you done this? Have you done this? and - are you in craigslist, are you on eBay? Have you done those two things? Well, no, is there any in the list? Well, yes there is any in my list. Are you running newspaper ads? Well, I read a couple; I did get many calls so I did not run those anymore. Are you running small paper ads? and you start going through - are you on Point 2? Are you on FM and you start going to this litany of marketing and advertising to do for a property and well - no, I have not done all of that. Well, if you have not done all of that then quit fussing, quit complaining. Another thing that I got a person I was talking to just complaining about their house not selling and they sent me a comparison property and said this is our competition and I looked at it and it is over roughly 800 feet difference in size. It is in a different neighborhood.

6:00
Bill Barnett

Their house is drop dead gorgeous and has been thoroughly updated top to bottom. The house, they are comparing it to - it needs updating. It is a pretty house, do not kid yourself. It is a pretty house, but it needs updating. It has got wallpaper all over. It has got Corian countertops so it is 800 feet smaller. It needs updating. It is not in the same neighborhood. It is on last - it is all about eight tenths of an acre. Their house is on over 2 acres and yet this other house is $200,000 or it is roughly $100,000 cheaper than what they are selling their house for and it is like you are not comparing apples to apples. This house would not remotely comp with your property so why in the world would you care. So, when you are getting information, make sure that you are getting the right information and make sure you are comparing apples to apples, so you can control your attitude because in your business that is a thing that is crucial to your business. Is that your attitude is where it should be. Now, attitude of builders around the country is starting to improve. Recently, from The Associated Press show that home builders in June had a little uptake. Prospects for home construction are not looking good. They just had a little bit of an uptake and in index of builders' outlook for the industry rose two points. Okay all you need now that is one up. I do not know how much two points is in that particular outlook or in that index, but it went up two points, which means it was an uptake. National Association of Home Builders said that builders' sentiment is barely above the lowest it has been since they started doing this. Now, they only started doing this in January of 2009 so when you look at builders where they were in January of 2009, where they are today.

7:59
Bill Barnett

There has been a lot of change about anything that would make them excited, but they started this mile a little bit cash strap builders are struggling in mid foreclosures and short sales when lenders allowed borrowers to sell homes for less and what is all on the mortgage that is the short sales side of it lower than expected home appraisals are starting to straddle deals across the board and man - this is something that you are going to fight, we fight it every day it is incredibly frustrating that what is going on in the appraisal market because when the federal government got involved and so did like they do it again and everything else. They have screwed up the appraisal market and you have got appraisers pulling comp scene that have no business being in a comparison with the property that you are selling because they may not be a like condition. They may not be in a comparable radius. They may be over six months old from a sale stand point. There is just a lot of property we see on appraisals in and out on a regular basis that should not be allowed in the appraisal, but try to go back and talking to the appraisers. It is pretty tough to do when you do it so you got to stay on top of this stuff because if you do not, it is your checkbook and your profit margin that is going to go down on that. Now, so what the new home builders are saying is basically the market continues to kind of balance along the bottom with conditions and some locations beginning to improve and that is according to David Crowe and he is the chief economist for the trade group for the National Association of Home Builders and so David seeing just this balance on the bottom, but what we are starting to see is activity increasing. Now, this is not going to help the new home builder. I am not talking about new home activity. I am just talking about the number of transactions that are happening in the market place is picking up on a regular basis. That is helpful for you and me because what happens there, activity increases first, then we start to see price increases. Now, when we come back from the break, we are going to get in to a story that I previewed last week and said that we will be doing here this week and it is the secret to getting a mortgage with so-so credit.

10:00
Bill Barnett

So join us right after the break for how to get a mortgage if you got so-so credit.

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