Approved By Charles | Approved By Charles

In this day and age of instant online offers to sell your home with no listing fee, no open houses, no showings, and no interruption to your daily life it seems like realtors should fear for their jobs. Well, no.

OK, part of this is accurate. Those realtors that charge a full commission to do nothing other than slap up a sign and put your home on the MLS should very much live in fear. Those production only with no relationship-building realtors should be very fearful. Better realtors and progress are coming from your lazy money.

I once had a realtor tell me that if you spend more than 4 hours listing a home, meaning actual work on a listing, you are doing it wrong. For the privilege, if this four hours this realtor is saying their knowledge, time and effort are worth 3.2% (common in Colorado) to list your home. How much is this? Well if your home sells for $525,000 that four-hour or less realtor is making at least $17,600 or $4,400 per hour. Awesome work if you can get it, but this approach, and attitude, gives all realtors a bad name.

A good listing agent, and I know more than a few, will spend countless hours on your listing. From the initial walk-through to small touch-up advice, to staging your property, doing open houses, and, in our market, summarizing possibly dozens of offers down to the top ones for you, and your family, to choose from. This isn’t even to mention the hours of work running comps (pricing on comparably sold homes to get you the best possible price).

Why is their time and experience so valuable and worth so much of your equity? Well, because here’s what the instant offer websites do instead of a proper agent.

They also pull comps on your property. They proceed to offer you 5-10% below market value for the convenience of not putting your home on the market. You will also be required to do any, and all required updates or repairs that they deem necessary. They do the repairs, at their chosen costs and reduce your offer price even further. It is not uncommon for, once all is said and done, for your discount no-interruption to your daily life sale of your home to put 7-15% less cash in your pocket when all is said and done. They then turn around and sell your property for 15-20% or more than they finally paid you. Yes, you didn’t have any open houses or showings. Of course, it was more convenient and less intrusive, but good golly. Your home that a listing agent would have sold for $525,000 with you walking away with $488,250 (6% to buyers agent and listing agent and 1% for title work that the seller pays for). $446,250 (15%). I don’t know about you but having strangers wander through my home is worth 8% more in my pocket.

You see a good realtor knows the area. They know how to market your home. They may already have buyers lined up. They certainly know other realtors to reach out to and, most importantly, you can trust what they say. You can call them virtually any time and they are there 100% for you and your family. Their experience and knowledge is worth every penny.

Finally, and remember this, nothing you pay them is cash out of their pocket. If they don’t sell your home they don’t get paid a nickel for all the time and effort they put in on your behalf. They get paid when you get paid. They have your best interest at heart and will go through every contract, every offer, and every document with you word by word if you desire. There is nobody to review your online offer or cut-rate service contracts. You are on your own and trust me when selling your most valuable asset, you don’t want to be on your own.

Post Views: 528

Let’s be honest here. Buying a home, be it a condo, a townhome, or a single-family home, is one of the most complex financial processes the average American will partake in during their lifetime. Not only is it complex, but it requires a great deal of teamwork to make it all work. There are lenders and mortgage professionals out there spouting about their simple process, their app-based process, their cookie-cutter process.

Don’t believe a word. Don’t believe the commercial on TV. Don’t believe the web banner ad. Don’t believe what you hear on the radio or in print or from anyone who represents these ‘simplified’ mortgage processes. This process is not, and, most likely, will never be a simple process. Let’s do a run-through, shall we?

For this discussion, I’m going to leave out the real estate aspects of the process and focus only on the mortgage loan application, qualification, and approval process.

You must have your credit pulled and this hard pull will have an effect on your credit score. It can have a huge negative effect on your score if you are denied a mortgage for credit purposes. As such it’s always good to have an idea as to where your credit stands. This, general, information can be obtained via a credit card score report, a credit score app, or a website like Credit Karma, or by contacting the credit bureaus and obtaining your credit report directly, which you can do once a year at no cost. These scores will rarely be accurate in regards to the mortgage scoring system used by mortgage lenders. Be prepared to be surprised at where your score comes in at. An honest and transparent lender should help guide and educate you along these lines.

You must provide verification of employment, yes your employer will be contacted, and if you don’t want your employer to know you are buying a home then you should stop before you start. Lenders have to verify your employment history, going back a minimum of two years. Prepare to be asked for your previous employers’ contact information and, possibly, for previous, or your current, employer to reach out to you to make sure the request is valid.

You must provide two years of residential history. You will need to provide contact information to verify your residential history as well. This can be mom and dad, landlords from previous rentals, or the leasing companies of previous rentals.

And then there’s the documentation. Thirty days of pay stubs, 60 days of bank statements, most recent retirement, investment, 401k, or pension statements. Copies of your drivers’ licenses. Two years of W2’s and/or 1099’s depending on how you get paid. And if you are self-employed be prepared to provide balance sheets, profit and loss statements, Schedule C’s, K1’s, and, probably, your complete tax returns. As well as CPA/Accountant contact for the verification of employment.

Finally, the number of actual human people involved, no matter the lender, no matter the app, no matter the ‘easy one click’ mortgage or ‘simple’ loan process, the number of eyes that will work on your mortgage is nowhere close to the automated zero some lenders would have you believe. In addition to a loan officer, or loan originator, there might, and probably will be, a processor, underwriter, loan assistant, appraiser, appraisal management company, title rep, escrow officer, insurance agent, quality assurance review, auditor, branch manager, etc…

With all of these people, processes, and documentation involved and required, the mortgage loan process can be very complicated. To make the process feel simpler requires a personal touch that only a professionally licensed loan officer can provide. The relationship and high touch approach CAN and WILL make a complex process seem easier than it is, but no bank or lender has a patent or appropriate training to teach customer service and personality.

Find someone you trust and get a referral to an experienced loan officer. You will not regret it.

If you are looking for just such a lending partner don’t hesitate to reach out to me via this form!

Post Views: 476

Why Your Relator is your Best Friend – Listing Edition

The Fallacy of the Simple [mortgage] Loan