VanEd Newslog

Identity Theft prevention, detection becomes key effort for IRS

The IRS announced that in the past week more than 200 actions in 23 states were taken as part of a crackdown on identity theft. This includes 58 arrests and 80 complaints being filed. There were an additional 150 visits paid to money services businesses designed to ensure that these entities were not knowing or unknowingly facilitating identity theft or tax refund fraud.

These actions along with auditing more than 250 check cashing operations to search for indications of identity theft will help ensure that tax payers will be better protected from fraudulent activity as it relates to tax fraud. The end result should also include some added protections for non-tax activities as well.

Read the news brief online by clicking here --> http://www.irs.gov/newsroom/article/0,,id=253147,00.html 

There is also a special section on the http://IRS.govwebsite dedicated to identity theft matters that includes YouTube videos and tips for taxpayers. 

Taxpayers looking for additional information can consult the Taxpayer Guide to Identity Theft or the IRS Identity Theft Protection page on the IRS website.

 

The most successful people in real estate choose VanEd. To learn more about the family of courses offered by VanEd, visit us online at http://www.vaned.com. And for up to the minute industry information or to receive special promotions and discount offers, connect with us online at any of our other social networks listed below!

VanEd Presents: Basic Residential Investments ~ now online

While new and emerging technology, the advent of social media and the use of services and applications change how we perform our daily tasks, real estate professionals must still be able to perform basic site analysis in order to help clients and customers determine the effectiveness of any investment in real estate.

In our updated course, Investment Real Estate 101, we will examine how to determine if an investment will meet the needs of your consumers. Buying real estate as an investment can be a sound practice but it requires research, understanding the market place and financial stability for tying up money for long term.

Students will be introduced to how these concepts are applied in analyzing real estate investments. You will learn the fundamentals of property management and what information and reporting must be reported to the owners.

Students will also be introduced to various concepts, including:

• basic factors affecting investment in real property 
• the fundamentals of property management in real estate
• methods used in choosing investment property
• Sec. 1031 Exchange Rules and methods

Don't let outdated strategies or ideas plague your business plan in the new real estate economy. Log on today to learn this timely and valuable information and to prepare yourself for future success.    >>> Click Here for more information!   You can also find this course in our 6 hour package or our Real Estate Investment 16 Hour package for Colorado Brokers.

The most successful people in real estate choose VanEd. To learn more about the family of courses offered by VanEd, visit us online at http://www.vaned.com. And for up to the minute industry information or to receive special promotions and discount offers, connect with us online at any of our other social networks listed below!

Real Estate Agents: Is Blogging Right for You?

Blogging, like social media, is a form of self-promotion that its proponents claim you must do if you’re to survive in today’s real estate market. On the other hand, the nay-sayers claim that blogging is already passé, and if you haven’t already started to blog, there’s no real sense in it at this late date.

Do I think it’s necessary to blog to survive? Absolutely not. Just as you don’t have to cold-call, door-knock, mass-mail, Twitter or Link-In. Blogging is simply another avenue to build your business; if it’s right for you, it’ll work for you. As with any other prospecting method, blogging is right for some… and not at all right for others. If it’s right for you, it truly can be a significant source of business for you; many real estate agents are finding their blog to be their most significant business source. Others, well, not so much.

It’s not hard to determine if blogging is right for you, really. Ask yourself:

• Do I like to write?
• Am I a reasonably good writer?
• Am I a decent speller and do I have a grasp of proper sentence structure?
• Am I reasonably computer-literate?
• Do I enjoy communicating with others online?
• Does the idea of sitting down several mornings (or evenings) a week to write a 300-500-word blog sound like something I’ll actually do?
• If I were asked right now to come up with four or five topics to blog about, could I?
• If I were sent out to spend a day in my favorite neighborhood, taking pictures, previewing homes, visiting the parks, shopping in the stores, eating in the restaurants—do I think I would come home with a sweet little list of interesting things I observed to write about?

Some agents simply aren’t suited to developing an online persona and that’s just fine! We all know agents who are delightful in person, but put them in front of a computer (after you’ve dragged them there kicking and screaming) and all that delightfulness quickly fades. They lose their spark and it’s obvious they’d rather be doing anything other than sitting at that keyboard.

Others tend to be far more delightful online (Brad Paisley’s song, I’m So Much Better Online, comes to mind!) than in person and can happily sit at a keyboard for hours at a time…and have to be dragged away kicking and screaming to venture out into the “real” world!

Of course, those are the two extremes and most of us fall somewhere in between. But you probably already know yourself well enough to determine if blogging is something you want to invest your time and energy in…or if that precious time and energy are better focused elsewhere. Trust that feeling.

Guest Author Jennifer Allan-Hagedorn has authored multiple books and courses designed to teach agents her Sell with Soul philosophy that centers on four interrelated principles: Respect, Competence, Confidence and Enthusiasm.  The latest release of her book is available in the VanEd bookstore. You can also visit her online at www.sellwithsoul.com or attend one of her free teleseminars on a variety of topics of interest to the real estate community.

Finance Friday: Fannie Guarantee Fees to fund Social Security tax cut

We are starting to see an increase in mortgage rates as a result of H. R. 3765, which was signed into law on December 23^rd. This bill continued the temporary cut in payroll taxes (social security or FICA payments). To help offset the cost; congress mandated that Fannie Mae and Freddie Mac increase their guarantee fee by 10 basis points (.10%) which goes directly to the US Treasury.

Because mortgages are quoted in 1/8 (.125) percent increments, the 10 basis points increase will result in a one-eighth percent rate increase. The borrower has a choice of paying the higher interest rate or a higher up front cost. The typical buydown cost to offset the 1/8% increase is of one-half point. This may not sound like much, but for a 300,000 loan the borrower can choose to pay $1500 more at closing or $25.00 more each month.

To fully understand this fee, we need to look at how mortgage instruments are priced in the bond market. Fannie Mae and Freddie Mac put together pools of mortgages and trade them in the bond market. The typical mortgage backed security (MBS) is traded in one-half percent increments. Today's yield on a Fannie Mae security is 3.5%, which means an investor who purchases a $1,000,000 bond will earn $350,000 annually.

The process starts by the mortgage broker providing a 4.0% mortgage for their customer.  This loan is sold to a mortgage servicing company, which charges a servicing fee between .25% and .375%. The servicing company will deliver the loan to Fannie Mae to put into a large pool of loans, called a Mortgage Backed Security. Fannie Mae funds their operation (yes, Fannie Mae is supposed to make a profit) by charging a guarantee fee of about .20%. On a typical $300,000 loan at 4.0%, the borrower pays monthly interest of $1,000. Out of this $1,000, the servicing company will make approximately $75.00 per month, Fannie Mae will make about $50.00, and the investor will make about $875.00.

The increase in the guarantee fee means Fannie Mae will now collect an additional $25.00 (for a $300,000 loan) each month to pass on to the federal government. For 2012 analysts predict the total mortgage volume to be about one trillion dollars, half of which will flow through Fannie Mae and Freddie Mac. Guarantee fees will be approximately $1.5 billion, of which he treasury will receive about $500,000,000. Since these fees are in place for the life of the loan, this will be a good source of revenue for many years to come. In four or five years, the total Fannie Mae and Freddie Mac loan volume subject to this new fee could total $5 trillion, which will add $5 billion annual to the government coffers.

Currently these fees are only charged on Fannie Mae and Freddie Mac loans and don’t affect FHA loans. However, the bill allows the FHA to increase the Mortgage Insurance Premium (MIP) so don’t be surprised if we see increases soon.

Guest Author Randy Kelly is a Mortgage Banker and Finance Author with Peoples Mortgage. You can reach him online anytime by clicking here.

Appraiser Qualifications Board (AQB) adopts changes to Licensing Qualification Criteria

While normally three years notice of changes wouldn't be cause for urgency, the recent adoption of the Real Property Appraiser Qualification Criteria may create just that for those who are thinking of upgrading their license or their level of authority. Granted you will have until January 1st, 2015 before the changes to the Criteria go into effect, but if you are a trainee and are working towards becoming a Certified General, take notice.

At it's December meeting the Appraiser Qualifications Board, or AQB, approved changes that will affect background checks (implemented and recommended at all levels), require additional trainee level coursework (supervisors get more education as well) and the education side of the criteria as college courses will now need to be reviewed by the AQB in order to be permitted. Other changes to the education profile include rules governing continuing education courses and new available CE topics. The new qualification summary can be found here: Download AQB Summary of Changes 2015 

VanEd suggests that if you are planning on relocating or changing credential status after January 1st, 2015 you verify with your state agency the rules and regulations you will be required to comply with. Keep in mind that most states will not have updated their own rules or regulations until sometime later in 2012 in order to maintain compliance with the AQB's rules. It is also important to note that State Regulatory Agencies may determine that they will implement the criteria prior to the January 1st, 2015 deadline set for implementation by the AQB.

The most successful people in real estate choose VanEd. To learn more about the family of courses offered by VanEd, visit us online at http://www.vaned.com. And for up to the minute industry information or to receive special promotions and discount offers, connect with us online at any of our other social networks listed below!

New Agents - More About Making Floor Time Work For You

So, you’re sitting on floor duty and a potential buyer walks in the door and ends up sitting across the conference room table from you. What’s next?

Well, some would have you whipping out your Buyer Questionnaire and interviewing your buyer prospect as to exactly what he’s looking for in what time-frame at what price range and oh, yeah, if he’s approved for a loan and oh, yeah some more, here’s an exclusive buyer agency agreement that requires your signature.

I disagree with this approach.

Calm down. Breathe. This person is a guest in your office, so be polite and make him feel welcome. Warmly introduce yourself. Offer some coffee or water. Once you’re comfortably settled in, just make conversation with him as you would with anyone you were having a conversation with!

Calmly ask what sort of home he’s looking for. Take notes if you like, but it’s not necessary at this point. Let him talk. Ask questions from time to time, but no interrogation or formal questionnaire, please. There’s plenty of time (or not) for that later. Right now your goal is to build rapport and trust, and, soon, to demonstrate your expertise. Rapport and trust are best built through listening, not talking!

Here’s all you really need to know during this first conversation:

1. What sort of property he’s looking for
2. What type of neighborhood he’s interested in
3. If he has a price range in mind
4. What his general time frame is
5. If there is any very specific must-have on his list (e.g., school district, RV parking, non-restrictive zoning)

You don’t need to ask exactly how many bedrooms and bathrooms he wants. Whether or not he needs a garage. What his minimum square footage requirements are. Not even whether or not he’s spoken to a lender.

Again, there’s plenty of time for that. Don’t chase him off at this early stage before he’s grown to like and trust you.

Buyer Questionnaire?

So after you’ve built a little rapport and the buyer seems to want to move forward, is now the time to whip out the Buyer Questionnaire?

No. Frankly, I’m not a fan of buyer questionnaires at all. I believe you can discover everything you need to know about a buyer from having a regular conversation with him. The problem with questionnaires aside from the fact that you don’t need them is that they’re way too comprehensive.

Huh? What do you mean, “too” comprehensive?

Most people don’t buy houses very often, so they don’t really know what they want aside from a very few Must-Have criteria (and even those are subject to change). Believe it or not, it can be counterproductive to attempt to nail down exactly what a buyer is looking for because he doesn’t know! But if you force him to answer your questions, he might make up answers just to please you.

Why is that a problem? Well, you might end up ruling out homes that the buyer would have liked but that didn’t quite fit what he said he wanted during your interview. Another possibility is that you create expectations in your buyer’s mind that you can’t possibly fulfill given his price range or location preferences.

So, try tossing the Buyer Questionnaire out the window and just having conversations with your buyer prospects. I think you’ll find this approach to be a far more productive way to build rapport and get to the next step – showing houses to your new buyer client!

Guest Author Jennifer Allan-Hagedorn has authored multiple books and courses designed to teach agents her Sell with Soul philosophy that centers on four interrelated principles: Respect, Competence, Confidence and Enthusiasm.  The latest release of her book is available in the VanEd bookstore. You can also visit her online at www.sellwithsoul.com or attend one of her free teleseminars on a variety of topics of interest to the real estate community.

Finance Friday: (Rewind) Will the housing market recover?

Most people are looking for security in their lives, and I don't mean security from the "terrorists". People are looking for job security, income security, health security, and financial security. Contrary to the beliefs of some politicians, most people don't want to be entrepreneurs (after all 50% of small businesses fail in the first five years). Most people would rather have a stable job with a decent salary and decent benefits.

Unfortunately, people don't have security in any of these areas. With the real unemployment rate running close to 15%, many people are worried about loosing their job. With the under-employment rate (working at a job below ones skills or training) close to 20%, there is very little income security. Workers are reluctant to ask for a raise with so many people wanting to take their job. There is very little health security. Most health insurance is tied to the job, so if you are worried about your job, you are worried about your health insurance. Also, premiums and deductibles have risen dramatically in the last few years, so a major illness may also be a financial nightmare even with insurance.  People have very little financial security, having seen declines in their home values, their retirement accounts, and their mutual funds. Many people are concerned they won't be able to retire as planned.  Can you say Wal-Mart greeter?

In the past, most people expected small annual increases in their pay that would at least keep up with the cost of living. Homes generally increased in value about the same as the rate of inflation. If you lost a job or got transferred, you could sell their house and bank the equity.

This is no longer the case. If you owe more on your house than it is worth, a major illness, a job loss or a job tranfer may also result in a foreclosure. Instead of being an asset, a home may now be a dead weight that could cause financial ruin. The obvious choice for most people is to rent, at least until they regain some security in their lives. So, if we are waiting for the real estate market to lead the recovery, we may have a long wait. I don't believe the real estate market will recover until the economy recovers.

Guest Author Randy Kelly is a Mortgage Banker and Finance Author with Peoples Mortgage. You can reach him online anytime by clicking here.

What we're reading: Top Posts from around the Industry

This is a sample of the articles, posts and videos that made their way onto our computers (and that we found interesting or informative) this week.

Inman Next posted this video of Chris Smith at an Agent Reboot. Our favorite find during the presentation of 20 Mobile Tools that will make you Stand Out (besides the passion Chris shows for his iPad and all of the potential uses for real estate professionals, of course) has to be the CalcMoolator app.  http://next.inman.com/2011/10/20-mobile-tools-that-will-make-you-stand-out/

HUD Secretary Shaun Donovan announced Wednesday that White House officials and state attorney's general are close to a settlement over the "robo-signing" foreclosure issue. Housing markets and borrowers will be thankful to get that behind them. Now we can get back to processing foreclosures the right way. And let's not forget that perhaps as many as a million borrowers will be eligible for some sort of write-down on their mortgages.  http://www.marketwatch.com/story/robo-signing-settlement-close-reports-2012-01-18?reflink=MW_news_stmp

The fact that Fannie Mae sees a 3.5% increase in home sales in 2012 isn't what caught our eyes. Instead we noticed that total loan originations would be down to $1.01 trillion from and estimated $1.36 trillion in 2011. Consider the projected 40% drop in refinance money an added bonus.  http://www.housingwire.com/2012/01/13/fannie-mae-economists-see-2012-home-sales-up-3-5-to-4-72-million

Adding value and ROI for Green features has been nothing short of ... well ... difficult when it comes to getting the appraisal completed. New moves from industry groups should help in the expansion of Green valuation, and as one of his 10 Predictions for Green building in 2012Sean Penrith says home buyers and home sellers asking for Green appraisers will help. http://www.sustainablebusinessoregon.com/columns/2012/01/ten-predictions-for-green-building-in.html

For up to the minute industry information or to receive special promotions and discount offers connect with us online at any of our other social networks listed below!

VanEd Presents: Kentucky continuing education online

VanEd is proud to be offering our line of Continuing Education courses for Kentucky real estate agents. The courses offer a wide variety and complete education package necessary for license renewal. Kentucky licensees now have access to the highest quality online real estate continuing education available anywhere.

Click Here to learn more about the courses and packages available to Kentucky real estate professionals, and find out why the most successful real estate agents in the industry choose VanEd.

Attention Brokers! Did you know that VanEd offers a Free subscription program that offers discounts and compliance and regulatory verification for Managing Brokers? Learn more online at http://www.VanEd.com/Affiliates.

Van Education Center is the trusted source of online real estate and appraisal education, offering programs in more than forty states with access to more than twenty professional designations and a growing list of professional development courses and programs. And now with the addition of Continuing Education in Kentucky, VanEd offers a full line of Kentucky products and services, including appraisal and continuing education courses and classes.

Visit http://www.vaned.com to learn more about all of our available programs, including Pre-License, Continuing Education and even Professional Development courses for real estate professionals.

How to Talk Your Bottom-Feeding Buyer Out of Low-Balling

So, you have a Bottom Feeding Buyer (BFB) who is bound and determined to get a killer deal on some real estate, huh? He’s heard-tell of this here “buyer’s market” and wants to get himself a piece of that action. Even if it takes all year…

Sigh.

We’ve all been there. Worked with BFBs who, in our opinions, were unrealistic about the extent of this here buyer’s market and the depths to which sellers are willing to go to offload their properties. They’ve listened to late-night seminars or their Uncle Charlie who provided “expert” advice on how to properly offer on a property (asking price MINUS repairs needed MINUS profit desired MINUS margin for risk MINUS 25%-for-good-measure) without regard for whether or not the asking price is reasonable or not.

BFBs want a deal. And they want you to help them get a deal.

So, you find your BFB exactly what he says he’s looking for. A well-priced home in a good location that needs just the right amount of work to satisfy his need for adding value with cosmetic upgrades.

Yay, sez you! Yay, sez your BFB!

You head for the offer table and the BFB wants to offer low. Really low. Obnoxiously low. Ridiculously low. Unreasonably low. (I’ll stop now, you get my drift).

What do you do?

Write ‘er up.

Yep, write it up as per the instructions of your client. No fussing, no arguing, no defending the asking price. If your BFB wants to your opinion of what to offer, he’ll ask for it. Not to say you can’t provide market data if he seems at all interested, but in most cases, especially early on, a BFB won’t be. He wants a deal and he’s certainly entitled to go after it.

Why shouldn’t you try to talk him out of low-balling?

• The buyer is the boss. It’s his money and he has the right to spend it (or not) the way he sees fit.

• You never know what the seller will accept. If you tried to talk your BFB “up” and the seller accepts his low offer, you’re toast in the credibility department.

• The BFB hired you to be on his team. His wants are your wants. His preferences, your preferences.

• If you argue with your BFB over offer price, he’ll wonder if you’re in cahoots with the seller or listing agent, again, jeopardizing your credibility.

Of course, it’s up to you to decide if you want to continue working with the Bottom-Feeding Buyer. You are certainly entitled to end the relationship if it’s not satisfying to you, just as he’s entitled to make whatever ridiculous, unreasonable, obnoxious offer he wants to. But if you agree to help your BFB achieve his goal of acquiring some real estate at a steep discount, don’t waste your own emotional energy and risk your credibility by arguing with him over his approach!

Guest Author Jennifer Allan-Hagedorn has authored multiple books and courses designed to teach agents her Sell with Soul philosophy that centers on four interrelated principles: Respect, Competence, Confidence and Enthusiasm.  The latest release of her book is available in the VanEd bookstore. You can also visit her online at www.sellwithsoul.com or attend one of her free teleseminars on a variety of topics of interest to the real estate community.