All Forum Posts by: Ralph Lewis

What is the best source/method for obtaining homeowners' information in order to target the prospecting and direct mail at owners who are at an early stage in the process?

Thanks for the welcome, Robin. I'll be sure to follow up on that offer to network.

Looking at 10m to 100m. From what I see, the smaller, the better -- 10m to 40m seems more likely to close.

Thanks for the warm welcome Ryan.

I'm afraid I've come with more questions than answers, but certainly I will try to contribute where I can. I believe that 4 of my first 14 were along the lines of what one would call a contribution. As I gain knowledge, I'm sure that percentage will climb.

I look forward to interacting with you and others on this site. So far, I am pretty impressed with the wealth of knowledge and willingness to share.

Thank you for pointing that out with regard to manufacturing. I spent the first 20 years of my working life in manufacturing. I loved making things, and I loved being in management and coordinating and building an efficient organization. But it didn't pay, considering the knowledge I needed to possess and the hours I worked. The only way to make "real" money in this country is to own the business, be in sales, or wheeling and dealing in investments of some type. We have become a big service economy with no underlying basis for that success, and I agree that there will be a major correction and price to pay some day.

Thus my reason for being here -- I backed into real estate related employment a few years back, and I see it as the best place to make real money. If manufacturing comes back in my lifetime, I'll be happy, but I'm not holding my breath or gambling my future.

At the risk of overkill, I might point out one more factor that does point toward losses of equity values in the long term in the area of Alt-A and even prime becoming far more staggering – appraisals for sub-prime loans were highly scrutinized, even during the refi boom. Prime and even Alt-A loans largely were not. Anyone who tried to get loans through New Century, who was, I believe, second only to IndyMac as the largest sub-prime lender, will attest to that.

Another area affecting the values is the requirements regarding the age of comps. Fannie Mae guidelines with regard to the age of the comparable sales, as well as most lenders’ internal guidelines, are reducing the old requirement that all comps be within 1 year. Some lenders want to see at least 2 of 3 comps within 60 days. In many of the more open areas of the burbs, this is impossible, as many comps do not exist in such a limited time period and such a down market, yet the lenders do not want to hear it. They will always kick an appraisal with older comps into appraisal review, and if other comps do not exist, they will likely order a second appraisal. We now come down largely to interpretation of the value, which can swing greatly depending on the appraiser. Add in the factors mentioned in my previous post, and you have a reduced value in terms of what a lender is willing to use as a basis for the amount they will finance.

Should the appraiser always use the most recent comps? Sure – but only if they are pertinent and best reflect the style and other factors in determining the value of that particular house. What lenders are doing is in fact forcing appraisers to use comps that are at times inappropriate for comparison purposes, then making a huge number of adjustments to derive a value. This gets us back to what is largely interpretation, and the down side of what the second appraiser, who derives his income from the business he gets from the lender (read incentive to keep it low,) will come up with as a value.

In a down market when you are using only very recent comps, however inappropriate they may be, the math says that you will send values lower at a much faster pace – thus the downward spiral we are seeing in some areas.

There are problems here on a multitude of levels, but in answering your question, the bottom line is that in any financed deal, the lender will indirectly set the value to some extent in today's market.

As pointed out, many appraisers were attempting to set values according to what was necessary to make the deal happen for the broker. After all, that is who is deciding if they will continue to get the appraisal business or not. This is not as underhanded as it sounds, however -- I do far more refinances than purchases -- but certainly I am not going to go through the motions of putting together a loan before I know if it is even doable, thus the request for a comp and the expectation that this will be the least value we will get. It does not mean the appraiser is dishonest -- my guy will not risk his license. It does, however, mean that a lot were when refi's and sales were at such a high volume that the lenders were not even looking at the appraisal for the most part.

Getting back to the role of the lender -- all lenders are subjecting appraisals to close scrutiny, first applying certain measurements to the basic facts, and then sending it to appraisal review when it does not meet the standards of these new guidelines (and they do not meet them A LOT right now.)

It doesn't matter what the realtor feels it is worth or sometimes even what the buyer is willing to pay, unless they have deep pockets to put down a larger down payment to make up the difference they cannot finance -- the lender will have tremendous influence over the value simply because they control the purse strings. Next to supply and demand, I believe that lender scrutiny of appraised values is now the second largest consideration in what is driving values down in many areas. Some of this is a real correction of 4 years of abuse, and some of it is a knee jerk reaction to what has happened in the industry.

Two big areas they tend to look at with these new guidelines -- what is happening to other sales in that county and that zip, and AVM's, which rely on county records. If you have a unique house in the more rural area of a large zip code, the lender's perception of the value will be tainted by what is happening in the more populous small town that is the center of that zip delivery area, and usually that is that values are going down. If you have an older house that was added to decades ago, and the county records do not reflect those changes (they did not obtain permits back in the days when this was not well policed,) the AVM will kick in and a huge discrepancy will occur in perceived value. Many areas with large numbers of old houses will not have their square footage and number of bedrooms properly reflected in county records. While they once allowed the appraiser to simply comment on these items in an addendum and let the value go through or possibly offered to simply finance at a reduced amount, they are now ordering their own appraisal instead. Their appraisal will absolutely come in lower, for reasons that are yet another point of discussion with regard to the appraisal industry.

The only way you are not subject to such scrutiny is if you have a cookie cutter house in a neighborhood filled with recent sales of like houses.

I deal with them here in PA. Their customer service and attention to detail is their strong point. This is very impressive considering their size. I would say that this distinguishes them from other large banks. Smaller banks may not offer the resources or programs you need. Customer service from a large bank with resources -- I consider them to be a unique package in terms of getting the job done with the least amount of anxiety.

I was a member for a limited amount of time a year or so ago, but used it very little due to other circumstances at that time that diverted my attention from my original intentions for being there.

What I have read in posts from others who are far more experienced than me agrees with what everyone is saying here -- the information is too old and largely distributed to be of any real use, and title co's are the way to go for up to the minute and accurate information.