Prospecting for New Buyers and New Sellers

Monday through Friday I get on my phones and call people on my Real Estate Data Base. I add to it when I meet new people, close new transactions. And, as it continues to grow, I continue to be able to help people in and out of homes.

Sometimes, I just leave a message, sometimes I drop a personal note. My favorite times are when I get to chat with someone I haven't talked to in a while. It's always a great catch-up time.

The last few months the market has been so stagnant with SS (Short-Sales) that I've been bumping up the reason for prospecting. To find some Standard sellers for all my buyers.

Fortunately for me, my data base people don't mind me calling them and asking for help. They know that the help I am working on for current clients will someday be the same help they are looking for.

When I have more listings than buyers, I work the opposite harder.

But, all in all, when I contact people, they have come to learn that it's not just for business, that I truly enjoy hearing about what is going on in their world. And frequently, I am able to help them somehow too. The electrician? I know someone that needs a new outlet. The plumber, I have a client with a leak. The single mom that needs a little baby-sitter, someone on my RE data base has a teenage daughter looking for extra money.

Prospecting, it's work for some, it's rewarding for others. It's what I do.

All Cash - Is It King?

On Sunday mornings I do like to write a semi-weekly blog post. So, I generally wake up wondering what I want the topic to be and start reading to stimulate those thoughts.

Today I am taking a buyer out to look for homes in Valencia and/or Stevenson Ranch. We've been out to several properties in the last few months. Criteria is tight, so it's been challenging. But, we have made offers on two. My client has shied away from Short-Sales (SS), so it limits us further.

We wrote an offer on a Standard Sale, cash wasn't king there. The seller was a bit over-priced and didn't accept our offer. Not to mention, they had a Home of Choice contingency on the sale. Since that time, those sellers have taken their home off the market. Go figure.

Second one was investor owned. They had purchased at a Trustee Sale, cash there, and since their initial investment, the values had dropped quite a bit in the area. Needed a little bit of work, but was good for my buyer. Cash was pretty close to King on that one, but off by about 10k so the sellers took the financed offer. That one is still in escrow now. They had a small margin of profit, understandable to me.

So today, we are going to look at a SS. Nice property, pretty close to clients needs. Have to check out a couple street noise issues and see what the family thinks. And, then of course, see if cash is king here.

Funny thing is, this morning I started with L.A.Times Real Estate reading and saw this article:

Cash Only Home Sales Rise In California

I'm working in the wrong neighborhood!!!

I do think that an all cash buyer will certainly be able to get a better deal than a financed buyer. But it depends on several different factors. And, sometimes, the factors don't fit the needs.

Reading About Loan Changes Today, Again.

Reading, Reading, Reading. Today it seemed to be all about some modifications of loan down payment amounts. Not all financial institutions are agreeing to them, but seems as if it's a plan that is moving forward.

L.A.Times had this one: Should a 20% Mortgage Down-Payment Be Standard?

And, this one on Inman this morning too: Consumer Group Defends Low Down Payments.

Basically will reward those that have enough for 20% down, and of course, penalize those that don't. But, some would say that the larger down doesn't mean they won't default on their loan. That it isn't the money they stand to lose that we should be watching, but the qualification of their original loan application. Yes!

And those lenders, the ones that fudge the applications......still today? Some will be required to be held accountable for a small portion of those loans even if the note is sold. And, we all know the notes are sold religiously and quickly. I've had some sold before the buyers new home has it's first payment due! So, if they have to hold 5% of that loan, it will tie up their capital....the banks certainly won't want that. And, won't want the risk of a default either.

So, I'm not sure how I feel about it. I've always felt the more you put down, the less likely a default. But, there is proof, in my buyers' pudding, that the small down-payment doesn't equal quick to trustee sale. And, really, don't qualify a buyer for more than they can afford, ever.

Thoughts?

580 FICO and you can still buy a home!

I love hearing about new 'products' to help in the home purchasing/selling arena!

Some seem crazy, some seem fantastic. This one is a little of both.

The FHA loan programs have been a wonderful thing for our market. They have enabled some with very little money to purchase their home. Help from a family member, ways to do work on a home built into the loan, not having to have reserves in the bank are a few that increase the ability to move inventory.

And, we need to move inventory. Will need to move inventory for quite some time.

So, one of my favorite lenders told me about a new product that FHA has to offer for someone that has below their generally minimum 620 FICO. For this loan, they must have a minimum of 580, but wow, that's amazing.

A few stipulations, but not insurmountable.

* Must have minimum 580 FICO with at least 1 valid credit scoring. If there is a Short-Sale in their history, has to have at least a 3 year lapse.
* Debt to Income ratio 45-50% dependant upon cash being brought in, borrowers current housing expense and payment history for same.
* Reserves must be between 2 - 4 months.
* Co-Borrowers that are not going to be living on the property need to have between 2 - 6 months reserves.
* No multi-residential. No flips where seller hasn't owned for at least 6 months.

Call me if you have more questions and I can answer and direct you to the lender that shared this with me.

But, really, to have purchasing power with a 580 FICO? Fantastic! If you've been saying "NO" because you're scared to get off the fence due to your credit rating, now may be a good time for you to take the leap!

Short Sales, Short Sales, Short Sales....

They have been around for a while now and they will surely be around for a while more. Did my infamous reading again today and noted an article that I share as it talks about some additional changes in the HAFA program. And, of course, why we even need these changes.

Short Sales To Ramp Up With HAFA Changes

Real Estate continues to have the need to speed up the Short Sale process, learn new ways to help expedite them. As a Realtor in Southern California, I have to consistently update my education, network with other agents, listen to what works and what doesn't. Understand that what may work in one instance, doesn't always work in another.

My opinion is we have a ways to go. But, the market will stabilize the sooner we get a handle on the situation. When we can eliminate additional foreclosures by doing Short-Sales instead, it will assist us in the stabilization.

I hate, truly despise, sitting in a classroom for EIGHT hours. Yet, I do it...on a pretty regular basis. Next month, two days in a row, eight hours a day, I will be sitting in the Hilton Garden Inn here in Valencia to be labeled a CDPE, Certified Distressed Property Expert. Yippee! ;o)

Now, mind you, the certification doesn't mean a whole lot to me, just the education it may provide to further assist clients in their home selling and/or purchasing process.

And, it means that I will most likely be attending another one fairly soon after, as more changes are made.....

Refresher Course! In case you forgot......

Funny, when we meet with sellers that tell us about how expensive the carpet was 10 years ago. Or the green granite that goes so well with the green sink in the kitchen. Or the silver-nickel sinks they put in the bathrooms.

Some things are hard to tell sellers....that although they may appear beautiful to you.....the buyer for your home will make changes.

So, sellers, keep in mind that you do things for your house to make it a wonderful home for you and your family. And, while the ultra-expensive purple drapes that went fantastic with your couches made your living room look spectacular....the buyer may want to decorate in red and turquoise.

Get the picture?

Yahoo had a 'Refresher Course' article this morning:

Ten Home Renovations That Don't Necessarily Add Value

Some things in Real Estate never change. Many things sellers do don't add value in the buyers eyes. And, when trying to get the best possible price for your home, it's the buyers eyes that count.



New Lending Rules On The Way

Fannie Mae, Freddie Mac and FHA are expecting to make some changes in the near future and every buyer or seller needs to be aware of these changes.

Just a brief run-down from the information I received. It is just to make you all aware.

Fannie Mae - Freddie Mac: Expected Changes

* Conforming High Balance/Jumbo Loan Limit Decrease from $729,000 to $625,000

* More Risk Based Pricing Premiums and Add Ons

* New 5% Lender Risk Retention Requirement for many Conventional Loans

* Stricter Condominium Project Approval and Financing Guidelines

* Stricter Minimum Fico Score Requirements

FHA Financing: Expected Changes

* Mortgage Insurance Premium Increases

* Condo Project Approval Expiration's

* Possible Increase in Minimum Down from 3.5% to 5%

* Possible Reduction in Allowable Seller Closing Cost Credit from 6% to 3%

* Possible Increase In Minimum Fico Score

These are huge changes that will cause some buyers to lose purchase power. That means less buyers out there for sellers to sell to.

Sellers, be aware, price properly. Buyers, be aware, get off the fence.

One of my favorite mortgage brokers provided this information in a neat orderly fashion for me to pass on to my clients.

Hope it helps.