IN THIS ISSUE:

- A Message From Jason Kane
- The Power of Positioning
- Harvard University Predicts Soft Landing
- Can You Steal Your Neighbors Home? 
 

KTS Message

Dear Friends,

I hope all is well with you and your business. Like myself, I'm sure that many of you are making adjustments to handle the increase in purchase transactions. As we all know, purchase transactions require more time and resources. However, they also present more opportunities for networking and referrals. 

It surprises me when loan officers don't attend the closing. In many respects the closing represents a celebration for the homebuyer. I can't tell you how many times I've handled closings where the borrower expressed disappointment that their loan officer didn't attend.

However, there are several loan officers that we work with that really utilize this time to make an impact. Here are some ideas for your next purchase transaction:

- Attend the closing. This allows you some face time with the realtors. It show the buyer that you are concerned and creates a sense of security for them. 

- Follow up with the home buyer after the closing. Give them a quick follow up call to see how they're settling in. This also allows you to ask for referrals. When people are going through the home buying process, it's all consuming. They will be discussing this with everyone they encounter. Make sure your name is on the top of their mind. 

- Send a small housewarming gift to their workplace, not their home. Sending the gift to their office opens more opportunity to create a buzz.  

I hope a few of these tips prove fruitful. As always, I welcome all of your comments. Please don't hesitate to contact me if I can assist you in any manner. 

Sincerely,

Jason Kane

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The Power of Positioning

How do you build a marketing strategy that can have real estate agents hunting for your services? Realtors® are bombarded everyday with a continuous stream of marketing messages from loan officers. They cope with this information-overload by ignoring most of them. So how do you stand out in an over-communicated environment? You'll change the dynamics of your marketing when you understand the importance of positioning. Positioning is a communication tool to reach agents in a crowded marketplace.

Positioning means, you position your services in the prospect's mind. A position is a place, a place in the mind of the prospect ? a perceptual location. When you market your services, you're competing for this space. If your position is similar in nature to your competitor's, you're competing in an overcrowded place in the prospect's mind.

Take a moment and consider your current position. Look at your communication pieces, which is commonly how agents position your services in their mind, if it's their primary exposure to your business. Your website, flyers, postcards, newsletters, brochures, advertisements, and business card are often the first communication an agent comes across regarding your services. What position are you communicating?

Not sure? Visit your competitor's website, if you switched your company logo with their company logo, how much difference would there actually be in the content or message? For most mortgage companies the answer is simple? very little.

Positioning means, a simple and singular message

To improve your position, you need to narrow your focus. A position that seeks to be everything to everyone will end up being nothing to everyone. For example, does your messages appeal with the promises' of loans closing on time, rendering superior service, high approval rates, etc.? This position doesn't work. First, it's competing with too many others; secondly, it isn't simple and doesn't focus on a single thing.

Look at examples in other service industries to understand the power of a narrow focus. When Federal Express began, they focused on a single position, a position that hadn't been dominated by other shippers yet. They communicated a single position through every medium.  "When it absolutely, positively has to be there overnight." This intense focus helped them build a brand identity that associated them with being the best at overnight shipping. And when people had packages that had to be delivered overnight and they weren't going to risk their decision - they chose Federal Express.

Southwest Airlines is another example. Their position of the "low-fare, no frills airline," helped them dominate and achieve prosperity in one of the toughest and most competitive service industries. They went as far as linking the image of peanuts to their brand identity to associate with the position of low cost. This connected successfully with budget conscious travelers.

Positioning means, setting yourself apart from competitors

Since most loan officers have positioned themselves identical, realtors see them as all the same. Mortgage services are indistinguishable. So how do you separate yourself?

The more similar the mortgage services, the more important the details. When realtors have to select a loan officer, they look for differences upon which to base their decision. This means the more identical mortgage services are, the more important each difference becomes. For you to separate yourself, accentuate the trivial.

For years, Domino's never stressed quality, price or value. Instead they relentlessly promoted, "Delivered in 30 minutes, or it's on us." Over the time of this campaign, they owned the position of speed. Consumers' perceived Domino's as fast and reliable.

Find a niche that is unoccupied in the realtor's mind and fill it first. There are numerous opportunities to specialize your services and occupy niches.

You can position around unique products:

Jumbo Loan expert
HUD expert
Interest Only Specialist

You can position around trivial details of processes:

Loans closed 5 days ahead of COE
Loan approvals within an hour or less
Daily file update alerts for realtors

You can position around gender, ethnicity, or geography:

Specialized in exclusively serving single professionals
Specialized in exclusively serving the Hispanic community
Specialized in exclusively serving Town & Country Ranch

Positioning is your competitive strategy for getting noticed. It is an outward expression of how you want to be perceived. It allows you to create a place for your services in an Agent's mind, where the competition isn't.

Source: Jeff Nelson, Loan Officer Marketing

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Harvard University Predicts Soft Landing

Climbing interest rates and cooling speculative demand is putting pressure on the housing boom, but as long as jobs continue to be created and builders curb production, the sector will experience a soft landing, according to Harvard's Joint Center for Housing Studies.

The center's "State of the Nation's Housing" report, released on Tuesday, predicted that even though home-price growth will fall to more moderate levels in many areas, sharp drops in prices are unlikely. The absence of severe overbuilding or big job losses in major metropolitan areas is an important factor in the stability, the report said.

About 1 million people became homeowners last year, and mortgages including low-down payment, hybrid-adjustable and interest-only loans helped them make the purchases amid higher home prices and interest rates, the report said. Most owners with adjustable loans have an initial fixed-rate period of three or more years, and most interest-only loans extend for at least five years.

"While homeowners with annually adjusting mortgage rates are facing interest increases this year, including those with expiring teaser discounts, only about one in 10 homeowners face higher mortgage payments this year" Nicolas P. Retsinas, director of Harvard's Joint Center for Housing Studies, said in a news release.

Years of high appreciation rates, however, are feeding housing affordability problems, the report found. Between 2001 and 2004, the number of households spending more than half their incomes on housing increased by 14% to 15.8 million. In addition, the bottom three-quarters of the income distribution is seeing slow wage growth that isn't keeping pace with rising housing costs. The supply of rentals affordable on a $16,000 annual income fell by 1.2 million between 1993 and 2003.

"Slow growth in domestic discretionary spending at the federal level and the reluctance of state and local governments to relieve intense barriers to the production of more affordable housing make the road ahead difficult," Retsinas said. "Unless governments step up to these challenges, spending on housing will increasingly crowd out spending on pensions and savings among those with low and moderate incomes."

The report also looks at the contribution foreign-born and minority owners will make to overall household growth. The center projects net immigration will run at 1.2 million annually, which will help drive household formation to 14.6 million over the next ten years.

"Strong household growth, combined with record incomes and wealth, will lift housing investments to new highs next decade," Eric Belsky, executive director of center, said in the news release. "Each generation is achieving higher homeownership rates, incomes, and wealth than the one ahead of it, with the leading edge of the echo baby boom now in their 20s and the baby bust now in their 30s starting off on especially high paths. This is despite the fact that each younger generation has successively higher shares of foreign-born and minority household heads with lower average incomes than same-age native-born whites."

Other findings:

• A renewal of rental demand was seen in all four regions of the country last year. Rental vacancy rates fell from 10.2% to 9.9% in 2005.

• Adjustable rate mortgages shares fell from 35% in 2004 to 31% in 2005. Interest-only loans rose to 20% of loan originations in 2005. Subprime originations increased in real terms to $625 billion in 2005 from $210 billion in 2001; more than one in 10 mortgage holders is a subprime borrower.

• House prices increased 9.4% in 2005, after adjusting for inflation. Of the 149 largest metropolitan areas in the country, the number in which median house prices are at least four times the median household incomes increased from 13 in 2001 to 49 in 2005.

• Minorities accounted for 63% of household growth from 1995 to 2005. They are projected to account for 71% of household growth from 2005 to 2015, which would put the minority share of all households from 28% today to 33% in 2015.

Source: Real Estate Journal

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Can You Steal Your Neighbors Home?

By Bob Bruss of Inman News:

"Thou shalt not covet thy neighbor's property" is part of the Ten Commandments. But real estate law in every state says it is all right to steal your neighbor's land without going to jail if you comply with state law.

That news may be shocking. However, it's true. In fact, statutes in every state encourage the theft of your neighbor's unused property. The selfish reason is the state wants to collect as much property tax as possible by keeping property in use.

But when a property is vacant and unused, the rightful owner often fails to pay the property taxes. So state laws encourage stealing property and returning it to the property tax rolls.

'SQUATTER'S RIGHTS' ARE THE LEGAL BASIS FOR STEALING REAL ESTATE. Every state except Louisiana adopted variations of English common law in the 1800s and early 1900s. Louisiana chose the French Napoleonic Code, which is often very "foreign" to non-residents.

For 49 states, English common law includes the tradition of "squatter's rights." Simplified, that means if I occupy your real estate without permission and pay the property taxes for the number of years required by state law, I can eventually claim full fee simple absolute ownership of your property.

For example, the house adjacent to mine has been vacant about three years. If I moved in and continuously occupied it, paying the property taxes when they come due, I could eventually acquire title to this property. However, I'm not going to do that.

The reason is I observe the legal owner occasionally visits his empty house. He has even applied for a building permit to remodel it. If he found me living in his house, he would summarily throw me out as a trespasser so I have no hope of ever acquiring title to that property by "squatter's rights."

TWO LEGAL METHODS TO STEAL YOUR NEIGHBOR'S PROPERTY. Each state has laws allowing two methods of stealing real estate without going to jail.

1. ACQUIRE LEGAL TITLE AND FULL USE. The most difficult method to steal your neighbor's property is "adverse possession." That means you must occupy the entire property without the owner's permission for the required number of years.

California has the easiest "squatter's rights" adverse possession law. Just occupy a California property for five years without the owner's permission, pay the property taxes, and you can acquire full ownership by then suing the legal owner in a quiet-title lawsuit. It's that easy.

However, Texas and several other states have much tougher adverse possession laws, requiring "open, notorious, hostile, exclusive and continuous occupancy" for 30 years. Needless to say, not many Texans claim title by adverse possession.

Other states have adverse possession limits between these five- and 30-year extremes.

The nation's leading adverse possession case is Stevens v. Tobin (251 Cal.Rptr. 587), decided by the California Supreme Court. Thomas W. Stevens sued the legal owner in a quiet-title lawsuit. He proved that he adversely possessed for 15 years the San Francisco apartment building at 1899 Oak St. in the famous Haight-Ashbury District. Stevens showed open, notorious, hostile and continuous possession. However, he was unable to prove payment of the property taxes. Therefore, he lost his attempt to gain title to the building by adverse possession.

2. STEAL PART OF A PROPERTY BY HOSTILE USE. Perhaps you don't want to acquire a neighbor's entire property without paying, but you just want to use part of that property, perhaps to plant flowers or vegetables.

All you need is a prescriptive easement. The legal requirements in each state are usually the same as for acquiring title by adverse possession, but you don't have to pay any property taxes.

In other words, you must occupy a portion of your neighbor's land by open, notorious, hostile and continuous possession for the number of years required by state law. Interestingly, use need not be exclusive so you could share the prescriptive easement area with the property owner or another user.

However, permissive use defeats ever acquiring a prescriptive easement. If your neighbor says "Sure, go ahead and use part of my property," you will never obtain a permanent prescriptive easement.

Prescriptive easement examples include driveways, paths or any portion of a property that is continuously used without permission.

To perfect a permanent prescriptive easement, after the required number of years' use, the claimant should bring a quiet-title lawsuit against the titleholder.

PREVENT LEGAL THEFT OF ALL OR PART OF YOUR PROPERTY. Periodic inspection of your property is the best way to prevent someone from acquiring title by adverse possession or partial use of a prescriptive easement for the required number of years in the state where the property is located.

If you discover someone using all or part of your property, erecting even a temporary fence or evicting a trespasser blocks the continuous hostile use without permission.

To illustrate, years ago when I was a summer student at Stanford Law School, one Sunday morning I got in my car with a few of my law school pals to drive into nearby Palo Alto for breakfast (we couldn't afford "brunch"). But the main drive was blocked with a barricade. The police officer directed us to a detour.

As a curious law student, I asked what was going on. He explained every summer Stanford blocks its private roads for a few hours on a Sunday to prevent anyone from acquiring a permanent prescriptive easement.

THE EASIEST WAY TO DEFEAT HOSTILE USE. If you are concerned someone might be occupying all or part of your property without your permission, there is a very easy way to avoid losing all or part of your property.

Just grant permission. Depending on state law, you can post a sign, record a notice or personally notify the hostile user that "permission to pass over my property is revocable." Consult a local real estate attorney for exact details.

WHEN PROPERTY OWNERSHIP OR USE IS MOST LIKELY TO BE LOST. Millions of individuals own real estate they rarely visit. Or, owners die and their heirs and friends don't know about a distant property they own.

For example, a few weeks ago I was talking with a Florida friend who bought Arkansas real estate last year on eBay. He was extolling about all its benefits. Then I asked when he last visited his land he said, "Never. I haven't seen it yet. But at a $3,000 purchase price, how could I go wrong?"

That is a property just begging for an adjacent owner to adversely possess or at least acquire a prescriptive easement.

Inspection is the best way to prevent loss of title or use of a property to be certain nobody is trying to take over your real estate. Also, be sure your heirs, relatives and others know where and what property you own.

SUMMARY: The common law of adverse possession and prescriptive easements has valid purposes to promote property use and property tax collection. However, realty owners can prevent theft of all or part of their property by periodically checking to be certain nobody is occupying all or part of their real estate without permission. For more details, please consult a local real estate attorney.

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