earnings

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Wells Fargo & Co. Chief Financial Officer Mike Santomassimo, during the bank’s first-quarter earnings call on Friday, confirmed the MSR sale but did not offer any specific details about the deal.

“During the first quarter, we successfully marketed mortgage servicing rights for approximately $50 billion of loans serviced for others that we expect to close later this year,” Santomassimo said. “We will continue to look for additional opportunities to simplify and reduce the size of our servicing business.”

Market speculation has been rife since January of this year that Wells Fargo was preparing to sell some sizable MSR packages, HousingWire reported previously. That rumor was given more credence when industry publication Inside Mortgage Finance reported in early February of this year that Wells Fargo was contemplating two bulk MSR offerings — one at $20 billion and the other at $40 billion. The report was based on unnamed sources and indicated the sales were being handled “inhouse.”

Wells Fargo’s has previously announced plans to reduce its MSR portfolio, valued on its books at $9.31 billion as of the end of 2022, U.S. Security and Exchange Commission (SEC) filings show. As of the end of the first quarter of 2023, the bank’s MSR portfolio was valued at $8.81 billion — down by some $500 million.

Wells Fargo’s total portfolio of loans serviced as of the end of the first quarter of 2023 totaled $666.8 billion based on the unpaid principal balance (UPB), down from $679.2 billion as of yearend 2022. That tally excludes loans subserviced for others — which, according to Santomassimo, is the type of MSRs Wells is selling in the $50 billion deal expected to close later this year.

The type or mix of MSRs sold — Fannie Mae, Freddie Mac or Ginnie Mae serviced loans — will determine the actual pricing for the deal, along with the volume of loans involved, the servicing-fee strip and the quality of the collateral, among other factors. As such, it’s hard to determine from the SEC filings the specific details of the $50 billion MSR portfolio marketed by Wells Fargo.

The price paid for an MSR package is expressed as a multiple of the average servicing fee of the portfolio. A 25 basis-point servicing strip at a 5 multiple, for example, would be 1.25%, which is then multiplied by the total outstanding principal balance of the servicing portfolio being sold to determine the sales price. 

Nick Smith, the founder and CEO of Rice Park Capital Management, which is very active in the MSR market, said MSR pools involving legacy loans from 2020 and 2021 — which was the era of 30-year fixed mortgages at 3% or less — are now selling for multiples of 4.75 to 5.25. The value is bolstered by the fact that those loans have very low prepayment (refinancing) speeds, which increases the value of the MSRs.

“It’s definitely the case that the bulk of the market is legacy loans,” Smith said. “We have $8 trillion [in mortgages] originated between 2020 and 2021, and in 2022, we had like roughly $2 trillion. 

“So, we had $8 trillion out of $10 trillion that is this low-coupon stuff, and 2023 is yet again, sort of higher rates, lower volumes. That [2020 and 2021 vintage] is the majority of what’s trading just because that’s the majority of what exists in the world at this point.”

Tom Piercy, managing director of Incenter Mortgage Advisors, said typically those conventional Fannie and Freddie legacy MSR portfolios are selling a full multiple above Ginnie Mae MSRs. Ginnie Mae guarantees mortgage-backed securities issued against loans originated through government agencies, such as the Federal Housing Administration (FHA).

“In the Ginnie space, we used to see a 4 multiple, and that market has now moved to a 3.5- to 3.8-type multiple,” Piercy said. “… When we have the cycle where things begin to slow, and when I say slow, meaning the economy as a whole, the FHA borrowers struggle.

“We’re seeing a lot of Ginnie Mae trades right now… with pools that are 18 to 24 months old that are running in a 10% to 15% delinquent category already [30 days past due or more].”

As to the mix of MSRs being sold in Wells Fargo’s just-confirmed $50 billion offering, Tom Goyda, a Wells Fargo spokesperson, said the bank has “not commented specifically on the details of any transactions.”

Source: housingwire.com

Apache is functioning normally

Manufactured, HELOC, Automation, Home Insurance Products; Wholesaler Earnings and News; Inflation and Rates

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Manufactured, HELOC, Automation, Home Insurance Products; Wholesaler Earnings and News; Inflation and Rates

By:
Rob Chrisman

Thu, Aug 10 2023, 10:02 AM

A general discussion topic of those here at the MMLA conference in Michigan is the ups and downs we’re all facing. While mortgage applications drift down, and industry headcounts go down, and towns on Maui like Lahaina burn down, here’s something that isn’t going down: credit card debt. Talk to any underwriter or loan officer and they will tell you that loans have become more difficult, in part because of borrower debt loads, and sure enough credit card balances hit $1.03 trillion in the second quarter. And it ain’t going down. The number is up 4.6 percent from $986 billion in the preceding three-month period. For some good economist’s perspectives and interest rates in general, and one capital markets guy’s, tune in to “Unparalleled Insights into Trends and Bold Predictions” with Selma Hepp (CoreLogic’s Chief Economist), Michael Fratantoni (MBA’s chief economist), and Rob Chrisman” on Wednesday August 16th at 1PM ET/10AM PT, sponsored by TrustEngine. (Today’s podcast can be found here and is sponsored by SimpleNexus, an nCino Company, developer of mortgage technology uniting the people, systems, and stages of the mortgage process into one seamless, end-to-end solution. Hear an interview SimpleNexus’ Jay Arneja on closing technology initiatives, standardization, and digital transformation impacting the industry at the moment.)

Lender and Broker Software, Products, and Services

Mortgage leaders: The home insurance market is facing unprecedented volatility with carriers declining new business and increasing premiums to an all-time high. This can delay closings and even lead to DTI exceeding acceptable limits once accurate insurance costs are factored in. Matic, a home insurance marketplace built for the mortgage industry, helps borrowers save time by shopping multiple A-rated carriers at once and providing transparent pricing and coverage options. With flexible integration options for your company, Matic adds visibility and control, allowing lenders to foresee potential issues that could result in delayed closings. To learn how mortgage enterprises can gain efficiencies and add a new source of revenue with Matic, book a demo today. For more strategies on how to navigate the next phase of the housing market, get Matic’s latest report.

While free origination tools are tempting, they can come with hidden costs, including slowing down the mortgage process, increasing turn times, and halting productivity. Blend’s robust, comprehensive features, intuitive personalization, and automated workflows have proven results: 37% increase in transaction speed, 7 days cut from the loan lifecycle and 34% increase in pull-through. Click here to find out how Blend’s Mortgage Suite helps deliver value during every step of the process.

Problem! Your employees are wasting valuable time on tasks that aren’t generating your business revenue! Solution! Automate the time-consuming parts of the mortgage origination process with Velma Connector! Connector is an easy-to-use, rules-based automation tool that enhances your LOS! Need to put your ECOA process on autopilot? Connector takes the human element out of it. Want to know which loans need attention before it’s too late? Connector will send you the report. Want to automate borrower communications and info collection? Connector hits the send button for you. Stop wasting time and money on manual processes! Get Velma Connector today!

“Turn fixed costs into variable costs on a dime. When the market zigs, lenders need the flexibility to zag. Richey May Advisory brings the mortgage industry expertise and agility you need to convert fixed costs into variable costs. Our difference maker is your ability to outsource services to highly trained experts in a model that fits your needs. Whether that means loan-level accounting, advisory, business intelligence, compliance support, cyber services, internal audits, or underwriting automation, we have the tools, knowledge, and experience to deliver value and improve your financial performance unlike any competitor, anywhere. You’ll feel it almost immediately in your day-to-day operations. Even better, you’ll notice the difference in your bottom line. Reach out or visit our website to learn more about how we can help your operation.”

TPO Programs for Brokers and Correspondents

“Going to California MBA’s 2023 Western Secondary conference? Let’s get together and innovate! Deepen your product lineup with Planet’s Renovation and Manufactured Housing loan programs. Help your clients address today’s housing challenges by adding buydowns and USDA loans to your product mix. We make it easy and profitable to offer niche products. Reach out to Regional Sales Managers Tiffany Ta / 714-376-3214 or Jennifer Salsbury Caldwell / 909-225-8444 to explore new products to build your sales.”

Looking to gain a competitive advantage in today’s tough market? Lenders across the industry are catching wind of HELOC benefits and leveraging this tool to increase their book of business. Let us help you get a leg-up on the growing competition. Symmetry’s Piggyback, Post-close, and Stand-alone HELOCs are unlike any other HELOCs on the market, offering service, speed, simplicity, and pricing that stands up against the competition. Here are just five of the ways Symmetry’s HELOC solutions can help you win and keep more borrower business: cash for borrowers, jumbo avoidance, more second home business, increased condo business and client retention. Symmetry is ready to help you build a strong, resilient growth strategy: Contact your area manager or email us to get started!

Wholesaler Earnings and TPO News

Someone in residential lending is making some coin besides Freddie Mac and Fannie Mae ($2.9 and $5.0 billion respectively in the 2nd quarter).

Last week we learned that Rocket Companies (which, as the name implies, contains several companies) generated total revenue, net of $1.236 billion and net income of $139 million. “Generated total adjusted revenue of $1.002 billion and adjusted net loss of $33 million, or an adjusted loss of $0.02 cents per diluted share.”

Focusing on mortgage banking, “Rocket Mortgage generated $22 billion in mortgage origination closed loan volume with a gain on sale margin of 2.67 percent. Rocket gained purchase market share in the quarter, both year-over-year and quarter-over-quarter. Servicing book unpaid principal balance, which includes subserviced loans, was $504 billion on June 30, 2023. As of June 30, 2023, our servicing portfolio includes 2.4 million loans serviced. The portfolio generates approximately $1.4 billion of recurring servicing fee income on an annualized basis.”

Yesterday United Wholesale reported second quarter earnings with origination volume climbing to $31.8 billion, was up 43% compared to the first quarter and up 6.4% compared to a year ago. “Gain on sale margin compressed to 88 basis points in Q2 compared to 92 in Q1 and 99 a year ago. Purchase volume was 88% of total volume. UWM is guiding for third quarter volume to come in between $26 and $33 billion, and gain on sale to range between 75 and 100 basis points. Adjusted earnings per share came in at $0.11, which covers the $0.10 dividend. At current levels, the stock has a dividend yield of 6%.”

Speaking of UWM, “spec pools” are indeed a thing as certain investors pay up for certain loan attributes that the investor desires. In this case, UWM announced “sharper pricing on loans under $200,000, in addition to major enhancements to its Control Your Price program on non-agency Jumbo loans… UWM has removed loan-size pricing adjustments on loans under $100K and will be paying up premiums for market-based pay-ups on 30-year fixed conventional loans $200K and below.”

“UWM also announced it has increased the number of Control Your Price basis points brokers can apply to Jumbo loans, up to 40 basis points. UWM will also double or triple the Control Your Price basis points brokers apply on all non-agency Jumbo loans, up to 120 basis points.”

The FHFA, which is the conservator of Freddie and Fannie? FHFA Working Paper 23-04: How Do Students Value an Elite Education? Evidence on Residential Location and Applications to NYC Specialized Schools.

Pennymac is aligning with the adoption of Fannie Mae/Freddie Mac Form 1103, Supplemental Consumer Information Form (SCIF) as announced in FHA ML 2023-13. Use of the form is effective with FHA loan applications dated on or after 8/28/2023. View Pennymac Announcement 23-51 – FHA Mortgagee Letter 2023-13 SCIF for details.

CBC Mortgage Agency (CBCMA), a Native American wholly owned and federally chartered housing finance agency, has been approved by the U.S. Department of Agriculture to provide 30-year mortgage loans for borrowers outside of urban and suburban areas. Because the USDA loan program offers 100% financing, CBCMA enables correspondent lenders to help low- to moderate-income families in rural areas achieve homeownership. USDA loans provide low- and moderate-income borrowers with “the opportunity to own adequate, modest, decent, safe and sanitary dwellings as their primary residence in eligible rural areas,” according to the agency. Up to 90% of the original principal amount of USDA-based 30-year notes are guaranteed by the agency.

AmeriHome Mortgage Announcement 20230707-CL summarizes previously published changes made during July, additional changes made with this announcement, and recent Agency and regulatory news.

Recently, the GSEs announced updated policies addressing critical repairs, deferred maintenance, and special assessments in projects with five or more attached units effective for loan applications dated on or after September 18, 2023. View AmeriHome Correspondent Product Announcement 20230801-CL for additional information.

PRMG Product Update 23-36 includes clarifications regarding FHA Standard and High Balance cash out transactions on Manufactured Homes, borrowers living rent free requirements on Investor Solution, self-employment verifications requirements of Ruby Jumbo and Express Jumbo. Additional updates and clarifications for Ruby Express and Onyx Jumbo.

Capital Markets

A slide in big tech equities yesterday due to President Biden’s Executive Order announcement prohibiting investment in certain Chinese technologies, as well as higher energy prices, helped mortgage-backed security “sentiment” and further flattened the yield curve, which at this point is to say it increased in inversion: “bear flattening.” Fortunately, MBS prices were not very reactive to the initial selloff in Treasuries which tightened spreads further. Investors squared positions ahead of today’s Consumer Price Index inflation data that will help shape the outlook for the Fed’s next steps.

What was the result of all this noise? The U.S. 10-year note and the 30-year bond prices, along with them MBS, pushed to fresh highs in the afternoon after the completion of the day’s solid $38 billion 10-year note offering while 5-year notes and shorter tenor prices slipped to fresh lows as the market prepared for July CPI. Some movement was driven by European equities rebounding after Italy walked back Tuesday’s windfall tax announcement, saying the tax would be capped at 0.1 percent of assets.

Today brings the CPI report for July, as expected. Headline CPI increased .2 month-over-month and () year-over-year when it was expected to increase 0.2 percent month-over-month and 3.3 percent year-over-year compared with 0.2 percent and 3.0 percent in June. The core reading, ex-food and energy, was .2, as expected, and 4.7 percent year over year versus 4.8 percent previously. Weekly jobless claims have also been released: 248k, higher than expected, 1.684 million continuing claims. Later today brings a Treasury auction of $23 billion 30-year bonds, and remarks from Atlanta Fed President Bostic and Philadelphia Fed President Harker. We begin the day with Agency MBS prices better by .125-.250 and the 10-year yielding 3.96 after closing yesterday at 4.01 percent after the inflation data.

Employment and Transitions

“Attention homebuilders and other potential joint venture partners! In today’s volatile market, a reliable lending partner is non-negotiable. Enter PrimeLending, backed by the strength of Hilltop Holdings and PlainsCapital Bank. We’re not just surviving; we’re thriving. With over 37 years in the mortgage industry, we bring more than stability and experience. We bring game-changing insight to boost your revenue. Join us at PrimeLending Ventures Management, LLC. Our proven track record, streamlined operations, and cutting-edge technology speak for themselves. Imagine this: together, we’re not just about making profits, but about evolving your brand. What are you waiting for? Reach out to Mike Matthews today to talk about a partnership built on shared success.”

Mortgage Capital Trading, Inc. (MCT®), the de facto leader in innovative mortgage capital markets technology, today announced the appointment of Steve Pawlowski as Managing Director, Head of Technology Solutions. Mr. Pawlowski will be responsible for expanding upon MCT’s proven record of driving efficiency and liquidity in the secondary market. “MCT was the fastest and most comprehensive technology partner I worked with on API development while at Fannie Mae,” said Steve Pawlowski, Managing Director, Head of Technology Solutions at MCT. “I couldn’t be more excited to apply my institutional expertise to this agile and committed technology development team.” Mr. Pawlowski will provide leadership on all MCT technology development. He brings extensive industry experience to MCT, including 30+ years with Fannie Mae’s Capital Markets and Single-Family Digital Products and Services organizations. Read the full press release or join MCT’s newsletter to stay up to date on recent news and educational content.

 Download our mobile app to get alerts for Rob Chrisman’s Commentary.

Source: mortgagenewsdaily.com

Apache is functioning normally

Despite fewer real estate transactions occurring year over year, listing giant CoStar still managed to grow during the second quarter of 2023. And more importantly, it leapfrogged Realtor.com to become the second most visited residential listing site.

CoStar, best known for its commercial listing platform, recorded a 13% overall annual increase in revenue to $606 million, and a 20% yearly jump in net income to $100.52 million.

“We achieved another great quarter of very strong results in terms of revenue, sales and traffic to our websites,” Andy Florance, the founder and CEO of CoStar Group, said in a statement. “Achieving these results despite commercial property transactions plummeting 63% in the second quarter, demonstrates the resilience of our platforms.”

While the overall firm reported an annual increase in revenue, CoStar’s residential brands saw revenue fall to $12.7 million in Q2 2023, compared to $20.2 million in Q2 2022.

CoStar attributed much of its growth this quarter to the rapid increase in traffic it has seen on its sites over the past year. According to Google Analytics data cited during CoStar’s second quarter 2023 earnings call with investors and analysts Tuesday night, the firm saw 105 million unique visitors to its various websites in June — a new record for the company.

Homes.com, the firm’s flagship residential website, reported 38 million unique visitors in June, up 130% year over year. Overall, CoStar’s various residential websites recorded 84 million average monthly unique visitors during the second quarter.

Based on the self-reported metrics of other major listing sites, including Redfin, Realtor.com and Zillow, this makes CoStar the second most visited residential listing site, only falling short of listing behemoth Zillow and now ahead of Realtor.com.

In addition, Florance noted on the call that, “according to comScore, Homes.com unique visitors are up 224% in the second quarter over the same quarter last year, while Zillow’s traffic is down 5%, Realtor.com is down 13% and Redfin is up 4%.”

On the call, Florance said consumers were visiting Homes.com because they can easily contact the listing agents.

“Competing sites are sending that lead into a call center and often syndicating that lead out to multiple unrelated agents that don’t know that listing at all,” he said, taking a shot at Zillow. “So consumers are reasonably smart sometimes and I think they’re onto that.”

Florance also added that he believes the firm has a lot of runway ahead for future growth.

“This is a marathon and not a sprint. We are clear that we have more and bigger traffic levers to pull to grow traffic over the quarters to come,” he said. “Our future growth in traffic will come in waves. Any period where traffic lulls, it may just be the trough before a monster wave comes. I’m very confident that 18 months from now, we will have very impressive rankings.”

CoStar made waves earlier this year earlier this year when news broke that it was in talks with News Corp to acquire Move Inc., the parent company of Realtor.com, for a rumored $3 billion. The deal was called off in late February when CoStar told investors and analysts in its fourth-quarter 2022 earnings call that “at this point, CoStar Group is not acquiring Realtor.com.”

Source: housingwire.com

Apache is functioning normally

Owning and managing vacation rentals is a dynamic endeavor, one that balances profit, experience, and community impact. Regardless of whether you’re managing a house in Oklahoma City or a condo in San Marcos, CA, you’ll encounter unique challenges specific to different markets. These are hurdles nearly all vacation rental managers have faced, especially in the early days.

However, navigating this terrain requires a careful avoidance of potential pitfalls that can hinder your success. From maintaining a balanced objectivity to perfecting market strategies, ensuring effective communication to building strong relationships with neighbors,

This Redfin article presents a comprehensive list of vital vacation rental issues to sidestep. Drawing on the expertise of industry leaders, you’ll gain valuable insights into these potential roadblocks and learn how to proactively avoid them. You can move onto orchestrating a thriving five-star vacation rental venture, as these experts illuminate the path to smoother operations, satisfied guests, and prosperous outcomes. Learn from their experiences to safeguard your investment, maximize your earnings, and cultivate a positive impact on the hospitality landscape.

1. Unbalanced objectivity and emotion

“It’s crucial to remember that your vacation rental is not merely a personal space, but a business asset designed to generate revenue,” recommends Matt Barbuzzi from Park Place Property Management  “While striving to host only the best guests is important, you must be prepared for the occasional mishap, as they’re inevitable in this line of business. Do not allow personal sentiments to cloud your judgment or emotional resilience. This is particularly crucial if your property carries sentimental significance or serves as a family space. Unless you’re renting it to close friends or relatives, we strongly advise against utilizing such properties for short-term rentals due to potential emotional distress.”

2. Neglecting proper screening

“Screening vacation guests presents unique challenges compared to screening conventional yearly renters, as you have limitations on the information you can request, such as contacting and verifying employment history and previous landlords. Nevertheless, implement various techniques to ensure the security of our properties,” shares Maximilian Kostyashkin and Carlos Pena from MAK Realty Group. “These techniques include:

  • Utilizing advanced guest screening software such as Autohost, Chekin, Superego, or Authenticate. These platforms conduct credit checks, background checks, official ID verification, and require damage deposits. Additionally, they provide comprehensive short-term rental agreements for guests to sign.
  • Implementing a minimum stay requirement: During peak seasons, we request a minimum stay of three days. This measure helps prevent individuals from renting your property for a one-time event or party.
  • Noting the usage of noise monitoring technology, which effectively deters party-oriented renters.
  • Employing device monitoring software: All of our properties are equipped with software that tracks the number of devices in use. A sudden spike in device count, such as reaching 20, is often indicative of a potential party being hosted by your guests.”

3. Underpaying housekeeping

“Don’t settle for the lowest cost – invest in your cleaners, and your guests will undoubtedly notice the difference in the quality of your vacation rental,” stresses Realty Street.

“I can’t stress enough how crucial it is to pay cleaners. By offering fair compensation, you not only maintain a high standard of cleanliness but also enhance their motivation and dedication to delivering exceptional service. Skilled cleaners are attracted to good pay, and this directly impacts the guest experience, contributing to a positive reputation, and ensuring a comfortable and welcoming environment for your guests.”

4. Overcomplicating your guest’s experience 

“Don’t impose excessive check-out procedures on guests. Tasks such as initiating a load of towels, disposing of kitchen trash, and running the dishwasher are optimal. It’s essential to communicate to guests that these chores contribute to minimizing cleaning fees and encouraging early check-ins,” says HAVEN Property Management.

“Offer instructional videos for any intricate features in your vacation rental. Videos that guide guests through operating the hot tub, using smart devices, or navigating other complex equipment can be conveniently provided in video format.”

5. Setting bad pricing

“Many hosts lack market knowledge about rates and set their prices based on their emotional attachment to the specific property. This often leads to rates that are excessively high for the market, resulting in a lack of bookings,” shares Oliver Albrecht from Valibera. “Then after a while, they significantly reduce the rates, leading to more bookings, but these rates may only cover the house’s costs without generating any profit for the homeowners. This cycle continues for a while until they eventually give up, having to either rent the house on a long-term basis or even sell it due to their inability to meet the mortgage payments.”

6. Communication problems

“The foremost error in vacation rental management is failing to communicate with property owners. Their investment properties, often among their most valuable assets, rely on generating income or covering their costs,” says Port Aransas Airbnb Vacation Rental Property Management by Grand Welcome. 

“Entrusting management to others necessitates trust, and trust thrives on communication. Without it, owners concoct narratives, eroding trust, leading to misunderstandings and unfulfilled expectations. Communication is the bedrock of vacation rental partnerships, ensuring both parties thrive. A proactive approach, balancing issues and successes, fosters deeper trust. Regular, strategic personal calls build trust, deepen partnerships, and facilitate owner-to-owner referrals that surpass marketing efforts in expanding business.”

7. Having a bad relationship with your neighbors 

“Some owners become concerned about potentially upsetting neighbors with their short-term rental (STR) properties, and rightfully so—no one wants to create adversaries,” recommends Long Beach Airbnb Vacation Rental Property Management by Grand Welcome.

“Provide owners with the following anti-nuisance tactics:

  • Communicate with the neighbors before launching your short term rental (STR) and provide them with a contact number to call if any issues arise.
  • Be available 24/7 for communication or property visits to ensure a peaceful environment.
  • Communicate with guests—through the listing, pre-arrival emails, and arrival-day texts—that events and parties are prohibited, and violating this rule will result in eviction. Be polite but firm.
  • Consider only renting to guests who stay for more than two nights (three or more nights are even better). One-night stays tend to attract “party” people.

Here is an example from a standard email I send to my STR guests:

I wanted to let you know that there is a long-term tenant living above the garage (separate building) and neighbors on both sides in close proximity, which means the back patio closes at 11pm sharp. The Belmont Heights Retreat is the perfect place for peace and serenity.  

If you have any issues during business hours – my contact information can be found below, and we have a Guest Services line available 24/7 at 888.XXX.XXXX”

8. Neglecting feedback 

“Feedback is the lifeblood of your vacation rental. How do you know what guests do or don’t like, or where you’re missing the mark on certain things? Without actively seeking, tracking, and implementing feedback, you’re vulnerable to operational blind spots that will impact your bottom line,” suggests Michael Skinner from Savvy VRM. “If guests don’t leave a review, nudge them by politely asking for one. Or send them a text asking if they’d be open to discussing their experience with you on a quick phone call.”

9. Poor market strategy

“At Grand Welcome Nashville, we don’t just rely on traditional platforms. We amplify our reach by promoting on over 120+ websites, social media marketing campaigns, and our community ensuring our homeowners get unparalleled exposure and guests taste authentic Nashville,” suggests Nashville Airbnb Rental Property Management by Grand Welcome.

“Nashville is more than just a city; it’s an experience, a melody that lingers long after the song ends. I think that capturing this essence in your marketing is crucial. Highlighting local attractions, events, and the unique Nashville vibe can magnetize guests, drawing them into the city’s embrace.”

10. Skimping on professional photos

“I believe the top mistake to avoid is not hiring a professional photographer to take listing photos. This can differentiate you from your competition and make you stand out instantly, as first impressions are incredibly important,” recommends Gabe Chase from Brentwood Property Group.

11. “Set it and forget it” pricing

“One of the most common mistakes is adopting the ‘set it and forget it’ approach to pricing. Each day holds its distinct market value, and overlooking this fact can result in either foregoing potential income or struggling to secure bookings,” says Garret Ham from Weekender Management. “While using pricing tools like Wheelhouse and PriceLabs is a positive step, they are not a universal solution. These tools still rely on the property manager’s insights and knowledge, and should be complemented by your own market research.”

12. Unclear check-in, check-out times

“It’s good to remind the guest in a friendly way what time check-out is, especially the day before to check-out. Also, place it in a visible space in the house and in a friendly ‘hope you liked your trip’ text,” suggests Michael B. Emerick, Co-Founder of Oversee. “If the guest gets a little spacey and leaves late, it can cause a poor experience for the next guest by pushing back their check-in time. Be as hospitable as possible, but don’t let a guest infringe upon another guest’s vacation.”

13. Lack of adequate property insurance

“Not having property insurance leaves vacation rental owners vulnerable to potential financial losses and liabilities in the event of accidents, damages, or unforeseen circumstances,” warns  Nomadness Rentals. “Proper insurance coverage, such as vacation rental insurance, is crucial to safeguarding your investment and protecting against risks associated with short-term rentals.”

14. Not setting house rules and policies for guests

“Whether it’s a chic apartment in the heart of Austin or a secluded cabin in Hill Country, clarity is key. Clearly defined house rules, from pet policies to quiet hours, ensure guests know what’s expected,” recommends Alexander Buchanan, owner of Austin Airbnb Rental Property Management by Grand Welcome. “A comprehensive guest manual, with guidelines on appliance usage, emergency contacts, and local tips, ensures a hassle-free stay. This proactive approach minimizes misunderstandings and ensures guests can fully relax, knowing they’re in good hands.”

15. Incapable of juggling roles and meeting demands

“As vacation rental managers, we wear many hats, skillfully handling both property owners and their assets – encompassing furnishing, maintenance, upkeep, updates, pricing, marketing/advertising, accounting, and more,” says Blue Pacific Vacation Rentals

“We also navigate the world of guests – marketing/advertising to secure bookings, administering paperwork/contracts for owner and guest protection, overseeing maintenance, managing access/technology/information, arranging cleaning/maintenance, and meticulously curating guest experiences to foster repeat patronage, among other responsibilities. This multifaceted role underscores the distinct and demanding nature of vacation rental management, far exceeding the misconception that it merely involves posting property images on Airbnb.”

“There are myriad mistakes one can make while managing a short-term rental venture. Drawing from my experience in the current market, the most prevalent errors involve not assigning sufficient importance to gaining a competitive edge. This entails investing in elements such as furnishing, decorations, high-quality linens, bedding, and amenities, all of which are essential in an already saturated market. 

16. Not differentiating yourself

“It’s imperative to set yourself apart amidst this crowded landscape,” suggests Tampa Airbnb Vacation Rental Property Management by Grand Welcome. “Furthermore, the significance of a well-planned pricing strategy, maintaining cleanliness, and ensuring effective communication and responsiveness in guest services cannot be overlooked in terms of common mistakes. 

Make sure to differentiate yourself. With numerous short-term rentals available, standing out is crucial. Highlight what makes your property unique, whether it’s a specific theme, design, or location. Don’t ignore offering local insights. As a host, you can provide valuable insights about the local area. Recommendations for nearby attractions, restaurants, and services can enhance the guest experience.”

17. Skipping local laws and regulations

“Begin by thoroughly studying the local laws and regulations that pertain to STRs,” recommends MyTripify. “Ensure you grasp all the pertinent regulations, or enlist the expertise of a property manager who does. Non-compliance, such as violating HOA restrictions or listing an STR with an occupancy exceeding septic tank limits, can lead to hefty fines. The potential consequences far outweigh any initial gains.

That being said, don’t underestimate the importance of insurance coverage for STR hosts. Investing in insurance products is a cost-effective means of mitigating the risk of property damage. By securing insurance, you regain control over potential damages and maintain your property’s excellent condition, all the while upholding high levels of guest satisfaction.”

18. Forgetting systems and setting expectations as you grow your business

One of the biggest mistakes vacation rental managers make that’s costing you time and money is hiring additional people on your team without systems,” warns Pink Cash Cow Property Management. “As your business grows, you can’t do everything yourself, so you hire someone to help you with tasks at the property or remotely. However, the person may not do it right, not getting the results you’re looking for, or you’re getting negative reviews and guest complaints. 

You end up doing the work again yourself or spending time trying to find someone else. The best way to efficiently operate and grow your business without taking more time or effort is creating systems and processes that people can follow for consistent results, like getting five-star reviews without you doing the work. Have a process and system for maintenance, cleaning, staging, linens, etc.”

19. Not being persistent enough 

“One of the most, if not the most, important steps in ensuring successful vacation management for your home or business is to ensure that you are overly communicative with your guests, both before and during their stay,” shares Emily Bishop, Communications Manager for Brightwild. “Lay out check-in instructions clearly, while also making sure that any preemptive questions guests may have are already answered. It seems overly simplistic, but you’d be surprised to know that this isn’t always a priority for some vacation management companies.”

20. Not learning and resolving problems quickly

“One observation I make regarding most vacation rentals is the absence of established, repeatable systems geared towards success. This translates to encountering hard challenges, even if these issues were addressed just six months prior. Consequently, the team finds itself retracing steps to unearth solutions for guests or risk leaving them discontented,” says Cody Wood from STR Accommodations.

“Similarly, another prevailing issue frequently encountered in the vacation rental industry pertains to the swiftness with which guest concerns are tackled. At times, these concerns revolve around maintenance matters, indicating a deficiency in the property’s upkeep schedule, or worse, its nonexistence. 

Alternatively, the problems might stem from malfunctioning amenities or depleted supplies due to a lack of efficient restocking systems on the part of the owner or manager. The remedy for both aforementioned concerns involves implementing a quarterly or monthly maintenance regimen supplemented by a 24/7 emergency helpline dedicated to property support. Diligent tracking of inventory levels post each turnover clean at the property level is essential. Speed assumes paramount importance in the realm of vacation rentals, as our physical absence from the property necessitates possessing a clear grasp of effective troubleshooting procedures. This approach not only facilitates swift responses but also leaves guests content with the prompt resolution of their issues.”

21. Keeping up with maintenance needs

“One common mistake is underestimating the ongoing maintenance needs of a vacation rental property. Failing to address maintenance issues promptly can lead to negative reviews and dissatisfied guests,” Bend Airbnb Vacation Rental Property Management by Grand Welcome advises. “To avoid this, we recommend creating a thorough maintenance schedule, conduct regular inspections, and request that the homeowner set aside a portion of their rental income for unforeseen repairs.

Sameway, using poor-quality or outdated photos for your vacation rental property can deter potential guests. Ignoring the importance of professional photography can lead to decreased bookings and interest. We highly recommend investing in high-quality, well-lit photos that accurately showcase the property’s best features. Always hire a professional photographer who specializes in real estate to capture the property’s appeal.”

Source: redfin.com

Apache is functioning normally

Carrying student debt, whether for themselves or someone else, limits potential home buyers’ budgets by $92,440, leaving fewer homes on the market they can afford.

The average monthly student debt payment for renters who plan to buy a home in the next year is $388, according to the latest Housing Aspirations Report from Zillow. The maximum priced home a buyer with student debt could afford is $269,400, if they spend no more than 30 percent of their income on combined housing and student debt. At this price point, they could buy 52.3 percent of homes currently listed for sale.

For a buyer with no student debt seeking to spend the same share of income, the buying limit would increase to $361,800, and they could afford to buy 66.4 percent of available homes nationwide.

Student debt reached record levels this year, with the total amount at $1.56 trillion in the third quarter of 2018. Paying off student loans also makes it harder to set aside money for a down payment, which is one of the top barriers to homeownership. And saving for that down payment takes longer than it did for previous generations.

“Higher education pays off when it comes to lifetime earnings and the long-term odds of homeownership, but carrying any kind of debt limits how much home buyers can afford. For today’s generation of young home buyers, who came of age in a period of rapidly rising education costs, student debt payments can delay the pace of down payment savings and put a dent in their max price point once they do decide to buy,” said Zillow Senior Economist Aaron Terrazas. “With for-sale supply still tightest for the most affordable homes but increasingly available at higher prices, even a small reduction in a buyer’s target price point can result in substantially fewer options.”

Nationwide, about one third (33.9 percent) of renters who are planning to buy a home in the next year have some form of student debt, whether it is for themselves or someone else.

Student debt plays the biggest role in housing affordability in Las Vegas, where buyers with no student debt can afford a much larger share of the homes for sale than those with student debt (57 percent versus 29.3 percent, respectively).

It makes the smallest difference in San Jose, California, where buyers with student debt can afford 11.7 percent of homes, compared with the 18.3 percent of homes that shoppers free from student debt can buy.

Mike Wheatley is the senior editor at Realty Biz News. Got a real estate related news article you wish to share, contact Mike at [email protected].
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Source: realtybiznews.com

Apache is functioning normally

AG Mortgage Investment Trust, Inc. entered into a definitive agreement Tuesday to merge with Western Asset Mortgage Capital Corp., beating its competitor Terra Property Trust, Inc.

AG Mortgage, a pure-play residential mortgage REIT controlled by Angelo, Gordon & Co. and owner of mortgage lender ARC Home, made a stock-and-cash offer for its peer Western Asset, managed by Franklin Resources, Inc. As a result, Western Asset terminated its previously-announced acquisition agreement with Terra Property. 

The AG Mortgage deal includes the payment of $10.11 per Western Asset common share and $1.12 in cash per share, representing a transaction value of $11.23 per share, a 34% premium on Western Asset’s closing stock price on the NYSE on July 12, 2023.

“Combining these highly complementary portfolios will help scale our platform, generate greater operational efficiencies, cost synergies, and accretive earnings growth, and benefit all stockholders,” T.J. Durkin, president and CEO of AG Mortgage, said in a statement. 

Last year, Western Asset, a non-qualified-mortgage player, announced it was exploring a potential company sale or merger after posting a $22.4 million net loss for the second quarter of 2022.

The dispute between AG Mortgage and Terra Property began two months ago. 

On June 28, Terra Property, managed by Mavik Capital Management, and Western Asset announced that they entered into a definitive agreement to merge in a book-for-book deal. The transaction valued Western Asset at $17.30 per share, but the REIT’s stocks traded down after the deal became public. Investors were skeptical about Terra Property’s share value since it’s a non-traded REIT. 

On July 13, AG made its first offer for Western Asset at $9.88 per share, including $0.98 in cash. The bid included an implied value of $8.90 per common share ($54.5 million in total) and $0.98 per share in cash to shareholders ($6 million in total). AG Mortgage waived $2.4 million in management fees in the first year after closing.

Terra Property then enhanced its proposal, offering an implied share price of $15.96 per share, including $1.43 per share and $8.75 million in cash, but Western Asset declined. 

Vik Uppal, chairman & CEO of Terra Property and Mavik Capital Management, expressed disappointment with the response to its proposal that he felt demonstrated “superior value.” “

“[Western Asset] requested additional changes that we were unwilling to make because they would not have been in stockholders’ best interests, ” Uppal said in a statement.  

Bonnie Wongtrakool, Western Asset CEO, said the merger with AG Mortgage delivers immediate cash value to Western Asset  stockholders and will let them continue to participate in the upside of the combined company.  

Source: housingwire.com