TEAM EMPOWERMENT MORTGAGE CHATTER: Dec 5; Are the Holidays a Good Time to Sell?; …And the Changes Keep Coming; 1st Time Home Buyers Scared Off?; The Proper Short Sale Application; 6 Ways to Go the Extra Mile

“If you turn it over to the universe you will be surprised and dazzled by what is delivered to you. This is where magic and miracles happen.”

– Dr. Joe Vitale: Motivational author and speaker

 

 

 

ARE THE HOLIDAYS A GOOD TIME TO SELL?

Sixty percent of real estate professionals advise their sellers to list a home during the holidays because it’s a good time to sell, according to a new survey conducted by Realtor.com.

Why are the holidays such a good time to sell? Seventy-nine percent of the agents surveyed said that more serious buyers come out during the holidays, and 61 percent say less competition from other properties make it a great time to sell. Plus, 17 percent of agents say the cold weather is actually a benefit, making homes feel more cozy.

But online listing photos become even more crucial during the holiday season, according to the survey. Slightly more than half of agents say that the photos are more important because sellers tend to offer less open houses around the holidays, and so the online photos help buyers decide the properties to see and which ones to possibly bypass.

The biggest hurdles sellers face during the holidays, however, are keeping a home ready to show (clean and staged) as well as winter weather conditions and buyers’ vacation schedules, the Realtor.com survey found.

 

…AND THE CHANGES KEEP COMING

With an election year right around the corner, it seems obvious that the world is full of flip-floppers, so why should housing and mortgage policy-makers be any different?

• Remember when the Federal Government was trying to ease its way out of being the dominant provider of mortgage financing (and trying to move people more into the private sector and Private Mortgage Insurance)?

• Remember the days when government insured financing (through FHA loans) was capped at 85% of their conventional counterparts (from Fannie Mae and Freddie Mac)?

• Then, the government recently decided to LOWER the conforming loan limits in high cost areas from $729,750 back to $625,500. The logic was sound. Home values have declined, therefore, so should conforming loan limits.

But then comes the reality that the home buyers buying between $650-750,000 are going to suffer with higher rates. How can we fix it? The flip flop. That’s how. The government’s solution-raise FHA loan limits back up. More government involvement in housing finance. None-the-less, it’s good news for a segment of the home buying population who can still enjoy great rates with as little as 3.5% as a down payment.

In the constantly changing world of mortgages, it is imperative that you work with a loan professional who knows how to properly position you, taking into consideration numerous factors – from loan program, to costs, to eligibility.

 

FIRST-TIME HOME BUYERS SCARED OFF?

Home prices have fallen to 2002 levels and mortgage rates are at record lows – so why are the number of first-time home buyers decreasing instead of increasing?

First-time home buyers used to account for about half of all housing sales, but over the past year, they’ve made up only about a third of buyers, according to a recent New York Times article.

“The obstacles facing first-time buyers are big, and it’s changing the way they look at home ownership,” Dan McCue, research manager at Harvard University’s Joint Center for Housing Studies, told The New York Times.

Higher down payment requirements, job insecurity, and tougher credit standards may all be holding back first-time home buyers – which tend to be dominated by young professionals. The median down payment for a single-family home in 2002 was 4 percent in nine major metro areas, but now stands at 22 percent, according to Zillow.com.

What’s more, while mortgage rates are hovering at record lows, fewer buyers are able to qualify. About one-third of households have credit scores that aren’t good enough to qualify for a mortgage. The median required credit score from FICO Inc. has increased from 720 in 2007 to 760 currently, according to The New York Times article.

 

 

THE PROPER SHORT SALE APPLICATION

Brought to you by – Christopher Reale, Director of Short Sale Operations at Lepizzera and Laprocina Title and Escrow Services, as today’s guest blogger

In any business, whether it be real estate or other, in order to be successful one must have a systematic approach to their craft. This holds true when putting a short sale transaction together. During our 5 year tenure negotiating short sales, we have found that some Real Estate professionals lack such an approach.

I learned early in my mortgage career that if I submitted a lackluster credit file to my underwriting department I would receive lackluster results. These results included denied files, upset underwriters and a processing department that wanted to throw the file back on my desk faster than I wanted it submitted. I quickly remedied the situation after a conversation with a very good friend who is a million dollar producer in the financial services industry. He shared with me his systematic approach when handling his clients. He did not sway from this system. He applied the approach to every client that he spoke to. He did the work up front, asking every detailed question imaginable on his fact finding sheet. He left no stone unturned. Though sometimes monotonous in nature, this systematic approach allowed him to implement a solid financial plan for his clients and provide the bridge to a solid financial future.

I quickly adopted a similar approach with my clients. I was able to come up with a systematic approach to my origination method that was both trackable and attainable. I left no stone unturned when speaking to my clients. I made sure I over documented the credit file and provided a complete and accurate credit profile to my underwriting department for every client I had the pleasure of writing a loan for. The results were amazing. I was pushing files through underwriting with transaction speeds never seen before and I was making allies doing so. When the processing and underwriting departments received a file from me, they knew it would only have to be touched one time and a conditional approval would be granted. They actually wanted to receive files from me rather than wanting to throw them back on my desk. Success!

I share this information because the short sale application process is very similar to the loan origination process.

However, if you take a shot gun approach rather than a targeted systematic approach to the process, you will set yourself up for failure. Below are the documents one must attain to make sure the short selling bank does not throw the file back on your desk when submitting the file for short sale approval:

Financial Information

• Tax information

o Two most recent 1040’s

o Two most recent W2’s

• 60 days of current bank statements

• 30 days of current pay stubs or commission check stubs

• If self employed-pay stubs or YTD profit and loss statement

• Monthly budget/financial statement signed and dated same day as P&S

Hardship information

• Hardship letter dated signed same day as purchase contract

• Any docs supporting the actual hardship

• Medical bills

• Child support or alimony payment information. Divorce decree or child support order

Mortgage & Other Relevant Property Information

• 1st Mortgage statement

• 2nd Mortgage statement if applicable

• Recent Real Estate tax bills

• Recent condo association bills if applicable

• Any recent water or sewer bills

Other Pertinent Documentation

• Authorization form

• Short sale disclosure

• Waiver of conflict if representing the buyer

• 3 recent comps

• Listing agreement

• Offer/P&S

• Listing history

• Buyer proof of funds letter or Pre Approval letter

It is important to understand that the above documents are required for almost every short selling bank. There are also bank specific forms that, in most cases, must accompany the above. You may contact your negotiator or the bank directly to obtain the bank specific documents. However, if you make an attempt to structure a document checklist with the above documents and systematically approach every short sale file with the idea of fulfilling that checklist, you will soon see that the short sale process will be one which will prove to be lucrative. The end result will be a happy buyer, seller, production team and, of course, bank negotiator. After all, a systematic approach to the short sale process will alleviate the negotiator throwing the file back on your desk for deficient information. In fact, they will be eagerly awaiting the next file with your name on it!

 

 

6 WAYS TO GO THE EXTRA MILE

Salespeople can outdo competitors by taking one of two avenues: lowering prices or boosting the quality and quantity of service they provide to customers. All too often, however, they make the mistake of dismissing customer-service requests as an administrative burden rather than embracing them as an opportunity to distinguish themselves from the rest of the field.

Consumer polls have shown time and time again that customers will pay more for a product when impressed with the level of post-transaction service they receive. Real estate professionals who get into the habit of providing stellar service will reap the benefits in the form of increased sales, improved customer loyalty, and more business due to positive word-of-mouth advertising from happy clients.

Practitioners can ramp up their customer service by:

1. Responding to customer calls and e-mails within an hour.

2. Mailing a handwritten thank-you note to new customers once a transaction closes.

3. Proactively contacting customers to see if they have any service needs.

4. Handling customer requests expeditiously.

5. Building rapport and strengthening relationships with top clients by taking them out for a casual meal.

6. Keeping in touch with customers by mailing out a motivational or business article every six months or so.

 

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