I think we must circle around the issue that rates may be in that 5.5 range for a 30 year conforming. We have lower prices, about 30+ percent below the highs in many areas. Realtors must rally around this and get the buyers to understand the opportunity. To many buyers they are still deer in the headlights. Realtors must present a case for a turning point here by the intervention in the main mortgage players, Fannie Mae and Freddie Mac.
I am not saying there are no more issues, there are, but when everything is fully resolved the market will be up 5 to 10 percent off the lows. The key to investing is to know when the ship is starting to turn around. I think there are hands on the rudder.
Point one, get a good lender. Find one that is left out of all this. There are some in every market. We have a few in ours. If you don't know, ask other agents who they are using and how they are doing. There is one big national that we all know who is in great shape and is writing mortgages in a good organized manner, Wells Fargo. However, you know your own area. Meet with them and organize a presentation, for you and the mortgage representative. Get your buyers involve in this feeling of opportunity. They will thank you for it later with referrals.
We are a national sales force of over a million strong. This sales force if motivated, can do anything. Right now we have been given the makings of a tool, available mortgages at lower rates. Slowly the market will get it on its own, but we can move it and everyone will profit by it.
Have an office meeting with the mortgage rep. if needed and prepare ads, even local papers can give it a little PR. Basically, there is a reason to call your clients and get them involved. A bit of movement could get it all going. I have been saying if rates could break 5.5 percent we would get going again. People are very rates sensitive; mortgages are up 9.5 percent already week over week with the rate changing so far. You must first believe to get anyone else to believe. You must believe what you sell.
Richard
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Your right Richard but unfortunately this will probably on be a short term blip with interest rates. I bet they will be on the rise after wall street forgets about this news. Those on the fence about buying should certainly jump in.
I'll tell you what it means to have the federal government rescue Freddie and Fannie. It means we just took another step towards socialism. Another word for what the government did is "nationalize". Either we're a capitalist society where people can take risk and fail or succeed. I hear the people who ran these two into the ground are walking away with huge golden parachutes. Not only that, now the auto industry, wants a 100 billion bail out. We can take the short term view that this will be good for our business, but remember where this money is coming from. They're printing it!
I don't think socialism, their charter was to provide a steady market for this paper. Without them there is only spot market in the institutions and banks. They had to take them over. They will not keep them forever, but they may not be the same as before.
I think the people who are responsible for these very leveraged practices and over extending credit should have some culpability here. They should not get away with dignity and money.
Richard
Jerry you are exactly right! The money has to come from somewhere and it's all going to trickle back into our tax dollars. This topic of discussion is extremely interesting. Richard i'm glad you have a different perspective than most.
The Fannie/Freddie takeover is another "Wall Street" bailout. The investment community (which owns our "democracy and our se-lected representatives" hold worthless bonds and securties, and are unwilling to take the full and indicated haircut. Their handmaidens (our govt) will purchase the junk with the three hundred odd billion dollars which We, The People(?) have been earmarked for this purpose.
Capitalism (an economic system) and democracy (a cherished political ideology) by definition and practice are incompatible and as a result, we are where we are today. We cannot hope to solve the problems we face today with the same level of thinking that created them.
I would do a back flip if rates broke 5.5%. It is promising with FHA at 6% this week.
Rick :
If the capital is available it will. I think the federal reserve will lower again very soon. Things are very wild right now.
Richard