5 Things Most People Don't Know About Negotiating

VICTORIA PYNCHON, THE DAILY MUSE OCT. 22, 2013, 4:42 PM 

Many of us often shy away from asking for more and better. More money. Better working arrangements. A larger team. Better access to material resources. Higher fees. Better prices.

Some of us are afraid to ask. Some of us, especially women, have been taught not to ask — we’ve been taught to be self-sacrificing, not self-serving. Some of us do ask, but stop short of asking for what we really want or what we’re truly worth.

But whatever your reason, I probably don’t have to tell you that, by not asking, you’re missing out on more than just money; you’re putting your long-term opportunities and earning potential at stake.

If you’ve ever stopped before negotiating your true market value, read on for five things most people don’t know about negotiating that will change the way you think about asking — and give you a strong leg up when you do.

1. The Negotiation Doesn’t Start Until Someone Says “No”

One of the greatest inhibitions my clients have is risking rejection. This is particularly true in the post-’08 meltdown and continuing jobless recovery from the worst economic calamity since the Great Depression.

Our reluctance to negotiate past “no” is even harder because both men and women miss the key point: It’s not really a negotiation if we’re asking for something we know our bargaining partner also wants. Negotiation is a conversation whose goal is to reach an agreement with someone whose interests are not perfectly aligned with yours.

And let’s be honest, who has relationships with people who always want what we want? No one! So if we want to get what we’re entitled to get or capable of getting, we either have to negotiate past “no” or spend the rest of our work lives being victimized by people who are happy to place themselves and their needs ahead of ours.

“No” signals an opportunity to problem-solve the conflicting and overlapping interests both parties want to serve. Invite your bargaining partner to your side of the table to figure out how both of you can get as much as each of you wants as possible.

2. Your Bargaining Partner Will Be Happier if You Make Several Concessions Than if He Gets What He Thinks He Wants

This is true in the same way that “the earth is round” or “the universe is expanding” or “high heels hurt your feet” are true. In experiment after experiment, social scientists have proven that people are not particularly happy when they get what they think they want. They’re happier when their bargaining partner says “no” a couple of times before he or she says “yes.”

Why? Because negotiators are more afraid of leaving money on the table than they are about getting what they think they want. If I ask for a 5% raise and my boss says “yes” without hesitation, I generally suffer from buyer’s remorse, certain that if I’d asked for 7% or maybe even 10%, my bargaining partner would have given it to me.

This is just one of the many reasons why it’s important to ask for more than you actually want. The other reason to do so is the proven influence of the first number put on the table. Negotiators call that number an “anchor” because it sets one end of the bargaining range and moves your negotiation counterpart in its direction throughout the course of the bargaining session.

If you’ve adequately researched your negotiation partner’s interests and your own market value, you needn’t fear making the first offer, hoping that his or her first offer will be far more than you’re expecting. Waiting for the “other guy” to make the first offer is the mark of a negotiation amateur. Anchor first and anchor high, and you’ll be playing in the big leagues.

3. It’s Never About Money

Though we seldom reflect on our relationship with money, if asked we’d have to admit that money itself — in its tangible form — can neither sustain life nor enhance it. Cash, checks, credit, money orders, and wire transfers cannot themselves be consumed. Grant deeds and lease agreements cannot be inhabited. Stock certificates cannot create warmth in winter nor illuminate the dark of night.

That being the case, there is no relationship and every relationship between any given sum of money and what it can buy. With $20 in my wallet, I can purchase dinner for five at McDonalds or a bottle of cheap Bordeaux at a local restaurant. I can pick up a pair of sandals at Payless; subscribe to Time magazine for six months; rent a surfboard at the beach; fill half my tank with gas; hire a day laborer to do odd jobs on a Saturday afternoon; or, according to my Sunday magazine, save a child in a developing country from starvation. Sentimental pop songs to the contrary, enough 20s can even buy me love.

Before negotiating any deal, take a look at the way in which you “value” money. Is it status you’re seeking? Security in your elder years? Education for your children? A meaningful break from work that takes you to a foreign country or high-end spa? Then ask your negotiation partner what she values, prefers, needs, fears, prioritizes, or desires. You’re apt to find yourself on the same page of value once you stop treating money as an objective measure of worth and start seeing it for what it is — a subjective experience that can make $1,000 act in the world as if it were $10,000.

4. Your Bargaining Strength is All in Your Head

The person who is perceived to have the least to lose is the person with the greatest bargaining advantage. If you’re negotiating—that is, having a conversation leading to agreement, there is always something at stake for both parties.

A good example: Many say the Los Angeles or San Francisco or New York City real estate markets are over-heated and that everything is over-priced. It’s a seller’s market. It seems as if there are an unlimited number of people willing to pay “over asking” and many of them “all cash” for every home or condo or co-op for sale. Doesn’t that mean that all buyers are in a weak negotiating position and all sellers in a great one?

Not necessarily. Every seller is selling for a different reason. A considerable number of homeowners are retiring. Their kids are gone and they don’t need so much space anymore. Some of them have already signed up for a place in a retirement village or a condo in Palm Springs. They are pressured by time. They could pay for both residences for a month or two, but if it takes them six months to get the price they want, they will have spent the extra purchase price on rent or mortgage payments or homeowner fees in their new home.

The more knowledge you have of the hidden interests and constraints under which your bargaining partner is operating, the more negotiation power you have, even in a “seller’s” market.

But there’s even better news than that! If you act as if you are prepared to walk away from a deal unless you achieve your desired goal, your bargaining partner will be far more incentivized to meet your requirements or make serious problem solving efforts to create enough value so that both of you get what you most want.

5. Any Reason is Far Better Than No Reason and Nearly as Good as an Excellent One

When people estimate their value to their company by the results that their work has produced, they often hesitate sharing that information. “I can’t prove that,” they say, and being unable to “prove” it, they feel unable or unwilling to take credit for it.

Here’s the super secret of all great negotiators: You don’t have to prove something that justifies what you want; all you have to do is say it. When you’re negotiating, you’re not in a court of law. You’re rarely making statements of fact that could land you in hot water for fraud if they prove to be untrue. You’re stating an opinion, and no less an authority than the Supreme Court of the United States has said there is no such thing as a false opinion.

In common parlance, you’re puffing.

The social science research confirms that appearances are reality.

In one experiment, students were asked to cut in line at a local Kinkos. One group was told to give no reason, one a nonsensical reason, and one a good reason.

1. Can I cut in line?
2. Can I cut in line? My mother’s in the hospital, and I need to get these papers copied before I can go see her.
3. Can I cut in line? I need to.

Here are the compliance rates:

1. No reason: 40%
2. A good reason: 98%
3. A nonsensical reason: 97%

So, go ahead. Take credit for last quarter’s increase in net profits even if you can’t prove it. You don’t have to file a declaration under penalty of perjury or testify under oath on the witness stand. You’re highly unlikely to be cross-examined because your negotiation partner can’t prove that your causal assertion is untrue. Millions of years of “common sense” support your assertion that correlation is causation.

It’s not. But it might as well be.

Feel free to try out these strategies and tactics at home with the people closest to you. Can’t agree on a movie? Be willing to walk away if your choice isn’t met. Give a reason, any reason, why your choice would be better for everyone, not just for yourself. Understand that the push-back you’re getting is just an opportunity to problem-solve in a way that satisfies your interests and your roommate’s or spouse’s interests at the same time. Do this at home, and then try it out with that raise you haven’t gotten for the past five years. Then, let me know how it went!

Happy negotiating!

Victoria Pynchon is an attorney who practiced commercial litigation for 25 years. Since 2004, she has been mediating and arbitrating commercial disputes — the former with ADR Services, Inc. in Century City and the latter with the American Arbitration Association in Los Angeles. In 2010, she founded She Negotiates Consulting and Training with her business partner Lisa Gates. In 2006, Victoria earned her legal masters degree (LL.M) in Dispute Resolution. She has been teaching negotiation and providing negotiation consulting services to lawyers, executives, professionals, managers and entrepreneurs ever since. She is the author of two books, The Grownups' ABCs of Conflict Resolution (Reason Press 2010) and Success as a Mediator for Dummies (Wiley, April, 2012).

This post originally appeared at The Daily Muse. Copyright 2013.

How To Jump Through Condo-Lending Hoops

 

Whether buying or refinancing, getting a loan on a condo is hard. Here's what you should know.

By Michele Lerner of Bankrate.com

Borrowers run into two problems when getting a mortgage on a condominium: strict standards that make it hard to qualify for a condo loan and high costs.

These issues beset condo buyers who want to get mortgages as well as people who already own condos and want to refinance.

"Condos are like the canary in the coal mine, a leading indicator of the health of the real-estate market," says John McClellan, a branch manager with Supreme Lending in Austin, Texas. "Recently, lenders' biggest losses came from condos, so they are viewed as risky."

Some lenders reject condo loans altogether.

Condo loans have to jump through two hoops. First the borrower has to qualify. Then the condo association has to qualify, over which the borrower has little or no control.

"Condo financing is very situational because it depends not only on the borrower but also on the project itself," says Matt Ostrander, CEO of Parkside Lending LLC in San Francisco. "The guidelines have tightened because lenders want to see a financially healthy condo development. They want to see a higher concentration of owner-occupants, and they want to see that delinquency rates on condo fees are low."

Standards differ
Lenders follow guidelines from the Federal Housing Administration, Fannie Mae and Freddie Mac for condo mortgages.

Among Fannie Mae's requirements:

• More than half of the condo units must be owner-occupied.
• No owner may own more than 10% of the units.
• No more than 15% of owners can be delinquent on condo dues.
• All amenities must be completed if the development is more than 12 months old.
• Buyers who make a down payment of less than 25% will pay an additional 0.75% of the loan amount at closing or an interest rate that is about 0.25% higher.

The FHA has much friendlier down-payment requirements but has strict guidelines for condo associations.

"It's a misconception on the part of the public that you can't buy a condo without a big down payment," says Ed Wilburn, a mortgage banker with FEMBi Mortgage in Miami. "The rules are stricter now, but if you find a building that has already earned an FHA approval, you can get in with a down payment of 3.5%.

"FHA approval depends on the financial health of the condo, so the condo association needs to prove that they have adequate insurance, a budget with reserves, no pending lawsuits and no anticipated special assessments."

Where to begin
Wilburn says condo buyers should start by checking to see if a building is approved for FHA loans. If not, they can ask the lender to see if the building meets Fannie Mae and Freddie Mac guidelines. Buyers can ask condominium managers if they have recently completed a homeowner-association certification or questionnaire, which provides information on condo-fee delinquencies, insurance and other factors that affect eligibility for loans.

"Even if the condo meets the Fannie Mae guidelines, buyers may find that they must make a down payment of 20% or more because mortgage-insurance companies are less willing to provide mortgage insurance on condo loans, (because) they are considered riskier," Wilburn says. "In fact, most mortgage-insurance companies won't insure a Florida condo. It may be easier in other markets."

McClellan says a local lender will know which local complexes have FHA or Fannie Mae approvals.

"Have a list of places you like and check the status of their approval" with the lender, he says.

Options thin out
Condos that are not approved for FHA or Fannie Mae financing are known as "non-warrantable" and offer few options for buyers or refinancers.

"Buyers can either pay cash, or they can look for a local bank that is willing to lend," McClellan says, "but they should be prepared with a hefty down payment of 50% or more, have excellent credit and still be prepared to pay a higher interest rate. They should expect to pay as much as 7.5% when rates are 4.5% for other loans."

Homeowners interested in refinancing will first need to face the potential problem of a lack of equity, because condo values have dropped in many areas.

"Condo owners can ask their management company if their complex is FHA- or Fannie Mae-approved, and if (the complex is) not, they may want to contact a local lender to see if they start the process for obtaining an approval," McClellan says. "It's in the best interest of all the owners to do what they can to meet FHA guidelines, (because) that approval can increase the value of all the homes in the development."

If The Debt Ceiling Does Not Pass: Mortgage Rates May Surge if Gov't Defaults

DAILY REAL ESTATE NEWS | WEDNESDAY, OCTOBER 16, 2013

The clock is ticking for lawmakers to prevent the debt ceiling breach or the government could default on its debts. If the government does default, there likely be one consequence for home buyers that will soon emerge: skyrocketing borrowing costs. 

"Anytime there is a default, the borrower is going to get punished in terms of higher interest rates; if the government defaults, that means Treasury rates will also rise, and that also pushes up mortgage rates,” Lawrence Yun, chief economist for the National Association of REALTORS®, told Fox Business Network. “The housing market is highly sensitive to changes in interest rates.”

Home buyers may not be aware that there is a strong link between the government default and mortgage rates. 

The average rate on a 30-year fixed-rate mortgages was 4.23 percent last week, Freddie Mac reported. 

However, if the government defaults, mortgage rates could rise overnight by a full percentage point or more, says Anthony Hsieh, founder and CEO of LoanDepot, an online mortgage lender. Stu Feldstein, president of SMR Research, a mortgage research firm, predicts mortgage rates could rise by as much as two percentage points within a day or so. 

Hsieh believes the rise in rates would prompt more buyers to consider adjustable rate mortgages. 

"In the last three years or so, consumers have been spoiled with rates in the high threes to the mid-to-low fours,” Hsieh says. “If we climb into the 5 percent interest rate range, that will create psychological barriers and adjustable rate mortgages will become attractive -- even if they aren't."

Higher mortgage rates could make a big difference to buyers’ with their monthly payments. For example, a 30-year fixed-rate mortgage for a $300,000 loan could have about a $1,472 a month payment at a 4.23 percent mortgage rate. But if mortgage rates rise to 5.5 percent, that same mortgage would have about a $1,703 monthly payment and $83,160 extra in interest over the life of the loan. 

Source: “Could Government Default Send Homebuyers Racing to ARMs?” FOX Business (Oct. 15, 2013) and “Mortgage Rates Could Spike if U.S. Defaults,” The Wall Street Journal (Oct. 16, 2013)

Is It Now Or Later?

Why it Might Be Cheaper to Buy Now

DAILY REAL ESTATE NEWS | THURSDAY, OCTOBER 10, 2013

Mortgage rates are nearing the 5 percent mark, prompting many home buyers to rush to take advantage of rates while they’re still low. 

“Most people agree it is only a matter of time before rates hit 5 percent,” Peter Grabel, a mortgage loan originator at Luxury Mortgage Corp. in Stamford, Conn., told realtor.com®. “The housing market has clearly turned the corner in most areas. I think a year from now, people will look back and realize that this was a great buying opportunity.”

Some forecasts show rates could edge even higher to 5.5 percent or even 6 percent in 2014. The Federal Reserve has announced that it will soon start tapering its $85 billion monthly bond-purchasing program, which is expected to send mortgage rates rising from recent record lows. 

Currently, 30-year fixed-rate mortgages are averaging 4.2 percent, according to Freddie Mac. 

In a recent blog post, realtor.com® illustrates the effect of rising mortgage rates on buyers’ pocketbooks: 

1. Example: A buyer gets a 30-year fixed-rate mortgage at a 5 percent interest rate on a $300,000 loan.
   Monthly payment: $1,610.46
   Total payment: $579,569.69
   Total interest: $279,769.69
2. Example: A buyer gets a 30-year fixed-rate mortgage at 6 percent interest rate on a $300,000 loan.
   Monthly payment = $1,798.65
   Total payment = $647,515.44
   Total interest = $347,515.44

The buyer with a 6 percent interest rate would pay about $67,746 more over the life of a loan than the buyer who was able to get an interest rate at 5 percent. 

Source: “Buy a Home Now or Pay More Later?” realtor.com® (Oct. 8, 2013)

Employment gap between rich, poor widest on record...

http://modernhomebuyers.com/

By Hope Yen, Associated Press

WASHINGTON (AP) - The gap in employment rates between America's highest- and lowest-income families has stretched to its widest levels since officials began tracking the data a decade ago, according to an analysis of government data conducted for The Associated Press.

Rates of unemployment for the lowest-income families – those earning less than $20,000 – have topped 21 percent, nearly matching the rate for all workers during the 1930s Great Depression.

U.S. households with income of more than $150,000 a year have an unemployment rate of 3.2 percent, a level traditionally defined as full employment. At the same time, middle-income workers are increasingly pushed into lower-wage jobs. Many of them in turn are displacing lower-skilled, low-income workers, who become unemployed or are forced to work fewer hours, the analysis shows.

"This was no `equal opportunity' recession or an `equal opportunity' recovery," said Andrew Sum, director of the Center for Labor Market Studies at Northeastern University. "One part of America is in depression, while another part is in full employment."

The findings follow the government's tepid jobs report this month that showed a steep decline in the share of Americans working or looking for work. On Monday, President Barack Obama stressed the need to address widening inequality after decades of a "winner-take-all economy, where a few do better and better and better, while everybody else just treads water or loses ground."

"We have to make the investments necessary to attract good jobs that pay good wages and offer high standards of living," he said.

While the link between income and joblessness may seem apparent, the data are the first to establish how this factor has contributed to the erosion of the middle class, a traditional strength of the U.S. economy.

Based on employment-to-population ratios, which are seen as a reliable gauge of the labor market, the employment disparity between rich and poor households remains at the highest levels in more than a decade, the period for which comparable data are available.

In the first seven months of 2013, the employment rate was 73.5 percent for households with income of more than $150,000 a year, compared with 33.8 percent for households making less than $20,000 – a gap of 39.7 percentage points, similar to the ratio in the most recent years after the recession. In contrast, the employment gap was 36.4 percentage points in 2005, at the height of the housing bubble.

"It's pretty frustrating," says Annette Guerra, 33, of San Antonio, who has been looking for a full-time job since she finished nursing school more than a year ago. During her search, she found that employers had become increasingly picky about an applicant's qualifications in the tight job market, often turning her away because she lacked previous nursing experience or because she wasn't certified in more areas.

Guerra says she now gets by doing "odds and ends" jobs such as a pastry chef, bringing in $500 to $1,000 a month, but she says daily living can be challenging as she cares for her mother, who has end-stage kidney disease.

"For those trying to get ahead, there should be some help from government or companies to boost the economy and provide people with the necessary job training," says Guerra, who hasn't ruled out returning to college to get a business degree once her financial situation is more stable. "I'm optimistic that things will start to look up, but it's hard."

Last year the average length of unemployment for U.S. workers reached 39.5 weeks, the highest level since World War II. The duration of unemployment has since edged lower to 36.5 weeks based on data from January to July, still relatively high historically.

Economists call this a "bumping down" or "crowding out" in the labor market, a domino effect that pushes out lower-income workers, pushes median income downward and contributes to income inequality. Because many mid-skill jobs are being lost to globalization and automation, recent U.S. growth in low-wage jobs has not come fast enough to absorb displaced workers at the bottom.

Low-wage workers are now older and better educated than ever, with especially large jumps in those with at least some college-level training.

"The people at the bottom are going to be continually squeezed, and I don't see this ending anytime soon," said Harvard economist Richard Freeman. "If the economy were growing enough or unions were stronger, it would be possible for the less educated to do better and for the lower income to improve. But in our current world, where we are still adjusting to globalization, that is not very likely to happen."

The figures are based on an analysis of the Census Bureau's Current Population Survey by Sum and Northeastern University economist Ishwar Khatiwada. They are supplemented with material from the Massachusetts Institute of Technology's David Autor, an economics professor known for his research on the disappearance of mid-skill positions, as well as John Schmitt, a senior economist at the Center for Economic and Policy Research, a Washington think tank. Mark Rank, a professor at Washington University in St. Louis, analyzed data on poverty.

The overall rise in both the unemployment rate and low-wage jobs due to the recent recession accounts for the record number of people who were stuck in poverty in 2011: 46.2 million, or 15 percent of the population. When the Census Bureau releases new 2012 poverty figures on Tuesday, most experts believe the numbers will show only slight improvement, if any, due to the slow pace of the recovery.

Overall, more than 16 percent of adults ages 16 and older are now "underutilized" in the labor market – that is, they are unemployed, "underemployed" in part-time jobs when full-time work is desired or among the "hidden unemployed" who are not actively job hunting but express a desire for immediate work.

Among households making less than $20,000 a year, the share of underutilized workers jumps to about 40 percent. For those in the $20,000-to-$39,999 category, it's just over 21 percent and about 15 percent for those earning $40,000 to $59,999. At the top of the scale, underutilization affects just 7.2 percent of those in households earning more than $150,000.

By race and ethnicity, black workers in households earning less than $20,000 were the most likely to be underutilized, at 48.4 percent. Low-income Hispanics and whites were almost equally as likely to be underutilized, at 38 percent and 36.8 percent, respectively, compared to 31.8 percent for low-income Asian-Americans.

Loss of jobs in the recent recession has hit younger, less-educated workers especially hard. Fewer teenagers are taking on low-wage jobs as older adults pushed out of disappearing mid-skill jobs, such as bank teller or administrative assistant, move down the ladder.

Recent analysis by the Associated Press-NORC Center for Public Affairs Research shows that whites and older workers are more pessimistic about their opportunities to advance compared to other groups in the lower-wage workforce.

Eric Reichert, 45, of West Milford, N.J. Reichert, who holds a master's degree in library science, is among the longer-term job seekers. He had hoped to find work as a legal librarian or in a similar research position after he was laid off from a title insurance company in 2008. Reichert now works in a lower-wage administrative records position, also helping to care for his 8-year-old son while his wife works full-time at a pharmaceutical company.

"I'm still looking, and I wish I could say that I will find a better job, but I can no longer say that with confidence," he said. "At this point, I'm reconsidering what I'm going do, but it's not like I'm 24 years old anymore."

Should I Rent or Buy A Home? | Calculators by CalcXML

Should I Rent or Buy A Home? | Calculators by CalcXML

Wait! Are You Buying the Right House?

Don't let your emotions overrule a reasonable assessment of whether a particular home really meets your needs.

By Marcie Geffner

Anyone who has ever bought a home remembers the wonderful feeling of finding the right property and falling in love with it. It's an indescribable mixture of comfort, excitement and dreams about to come true. "Can we afford it? Will the sellers accept our offer? How soon can we pick up the keys?" the excited buyers ask. Great vibes are undoubtedly a good sign in deciding to purchase a home. But you shouldn't let your emotions overrule a reasonable assessment of whether a particular home really meets your needs.

Here are a few of the many rational questions you'll want to ask yourself before you rush into a commitment to buy.

PriceYour lender says you can afford to buy the home you adore, but are you comfortable with the monthly payments you'll be obligated to make? Is the down payment within your means? Will you have enough cash to pay transaction costs and moving expenses? If the house needs major repairs, remodeling or redecorating can you save the necessary funds within a reasonable time period?

Condition
Along with price, the condition of the home should be a top consideration. Does the home need a new roof? Extensive upgrading of the electrical wiring? New plumbing? Is the home disaster-ready (e.g., bolted to the foundation in earthquake country)? A fixer-upper home with lots of potential can be a great find or a money pit. Will you be able to meet the financial challenges and live with the mess and inconvenience while the home is being brought up to your expectations?

Size and configurationIs the house the right size for your needs and does it have the right combination of bedrooms, bathrooms and other living areas? Is that small closetless den really big enough for your child's bedroom? Is one bathroom adequate and if not, what are the real costs and headaches of adding a second one? Does the kitchen have enough cupboard and countertop space? Is the garage wide enough and deep enough for your vehicles? Will your piano really fit in that alcove near the staircase?

Comfort 
Does the house have a central heating system? A central air-conditioning system? Are those climate controls important to you? Are the windows large enough and positioned to create cross ventilation? If the house has two stories, are you comfortable with the idea of walking up and down stairs every day? Is there a downstairs bathroom (and bedroom, if needed) for guests who can't navigate the stairs?

Style 
Is the design and architecture of the house too modern or too traditional for your preferences in furniture and home furnishings?

Resale potentialPeople move to a new home every seven years, on average. If you wanted to sell your home or were forced by unexpected circumstances to sell it, how easy would it be to find a ready, willing and able buyer?

FeaturesSome buyers fall in love with pricey home amenities that seem attractive and desirable at the time, but later prove to be more headache and less pleasure than the buyers anticipated. Do you really want a swimming pool? High-maintenance ornamental trees? Commercial-grade built-in kitchen appliances? Expensive hardwood floors? Some homes are easier to visit than they are to own.

How Fast Should You Buy a Home?

In hot markets across the country, homes are selling fast. And that means if you hope to buy a home, you have to be prepared to move quickly.

"I've seen all cash offers close in three days," says Realtor.com's Consumer Housing Specialist Leslie Piper. "And I've seen loans get approved and close within 21-25 days."

Forty-seven percent of all homes sold in June 2013 were on the market for less than a month, according to the National Association of Realtors. It also reports that the median time on market for all homes was 37 days in June. Short sales were on the market for a median of 68 days, while foreclosures typically sold in 39 days and non-distressed homes took 35 days.

If you don't have cash to buy a home, it's critical that you get pre-approved for a mortgage. "Prior to starting your house hunt, you give your lender all of your financials," says Scott Sheldon, a loan officer with Sonoma County Mortgages. "You let them pull a copy of your credit report, run your debt ratios … and you go house hunting knowing you are ready to roll."

Once your offer on the home is accepted, be prepared to be at your loan officer's beck and call. "If you are diligent about providing the lender everything they request, you should be able to close in 25 days or less provided the real estate agent title company and everyone is diligent about meeting contractual time frames," Sheldon adds.

Barriers to Speedy Homebuying

Piper warns that if deadlines can't be met, you can lose the home. "We are seeing a lot of back-up offers so if someone overpromises but underperforms things can fall out of escrow."

Searching for the right home to buy might take a little longer.

According to an annual survey by the National Association of Realtors, the typical buyer searched for a home for a median 12 weeks and visited 10 homes, down from 12 homes in the previous year's survey.

It helps to find a real estate professional you can trust to help you in your search. "That person is going to be your eyes and ears and tell you what is going on," says Piper. In addition to providing profiles on real estate professionals, Realtor.com offers free mobile apps with information about millions of homes for sale, and includes the ability to search within a particular school district.

Also be sure to scout out neighborhoods where you'd like to live so you are prepared to make an offer when a home you like becomes available. "Most buyers are choosing a (home) based on the neighborhood," says Walter Molony, spokesman for National Association of Realtors. "They want to be close to work or close to family and friends. If you are an entry level buyer you want to make sure you understand that neighborhood. Try it in rush hour. Get a crime report if you don't have first-hand knowledge. Check out schools if you are a family with children."

Tips to Buy a Home Fast

• Check your credit reports and your credit score before you start shopping for a home to give yourself time to fix any mistakes you find. You can check your credit reports for free once a year from each of the three major credit reporting agencies.
• Get preapproved — not just prequalified — for a mortgage. Doing so may even put you at an advantage over a cash buyer who may be offering less money.
• Work with real estate and mortgage professionals who have a track record of meeting deadlines. Don't be afraid to ask for references.
• Protect yourself. No matter how much you love the home, make your offer contingent upon a satisfactory home inspection, so you aren't stuck with a house with unknown problems, suggests Molony.

Want to buy a house? Take a number!

Remember when real estate was so hot there were lotteries, bidding wars and desperate people making offers sight unseen? In some markets, they're back.

By Marilyn Lewis 5 hours ago

Perhaps you, like me, thought we'd never again see the kind of madcap competition to buy homes that was common in the housing boom. I'm thinking of lotteries, not to win a home but just a chance to buy one. I'm remembering bidding wars and home shoppers so desperate to buy that they'd camp overnight outside new subdivisions to be first in the door the next day.

In some parts of the country, this kind of red-hot competition for homes, especially new homes, is back. Boom-era responses like camping in line overnight, homebuilder lotteries and buying homes sight unseen are making a reappearance.

That's how intensely demand is rising in some cities. If a picture speaks a thousand words, these nine spellbinding maps of U.S. home-price appreciation (a map for each year from 2005 through to today) tell the story of housing in the last crazy decade: from boom to bust to a second dizzying acceleration.


Lotteries fairer
So far, this the new run-up in prices is confined to a handful of cities and regions, particularly coastal California markets, Phoenix and Tucson, Las Vegas, Denver, Boston, Seattle, Portland,  the Washington, D.C. metro and several Florida markets.

Authors of the CoreLogic Case-Shiller Home Price Index say prices rose nationally 7.3% in 2012 and could jump an additional 3% this year.

In Silicon Valley, few jaws drop anymore when a nice-but-nothing-spe​cial 986-square foot Palo Alto cottage like this one, listed at $1.25 million, inspires 20 offers and sells for $1.73 million.

Nearby, in the only slightly less-expensive town of Sunnyvale, 50 or so eager, prequalified home shoppers began camping out overnight for a chance to buy newly completed units in a 228-unit condo development.

To inject more fairness -- and less discomfort-- into the buying process, builder O'Brien Homes revived the boom-era practice of holding lotteries that gave winners the chance to buy. The two-, three- and four-bedroom condos initially sold for $420,000 to $620,000. But by the time the development sold out in April, demand had pushed prices up 32%, to $555,000 to $815,000, CNN Money reports.

 In other Bay Area towns, Livermore and San Ramon, Calif., other builders are also resorting to lotteries to manage competition for their product. Such buyer demand is not confined to the Bay Area. Homebuyer lotteries also are cropping up in northern Virginia and in parts of Florida.


Tales of homebuying exuberance
Does these buyer frenzies add up to a new era of irrational real estate exuberance? Some say yes, others no. But, bubble or not, demand can get pretty intense as investors and buyers fall over each other to snatch up the few homes available for sale.

In San Diego, "major builders are requiring prospective clients to sign up on lists for a chance to buy a home," writes The San Diego Union-Tribune.

In the Portland suburb of Beaverton, Ore., this sweet but ordinary two-story, three-bedroom, three-bath home was shown 48 times in 48 hours.

"Another listing in the same area got four offers in its first four hours on the market," Redfin told Forbes. The 1,681-square-foot 12-year-old house sold March 28 for $295,000. It was listed Feb. 22 for $298,900, according to Redfin. The last time it was on the market, it was listed for $292,500 in June 2011 and sold in August for $10,000 less.

Forbes recently compiled examples of extreme buyer behavior gleaned from Redfin agents around the country. Among the wildest:

Month-to-month markups: Agent Brad Le got a $520,000 offer on a San Jose condo even though a unit with an identical floor-plan sold for $470,000 the week before. Nearly all of the nine offers on the Redfin listing waived inspection and financing contingencies.

Instant flips: A buyer for this Bowie, Maryland home beat out 15 other offers by paying $22,000 above the asking price, only to get an email from investors the next day asking if the buyer would like to sell at a profit the property he'd just got under contract.

Barclays: Home Prices to Rise 10% This Year...

Home prices will likely climb 10 percent in 2013 and 8 percent in 2014, according to Barclays analyst Stephen Kim, who recently upgraded his view of the housing market from neutral to positive. 

Kim told The Wall Street Journal recently that low mortgage rates are helping to make buying more affordable than renting in many markets. 

About “18 months ago, the industry was nothing much to look at: dilapidated foreclosures were flooding the market, home equity had suffered the worst retrenchment in a generation, and housing starts and sentiment were far below historic troughs levels,” Kim notes. “But after stabilizing in 2012, both new and existing home prices are now accelerating much more rapidly than in the 1990s cycle.”

Source: “The Housing Market: Not Your Analyst’s Oldsmobile?” The Wall Street Journal (April 23, 2013)

Following Goldman, Investment Banks Eye...UTAH?

A word of warning to Ivy League Excel jockeys heading to Wall Street: You may end up in Salt Lake City. It’s a long commute to the Hamptons, and the nightlife can be … well … sobering. Then again, think of the skiing.

Utah, already home to 5 percent of Goldman Sachs (GS)workers, is gaining momentum in its bid to be Wall Street of the West. State economic development officials say they are in advanced talks with three major banks on projects that would bring an additional 1,000 securities jobs to Salt Lake City.

For finance companies, the strategy is a classic arbitrage trade. The state offers real estate and labor well below the rates demanded in the concrete canyons of New York or other finance hubs. And, in part because a high percentage of the Salt Lake City population has completed the Mormon church’s two-year missionary program, foreign language skills are abundant. More than half of Goldman’s Salt Lake workforce is fluent in a second language.

Utah is also sweetening deals with major incentives, offering credits of up to one-quarter of corporate tax bills. That means Goldman will receive $47 million in Utah rebates by 2029, provided it keeps about 1,100 workers in the state and hits certain investment hurdles. Four years after signing that deal, Goldman has already met the first target. It has 1,500 Utah workers and is still making a strong Salt Lake sell in its recruiting materials.

It’s not just tech support. Goldman now has asset managers and research folks in the state. It even recently added a team of investment bankers. Next month, the company will host its annual meeting in Salt Lake City, its first outside New York City.

The state has also notched smaller recruiting victories of late. Morgan Stanley (MS) has expanded its Utah operations three times in the decade since it opened an office there. In November, Royal Bank of Scotland (rbs) committed to hiring 310 workers in the state, in exchange for $5.3 million in tax credits.

Granted, another 1,000 jobs won’t change the industry. But in a smaller city like Salt Lake, those jobs are significant, and over time, those zeros add up.

Meanwhile, the share of securities industry workers in New York City has fallen from 30 percent to 21 percent in the past 20 years,, according to a recent report by the Securities Industry & Financial Markets Association. The city’s finance industry now employs 169,700, down from a peak of 200,300 in 2000.

The labor picture is similar across the Atlantic. Employment in London’s financial services industry is nearing a 20-year low, though City banks and brokerage firms still employ about 237,000 people. Powder skiing is not one of their perks.

By Kyle Stock April 05, 2013 - Stock is an associate editor for Businessweek.com.

UTAH - 10th Best State With Low Tax Burdens

Not all states are equal, especially when it comes to local taxes. Find out which states' residents enjoy low -- or no -- sales, property or income taxes

Utah

Utah fell closer to the middle in income and sales taxes -- ranking 14th and 22^nd, respectively -- but since it has the third-lowest property tax rate ($837 per capita) and fifth-lowest corporate tax rate (5 percent flat tax), it's the 10th best state for overall taxes.

Brianna Ehley, The Fiscal Times

Home Prices Climb In December, Best Yearly Gain Since 2006...

February 26, 2013 9:30 AM ET

NEW YORK (Reuters) - U.S. home prices picked up in December, closing out 2012 with the biggest yearly gain in more than six years as the housing market got back on its feet, a closely watched survey showed on Tuesday.

The S&P/Case Shiller composite index of 20 metropolitan areas rose 0.9 percent in December on a seasonally adjusted basis, topping expectations for a gain of 0.5 percent.

Prices in the 20 cities jumped 6.8 percent year-over-year, ahead of expectations for 6.6 percent and the best yearly gain since July 2006.

"I expect the home price rise to persist in 2013," said Michelle Meyer, senior economist at Bank Of America Merrill Lynch in New York.

For the final quarter of the year, prices gained 2 percent on a seasonally adjusted basis. On a non-adjusted basis, prices were up 0.2 percent in December.

Last year housing contributed to economic growth for the first time since 2005 as the sector began to recover from its far-reaching collapse. Still, the market is far from fully healed, with over 20 percent of mortgages underwater and foreclosure rates still elevated.

Prices have been rising since last February as the supply of available homes for sale tightened in 2012, helping to stabilize home values. Investors buying cheap homes to be converted into rentals also supported the market and some hard-hit areas saw a sharp bounce back in prices. Phoenix, for example, saw gains of 23 percent compared to December 2011.

"While the economy faces challenges from the fiscal cuts, the housing market is on a good footing due to low inventory, slow clearing of foreclosure, steady household formation and more easing of mortgage credits," said Meyer.

Atlanta and Detroit racked up their biggest yearly increases since 1991, when they were first tracked. Prices in the cities climbed 9.9 percent and 13.6 percent, respectively. New York was the only region to decline on a yearly basis, down 0.5 percent.

U.S. stock index futures saw little reaction to the data, with Wall Street set for a higher open, while the dollar extended losses against the euro.

(Reporting by Leah Schnurr, additional reporting by Richard Leong; Editing by Chizu Nomiyama)

Would You Buy Near the Friendly Rails?

"Transit-oriented development" sounds like a solution to a variety of urban problems. If people could live and work within walking distance of a train or bus stop, people could save money on gas, people without cars could commute more easily, neighborhoods could reduce congestion and pollution, and economic growth could follow.

Generally, it makes sense for cities to invest in the hubs that connect people and the places they need to go. However, not every rail stop is equally primed for a new apartment complex or retail development, and determining why is a significant challenge. For example, there is little sense in pushing transit-oriented development in a community where every household already has multiple cars, and likewise there is little sense in developing stops in areas divided by highways and mega blocks where people are unlikely to walk to a train.

In early February, the Center for Transit-Oriented Development released a study of more than 100 transit stops in the Pittsburgh area, assessing the suitability for transit-oriented development. A quarter to half of the station areas in the system could benefit from a small infrastructure investment, such as a pedestrian bridge or tunnel, signage showing where the station is, or paved pathways or sidewalks. The assessment uses pentagonal graphs to illustrate ways that density, land use, care dependency and distance all shape communities differently.

"It’s a very simplistic way of measuring what you need," says CTOD director Abigail Thorne-Lyman. "But if you don’t have the resources to even know where to begin, it’s very powerful to say ‘I’m just going to look at these five things, and what do I need to improve to push myself into a more transit-oriented urban form?'" 

Source: "The Geometry of Transit-Friendly Neighborhoods," The Atlantic Cities (02/11/13)