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

An Age-Old Concept Reaping Future Rewards

W hy are social media like Facebook and Instagram so darn popular among real estate and mortgage folks?   Hint: the top reason might be an endless supply of memes, cat videos, and the chance to be snarky, but the other reason runs a VERY CLOSE second.   Give up?   Answer:   They’re free – and they really help even the playing field by enabling a one-person shop look and market like an organization who employs an army of wordsmiths and graphic artists. This new century is glorious, right?   With that in mind, let me re-introduce you to a centuries-old concept that is equally glorious – and can help IMPROVE the playing field for you, regardless of the size of your team: karma.   On the subject of “free”, I’m not suggesting that you work for free, but when you freely give of yourself and your knowledge, you’ll see a greater payoff, I promise! Recently, an agent came to us with a question: she has a client who is looking to sell his condo.   It...
Post a Comment
Read more

The Power of Doubt

We find ourselves in that weird week between Christmas and New Year’s – that week that feels a bit like the Twilight Zone where no one’s sure what’s real and what isn’t.   Because of that, most people tend to focus on one of two things: eating as much as possible or setting goals for the upcoming year.   The former is squarely focused on the present – how much can I stuff into my gaping maw at this very moment before I pass out and/or puke – while the latter is focused on the future.    Last week, before the Twilight Zone kicked into full gear, I read a short article that resonated with me, and I think it’ll prick up your metaphorical ears, too.   The author of the article is a gentleman who professionally trains Olympic athletes, and he highlights the talents of a particular athlete from the Philippines who is training to be a marathon runner.   He points out that this runner is not a professional athlete, nor does she receive any type of financ...
Post a Comment
Read more

Get to the Point (Posted February 29, 2016)

As you may have already noticed, there’s some amateur art included in this week’s newsletter.   While it’s certainly better than a crayon drawing that might grace a refrigerator that’s supposed to be “mommy” but looks more like a B-movie creature, we all acknowledge there’s a reason the guy in our office who drew this . . . i s still working in our office rather than making a living elsewhere.   Be that as it may, there’s a point to the picture: is this how you’re allowing your client to choose their mortgage company?   In many cases, it’s probably not too far off.   Agreed, it’s wise to stay on the right side of the law and be sure you’re never accused of “steering”.   With that in mind, many agents tell their clients that it’s completely their decision as to what mortgage company they use (and it is, of course) and effectively step back from the entire conversation – using the illustration to the left, they’re putting the blindfold ...
Post a Comment
Read more