By Les Christie, CNNMoney.com staff writer
Last Updated: February 17, 2009: 12:13 PM ET
NEW YORK (CNNMoney.com) -- There's a nice windfall for some homebuyers in the economic stimulus bill awaiting President Obama's signature on Tuesday. First-time buyers can claim a credit worth $8,000 - or 10% of the home's value, whichever is less - on their 2008 or 2009 taxes.
A big plus is that the credit is refundable, meaning tax filers see a refund of the full $8,000 even if their total tax bill - the amount of witholding they paid during the year plus anything extra they had to pony up when they filed their returns - was less than that amount. But there has been a lot of confusion over this provision. Adam Billings of Knoxville, Tenn. wrote to CNNMoney.com asking:
"I will qualify as a first-time home buyer, and I am currently set to get a small tax refund for 2008. Does that mean if I purchased now that I would get an extra $8,000 added on top of my current refund?"
The short answer? Yes, Billings would get back the $8,000 plus what he'd overpaid. The long answer? It depends. Here are three scenarios:
Scenario 1: Your final tax liability is normally $6,000. You've had taxes withheld from every paycheck and at the end of the year you've paid Uncle Sam $6,000. Since you've already paid him all you owe, you get the entire $8,000 tax credit as a refund check.
Scenario 2: Your final tax liability is $6,000, but you've overpaid by $1,000 through your payroll witholding. Normally you would get a $1,000 refund check. In this scenario, you get $9,000, the $8,000 credit plus the $1,000 you overpaid.
Scenario 3: Your final tax liability is $6,000, but you've underpaid through your payroll witholding by $1,000. Normally, you would have to write the IRS a $1,000 check. This time, the first $1,000 of the tax credit pays your bill, and you get the remaining $7,000 as a refund.
To qualify for the credit, the purchase must be made between Jan. 1, 2009 and Nov. 30, 2009. Buyers may not have owned a home for the past three years to qualify as "first time" buyer. They must also live in the house for at least three years, or they will be obligated to pay back the credit.
Additionally, there are income restrictions: To qualify, buyers must make less than $75,000 for singles or $150,000 for couples. (Higher-income buyers may receive a partial credit.)
Applying for the credit will be easy - or at least as easy as doing your income taxes. Just claim it on your return. No other forms or papers have to be filed. Taxpayers who have already completed their returns can file amended returns for 2008 to claim the credit.
Lukewarm reception
The housing industry is somewhat pleased with the result because the stimulus plan improves on the current $7,500 tax credit, which was passed in July and was more of a low-interest loan than an actual credit. But the industry was also disappointed that Congress did not go even further and adopt the Senate's proposal of a $15,000 non-refundable credit for all homebuyers.
"[The Senate version] would have done a lot more to turn around the housing market," said Bernard Markstein, an economist and director of forecasting for the National Association of Homebuilders (NAHB). "We have a lot of reports of people who would be coming off the fence because of it."
Even so, the $8,000 credit will bring an additional 300,000 new homebuyers into the market, according to estimates by Lawrence Yun, chief economist for the National Association of Realtors.
The credit could also create a domino effect, he said, because each first-time homebuyer sale will lead to two more trade-up transactions down the line. "I think there are many homeowners who would be trading-up but they have had no buyers for their own homes," Yun said.
Who won't benefit, according to Mark Goldman, a real estate lecturer at San Diego State University, are those first-time homebuyers struggling to come up with down payments. The credit does not help get them over that hurdle - they still have to close the sale before claiming the bonus.
One state, Missouri, is trying to get around that problem by creating a short-term loan on the tax credit of up to $6,750. The state would loan borrowers the money so they could use it at closing as part of the downpayment. Then, when the buyers receive their tax credit from the IRS, they pay back the state. Other states may follow with similar programs, according to NAHB's Dietz.
Many may look at the tax credit as a discount on the home price, according to Yun. A $100,000 purchase effectively becomes a $92,000 one. That can reassure buyers apprehensive about purchasing and then watching prices continue falling, he added.
And it provides a nice nest egg for the often-difficult early years of homeownership, when unexpected repairs and expenses often crop up. Recipients could also use the money to buy new stuff for their home - a lawnmower, a rug, a sofa - and, in that way, help stimulate the economy.
Thursday, April 16, 2009
Friday, February 20, 2009
Finding Good Deals in Real Estate
A thriving real estate investor or retailer solves a lot of other people’s problems; that’s how you become successful. The more knowledge, ability, experience, contacts, and resources you have, the more solutions you can begin to offer people in solving their problems. In addition to this, you will be ahead of the pack if you can get people calling or coming to you with their specific problem first. That means you have to advertise the fact that you are in a position to help while being fair, trustworthy, and accurate in making quick decisions before the competition tries to persuade these people first.
For the above reason alone — competition — you will need to understand marketing. That means deciding on what you are going to specialize in, developing a method to define your target audience, and then attracting them with a well-written message using the different types of media to get the word out. That last paragraph brings up a good point: What exactly do you want to specialize in? Following are some categories from which to choose:Condos, vacation property
Single-family homes
Apartments for one to four families (residential duplex, triplex, fourplex)
Commercial— hotels/motels, strip malls, office complexes, mobile home parks, storage units, parking lots, garages, restaurants, stores, apartments for five or more families, and so forth
Industrial—factories, refineries, manufacturing plants, and so forth
Farms—commercial, industrial, or agricultural, depending on zoning
Raw land—lots, vacation, recreational, sub-dividable residential, commercial, industrial, agricultural, and special purpose
Special purpose—churches, schools, hospitals, power plants, theaters, sports arenas, golf courses, marinas, and so forthHere are some examples of how you might go about finding some good deals:Look at bulletin boards, local papers and small independent publications. This goes for every publication you get. Make sure you get one of the first copies off the press. Go to the facility that houses the presses and get your copy before the ink has a chance to dry. Let no one beat you to the punch. Better yet, advertise yourself and get people who are thinking about selling to call you before they actually tell the world through an ad.
Look at the legal section of the newspapers. Contact heirs and attorneys, and sales in the garage or estate sale sections. Also, 20 percent of people who have garage sales are planning on moving soon. Ask about their house or their neighbor’s homes. Always keep your antenna up! Your odds of success increase when you choose large population centers and remain in the market constantly on the lookout for your type of deal.
Look for vacant houses that are run down, fire damaged, or abandoned, with city notices evident. Talk to the neighbors of these homes. They usually know who owns it and what is going on. They have an interest in seeing it restored to beauty. It sure is a shame you can’t look in the mailbox to see who is receiving mail at the property in question—wouldn’t that be easy? Walk up to a property and look in a window to confirm that it is indeed vacant—but don’t endanger yourself by getting bit or shot! Use common sense. Contact out-of-state owners through property records or by letter and/or phone. Leave your cards on the door.
OREO stands for Other Real Estate Owned. Make friends with your local lenders and let them know you are the one to call when they have a foreclosure looming or in progress. Hint: If you prequalify with lenders beforehand, they may call you sooner.
Watch the local paper for foreclosure auctions, tax sales, and HUD and VA listed properties. Note: Auctions held in bad weather where the property absolutely must be sold are your best chance to limit competition and get property at rock-bottom prices. Because there is no low limit on what can be accepted (no reserve) you may win big.
Real estate agents are going to try to sell you something! When you approach them be very specific with them and tell them to call only if they have an absolute steal. Ask agents to give you those expired listings since they couldn’t sell them. Suggest a 2 percent commission if they will assist with closing the paperwork after you make the deal with the seller on your own.
Don’t be so selective. If the property is an absolute steal, lock it up and sell it to somebody who does like to work with that type of real estate. Get the option and hand it off to another buyer. Look for distressed sellers in addition to distressed property.
Post fliers everywhere—colleges, Laundromats, shopping centers, bowling alleys, public bulletin boards, churches, local businesses, wherever large numbers of people congregate. Give them a chance to give you a lead on a hot deal. (For example, print up cards that say “I pay $500 to you at closing if I buy a house that you told me about! Do you know anyone who is selling property? Please call [your name] at 555-1212.”) Print quality business cards.
Join organizations of all types. The sky is the limit. There are so many—just pick the ones that you would be interested in truly being a member in and let it be known you pay bounties for consummated (closed) deals.
When you use headhunters, leave out no one. Property managers, moving companies, relocation services, neighbors, landlords, tenants, the mailman, the paper boy, gardeners, landscapers, service technicians, pest control people, friends, acquaintances, relatives, and other investors. You name it!
Everyone should know they can make $500 if you end up buying a property they tell you about. Enlist your army! Give each of your soldier’s stacks of your cards for exponential growth.
A special note: Water, gas, and electric company personnel who shut off utility meters can be very good bird dogs when it comes to finding property that is in trouble or vacant. Make sure they have your cards.
Have at least 10,000 business cards printed with your offer of the $500 bounty and hand them out in stacks to everyone you can. As you grow, you might consider TV, radio, phone books, billboards, street benches, bumper stickers, and bigger commissions. Use your imagination.
Put up signs telling people you buy real estate.
Make multiple lowball offers on overpriced properties and walk away. Don’t deposit earnest money but they may stew on your offer and call you a month later accepting your deal. Leave the offer with them.
Older people should not be left out. They are very valuable informants. They know everything and need people to talk to! Listen to them. Go to free seminars on real estate. Do this not only to learn about real estate but also to capture names and circulate among real estate–minded people. Once you have their names, call your own club meeting and network to prosperity. Find your mentor here.
Go to where people are buying those “by owner” signs. Ask them what they are selling. Follow them home and get the first look! Be first or lose the deal.
Try offering 15 percent less than what you intend on paying. You never know; they may accept it. If they don’t, you can still negotiate up to 15 percent more and get it for what you originally were willing to pay. If it’s any higher, walk away but leave the offer on the table (the offer stands).
Make your offer easy for the seller to understand. Get the option to buy but use a contingency to protect yourself. Iron out the details later but lock it up now!
Buy from sellers who tend not to care: seized, foreclosed, tax sales, corporations, nonprofits, disinterested heirs, probate attorneys, and private auctions.
Try just helping someone to sell his or her property even if you don’t want it. Be a friend and offer to help for nothing in return. You will be amazed at what happens when you sincerely try to help with no thought in mind of making money. This is a magic bullet in disguise.Those are some of the basics of advertising and finding the opportunities to buy real estate below market. The old saying goes: You make your profit when you buy, not when you sell. (20 percent off retail, minimum).
For the above reason alone — competition — you will need to understand marketing. That means deciding on what you are going to specialize in, developing a method to define your target audience, and then attracting them with a well-written message using the different types of media to get the word out. That last paragraph brings up a good point: What exactly do you want to specialize in? Following are some categories from which to choose:Condos, vacation property
Single-family homes
Apartments for one to four families (residential duplex, triplex, fourplex)
Commercial— hotels/motels, strip malls, office complexes, mobile home parks, storage units, parking lots, garages, restaurants, stores, apartments for five or more families, and so forth
Industrial—factories, refineries, manufacturing plants, and so forth
Farms—commercial, industrial, or agricultural, depending on zoning
Raw land—lots, vacation, recreational, sub-dividable residential, commercial, industrial, agricultural, and special purpose
Special purpose—churches, schools, hospitals, power plants, theaters, sports arenas, golf courses, marinas, and so forthHere are some examples of how you might go about finding some good deals:Look at bulletin boards, local papers and small independent publications. This goes for every publication you get. Make sure you get one of the first copies off the press. Go to the facility that houses the presses and get your copy before the ink has a chance to dry. Let no one beat you to the punch. Better yet, advertise yourself and get people who are thinking about selling to call you before they actually tell the world through an ad.
Look at the legal section of the newspapers. Contact heirs and attorneys, and sales in the garage or estate sale sections. Also, 20 percent of people who have garage sales are planning on moving soon. Ask about their house or their neighbor’s homes. Always keep your antenna up! Your odds of success increase when you choose large population centers and remain in the market constantly on the lookout for your type of deal.
Look for vacant houses that are run down, fire damaged, or abandoned, with city notices evident. Talk to the neighbors of these homes. They usually know who owns it and what is going on. They have an interest in seeing it restored to beauty. It sure is a shame you can’t look in the mailbox to see who is receiving mail at the property in question—wouldn’t that be easy? Walk up to a property and look in a window to confirm that it is indeed vacant—but don’t endanger yourself by getting bit or shot! Use common sense. Contact out-of-state owners through property records or by letter and/or phone. Leave your cards on the door.
OREO stands for Other Real Estate Owned. Make friends with your local lenders and let them know you are the one to call when they have a foreclosure looming or in progress. Hint: If you prequalify with lenders beforehand, they may call you sooner.
Watch the local paper for foreclosure auctions, tax sales, and HUD and VA listed properties. Note: Auctions held in bad weather where the property absolutely must be sold are your best chance to limit competition and get property at rock-bottom prices. Because there is no low limit on what can be accepted (no reserve) you may win big.
Real estate agents are going to try to sell you something! When you approach them be very specific with them and tell them to call only if they have an absolute steal. Ask agents to give you those expired listings since they couldn’t sell them. Suggest a 2 percent commission if they will assist with closing the paperwork after you make the deal with the seller on your own.
Don’t be so selective. If the property is an absolute steal, lock it up and sell it to somebody who does like to work with that type of real estate. Get the option and hand it off to another buyer. Look for distressed sellers in addition to distressed property.
Post fliers everywhere—colleges, Laundromats, shopping centers, bowling alleys, public bulletin boards, churches, local businesses, wherever large numbers of people congregate. Give them a chance to give you a lead on a hot deal. (For example, print up cards that say “I pay $500 to you at closing if I buy a house that you told me about! Do you know anyone who is selling property? Please call [your name] at 555-1212.”) Print quality business cards.
Join organizations of all types. The sky is the limit. There are so many—just pick the ones that you would be interested in truly being a member in and let it be known you pay bounties for consummated (closed) deals.
When you use headhunters, leave out no one. Property managers, moving companies, relocation services, neighbors, landlords, tenants, the mailman, the paper boy, gardeners, landscapers, service technicians, pest control people, friends, acquaintances, relatives, and other investors. You name it!
Everyone should know they can make $500 if you end up buying a property they tell you about. Enlist your army! Give each of your soldier’s stacks of your cards for exponential growth.
A special note: Water, gas, and electric company personnel who shut off utility meters can be very good bird dogs when it comes to finding property that is in trouble or vacant. Make sure they have your cards.
Have at least 10,000 business cards printed with your offer of the $500 bounty and hand them out in stacks to everyone you can. As you grow, you might consider TV, radio, phone books, billboards, street benches, bumper stickers, and bigger commissions. Use your imagination.
Put up signs telling people you buy real estate.
Make multiple lowball offers on overpriced properties and walk away. Don’t deposit earnest money but they may stew on your offer and call you a month later accepting your deal. Leave the offer with them.
Older people should not be left out. They are very valuable informants. They know everything and need people to talk to! Listen to them. Go to free seminars on real estate. Do this not only to learn about real estate but also to capture names and circulate among real estate–minded people. Once you have their names, call your own club meeting and network to prosperity. Find your mentor here.
Go to where people are buying those “by owner” signs. Ask them what they are selling. Follow them home and get the first look! Be first or lose the deal.
Try offering 15 percent less than what you intend on paying. You never know; they may accept it. If they don’t, you can still negotiate up to 15 percent more and get it for what you originally were willing to pay. If it’s any higher, walk away but leave the offer on the table (the offer stands).
Make your offer easy for the seller to understand. Get the option to buy but use a contingency to protect yourself. Iron out the details later but lock it up now!
Buy from sellers who tend not to care: seized, foreclosed, tax sales, corporations, nonprofits, disinterested heirs, probate attorneys, and private auctions.
Try just helping someone to sell his or her property even if you don’t want it. Be a friend and offer to help for nothing in return. You will be amazed at what happens when you sincerely try to help with no thought in mind of making money. This is a magic bullet in disguise.Those are some of the basics of advertising and finding the opportunities to buy real estate below market. The old saying goes: You make your profit when you buy, not when you sell. (20 percent off retail, minimum).
Monday, February 16, 2009
Real Estate Agents- How to get Noticed
What is the key to getting noticed, being remembered, and getting referrals? It’s simple actually, the answer is building strong, lasting client relationships. The most effective way to do this is by keeping in constant contact with them and leaving a gift behind to remind them of you later. A phrase used for this type of self advertising is “Pop By”. You want to Pop By clients, old and new, on a regular basis.
And it doesn’t matter which market you find yourself in. If it’s booming, you need to keep in constant contact with all your many clients and hit the pavement to get those FSBOs in your trusted hands. When it’s a slow, dragging market, you need spend a lot of time building long lasting relationships with the few clients you have at the time so they think of you every time hear of a friend who wants to sell. And you need to hit the pavement and gobble up those listings that have expired. After all, who wants to be sitting at the office making cold calls all day? Every agent’s dream is to be working completely by referral. And this is done by keeping in constant communication with your clients and building new relationships with their referrals.
So what’s the best way to do this simple key thing? The answer is simple and FUN! The most effective way to do the above is by quickly stopping by and bringing the client, or prospective client, a small personalized gift that can be left behind to remind them of who you are. The main point is for this gift to be personalize with your contact information. This doesn’t necessarily mean you have to purchase the minimum of 300 letter openers (as cool as they are) with your logo painted on them. You can do this much more economically, creatively and with a lot more flexibility by creating your own tags or putting your business card with the gift.
So start a campaign! Whether it’s gobbling up those expireds, getting the latest FSBOS to trust in you, or keeping your past clients within arms reach, you need to start a campaign that’s all your own. Use gifts that are small, inexpensive and something you can easily personalize by attaching a tag or business card. Another key point to this style of gift is to add a smart, witty tag line so the client actually remembers what they read. You can make cookies and write “I’ve got the recipe to your success.” This is a concept advocated by some major business coaching companies here in the states.
Are you going to focus on gobbling up those expired listings? Search the MLS every morning to grab that listing that expired at 11:59pm last night. Be at their door hours after it has expired and represent them before anyone else get’s the opportunity. For expired you want to bring an item that’s not too pricy – you don’t want to invest too much in someone that might close the door on you. But is definitely something to break the ice when you randomly show up on their door step. Something that catches their attention and/or entertains them. I have a client that gives little miniature flash lights to all her expireds and “Spot Lights” their home to get it sold. Another clients using little tool shaped candies to say that she has “all the right tools to get the job done.”Some key points:
Have you already branded yourself? Pick gifts that highlight your brand. Use several different “levels” of gifts. Have smaller, less expensive gifts for lower priority clients and nicer slightly more expensive gifts for your A clients. Bring gifts specifically for your clients children or pets. When the clients sees that you have paid attention and know about their family and personal life, they are more willing to trust in you and take you in as part of that life. Specify it to the season or holidays. Halloween, Thanksgiving and Christmas make this type of marketing great fun. Get creative and have fun! Point being, spend some time building a brand and hitting the pavement to really get to know your clients. Besides, sitting in the office simply calling to say hi get’s really boring. So get creative, get out there, and get busy!
And it doesn’t matter which market you find yourself in. If it’s booming, you need to keep in constant contact with all your many clients and hit the pavement to get those FSBOs in your trusted hands. When it’s a slow, dragging market, you need spend a lot of time building long lasting relationships with the few clients you have at the time so they think of you every time hear of a friend who wants to sell. And you need to hit the pavement and gobble up those listings that have expired. After all, who wants to be sitting at the office making cold calls all day? Every agent’s dream is to be working completely by referral. And this is done by keeping in constant communication with your clients and building new relationships with their referrals.
So what’s the best way to do this simple key thing? The answer is simple and FUN! The most effective way to do the above is by quickly stopping by and bringing the client, or prospective client, a small personalized gift that can be left behind to remind them of who you are. The main point is for this gift to be personalize with your contact information. This doesn’t necessarily mean you have to purchase the minimum of 300 letter openers (as cool as they are) with your logo painted on them. You can do this much more economically, creatively and with a lot more flexibility by creating your own tags or putting your business card with the gift.
So start a campaign! Whether it’s gobbling up those expireds, getting the latest FSBOS to trust in you, or keeping your past clients within arms reach, you need to start a campaign that’s all your own. Use gifts that are small, inexpensive and something you can easily personalize by attaching a tag or business card. Another key point to this style of gift is to add a smart, witty tag line so the client actually remembers what they read. You can make cookies and write “I’ve got the recipe to your success.” This is a concept advocated by some major business coaching companies here in the states.
Are you going to focus on gobbling up those expired listings? Search the MLS every morning to grab that listing that expired at 11:59pm last night. Be at their door hours after it has expired and represent them before anyone else get’s the opportunity. For expired you want to bring an item that’s not too pricy – you don’t want to invest too much in someone that might close the door on you. But is definitely something to break the ice when you randomly show up on their door step. Something that catches their attention and/or entertains them. I have a client that gives little miniature flash lights to all her expireds and “Spot Lights” their home to get it sold. Another clients using little tool shaped candies to say that she has “all the right tools to get the job done.”Some key points:
Have you already branded yourself? Pick gifts that highlight your brand. Use several different “levels” of gifts. Have smaller, less expensive gifts for lower priority clients and nicer slightly more expensive gifts for your A clients. Bring gifts specifically for your clients children or pets. When the clients sees that you have paid attention and know about their family and personal life, they are more willing to trust in you and take you in as part of that life. Specify it to the season or holidays. Halloween, Thanksgiving and Christmas make this type of marketing great fun. Get creative and have fun! Point being, spend some time building a brand and hitting the pavement to really get to know your clients. Besides, sitting in the office simply calling to say hi get’s really boring. So get creative, get out there, and get busy!
Wednesday, February 4, 2009
The Do's and Don'ts of Short Sales
It is a veritable alphabet soup of language out there relative to distressed sellers’ properties. There are foreign-sounding terms, made-up jargon, rules, policies, procedures; blah, blah, blah. No matter who you might happen to speak with, they know someone who knows someone who is an “expert” at handling one or all parts of the distressed properties’ options.
Well, to paraphrase the Trojans, beware of Greeks bearing gifts-especially when the gift bearers are claiming to be experts within a market segment fraught with pitfalls and legalities at every turn. Many are dilatants, few are experts. Rick Cowle (rcowlelaw@comcast.net), a highly experienced attorney who has handled hundreds of bankruptcies, short sales, foreclosures and mortgage modifications, is an expert. When Cowle speaks, he has experience, credibility and expertise on his side. His advice and counsel are sought by other attorneys new to “distressed property” issues.
MBS: Rick, you and I have worked with REO (real estate owned) properties and with sellers in all phases of foreclosure in the past. We’ve seen markets deal with the onslaught of short sales and foreclosures 15 years ago, but nothing comes close to what we are seeing today. The volume and rapidity of the properties cropping up is unparalleled. What advice do you have for the agents out there struggling to assist people fraught with problems?
RC: While it may be easier said than done, it is important to consult an expert. There are resources out there available to the public such as the Housing and Urban Development website, free credit counseling services, attorneys with extensive experience with distressed seller issues, etc. It is even possible to use Google to find attorneys who advertise their credentials as distressed property experts. The thing never to do is to give advice or guidance when you are not qualified to do so. Taking a three-hour short-sale class does not make one an expert on giving advice on the short-sale process. However, there is much that an agent can do in concert with an attorney. I always advise agents to help the seller find an attorney before they do anything else.
MBS: Sellers who are in financial distress fear that they cannot afford an attorney to assist them. They often simply “ignore” bank delinquency notices because they believe they are powerless to help themselves. Presented with such a scenario, what do you recommend?
RC: While I cannot speak for all attorneys, I know that many, myself included, have plans that take into consideration the sellers’ current financial realities and allow for ways to navigate the process with little or perhaps no attorney fees upfront. There are cases where attorney fees can be billed to and paid by the financial institution holding the lien. This is one part of the negotiable issues to be worked out. The ultimate cost to the seller can be far more damaging by non-action than by researching all options. If the agent plays a part in being a resource to the consumer, they indeed have value. Knowing what to do is less important than knowing what is available to help the consumer and guiding them to those resources. Just helping sellers to know what questions to ask or where to begin the process is invaluable.
MBS: It is no secret that even when sellers, or agents they have authorized to do so, try to contact the bank(s) in question, there is no guarantee that they will make any progress getting to the right people to help. It can feel like a black hole, and the level of frustration felt by everyone is enough to cause ulcers. What’s the right way to handle these roadblocks?
RC: There is no one answer that is right. Getting to the right people in the right departments is key in possibly preventing foreclosure. It is not going to be the mortgage department that will facilitate the process. The right department may be called asset recovery, loss mitigation, workout or something else. In addition, each lender will have its own paperwork requirements. Getting that package from the bank and completing the required documents is essential to even being heard. By hiring an experienced negotiator who works with most, if not all, major national banks, he/she will know what is required by that bank in advance and has forms on file for the sellers use. By knowing how to complete the necessary forms and doing so in a timely fashion, it could shorten the process for short sale approval by perhaps months.
MBS: What is a short sale for those readers who may be new to this?
RC: When the sellers owe more on their mortgage(s) than the value of their home, the sellers are in a shortage situation if they decide to sell. There will not be enough money to pay off the loan(s). The seller would need to come to the table with proceeds to satisfy the lien(s). That is not the same as being able to justify a short sale where the bank determines that the seller is worthy to be allowed to sell the home at less than the outstanding lien(s), and the bank will accept as their loss the shortage. In order to be considered for short-sale eligibility one would have to have a hardship such as divorce, medical expenses, job loss, death of family member or some similar life catastrophic situation. In addition, the sellers’ expenses must exceed his/her/their assets/income, they are behind on their payments and have no way to repay the bank. Simply owing more than the home is worth yet wanting to sell regardless of a lack of hardship is not a reason to apply for a short sale.
MBS: Let’s assume there is a hardship as stated above. What is the process for the agent/seller to follow?
RC: “List the property at a price based on a detailed market analysis. The agent needs to be sure that they make other agents in the MLS aware that it is a possible short sale and that ‘all transactions including the amount of compensation, are subject to bank’s approval.’ The fact is that even if a home is listed at market value and a buyer comes along and makes an offer commensurate with that value, the bank may not accept the sale. There are cases where the bank’s price opinion may be higher than the offer on the table, and the bank may counter or refuse the offer if it does not conform to what they believe is accurate. I often suggest that the agent take a video of the home to truly document condition as some appraisals are done without a full walk through. Without documentation it may be difficult to make the case to the bank about why the home is not worth what the bank’s appraiser determined. Agents should always meet the bank’s appraiser at the property and provide them with comps. They may not use the agent’s comps, but the documentation could come in very handy if a conflict ensues. This is not to be taken as gospel that any bank will debate with either an agent or an attorney. Some will, others will not.
MBS: What are the banks looking for relative to a buyer’s qualifications?
RC: In the vast majority of the time, the bank does not want to negotiate contingencies. Buyers who have another sale pending and need the proceeds from that sale in order to close on the next purchase are not likely to be considered. Banks take a dim view of buyers requesting concessions. Sales are always as is with no repair credits, except under very, very rare instances. While buyers can have inspections done, it is for their consideration only and not for negotiating any issues that may surface. I had an incidence where during the processing of the short sale, the house suffered a freeze-up. I went back to the bank and renegotiated for the purchasers. We had to document the problems and estimate the cost of repair. That is the kind of rare occurrence I would consider presenting to the bank.
MBS: Are there some red flags that agents should be aware of before venturing into helping a distressed seller?
RC: Sellers need to be very cooperative with the agent and whoever else enters the process. Couples involved in a divorce and at odds with each other can present insurmountable challenges when it comes to being responsive and getting all documentation in the hands of the right people. The sellers must also be willing to do the required paperwork. This is time consuming and detailed. Anyone who won’t ‘dig out’ what is needed as proof of the claims being made are wasting everyone’s time. There are also transfer documents that require signatures. Once again, if there is more than one seller, and the two or more are not likeminded, raise the red flag and be sure the problems are cured before approaching the bank with an offer. We hear about short sales taking up wards of a year plus. That is usually because of problems with issues such as referenced above. Well prepared and cooperative sellers make both the attorney’s and agent’s jobs much easier.
MBS: Often homes will have more than one lien holder. In such instances, what happens when trying to process a short sale?
RC: I have had about a 90% success rate working through this very issue. I know that the high rate of success is due to being very familiar with the lien release process and how to approach banks relative to why taking the sale is in their best interest. It is often a delicate balancing act fraught with lots of back and forth negotiating. I would say that it would be nearly impossible to accomplish without the skills of a very experienced negotiator working on the sellers’ behalf.
MBS: What upcoming trends do you see within this segment of the business?
RC: Lack of knowledge on the real estate practitioner’s part while the number of distressed sellers continues to grow, will only exacerbate the challenges of getting these properties sold rather than in foreclosure. Banks are not yet geared up for the breadth and depth of the problems, and many sellers are falling between the cracks who could otherwise have been helped. The market will soon be flooded with REOs as these homes process through the banks’ systems after the foreclosure process. Agents want to work this segment of the market yet few understand the breadth and depth of what is required and the time commitment. Banks need educated agents for REO listings.
MBS: Having managed and processed hundreds of REO properties, I could not agree more. As matter of fact, errors and omissions companies are now concerned about indemnifying brokers who do not require their agents to clear all REO listings with the company prior to seeking them out. It is a very litigious, slippery slope. Banks require all kinds of guarantees and bonding for persons who work on their listings… not for the faint hearted for certain.
RC: I could not agree more. The more people understand the whole process from first delinquency on the mortgage through to the REO stage, the less likely they are to want to take it all on.
MBS: There are times when second lien holders, or even first, will ask the sellers to sign an unsecured promissory note for part of the shortage paid by the lender on the sellers’ part. When does that happen and how often?
RC: “If the lien holder(s) feel that there are assets forthcoming, they may take this step. We see this often with loans that are secured by PMI (private mortgage insurance). PMI companies are getting hit pretty hard with the number of bad loans that were secured by PMI and subsequently failed. They may try to recoup part of the indemnifying monies they’ve lay out if they feel there is a good chance to recoup part down the road.
MBS: There are so many other topics that we could explore at great length. Volumes have been written on the whole area of distressed sellers and properties. What would you say is the single most important thing an agent could do to help them help their sellers?
RC: Education, education, education. Read, take classes, join networking groups of like-minded practitioners, etc. We simply cannot know enough to help people who need good advice, guidance and support now more than ever!
MBS: Amen to that!
Well, to paraphrase the Trojans, beware of Greeks bearing gifts-especially when the gift bearers are claiming to be experts within a market segment fraught with pitfalls and legalities at every turn. Many are dilatants, few are experts. Rick Cowle (rcowlelaw@comcast.net), a highly experienced attorney who has handled hundreds of bankruptcies, short sales, foreclosures and mortgage modifications, is an expert. When Cowle speaks, he has experience, credibility and expertise on his side. His advice and counsel are sought by other attorneys new to “distressed property” issues.
MBS: Rick, you and I have worked with REO (real estate owned) properties and with sellers in all phases of foreclosure in the past. We’ve seen markets deal with the onslaught of short sales and foreclosures 15 years ago, but nothing comes close to what we are seeing today. The volume and rapidity of the properties cropping up is unparalleled. What advice do you have for the agents out there struggling to assist people fraught with problems?
RC: While it may be easier said than done, it is important to consult an expert. There are resources out there available to the public such as the Housing and Urban Development website, free credit counseling services, attorneys with extensive experience with distressed seller issues, etc. It is even possible to use Google to find attorneys who advertise their credentials as distressed property experts. The thing never to do is to give advice or guidance when you are not qualified to do so. Taking a three-hour short-sale class does not make one an expert on giving advice on the short-sale process. However, there is much that an agent can do in concert with an attorney. I always advise agents to help the seller find an attorney before they do anything else.
MBS: Sellers who are in financial distress fear that they cannot afford an attorney to assist them. They often simply “ignore” bank delinquency notices because they believe they are powerless to help themselves. Presented with such a scenario, what do you recommend?
RC: While I cannot speak for all attorneys, I know that many, myself included, have plans that take into consideration the sellers’ current financial realities and allow for ways to navigate the process with little or perhaps no attorney fees upfront. There are cases where attorney fees can be billed to and paid by the financial institution holding the lien. This is one part of the negotiable issues to be worked out. The ultimate cost to the seller can be far more damaging by non-action than by researching all options. If the agent plays a part in being a resource to the consumer, they indeed have value. Knowing what to do is less important than knowing what is available to help the consumer and guiding them to those resources. Just helping sellers to know what questions to ask or where to begin the process is invaluable.
MBS: It is no secret that even when sellers, or agents they have authorized to do so, try to contact the bank(s) in question, there is no guarantee that they will make any progress getting to the right people to help. It can feel like a black hole, and the level of frustration felt by everyone is enough to cause ulcers. What’s the right way to handle these roadblocks?
RC: There is no one answer that is right. Getting to the right people in the right departments is key in possibly preventing foreclosure. It is not going to be the mortgage department that will facilitate the process. The right department may be called asset recovery, loss mitigation, workout or something else. In addition, each lender will have its own paperwork requirements. Getting that package from the bank and completing the required documents is essential to even being heard. By hiring an experienced negotiator who works with most, if not all, major national banks, he/she will know what is required by that bank in advance and has forms on file for the sellers use. By knowing how to complete the necessary forms and doing so in a timely fashion, it could shorten the process for short sale approval by perhaps months.
MBS: What is a short sale for those readers who may be new to this?
RC: When the sellers owe more on their mortgage(s) than the value of their home, the sellers are in a shortage situation if they decide to sell. There will not be enough money to pay off the loan(s). The seller would need to come to the table with proceeds to satisfy the lien(s). That is not the same as being able to justify a short sale where the bank determines that the seller is worthy to be allowed to sell the home at less than the outstanding lien(s), and the bank will accept as their loss the shortage. In order to be considered for short-sale eligibility one would have to have a hardship such as divorce, medical expenses, job loss, death of family member or some similar life catastrophic situation. In addition, the sellers’ expenses must exceed his/her/their assets/income, they are behind on their payments and have no way to repay the bank. Simply owing more than the home is worth yet wanting to sell regardless of a lack of hardship is not a reason to apply for a short sale.
MBS: Let’s assume there is a hardship as stated above. What is the process for the agent/seller to follow?
RC: “List the property at a price based on a detailed market analysis. The agent needs to be sure that they make other agents in the MLS aware that it is a possible short sale and that ‘all transactions including the amount of compensation, are subject to bank’s approval.’ The fact is that even if a home is listed at market value and a buyer comes along and makes an offer commensurate with that value, the bank may not accept the sale. There are cases where the bank’s price opinion may be higher than the offer on the table, and the bank may counter or refuse the offer if it does not conform to what they believe is accurate. I often suggest that the agent take a video of the home to truly document condition as some appraisals are done without a full walk through. Without documentation it may be difficult to make the case to the bank about why the home is not worth what the bank’s appraiser determined. Agents should always meet the bank’s appraiser at the property and provide them with comps. They may not use the agent’s comps, but the documentation could come in very handy if a conflict ensues. This is not to be taken as gospel that any bank will debate with either an agent or an attorney. Some will, others will not.
MBS: What are the banks looking for relative to a buyer’s qualifications?
RC: In the vast majority of the time, the bank does not want to negotiate contingencies. Buyers who have another sale pending and need the proceeds from that sale in order to close on the next purchase are not likely to be considered. Banks take a dim view of buyers requesting concessions. Sales are always as is with no repair credits, except under very, very rare instances. While buyers can have inspections done, it is for their consideration only and not for negotiating any issues that may surface. I had an incidence where during the processing of the short sale, the house suffered a freeze-up. I went back to the bank and renegotiated for the purchasers. We had to document the problems and estimate the cost of repair. That is the kind of rare occurrence I would consider presenting to the bank.
MBS: Are there some red flags that agents should be aware of before venturing into helping a distressed seller?
RC: Sellers need to be very cooperative with the agent and whoever else enters the process. Couples involved in a divorce and at odds with each other can present insurmountable challenges when it comes to being responsive and getting all documentation in the hands of the right people. The sellers must also be willing to do the required paperwork. This is time consuming and detailed. Anyone who won’t ‘dig out’ what is needed as proof of the claims being made are wasting everyone’s time. There are also transfer documents that require signatures. Once again, if there is more than one seller, and the two or more are not likeminded, raise the red flag and be sure the problems are cured before approaching the bank with an offer. We hear about short sales taking up wards of a year plus. That is usually because of problems with issues such as referenced above. Well prepared and cooperative sellers make both the attorney’s and agent’s jobs much easier.
MBS: Often homes will have more than one lien holder. In such instances, what happens when trying to process a short sale?
RC: I have had about a 90% success rate working through this very issue. I know that the high rate of success is due to being very familiar with the lien release process and how to approach banks relative to why taking the sale is in their best interest. It is often a delicate balancing act fraught with lots of back and forth negotiating. I would say that it would be nearly impossible to accomplish without the skills of a very experienced negotiator working on the sellers’ behalf.
MBS: What upcoming trends do you see within this segment of the business?
RC: Lack of knowledge on the real estate practitioner’s part while the number of distressed sellers continues to grow, will only exacerbate the challenges of getting these properties sold rather than in foreclosure. Banks are not yet geared up for the breadth and depth of the problems, and many sellers are falling between the cracks who could otherwise have been helped. The market will soon be flooded with REOs as these homes process through the banks’ systems after the foreclosure process. Agents want to work this segment of the market yet few understand the breadth and depth of what is required and the time commitment. Banks need educated agents for REO listings.
MBS: Having managed and processed hundreds of REO properties, I could not agree more. As matter of fact, errors and omissions companies are now concerned about indemnifying brokers who do not require their agents to clear all REO listings with the company prior to seeking them out. It is a very litigious, slippery slope. Banks require all kinds of guarantees and bonding for persons who work on their listings… not for the faint hearted for certain.
RC: I could not agree more. The more people understand the whole process from first delinquency on the mortgage through to the REO stage, the less likely they are to want to take it all on.
MBS: There are times when second lien holders, or even first, will ask the sellers to sign an unsecured promissory note for part of the shortage paid by the lender on the sellers’ part. When does that happen and how often?
RC: “If the lien holder(s) feel that there are assets forthcoming, they may take this step. We see this often with loans that are secured by PMI (private mortgage insurance). PMI companies are getting hit pretty hard with the number of bad loans that were secured by PMI and subsequently failed. They may try to recoup part of the indemnifying monies they’ve lay out if they feel there is a good chance to recoup part down the road.
MBS: There are so many other topics that we could explore at great length. Volumes have been written on the whole area of distressed sellers and properties. What would you say is the single most important thing an agent could do to help them help their sellers?
RC: Education, education, education. Read, take classes, join networking groups of like-minded practitioners, etc. We simply cannot know enough to help people who need good advice, guidance and support now more than ever!
MBS: Amen to that!
Wednesday, November 5, 2008
Miami-Dade to buy up bank-owned homes
Miami-Dade to buy up bank-owned homes
(borrowed from the Miami Herald)
FORECLOSURESMiami-Dade to buy up bank-owned homesMiami-Dade County has devised a plan to buy up property with $62.2 million it received in federal grants to stem blight caused by foreclosures.BY MONICA HATCHERmhatcher@MiamiHerald.com To stabilize local neighborhoods suffering from the effects of foreclosures, Miami-Dade County officials have drawn up a spending plan for the $62.2 million in grant money they got as part of a mammoth housing stimulus measure passed earlier this summer by Congress.
The money will primarily be used to buy, rehab and resell or rent bank-owned properties to low-income residents.
Miami-Dade, especially hard hit, received more money under the law than any other local jurisdiction, owing to a funding formula that looked at the concentration of subprime loans, percentage of homes in foreclosure, and the likelihood of future foreclosures.
Congress approved nearly $4 billion in additional neighborhood stabilization funding to offset the effects of foreclosures, which can depress property values of neighboring homes, attract crime and cause eyesores and safety hazards.
The state and other local governments received a total of $541 million. Broward County received $17.7 million, while Monroe County was excluded. A handful of large cities in both counties received their own money directly.
County and city administrators are required to follow certain guidelines when deciding how and where the money will be spent. Areas heavy with foreclosures and where more than half the residents earn less than 121 percent of the area's median income will be the county's top priority, said Robert Cruz, a county economist who analyzed foreclosure trends to determine the areas of greatest need. Broadly, the targeted areas extend throughout central Miami-Dade and southeastern parts of the county. The money cannot be used to prevent homeowners from losing their homes.
Miami-Dade's proposal would directly help about 1,500 residents in the form of counseling, down-payment assistance or the rental of refurbished apartments, said Clarence Brown, who heads the county's community and economic development office.
The county plans to set aside $10 million to buy bank-owned properties and will spend $1 million to tear down about 80 blighted structures. It has also proposed putting aside $26.6 million to buy apartment buildings, with the expectation of adding 215 new units to the market.
''We're figuring we can get the biggest bang for our buck if we utilize the money for rentals because we can house the most people that way faster,'' said Cynthia Curry, a senior advisor to County Manager George Burgess.
(borrowed from the Miami Herald)
FORECLOSURESMiami-Dade to buy up bank-owned homesMiami-Dade County has devised a plan to buy up property with $62.2 million it received in federal grants to stem blight caused by foreclosures.BY MONICA HATCHERmhatcher@MiamiHerald.com To stabilize local neighborhoods suffering from the effects of foreclosures, Miami-Dade County officials have drawn up a spending plan for the $62.2 million in grant money they got as part of a mammoth housing stimulus measure passed earlier this summer by Congress.
The money will primarily be used to buy, rehab and resell or rent bank-owned properties to low-income residents.
Miami-Dade, especially hard hit, received more money under the law than any other local jurisdiction, owing to a funding formula that looked at the concentration of subprime loans, percentage of homes in foreclosure, and the likelihood of future foreclosures.
Congress approved nearly $4 billion in additional neighborhood stabilization funding to offset the effects of foreclosures, which can depress property values of neighboring homes, attract crime and cause eyesores and safety hazards.
The state and other local governments received a total of $541 million. Broward County received $17.7 million, while Monroe County was excluded. A handful of large cities in both counties received their own money directly.
County and city administrators are required to follow certain guidelines when deciding how and where the money will be spent. Areas heavy with foreclosures and where more than half the residents earn less than 121 percent of the area's median income will be the county's top priority, said Robert Cruz, a county economist who analyzed foreclosure trends to determine the areas of greatest need. Broadly, the targeted areas extend throughout central Miami-Dade and southeastern parts of the county. The money cannot be used to prevent homeowners from losing their homes.
Miami-Dade's proposal would directly help about 1,500 residents in the form of counseling, down-payment assistance or the rental of refurbished apartments, said Clarence Brown, who heads the county's community and economic development office.
The county plans to set aside $10 million to buy bank-owned properties and will spend $1 million to tear down about 80 blighted structures. It has also proposed putting aside $26.6 million to buy apartment buildings, with the expectation of adding 215 new units to the market.
''We're figuring we can get the biggest bang for our buck if we utilize the money for rentals because we can house the most people that way faster,'' said Cynthia Curry, a senior advisor to County Manager George Burgess.
Stocks plunge as investors ponder Obama presidency
Stocks plunge as investors ponder Obama presidency
(borrowed from the Miami Herald)
By SARA LEPRO and TIM PARADISAP Business WriterNEW YORK -- A case of postelection nerves sent Wall Street plunging Wednesday as investors absorbing a stream of bad economic news wondered how a Barack Obama presidency will help the country weather a possibly severe recession. Volatility returned to the market, with the Dow Jones industrials falling nearly 500 points and all the major indexes tumbling more than 5 percent.
The market was expected to give back some gains after a six-day runup that lifted the Standard & Poor's 500 index more than 18 percent. But investors lost some of their recent confidence about the economy and began dumping stocks again; light volume helped exaggerate the price swings.
"I think what is happening in the market is a continuation of really the last few weeks," said Subodh Kumar, global investment strategist at Subodh Kumar & Associates in Toronto. "The markets are still incorporating the slowdown in the global economy."
Worries about the financial sector intensified after Goldman Sachs Group Inc. began to notify about 3,200 employees globally that they have been lost their jobs as part of a broader plan to slash 10 percent of the investment bank's work force, a person familiar with the situation said. The cuts were first reported last month. Goldman fell 8 percent, while other financial names like Citigroup Inc. fell 14 percent.
Commodities stocks also fell after steelmaker ArcelorMittal said it would slash production because of weakening demand. Its stock plunged 21.5 percent.
Although the market expected Obama to win the election, as the session wore on investors were clearly worrying about the weakness of the economy and pondered what the Obama administration might do to help it. Analysts said the market is already anxious about who Obama selects as the next Treasury Secretary, as well as who he picks for other Cabinet positions
Analysts said investors were also uneasy in advance of the Labor Department's October employment report, to be issued on Friday. Economists on average expect a 200,000 drop in payrolls, according to Thomson/IFR. Employers have been slashing jobs after a freeze-up in the credit markets crippled many companies' ability to get financing.
Late-day selling by hedge funds helped deepen the market's losses during the last hour. More selling by the funds is expected to weigh on the market ahead of a Nov. 15 cutoff for shareholders to notify fund managers of their intent to cash out investments before year-end.
According to preliminary calculations, the Dow fell 486.01, or 5.05 percent, to 9,139.27.
The S&P 500 index fell 52.98, or 5.27 percent, to 952.77. Through the six sessions that ended Tuesday, the index, the one most closely watched by market professionals, rose 18.3 percent.
The Nasdaq composite index fell 98.48, or 5.53 percent, to 1,681.64, while the Russell 2000 index of smaller companies fell 31.33, or 5.74 percent, to 514.64.
(borrowed from the Miami Herald)
By SARA LEPRO and TIM PARADISAP Business WriterNEW YORK -- A case of postelection nerves sent Wall Street plunging Wednesday as investors absorbing a stream of bad economic news wondered how a Barack Obama presidency will help the country weather a possibly severe recession. Volatility returned to the market, with the Dow Jones industrials falling nearly 500 points and all the major indexes tumbling more than 5 percent.
The market was expected to give back some gains after a six-day runup that lifted the Standard & Poor's 500 index more than 18 percent. But investors lost some of their recent confidence about the economy and began dumping stocks again; light volume helped exaggerate the price swings.
"I think what is happening in the market is a continuation of really the last few weeks," said Subodh Kumar, global investment strategist at Subodh Kumar & Associates in Toronto. "The markets are still incorporating the slowdown in the global economy."
Worries about the financial sector intensified after Goldman Sachs Group Inc. began to notify about 3,200 employees globally that they have been lost their jobs as part of a broader plan to slash 10 percent of the investment bank's work force, a person familiar with the situation said. The cuts were first reported last month. Goldman fell 8 percent, while other financial names like Citigroup Inc. fell 14 percent.
Commodities stocks also fell after steelmaker ArcelorMittal said it would slash production because of weakening demand. Its stock plunged 21.5 percent.
Although the market expected Obama to win the election, as the session wore on investors were clearly worrying about the weakness of the economy and pondered what the Obama administration might do to help it. Analysts said the market is already anxious about who Obama selects as the next Treasury Secretary, as well as who he picks for other Cabinet positions
Analysts said investors were also uneasy in advance of the Labor Department's October employment report, to be issued on Friday. Economists on average expect a 200,000 drop in payrolls, according to Thomson/IFR. Employers have been slashing jobs after a freeze-up in the credit markets crippled many companies' ability to get financing.
Late-day selling by hedge funds helped deepen the market's losses during the last hour. More selling by the funds is expected to weigh on the market ahead of a Nov. 15 cutoff for shareholders to notify fund managers of their intent to cash out investments before year-end.
According to preliminary calculations, the Dow fell 486.01, or 5.05 percent, to 9,139.27.
The S&P 500 index fell 52.98, or 5.27 percent, to 952.77. Through the six sessions that ended Tuesday, the index, the one most closely watched by market professionals, rose 18.3 percent.
The Nasdaq composite index fell 98.48, or 5.53 percent, to 1,681.64, while the Russell 2000 index of smaller companies fell 31.33, or 5.74 percent, to 514.64.
Obama turns to building a presidency
Obama turns to building a presidency
(Borrowed from the Miami Herald)
By TERENCE HUNTAssociated Press WriterWASHINGTON --
His storied election behind him and weighty problems in his face, Barack Obama turned Wednesday to the task of building an administration in times of crisis as Americans and the world absorbed his history-shattering achievement as the first black leader ascending to the presidency.
Obama enjoyed an everyman day-after in his hometown of Chicago on Wednesday after an electric night of celebration, anchored by his victory rally of 125,000 in Chicago and joyful outpourings of his supporters across the country. The president-elect saw his two young daughters off to school, a simple pleasure he's missed during nearly two years of virtually nonstop travel, then had a gym workout.
Pressing business came at him fast, with just 76 days until his inauguration as the 44th president.
The nation's top intelligence officials planned to give him top-secret daily briefings starting Thursday, sharing with him the most critical overnight intelligence as well as other information he has not been allowed to see as a senator or candidate. And Obama planned to give the first of his daily briefings to the media on Thursday as he moves quickly to begin assembling a White House staff and selecting Cabinet nominees.
Obama was asking Illinois Rep. Rahm Emanuel, former political and policy adviser to President Clinton, to be his White House chief of staff, Democratic officials said. John Podesta, who served as Clinton's chief of staff, was expected to join Obama Senate aide Pete Rouse and campaign adviser Valerie Jarrett in leading the transition team.
President Bush pledged "complete cooperation" in the transition and called Obama's victory a "triumph of the American story."
Naming the staggering list of problems he inherits in his decisive defeat of Republican John McCain - two wars and "the worst financial crisis in a century," among them - Obama sought to restrain the soaring expectations of his supporters late Tuesday night even as he stoked them with impassioned calls for national unity and partisan healing.
"We may not get there in one year or even in one term," he said. "But, America, I have never been more hopeful than I am tonight that we will get there. I promise you, we as a people will get there."
Helping him to get there will be a strengthened Democratic majority in both houses of Congress. When Obama becomes the president on Jan. 20, with Delaware Sen. Joe Biden as his vice president, Democrats will control both the White House and Congress for the first time since 1994.
A tide of international goodwill came Obama's way on Wednesday morning, even as developments made clear how heavy a weight will soon be on his shoulders.
Russian President Dmitry Medvedev issued a congratulatory telegram saying there is "solid positive potential" for the election to improve strained relations between Washington and Moscow, if Obama engages in constructive dialogue.
Yet he appeared to be deliberately provocative hours after the election with sharp criticism of the U.S. and his announcement that Russia will deploy missiles near NATO member Poland in response to U.S. missile defense plans.
In Afghanistan, where villagers said the U.S. bombed a wedding party and killed 37 people, President Hamid Karzai said: "This is my first demand of the new president of the United States - to put an end to civilian casualties."
Young and charismatic but with little experience on the national level or as an executive, Obama easily defeated McCain, smashing records and remaking history along the way.
Obama enjoyed an everyman day-after in his hometown of Chicago on Wednesday after an electric night of celebration, anchored by his victory rally of 125,000 in Chicago and joyful outpourings of his supporters across the country. The president-elect saw his two young daughters off to school, a simple pleasure he's missed during nearly two years of virtually nonstop travel, then had a gym workout.
Pressing business came at him fast, with just 76 days until his inauguration as the 44th president.
The nation's top intelligence officials planned to give him top-secret daily briefings starting Thursday, sharing with him the most critical overnight intelligence as well as other information he has not been allowed to see as a senator or candidate. And Obama planned to give the first of his daily briefings to the media on Thursday as he moves quickly to begin assembling a White House staff and selecting Cabinet nominees.
Obama was asking Illinois Rep. Rahm Emanuel, former political and policy adviser to President Clinton, to be his White House chief of staff, Democratic officials said. John Podesta, who served as Clinton's chief of staff, was expected to join Obama Senate aide Pete Rouse and campaign adviser Valerie Jarrett in leading the transition team.
President Bush pledged "complete cooperation" in the transition and called Obama's victory a "triumph of the American story."
Naming the staggering list of problems he inherits in his decisive defeat of Republican John McCain - two wars and "the worst financial crisis in a century," among them - Obama sought to restrain the soaring expectations of his supporters late Tuesday night even as he stoked them with impassioned calls for national unity and partisan healing.
"We may not get there in one year or even in one term," he said. "But, America, I have never been more hopeful than I am tonight that we will get there. I promise you, we as a people will get there."
Helping him to get there will be a strengthened Democratic majority in both houses of Congress. When Obama becomes the president on Jan. 20, with Delaware Sen. Joe Biden as his vice president, Democrats will control both the White House and Congress for the first time since 1994.
A tide of international goodwill came Obama's way on Wednesday morning, even as developments made clear how heavy a weight will soon be on his shoulders.
Russian President Dmitry Medvedev issued a congratulatory telegram saying there is "solid positive potential" for the election to improve strained relations between Washington and Moscow, if Obama engages in constructive dialogue.
Yet he appeared to be deliberately provocative hours after the election with sharp criticism of the U.S. and his announcement that Russia will deploy missiles near NATO member Poland in response to U.S. missile defense plans.
In Afghanistan, where villagers said the U.S. bombed a wedding party and killed 37 people, President Hamid Karzai said: "This is my first demand of the new president of the United States - to put an end to civilian casualties."
Young and charismatic but with little experience on the national level or as an executive, Obama easily defeated McCain, smashing records and remaking history along the way.
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