The Real Estate Zone - Radio Show

Real Estate Zone

2012-03-26T12:49:16Z

The "Law Dogs" are in the House.

2012-01-08T16:33:23Z

Attorneys John Hay and Brad Compere discuss real estate law

The Real Estate ZOne

2011-11-17T18:44:07Z

The Real Estate Zone talks to the Owners of Sett Studio

2011-09-22T12:56:23Z

The Real Estate Zone talks to the Owners of Sett Studio - Mike Speciale and James Shieh about solutions for urban living.

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How does your credit score effect your cash flow?

2011-07-18T21:11:07Z

John and his special guest Carl Stanley with Rising Point Solutions discuss credit repair and tips and tricks to keep your score the highest it can be.

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Is Austin Becoming a "Destination" City? What does it mean to Real Estate?

2011-07-18T20:59:54Z

Is Austin Becoming a "Destination" City? What does it mean to Real Estate?

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Current state of Real Estate in Austin Texas

2011-07-11T15:56:22Z

John McClellan talks about the current state of Real Estate in Austin Texas

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Single Family Homes vs Multifamily as an investment

2011-06-27T16:17:21Z

Real Estate Investing

The Real Estate Zone June 10 2011

2011-06-27T15:56:18Z

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The Real Estate Zone June 18 2011

2011-06-27T15:34:57Z

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The Real Estate Zone June 8, 2011

2011-06-27T15:09:21Z

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The "Real Estate Zone" May 28, 2011

2011-06-27T15:01:58Z

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The Real Estate Zone with John McClellan and Kevin Bown - Is QE2 cause to worry about inflation?

2010-10-20T16:18:00Z

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The Real Estate Zone with John McClellan and Kevin Bown - where are mortgage rates headed?

2010-10-20T16:10:00Z

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The Real Estate Zone with John McClellan and Kevin Bown - Shadow Inventory

2010-10-20T16:02:00Z

The Real estate zone

Austin Real Estate Daily

2010-07-18T19:35:00Z

John and Jason discuss Texas Real Estate.
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Listen Learn Lend Philosophy

2010-07-08T18:13:00Z

John McClellan talks about his "listen Learn Lend" philosophy.
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The Real Estate Zone - Short Sales and TDHC bond 77

2010-07-02T17:22:00Z

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The Real Estate Zone with John McClellan and Kevin Bown - Bond 77 Down payment assistance program

2010-06-18T13:34:00Z

John and Kevin discuss Bond 77 and current market trends. ... ...

The Real Estate Zone with John McClellan and Kevin Bown - Interview with Eric Pike of the TDHCA "Bond 77"

2010-05-26T00:35:00Z

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The Real Estate Zone May 16, 2010

2010-05-18T17:28:00Z

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The Real Estate Zone with John McClellan and Kevin Bown - How to fight your Property Tax Appraisal and what do PIIGS and Mortgage Rates have to do with each other.

2010-05-09T21:10:00Z

Fighting Property Tax Appraisals / PIIGS and Mortgage Rates.

"The Real Estate Zone" with John McClellan and Kevin Bown

2010-05-09T21:02:00Z

The Real Estate Zone with John McClellan and Kevin Bown

2010-05-08T20:30:00Z

The Real Estate Zone with John McClellan and Kevin Bown

2010-05-08T20:17:00Z

The Real Estate Zone

2010-03-29T20:51:00Z

The Real Estate Zone

2010-01-22T18:01:00Z

Incentives - who's buying Real Estate - Why and Where

2009-11-16T20:55:00Z

Incentives - who's buying Real Estate - Why and Where...John McClellan & Kevin Bown take an indepth look at who's buying real estate and where.

First time home buyer incentives....part two

2009-08-24T18:00:00Z

First time homebuyer incentives....

2009-08-24T15:49:00Z

Central Texas Real Estate and Elvis? Part two...

2009-08-22T16:58:00Z

Central Texas Real Estate and Elvis?

2009-08-22T16:47:00Z

Live at Uncle Billy's on Barton Springs Rd - Barton Place Condos - Special guest Rick Engel

2009-05-04T19:39:00Z

John & Kevin discuss ...What the heck is up with the Austin Real Estate market!! (2nd Hour)

2009-03-11T18:02:00Z

John & Kevin discuss ...What the heck is up with the Austin Real Estate market!!

2009-03-10T20:00:00Z

John & Kevin talk with local restaurateur and developer Rick Engel (2nd hour)

2009-03-09T20:26:00Z

John & Kevin talk with local restaurateur and developer Rick Engel

2009-03-09T20:23:00Z

Real Estate 101 Radio Show with John McClellan

2009-02-10T20:04:29Z

David Klien talks about 20/20 Congress Condos

2009-02-10T19:39:00Z

John & Kevin talk to special guest David Klien about the condo conversions

2009-02-09T13:57:00Z

John & Kevin discuss private funding alternatives for residential real estate

2009-02-09T13:31:00Z

John & Kevin discuss private funding alternatives for commercial real estate

2009-02-09T13:22:00Z

2009 - What to expect in the housing market and which strategies to use (part 2)

2009-01-29T19:18:00Z

2009 - What to expect in the housing market and which strategies to use

2009-01-29T19:06:00Z

John McClellan and Kevin Bown discuss the impact 2008 had on the housing market

2009-01-29T18:56:00Z

Two guys talking Central Texas Real Estate

2008-12-23T15:00:00Z

John & Kevin discuss Central Texas Real Estate - Special Guest Chris Dodd with Buffington Texas Classic Homes

2008-12-17T17:30:00Z

John & Kevin Discuss how the market is segmenting and why this is happening

2008-12-10T20:19:00Z

How will the election influence Real Estate demand and prices?

2008-11-03T17:30:00Z

Why is the Central Texas housing market segmenting into three separate categories?

2008-11-03T17:04:00Z

John and Kevin discuss the Central Texas housing market and how it has segmented into 3 separate catagories

Special Guest Terry Toomey discusses her new web site http://www.zerocollegedebt.com

2008-11-03T17:01:00Z

Special Guest Terry Toomey discusses her new web site http://www.zerocollegedebt.com

The Zero College Debt Program has been designed to help you pay for college without taking on mountains of debt. This program works well for both undergraduate and graduate programs. It is also an excellent alternative for professional programs requiring internships and long commitments to education.

How to be a Flipper not a Flopper....When Buying and Selling Real Estate

2008-09-02T19:29:00Z

John and Kevin discuss the ins and outs of buying and selling real estate in today's market.

How is the new "Housing and Economic Recovery Act of 2008" affecting Real Estate

2008-08-13T15:37:00Z

John & Kevin discuss how new legislation is affecting the housing market and what strategies to employ because of it.

What does your credit score and a glamour shot have in common?

2008-08-11T17:49:00Z

John and Kevin discuss your credit scores and their importance in today's market. In our "how to be a flipper not a flopper" segment John and Kevin discuss why now may be the perfect time to act!

How to determine the correct real estate investment strategy, Part two

2008-08-07T14:55:00Z

John and Kevin Discuss how using the correct strategy in any market can be the difference between making or losing money.

How to determine the correct real estate investment strategy

2008-08-05T18:39:00Z

John and Kevin Discuss how using the correct strategy in any market can be the difference between making or losing money.

The end of seller-funded down payment assistance . . .and other things politicians forgot to tell you about the new housing bill

2008-07-29T22:54:00Z

The end of seller-funded down payment assistance . . .

and other things politicians forgot to tell you about the new housing bill

By John McClellan

Well, they finally did it! On Saturday, July 26, 2008, Congress finally got the

photo op they were looking for: "Hey, look at us, your Congress at work. We are working on a Saturday to help all you poor homeowners out of the mess WE got you into."

Yes, Congress has passed the Housing and Economic Recovery Act of 2008. Sounds like a grandiose plan, doesn't it? If we look closely, though, we'll realize that it is all show and no substance. This plan is supposed to help hundreds of thousands of homeowners to get out of mortgages that they cannot afford, to help Fannie Mae and Freddie Mac to stay solvent, and to overhaul FHA lending. Let's review some of the major points of the act:

The Bad

Changes the minimum contribution on an FHA loan from 3% to 3.5%

Did they think they were helping to stimulate the housing market? What does adding a .5% down payment actually accomplish other than to exclude that many more buyers?

Eliminates all seller-funded down payment assistance, i.e., no more Nehemiah, Genesis, AmeriDream, etc.

Once again, how is the average borrower helped? FHA loans are among the most affordable loans available for borrowers. This provision will effectively eliminate 40 percent to 50 percent of qualified buyers.

Gives a tax credit of $7,500 for first-time homeowners

Credit? The last time I received a credit on an account, I did not have to pay for it. This is not a credit. It is an interest-free loan, so why even bother giving this so-called tax break? First-time home buyers will immediately be upside down $7,500 the first year because borrowers will have to repay it. If Congress were really trying to help first-time home buyers, why not use this tax credit as the down payment assistance they took away?

Puts a temporary moratorium on FHA's risked-based mortgage insurance premiums

Risked-based pricing is a good thing; it helps HUD to mitigate its risk and gives incentive to borrowers to have better credit while still allowing those borrowers with not-so-perfect credit to qualify.

Hope for Homeowners Act of 2008

This part of the program is supposed to help homeowners who CANNOT afford their homes to refinance into an FHA loan. However, there are a few caveats: The current lender must first write the debt down to 90 percent of current market value. This provision is voluntary for banks, so they do not have to agree to do this. If they don't agree to write down the debt, the homeowner does not qualify for the program. IF they do decide to write the debt down to 90 percent of current market value, the borrower can get a new fixed-rate FHA loan. Although this is a great deal, there is a problem: The homeowner now has a partner in his home. To illustrate, if the homeowner sells during the first year, HUD keeps 90 percent of the equity; and that steps down each year for the next five years, stopping at 50 percent. Therefore, if the homeowner decides to sell his house after 20 years, HUD will be entitled to HALF his equity! This is all well and good if it saves his home, but I doubt that many homeowners will see any benefit because most lenders will not voluntarily write the debt down.

The Good

Loan limits will be permanently raised to $417,000, or 115 percent of an area's median home price, which ever is higher, with a cap at $625,500 on all conventional loans.

FHA loans will be 115 percent of the median home price. Any temporary increases that were already in effect will be kept in place.
Licensing and registration will be required on a national basis for all mortgage brokers.

We are a full 12 months into the mortgage meltdown, which, unfortunately, has lined up with an election year. The sad truth is that this bill will once again lower the available buyer pool and make it difficult for a majority of Americans to fulfill their dream of home ownership. Here's a message to Congress: Let the market take care of itself! Strong banks will survive, and borrowers who made good decisions will be rewarded.

All we can do now is to hope that the politicians have gotten enough photo and mic opportunities and will allow us to get on with fixing our industry.

It is going to be a longwinter . . . .

How do politicians affect local real estate ... Part two

2008-07-10T21:13:00Z

John and Kevin discuss the affects of local politics on Real Estate. Austin's Mayor Pro Tem Brewster McCracken discusses his vision for the future of Austin. Councilmen McCracken announces for the first time his intention to run for Mayor of Austin in next Mays election.

How do politicians affect local real estate - a conversation with Mayor Pro Tem Brewster McCracken

2008-07-07T14:52:00Z

Is strategy more important than location in Real Estate investing?

2008-07-03T20:06:04Z

John and Kevin discuss the importance of having the correct investment strategy for current market conditions.

Brewster McCracken on Real Estate 101

2008-07-02T19:20:00Z

How gas prices effect real estate

2008-06-30T14:51:00Z

In this show John & Kevin discuss the relationship between the price of gasoline and demand on Real Estate.

Pricing your home in a buyers market

2008-06-27T17:50:00Z

1. Recognize that housing markets are local. Home prices are like the weather-- very different in different areas.

2. Analyze who is buying and selling in your market.
What's your competition? Who are the buyers, and why are they shopping?
Are you competing against a flood of new houses from builders eager to sell, or are you selling a newer home in an area where most of the housing stock is older?

3. Ask the professionals.
Don't ignore the elephant in the living room. When you interview real-estate agents, ask about the market conditions for your area and price range.
Specifically, ask about the "absorption rate", What that means: In the current conditions with the current inventory, how long would it take the market to absorb, or sell, all the houses on the market?
If the supply is much larger than the demand, ask potential agents how they would price to offset that inventory.

4. Know what your house is worth.
Talk to a handful of agents. Get an appraisal from a certified professional appraiser. Look at your comparables. Taken together, that information will give you a pretty good idea of what your home is currently worth.

5. Consider strategic pricing.
Here's how it works: If prices in your area are dropping 1% each month, and you want to sell within the next three months, you take 3% off your price right off the bat. So if you were going to put your home on the market for $400,000, you set the price at roughly $388,000.
The upside: You'll have the competitive edge over the guy who's dropping his price every month, without the air of desperation. Plus, in a market where prices are falling, you'll make more money if you sell quickly.
The downside: Predicting the market is a tough call, even for the pros. And it's really difficult to raise the price if your market starts to rebound

.
6. Rebate your "commission."
If you're selling it yourself and need to move quickly, consider subtracting half of what would have been the commission from the sale price. The standard commission is about 6%, so if you subtract 3%, your $300,000 house would go on the market for $291,000, he says.
Listing a home for "$9,000 to $10,000 under that value should create higher interest," especially if it's new to the market.

The downside: If the house doesn't sell and you end up hiring an agent, you'll need to cover the commission, which may mean raising your sale price or taking a smaller profit.

7. Evaluate whether you really have to sell now.
If you want to get the best possible price for your home and the local market is tanking, see if you can delay the sale. Otherwise, in a lot of markets, sellers have "to be willing to accept a pretty good haircut over what they thought their home was worth last year.

The downside of waiting: The market could decline or your circumstances could change to the point that you might need to sell quickly.
But for situations where the move is optional (or you might be able to rent the property until your local market improves), waiting is a solid option.
Just because you've already planted that "For Sale" sign doesn't mean you can't change your mind if you're not seeing the interest you expected.

8. Assess the market where you plan to buy.
If you're selling one house and buying another, look at the market where you plan to move. It might be that, with the housing there, it's a great time to buy.

source- msn.com

July's Feature Realtor Christi Davidson

2008-06-27T16:51:00Z

Banking on real estate success, Davidson’s experience in financial management leads to continued achievement

Financial management, image building, public and media relations, advertising, marketing negotiations, corporate positioning, and budgeting and analysis: This business knowledge, experience, and skill can be attributed to Christi Davidson—qualifications that set her above the realm of the norm for real estate brokers.

Davidson, who is a member of the Keller Williams Realty family of brokers, has been a member of the Austin business community for nearly 25 years, having spent 14 years in the banking industry. Christi, who is in her ninth year in real estate, was most recently vice president of various departments at Frost National Bank—business development, private banking, and trust.

Davidson’s unique experience is a huge plus for determining the initial financial expectations of her clients as she begins the process of listing their houses on the ever-changing and volatile Austin area market.

“Everyone really does have a sales price in mind for their home when they decide to sell, Davidson said. “I am able to come into the process with an accurate market analysis at that particular time and area. I never have a price to tell them to sell their house for. Instead I give them a range that I know the buyers are willing to pay based on the current market conditions.”

Christi has seemingly been on point from the start of her real estate career. She joined Keller Williams in 1998 and was recognized as the City-wide Rookie of the Year, as well as Runner-up State-wide Rookie of the Year for Keller Williams right out of the gate. Since that time she has been a member of numerous boards and is currently a member of the Austin Board of Realtors, the Texas Association of Realtors, and the National Association of Realtors; and she has been recognized by top management as a consistent top performer and top producer.

“I am in the top 5 percent in sales agents in the Keller Williams Realty Market Center, Davidson said. “I am a Certified Luxury Home Marketing Specialist and have been nominated by the AUSTIN BUSINESS JOURNAL as one of the city’s top producers.”

Christi offers her clients strong organization and follow-up skills, commitment, vision, and leadership. She has excellent abilities in influencing measurable company growth and recognition and works with enthusiasm, tenacity, and energy to get the job done.

“I think that I conduct business a bit differently than other realtors by combining my 15 years of experience in banking and business development with all the aspects of real estate,” she said. “Last year 98 percent of my clients came to me through personal referrals.”

Although Davidson is creative and innovative and enjoys the challenge of starting and completing new projects, it is her forthright disposition that spurs her to be straightforward and to the point with her clients.

“I have to always remind my clients that I don’t price their house and they don’t price their house; the market and the buyers price their house,” Davidson declared. “From that point I explain that we take the price-per-square-foot ranges, and I prepare an estimated settlement statement as if we were already at closing, based on the range of price-per-square-foot prices; and we get a bottom line. That way, when I get contracts for my clients after we put their house on the market, there are no surprises.”

By her employing this strategy Davidson’s clients already know the amount of money they will walk away with from the closing table—they really know the amount before she puts the sign in their yard.

“I think that is where all my banking background has been such an asset to me in real estate,” Davidson explains. “The other thing I tell my clients is that we are in this together; this is a partnership. I lose as much sleep as they do if their house doesn’t sell. I want my signs up and down.”

Christi also uses her skills to help find the right home for clients who are interested in buying rather than selling, which, she says, is really a process of elimination:

“I look at what is on the market based on what is most important to my clients. I always ask my clients to put together a wish list for things they want in their new home, and then I ask them to prioritize that list from 1 to 10 to make sure I know which things they really must have.

She adds, “If we are looking for a resale home in a very tight market, we must be realistic on their priority list. I want to make sure that their expectations are realistic so that they won’t be disappointed and so that we can find that perfect home.”

Davidson also explains that another important factor is to get her clients with a lender before even looking at their first house so that they will know exactly the amount of money they will have to spend.

“I then know what homes to fit to their needs,” she continued. “There is no reason to ever get into a car with a realtor without having already been pre-qualified by a lender and to know what you can or cannot afford. Too many clients can get their hopes up for a home that they can’t really ever have.”

With those means in mind, Davidson has formed a working relationship with John McClellan and his team of mortgage professionals:

“John understands the process better than anyone and is the most accommodating. I will have my clients visit with John, and within 15 minutes of the conversation he can give them a very good idea of what price of home we should be looking at. That makes my job so much easier. Of course, the clients will at another point go in and visit with John’s team more in depth about the different types of loans he can offer to meet their own personal needs.”

Davidson adds, “John takes as much or as little time with the clients as they want. He will hold their hand through the process, if it is their first time or if they are pros at it and it is their sixth house. He will lay out options to suit them and help them get into the home of their dreams.”

Christi tells her clients that a realtor’s having the right lender is crucial to the real estate process:

“With John and his team I always know that my client’s real estate transactions will get funded and closed. The worst thing is to get to the table only to find out there are problems with the loan and you can’t find the lender. That doesn’t happen with John. The loan always closes.”

Contact Christi Davidson at 512-794-6770
or at www.christidavidson@kw.com www.callchristi.com

The Next Big Downtown Change: 5 Proposals for Green Water Treatment Site Revealed

2008-06-26T22:35:00Z

This week, five proposals were released for the redevelopment of the sweeping Green Water Treatment Plant site between Seaholm and the Second Street District.

Nestled between Whole Foods, Ladybird Lake, Seaholm, Austin Music Hall, and the 2nd Street District is the City's oldest sewage treatment plant - the Thomas C. Green Water Treatment Plant - which began purifying water from Ladybird lake in 1925. The plant covers 6 acres across 4 city blocks. In addition to using a key tract of land to process water using 1920's technology, the plant also serves to disrupt the natural grid of the city -- it stops second street at its west end and blocks Nueces and Rio Grande from reaching Cesar Chavez.

The Green site offers an incredible development opportunity. With four downtown blocks, it is a huge chunk of land. The location is perfect -- it is on the lake and adjacent to both the hot second street district and the future Seaholm multi-use development. The site is free of Capital View Corridor restrictions, although portions of the site close to the lake are limited to 45 feet in height.

The plant, which is located between Cesar Chavez and Third streets between Seaholm and San Antonio is about to be decommissioned to make way for a new development. This week, the city released basic details on five proposals for redevelopment of the site. Once complete, the new development will likely add retail, housing, and office space while filling in the missing streets on the city grid.

Here are sample renderings from each of the proposals. It's an amazing set, they provide a vision of an important new urban district near the center of downtown Austin:

Larry Speck/PIRATE DESIGN

MITHUN

CATELLUS DEVELOPMENT GRO

BOSSE AND TURNER ARCHITECTS

COTERA AND REED ARCHITECTS

No matter who wins, here are some of the changes that are likely in store for the site when construction begins in 2010 or 2011:

- About 1,000 new apartments and condominiums including many affordably-priced units. While there are many condo and apartment projects currently under construction - and a few that have been cancelled -- demand remains very strong for central, affordable units. All proposals would include more than 100 units priced to be affordable for a family earning approximately $57,000.

- Multiple high-rise towers with downtown retail and restaurant space which will expand the thriving 2nd Street District.

- Lots of office space -- an important part of the downtown mix that has been largely ignored by the current building boom.

- The various proposals include many interesting elements such as a large downtown H-E-B., a movie theater, a major bookstore, a senior assisted-living center, a waterfront park, large hotels

Here is a summary of the individual proposals from the Statesman:

The proposals made by Catellus Development, Forest City, Simmons Vedder Partners, Stratus Properties, Trammell Crow and their respective partners have some things in common. But each also has elements unique to its plan. "Each one of the five has something that is different from the others, that's distinct to that proposal," Council Member Brewster McCracken said. "It's really amazing."

Trammell Crow and partners Constructive Ventures and USAA Real Estate Co. propose the biggest and tallest buildings with the most parking. Their plan also includes the most diverse uses, with space for a 350,000-square-foot hotel and a 250-unit senior assisted living facility in addition to condos, apartments, offices and retail businesses. Five public gathering spaces could accommodate as many as 2,700 people.

Stratus Properties' proposal includes a two-story H-E-B grocery store, with H.E. Butt Grocery Co. serving as a limited partner in the project.

"We think H-E-B being a full-service grocery store is something everybody can afford, it helps every one of those retailers in the area and it makes residential more viable," said the team's attorney, Steve Drenner.

A movie theater and bookstore would also help drive more traffic to the Second Street retail district.

Stratus and partner AMLI Residential are proposing the largest number of rental units, which they say would let them offer housing in a greater range of prices, and they plan to offer medical office space not found downtown. Canyon-Johnson Urban Fund, a partnership of Canyon Capital Realty Advisors and Magic Johnson Enterprises, is also a part of this team.

Simmons Vedder proposes a waterfront art park and four bridges over Shoal Creek, including two for pedestrians only.

This team, which includes Cotera + Reed Architects and Bury + Partners Engineering Solutions, also proposes to essentially turn the buildings into power plants by installing solar panels in the skins of its towers. It plans to use water collected from the condensation of air conditioners to flush the toilets.

Catellus Development has proposed a primarily residential project with 500,000 square feet of office space and nearly 200,000 square feet of retail. But the company is also offering to collaborate with city leaders and the community to develop a final master plan for the property that could differ significantly from its initial proposal.

"We're going to present something we think is really neat, dynamic, progressive and all of that, but with that said, if we are selected we're going to say, 'Let's go out and spend time and hear from the city what they really want and hear from stakeholders what they really want,' " Catellus President Greg Weaver said.

Forest City, which is partnering with Novare Group and Andrews Urban, emphasizes public spaces with a grand plaza at Second and Nueces streets complete with a fountain and transplanted moon tower. A grand staircase inspired by the Spanish Steps in Rome would connect the plaza to the trail along Shoal Creek, which would run from the Austin Energy site north of Third Street to Lady Bird Lake.

Buying Real Estate with a Self Directed IRA

2008-06-26T17:35:00Z

John & Kevin discuss buying real estate with a self-directed IRA. Special guest Dan Cordoba shows us how you can use your self-directed IRA to participate in the transaction.

Credit Scores... Important?

2008-06-23T17:03:15Z

Yes, more than ever!

“What is his credit score?” This is one of the first questions that I ask my loan officers when they bring a file to me for review. “Why?” you ask. It’s ALL about the credit scores; in fact, it’s all about the middle score of the three credit scores that most people have. In the lending business the credit score affects interest rate, mortgage insurance (MI) rate, down payment amount, loan type, and, more importantly, whether an applicant is even eligible for the loan.

When I first joined the ranks of mortgage originators, we didn’t have credit scores to help evaluate a borrower’s credit worthiness. In the “old days” we used the term credit profile, and we had strict rules about the number of revolving lates, installment lates, and mortgage lates. At that time no one cared about the borrower’s balance-to-limit ratios or length of credit. With the advent of the use of credit scores by lenders in the mid 90s, however, we had a “dumbing down” of the art of loan origination and underwriting. Before credit scores we as loan originators would print out the credit report and meticulously go over each line, checking for late payments and looking for bankruptcies and signs of a past foreclosure. We scrutinized the report for patterns in older late payments, looking for ammunition for the explanations that we knew the underwriter would be demanding. After we had given due diligence to the file, we then turned it in to the underwriter, hoping that all of that diligence would hold up under his scrutiny.

Then came the advent of the FICO score. All of a sudden the lates did not matter, as long as the score was high enough. Credit scores actually made it easier for borrowers to qualify for home loans. If the score was 620, the borrower was in; if it was lower than 620, well—too bad; it didn’t matter how the credit profile looked. Loan officers became slaves to the credit score and, along with the underwriters, we started relying completely on the credit score to determine a borrower’s credit worthiness. Loan officers became less and less knowledgeable about the true strengths and weaknesses of the borrower, and more and more they became a conveyor belt for loan applications: Get ‘em in . . . check the score . . . get ‘em out!

What affects your credit score? What has changed? What do I need to do as a loan officer? These are questions that are asked on a daily basis in my office. They are asked by the clients, and they are asked by our staff. To understand why, we will first consider how the scores work and then look at some of the changes that Fannie Mae and Freddie Mac have instituted.

First, let’s consider some of the variables that affect your credit score by breaking them down into five categories:

Payment history
Amounts owed
Length of credit history
New credit
Types of credit used

Payment history. Your payment history is the most important variable affecting your credit. Have you made payments on time? Do you have any past-due accounts? Do you have a bankruptcy or judgments? Positive factors are also considered: Do you have accounts that have always been paid on time? How long have you had a good credit history (or bad credit history)? Lates during the last 6 months have a greater impact than lates that occurred 11-13 months ago.

Amounts owed. The amount that you owe in relationship to your actual credit limit is very important. Each account is looked at to determine your balance-to-limit ratio. If the ratio is more than 50 percent, that is a big red flag. Therefore, you need to keep it at less than 50 percent on each account. Better yet, keep it at less than 19 percent. Try to manage your debt: Just because you pay the balance on a credit card every month does not mean that the zero balance will be reflected in your score, which is actually a snapshot in time. Your credit card company may report to the credit bureaus at the time your balance is at its highest for the month. TIP: Call your credit card company to find out when they report, and then time your payment around that date. Even if you are not paying the entire balance, you will nonetheless be taking that snapshot at the most favorable time; i.e., your credit score will be viewed in the very best light.

Length of credit history. Do you still have that low-limit, high-rate credit card that you got in college? DO NOT close that account. An old account in good standing is one of the best ways to keep your credit scores higher; accounts existing for less than 12 months are considered red flags. Therefore, keep your old accounts open; if the interest rates are high, don’t charge to those cards. One surefire way to significantly lower your credit score is to close an old account and transfer its balance to a new card.

New credit. This category goes along with length of credit history, and it also considers additional factors. An account existing less than 12 months is a red flag; so are accounts existing less than 24 months—just not as much. There is a “magic number”: In my experience I have found that the strongest accounts to have are those existing at least 48 months. Credit inquiries are also red flags that bring scores down. An inquiry is an alert that a borrower may be trying to access new credit, which can be a sign of instability. TIP: It’s okay to shop around. If you are shopping for a car or a house, multiple credit pulls in a certain period of time (6-14 days, depending on the credit bureau) will count only as one. So, don’t be afraid to shop around for that car loan.

Types of credit used. It is important to have a good mix of credit types on your report—e.g., two or three revolving national credit cards, a national department store account, a car loan, and a mortgage loan.

Now, let’s consider why lending institutions care so much about scores. Fannie Mae employs actuaries to study mortgage performance and to determine risk levels for various credit scores, loan amounts, loan to values, document types, property types, and on and on. In this article we are concentrating on factors that affect the relationship of credit scores and risk level. Recently Fannie Mae adjusted its automated underwriting engine to better reflect the risk levels associated with mortgage lending. Fannie Mae’s minimum credit score requirement has been raised to 580—this requirement is a trump card for a mortgage loan. Even if the borrower is putting down 50 percent and has a million dollars in the bank, Fannie Mae will not take the loan if the middle credit score falls below 580. As foreclosure proceedings have continued to rise in the past few years, lenders are beginning to take a much closer look at the relationship of credit scores to foreclosure rates.

Fannie Mae and Freddie Mac recently came out with a tiered rate schedule that is determined by the borrower’s credit score. In the past, whether the credit score was 600 or 800, the rate was the same as long as the automated underwriting system approved the loan. With the advent of this new scoring system, rates for borrowers with scores below 720 are higher than rates for borrowers with scores above 720. The system is tiered in 20-point increments all the way down to the newly established low score of 580. This means that a borrower with a 640 credit score could have a rate that is more than half a percent higher than a borrower with a 730 credit score.

If that were not enough, mortgage insurance (MI) companies have also instituted tier rates based on credit score, and some have refused to issue MI if the score is below 640. Therefore, even if you have an approval from Fannie Mae’s automated underwriting system, you may not be able to get the MI, which you will need if the borrower is putting down less than 20 percent. The difference between a 650 score and a 700 score could mean that you MI payment triples!

What does all of this mean to the borrower? Like it or not, we are going to have to deal with the tightening of these lending standards for the next year or so. A greater knowledge of how credit works will be the way loan officers set themselves apart from the rest of the crowd. A great loan officer will be able to counsel a borrower about how to correctly manage his credit scores to maximize his ability to qualify for the best rates, the best MI, and the best loan programs. Most importantly, a great loan officer can make the difference between the borrower being a renter and the borrower becoming a homeowner. Loan officers, take heed! It’s time to be a mortgage professional!

John McClellan
Mortgage Banker
Supreme Lending
512-589-8088(direct)
512-279-1150(office)
John@teammcclellan.com
www.mortgage1370.com

Real Estate 101 with John McClellan

2008-06-23T15:11:00Z

On this show John and Kevin discuss ROI ( return on investment ) with special guest Dan Cordoba. They talk about differant tax strategies you can implement while investing in real estate.

Real Estate show discussing different strategies for making money not losing money in the every changing world of real estate investing.

Father's Day is this Sunday, June 15th

2008-06-11T20:28:00Z

Father's Day Events:

Father's Day Antique Car Show - Trade in the roar of motorcycles for the revs of antique cars at the 8th Annual Father's Day Antique Car Show. The Car Show starts at 12pm on Father's Day. Instead of Northcross Mall, visit at their new location at 51st Street and North Lamar.

Father's Day in the Park - The Austin Symphonic Bands annual concert for Father's Day starts at 7:30pm on June 15 at the Zilker Hillside Theatre. Take a picnic meal and sit tapping your fingers or toes to the patriotic tunes and other favorites.

Republic of Texas Bike Rally - Is your dad a biker at heart? Spend the day with your motorcycle-loving dad at the Republic of Texas Biker Rally. The ROT Rally is June 12 to June 15 at the Travis County Exposition Center. For a fun but inexpensive Father's Day gift, just take him down to Congress Avenue during the big street party where you can ooh and ahh and snap pictures of dad in front of his favorite bikes.

On the Road with the Beats - Was your dad a member of the Beat Generation? He might enjoy this exhibit that runs through August 3 at the Harry Ransom Center.

Father's Day Brunch at the UT Club - For all members of the UT Club, Plan to celebrate Dad and all he has done! Chef Patrick is preparing a Father's Day Brunch featuring all of his favorites. In addition, there will be drawings for power tools and fun gadgets, in honor of all the Dads present. From 11:30PM to 1PM

Round Rock Express Game - Round Rock vs. Memphis Redbirds Featuring a Pre and Post Game Father's Day Catch Starts at 7:05PM buy tickets online at www.roundrockexpress.com . There will also be a glove giveaway for the kids.

Austin Golf Courses and Driving Ranges: (Just a few)

Falconhead Golf Club - 15201 Falconhead Blvd, Austin, TX 78738
Play America's First PGA Tour Signature Series golf course and see why Falconhead has quickly established itself as the ultimate golfing experience in the Austin area. Open to the public 7 days a week.

Forest Creek Golf Club - 99 Twin Ridge Parkway, Round Rock, TX 78664
When it comes to delivering the ultimate golf entertainment experience, it doesn't get much better than Forest Creek Golf Club. Widely known as the best daily fee layout in Central Texas.

Plum Creek Golf Course Austin - 750 Kohler's Crossing Road
A short drive from downtown Austin, Plum Creek is located on more than 200 acres, winding through the beautiful Texas Hill Country. The golf course features 18 championship holes of golf, each with its own unique character.

Teravista Golf Course - 4333 Teravsita Club Drive, Round Rock, TX 78664
Teravista Golf Club, Central Texas' only Troon Golf facility, has created the ultimate Member for a Day experience. Teravista was voted #1 by Avid Golfer magazine for Best Service, Best Practice Facility and best Pro Shop.

Play Golf Austin - Get Great Deals at Austin Golf Courses
Practice More, Play More, Pay Less at Play Golf Austin. Enjoy golf discounts, free clinics, and free range balls at 14 Austin area golf facilities for only $19.95 per month. Details Here!

Oak Hill Driving Range - 5243 Hwy 290, Austin, TX 78735
Welcome to Oak Hill Golf Range! Not everyone has the time to enjoy their favorite pastime once a week, but nearly all of us have a few minutes to spend some quality time while hitting a bucket of golf balls. Swing on by Oak Hill Range when you get that chance.

Avery Ranch Golf Course - 10500 Avery Ranch Club Drive Austin, TX 78717 - Avery Ranch Golf Club in Austin, TX has quickly established itself as the premier daily-fee golf course in the Austin area. This 226 acre, 7107 yard, 18-hole championship public course has tee placements that will challenge the low-handicapper while creating an enjoyable golfing experience for all levels of players. Architect, Andy Raugust, has blended panoramic vistas and gentle rolling hills with oak-lined fairways and the 60-acre Avery Lake. Avery Ranch Golf Course, Austin is truly the ultimate partnership of nature and the sport of golf.

Restaurants Dad may enjoy!

Stubb's Bar-B-Q

801 Red River St
Austin, TX 78701
Phone: (512) 480-8341

Moonshine - Patio Bar & Grill

303 Red River St
Austin, TX 78701
Phone: (512) 236-9599

Lamberts Downtown Barbecue

401 W Second St
Austin, TX 78701
Phone: (512) 494-1500

Sullivan's Steakhouse

300 Colorado St
Austin, TX 78701-3925
Phone: (512) 495-6504

Eddie V's Edgewater Grill

301 E Fifth St
Austin, TX 78701
Phone: (512) 472-1860
Fax: (512) 477-9794

Threadgill's World Headquarters301 W Riverside Dr
Austin, TX 78704
Phone: (512) 472-9304
Fax: (512) 494-1099

Pappadeaux Seafood Kitchen
6319 I-35 N @ 290
Austin, TX 78752
Phone: (512) 452-9363
Fax: (512) 452-8541

Fathers Day websites:

http://www.loveyoufather.com/

Real Estate 101 with John McClellan and Kevin Bown 6-8-2008

2008-06-11T13:10:00Z

On this show John and Kevin discuss current market conditions, their effect on real estate strategies and how they affect you as a homebuyer or real estate investor. The top 10 hottest areas in central Texas.

Real Estate show discussing different strategies for making money not losing money in the every changing world of real estate investing.

Real Estate Stats – 72% more grains of salt in just one year!

2008-06-05T20:30:00Z

Today we will discuss the tremendous range in meanings that can be taken from what are commonly referred to as “Real Estate Stats”. To do this, let’s look at a submarket in Austin – zip code 78703. This zip code sits right in the heart of what is called “Central Austin”. The point of this article is to encourage you to arm yourself with a few grains of salt when listening to or reading information provided by a news source, a politician or even a neighbor!

Some “raw” stats for our experiment (78703 - detached single family homes):

May of 2008, had 25 homes sell. The average square footage was 1839, average sale price $527,112 for an average sale price per foot of $293.93.
May of 2007, had 27 homes sell. The average square footage was 2413, average sale price $677,476 for an average sale price per foot of $279.96.

Here’s your task: You are the editor of local newspaper, and you must write a headline that sells papers. What will you write? How about:

“78703 values PLUMMET! Average sale prices down 22%!”

Maybe you are a politician? Try:

“McMansion ordinance SUCCEEDS! Sold Home sizes down 23.8%!”

OR, you could read the data differently and have a different meaning all together:

“No Mortgage meltdown in 78703! Average price per square foot up 5% over last year!”

OR, maybe:

“Consumers are now choosing smaller houses in Central Texas”

What is the “truth”? Answer, it is subject to your interpretation. Yes, the “truth” depends on what is important to you and from which angle you choose to approach the situation. Are any of the above headlines true? Yes - They could all be argued to be true. Remember however, they are also all LOADED with un-spoken opinions meant to make you feel a certain way.

The market trend in any submarket is a combination of a huge amount of market forces. The purpose of this article is not for me to speculate about what is really going on in 78703 (I will happily do that in person with you…), but to encourage you to notice headlines in a new way; one that begins to wonder about the intentions of the author/editor/producer or broadcaster.

Enjoy the news…

…WITH a grain of salt!

Kevin Bown
Realtor
Goodwin Partners Inc.
512-658-2419(direct)
kevin.bown@goodwintx.com
www.goodwintx.com

Real Estate 101 with Special Guest Cid Galindo

2008-06-05T19:48:00Z

Sunday June 1st we hosted a special guest, Cid Galindo who is running for City Counsel Place 4.

On the show John & Kevin discussed current issues that effect our real estate market and mortgage lending. They interviewed Cid, and discussed his plan for Austin.

"Hopefully we can help people understand how density is green and how development can serve to protect the City's resources."

Austin's Hottest MLS Areas

2008-06-05T18:17:00Z

Austin's hottest areas are still dominated by the "In town" and affordably priced areas. While many areas in the Austin metro have experienced tremendous growth, these are also the areas that had the most excess inventory once credit constraints slowed some of the absorption. The in-town properties however have not had the excess inventory problem. The other main trend that has been making itself know has to do with the fear (and reality) of $4.00 gasoline. Buyers are beginning to put more of a premium on location than they used to. Look for this trend to continue to fuel in-town properties appreciation.

Some of the hottest areas based upon supply and demand include:

#1/10S #2/N #3/2N #4/10N #5/SE #6/SWE #7/NW #8/2 #9/1N #10/3E

The in-town areas that seem to be absent from this list including 6,7,8E,4,1B & 1A all generally start out in the mid $300's and go up. The in-town trend will help all of these areas, however they currently have supply/demand ratios that are cooler. Look for these areas to see some strengthening this summer as we get into the season where families with kids prefer to move.

Real Estate Questions? Ask Kevin!

Kevin Bown

Realtor
Goodwin Partners Inc.
512-658-2419(direct)
kevin.bown@goodwintx.com
www.goodwintx.com