Understanding the Role of the Real Estate Agent

Not sure you need an agent to help with your real estate transaction? Here are seven ways they bring value you might be missing out on.

The road to homeownership can be bumpy, and it’s often filled with unexpected turns and detours. That’s why it makes sense to have a real estate pro help guide the way.

While real estate websites and mobile apps can help you identify houses you may be interested in, an experienced agent does much more, including:

1. Guide. Before you tour your first home, your agent will take time to learn more about your wants, needs, preferences, budget and motivation. A good real estate agent will help you narrow your search and identify your priorities.

2. Educate. You should expect your agent to provide data on the local home market and comparable sales. The home-buying process can be complicated. A good agent will explain the steps involved – in a manner that makes them understandable – and provide counsel along the way.

3. Network. An agent who is familiar with your target neighborhoods will often know about homes that are for sale – even before they’re officially listed. Experienced agents tend to know other agents in the area and have good working relationships with them; this can lead to smooth transactions. Your agent may also be able to refer you to trusted professionals including lenders, home inspectors and contractors.

4. Advocate. When you work with a buyer’s agent, their fiduciary responsibility is to you. That means you have an expert who is looking out for your best financial interests, an expert who’s contractually bound to do everything in their power to protect you. If you find yourself in a situation where the same agent represents both the buyer and seller, things can get trickier, advises Scottsdale, Arizona-based real estate agent Dru Bloomfield.

“A lot of people think they’ll get a lower price by going straight to the listing agent, but that’s always not true,” she says. “If I was representing both the buyer and seller, I’d be hard-pressed to take a low-ball offer to the seller. But, as a buyer’s agent I’d do it, because I have no emotional ties or fiduciary responsibility to the seller. Buyers should work with an agent who can fully represent them.”

5. Negotiate. Your agent will handle the details of the negotiation process, including the preparation of all necessary offer and counteroffer forms. Once your inspection is done, the agent can also help you negotiate for repairs. Even the most reasonable consumers can become distraught when battling over repair requests; an agent can do “the ask” without becoming overly emotional.

6. Manage minutia. The paperwork that goes along with a real estate transaction can be exhaustive. If you forget to initial a clause or check a box, all those documents will need to be resubmitted. A good real estate agent understands the associated deadlines and details and can help you navigate these complex documents.

7. Look out. Any number of pitfalls can kill a deal as it inches toward closing; perhaps the title of the house isn’t clear, the lender hasn’t met the financing deadline or the seller has failed to disclose a plumbing problem. An experienced real estate agent knows to watch for trouble before it’s too late, and can skillfully deal with challenges as they arise.

Professional real estate agents do so much more than drive clients around to look at homes. Find an agent you trust and with whom you feel comfortable working; you’re sure to benefit from their experience, knowledge of the local market and negotiation skills.

Related:

Originally published July 21, 2014.

Source: zillow.com

5 Mortgage Misconceptions Set Straight

Looking for a home loan? Get your facts straight so you can proceed with confidence.

Getting a mortgage can be a breeze or a slog, depending on what you know about the process. To get organized and set your expectations properly, let’s debunk some common mortgage myths.

1. Lenders use your best credit scores

If you’re applying for a mortgage jointly with a co-borrower, logic suggests that your lender would use the highest credit score between both of you.

However, lenders take the middle of three credit scores (from Equifax, TransUnion and Experian) for each borrower, and then use the lowest score between both borrowers’ “middle scores.”

So, if you had a middle score of 780, and your co-borrower had a middle score of 660, most lenders would qualify and approve you using the 660 credit score.

Rates are tied to credit scores, so in this example, your rate would be based on the 660 credit score, which would push your rate up significantly — or potentially even make you ineligible for the loan.

There are exceptions to this lowest-case-credit-score rule. Most notably, if you have the higher credit score and are also the higher earner, some lenders will allow your higher credit score on the file — but this is mostly for jumbo loans above $417,000.

Ask your lender about exceptions if you have credit score disparity between co-borrowers, but know that these exceptions are rare.

2. The rate you’re quoted is the rate you’ll get

Unless you’re locking in a rate at the moment it’s quoted, that rate quote can change. Rates are tied to daily trading of mortgage bonds, so most lenders’ rates change throughout each day.

Refinancers can often lock a rate when it’s quoted — as long as you’ve given your lender enough information and documentation to determine if you qualify for the quoted rate.

You typically receive a quote when you’re beginning your pre-approval process, but a rate lock runs with a borrower and a property. So until you’ve found a home to buy, you can’t lock your rate. And while you’re home shopping, rates will be changing daily, so you’ll need updated quotes from your lender throughout your home shopping process.

Rate quotes also come with an annual percentage rate (APR), which is a federally required disclosure that shows what your rate would be if all loan fees are incorporated into the rate.

This can make you think that APR is the rate you’ll get, but your loan payment will always be based on your locked rate, and the APR is just a disclosure to help you understand fees.

3. Fixed-rate mortgages are always better than adjustable-rate mortgages

After the 2008 financial crisis, many borrowers started preferring 30-year fixed loans. For good reason too: The rate and payment on a 30-year fixed loan can never change. But the longer the rate is fixed for, the higher the rate.

So before settling on a 30-year fixed, ask yourself this question: How long am I going to own this home (or keep the loan) for?

Suppose the answer is five years. If you got a five-year adjustable rate mortgage (ARM) instead of a 30-year fixed, your rate would be about .875 percent lower. On a $200,000 loan, you’d save $146 per month in interest by taking the five-year ARM. On a $600,000 loan, the monthly interest cost savings is $438.

To optimize your home financing, peg the loan term as closely as you can to your expected time horizon in the home.

4. Real estate agents don’t care which lender you use

A federal law enacted in 1974 called the Real Estate Settlement Procedures Act (RESPA) prohibits lenders and real estate agents from paying each other fees to refer customers to each other. So as a mortgage shopper, you’re always free to use any lender you choose.

But real estate agents who would represent you as a buyer do care which lender you use. They’ll often suggest that you use a local lender who’s experienced with your area’s nuances, such as local taxation rules, settlement procedures and appraisal methodologies.

These areas are all part of the loan process and can delay or kill deals if a nonlocal lender isn’t experienced enough to handle them.

Likewise, real estate agents representing sellers on homes you’re interested in will often prioritize purchase offers based on the quality of loan approvals. Local lenders who are known and respected by listing agents give your purchase offers more credibility.

5. Mortgage insurance is always required if you put less than 20 percent down

Mortgage insurance is a lender-risk premium placed on many home loans when you’re putting less than 20 percent down. In short, it means your total monthly housing cost is higher. But you can buy a home with less than 20 percent down and avoid mortgage insurance.

The most common way to do this is with a combination first and second mortgage — often called a piggyback — where the first mortgage is capped at 80 percent of the home’s value, and the second mortgage is for the balance of what you want to finance.

Related:

Originally published January 12, 2016.

Source: zillow.com

In the Market? Here’s What You Should Know About Contingencies

Home contingencies are aspects of home purchase contracts that protect buyers or sellers by establishing conditions that must be met before the purchase can be completed. There are a variety of contingencies that can be included in a contract; some required by third parties, and others potentially created by the buyer. While sellers in the current market prefer to have little to no contingencies, the vast majority of purchase contracts do include them, so here’s a primer to help you navigate any that come your way!

Financing Contingency

The most common type of contingency in a real estate contract is the financing contingency. While the number of homes that sold for cash more than doubled over the last 10 years, the majority of home purchases — 87% of them, in fact— are still financed through mortgage loans.

Why is this important? Because most real estate contracts provide a contingency clause that states the contract is binding only if the buyer is approved for the loan. If a contract is written as cash, in most cases, the financing contingency is removed.

contingenciescontingencies

Why Does The Financing Contingency Exist?

This contingency exists to protect the buyer. If a buyer submits a winning offer, but can’t get approved for a loan to follow through with the purchase, this clause can protect the buyer from potential legal or financial ramifications.

Tip: Homeowners can, and should, request to see a buyer’s prequalification letter before accepting their offer.

Home Sale Contingency

For many repeat homebuyers, they must sell a property in order to afford a new home. Whether they’re relocating for work, moving to a larger home, or moving to a more rural area, 38% of home buyers in a recent survey reported using funds from a previous home to purchase a new one. This is where a home sale contingency comes into play; this clause states that the buyer must first sell their current home before they can proceed with purchasing a new one.

Why Does This Contingency Exist?

This is another contingency that exists to protect the buyer. If their current home sale doesn’t close, this clause can protect the buyer from being forced to purchase the new home. In other words, they can back out of the new home contract without consequence. Keep in mind that in a seller’s market, this type of contingency offer is less desirable to sellers; in fact,  they may rule out your offer completely if this is included.

TIP: In many situations, homeowners can negotiate escape clauses for the home sale which would allow them to solicit other offers and potentially bump the current buyer out of the picture.

Home Inspection Contingency

Not only is it common, it’s also wise to include a home inspection contingency in any offer. Whether it’s a new home or an existing home, there is no such thing as a flawless house. Home inspections can uncover hidden problems, detect deferred maintenance issues that may be costly down the road, or make the home less desirable to purchase completely. A home inspection contingency essentially states that the purchase of a home is dependent on the results from the home inspection.

contingenciescontingencies

Why Does This Contingency Exist?

Whether it’s a roof in need of replacement or an unsafe fireplace, homebuyers need to know the maintenance and safety issues of the properties they’re interested in purchasing. If a home inspection report reveals significant (or scary!) findings, this protects the buyer from the financial burden that repairs would require. This is why agents will tell you it’s never a good idea for a home to be purchased without a home inspection contingency.

TIP: The findings from the report can usually be used to negotiate repairs or financial concessions from the seller.

Sight-Unseen Contingency

Especially during sellers markets, it’s not uncommon for a home to have dozens of showings within the first couple of days of listing. This breakneck pace can create a scenario in which homebuyers may not be able to coordinate their schedules to get a timely showing appointment. To help prevent missing out on the chance to buy a home, buyers in this situation will sometimes make offers on the home, sight unseen.

contingenciescontingencies

There’s no sugarcoating it…this is a high-risk strategy with ample opportunity for negative consequences. However, if this strategy is used, many real estate agents will add a sight- unseen contingency to their offer. This contingency states that the offer for purchase is dependent on the buyer’s viewing of, and satisfaction with, the property.

Why Does This Contingency Exist?

In a market with shrinking inventory, desperate buyers want a fighting chance at a hot property; in some cases, that can only exist by submitting an offer before they can see it in person.

TIP: Sight unseen offers are also high risk to the seller. If you include this contingency in your offer, try to keep other seller requests to a minimum. 

Why Contingencies Can Be Positive

In a seller’s market, buyers may feel the pressure to remove as many contingencies as possible in order to compete. But, it’s important to remember that contingencies are actually safeguards in place to prevent buyer remorse, expensive future repairs, or financial calamity. It’s always crucial for buyers to hire a seasoned real estate agent who can advocate for their best interests, negotiate and strategize in safe and competitive ways, and advises them of the risks of each decision.

Looking to Buy? Don’t Go it Alone!

The homebuying process is a complex one, but that doesn’t mean you’re left with all the heavy lifting. Find your dream home and a local agent on Homes.com, then visit our “How to Buy” section for all the step-by-step insights for a smooth process.


Jennifer is an accidental house flipper turned Realtor and real estate investor. She is the voice behind the blog, Bachelorette Pad Flip. Over five years, Jennifer paid off $70,000 in student loan debt through real estate investing. She’s passionate about the power of real estate. She’s also passionate about southern cooking, good architecture, and thrift store treasure hunting. She calls Northwest Arkansas home with her cat Smokey, but she has a deep love affair with South Florida.

Source: homes.com

Are the Low Mortgage Rates a Home Buyer Trap?

Despite a slight uptick this week, mortgage rates are still pretty much rock bottom, and unarguably at ridiculously low levels.

This has sparked yet another refinance boom, with mortgage application volume rising to its highest point since May 2009, per the latest data dump from the Mortgage Bankers Association.

This is great news for existing homeowners with plenty of home equity looking to refinance to a lower rate. It’s also working out nicely for those who don’t have equity thanks to programs like HARP 2.0.

All in all, it’s a gift to these borrowers who are experiencing some serious monthly mortgage payment relief.

But what about new and prospective home buyers?

Are People Buying Because of the Low Rates?

With rates this low, you have to wonder if it’s all a big trap (whether intentional or not) to lure would-be buyers off the sidelines and into the game.

If you’ve followed the housing market lately, at least in certain regions of the country, such as Los Angeles, homes are speeding into pending status just days after being listed.

In fact, many are pending just one or two days after being listed. It’s looking like a serious seller’s market, though obviously a very unconventional one.

The low rates have increased affordability so much that a new pool of buyers has essentially been created, which has facilitated both standard and short sales.

Again, great news for those who have waited very patiently to sell their homes; many can finally do so!

And perhaps even better for the housing/mortgage market, with seemingly bad loans being replaced with better ones.

Heck, I’m even seeing a ton of flips that are actually selling for a tidy profit. I thought flips were dead?

Reminder of the Homebuyer Tax Credit

But it all seems reminiscent of the boost seen with the now infamous homebuyer tax credit.

That “free money” created a short-lived, yet steep run-up in home prices as first-time home buyers came out in droves.

Just a short time later, it became clear that those who purchased a home did so at a premium, and their tax credit was quickly eclipsed by a larger loss in home value.

If you take a look at this home price chart, you’ll see how the homebuyer tax credit stoked demand, but its effect was clearly fleeting.

In fact, those who purchased before the tax credit expiration were actually worse off compared to those who bought later on.

To bring it all together, home prices were pumped up as a result, similar to what we may be seeing with the record low mortgage rates.

With rates so low, homeowners and their clever real estate agents probably feel they can list their homes for more than they could have six months ago.

And the whole “it’s never been a better time to buy” adage is back.

Economy Still in Disarray

The big problem is that the economy is still a huge mess, with the European crisis hanging over our heads, and domestic unemployment still far from unresolved.

Then there are the millions of homes in the process of foreclosure, or knocking at its door.

So is this artificial stimulus actually going to help the real estate market long-term, or is it just another quick fix with no staying power?

My gut tells me that this recent run-up in prices and virtual 180 in consumer sentiment is bad news.

Getting into a bidding war over a house just months after no one was interested seems really fishy.

Additionally, all these calls of a “housing bottom” are concerning as well. You always have to wonder when every single media outlet (including your local news channel) is claiming that the worst is behind us.

Of course, the low rates have led to lower mortgage payments, even with the recent home price increases factored in.

So there’s some serious power behind those rates. The question is will you be able to buy a home next year at an even better price with a similar (or even lower) interest rate?

Read more: Home prices vs. mortgage rates.

About the Author: Colin Robertson

Before creating this blog, Colin worked as an account executive for a wholesale mortgage lender in Los Angeles. He has been writing passionately about mortgages for 15 years.

Source: thetruthaboutmortgage.com

5 Ways to Win in a Purchase Money Market in the New Reality

During my recent conversations with sales leaders, managers across the board expressed concern about their originators adapting to the new environment of rising interest rates and the shift to purchase money.

Sherlock: not having an accurate view of sales performance is a recipe for disaster
Pat Sherlock

The decline in refinance business is a reality with mortgage applications dropping 43% in the last week, according to the MBA. This raises a critical question: how many lenders and originators will be able to transition to a purchase money marketplace when the easy money of refinancing is replaced by the hard work of finding customers who want to purchase and finance a home?

Every experienced mortgage lender has certainly witnessed big changes in interest rates over the last 20 years. Sometimes it happens quickly. Other times it can be a slow climb to higher interest rates. This time, it is a little of both. The global pandemic caused the Fed to drop interest rates to historic lows and now, with the end in sight, rates are inching back up.

The real question for lenders and originators that have 90%+ refinance business is: can they switch to the traditional purchase money market that still depends on local relationships or will they decide to sell out to other, better structured lenders? Frankly, the selling out strategy has likely already run its course, leaving lenders that have not invested in digital technology or sales training with few alternatives.

5 Steps to Success

That said, what changes should originators who have been living off of refinance lending make to succeed in a purchase money environment? Here are five recommendations:

  1. Develop a marketing plan. Yes, I know having a plan doesn’t seem like the right strategy when a loan officer is panicked and needs income. But, setting aside some time to analyze the market and identifying underserved opportunities is a worthwhile activity because where producers commit their time and marketing resources is always a balancing act. There are only so many hours in a day and spending them correctly matters a lot.
  2. Understand growth in the local area. An originator’s marketing plan should determine what home building activities in their local market are driving growth. Is it new construction, retirement homes, second homes, etc.? Every market is different and understanding where growth will be coming from is critical. Looking at the research the local municipality has already done is a good start.
  3. Identify underserved market opportunities and the people associated with them. Every market has underserved opportunities that some individuals have already recognized—you want to know these professionals. Rarely is an underserved market completely void of participants. An originator’s job is to develop relationships with the parties in the market before other loan officers decide to market to them. Building relationships takes time and requires originators to form relationships with builders, attorneys, real estate agents and other professionals.
  4. Don’t forget about previous customers. Since developing and building relationships is time-consuming, originators must also work their database of closed loans over the last several years. Former customers are already familiar with an originator’s service levels and a certain percentage might be interested in purchasing a second home or investment property. Some clients might be receptive to listening to a webinar on the latest trends in the local real estate market. This is a great opportunity for originators to partner with a realtor to target a particular audience. The real estate agent can provide his or her perspective as part of the webinar or live stream event. However originators reach out, they should avoid sending mass emails and direct mail. Consumers want a more personal, customized approach.
  5. Rekindle referral business. Originators who have a plan, determine their niche and develop relationships with referral sources and customers in an underserved marketplace are on the path to success in a purchase money environment. Working former customers is a smart way for producers to generate current business while establishing relationships with new referral sources.

Implementing all five strategies is a great way for originators to position themselves for robust performance in a purchase money market.

Pat Sherlock is the founder of QFS Sales Solutions, an organization that helps organizations improve their sales talent management and performance. For more information, visit https://patsherlock.com.

Source: themortgageleader.com

Last Chance to Get a Mortgage Rate Under 4%?

At the start of each year, the financial pundits weigh in on the direction of many things for the 365 days that lie ahead, including mortgage rates.

And seeing that rates began 2013 at near all-time lows, the obvious (and conservative) prediction is to say that rates will rise.

Most individuals also seem to believe rates will rise, again, because they’re currently so very low and hard to believe.

In fact, the mood for mortgage rates over the past few weeks has been decidedly negative, as if the party is finally over.

But a recent article from The Street titled, “It’s Last Call for Mortgages Below 4%,” seems a bit dramatic.

Interested Parties Creating a Panic?

In the post, National Association of Realtors (NAR) boss Lawrence Yun thinks it “may be [the final] once-in-a-lifetime opportunity” to snag a mortgage below 4%.

Notice the “final” bit, as if there were multiple once-in-a-lifetime opportunities here…

Yun predicts rates on the 30-year fixed will climb to 4% during summer, and 4.5% by the first half of 2014.

He attributes the rise in rates to inflationary concerns, sparked in part by the Fed’s “easy money policies.”

MBA’s Vice President of Research and Economics Mike Fratantoni also weighed in, predicting a 30-year fixed mortgage rate around 4% by late June, and 4.6% before 2015.

To sum it up, the heads of a bunch of real estate agents and mortgage bankers believe rates will rise a percentage point or so in the next year and change.

In other words, buy a home or refinance now before it’s too late!

We’ve Heard These Predictions Before

Unfortunately, this isn’t the first time the pundits have predicted a rise in rates, only to be 100% wrong.

The last couple years, pundits predicted higher rates and wound up eating their hats as rates slipped to new all-time lows (I too was wrong…).

So who is to say they won’t repeat history and get it wrong again? Is a 30-year fixed mortgage rate below 3% really that far out of reach?

A couple of Fed researchers believe mortgage rates are artificially inflated by lenders because of capacity constraints, meaning there’s room for them to fall or at least stay put.

My prediction for 2013 calls for sideways action with plenty of ups and downs, and perhaps a gentle rise. But nothing substantial.

Waiting May Benefit You

While the interested parties might make it appear as if the end is nigh, good things could come to those who wait.

The latest weekly mortgage rate survey from Bankrate was titled, “Mortgage Rates Climb to 4-Month High.”

Their survey said the 30-year fixed averaged 3.67% during the week ending January 10, up from 3.58% a week earlier.

For the record, a four-month high isn’t saying a whole lot when rates were hovering near record lows.

Additionally, the company believes the “euphoria” post-fiscal cliff will fade, and bring bond yields down with it (which means lower mortgage rates for consumers).

There’s also the impending “debt ceiling,” which is the latest economic freak-out, the unresolved and strangely quiet Eurozone crisis, ongoing domestic unemployment concerns, and an all-around unsettled economic picture.

Take that all into account and you have to wonder why mortgage rates would suddenly increase just because it’s 2013. Surely the Fed wouldn’t allow a rapid rise in rates in such an uncertain and fragile environment.

Heck, those who wait to buy a home may even get the gift of a lower purchase price along with a lower mortgage rate.

Assuming rates do encounter upward pressure, spreads between yields on mortgage-backed securities (MBS) and primary mortgage rates may normalize (shrink) as lenders finally get competitive with one another.

Read more: Is a 30-year fixed in the 2% range possible?

About the Author: Colin Robertson

Before creating this blog, Colin worked as an account executive for a wholesale mortgage lender in Los Angeles. He has been writing passionately about mortgages for 15 years.

Source: thetruthaboutmortgage.com

How to Measure the Square Footage of a House or Apartment

It’s important to understand just how big your space is.

When you find the perfect place to rent in your chosen neighborhood that’s also within your budget, you probably aren’t wondering whether the square footage in the listing is accurate. However, that calculation is one of the most important factors when evaluating a property’s value. After all, if your rent is based on 1,200 square feet, you have the right to get what you’re paying for, right?

The American National Standards Institute (ANSI) provides guidelines for measuring and calculating residential square footage. Many builders and real estate agents follow these, but because compliance with these standards is voluntary, what’s advertised isn’t always accurate.

Also, square footage guidelines can vary depending on where you live: Some states disclose this information, and others don’t. Here’s how to measure the square footage of a house or apartment.

Gather a few supplies for the task

Tape measurer on wood.

Calculating square footage is pretty easy. First, you will need a couple of things on hand that will help you measure the space:

  • A large piece of paper
  • A pencil
  • A calculator
  • A laser measuring tool or a measuring tape

Sketch out your space

If you’re planning to rent a one-story condo that’s rectangular, that’s an easy calculation: Measure the width and length, in feet, and then multiply those two numbers.

Since most properties aren’t perfectly shaped, however, you’ll probably need to complete a few steps to get the full picture. Begin by drawing a diagram of all rooms and hallways, and be sure to label each one so you can keep track of the measurements.

If you’re looking at a new rental unit, ask the landlord if you can see the builder plans of your apartment’s floor plan because the square footage is usually already calculated.

Measure each room

Going room by room, measure the length and width, rounding off to the nearest half-foot.

Real estate agents often use an electronic laser distance measuring tool. If you have one, place it on a wall, aiming it directly at the wall opposite it. You will then see the square footage displayed on the device’s screen. A tape measure works well if you don’t have a laser tool.

Multiply those numbers, rounding off to the nearest square foot, then write down your measurement on your sketch. For instance, if the kitchen is 10 feet by 16 feet, the total square footage is 160 square feet.

If a room has an alcove, such as a living room with an area for a home office, measure that space separately and add it to the overall square footage of the room. The same is true for rooms with closets: measure each one by multiplying the length by width.

Sketching out square footage of an apartment space.

Leave out these spaces, because they don’t count

Generally, ANSI standards suggest counting only finished spaces — any lived-in area that has walls, a ceiling height of seven feet or more and a floor. So, if you can’t walk on or live in a certain spot, that is a non-usable space, not part of the gross living area. For example, if you’re renting a house, patios, porches and garages — don’t count towards your unit’s square footage. If the garage is converted into a living space though, it will count in the overall square footage.

Pool houses, storage areas or guest houses are also excluded, and in some states, so basements.

Calculator.

Add up all your measurements

Once you’ve measured each space, you can add up all your numbers to find out the rental unit’s total square footage.

How to calculate square footage if you can’t visit the unit

If you’re apartment hunting from another location and can’t physically measure the rooms, there are other ways to find out a house’s total square footage.

You can look up the city or county’s property records. Some towns make detailed property records — including square footage — available online. If not, and you’re working with a real estate agent, he or she can pull this information for you.

Or, you can hire an appraiser to measure the property for you.

Square footage is an important factor when renting

Measuring an apartment or house’s square footage helps determine its value. While knowing this information can help you decide if a property is worth the rent being charged, remember that calculating square footage is subjective.

Some landlords and real estate agents may use ANSI guidelines and some not. Certain states require square footage in every listing description while others do not. That’s why it’s up to you to figure it out yourself or hire a professional to do it for you.

Source: rent.com

Three Real Estate Pros, Others Plead Guilty in Mortgage Scam

Eleven people, including three real estate agents, have pleaded guilty to a multi-year mortgage fraud scheme. So reports the Atlanta Agent.

The scam resulted in more than 100 mortgages being approved due to false documents, according to the Justice Department.

The three real estate agents, based in the Atlanta area, and the other defendants all agreed to pay restitution.

Read the full article from the Atlanta Agent. 

Source: themortgageleader.com

Why You Should Live in Your Home Until It Sells

Last updated on October 23rd, 2019

A new study from Redfin proved what we probably all assumed was the case; vacant homes sell for less than those filled with stuff.

There’s something slightly unappetizing about a vacant home, whether it’s the emptiness of it all, or the desperation knowing someone is losing money each month it sits on the market.

Homes are also simply more exposed when there aren’t area rugs, couches, tables, and beds covering up minor (or major) defects.

Vacant Homes Sell for Less and Take Longer to Sell

  • Empty homes sold for 3.6% less than occupied ones in 2018
  • That’s about $11,000 less on average
  • They also took an extra six days to sell
  • So you may want to stick around (or at least make it appear that way)

As suspected, vacant homes often sit on the market longer than their occupied counterparts and fetch lower prices.

On average, such properties spent an additional six days on the market and went for $11,306 less when they finally did sell.

This is according to a survey of homes listed and sold in 2018, conducted by real estate brokerage (and mortgage lender and iBuyer) Redfin.

The biggest discounts were seen in Omaha, Nebraska and Greenville, South Carolina, where vacant properties sold for 7.2% less than occupied homes on average, a haircut of about $15,000.

Similar discounts were seen in El Paso, Texas, where the average vacant home sold for 6.6% less, or roughly $10,000, compared with occupied homes.

Discounts were smaller in more in-demand metros, including San Jose (just 0.9% less), Las Vegas (-1.5%), and Orange County (-2.3%).

[Why You Should Buy a Home Next to Trader Joe’s or Whole Foods]

How Many Homes Sales Are Vacant Properties?

  • Over a third of home sales in 2018 were vacant properties
  • But share of unoccupied homes varied widely by region
  • 67% of sold homes in El Paso, TX were unoccupied
  • While just 13% were empty in Kansas City, MO

Interestingly, Redfin found that 35.5% of all properties that sold in 2018 were empty at the time of sale.

That’s a lot more than I expected it to be. The share must have been really high during the housing crisis a few years back.

But this varied tremendously from one metro to the next.

For example, 67% of homes in El Paso, Texas were empty when they were listed for sale, whereas only 13% of Kansas City, Missouri homes were unoccupied.

There were a lot of empty homes in Arizona too, with both Tucson (54%) and Phoenix (50%) having large shares of vacant home sales.

Similar numbers were seen in Austin, TX (52%), Tacoma, WA (51%), and Las Vegas, NV (49%).

Meanwhile, empty homes were more of a rarity in Fort Lauderdale, FL (14%), Hampton Roads, VA (17%), and Greenville, SC (20%).

[Homes Next to Starbucks Are Worth More]

Make the Home Look Lived In, But Have Good Taste

  • Not all occupied homes are created equal
  • A poorly decorated home could actually hurt its chances
  • Expect to do some cleaning/renovating/staging if you sell your home
  • Many real estate agents now provide some of these services

While vacant homes mostly sold for less than the occupied ones, results may vary based on how the house itself looks and how it’s decorated.

Redfin agent Billie Jean Hemerson notes that a home seller’s furnishings can have a big impact on sale price.

If the home isn’t empty, but all the furniture looks like it’s from 1980 (in a bad way), or there’s lots of clutter, it’s probably going to do more harm than good.

Conversely, if the home seller has good taste that fits with what today’s home buyer is looking for, it could result in a price increase and perhaps a bidding war.

So just having an occupied home isn’t enough. There’s a good chance you’ll need to put some work into it if and when you list.

Fortunately, many real estate agents these days include some level of home staging in their listing package.

And Redfin themselves offer a so-called “concierge service” for a 2% listing fee (instead of 1%) that includes cleaning, staging, and a custom home improvement plan.

The company also recently partnered with a virtual staging company called roOomy to help decorate vacant properties, ideally so they sell for more in a shorter period of time.

Ultimately, when a home buyer checks out your property, they’ll want to get a sense of what it will be like when they live there.

If it’s empty, or poorly decorated, some prospective home buyers may not be able to look beyond that, even if the home itself is just fine.

Of course, if you’re a savvy home buyer with an eye for design, you might be able to snag a discount on a home that needs just a little bit of TLC to get back to its prime.

As a buyer, you should take note of the fact that vacant properties often sell for less, and use it as a negotiating tool.

While the staged homes will undoubtedly look more appealing, there’s a good chance they’ll sell at the higher end of the market.

And all those beautiful furnishings will be gone once it’s time for you to move in…

Read more: 12 home selling tips for 2019

Source: thetruthaboutmortgage.com

Choosing the Best Listing Agent for You

Don’t entrust your home sale to just anyone. The right match can help your home sell faster and for more money.

Selecting a listing agent is an important decision. Unlike with a buyer’s agent, you’ll sign an agreement with a listing agent for a fixed term, and with the sole responsibility of getting your home sold for the most amount of money, and in the least amount of time.

Here are some tips for choosing the best listing agent — and some important considerations for home sellers doing it for the first time.

The local advantage

A good local real estate agent knows the intricacies of each market and how it operates. They know the building department, the tax assessor, and the local real estate customs.

Being local means that they know the other agents and have relationships that will serve to help you. Their local experience will make the difference between a quick sale or your deal falling apart and dragging on for months.

How local is local? In most towns and communities, agents cover a few school districts. If they come from too far away, they may not be your best choice.

Experience counts

There is no doubt about it, experience matters. The agent who’s sold more homes in your town or neighborhood clearly has the track record.  And, they are more qualified to sell your home than someone with less experience.

How? They know the inside scoop of many of the recent deals. They know which agents are working with real buyers, and which to steer clear of.

Through their experiences, they will know which features or finishes work best in the market. They’ll know which home got the best response and which did not. That knowledge base will translate into value add for you.

A personality match

You want an agent who is honest, trustworthy, ethical and easy to be around. Sometimes the agent who’s sold the most may not be the best agent for you.

You will spend a considerable amount of time working alongside this person for up to six months, or even a year. You must trust them and feel that they can be trusted externally.

This agent will represent you and your interests to the public, and you must have complete faith that they will serve you effectively.

Finally, you’ll have to like this person and find them to be easy to be around. If it’s not a personality match, no matter how successful they are, look for someone else.

Attention, please

Sometimes sellers ask questions like, “Will you be present for the showings?” or “Will I interface with you daily, or an assistant?”

Folks who want or need personal attention need to let their agent know that right away and make that a part of the decision-making process.

In some cases, busier agents aren’t set up to give personalized attention or to be present everywhere for everyone. They have systems and folks in place to operate the business. And it’s that operation that makes them successful.

A less busy agent might purposely choose to work with just a few clients at a time. As such, they would be wiling to do more or be more hands-on with their customers than a busier agent.  Know what you expect, and don’t settle for less.

Ask around

One of the best ways to find a listing agent is to get a referral. If a neighbor or friend sold in the past year, ask them who they worked with and how happy they were.

Before reaching out, check out the prospective agent’s reviews and previous business online.

If you interview them, ask them for references from other past clients. Good real estate agents work their business purely on referral, and the last thing they want is to cut off a referral source or kill the chance to get another.

Don’t rush it

Take your time to identify the best agent to sell your home. It’s not something to take lightly, nor should it be done without serious research.

Always go local, and decide which type of agent would work best with you.

Finally, go with your gut. Like many important life decisions, you likely have a gut reaction to people and situations. Let that inform you here.

Ready to put your home on the market? Check out our Home Sellers Guide for more tips and resources.

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Note: The views and opinions expressed in this article are those of the author and do not necessarily reflect the opinion or position of Zillow.

Source: zillow.com