Market

Coach’sTIPS Jan. 2008

TO MAXIMIZE YOUR CLIENT APPRECIATION PROGRAM ™

5770 Armada Drive, Carlsbad, CA 92008 • ph 800.945.3485 • f 760.476.2786

·

Piggy bank to promote savings goals

The best remodels will realize a return on investment almost immediately and will certainly pay for themselves within a few years. In addition, a beautifully remodeled kitchen or bathroom will make living in your familiar home a new and exciting experience.

Tagline

Sample dialog for follow up on business-to-business referrals: “You were referred to me by one of my clients, John Smith. He told me that you helped him remodel his kitchen, and that he was very pleased with the quality of work and service you provide. As part of my full service real estate business, my clients often look to me to refer quality businesses and services such as yours. I would love to schedule some time to come by and meet with you to find out more about you and your business so that I can add you to my preferred vendor list. What would be a good day and time for us to meet? I have Monday or Thursday available.”

Coaching Tip:

Never endorse or refer any businesses you haven’t researched yourself. Remember, you are putting your name on the line.

This Month’s CAP!

One thin Take A Close Look

Millions of

2007 Home Sales Fifth in His Best tory :

g remains

Houses Sold

1.6m

Low 1970

3.0m Rebound 1976

constan

t—real esta

1.9m

Low 1982

GOOD The U.S. EconoNEWS—Look Beyond the Headlines my Is Stabl e

Unemployme nt is low and has been holdin all but three years in the g steady at last 30. 2 U.S. about 4.6 percen to grow in 2008. 4 personal income t for the last held steady two years. This is better in 2007. 3 Gross Domes than tic Product 20 is forecast 7%

15

Interest Rate %

6% 5%

projection

2006 2007 2008 2009

10

5

Market

UPDATE

3.6m Rebound 1986

te sales

3.6m High 1988

go up ove

3.2m

Low 1990

Mortgage Rates Are

1980

1985

1990

1995

1 Nat’l Assn. 2 http://w Realtors 09/07. http://w ww.bls.gov/cps/p ww.realtor.org/R 3 http://w ww.forecasts.org/ rev_yrs.htm esearch.nsf/htmla 4 http://w rchives/ResearchU ww.cbo.gov/ftpdo personal-income. 5 Nat’l Assn. htm pdate091407 Realtors, Existingc.cfm?index=7731 Homes Sales. http://www.realt or.org/Research.n sf/files/ehsrepor t.pdf/$FILE/EHSr eport.pdf

5.2m High 1999

Historically

Mortgage availa Very Low bility is restric subprime lender ted, but that applies more s than fixed-r Despite 2007 to ARMs and ate mortgages market fluctua from prime have stabiliz tions, rates lenders. ed and are quite low by long-term standa selective, and rds. Lenders are more you should you be, too.

Seek the Advic e of Professiona

The prime ls lenders Be patient. industry remain in the mortgage strong. Throug Good things professional ha qualification will come. process, they provide marke t stability via lending policie sound s. Seek their advice for traditional financing progra are best qualifi ms that will fit your needs ed to “sort things long advice regard ing home loans out for you” and provid term. They e responsible and refinancing.

A modest recove The latest news at time of publica while pendin ry for existing-hom tion: e sales is expect g market will home sales indicate ed in 2008 near-term improv stability. Lawre as the impact of mortgage produc e from a steady the credit 2000 unleas nce 2005 for existing-hom ts. “Even with relativ hing of pent-up demanYun, NAR chief econom crunch subsides, ely low ist, Interest Rates e sales. The d an all-time median existin fourth quarter sales, and from a wide abund said the housing Are Low high set in ance 2007 The Federa g-home price 2006, ” l Reserv Yun said. in 2007 will will be the fifth highes of safer have fallen economy movin e Board adjusts interes t by less than year on record t rates as a g. Over the 2 percent from means of holdin high, causin last 20 years, g or compo during tight g inflation unding the rates genera There will always situation. Curren housing markets, inflatio in check while keepin lly equate g be our to opport tly, interest n and interes lower house a tight marke unities to sell and buy a rates are t rates have payments and t. home—make been may be a strong historically low. Lower sure the timing right for you. interest motivator to is sell or buy during 0

r time.

4.2m Rebound 1996

During the 90’s, there 70’s, 80’s and were signific changes ant in the some of economy, which in the housin were reflected g marke trend was t. The The housin always the same. and improv g market rode it out ed. 2005 and were strong years for 2006 sales, but home 2007 was did you know that actually the in history fifth best ? “Existing are projec home sales this year ted at 5.92 million (2007), rising million in 2008, compa to 6.27 6.48 million in 2006.” 1 red with

GOOD NEWS —The

Housing Mark When you buy and sell et Is Relat is relative. accommodat Taxes are structu ive e the premis red to e that they are also 2007 is on buying anothe when most people sell track to be their home, There are financ r one becaus the year in the e they need history of realfifth best ial incentives a place to live. this timely estate encouraging U.S. EXISTI reinve NG HOME 2007 is on market conditi stment. So, regardless Homes Sold S STATIS TICS 5 pace of ons, buying 1.15% increas to show a 2004 Avg. Price and selling relatively close 6.7 million in a sales price e in average 2005 period of time $195,400 a high marke 7.0 million levels the playin 2006 t, you are also $219,600 g field—if 6.4 million years ago, buying in a you sell in 2007 (est.) the market $221,900 5.5 million has likely apprec high market. If you bough $224,500 t iated signifi cantly—it always does. MORE

I can help you get the most out of your home! Oh, by the way®…if you know of anyone who would appreciate the level of service I provide, please call me with their name and business number, and I’ll be happy to follow up and take great care of them.

3.9m High 1978

January 2008 CAP Highlights: Good News About the U.S. Economy Interest Rates, Historically Speaking Trends & Updates

© 2008 Buffini & Company All Rights Reserved. Used by Permission. LGK JANUARY CAP SL

Home improvement guides or copies of Remodeling Magazine

· Worksheets that will help plot out savings and budgeting plans

If you haven’t already established a cross-endorsement campaign with any of these types of businesses, take this opportunity to search your database for people willing to give you a referral.

1990s

·

“As part of the full service I provide my clients, I am always looking for great businesses or resources to refer customers to. Do you know an interior designer that you have used and would recommend?”

JANUAR Y CAP S

A handy calculator

Sample client call dialog:

Permissio n. LGK

·

Hosting a home improvement event will give you a chance to add these businesses to your endorsement database and can earn you valuable referrals from these professionals in return.

Reserved . Used by

Even if your clients aren’t expecting to be moving anytime soon, it is always a good idea to consider a remodel or home improvement venture. You can Pop By with one of the following items that will help your clients plan or begin saving for a remodel or improvement project:

Interior designers and decorators Landscape architects Contractors Home exterior professionals such as designer painters, resurface specialists and siding experts

Compan y All Rights

CARE

· · · ·

Buffini &

January is a great football month. Plan a party around a major bowl game or NFL playoff game. Remember to have plenty of things to do for people who may not be interested in football.

mixer, such as a barbeque or cocktail party, where your clients can mingle with professionals who can help them revitalize their home. Ideas for business-to-business relationships include the following:

© 2008

Idea:

C OMMUNITY Promoting home improvement is a great opportunity to host a fun and casual

1980s

Today’s market offers a wide range of opportunity. The more knowledgeable you are, the better asset you are to your client. It is important for you to be well-versed and have an open and accurate perspective, so you can be a trusted resource. This goes a long way in creating the types of relationships that are lasting and promoting referral business. Inviting one of your A+ clients to lunch and bringing January’s Item of Value to review is a great way to set your client’s mind at ease about our current housing news. Be prepared by knowing market history and facts. Becoming an accurate source of knowledge is crucial to being a successful agent. Describing some of the ways that you are continuing to perform at a top level in the current market is invaluable in gaining loyalty and promoting referral business.

1970s

CONTACT

www.buffiniandcompany.com

“To be well-informed is to have the world at your fingers.” —Joseph Jones Dear Friend, Did you know that 2007 was actually the fifth highest year for home sales in history? Take a closer look at the numbers and you will discover that the state of the real estate market may not be everything the media leads you to believe. Sometimes we all need a little historical perspective to see the big picture clearly. Fortunately, I did all of the research and analysis for you already. This month’s Item of Value includes a variety of interesting and informative statistics that illustrate why last year was a good year overall for home sales. With mortgage rates historically low and new, innovative mortgage programs being unveiled, there is even greater promise for home sales in 2008. On the backside, you will find a noteworthy study on the rising trend of vacation home sales. Nearly one-third of vacation homes are being purchased with the intent of becoming a full-time residence upon the buyer’s retirement. With today’s mortgage rates, renting options and family gathering advantages, buying a vacation home is a great option to consider. With so much to take into account when you buy or sell a home, I am always available to help you sort out what is best for you. Sincerely,

Oh, by the way® …if you know of someone who would appreciate the level of service I provide, please call me with their name and business number, and I’ll be happy to follow up and take great care of them.

You can download this cover letter from our website, so that you can customize it for each of your clients.

One thing remains constant—real estate sales go up over time.

3.0m

3.9m

Low 1970

Rebound 1976

High 1978

2007 is on track to be the fifth best When you buy and sell is relative. Taxes are structured to year in the history of real estate accommodate the premise that when most people sell their home, U.S. EXISTING HOMES STATISTICS 5 they are also buying another one because they need a place to live. Homes Sold Avg. Price There are financial incentives encouraging 2004 6.7 million $195,400 2007 is on pace to show a 7.0 million $219,600 this timely reinvestment. So, regardless of 1.15% increase in average 2005 sales price 2006 6.4 million $221,900 market conditions, buying and selling in a 2007 (est.) 5.5 million $224,500 relatively close period of time levels the playing field—if you sell in a high market, you are also buying in a high market. If you bought years ago, the market has likely appreciated significantly—it always does.

MORE GOOD NEWS—Look Beyond the Headlines The U.S. Economy Is Stable Unemployment is low and has been holding steady at about 4.6 percent for the last two years. This is better than all but three years in the last 30.2 U.S. personal income held steady in 2007.3 Gross Domestic Product is forecast to grow in 2008.4 projection

7% 6%

Interest Rate %

Market

5%

15

2006 2007 2008 2009

10 5 0

1980

1985

1990

1995

2000

2005

3.6m

3.6m

Low 1982

Rebound 1986

High 1988

3.2m

4.2m

5.2m

Low 1990

Rebound 1996

High 1999

During the 70’s, 80’s and 90’s, there were significant changes in the economy, some of which were reflected in the housing market. The trend was always the same. The housing market rode it out and improved. 2005 and 2006 were strong years for home sales, but did you know that 2007 was actually the fifth best in history? “Existing home sales are projected at 5.92 million this year (2007), rising to 6.27 million in 2008, compared with 6.48 million in 2006.”1

GOOD NEWS—The Housing Market Is Relative

20

1.9m

UPDATE

Mortgage Rates Are Historically Very Low Mortgage availability is restricted, but that applies more to ARMs and subprime lenders than fixed-rate mortgages from prime lenders. Despite 2007 market fluctuations, rates have stabilized and are quite low by long-term standards. Lenders are more selective, and you should be, too.

Seek the Advice of Professionals

Be patient.

The prime lenders in the mortgage Good things industry remain strong. Through a will come. professional qualification process, they provide market stability via sound lending policies. Seek their advice for traditional financing programs that will fit your needs long term. They are best qualified to “sort things out for you” and provide responsible advice regarding home loans and refinancing.

The latest news at time of publication:

A modest recovery for existing-home sales is expected in 2008 as the impact of the credit crunch subsides, while pending home sales indicate near-term stability. Lawrence Yun, NAR chief economist, said the housing market will improve from a steady unleashing of pent-up demand and from a wide abundance of safer mortgage products. “Even with relatively low fourth quarter sales, 2007 will be the fifth highest year on record for existing-home sales. The median existing-home price in 2007 will have fallen by less than 2 percent from an all-time high set in 2006,” Yun said.

Interest Rates Are Low The Federal Reserve Board adjusts interest rates as a means of holding inflation in check while keeping our economy moving. Over the last 20 years, during tight housing markets, inflation and interest rates have been high, causing or compounding the situation. Currently, interest rates are historically low. Lower interest rates generally equate to lower house payments and may be a strong motivator to sell or buy during a tight market.

1 Nat’l Assn. Realtors 09/07. http://www.realtor.org/Research.nsf/htmlarchives/ResearchUpdate091407 2 http://www.bls.gov/cps/prev_yrs.htm 3 http://www.forecasts.org/personal-income.htm 4 http://www.cbo.gov/ftpdoc.cfm?index=7731 5 Nat’l Assn. Realtors, Existing Homes Sales. http://www.realtor.org/Research.nsf/files/ehsreport.pdf/$FILE/EHSreport.pdf

There will always be opportunities to sell and buy a home—make sure the timing is right for you.

© 2008 Buffini & Company All Rights Reserved. Used by Permission. LGK JANUARY CAP S

2007 Home Sales Fifth Best in History

1.6m

1990s

Take A Close Look:

1980s

1970s

Millions of Houses Sold

vacation Home Sales are on the upswing. A rising trend in the real estate market is the purchase of second homes. In fact, vacation home sales rose nearly 5 percent in 2006. The average buyer’s age was 44, and one-third already had plans to eventually make the vacation home their full-time residence. There are several reasons why now is a good time to consider purchasing a house for your retirement: The market is good. Competing bids are rare in today’s market, and sellers are eager to make a deal. This gives you better bargaining power. Sooner is better than later. You can be assured that the price of a home is lower now than it will be in 10 years. Consider also that the prices of the most desirable locations, such as waterfront and resort properties, are likely to rise even faster.

Mortgage rates are low. Now is a good time to get a great deal on a mortgage, and you cannot be certain of rates down the line.

Time is on your side. Fortunately, you aren’t in the position to have to make a snap decision. Take the time to research your purchase and the areas you are interested in living. Sort out your finances now. Another added benefit of having time to plan your secondary home purchase is the ability to crunch the numbers ahead of time and figure out what you can afford and what your fixed expenses would be.

Rent to own. You have the option to rent out the house to help decrease costs. This won’t necessarily make your vacation home a profitable venture, but it can make it more attainable. As a rule of thumb: if one week of peak rental income can cover a month of mortgage expense, it is a good deal.

Establish your roots. Buying a retirement house early makes it easier to move into when the time comes. You will already have an attachment to the home with sentimental memories, be familiar and comfortable with the area and already know your neighbors and the community.

Create a family retreat. Owning a home in a vacation setting will quickly make it a top destination for quality family time. Buying while your children are still in the household will make them much more likely to visit on vacation with their children after they move out.

5

CONSIDER THESE THINGS WHEN YOU ARE LOOKING FOR A RETIREMENT OR VACATION HOME: • Is it affordable? You obviously don’t want to spend more than you can afford. • Is it convenient to get to? Generally, it should be within three hours from a major city. • Can you rent it out? If you plan on renting it out to lower costs, make sure you are buying in an active vacation rental market. • What is there to do? You’ll want to make sure there is plenty to do around the area. • Is there room to grow? The most desirable destinations are usually in the least saturated markets. • Is it both a winter and summer retreat?

Beautiful Places TO

Own On A

Budget

1. 2. 3. 4. 5.

White Mountains, Arizona Central Sierra Mountains, California South Padre Island, Texas Amelia Island, Florida Murrells Inlet and Surfside Beach, South Carolina

vacation Home Sales are on the upswing. A rising trend in the real estate market is the purchase of second homes. In fact, vacation home sales rose nearly 5 percent in 2006. The average buyer’s age was 44, and one-third already had plans to eventually make the vacation home their full-time residence. There are several reasons why now is a good time to consider purchasing a house for your retirement: The market is good. Competing bids are rare in today’s market, and sellers are eager to make a deal. This gives you better bargaining power.

Sooner is better than later. You can be assured that the price of a home is lower now than it will be in 10 years. Consider also that the prices of the most desirable locations, such as waterfront and resort properties, are likely to rise even faster.

Mortgage rates are low. Now is a good time to get a great deal on a mortgage, and you cannot be certain of rates down the line.

Time is on your side. Fortunately, you aren’t in the position to have to make a snap decision. Take the time to research your purchase and the areas you are interested in living. Sort out your finances now. Another added benefit of having time to plan your secondary home purchase is the ability to crunch the numbers ahead of time and figure out what you can afford and what your fixed expenses would be.

Rent to own. You have the option to rent out the house to help decrease costs. This won’t necessarily make your vacation home a profitable venture, but it can make it more attainable. As a rule of thumb: if one week of peak rental income can cover a month of mortgage expense, it is a good deal.

Establish your roots. Buying a retirement house early makes it easier to move into when the time comes. You will already have an attachment to the home with sentimental memories, be familiar and comfortable with the area and already know your neighbors and the community.

Create a family retreat. Owning a home in a vacation setting will quickly make it a top destination for quality family time. Buying while your children are still in the household will make them much more likely to visit on vacation with their children after they move out.

5

CONSIDER THESE THINGS WHEN YOU ARE LOOKING FOR A RETIREMENT OR VACATION HOME: • Is it affordable? You obviously don’t want to spend more than you can afford. • Is it convenient to get to? Generally, it should be within three hours from a major city. • Can you rent it out? If you plan on renting it out to lower costs, make sure you are buying in an active vacation rental market. • What is there to do? You’ll want to make sure there is plenty to do around the area. • Is there room to grow? The most desirable destinations are usually in the least saturated markets. • Is it both a winter and summer retreat?

Beautiful Places TO

Own On A

Budget

1. 2. 3. 4. 5.

White Mountains, Arizona Central Sierra Mountains, California South Padre Island, Texas Amelia Island, Florida Murrells Inlet and Surfside Beach, South Carolina

vacation Home Sales are on the upswing. A rising trend in the real estate market is the purchase of second homes. In fact, vacation home sales rose nearly 5 percent in 2006. The average buyer’s age was 44, and one-third already had plans to eventually make the vacation home their full-time residence. There are several reasons why now is a good time to consider purchasing a house for your retirement: The market is good. Competing bids are rare in today’s market, and sellers are eager to make a deal. This gives you better bargaining power.

Sooner is better than later. You can be assured that the price of a home is lower now than it will be in 10 years. Consider also that the prices of the most desirable locations, such as waterfront and resort properties, are likely to rise even faster.

Mortgage rates are low. Now is a good time to get a great deal on a mortgage, and you cannot be certain of rates down the line.

Time is on your side. Fortunately, you aren’t in the position to have to make a snap decision. Take the time to research your purchase and the areas you are interested in living. Sort out your finances now. Another added benefit of having time to plan your secondary home purchase is the ability to crunch the numbers ahead of time and figure out what you can afford and what your fixed expenses would be.

Rent to own. You have the option to rent out the house to help decrease costs. This won’t necessarily make your vacation home a profitable venture, but it can make it more attainable. As a rule of thumb: if one week of peak rental income can cover a month of mortgage expense, it is a good deal.

Establish your roots. Buying a retirement house early makes it easier to move into when the time comes. You will already have an attachment to the home with sentimental memories, be familiar and comfortable with the area and already know your neighbors and the community.

Create a family retreat. Owning a home in a vacation setting will quickly make it a top destination for quality family time. Buying while your children are still in the household will make them much more likely to visit on vacation with their children after they move out.

5

CONSIDER THESE THINGS WHEN YOU ARE LOOKING FOR A RETIREMENT OR VACATION HOME: • Is it affordable? You obviously don’t want to spend more than you can afford. • Is it convenient to get to? Generally, it should be within three hours from a major city. • Can you rent it out? If you plan on renting it out to lower costs, make sure you are buying in an active vacation rental market. • What is there to do? You’ll want to make sure there is plenty to do around the area. • Is there room to grow? The most desirable destinations are usually in the least saturated markets. • Is it both a winter and summer retreat?

Beautiful Places TO

Own On A

Budget

1. 2. 3. 4. 5.

White Mountains, Arizona Central Sierra Mountains, California South Padre Island, Texas Amelia Island, Florida Murrells Inlet and Surfside Beach, South Carolina