Skip to main content

Posted November 2, 2015

Some Good (Old) Advice
As a parent, one of your ongoing goals is to impart day-to-day guidance and deep wisdom to your kids like “look both ways before you cross the street” and “don’t eat yellow snow”.  While YOU know how insightful these little nuggets are, they don’t always listen to you, but when someone other than yourself shares the same advice, they’re viewed as geniuses who could kick Stephen Hawking’s tail on Jeopardy. 

As a real estate agent, when you’re dealing with someone who is currently renting, you quite often feel the same way: why won’t they listen to me?  I feel your pain, and I have something you can share with your “children” that comes from a “genius” other than yourself.  This information comes from Lawrence Yun, chief economist for the National Association of Realtors, and The Fed.  If you think it would work, tell them you got it from this really cool cat named Larry and his Uncle Sam.  Regardless of how you spin it, here’s the low down:

•  In 2016, the predicted net worth for a typical home owner is $225,000; for a renter, it’s $5,000
•  That means a home owner’s net worth is 45 times more than a renter’s

“Larry” sums it up by writing in Forbes.com, “The simplest math shouldn’t be overlooked.  A vast majority of home buyers take out a 30-year fixed-rate loan to make a home purchase.  After 30 years, there is no loan payment (nor rent payment).  So the home price growth over that time period would be the equity that the home buyer would have accumulated.”

I know there’s nothing new (or even that “insightful”) in that piece of wisdom, but sometimes people need a gentle reminder – and having it come from someone other than yourself might elevate it to “genius” status.  Sometimes it’s a thankless job. : )

Big Bank Brush-Off
As you may have already heard, the Big Banks like BB&T, Bank of America, Chase, and Wells Fargo have drastically decreased the number of FHA loans that they are originating.  As an example, one of the Big Boys originated 19,111 FHA loans in the second quarter of 2013; in the second quarter of 2015, they did only 340.  So why bring this up? 

The Big Banks have the biggest voices and biggest megaphones: their message will be heard and broadcast through national media.  Even the casual home buyer is bound to hear snippets – and what they’ll most likely hear is that FHA loans are no longer available.  That piece of incomplete information could stop them cold in their tracks or completely derail them in their design to look for and buy a home.


There are many great things about Big Banks, but loan option variety is not one of them.  Educate your clients and empower them with the knowledge that we have what they need – whether it’s an FHA loan or another product that will get them the home they want. 

Comments

Post a Comment

Popular posts from this blog

Numbers Don't Lie, But Wherein Lies the Truth? (Posted November 21, 2016)

Said with enough conviction, you can make almost anything sound true.   Preface the fabrication with “according to a recent bi-partisan government study,” and you’re three quarters of the way to selling the lie to a lot of people.   Seriously, try this. The next time you’re at a dinner party or having coffee with friends, pepper this little tidbit into the conversation: “I read something really interesting the other day.   According to a recent bi-partisan government study – I think it took them three years to get it all done – middle-aged men who drive either a Toyota Camry or a Honda Odyssey have more testosterone than younger men who drive either a Ford F150 or a Dodge Charger.”   You’ll get some raised eyebrows and looks of mild disbelief, but don’t let that deter you.   Just lift up your hands, palms outward, and say, “I just think it’s interesting, and it makes sense when you think about it” – and then change the subject to something completely u...
Post a Comment
Read more

Dumb as (or Smart as) a Box of Rocks (Posted June 27, 2016)

Obviously, you all want to know what Brexit means to the economy and the housing market specifically.   So do I!   But since my crystal ball is at the cleaner’s, let’s give the Brits and the European Union a little time to work out the terms of their separation and look at something else.   What’s a “fad ”?   With the help of Google, this is what I got as a definition: “an intense and widely shared enthusiasm for something, especially one that is short-lived and without basis in the object's qualities; a craze.” In April 1975, an advertising executive by the name of Gary Dahl invented the Pet Rock.   The idea came from his sitting in a bar with some friends who were complaining about the cost and time required to take care of various types of pets.   He marketed his “pets” by placing a rock in a box cut and shaped like one you would get at the pet store to carry home a puppy or a kitten.   Along with the box and the rock, a booklet was included...
Post a Comment
Read more

Left Behind (Posted April 4, 2016)

It’s highly likely that almost every single one of you already read the Yahoo! Finance article about the survey that Chase recently completed.   For the seven people who decided to take a nap under a rock last week, I’m going to share some of the major talking points here – the rest of you can step away and have an ice cream or paint your cat’s toenails.   First off, the survey shows that an ALARMING 68% of Americans are starting the home search on their own (gasp!) with 45% using a computer or laptop (as opposed to some other type of technologically advanced processor like a microwave oven) as the first step in this search and 13% using their mobile devices.   (In other related news from the Department of the Obvious, scientists have found that fish still have no use of a bicycle and looking directly at the sun is inadvisable.)   With numbers like these, we should just throw in the towel and join the circus, right?   Here’s the weird thing: in the ...
Post a Comment
Read more