The SECRET why clients are having BREAKDOWNS

In a market that is full of whirlwind, car-to-contract offers; as Realtors, we often forget to stop and consider the state of our clients. Not just the financial state; obviously, we know that or they wouldn't be in our ride...duh. But the emotional state, of the buyer and/or seller.

Stressed to the max

As sales professionals we have become accustom to a fire drill mentality; and, at times fail to recognize the client, is not sharing that same cranial space. For many buyers and sellers, the psychology of the home buying journey, can be overwhelming. As my teenage kids put it..."they get all in their feelin's". LOL. But, really...they do. And, it's okay. Frankly, if they weren't all twisted in this process; one that can cost them as little as 100k, or over a million...I'd kinda wonder about their cerebral balance. Right? Who drops that kinda cash, and doesn't flinch? No introduction, needed...thank you.

Now, that we are cognisant of both, the money and the mind; what can we do to help? In this tumultuous housing market, and take-no-prisoners purchase offers...how do we, the real estate agents, navigate these mind-numbing contract losses? Huh? Loss? I don't care if your last name is Trump, and you've got a cool comb-over, too...failing to secure a bid, in this home economy, is inevitable. Oh the sting to our stellar sales record! But more so; the pain and sorrow, that ties itself to the client, with each rejected offer.

As Realtors we wear many hats. Skilled agent, researcher, negotiator, financier, pseudo friend (and sometimes real) and psychologist. Dialing in the art of "mind doctor" requires observing...body language, tone of voice, mood; and, various other behaviors that can clue us in on our clients emotional needs.

Granted this does all sound a little, I don't know...creepy. I mean, we aren't Freud; but, we are freakin' fantastic agents (that can sell a house...not change a life). However, let's not underestimate our super power abilities, either. Maybe, just maybe, we can reach deep into our telepathy powers, and sense what our client's need might be. Use our x-ray vision to watch for signs of a "property pursuing breakdown." I think at the end of the day, the biggest and best strength we posses is...compassion. Perhaps empathy, as well. With a true heart, to see and feel their distress; we can begin to offer what is of most value to them in this market...encouragement.

Home is where the heart is, find it

Let's look at 5 ways that can help protect their hearts; so, they can work with a clear mind. Decisions are best made when the psyche is open, and happy.

1. Be aware. Again, body movement, speech patterns, and attitude can all be tell tale signs of stress. When you are with your client...be present. Not just there.

2. Provide options. There is nothing more discouraging than losing something; and, being fearful that you may never find it, again. One of the best cures for despair is, hope. If you can't find the exact home your client lost...you can do your damnedest to show 'em a whole lot more of the same! Sometimes the new thing, can be better than the old.

3. Let them mourn. In this business, we are professionals. We behave with class and style (let's hope)...and it is natural for people in association, to mirror one another. But, man...what if they just wanna kick something? What if they want to say "I'm so bleepin' tired of this looking!" Let's say your client wants to burst into tears; because that last one they missed out on, was the perfect house! Let 'em. I use humor often to back out of awkward situations (that's a lie; I use humor for most things..I think life is absurdly funny, the majority of the time)...but, try laughing with them. You be the first one to spew a sentence of bar room babble. You might be surprised how your humanness, helps them cope.

4. "Hey Mickey your so fine, your so fine you blow my mind! Hey, Mickey! Hey, Mickey!" Yeah, be their cheerleader. I don't care if the other 98% of your day, is dressed with your real persona, which resembles Oscar, The Grouch. Get out your pom poms and megaphone...and make it happen. Be perky...your 5 star reviews on Zillow are at stake. Do it, damn it.

5. Hug it out.

It's a love thing

Breakdowns are really just pent up frustration, unreleased...followed by hopelessness. We can't prevent the emotions our clients will face, and/or feel; but, we can remedy them with Awareness, Provision, Empathy and Encouragement.

Let's remember why we got into this crazy business...we love homes, we love independence and we love people. #spreadthelove

Could you do a Munster Mansion make-over? Are you sure?

Ooh my gawd!!! It's perfect! Uh, perfectly...awful. I have yet to figure out the intense longing and attraction some buyers have for what I fondly refer to as a "Munster Mansion".

How and Why? You're sure? 

As my clients and I, venture out on our pleasant little tour, in an effort to locate that darling little home, on that happy little street; something goes wrong. Terribly wrong. One wrong turn, one wrong light, one wrong address; and, there it is...watching, waiting, ah heck, beckoning. The spook house.

I am not literally suggesting the house is haunted; but, I am saying, it looks that way for sure! Yet, beyond any comprehension I can muster (um, I mean Munster) up...my client falls in perplexing love.

Moving forward, every visit to the property feels like I should be decked out in Van Helsing garb; as we drudge through the "how many millions might this cost to repair" inspections. And, still...they yearn; and ultimately they win...the zany house of their dreams. But, at what cost? Grandpa may need to come up with some mystic concoction down in his lab, in order to make any respectable loan happen.

Where's the cash stashed?

So, could you do a Munster Mansion make-over? Are you sure? Do you know what it takes?

Have you tumbled deeply into the vortex of passion for this fixer-upper; and, feel confident you can do it because you watch HGTV? Only, because I am ridiculously infatuated with Tim Burton; my heart "hears" your heart for this new home...and, with great bewilderment I want to help you.

To start...well, where do you start?!!!

FHA and VA loans

If you have a VA or FHA approval, we can now stop. Withdraw your offer, if one exists. Or, I plead of you, don't fall in love with this kind of home; it will only end in heartbreak. Why, you ask? Because, these two loan programs won't touch this creepy abode with a 10 foot pole. They are not in the habit of loaning on "high risk" homes. It's the government, what can I say.

Conventional loans

Personally, I lean more toward a liberal side in most everything; but, conventional loans are one thing I can get my Adam's Groove on to! Conventional loans have far less restrictions (doesn't this seem like an oxymoron; conventional = less restrictions) compared to FHA and VA loans. Basically, if you want to buy a decrepit real estate project, the banks are cool with it; but the down payment assistance option, associated with FHA and VA are null. Most conventional loans require a minimum of 5% down (but, hey if you are buying a fixer upper to begin with; you must have some money buried in a revolving library door, somewhere).

Rehab loans:

Here is where the marriage of FHA and conventional meet! You do have a couple options with these loan programs.

203k Original - Full and Streamline loans. These loans allow you to buy your favorite money pit property, and with the help of a HUD inspector, certification and a little elbow grease; you could have your dream home. In essence, these programs wrap the repair costs and the purchase price together. I believe they have recently opened up this type of funding for investors and 2nd homes, as well. It's a beautiful union.

In my opinion, one of the best websites on the web for this information is http://203k.tv/. The details of these loans are outstanding (and, they have a really awesome website, too)!

401K loans:

I don't profess to know very much at all about these accounts; but, I do know that you can request a withdraw for home purchases and/or remodels. Best to check with your HR department on this one (What? I can't know everything; real estate is MY thing).

Bring on the ghouls and tools

Still think you can take on a spooky and kooky crib? Yeah, me too. First-time buyer or experienced property professional; just knowing there are lending programs out there for you. My motto in real estate has always been...if it speaks to you, it's meant for you. However, in this case if it "speaks" to you...time to look for a new place to call home!

Taste testing homes...How many is too many?

I want it all! Wait, I need a minute; I have no idea what I want. As Forrest Gump so famously said..."life is like a box of chocolates". And, so it is, in real estate, too!

The process of taste testing

A very common apology I hear when I have been out showing property a few times, with new clients is...I'm sorry. Apparently, they feel the need to apologize for looking at too many homes. Understandably. After all, there is a common myth roaming about the universe, that Realtors become impatient and frustrated when they have to show more than 5 homes to their new clients. Umm, no. I can assure you, if you have a real estate agent with a true passion for helping folks, and they love what they do; this rumor regarding your cut-off is just that, a rumor. You're not in a bar.

In reality, it is our job to make sure that we guide you into an organized and efficient tour of homes; as this makes your ability to choose, easier. But, the operative word here is...guide. There should never be a set number of tours in place, in order to accomplish this decision.

Whether, you're relocating or looking for the first time, in your own neighborhood; we anticipate it taking a little time for you to decide. One of the funniest things, I continually experience with buyers is the "kid in the candy shop" syndrome. The prospect of what can be uncovered when we start your journey; is much like a mixed box of chocolates, not yet bitten into (don't lie, we all poke a hole in the bottom to taste test them). Our reactions to homes are nearly the same; everything from "ooh..aw" to "OH...no"! Yet, at some point, when these eclectic groups of delicious homes, are all finally revealed; it leaves you feeling feel full, and little bit queasy. The excitement of what's inside, has given way to..."I'm good...I know what I like, now". It never fails.

However, this process is important for you, and important for your Realtor, too. It should not be skipped over, or become a source of irritation for buyers or agents. Without this step, you truly can't fall in love with the right house. For without this piece of the puzzle, you will always have that nagging feeling of "is this the right home"? Yet, just like anything you put your heart and soul into; and, all things that require hard work and patience...the reward is so sweet! Because, of this taste testing process, you are confident that you have found your dream home! And, for your Realtor, there is a sense of accomplishment, in allowing this development to happen and savoring the results.

Try not to be glutenous

However, a word of warning to buyers...there is a point in which your sampling becomes glutenous; this is where your Realtor's guiding becomes important.

The truth of the matter is, there is probably less than 10 styles of homes out there. You have, traditional, contemporary, Victorian, mid-century, cottage, cape cod and patio style homes. Throw in a few A-frames, organic-green huts and a houseboat to round out your option list...and that's about it.  Basically, what I am trying to say is...you can only see so many types of houses; so please, cut yourselves and your sales agent a break, and don't look at them all! It will confuse you, I promise. The only element that truly changes within these various home designs, is the finishing. Finishing is considered...wood stain, fixtures, carpet and wall color, etc. At the end of the day...like the house? Like the location? Like the price? Then get a carpet allowance...and "like" the purchase agreement!

There is an exception to this rule, a Seller's Market. What's that, you ask? Too little inventory, too many buyers. If you don't want to be searching for a home the rest of your ever-lovin' lives; then follow this recipe...love it? Buy it! If not, the 5 other Realtors faxing over offers, will be happy to have their clients take it off your hands.

It's not just a home

When all is said and done...how many houses is too many? Use your common sense. If you were a Realtor showing someone property, at what point would you think..."enough is enough"? Your response to that question, will be a good gauge. By the same token; you should never feel rushed or pressured. Nor should you get a vibe of exasperation from your Realtor. Your not just buying a home; your buying pride of ownership and a life-time full of memories.

So, go on...taste 'em all! It's all good.

What have you done for me, lately? Your Realtor's role.

What have you done for me, lately?

Remember that mega popular song by Janet Jackson, "What have you done for me, lately"? Do you feel like you should be belting out a karaoke version of that; as it relates to your Realtor?

This poses a good question...what exactly should you expect from your Real Estate Agent? And, more importantly; have you been receiving it?

Well, at the very least a return phone call by the end of the business day; and at optimum service, a pro-active email or text, every few days. Even if it's just to tell you..."nothing is new, all is still good and I just wanted to say, hi". I find it pathetically sad when I speak with new clients who have fired their agents, and share their stories, that they often wouldn't hear from their sales professional for several weeks! Huh? Whether you're making a $100,000 purchase or a million dollar buy; personally, if it was me, and that was my experience; I'da moved on to a high decibel version of Michael Jackson's "Scream" by now!

So, what should you expect

So, what should you expect between "I forgot your name, after I wrote the contract", and "I'm just making my 20 minute check in call"?

To begin, education is a good step. Most first-time home buyers, or folks that haven't had a home in years, aren't sure how to build a bridge from visiting the real estate office, to visiting the title office for closing. Here's the part that kills me...clients think they have to have the hammer and nails to do it, themselves. What?!!! At no point, should you ever feel concerned you are asking too many questions. And, if you ever do, Donald Trump's catch phrase "YOU"RE FIRED" will suffice. A good Realtor will expect you to have many questions; and, be happy to help you through the process. Remember, there are no dumb questions.

My personal style is simplified and visual. When I say simplified, I am not indicating that my clients are not wonderfully intelligent people; but, hey...when you don't know something, you don't know it. I always think when I'm learning something new; get me from point A to point B, in the most remedial way, and we're golden!

6 simple service points

Great...yah, yah, yah....I still haven't really answered the question, specifically; what should I expect from my Realtor.

Here ya go...

1. A visit, to sit down and discuss the process of buying and/or selling a home. This conversation should include every aspect of what will happen from the visit you are currently having; until the minute they hand you your new house keys.

2. Various options to stay in contact your agent; ie: email, cell, office number, etc.

3. A commitment of time, in which they will return your calls. I find you can plan on failing, if you fail to plan. As in any good relationship; you have to lay the ground work of expectations, as well as, the no-nos in order to keep the relationship healthy. Assumptions. Bad.

4. Your Realtor will be aware of your time lines for inspections, reports, contract addendums, and so on. These time lines are critical; because; if you miss them, that home is yours now (regardless of what's on the inspection). #moneypit #theburbs

5. Granted your Realtor is not your lender; however, it wouldn't hurt your Realtor to reach out to your lender, and make an introduction. My MO as a real estate salesperson, is keep my hand in the cookie jar. Honestly, I don't care if the loan officer is offended that I call often to check on things. Yes, there is borderline obnoxiousness; but, that's not what we're talking about. In example, if you are a music producer (let's just go with that theme in this blog) and your son, daughter or best friend just got a contract with a major record label, but had no idea what any of being "signed" meant; would you lean back and watch at a distance, or keep an eye on it, to make sure they were protected? Get it? Exactly. So, heck ya...contact with the lender should be expected.

6. Even I don't fully understand the title company and what they do; but, they're awesome! In my mind, they are a company operated by The Great and Powerful Oz. I drop the check off to open your escrow account; and, 2 and half weeks later, they call to say it's magically clear and insured. Lol. Well, okay, I might know a little bit more. Basically, the title company makes sure there is nothing on the title that is an issue. For instance, a lien placed on the property, a city, state or government restriction, flood zones, etc. But, yes...your Realtor, does need to let you know, where, when and who is the title company you've chosen.

Comprehension vs Practice

Trust me when I tell you, there is a whole lot more involved than these 6 points, noted. However, the motive was to let you know, what you should expect from your Realtor. Regardless, of how busy your Realtor is (that is never a good excuse) contact is essential. If we are doing our job well, and we truly understand the mindset of a first-time or re-entry home buyer; then we comprehend the need for communication. We comprehend it, and we practice it.

If you find yourself humming along to Janet's little tune, after having left the 40th voicemail message in 10 days...it's time. Like that Disney Frozen chick sang..."Let it Go"! It's your cash, it's your home, and it's your journey. Ask away. Ask away. It's all okay!

FSBO = Forfeit Savings By Obliteration. Not, For Sale By Owner.

SO! You want to sell your home...(by yourself).

Awesome. No really, awesome. I'm a Realtor in the minority that says more power to you! It's not because I think "cool, you'll save so much money" (well, you actually will save some, if done right); but, more so because, I give major kudos to any unlicensed professional that knows exactly how to complete a home transaction sale, without any help from a Realtor. And, yes, asking a relative or friend with a license counts as help.

Aside from an air of sarcasm you may sense in my comments, I mean them with all sincerity. Let's face it, real estate is not brain surgery; however, we also don't get our license out of Cracker Jack box. We've taken the time to become knowledgeable, in order to pass a state and national exam; and exert additional effort after we are licensed, to stay current with new laws affecting those buying and selling real estate. We really do care about protecting our clients.

8 or so reasons to be a FSBO (until you reach #5)

That said, let's go over the steps it takes to accomplish a FSBO (For Sale By Owner).

Let me begin by telling you what I really think FSBO should stand for...Forfeit Savings By Obliteration.

Yep, I sure do. If I say nothing else in this blog, please here this...if you don't lose money, at the very least you'll lose time. And, what is that old saying, "time is money". Enough said.

Mindset of a FSBO (fyi...before being a Realtor, I was a FSBO):

1. Look on Zillow, Trulia, Realtor.com, Craigslist, etc., to get the true value of my home.

2. Put my home on every internet site known to man; and, then stick a box out front with some cool flyers.

3. Hold an Open House or two, with signs peppered along the neighborhood streets.

4. Show the house (it's easier to show it when I'm selling it, because the buyers have to work around my schedule). LOL.

5. Receive an offer, and review it. Geeze, I hope I don't miss something. Do I have all the paperwork? Who opens title? What are my closing cost? Do I call a lender for that or the title company? When do the reports all have to be done? What happens if there are problems with the reports? Do I have to pay for all the repairs?

6. I need to call someone. I don't want to hand over that extra 3%! I need that money.

7. Wait. The appraisal didn't come in at value; and, now they say they aren't going to buy it. Oh no, we are in contract, and they ARE buying it! What loan disclosure? I think we missed that page.

8. What? I just got to the title company to close, and the check was like thousands of dollars less than I was expecting to receive! HUD-what Statement...what's that?

Okay, well...up to about #5 you were Gucci, right? Trust me, I remember that feeling of "did they write this BRE contract in another language (like ig-pa atin-la)?!!! I also recall the feeling of debilitating fear and steadfast stubbornness at NOT calling a Realtor. Yet, I called; and, then I became one (mostly, because I really, really wanted to help people avoid my same pitfalls).

Can we REALLY talk, now

Can we talk, now? Let's get down and dirty here; truth be told, a FSBO happens because of money. You don't really care who "shows" the house or makes the schedule. And the old excuse, I don't want strangers in my home when I'm not there; uh, do you know that Realtors have to be fingerprinted and pass a FBI and State background check before we get that little Star Trek thingy to open your home up? I think you're pretty safe with us.

Back to the money. Just for kicks and giggles; let's go with a fact for a minute, instead of an assumption, and see what that looks like:

According the National Association of Realtors, 2014 the average FSBO sales price was $174,900; and, the average sales price of a home with Realtor representation was $215,000. That is a $40k-ish difference! So, see selling your home with a licensed professional will bring you a higher profit; as well as, coverning the commissions.

Another interesting NAR fact:

Most difficult tasks for FSBO sellers:

• Understanding and performing paperwork: 18%
• Getting the right price: 13%
• Preparing/fixing up home for sale: 12%
• Helping buyer obtain financing: 3%
• Attracting potential buyers: 3%
• Selling within the planned length of time: 7%
• Having enough time to devote to all aspects of the sale: 6%

Statistics-Shamistics, blah, blah, blah. But, wait...what about that little "fact" of $40,000 more on average, in your pocket, if you list with a Realtor. At the end of the day, which is more important pride, time or cash? I am confident, that is the one answer that needs no stats. Yeah, that just happened. Call a cool Realtor.

What kind of real estate client are you? Your answer determines your success.

Diva? Doormat? Determined? Which of these personalities are you? In the daily grind, it may not matter who you are. But, as a client, in the vast sea of real estate; it will determine your success, or your failure.

After years in this business, I have been able to pin a specific title to groups of people, with certain characteristics; and each of these titles is significant in relating to their style of buying and selling property.

Let's begin with the Diva

He/She comes to the table with one, of two (and sometimes both) mindsets. First, "I know everything" and second, "You know everything; so, I'll do nothing". Here are the obstacles with each mindset. If a Diva approaches the home buying or selling process with a "I know everything way of thinking"...why the heck are you calling me, then?!!!  We both know you are never going to listen to a thing I say; since, well...you now everything! Diva #2, client knows nothing (or more importantly pretends not to) so your Realtor is going to need a good pair of waders, because they are about to go in deep. Basically, your Realtor can forget their relaxed dock pole fishin' days. You are expecting them to catch a big mouth bass, and you will not be handing them so much as an itty bitty worm to catch it with. Problem, I can't read your mind, I need a sea mate, and I know you know a little something about property; because, truth be told, you became a Diva because you are giving The Donald a run for his money.

Diva Solution: Give me the opportunity to be the expert; you did call me. Also, it wouldn't hurt for you to reach into that bait and tackle box, and pull out a fishing line strung with interdependence. After all, it is your investment.

Doormat

Just as it sounds. "I don't really know what I'm looking for...I'm not sure why I'm looking...Well, the other agent told me to...My brother said I should..." How do you get out of bed in the morning without a coach and a cheerleading squad? When it comes to real estate, you have got to have some concept of what you want. That doesn't necessarily mean you need to be assured of the exact home design, bedrooms, baths, etc, etc. However, you do need to know important things like, when you want to move, what your loan looks like; and, if in fact you are sure this is what YOU want to do. Please, never knock on the door of a Real Estate office (well, in this age of electronics..send an email) because your mother's best friend's cousin told you it's a good time to buy. For god's sakes, if you like your rented studio apartment...stay!

Doormat Solution: If YOU really want to buy; then do it "like a boss"! Use your words, pull that big voice from your belly...and let's go buy a home!

Determined

Let me just say, if you are this kind of client...I love you; and you should love you, too. Reason? You will be a success in your real estate investments, before you every need to tweek a thing.
You are best described as decisive, pro-active and a team player.

Let's take a minute to break down each of these adjectives

1. Decisive. You have already decided you want to buy a home.

2. Pro-active. You have also determined, that to do so you need to visit a lender to qualify (this will include checking your credit). The lender can tell you what your purchase amount will be, what your payments will look like and how much money you will need to close the deal. Additionally, the Determined client will have considered, area and specifics of the home they are looking for (this is not necessary, just a plus).

3. Team Player. In all honesty, this is the most important aspect of this triple-threat combo. Regardless of your decision making abilities, and your awesome "go-getter" attitude; if you can't be cooperative, and considerate in the home buying or selling process, it will fail.

Your success

Your success ultimately boils down to how willing you are to listen to the voice of experience, combined it with kick-butt decisiveness and determination; and, finally being as eager to follow the necessary steps to home ownership, as you are prepared to bait the hook, be the sea mate or share your research like a champion angler. I promise you, your internal rudder enveloped in these attributes, will guide you to real estate success!

Buyer Beware...A Whole Different Meaning.

Have you ever heard the saying "Buyer Beware"? I am sure it's a commonly used phrase as it relates to the sales industry. "Buyer Beware" of the shady car salesman. "Buyer Beware" of the mechanic who insists your car needs all the repairs, now. "Buyer Beware" of the Realtor who wants to list your home or sell you one, with no regard for your best interest. Well, "Buyer Beware" took on a whole new meaning for me, lately.

The Perfect Realtor

Recently, while meeting with some new clients, that I agreed to work with after they had fired their previous Realtor; it dawned on me that "Buyer Beware" has numerous meanings. Apparently, these folks had been through a string of agents, because many of them "didn't do their job", according to the clients. Quite frankly, I know some of these real estate agents and they are experienced, respectable salespeople! This started the wheels turning in my mind regarding the pitfalls for clients purchasing or selling property. More, specifically, is it critical for property consumers to be as mindful of the sinking hole home, as they are the "perfect Realtor"? In reality, there is no perfect Realtor. However, in an effort to find that individual, they may be passing up many very good Realtors. When we think of that phrase, "Buyer Beware" we often associate it with tangible situations; but, how often do we fasten it to emotional alerts? Simply stated, does our vehicle have to stop, or our pocket book become drained in order to be consumer cognizant?

So, I posed this question to myself..."if I were a client, in search of a Realtor, what would I be looking for"?

Answer...experience, integrity, passion and empathy. Hmm, empathy. That seems like a strange word to use as it relates to my self-imposed question; yet, after seriously pondering it...not really.

Empathy and Bonding

Take this into consideration; when we meet someone new, business or personal, what is it that connects us to that person? Similarities. Those similarities might be children, work, spouses, friends, hobbies, etc. These strangers tell us a story, and then we share one much the same, and so on and so forth. At some point, one of these stories will involve a situation that may have been frightening or trying; and, because we have related to one another's stories, we now can empathize. And? Well, once someone empathizes with us, we begin to build trust; regardless of the amount of time we have been associated with them.

But, how does the correlate to real estate? And, more importantly, how does this translate to "Buyer Beware"?

Think of it like this...whether you are purchasing a home for the first time, with little education or you are a seasoned seller; you want to be assured that the Realtor you will choose, can relate to your situation. If he/she can closely feel your history, in essence have empathy regarding your fears, lack of knowledge, past negative experiences; then you can feel confident that they too, having been through these experiences, will make every effort to prevent these same hardships from effecting you. Basically, the Realtor's empathy becomes your guarantee of protection.

So, again...how does this translate to me, personally having a better and different understanding of the old phrase "Buyer Beware"; and, how does it have real significance for you, the property consumer? Because, as important as it is for clients to avoid the money pit homes, shady loan sharks, or turn and burn agents...it is just as critical that consumers diligently seeks the right agent. Not the perfect agent. Experienced. yes. integrity. yes. passion. yes. Empathy...absolutely yes.

"Buyer Beware" of the piranha pool...instead, fish for the Empaths.

http://www.empathtest.com/ Like to know if you're an Empath?

"We have been talking about buying our first home; what do we do next?

"We've been talking about buying our first home for awhile, and we are ready. What do we do next? Do we contact a real estate agent?"

This is a common question with new home buyers. You'd think that would be the next logical step; but, there is one very important step before finding the Realtor...find the lender! Of course most Realtors can direct you to a good loan officer or bank to get qualified; but, it might not be someone you are comfortable with; so I suggest doing a little research on your own.

To begin, get referrals; that's always the best way to go. If you are new to the area or don't know anyone who can refer you to a lender; Search the Internet and thoroughly investigate offerings for details. Advertising can be overwhelming, so squint through the mountains of ads to look for qualification requirements.Take notes and have questions prepared. The mortgage lending industry is electronic, everything is available to you in writing instantly. Once you've communicated, either by email or phone with a loan officer you feel comfortable with; schedule an appointment to meet in person. The loan officer, should give you a list of items you will need to bring with you, for pre-qualifying.

Anywhere from 3 to 7 days is how long it can take for a pre-approval. Pre-approval is different from pre-qualification. Pre-qualification in essence is having the loan officer review your documentation and saying "yep, based on what we are looking at in front of us, you qualify for home loan". A pre-approval is when your documentation has been forwarded to the underwriter; where they go over it in detail to determine if your ratios, income, credit, etc. look right for a lender to fund the loan. Upon the completion of underwriting, you will be informed by your loan officer that you have been pre-approved. The loan officer will then provide you with a letter to take to a Realtor; this allows the Realtor to know how to help you in your home search.

Trust me when I say it is best to take this step first! Most qualified Realtors will not show you homes without that letter of pre-approval. One reason is they need to know "what" your purchase power is, in order to show you the right homes. Second, no good Realtor will waste their time showing homes, only to find out you don't qualify to buy one.

As tempting as it is to jump right into the FUN part of home buying; you will save yourself heartache and time by taking the qualification step first. I can promise you, we are as excited as you to search for your new home...and even more excited when you come to us prepared!

"Helping Educate with the ABC's of Real Estate"

MPP's Q&A...“I am ready to buy my first home, but I am not sure I have enough money for the downpayment and closing costs....

Miss Property Professor’s Question of The Day

“I am ready to buy my first home, but I am not sure I have enough money for the down payment and closing costs. I’m not sure what I need or when I need it. I don’t want to go and talk to a real estate agent until I know for sure I’m prepared for all these costs.”

This may be the number one question I receive from first time home buyers; and frankly, the smartest one to be asking! The last thing you want to do is get to closing day and be short on funds to close. It’s not a pretty sight. Therefore, having a great Realtor, loan officer and title representative is critical. I know there are all kinds of horror stories out there about the gazillions of dollars it is going to cost to buy a home (the truth is you’ll spend more when you sell your home) but, just like the term gazillion dollars is an exaggeration, so is the amount of money you will need.  Granted, things can get pricey...but, that doesn’t mean it is necessarily coming directly from your bank account.

Since 1934 FHA has been offering loan programs to help buyers with the “american dream”...home ownership. In 1944, The Veterans Administration followed their lead, doing the same. Since then bond programs have popped up left and right offering down payment and closing cost assistance to everyone from teachers to firefighters, and everyone in between! Upon meeting with your loan officer, you will be able to find out which, if any of these programs you can qualify for. So, given you receive approval on an assistance program...it’s all good! NO $$$ out of your pocket for the down payment.

As scary as it is to go there….closing costs (eeeeeeeek) again, not as bad as the urban legends make them out to be. I’d say in 4 out of 5 purchase contracts, the closing cost can be written into the offer (even if you are using a conventional loan. It’s pretty easy to follow…

Purchase Price: $100k

Estimated Closing Costs: $5k

Offer: $105k (purchase price + closing cost)

Seller agrees to credit back $5k to you for closing costs; bringing the purchase price back to $100k. This covers your closing cost without having to take money out of your wallet up front. Keep in mind this is only an example (in real estate everything is an estimate) until closing day!

So, see there is no down payment demon out there...lol! No closing cost spook! If you are ready to buy, you’ve been to a lender, have your pre-approval and safely ($1,000) in bank reserves...I’d say DO IT!