Why Real Estate Agents are at Risk for Theft and How to Prevent It

Open houses are becoming targets for thefts more often, and real estate agents are at risk of losing valuable items, as are the homeowners.

As a real estate agent, you’re inviting the public to a property, which is an invitation to anyone, from thieves to those who might want to harm you.

A common tactic thieves use at open houses is teamwork and distraction. Linda Powers of Specialists Real Estate in Las Vegas told her story of such an encounter on Realtor.org.

“Last year I was holding an open house on my listing, and four women walked in and said they were sisters and looking for a home for their mother. Two of them walked out to the yard while I stayed with the others.

“The two in the yard then called me outside because they had a few questions. When we walked back in, the gals stayed a little longer talking and asking more questions about the house.

“It wasn’t until the next morning that I noticed my debit card and a few dollars missing. They managed to spend a few hundred dollars before I canceled the card. I found out later that these ladies had been making the rounds around Las Vegas doing the same to other agents while sitting on their open houses.

“Needless to say, I now keep my wallet in the trunk of my car. It also helps to do open houses in twos, especially when the home is lived in and has things to steal. This economy is bringing out the worst in people.”

SAFETY TIPS

There are preventative actions, such as those mentioned by Linda, that will help you protect yourself from theft.

Promote security in your advertisements.
When you advertise the open house, note that identification will be required at the front door and video surveillance will be in use. “The bad guys will be less likely to show up,” Siciliano says.

Partner up.
When would-be assailants see two people at the front door, they’ll be less likely to go in. (Read one agent’s story how the buddy system protected her).

Introduce yourself to neighbors.
Let them know you’ll be showing the house so others know that you are there.

Watch for patterns.
At an open house, note any patterns in arrivals, particularly near the end of the open house. One common scam: Thieves come near the end of the open house, working as a team. They have “buyers” distract the agent as others steal valuables in the home. (Read what happened to one sales associate.)
Stow away your valuables.

Never leave your purse, laptop, or wallet unattended on the counter in plain view. Keep them in the trunk of your car. However, always keep your cell phone on you so you can call for help if you need to. Also, before the open house, tell your clients to put away all of their valuables, prescription drugs, and mail.

Seven Financial New Year’s Resolutions to Keep

Small changes in your financial behavior can add up to big savings over the long term, and New Year’s is a perfect time to make some financial resolutions.

DailyFinance.com has listed seven great resolutions that are simple and will fatten up your wallet in 2012. Click here to see the full list; a shortened version is below:

1. Get healthy by losing weight and quitting smoking, which can lower your insurance premiums.

2. Be a smart shopper by using sales, coupons, and programs and apps like LivingSocial and Groupon to find good deals.

3. Simplify your day to day finances with things such as online automatic bill pay.

4. Increase your financial literacy and educate yourself about things you don’t understand.

5. Be prepared and start an emergency savings fund in case something unexpected happens.

6. Pay down debt and try to pay more than the minimum each month.

7. Create a basic household budget that makes sense and is easy to follow.

This Week’s Market Commentary

This week bring us the release of only three monthly reports that are relevant to the bond market and mortgage rates, but two of them are considered to be highly important.

In addition to those three reports, we also will get the minutes from the last FOMC meeting that may influence the markets and possibly mortgage rates. The financial markets are closed today due to the New Year’s Day holiday.

The first report is the Institute for Supply Management’s (ISM) manufacturing index for December late tomorrow morning. This highly important index measures manufacturer sentiment. A reading above 50 means that more surveyed manufacturing executives felt that business improved during the month than those who felt it had worsened.

That indicates manufacturing sector strength rather than contraction. Analysts are currently expecting to see a 53.4 reading in this month’s release, meaning that sentiment strengthened from November’s 52.7. A smaller reading will be good news for the bond market and mortgage shoppers, while a higher than expected reading could lead to higher mortgage rates tomorrow morning as it would point towards economic strength.

Also tomorrow is the release of the minutes from the last FOMC meeting. This will give market participants insight to the Fed’s thinking and concerns regarding the economy, inflation and monetary policy. It is one of those pieces of information that may cause a great deal of volatility in the markets or be a non-factor, depending on what the minutes show. They will be released at 2:00 PM ET, so they won’t affect the markets or mortgage rates until afternoon hours.

The Commerce Department will post November’s Factory Orders data late Wednesday morning. This data gives us a fairly important measurement of manufacturing sector strength. It is similar to the Durable Goods Orders release that was posted late last week, except this report includes orders for both durable and non-durable goods. Durable goods are items that are expected to last three or more years such as electronics and autos. Examples of non-durable goods are food and clothing. Analysts are expecting to see an increase of 2.1% in new orders. This report generally does not have a huge impact on the bond market or mortgage rates, but it can influence bond trading enough to create a minor change in rates. The smaller the increase, the better the news for mortgage rates.

The final report of the week comes Friday morning when the Labor Department will post December’s employment figures. The Employment report is arguably the most important monthly release we see. It gives us the national unemployment rate, the number of jobs added or lost during the month and average hourly earnings, which is a key measure of wage inflation. Rising unemployment, a decline in payrolls and earnings would be ideal news for the bond market.

Current forecasts call for a 0.1% rise from November’s unemployment rate of 8.6%, 150,000 new jobs added to the economy and an increase in earnings of 0.2%. If we see weaker than expected results, mortgage rates should improve Friday. However, stronger than expected readings will likely raise optimism about the economy, pushing mortgage rates sharply higher.

Overall, the key data of the week will be Friday’s Employment report, but look for tomorrow and Wednesday to be active due to the economic data and FOMC minutes scheduled. If they give us favorable results, mortgage rates will likely move lower for the week. But if not, we can expect to see mortgage rates move higher on the week.

This Week’s Market Commentary

This week is fairly light in terms of the number of economic releases scheduled for release. There are only three monthly or quarterly reports on the agenda that have the potential to influence mortgage rates and none of them are considered to be highly important. That means that the stock markets could be the focal point multiple days, especially the middle part of the week.

October’s Factory Orders is the first, coming late this morning. This report is similar to the Durable Goods Orders report that was released the week before last, except this one includes manufacturing orders for both durable and non-durable goods. This data usually isn’t a major influence on bond trading, but with little data this week that can impact mortgage rates, it could draw more attention than usual. Analysts are expecting to see a decline in new orders of approximately 0.4%. The larger decline, the better the news for bond prices and mortgage rates because it would signal manufacturing sector weakness.

There is no other relevant economic news scheduled for release until Friday morning. October’s Goods and Services Trade Balance report will be posted early Friday morning. This report gives us the size of the U.S. trade deficit, but it is considered to be of low importance to mortgage rates. It is expected to show a $44.0 billion trade deficit. Unless it varies greatly from forecasts, I don’t expect this data to affect mortgage pricing Friday.

Also Friday is the release of December’s preliminary reading to the University of Michigan’s Index of Consumer Sentiment. This index measures consumer willingness to spend and can usually have enough of an impact on the financial markets to change mortgage rates slightly. Consumer sentiment or confidence is tracked because the more comfortable consumers are about their own financial situations, the more likely they are to make a large purchase in the near future. Since consumer spending makes up two-thirds of the economy, any related data is watched closely. Friday’s release is expected to show a reading of 65.0, which would be an increase from last month’s final reading. A decline in confidence would be considered good news for the bond market and mortgage rates.

Overall, today will probably bring us the most movement in rates as the markets digest weekend news. I don’t believe we will see as much volatility in the stock markets as we saw last week though. Interestingly, despite the sizable rally in stocks last week, mortgage rates didn’t take much of a hit. Even though mortgage bonds showed resilience last week, I still think that the upward risk outweighs the likelihood of seeing noticeable improvements in rates in the immediate future. Therefore, I recommend maintaining contact with your mortgage professional if still floating an interest rate

New Jumbo Mortgage Rules’ Effect on Expensive Areas

On Saturday October 1, the size of jumbo mortgage loans available to Fannie Mae and Freddie Mac will get smaller, changing the mortgage landscape.

According to a recent Yahoo! Finance article, this will have a greater effect on expensive zip codes, like many in the Bay Area and peninsula.

“In expensive housing markets where prices have fallen, the limits will drop the most,” reported Yahoo! Finance.

While the new lower limit of $625,500 — down from today’s $729,750 — is likely enough to cover a house in many places in the country, that is not the case everywhere.

To read more about these new limits and what they mean for expensive zip codes, read the full article here.

This Week’s Market Commentary

This week brings us the release of only two relevant monthly economic reports but neither of them is considered to be highly important. There are two important Treasury auctions this week that may influence mortgage rates more than the minor economic data that is scheduled.

It is also a holiday-shortened week with the bond market closed Friday in observance of the Veterans Day holiday. The stock markets will be open Friday, but bonds will not be traded meaning that many lenders will be closed.

Neither of this week’s monthly economic reports is expected to lead to noticeable changes in mortgage rates. This means that the stock markets will likely be a significant influence on bond trading and mortgage rates in addition to the two particular Treasury auctions. If the stock markets rally, we could see funds shift from bonds into stocks that potentially offer better returns, leading to higher mortgage rates. If stocks fall from current levels early in the week, bonds and mortgage shoppers should benefit.

The two important Treasury auctions come Wednesday and Thursday when 10-year Notes and 30-year Bonds are sold. The 10-year sale is the more important of the two as it will give us a better indication of demand for mortgage-related securities. If the sales are met with a strong demand from investors, we should see the bond market move higher during afternoon trading the days of the auctions. But a lackluster interest from buyers, particularly international investors, would indicate a waning appetite for longer-term U.S. securities and lead to broader bond selling. The selling in bonds would probably result in upward revisions to mortgage rates.

The first monthly data of the week is September’s Goods and Services Trade Balance report early Thursday morning. It helps us measure the size of the U.S. trade deficit, but usually is not a major influence on bond trading or mortgage pricing. It does affect the value of the U.S. dollar, which makes U.S. securities more attractive to international investors when the dollar is strong. This is because the securities’ proceeds are worth more when sold and converted to the investor’s domestic currency. However, its results will not likely directly lead to changes in mortgage rates. Analysts are expecting to see a $45.8 billion trade deficit.
November’s preliminary reading of the University of Michigan’s Index of Consumer Sentiment will be released late Friday morning. This index measures consumer confidence, which gives us an indication of consumer willingness to spend. It is expected to show a reading of 61.5, up from October’s final reading of 60.9. That would be considered negative news for bonds because rising sentiment means consumers are more optimistic about their own financial situations and are more likely to make large purchases in the near future. Since consumer spending makes up two-thirds of the U.S. economy, any related data is watched closely.

Overall, it is difficult to predict just how active this week will be for mortgage rates. As expected, last week brought us quite a bit of volatility in rates. This week could be very calm or could be just as active as last week was. I don’t believe the economic data on tap will be a catalyst. I think the key will be the stock markets and Wednesday’s Treasury auction. If they give us favorable results, mortgage rates will likely close the week lower than today’s opening levels.

This Week’s Market Commentary

This week brings us the release of seven economic reports for the markets to digest, in addition to a speaking engagement by Fed Chairman Bernanke. Also worth noting is the fact that this will be an extremely busy week for corporate earnings, which usually translates into stock volatility.

The most important economic reports are scheduled for the middle part of the week, but we may see movement in mortgage rates each day. Intra-day revisions to mortgage rates on more than one day are also possible. Therefore, proceed with caution if closing in the near future.

Today has September’s Industrial Production data scheduled to be posted. It will be released mid-morning, giving us an indication of manufacturing strength by tracking output at U.S. factories, mines and utilities. It is expected to show a 0.2% increase in output from August’s level, meaning that manufacturing activity rose slightly.

A larger than expected increase in production would be negative for bonds and mortgage rates as it would indicate economic strength. A decline in output would likely push mortgage rates lower tomorrow morning.
September’s Producer Price Index (PPI) will be released early Tuesday morning. This is one of the two very important inflation readings we get each month. This index measures inflationary pressures at the producer level of the economy. Analysts are expecting to see a 0.2% increase in the overall index and a 0.1% rise in the core data reading. The core data is the more important of the two because it excludes more volatile food and energy prices. A larger than expected increase could raise concerns in the bond market about future inflation and lead to higher mortgage rates Tuesday. However, weaker than expected readings should result in lower rates.

Wednesday has three reports scheduled that may influence mortgage rates. The first is the sister report of Tuesday’s PPI. This would be September’s Consumer Price Index (CPI). It measures inflationary pressures at the more important consumer level of the economy and is one of the most important reports that the bond market gets each month. Analysts are expecting to see a rise of 0.3% in the overall index and an increase of 0.2% in the core data reading.

A larger than expected increase in the core reading could raise inflation concerns, pushing bond prices lower and mortgage rates higher. Inflation is the number one nemesis of the bond market because it erodes the value of a bond’s future fixed interest payments. When inflation is a threat, even down the road, bonds sell for discounted prices that push their yields higher. And since mortgage rates tend to follow bond yields, this leads to higher rates for mortgage borrowers.

September’s Housing Starts is Wednesday’s second release, also coming at 8:30 AM ET. This report will probably not have much of an impact on the bond market or mortgage rates. It gives us a measurement of housing sector strength and mortgage credit demand by tracking construction starts of new homes, but is usually considered to be of low importance to the financial and mortgage markets. It is expected to show an increase in new home starts between August and September. I believe we need to see a significant surprise in this data for it to influence mortgage rates.

The final report scheduled for release Wednesday will come during afternoon trading when the Federal Reserve posts its’ Beige Book at 2:00 PM ET. This data details economic conditions throughout the U.S. by region and is relied upon heavily by the Federal Reserve when determining monetary policy at their FOMC meetings. If it reveals stronger signs of economic growth from the last release, we could see mortgage rates revise higher Wednesday afternoon.

Thursday has the last two reports of the week with the release of September’s Existing Home Sales data and Leading Economic Indicators (LEI), both at 10:00 AM ET. This index attempts to measure future economic activity, particularly during the next three to six months. Current forecasts are calling for an increase of 0.3% from August’s reading. This would indicate that economic activity is likely to increase moderately over the next couple of months. That would be relatively bad news for the bond market and mortgage rates, but this report is considered to be only moderately important. Therefore, a small increase would not be of much concern to the bond and mortgage markets. Ideally, we would like to see a decline in the index.

The National Association of Realtors will release September’s Existing Home Sales data. This report gives us an indication of housing sector strength and mortgage credit demand by tracking home resales. I don’t see it having much of an influence on the bond market or mortgage rates, but a reading that varies greatly from analysts’ forecasts could lead to a slight change in mortgage pricing. It is expected to show a decline in sales from August to September, meaning the housing sector remained soft. That would be favorable news for the bond market since a weak housing sector makes a broader economic recovery less likely.

Overall, it appears that Tuesday or Wednesday are the likely candidates for the most important day of the week. In addition to the economic data Tuesday, Fed Chairman Bernanke will speak at a Boston Fed conference during early afternoon hours. This adds to the days’ value as his words always have the potential to cause volatility in the markets. Besides the economic reports, there are many companies posting earning reports during the week, including some big names that include Apple, Citigroup, IBM and Intel.
If the corporate earnings releases are generally weaker than forecasts, stocks may suffer, making bonds more appealing to investors. The end result would likely be an improvement in rates. The flip side though is stronger than expected earnings that drive stocks higher, pushing bond prices lower and mortgage rates upward. Accordingly, please maintain contact with your mortgage professional if still floating an interest rate.