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Debt Ceiling Catastrophe?

by Ingrid Miles, CBR, REALTOR®

Debt Ceiling Catastrophe?

August 2, 2011 is the date given by when the federal government will run out of money to pay all its obligations – including social security checks, government employee salaries, interest on borrowed money, etc.  The message has been that without the ability to borrow more to pay the obligations by raising the debt ceiling, catastrophe awaits.  Foreign countries holding  U.S. government bonds have been wagging their finger at the U.S. to not default or else.

If a borrower is about to default, no one in their right mind would want to lend to such a scammer.  Greece, which will inevitably default for sure either this year or next, is able to tap money by offering a 16 percent interest rate (which in my view is a sucker bet since Greece will not pay what is promised).  As for the U.S., the government borrowing rate is still very low.  The U.S. can borrow at a 0.35 percent interest rate on a 2 year loan and 2.9 percent on a 10 year.  These rates are at near-historic lows.  However, given all the talks of impending doom and with Washington politics not getting any closer to a budget deal, are investors continuing to be unconcerned about a U.S. default?

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Perhaps the investors, including the Chinese — one of the biggest purchasers — only talk the talk but are not willing to walk the walk.  That is to say, global bond purchasers are very content to lend at low interest rates to the U.S. government and are not a bit apprehensive about not getting the money back and with the specified interest.

Let’s take a look at what might happen.  If August 2nd comes around and the government defaults, will the Chinese investors panic?  Or would they trust that the U.S. will eventually honor the obligation at even if the payment deadline is delayed a bit?  Based on the current appetite for U.S. bonds, global investors are saying that they are perfectly fine with delayed payments, provided the principal and any accrued interest are paid at some point in the future even if the date is unspecified.  After all, most global bond purchasers have been simply recycling money back into the Treasury once the maturity date arrives.

My guess, therefore, is that come August 2nd there will be no panic or economic chaos.  Standard and Poor’s and rating agencies will squawk about downgrading the U.S. to a lower rating, but who is listening to them anymore after they gave top, AAA ratings on just about every subprime mortgage collateralized debt obligation that went bust?

However, if the debt default was to continue on for two to four months and truly raise uncertainty in the global investors about when they will get their money back, then a major economic headache is possible.

In other words, don’t panic in August.  But do start to worry in October.

July 15, 2011 by Lawrence Yun, Chief Economist & Senior Vice President

What Do Home Buyers Want?

by Ingrid Miles, CBR, REALTOR®

What do homebuyers want?

Recently they told us! Trulia Staff sat down with a user group and had a discussion on what they look for when hiring a real estate agent. Here’s what they had to say (in order of importance):

1. Honesty and Credibility

Win them over with the truth!
When these buyers talked about honesty and credibility, it often came with stories about past negative experiences with agents. The stories were about agents trying to push them towards a more expensive purchase and a strong dislike for the false sense of urgency they feel agents create when it comes to placing an offer on a house. Buyers have expressed how hard it is to trust anyone in today’s real estate market so it’s even more important for agents to help them feel comfortable.

2. Area Familiarity

Do your neighborhood homework!
These buyers place a high importance on finding an agent who not only sells homes in a specific neighborhood, but also knows that neighborhood well. They want an agent who knows all about the schools, local parks, safety, restaurants and even the secret gems the neighborhood has to offer.

3. Good Follow Through

You say it, you do it.
During the conversation our buyers constantly verbalized their frustration with agents who didn’t do what they said. Email me, call me and send me the things you say you will. It seems like such a small thing to ask for. Do what you say, combine it with some honesty, and you’ll be an agent buyers feel comfortable working with.

4. Organization

Keep it in order.
</p> <p>Your browser does not support iframes.</p> <p>You’re honest, you know the area like the back of your hand, and you try your hardest to follow through but it’s just so hard to keep track of your to-do lists and return every phone call. Buyers are expecting agents to be organized and put together. There are a ton of tools out there to help with this. (We love Evernote!)

5. Good Listener

Everyone is unique. Treat them like it!
Users want an agent to listen to them with a blank mind. I heard phrases such as “pigeon hole”, “judge”, “they aren’t listening”, “tell me what I want”…etc. come up in our discussion. Users don’t want an agent to assume they need A just because they hear B. They want an agent who listens to what they want and will ask as many questions as required to really understand who they are and what they are looking for.

Make sure you get those references too- recommendations and testimonials followed closely in the 6th position.

These characteristics come straight from prospective home buyers searching on Trulia. We hope these tips help you communicate what matters most to homebuyers to further your relationships and connect with more prospects.

Cassy Rowe, Lead Mobile Interaction Designer at Trulia.com

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Contact Information

Photo of Ingrid Miles, CBR, SRES, Lead REALTOR, Stephen Mil Real Estate
Ingrid Miles, CBR, SRES, Lead REALTOR, Stephen Mil
Keller Williams Realty
11 South Main St & 1 Merrimac St
Topsfield & Newburyport MA 01983 & 01950
Direct: 978-471-9750
978.861.4218
Fax: 978-861-4218

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