Changes in the FHA minimum down read this and let me know what you think

Last Chance: 3.5 Percent Down

by admin on March 30, 2011

Mortgage industry changes: Low rates and terms may soon be history

You are going to be hearing a lot about restructuring the mortgage industry in the next months and years.
But the bottom line for home buyers is buy now and get financing in place by as early as May. The great terms of recent years will soon be gone, and probably gone forever.

Experts say you will probably never again see down payments in the 5 percent range (even now becoming harder to find) or 30-year fixed rates under 5 percent.

The median down payment in nine major U.S. cities rose to 22 percent late last year. This was the highest requirement since 1997 on properties purchased through conventional mortgages, according to a Wall Street Journal report.

In many areas, however, a down payment of only 10 percent of the mortgage amount could be available for people with high credit scores.

The lowest down payments are still offered by the Federal Housing Administration, FHA. They will finance a home with a 3.5 percent down payment.

But a recent Obama Administration white paper on the mortgage industry hints that this very low down payment might change as the federal footprint in the mortgage market shrinks.

According to CNN Money, Congress will be considering raising FHA down payment requirements, approving higher insurance fees for FHA mortgages, and changing rules for ‘qualified’ mortgages.  This could mean higher interest rates for consumers and higher down payments, perhaps up to 30 percent.
With its low down payment requirements, low interest rates, and lower credit score requirements, FHA now has a 30 percent market share in the mortgage arena but plans are to reduce its activity to just 10 percent.

Administration officials say the planned process could take some time, but it might include phasing out federal backing of Fannie Mae and Freddie Mac. Since the mortgage crisis began, the government has bailed out the federally backed entities to the tune of $150 billion.

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Lots happening this week take a look at the latest update and let me know what you think!

This Week’s Market Commentary

by admin on March 28, 2011

This week brings us the release of five reports that are considered relevant to mortgage rates but some of the data is considered to be very important and one is arguably the single most important data we see each month.

We also have two Treasury auctions that have the potential to swing bond trading enough to change mortgage rates. There are events that are relevant to mortgage rates, or at least have the potential to be, each day of the week, so we can expect to see a fair amount of volatility in the markets and possibly mortgage rates the next few days.

The first is February’s Personal Income & Outlays report early this morning. This data helps us measure consumers’ ability to spend and current spending habits, which is important to the mortgage market because of the influence that consumer spending- related information has on the financial markets.

If a consumer’s income is rising, they are more likely to make additional purchases in the near future. This raises inflation concerns, adds fuel for economic growth and has a negative effect on the bond market and mortgage rates. Current forecasts are calling for a 0.3% increase in income and a 0.5% rise in spending. Smaller than expected increases would be ideal for mortgage shoppers.

March’s Consumer Confidence Index (CCI) will be posted late Tuesday morning. This index gives us an indication of consumers’ willingness to spend. Bond traders watch this data closely because consumer spending makes up two-thirds of our economy. If this report shows that confidence is falling, it would indicate that consumers are more apt to delay making large purchases. If the report reveals that confidence looks to be growing, we may see bond traders sell, pushing mortgage rates higher Tuesday morning. It is expected to show a decline from February’s 70.4 reading to 65.0 for March.

The biggest news of the week will come early Friday morning when the Labor Department posts March’s Employment report, giving us the U.S. unemployment rate and the number of jobs added or lost during the month. This is an extremely important report to the financial and mortgage markets. It is expected to show that the unemployment rate remained at 8.9% and that approximately 185,000 payrolls were added during the month. A higher unemployment rate and a smaller than expected payroll number would be good news for bonds and would likely push mortgage rates lower Friday morning because it would indicate weakness in the employment sector of the economy.

The Institute for Supply Management (ISM) will release their manufacturing index late Friday morning. This index gives us an important measurement of manufacturer sentiment by surveying trade executives and is one of the more important of this week’s data. A reading above 50 means more surveyed executives felt business improved during the month than those who said it had worsened.

This month’s report is expected to show a reading of 61.2, which would be a small decline from February’s reading of 61.4. This means that analysts think business sentiment remained fairly close to last month’s level. That would be neutral news for the bond market and mortgage rates. A noticeable decline would be favorable for rates while an increase would be negative.

In addition to this week’s economic reports, there are two relatively important Treasury auctions that may also influence bond trading enough to affect mortgage rates. There will be an auction of 5-year Notes Tuesday and 7-year Notes on Wednesday. Neither of these sales will directly impact mortgage pricing, but they can influence general bond market sentiment. If the sales go poorly, we could see broader selling in the bond market that leads to upward revisions to mortgage rates. However, strong sales usually make bonds more attractive to investors and bring more funds into bonds. The buying of bonds that follows usually translates into lower mortgage rates. Results of the sales will be posted at 1:00 PM ET auction day, so look for any reaction to come during afternoon hours.

Overall, I expect to see the most movement in rates either Tuesday or Friday. Friday is the most important day of the week with the employment numbers and ISM index being released, but we will likely see a fair amount of movement in rates Tuesday also. I am expecting tomorrow or Wednesday to be the calmest day of the week, but we should still see some changes to rates those days. In general, it will probably be a pretty active week for mortgage pricing. Accordingly, it would be prudent to maintain contact with your mortgage professional if still floating an interest rate.

New loans could raise the price of homeownership? NPR http://m.npr.org/news/front/134663182

New Loans Could Raise The Price Of Homeownership

AP

A foreclosed house for sale in the Detroit suburb of Southfield, Mich.

Published: March 27, 2011

by Chris Arnold

Since the housing bubble collapsed, it's been harder for many Americans to qualify for a home loan. But soon, it might get even more difficult.

The government is reshaping the mortgage market. And right now there is strong political support for requiring much bigger downpayments for most home loans. Powerful congressional Democrats and Republicans support the move as does the Obama administration.

In a matter of weeks, federal regulators are expected to unveil new rules for home loans. And the buzz is that the rules could translate into mandatory 10 percent or even 20 percent down payments for most new loans in the U.S., which would be a significant change.

A Mandatory Downpayment
For the average priced home that would mean saving $18,000 to $36,000 for a downpayment. Some experts think that's a good idea.

"We put too many people into houses that weren't qualified to buy, they didn't have income [and] they didn't have skin in the game," says Edward Pinto, a fellow with the American Enterprise Institute.

He thinks requiring 20 percent down is probably going too far and favors a 10 percent downpayment rule. He says that would be good evidence of a person's ability to handle owning a house.
"And if people know they need the downpayments, they'll start saving for them," he says. "You can't just buy lattes if you need to be saving for downpayments."

A Return To The 1960s?
Some economists and many housing advocates don't like the proposed downpayment rules.
They say this would set the country back more than 30 years in terms of the ability for minorities and people without family wealth to buy houses.
Mike Calhoun, the president of the nonprofit Center for Responsible Lending, estimates it would take 7 years for the average American to save up even a 10 percent downpayment.

"If it made a big difference in the performance of mortgages it would be worth it," he says. "But the real key is not the downpayment."

Calhoun says some loans with smaller downpayments perform quite well. He says the housing bubble and subsequent foreclosure mess happened mainly because lenders got sloppy in other ways. For example, those no document
"All those other safeguards were totally abandoned," he says.
Calhoun says "bailout shock" is the reason why the big down payment rule is so popular right now among both Democrats and Republicans

"The taxpayers got stuck with a big bailout, and so people sort of want to throw the baby out with the bath water and say, 'Let's never do anything like that again.'"

The Death Of The 30-Year Fixed-Rate Mortgage?
The down payment is just one big change. Lawmakers are talking about dismantling the government-backed mortgage finance giants Fannie Mae and Freddie Mac. And Pinto, of the American Enterprise Institute, says that for decades Fannie and Freddie have subsidized one of the bedrocks of the current mortgage industry — the 30-year fixed-rate loan.

"That exists because the government subsidizes it," he says.
Going forward, banks might prefer to push borrowers towards shorter-term perhaps 20-year fixed-rate loans instead. In most other countries, loans with shorter-term fixed rates are much more common. But going down that road could also make it more expensive to buy a house.

Calhoun, of the Center for Responsible Lending, doesn't like that path. But Pinto says in the long run it might help homeowners.

"The problem with the 30-year loan — it amortizes incredibly slowly," Pinto says. In other words, homeowners pay a ton of interest up front in the first years, and it takes a long time to pay off what they owe.

Twenty-year loans do have moderately higher monthly payments, but Pinto says borrowers would quickly find themselves owning a bigger chunk of their houses. [Copyright 2011 National Public Radio]

5 Rules for Mortgage Insurance Tax Deductions

by admin on March 24, 2011

President Obama has signed a bill that has extended the tax deduction of mortgage insurance through
2011. Here are the rules to remember in regards to this tax deduction:

1. Your purchase or refinance loan must close before Dec 31st, 2011.

2. Household income must be $100,000 or less to get the full write off of the insurance premium.

3. The amount of the write off is reduced by 10% for every $1000 over $100k, with it phasing out at $109,000. This means if you make over $109k as a household you can not write off mortgage insurance.

4. It applies to your primary home and one other residence that the tax payer uses.

5. All forms of mortgage insurance qualify for this. So if you have a FHA or conventional loan, they qualify. If you have paid upfront mortgage insurance with a VA, FHA or USDA loan you can also use this as a tax deduction. The amount is just divided over a 7 year period.
The above is not intended as tax advice. Seek out a tax professional for advice about mortgage insurance deductions.

Newsletter with great talking points about is multitasking is it tru or a myth?

Multitasking: lifestyle or self-delusional myth? I used to believe in my power to multitask AND my ability to do it all well—in fact I couldn’t understand why others couldn’t, wouldn’t and didn’t embrace the multitasking lifestyle. After all, isn’t multitasking required to be a successful business professional these days? When multitasking, we spend a lot of time and energy going back and forth between projects and each time we use too much of our energy just remembering where we are and what we are doing. This leaves us with little left for anything creative or innovative. After a health scare, I realized that multitasking was not only taking its toll on me physically, but also mentally. In fact, when I was honest with myself I realized that multitasking left me was tired, drained, stressed—the opposite of how I define successful. Then I had the good fortune to come across the wonderful book The Power of Less, by Leo Babauta, about doing less AND achieving more. I was intrigued and after reading it I was hooked. Once I put Leo’s theories of time management into practice I was amazed by how much more I was able to accomplish while doing fewer activities. Here is the kicker. It wasn’t that what I was doing previously was bad, but rather that I wasn’t distinguishing between what was important versus what was fast and easy to get done. I had been prioritizing tasks that seemed easy to get off my to-do list rather than focusing on the important activities that would help me achieve my goals. After realigning my focus on what was important to me, it became a lot easier to eliminate the distractions that I had allowed to clutter up my days, my weeks and my life. Now I do a lot less, but what I accomplish is important to me and I am achieving the goals I set for myself and my business. In fact, I was able to triple my business from 2009 to 2010. How? By only working on those tasks that take me to where I want to go and not allowing myself to get sucked into time wasting activities that are always available, but not part of my plan. I spend my time strategically; I choose where and how I will put my time, energy and money so that my life is more productive AND more enjoyable and so can you! And now there are others coming out of the multitasking closet and admitting that doing lots of things at once is not serving us. Last year there was an interesting article in the San Jose Mercury News by columnist Mike Cassidy titled, “We can’t multitask? That’s heresy in the valley.” Mike’s article shared information about the former chief information officer at Google, Douglas Merrill, and his new book on how multitasking does not lead to being effective or productive—at least not as much as we think it can. “It's not really a question of whether or not we can do two or three things at once. Literally speaking, we can do them. The point, Merrill says, is whether we can do two or three things at once and do them well. It's our brains' fault, it’s all about our short-term memory constraint. [Merrill explains] that our short-term memory vault can hold only a few things at a time. When we switch tasks, it must upload what we're focused on to long-term memory to make room for the new task. And when we switch back to the first task, the process is reversed. "So usually what happens," he says, "when you're shoving something from short-term to long-term memory, you drop something or you transpose it or you make some kind of mental error."”  To read the whole article check out: " We can’t multitask? That’s heresy in the valley" Does the idea of only doing one thing at a time give you anxiety? Perhaps you might need multitasking withdrawal. If so, I am offering my upcoming Learn @ Lunch program called The Power of Less in which I will teach you how to realign your time and energy with your priorities. You will learn how to eliminate distractions and find your focus so you can accomplish your dreams—whatever they may be. We will explore our values and, beliefs about how we spend our time while developing new time management skills that will allow you to accomplish your goals more effectively and productively with less stress. The next session begins on Monday March 21st and we will meet every other Monday on April 4th, April 18th and May 2nd from 11:30 am to 1 pm in Los Altos and costs only $299 for all four sessions. You bring your own lunch and I supply the rest! For more information and to register check out: The Power of Less or call 650-248-1545.

·        Multitasking: lifestyle or self-delusional myth? Special Offer My Spring 2011 Program Schedule: • The Power of Less, my time management program will take place on 4 Mondays: March 21, April 2, April 18 & May 2 from 11:30 to 1 pm in Los Altos • Build the Business You Want From the Business You Have, my marketing strategy development full day seminar will take place on Tuesday, April 26 from 10 am to 4 pm Location tba • OverComing UnderEarning a 4 part Learn @ Lunch program on how to earn more money will take place on 4 Wednesdays: May 11, May 25, June 8 & June 22 from 12 pm to 1:30 pm Location tba Pass it on >> If you know someone who may be interested in receiving this newsletter, you can easily forward up to five copies at once. >> Having problems viewing this email? Click here for the web version.

One of my favorite authors and speakers Keith Ferrazzi

Simple Sales Tip with a Huge Impact on Your Closing Ratio

Posted on March 24th, 2011 by Keith Ferrazzi

I met sales trainer Greg A. Cozine recently at a lunch set up by RMA’s West Coast head of sales. Greg shared some great insights into the sales process, so I asked him to put together a guest blog to share one with all of you.
Here’s Greg with the easy-to-implement tip that he has found has a HUGE effect on his trainees’ success:

Understanding the difference between a suggestion and a direction is one of those nuances in the sales process that can really have a huge impact on your closing ratio.

Suggestions are close cousins of opinions. You know what they say about opinions right? Everybody has one...at least one. While well thought out opinions and helpful suggestions can be useful in moving your presentation forward…in and of themselves they do not actually close deals. In the closing process, ultimately what really matters is not what you suggest to your prospect/client but what you actually direct them to do.

Here’s an example of what I mean in day to day life. Suppose I want to get a group of coworkers to head out to a great sushi spot for lunch. If I say, “Hey guys, I heard of this new sushi place that’s supposed to be really good. Do you want to give it a try?” In effect what I’m doing is asking for their opinion. But if I’m really confident in what I’m offering why am I hedging?  Instead, I should say, “Guys, there’s this great new sushi place… you’re going to love it…let’s go!”

By being directive, you instill confidence in those that are receiving your offer. People often have a need and desire to be directed and to be directed by people who have absolute confidence in their product or services, especially when what’s being offered is something new. This can apply to lunch or a major financial transaction.  Now, of course, you’d better have solid reasoning and intelligence behind your directive – you need to deliver the goods! If the sushi absolutely sucks, it’ll be the last time anyone ever takes a lunch direction from you.

Suggestive: “Brett, I know this is a new approach for your company but I think if you give it a try you’ll not be disappointed…and I promise I’ll give you great customer service with the deal…so what do you think…you want to give it a try?’

Response: “Well let me think about this a little and I’ll get back to you blah blah blah…”
By being suggestive as in the example above, you’re just setting yourself up for an ambiguous reply. Everybody wants to hedge their bets, especially if they are offered a hedge.

So here’s the directive approach:
“Brett, this offering is going to get results that make a difference – and we’ll back that up with customer service that is second to none…let’s do it.”

Response: “So how much is the total cost again? And how does your customer service work? Will that be primarily through emails and phone or will you come to the office for follow up…”

Now the prospect is asking buying questions…which is exactly what you want.
If you’re speaking to a real qualified buyer (the decision maker) and you’ve given a great presentation and all that goes with it along the way…you’ve earned the right to be directive and ask for the deal! If the buyer has any unanswered questions there is nothing like asking for the deal to get him/her to start asking them. Don’t hedge and don’t think that asking for the deal means you’re being aggressive. Rather, you are confident of what you can deliver.

Think about the film business: I’ve yet to see a film that has a “suggested by” in the credits. It’s called a director for a reason…as in “directed by.”  And nothing attracts great actors like a director who is absolutely confident about what they want, why they want it and how to achieve it. Same thing applies to the relationship between you and your prospect or clients. This is your movie! Be the director!
That’s my story and I’m stickin’ to it!

Greg A. Cozine is a sales trainer, coach, and speaker with over 25 years of experience.

FHA changes are coming April 18th

FHA Loans Could Undergo Changes

by admin on March 25, 2011

With its extremely low down payment, the Federal Housing Agency (FHA) loan is the primary method for financing for homebuyers across the country. According to a recent Wall Street Journal article, the FHA loan will be undergoing some changes that could have a major effect on affordability.

“About 56% of mortgages for a home purchase were FHA-insured in 2009, up from 6% in 2007,” reported the WSJ. According to the Mortgage Bankers Association, up to 80% of those who received an FHA loan were first-time homebuyers.

Currently these loans can be for up to  $729,750 in high-cost markets, but the Obama administration is recommending that these high limits expire in October. $625,500 would be the new high limit.
More changes to the FHA program are seen on the horizon. “On April 18, the annual mortgage-insurance premium on new FHA loans is set to rise by a quarter of a percentage point on 30- and 15-year mortgages,” states the article. In addition, some predict that the standard 3.5% down payment could soon rise to 5%.

What do you think about these expected changes to the program and the impact it might have on the market?

My good friend John Miller author of QBQ sends me his quick note love it!

My wife, Karen, The QBQ! Mom, recently said to me, “John, you have an opinion on absolutely everything!” As I thought about her statement, I realized an opinion was forming in my mind ...
She’s right. I always have.
I probably got it from my dad, the Cornell University wrestling coach and pastor. He loved to teach, as well as freely share his opinions—on people, places, and things. And since modeling is the most powerful of all teachers, and our most critical role models are our parents, I suppose I got the tendency to always have an opinion from him.
Now, having opinions is not necessarily a bad thing, but it could be since it’s true that any strength taken to an extreme becomes a weakness. Having strong and frequent opinions can lead us to improving, well, anything! But having too many opinions can cause frustration, stress, and relational damage. It can feel—and be—critical. It’s a fine line. I’ve had to learn to bite my tongue and not always share what I’m thinking. The reality is some things just aren’t worth having an opinion on.
In QBQ! The Question Behind the Question, about halfway through the book, we pose this question: “As you’ve been reading this material on personal accountability, who have you been picturing, thinking, 'I wish they could hear this, because they need it!'”
And since I did write the book, I will stipulate to the fact that I can’t, even with all my opinions, change anyone but me. But if I had no opinions, then QBQ! and its companion book, Flipping the Switch, would never have been written! And the new team study book, Outstanding! 47 Ways to Make Your Organization Exceptional, would’ve been titled—if it had been written at all—Mediocre! Absolutely 0 Ways to Improve the Place.
On a recent flight I sat next to a woman with wisdom. And, of course, wisdom is what we learn after we know it all. That’s who and what she was: A wise person who could teach others simply by how she lived. As we chatted, she shared that when she first moved to a certain big city with her husband and three young children, not one neighbor came to greet them. The weeks went by, they unloaded boxes and hung pictures and drapes, but nobody welcomed them to the neighborhood. So one day she told her kids, “Let’s bake cookies for all!” —and they did. Then, loading up their little red Radio Flyer wagon, they spent a Saturday morning delivering fresh, still-warm homemade cookies and big smiles to their new neighbors, up and down the street.
Upon hearing her story, I commented, “Um, gee, that’s really something. Your family was the new family in the neighborhood and yet you took cookies to people!?” Her response was wise. Leaning toward me with a hint of mischief in her eyes, she nearly whispered, “Sometimes you just gotta teach people how to live.”
I know what she meant, and you do, too. She wasn’t being arrogant, haughty, or proud. She was actually endorsing what we teach in our books: I can’t change others, but I sure can model the right behaviors myself. She definitely had an opinion on this whole topic of how to be neighborly, but instead of lashing out at people, playing the victim, or complaining about the neighbors in front of the children, she turned her opinion into action. Yes, action that all could see. And most importantly, she had three children watching her. I bet as adults now, they chuckle over Mom’s fine example as they, with their kids in tow, deliver cookies to people who maybe, possibly, just don’t quite know “how to live.”
And that’s okay. I mean, who doesn’t feel better eating a fresh, still-warm homemade cookie—and learning a valuable life lesson at the same time?
Remember, modeling is the most powerful of all teachers. Let’s turn our opinions into actions.

Interesting piece about paying points. Do you pay points when you borrow?

Advantages of Paying Points

by admin on March 22, 2011

• Points paid on a purchase transaction are a tax deduction in the year of the close of escrow

• Paying points can dramatically reduce the interest rate on the loan

• Lowering the rate lowers the payment, lowering the income needed to qualify

• A lower rate saves the buyer thousands of dollars over the life of the loan

• There’s never been a better time to buy down a rate

1. Historically .50 point lowered the rate by .125%
2. Now .50 point lowers the rate by nearly .20%

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This Week’s Market Commentary

This week brings us the release of five monthly and quarterly reports for the bond market to digest. Two of the reports can be considered much less important than the others, but with mortgage-relevant reports scheduled four out of the five days we will still likely see some movement in rates a couple days this week.

The first report of the week is February’s Existing Home Sales from the National Association of Realtors late this morning. It will give us a measurement of housing sector strength and mortgage credit demand, but is usually considered to be of moderate importance to the financial markets.

Its’ sister report- February’s New Home Sales, will be posted Wednesday morning. Since it is today’s only data, it may influence bond trading enough to cause a slight change in mortgage rates, but it will take a large variance from forecasts for it to heavily influence rates. Current forecasts have the report showing a decline in sales and Wednesday’s release showing a minor increase in sales. The bond market would prefer to see weakness as it would make a broader economic recovery difficult if the housing sector is still struggling. And since weaker economic conditions make long-term securities such as mortgage-related bonds more attractive to investors, disappointing results would be favorable for mortgage rates.

There is nothing of relevance scheduled for release Tuesday, so look for the stock markets to be the biggest factor behind changes to mortgage rates. Wednesday’s only data is the New Sales report, but since it tracks only approximately 15% of all home sales, it likely will not have much of an impact on mortgage pricing.

Thursday’s only important data comes from the Commerce Department, who will post February’s Durable Goods Orders. This report gives us a measurement of manufacturing sector strength by tracking new orders for big-ticket items, or products that are expected to last three or more years. This data is known to be volatile from month to month but is still considered to be of fairly high importance to the markets. Analysts are expecting it to show an increase in new orders of approximately 0.9%. A larger increase would be considered negative for bonds as it would indicate economic strength and could lead to higher mortgage rates Thursday morning.

The next relevant data is Friday’s final revision to the 4th Quarter GDP. This is the second and final revision to January’s preliminary reading of the U.S. Gross Domestic Product, or the sum of all goods and services produced in the U.S. It is expected to show that the economy grew at an annual pace of 2.9% last quarter, up slightly from the previous estimate of 2.8%. Analysts are now more concerned with next month’s preliminary reading of the 1st quarter than data from three to six months ago, so I don’t expect this report to affect mortgage rates much.

The final report of the week comes from the University of Michigan at 10:00 AM ET Friday. Their revision to their March Consumer Sentiment Index will give us an indication of consumer confidence, which hints at consumers’ willingness to spend. This is relevant because rising levels of confidence usually means consumers are more willing to make large purchases in the near future. That translates into fuel for economic growth. It is expected to show a very small decline from the preliminary reading of 68.2, meaning that surveyed consumers were slightly less optimistic about their own financial situations than previously thought. Favorable results for bonds and mortgage rates would be a large decline in confidence.

Overall, it is difficult to label one particular day as the most important of the week. The single most important report will likely be the Durable Goods Orders, but none of the week’s data has the potential to be a major market mover. If the stock markets move lower, we should see gains in bonds and improvements in mortgage rates. But, if stocks move higher, pressure in bonds is possible, leading to higher mortgage pricing. I believe there is still plenty of the recent flight-to-safety funds still in bonds that will probably move out if the stock markets continue to regain last week’s losses. This could lead to increases in mortgage rates if investors shift funds away from bonds and back into the stock markets.

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What Google’s New Algorithm Means for Real Estate

A couple of weeks ago Google rolled out a new algorithm used to calculate what shows up highest in their search engine results, and it is having a dramatic effect on real estate in particular.

According to Google, 11.8% of search queries are significantly different after this not-so-subtle change in the formula.

What does this have to do with real estate? Real estate searches typically benefit most from what are referred to as “long tail searches” – searches with phrases, such as “homes for sale in San Mateo near downtown.”

Now these long-tail search queries will be treated differently by Google’s algorithm, though exactly how this will play out is unclear at this point. Real estate is an industry particularly affected by this change due to the nature of online searches regarding it, which tend to be pretty specific.

According to a recent press release, Google implemented the changes to their system in order to hamper content-farm sites (internet spam sites looking to gain traffic that lack quality content).

“This update is designed to reduce rankings for low-quality sites—sites which are low-value add for users, copy content from other websites or sites that are just not very useful. At the same time, it will provide better rankings for high-quality sites—sites with original content and information such as research, in-depth reports, thoughtful analysis and so on,” stated the official Google release.

The major takeaway from this is that paid-for SEO (search engine optimization) is becoming less reliable, especially in the real estate field, and creating quality content is the most important thing with online marketing.