Federal Tax Credit Program

Thought we would post here a copy of the document that talks about the Federal Tax Credit Program for First Time Home Buyers. The document can be accessed by clicking on the link

Here

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Survey Continues to Validate Internet-Real Estate Relationship

As reported by Inman News, a new California Association of Realtors survey called "Survey of California Home Buyers" shows ever growing relationship between real estate sales and use of the Internet compared to the 2007 survey

Excerpts from the article from Inman are included here and show the importance of having a strong Internet plan. A couple of particularly interesting points include the fact that Internet buyers spent less time looking at homes before purchasing and viewed about half as many homes with their agent before settling on a purchase than traditional home buyers reported.

Another key area to note is that of responsiveness of the agent where the expectation of the consumer has increased dramatically.

On a positive note, far more of the Internet buyers indicated that they were likely to use the same agent again in comparison to the traditional buyer, making Internet generated buyers a much more valuable repeat and referral pool.

Here are some portions of the Inman article:

Web snares more real estate buyers (subscription)

Inman News, September 15, 2008



Survey reveals growing use of Internet in home purchases



The share of home buyers who said the Web was integral to their purchase process continues to grow, according to an annual survey of home buyers by the California Association of Realtors trade group. Meanwhile, the home-search process lengthened compared to the 2007 survey.



The association's "Survey of California Home Buyers" reveals that 78 percent of buyers used the Internet "as an important part of (their) home buying and selection process," compared to 72 percent in 2007.



Buyers who stated that the Internet was an important part of the buying process spent an average 8.3 weeks searching for a home with their agent, up from 5.2 weeks in 2007 and 2.2 weeks in 2006 -- reflecting the slowing sales environment of the past two years.



"Traditional" buyers who said the Internet was not an important part of the buying and selection process took even longer -- 10.3 weeks searching for a home with their agent compared to eight weeks in 2007.



Also, the survey found that traditional buyers saw almost twice as many homes with their agent (23.3 homes) as Internet buyers (12.7 homes).



“Due to the high inventory of homes on the market, and uncertainty about the direction of home prices, buyers are more cautious and are moving at a slower pace during the home buying process than in previous years,” said William E. Brown, CAR president, in a statement.



The sample of buyers in the survey included 1,249 home buyers who used the Internet and 351 who had not to purchase homes during the last half of 2007.



The survey found that affordability for first-time buyers has improved with home-price declines and relatively low mortgage interest rates.



"However, problems in the area of real estate finance continue to limit access to capital on the part of all buyers, including first-timers," and has shrunk the pool of first-time buyers. Also, because of the credit crunch, "there is no guarantee that the loan will actually be funded," according to the report.



Participants expressed a need "to better understand the direction of the market" and for escrow to close on time, citing concerns about "market conditions" and "agent responsiveness," the report states.



Specifically, participants asked for better negotiating and faster response times from their agents. "Both assessments reflect the uncertainty of the market in recent months and frustration with that uncertainty," the report concludes from those survey findings.



The share of first-time buyers in the "Internet" group participating in the survey dropped from 31 percent in the 2007 survey to 22 percent in the 2008 survey and is down from 41 percent in 2006.



"With lenders tightening their underwriting standards and requiring a larger down payment from borrowers, many first-time buyers who had already been facing affordability constraint due to high home prices in California found it insurmountable to qualify for a home loan."



About 77 percent of first-time buyers reported that they were motivated to buy by falling home prices, compared to 64 percent of repeat buyers.



Other motivators included: low mortgage interest rates enabled the buyer to move to a better location, the likelihood that sales will increase, mortgage rates enabled the buyer to move to a bigger home, and the desire to move to a more affordable area, in that order.



Satisfaction with the home-buyer process dropped in ever category in 2008 compared to the prior year -- the average rating among the nine categories was 3.4 in the latest survey (five is "most satisfied" and one is "most dissatisfied). In last year's survey, the average rating was 4.1.



Overall satisfaction with agent averaged 3.3 in the 2008 survey compared to 4.1 in the 2007 survey.



About 80 percent of those who were not satisfied said the agent "did not negotiate aggressively on their behalf," according to the survey report.



And the report suggests, "Although home buyers did not mention it, failure to close escrow on time probably contributed to the level of dissatisfaction buyers had with their agent," as 57 percent of Internet buyers participating in the 2008 survey reported that they did not close escrows on time.



About 31 percent of the Internet group in the survey expected an instant response from their agent, up from 22 percent in 2007. And 96 percent of Internet buyers expected a response within four hours or less, according to the latest survey. That compares to 94 percent in the 2007 survey.



Also, about 84 percent of participants said they considered the agent's response time to be either a "very important" or "extremely important" factor in their decision-making process, the survey report states.



About 71 percent of the Internet buyers in the survey said they would use the same agent again, down from 92 percent in 2007.



Among the "traditional" buyers, 27 percent reported they would use the same agent again, down from 47 percent in 2007 and 79 percent in 2005.





Multiple pictures and a slide show were named by survey participants as "extremely important" Web site features by buyers (61 percent), followed by maps and directions, agent contact options, virtual tours and neighborhood profiles.



About 88 percent of survey participants hired an agent to assist them in the home-sale transaction. About 90 percent of buyers in the Internet group found their real estate agent using the Internet, while 9 percent found their agent through a for-sale sign and 1 percent through an agent's marketing materials.



Meanwhile, about 32 percent in the traditional buyers' group reported that they had a previous transaction with the real estate agent, 28 percent found the agent through marketing materials, 27 percent through a for-sale sign and 14 percent through a referral, according to the survey.

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Tree.com takes root!

Thought some of you might be interested in this even though it is not directly about the 210 program.

Tree.com, Inc. Spins-off From IAC and Begins Trading as TREE



CHARLOTTE, N.C., August 21, 2008 – Tree.com, Inc. marks its first day as an independent, public company following its separation from IAC (NASDAQ: IACI). Tree.com, Inc. now trades on NASDAQ under the symbol TREE.



Tree.com, Inc. is the parent of several well-known brands and businesses in the financial services and real estate industries including LendingTree, LendingTree Loans sm, GetSmart.com, HomeLoanCenter.com, RealEstate.com, iNest.com, RealEstate.com, REALTORS® and Domania.com. Together, they serve as an indispensable ally for consumers who are looking to comparison shop loans, real estate and other financial products from multiple businesses and professionals who compete for their business. As an independent company, Tree.com will explore new areas where a competitive marketplace model empowers consumers and provides choices when making key life decisions.



“Today we officially launch Tree.com and establish it as the go-to source for consumers looking to learn about and compare financial products and real estate from anywhere in the country,” says Doug Lebda, chief executive officer and chairman of Tree.com, Inc. “Our company is made up of brands and businesses that consumers know and trust and we look forward to being an independent company and creating value for consumers, investors and shareholders alike.”



Tree.com’s Roots

LendingTree was founded in 1996, launched nationwide in 1998 and since that time has facilitated more than 23 million loan requests and $185 billion in closed loan transactions. The company’s unique business model matches consumers with multiple lenders who compete for their business or as the commercials say, “When Banks Compete, You Win®!”. Since inception, the company has focused on educating consumers about loan products and then presenting multiple offers for mortgages and refinance loans, home equity loans/lines of credit, auto loans, personal loans and credit cards.

LendingTree entered the real estate industry with the acquisition of HomeSpace, Inc. in 2000 and later launched RealEstate.com, which provides consumers access to nearly 2 million home listings, 97 million home values and a unique deep-dive view into more than 22,000 cities reaching every metropolitan area in the U.S. RealEstate.com also owns RealEstate.com, REALTORS®, an Internet enabled real estate brokerage that operates in 14 markets with more than 1,000 sales agents. In 2000, LendingTree went public and in 2003, was acquired by IAC/InterActiveCorp.



Tree.com Leadership

Tree.com launches with an experienced leadership team led by Doug Lebda, including:



· Darren Beck, Senior Vice President, Marketing

· Scott Cammarn, Senior Vice President and General Counsel

· Dean Conant, Vice President, Information Technology Operations

· Claudette Hampton, Senior Vice President, Human Resources

· Bob Harris, President, LendingTree Exchange

· Keith Moore, Senior Vice President and General Manager, Emerging Businesses

· David Norris, President, LendingTree Loans

· Matt Packey, Senior Vice President and Chief Financial Officer

· Bret Violette, President, RealEstate.com



For more information about Tree.com, Inc., please visit www.tree.com.

Important Information
The matters discussed herein contain forward-looking statements. These statements involve risks and uncertainties. Additionally, Tree.com, Inc. is subject to other risks and uncertainties set forth in its filings with the Securities and Exchange Commission. These risks and uncertainties could cause actual results to differ materially from any forward-looking statements made herein.

About Tree.com, Inc.

Headquartered in Charlotte, N.C., Tree.com, Inc. is the parent of several well-known brands and businesses in the financial services and real estate industries including LendingTree, LendingTree Loans sm, GetSmart.com, HomeLoanCenter.com, RealEstate.com, iNest.com and Domania.com. LendingTree was founded in 1996 and launched nationwide in 1998. In 2003, the company was acquired by IAC/InterActiveCorp and later spun-off in 2008 to form Tree.com, Inc. For more information, please visit www.tree.com.

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So, How's It Going?

You all have been following the 210 Days to Success program for some months now. Some more than others and some of you are just now getting engaged with the concept and process. We'd like to hear how things are going for you.

The idea behind 210 days is that opportunities in the real estate space take time to mature. There is a distinct life cycle to the buying process and the steps are not often skipped. Buyers typically move through the process at about the same pace and experience shows us that the average is 210 days. From lookie-loo to proud homeowner.

We also found that the agent needed to be involved in that process for its entirety. So this program was designed to help with that. Help get the customer to the agent faster and help the agent understand the process, the time required, and so on.

Now we would like to hear from all of you how it's going out there. Do you feel like your connecting better with the consumer? Are you seeing success through closings? Pendings? More Actives?

We can look at the numbers but only you know the stories. So let's hear them.

Comment here so we can all share our stories. That's the kind of communication that helps us all succeed.

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Remaining segments of 210 Program now posted!

Check out modules 5, 6 and 7 of the 210 days to agent success program. Just look down the right hand side of the 210 Days to Success blog for the rest of this outstanding training program!

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Homes Are Biggest Bargain Since 2004

That's the headline on Les Christie's article in CNN Money today online. That doesn't mean that buyers are flocking into the market but it does mean you have a reason to call your buyers and talk about the opportunity.

There are always two sides to every story and while most national media likes to focus on the "Housing Crisis", folks need to remember that this presents an enormous opportunity for folks who want to own a home.

Here is a link to the story "Homes are Biggest Bargain since 2004" for you to review and share. Good luck in bringing your buyers over the wall to affordable home ownership!

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Economists see credit crisis nearing end

Forecasters expect credit conditions to improve in the second half of the year; outlook for economic growth scaled back.

While no one is predicting a major turnaround in the economy right away, perhaps some good news for those of us in the housing industry.

WASHINGTON (AP) -- First the good news: The worst of the painful housing slump and the credit crunch might come to an end this year. Now the bad: The economy will weaken further and unemployment will rise.

That's the latest outlook from forecasters in a survey to be released Monday by the National Association for Business Economics, also known by its acronym NABE. It will take time for any rays of light to poke through the economic clouds, though.

A growing number of economists believe the country is on the brink of a recession or in one already, dragged down by all the problems in housing, credit and financial markets. Now 56% of the economists think the economy has started or will enter a recession this year. That's up from 45% in a survey in February. If there is a recession, it probably will be short and shallow, economists said.

Forecasters downgraded their projections for economic growth. They now predict the economy, which grew by 2.2% last year, will slow to 1.4% this year. That's lower than the 1.8% growth projected in February. If the new figure proves correct, it would mark the weakest growth since the last recession in 2001.
Next year, the economy should grow by 2.3%, less than previously forecast and a pace that is still considered subpar.

"Although housing and credit markets will gradually loosen their grip, U.S. economic growth is expected to only slowly return to health," said Ellen Hughes-Cromwick, president of NABE and chief economist at Ford Motor Co.

Given the outlook for sluggish overall economic activity, companies are likely to remain cautious in their spending and hiring.

The unemployment rate, which averaged 4.6% last year, will move higher. Forecasters predict the jobless rate will hit 5.3% this year and 5.6% next year.

Forecasters are hopeful that the housing slump - in terms of home sales - will hit bottom this year. However, economists were divided over whether the low point would be reached in the second, third or fourth quarters of this year. House prices, though, are still expected to drop this year and next.

On the credit front, economists predict conditions will improve in the second half of this year.

"The economy is still going to be weak in the very near term, but the worst is likely to end this year with respect to the housing decline and the credit crunch," said Lynn Reaser, chief economist at Bank of America's Investment Strategies Group, who was involved in the NABE survey. The survey of 52 forecasters was conducted April 17 through May 1.

Weakness in housing was cited as the factor most responsible for the economy's troubles. That was closely followed by credit problems and high energy, food and commodity prices.

With food prices marching upward, gasoline prices closing in on $4 a gallon nationwide and oil hitting a record high near $128 a barrel, inflation should rise. Consumer prices will increase 3.6% this year, up from a previous forecast of a 3% rise. Next year, prices should calm down a bit, with the inflation rate clocking in at 2.4%.

To bolster the economy, the Federal Reserve has been cutting a key interest rate since last September. However, when the Fed last lowered rates, in April to 2%, policymakers signaled that their rate-cutting campaign may be drawing to a close. Fed policymakers are concerned that moving rates lower could aggravate inflation. At the same time, they are hopeful that their powerful rate cuts plus the government's $168 billion stimulus package of tax rebates for people and tax breaks for businesses will lift the country out of its slump.

The forecasters believe the Fed will hold its key rate steady at 2% through the rest of this year. However, they predict the Fed will start bumping up rates next year to ward off inflation. They believe the Fed's key rate will rise to 3% by the end of 2009.

Economists, meanwhile, had mixed thoughts about the extent to which tax rebates will be spent this year. The more spent, the more energizing effect they will have on the economy. Roughly 35% thought households will spend 26 to 50% of the rebates, while a quarter believe 25% or less would be spent. Thirty-one percent thought 51 to 75% would be spent.

"We're likely to see the boost from tax rebates fading later in the year," Reaser predicted. "The recovery is expected to be quite muted."

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More People Soon Able to Qualify!

Fannie Is Poised to Scrap Policy Over Down Payments

The Wall Street Journal, James Hagerty, May 16, 2008



Fannie Mae is expected to announce Friday that it is scrapping a policy requiring higher down payments on home mortgages in areas where house prices are falling.

The change comes in response to protests from vital political allies of the government-sponsored provider of funding for mortgages, including the National Association of Realtors, the National Association of Home Builders and organizations that promote affordable housing for low-income people.



Those various groups have said the policy is hurting an already feeble housing market by shutting out too many potential buyers.



The current policy, adopted in December and now due to end June 1, limits loan amounts in areas with declining home prices, including most of the densely populated parts of the country.



For instance, if a loan program normally allows people to borrow up to 100% of the estimated property value, the maximum is cut to 95% in "declining markets."



Under the new policy that is taking effect next month, Fannie will have the same maximum loan percentages across the country for people purchasing single-family homes that they intend to occupy, according to people familiar with the plan.



For borrowers approved by Fannie's automated underwriting program, the maximum generally will be 97%. For those approved by other means, the maximum will be 95%. (Fannie also has some loan programs, typically offered through state or local housing agencies or nonprofit groups, that allow certain borrowers to make no down payment.)



Fannie is expected to continue to have variable down-payment requirements on mortgages considered riskier, such as those used to buy investment or vacation homes.



Fannie and its main rival, Freddie Mac, own or guarantee the bulk of U.S. home mortgages and so set nationwide standards for lenders. Freddie also has a policy requiring higher down payments in declining markets. But Freddie earlier this month said it wouldn't require lenders to drop below 95% of the estimated value.



In a letter to the Realtors last week, Freddie also said that it is applying the policy flexibly. For instance, if appraisers can demonstrate that home prices in a given neighborhood are stable or rising even though values are falling in the wider metropolitan area, the declining-markets policy doesn't apply.



By softening the down-payment policies, Fannie and Freddie are taking more risks.



Borrowers who put just 3% to 5% down in many areas are likely to find within a year that they owe more than the homes are worth because prices have fallen, a situation known as being underwater.



In some cases, deeply underwater borrowers are choosing to walk away from their homes rather than trying to find a way to keep on paying, Patricia Cook, Freddie's chief business officer, told analysts this week.



But Fannie officials have argued that they have tightened lending standards in other ways -- for instance, insisting on higher credit scores for people who make small down payments -- to reduce default risk. Officials have also argued that underwater borrowers don't necessarily choose to walk away.



The concessions from Fannie and Freddie illustrate the conflicting pressures that they are facing. Many critics say they are taking far too many risks, increasing the danger that taxpayers may end up having to bail them out.



But politicians and the housing industry are pushing them to do more to prop up the housing market.



In a recent letter sent to Fannie and Freddie, the Realtors reminded the companies that the trade group in recent years helped them fend off Bush administration attempts to impose tighter regulatory constraints.



Fannie and Freddie may need the Realtors' lobbying support in the weeks ahead as Congress seeks to give final approval to long stalled legislation designed to improve regulation of the two companies.

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Don't Give Up...and here's the PROOF!

Congratulations to the Carlson GMAC family of realestate companies in Massachusetts - they hung in there for the long term and it paid off! Well done agents!

Their recent successes and great examples that incubation works:

Maryellen Mitchell from the Carlson Beverly Office had a closing 3/20 with a Buyer assigned to her 5/20/07 - 305 Days

Sarah Anderson from the Hammond Office in Charlestown also has a closing on 3/20, a listing assigned to her on 7/24/07 - 240 Days

Sometimes 210 days isn't long enough:

On 2/10/08 one of Sarah Anderson's LendingTree buyers signed a P&S. Sarah had been incubating them since 7/1/2006 - 589 Days

Beth Petrone, from the Hammond office in Newton was assigned a listing on 1/27/2008 for a lead that Bruce had been incubating since 10/5/06. They finally gave up on their MLS entry only listing. The property went under contract 3/25/2008 - 537 Days from initial contact, 58 days after Beth listed it, with a full price offer

Charlie Smith, Cambridge Hammond office put a buyer under contract on 3/24/08 that originated on 6/12/2007 - 286 Days.

Brenda Flower, Carlson Longmeadow has a double this month - a List/Buy. 79 days.

Claudia DiDomenico, Carlson Framingham had the slam dunk. A lead she received on 3/19/2008 went pending on 3/25/2008 - 6 Days, and everybody thought the" good ol' days" were gone.

And we end where we began with Maryellen Mitchell, Carlson Beverly, who but a buyer under contract on 3/15/08 that she has been working with since 7/23/08 - 236 Days.

Stay in front of your online consumer - be there when they are ready to buy! Again
congratulations for a job well done!

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OK, so here's a question...

What did you do today to engage your lendingtree customers? We've said over and over again that this is a process, not an event. and we've offered up a few suggestions about how to engagge and when to engage your customers. We've even tossed out a few topics to talk about with them.

So now I want to know...what are you doing?

Click that comment button down there and tell us. Share. You might have the idea of the year!

And after you share, read what others share and comment back.

We all might just learn something here!

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