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March 2009

Jumbo loans are back

2009-03-30_1057 Syndicated real estate columnist Kenneth R. Harney reported in a recent column that jumbo mortgage money is flowing back into the home loan market. This is great news for agents and their qualified luxury home prospects.

Jumbo loans are generally mortgages exceeding Fannie Mae and Freddie Mac's statutory high-cost market purchase limit.  At the beginning of this year, the ceiling was $625,500, compared to $417,000 a year earlier.  Congress has raised the upper limit in high-cost areas for Fannie, Freddie and the FHA to $729,750, a figure extended by Congress through the end of 2009.

According to Harney, new money is starting to flow into mortgage loans which are too large to be purchased or backed by Fannie Mae, Freddie Mac or the Federal Housing Administration.  Major banks are starting to fund programs offering "jumbo loans between roughly $730,000 and $1.5 million, with fixed 30-year rates starting in the upper five percent range," said Harney. 

Tim Kruger, a Westlake Village (CA) based Private Mortgage Banking officer for Wells Fargo, told a recent Institute training class in Beverly Hills that Wells Fargo is once again offering jumbo loans. Bank of America reports they will offer jumbo loans through their retail network and also through their Countrywide Home Loans subsidiary.  Amsterdam-based ING Group has also begun offering jumbos.  Rather than spinning these loans off to Wall Street, the lenders are expected to hold them in their own portfolios. Expect stringent qualifying requirements and minimum required down payments from 20% to 30%

And the rich get poorer!

The Forbes magazine annual list of Billionaires has hit the newstand (and the web).  Here's the scoop ... Last year there were 1,125 billionaires, today there are just 793.   Yes, almost thirty percent of last year's uber-rich have dropped into the ranks of multi-millionaires. Not only did the number of billionaires decline, their collective net worth shrank by a whopping $2 trillion dollars.  The top five this year all saw their portfolios shrink, but don't feel too sorry for them, each is still are worth more than $20 billion.

Here are the five wealthiest and their estimated net worth.

  1. Bill Gates (US)  $40 billion
  2. Warren Buffett (US)  $37 billion
  3. Carlos Slim Helu (Mexico)  $35 billion
  4. Larry Ellison (US)  $22.5 billion
  5. Ingvar Kamprad (Sweden)  $22 billion

What are the implications for the luxury home market?  The list of prospects for the $100 million dollar trophy properties around the world just got shorter. In fact, at least one billionaire is trying to back out of a deal made before the world credit crunch. Russian oligarch Mikhail Prokhorov contracted to purchase Villa Leopolda on the French Riviera for $750 million back in 2008. Now, according to the London Daily Mail, he wants his $55 million deposit back. Seller Lily Safra seems to believe a deal is a deal. 

Prokhorov aside, luxury products and services are still selling and purveyors of luxury other premium products are obviously hopeful -- Glenlivet single malt scotch, Mercedes-Benz, Burgess Yachts, and Richard Mille watches are promoting their wares in the pages of Forbes billionaire issue.

Yes, the rich have gotten poorer, but they'll be back with deeper pockets and pent-up demand for luxury residences. So, polish your skills, stay in the game, and keep working to brand yourself as a luxury expert.  It will pay off.

"Bark if you like this one!"

AP PHOTO from LA Times

Record set for most expensive listing in US -- $150 million
Owner's dog helps select listing agent

When  legendary television producer Aaron Spelling's widow decided to list her gated $150 million Los Angeles mansion in prestigious Holmby Hills, she invited Realtors in for marketing consultation appointments.  While list price suggestions and specific marketing plans may have carried some weight, the word is that Candy Spelling was watching the reaction of her Wheaton Terrier Madison to help her determine which real estate professional would walk away with the listing.  Sally Forster Jones, a Beverly Hills Coldwell Banker Previews agent, must have caused the dog's tail to wag, because she snagged the business as the co-listing agent. (Does anyone know who is co-listing with Sally?) 

The reported $150 million list price makes "The Manor" the most expensive listing in the US.  The new listing bumps another Los Angeles property priced at $125 million from the top spot.  The Spelling's French chateau style home is reported to have more than 56,000 square feet, sits on 4.6 acres and -- although not even Mrs. Spelling is sure of the exact count -- has about 100 rooms (at least one of which we assume belongs to Madison). Other features include a wine cellar, gift wrapping room, bowling alley, barber shop, beauty salon and parking for 100 cars.  It is just down the street from another trophy residence, The Playboy Mansion.

How saleable is a $150 million home?  With the number of multi-millionaires and billionaires in the world declining,  the prospect list has gotten smaller.  What do you think?

CNN video
LA Times article  
LA Times photo gallery

How to turn a development's website into a lead generation tool for you

2009-03-20_12492009-03-20_1234_001 Here's a cool tool!

We all know that the affluent are citizens of the world and are increasingly purchasing multiple residences, often in market areas distant from their primary residence.

Agent Shield can help you tap into this desirable and profitable market segment (no matter where you live) while delivering service to your clients.

Agent Shield provides FREE web 2.0 tools to safely and easily expand your sales opportunities to include new construction, second and vacation homes.

The patent pending Agent Shield technology allows you to use a development's website as a marketing and sales tool while retaining control of your prospects and leads. 

One you've signed up, you can choose which developments you want to work with.  You can then choose from "widgets" that make adding those developments to your website or emails as easy as copy and paste. 

More importantly, when clients  visit the development's website they see YOUR contact information instead of the developer's or the in-house sales team's.

You can find a quick video tour on this page.

March Wealth Report

Members can find this month's Wealth Report from The Luxury Institute in the Members Only section of our website (login required).

Topics covered this month:

  • Still Waiting for Springtime in Retail
  • The Current State of the Luxury Industry
  • Managing Luxury Brands
  • Adopt the Anti Laws of Marketing
  • Function of Luxury

Promote Your Listings Globally

If you have just joined our group on ProxioPro, or are about to here's a great opportunity to learn how to really leverage the network to promote yourself and your listings. 

Proxio expert Ray Thackery will be sharing the latest tips and tricks and answering your questions in a quick 15 minute webinar today at 3:00 p.m. (EST). 

To participate in this free webinar, simply click on this link at 3:00 EST. 
The meeting ID is 326-112-072.

Can't make it today?  Join us next week:

  • Monday:  How to Activate your account and get started with ProxioPro
  • Wednesdy:  How to add your listings for global promotion
  • Friday:  How to promote your listings globally

Get all of your questions answered and learn the latests tips and tricks in these quick and informative webinars.  Full schedule here.

Stand Out or Bow Out! (aka "Differentiation and Dominance")

As you know from our earlier post, this month's conference call for members featured marketing and branding gurus Ron and Alexandra Seigel of Napa Consultants and The Language of Luxury.

In the call, Ron and Alexandra share their fantastic expertise and insights on how to achieve market dominance through the  effective use of branding and differentiation.

If you missed the call, well, here's you chance to listen in!

Want to listen on your iPhone?  Download the mp3 file (13 MB)

Partnership with Proxio gives Institute members access to international MLS and referral network

2009-03-11_1201In the previous post we hinted at a way to leverage an international network in your business.  Well...

We're pleased to announce a partnership with Proxio that gives Institute members FREE access to the ProxioPro global referral network and international MLS.

All Institute members receive a free standard level account and discounts on upgrades. 

Plus, we’ve set up a special Institute group within the ProxioPro platform, so you now have the best of two worlds:

  • The ability to promote yourself, network, and share listings (and referrals) with other Institute members online
  • The ability to post listings and participate in an international MLS and networking system

This great new tool enables you to…

  • Get international visibility for yourself and your listings
  • Connect with other Institute Members for networking and referrals
  • Search for members and their listings

You can add-on additional features*…

  • Add other member’s listings to your website*
  • You can even create a personalized “mini-site” that features all of your listings, plus the listings of other agents in your network!*

Not only that, but because it is part of Proxio’s global network, the ILHM group on ProxioPro also offers Institute members the opportunity to connect with thousands of other agents around the world, to create professional relationships, build personal referral networks, and share listings! 

Members can find all the details on the Proxio benefits package in the Members Only section of our website (login required).

Others like you


Just a peek at the location of some of our recent readers.

I'll restrain from making trite comments about the shrinking world and the reach of the internet, and simply observe that, all being readers of this blog, these folks presumably have something in common with YOU.

Imagine if you could leverage this network in your business.  Can you? 

We think you can.  More on how to follow....

Moneycorp, currency rates, and real estate

Don't let the fancy charts in this post distract you. 
We're really talking about three simple things:
  • Delighting your clients and saving them money
  • Keeping deals together
  • Earning commissions


In today's market we're seeing quite a bit of volatility in the exchange rates between currencies.  The chart above shows the daily EUR/USD rate for the last 90 days.  The numbers on the vertical axis show what one Euro will "buy" in dollars. 

Right now that's about $1.25  for one Euro, but sixty days ago the Euro was getting about $1.40.  That's a difference of $0.15. 

"So what?" you say...  If you are buying or selling internationally and your transaction involves a currency exchange, this can be a big deal.  Let's say you have a European buyer buying an $800k home here in the States.   He first looked at it 60 days ago and he is ready to close today.  Let's assume he is getting exchange rates close to those shown in the chart above.


With no change in the sale price, that home is going to cost him €68,571  more today.  Ouch!  Obviously timing and exchange rates can make a big difference--even make or break a deal.  
With that in mind, we are pleased to announce a partnership with Moneycorp. 


In today's volatile markets, the right exchange services are more important than ever.  Moneycorp can help your clients get the best rates and protect them against adverse currency movements by locking in rates for up to two years. 
Our partnership with Moneycorp enables you or your company to offer Moneycorp's foreign exchange service to any of your clients who may need to make international money transfers or require currency services.
  • If you have clients from abroad who wish to purchase or sell property in the U.S...
  • If you have U.S. clients who are buying or selling abroad...
  • If you have contacts who conduct business internationally...
  • If you have clients who are moving assets internationally...
Moneycorp can make your clients' money go further--making you look good and earning commissions for you!

For more information see the Moneycorp page in the Members Only section of our website.  Or, contact Stella Giudicelli (account manager for our members) at +1 (407) 352-5890.