Mortgage Rates Mostly Flat This Week

Mortgage Rates Mostly Flat This Week

Mortgage rates mostly held steady this week after posting a sizable jump last week.

“Following a strong surge last week, rates held relatively flat this week,” says Sean Becketti, Freddie Mac’s chief economist. “The 30-year mortgage rate remained unchanged at 3.94 percent, while the 10-year Treasury yield dipped roughly 4 basis points. The markets’ reaction to the upcoming announcement of the next Fed chair may impact the movement of rates in next week’s survey.”

Freddie mac reports the following national averages with mortgage rates for the week ending Nov. 2:

• 30-year fixed-rate mortgages; averaged 3.94 percent, with an average 0.5 point, the same average as last week. Last year at this time, 30-year rates averaged 3.54 percent.
• 15-year fixed-rate mortgages: averaged 3.27 percent this week, with an average 0.5 point, rising from last week’s 3.25 percent average. A year ago, 15-year rates averaged 2.84 percent.
• 5-year hybrid adjustable-rate mortgages: averaged 3.23 percent, with an average 0.5 point, rising from last week’s 3.21 percent average. A year ago, 5-year ARMs averaged 2.87 percent.

Source: Freddie Mac

Tax Reform Bill Would Cap MID for New Mortgages

Tax Reform Bill Would Cap MID for New Mortgages

The Republican leadership in the House has released its long-awaited bill to reform the nation’s tax code, and it raises significant concerns for middle-class homeowners because of limits on the mortgage interest deduction and the deductions for property taxes and state and local taxes.

“This legislation closely tracks with the House Republican blueprint for tax reform released this spring, which threatens home values and takes money straight from the pockets of middle income homeowners,” said NAR President William E. Brown. “REALTORS^® believe in the promise of lower tax rates, but this bill is nowhere near as good a deal as the one middle-class homeowners get under current law. Tax hikes and falling home prices are a one-two punch that homeowners simply can’t afford.”

Based on a preliminary look at a summary of the bill, the MID cap would not affect current homeowners, but people who would become homeowners later would only be able to claim the MID ot the extent the mortgage on their primary residence is $500,000 or less. The current limit is $1 million.

In another provision, hurdles would be added to the capital gains exclusion most home sellers can take on the sale of their principal residence. Currently, the limit is $500,000 for a married couple filing jointly. The bill would eliminate the deduction for state and local income taxes. And while taxpayers would continue to have the option to deduct their property taxes, the deduction would be capped at $10,000.

Tax brackets consolidated

The bill, called the “Tax Cuts and Jobs Act,” would consolidate today’s seven tax brackets into four: A top rate of 39.6 percent for the highest earners, which is unchanged from the current top rate, and three other brackets with rates of 12, 25, and 35 percent.

In addition, the standard deduction would be almost doubled, to $24,000 for a married couple filing jointly, and half this amount for single filers. However, the personal exemption and exemptions for dependents would be folded into that higher deduction, negating most of its benefits, especially for larger families.

For businesses, the framework calls for lowering the top corporate rate to 20 percent from 35 percent. It would lower the top tax rate for so-called “pass-through entities” to 25 percent. Pass-through entities are taxed through the individual code and include limited liability companies, S corporations, and partnerships such as law firms and investment groups. Rules are included to limit who would get the 25 percent pass-through rate. Other provisions would affect expensing of some depreciable business assets and the deductibility of interest on business loans for corporations.

Changes to the bill could be made before it’s formally taken up in the House Ways and Means Committee, which is expected to happen on Monday. Senate consideration could soon follow.

—source REALTOR® Magazine

Seller Negotiation Tactics That Can Backfire

Seller Negotiation Tactics That Can Backfire

Homeowners should not become overconfident in a seller’s market, or they might end up sabotaging their sale. Realtor.com® recently featured common home seller negotiation tactics that can backfire, including:

Starting a bidding war.

“If mishandled, people may assume the worst, and the best offer may walk away,” Sep Niakan, broker-owner at HB Roswell Realty in Miami, told realtor.com®. For example, bidding war problems can surface when failing to clearly explain up front how you intend to handle multiple offers or when you give an offer deadline that is too many days away (some buyers may just move on).

Arguing over repairs.

Buyers may walk if sellers refuse to make repairs that turn up during a home inspection. The seller needs to carefully consider how good the offer is before refusing to make repairs, says Lucas Machado, president of House Heroes in Miami. “When the buyer’s offer is high, and the seller tries to negotiate away from legitimate repairs, the buyer may feel the seller is taking advantage of them,” he says.

Staying adamant about the closing date. 

Sellers may be trying to make the closing date so it perfectly aligns when they move into their new home. But buyers have scheduling issues of their own, too. “Sellers need to understand that they may have to move twice, since buyer and seller schedules seldom work out perfectly,” says John Powell, chief development officer at Help-U-Sell Real Estate in Tucson, Ariz.

Getting greedy over fixtures.

Fixture feuds are common ones. Sellers and their real estate agents need to carefully review before they list their home on what stays and what goes with the home. The buyer might “get so upset that a fixture they fell in love with is now missing that they won’t buy the home,” says Michael Hottman, associate broker at Keller Williams Richmond West in Richmond, Va. Replace anything valuable to sellers that won’t be staying with the house before showing it, or be willing to negotiate a comparable replacement. Read more: Fixture Feuds

Read more negotiation tactics that could sabotage a deal.

Source: “Hardball Fouls: 6 Home-Selling Negotiation Strategies That Can Backfire,” realtor.com® (Nov. 1, 2017)

5 Horrors at Home Showings

5 Horrors at Home Showings

From the artwork to the odor, your listing may be inadvertently giving buyers the creeps. Realtor.com® recently interviewed real estate professionals about the items that have scared off their buyers the most during showings. Here are the top five spooks.

1. Doors with too many locks. If the doors have more than the standard two locks, your buyer may wonder if something happened on the premises to make the seller feel unsafe, says Glenn Phillips, CEO of Lake Homes Realty in Birmingham, Ala. “Given a choice, most people won’t buy in places they think are unsafe,” he says.
2. Taxidermy. A single deer head may pass muster in some areas, but taxidermy runs the risk of making some buyers uncomfortable. “One house I helped stage had a stuffed bighorn sheep in the dining room and a stuffed bear in the family room,” says Amy Bly of Great Impressions Home Staging/Interiors in Montville, N.J.
3. Questionable art choices. Any artwork displayed should be neutral and carry no risk of offending or confusing potential buyers. Jeff Miller, cofounder of AE Home Group in Baltimore, recalls a seller who was obsessed with feet and displayed framed paintings and sculptures of feet—and even keychains with feet on them. “I told the seller to get their feet out of the picture,” Miller says.
4. Obvious DIY repairs. Amateur repair work that’s left half done can prove to be a big turnoff to buyers. “I once encountered a little house of horrors that actually had caution tape across a very outdated bathroom with a hole in the floor,” Bly told realtor.com®. The home also had “dark rooms with lights that didn’t work, as well as nonfunctioning appliances in the kitchen.”
5. Odd smells. Pet odors, mold, or musty smells can also give buyers the creeps. “Almost every home has a unique smell, and the owners rarely realize it,” says Jerry Koller, a sales associate with International Home Realty in Irvine, Calif. “Of course, it’s smart to try remedies such as Febreze or candles. But sometimes, you just need to replace carpet before putting your house on the market.”

Source: “8 Frightening Things in Sellers’ Homes That Can Scare Buyers Silly,” realtor.com® (Oct. 17, 2017)

When to Drop Your Listing Price

When to Drop Your Listing Price

Though low inventory is prompting buyers to raise their offers in order to beat out competitors, you still want your sellers to know: an overpriced listing will linger on the market. Buyers pay attention to time on market and may erroneously assume something is wrong with a property that has gone “stale.” Real estate pros say it’s critical to determine what time frame is considered stale in your market and drop the price of your listing before getting to that pivotal moment.

“I typically drop the price after the second week on the market, usually in $5,000 to $10,000 increments,” says Laura Barnett, CRS, GRI, a sales associate with RE/MAX DFW Associates in Coppell, Texas. “But I may be more aggressive than most.” Price cuts in the hot Dallas-area market, where Barnett works, haven’t been common lately, she says. But “there is a strange change that is in the air, and sellers are starting to have to become more humble. I would not say it is a buyer’s market, but a new balance between buyers and sellers has been hitting us since August.”

Soaring home prices may make buyers pause, but houses are still selling fast. Nationwide, the average time a home spent on the market was 34 days in September, down from 39 days a year prior, according to the National Association of REALTORS®. Some sellers may be adamant about “testing the market” with a high asking price, so you should have a game plan for what to do if it backfires. “I don’t believe in testing the market, but if we enter the market [with a list price] pushing the top of the range, we can easily gauge response within seven to 10 days,” says Dana Rice, a sales associate with Compass in Washington, D.C. “It’s almost a certainty that if we don’t get an offer within that first 10-day period, then we’ve missed the mark.”

Rice says she’s seen sellers do a rapid price adjustment that can then result in a quicker sale. You can “bring those same buyers back—the ones who liked the property in the first place and who will view the price adjustment as ‘the seller is listening to me,’” she says.

Source: “How to Know When to Drop the Asking Price on Your Home,” CNBC (Oct. 27, 2017)

Protect Your Email From Latest Hacking Trend

Protect Your Email From Latest Hacking Trend

Many real estate professionals have become keenly aware of targeted wire fraud scams that include email impersonation tactics. A growing avenue cyber criminals are using to get highly sensitive financial data is known as spear phishing, according to Asaf Cidon, vice president of content security for Barracuda Networks, a data protection company.

Spear phishing is a highly targeted and researched personal attack that is difficult to detect. Hackers might not use a malicious link or attachment, but will instead use nonalarming messages—sometimes impersonating another individual—in order to trick users into thinking the sender is safe so they offer up confidential information. This could be in the form of wire transfer instructions or other financial data.

With the FBI estimating that $5 billion has been lost from fraudulent wire transfers and other spear phishing attacks, the threat is becoming more sophisticated against the real estate industry. “It’s extremely easy to fall for this type of attack, especially under the pressure of closing a purchase of a property,” Cidon says.

Here are three ways to fight these threats against your real estate company.

Training and education. Helping your agents understand the threat of spear phishing is a great first step to ensure security, Cidon says. “The best training tools allow IT to simulate real attacks, impersonating executives in the company to test the security awareness of employees,” he says. Ensure that your staff and agents know that any financial transactions must be verified with a phone call or in-person conversation, not just email. Plus, when the people in your office are aware and know how to identify signs of a possible attack, everyone is safer.

Email security. Hackers target real estate pros and their clients by “spoofing” someone’s email address so the recipient thinks it’s legitimate because it looks the same. Domain-based Message Authentication Reporting and Conformance is an email authentication, policy, and reporting protocol, Cidon says, that can help protect a domain from fraudulent email. Talk to an IT professional about setup so you can ensure no one else can send emails from your domain.

AI Technology. “New AI-based technologies can automatically learn your organization’s unique communication,” Cidon says. These artificial intelligence systems monitor your email and will alert you to signs of abnormal attributes in the metadata and content of incoming messages.

Barracuda Networks also suggests free tools that can scan Office 365 accounts for advanced threats to determine your risk level. “Unfortunately, spear phishing carries a very significant risk, so it is well worth taking necessary steps to make sure you’re doing everything you can to keep your clients and organization safe,” Cidon says.

Source: Asaf Cidon, Barracuda Networks