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10/9/2008
Recently, I’ve been getting a lot of calls from concerned sellers that are worried any potential buyer will not be able to get a home loan. If you watch the news every day, it certainly seems like the sky is falling, but nothing could be further from the truth. It is tougher to get a loan now because guidelines have tightened, but not because money isn’t available.
I recently read an article that gave a good example of this…imagine you owned a pizza shop in a college town. Every time you got an order from a residence, you made the pizza and delivered it. The customer that ordered it answered the door and paid you. That type of customer basically had no risk for the shop owner.
Now, imagine some guys in a fraternity house playing a trick on another house. They call the same pizza shop and order ten pies, and ask that they be delivered to their rivals next door. The pizzas are made and the driver is dispatched, only to be told at the door that no one ordered the pizzas. They have just wasted 10 pizzas that they didn’t get paid for.
So, as a result of the losses, the pizza shop decides to not accept anymore delivery orders from fraternity row. That would be a good business decision, right? In years past, the government has prevented the mortgage industry from making these risk-based decisions. They have demanded equal lending opportunities, whether the borrower was a good risk or not. Now, those high-risk loans are not available.
Since guidelines have been tightened, the only people who can buy homes now are the ones that are good credit risks. For those borrowers, money is abundant. The so-called credit crunch is affecting the ability to borrow for many items, but not homes. The lending industry has allowed people who really shouldn’t be buying homes to buy them, but no more. If it is a smart financial decision and you have a down payment and good credit, loans are still very easy to do.
If you have any questions, please do not hesitate to call me directly at
678-992-7100, or email me at byearwood@cmsloan.net.
Brian Yearwood
Custom Mortgage Services, Inc.
When Frank and Rhonda bought a mountain home, they needed furniture. The home that they are selling and have staged had traditional English furniture and to be honest, they were ready to get new furniture.
They have purchased furniture for their second home and office in Hickory and High Point North Carolina, so instead of paying the decorators who had decorated the house $770,000.00 for their furnishings, they headed to Hickory again.
They lucked out and met the general manager of 13 showrooms and she helped me not only find what they were looking for, she made it really on them to purchase from her. She is no-nonsense and anyone who knows them, knows that they love blunt people.
Anyway, they wanted to tell you about them in case you need furniture.
Mary Messineo
828-310-6414
Designer’s Choice Furniture
The “best deal” is always subjective to the buyer’s interpretation of what a good deal is… Some buyers need a specific closing date, others need closing costs and some need personal items. How you get the best deal when you are a buyer is simple. Don’t make the seller mad.
Sellers are emotional wrecks, just like buyers. And some Sellers decide mid-stream that they are simply not going to sell to a particular buyer who has made them mad with requests that they feel are not applicable. An example of a request that they feel is not applicable is closing costs. Some Sellers realize that the closing costs for any transaction are the costs for a buyer to get a loan. As a result, they make it very difficult for the buyer because they think that the buyer must be broke if they need the costs paid for them by the seller. I agree that it is the job of the listing agent to advise the Seller that every concession is just a concession that results in a net for the Seller, but some Sellers don’t see it that way and can be pig-headed.
So, if you really want a smooth transaction, we have found after selling over 819 resale listings in 2007, make an offer that is clean. Write the offer looking for an agreement on price. Without bringing up smaller items up-front, there are fewer chances for problems and more opportunity to chunk up and reach a quicker agreement.
As a result, we have our buyer team write only clean offers to the Sellers of the listing that their buyer wants to buy so that we are assured the very best deal with the most chances of being consummated.
Here is how the clean offer works:
1. Only focus on getting a low asking price. Start at 88 to 90% or lower if you feel that the circumstances are right. You may consider putting a closing date range for the Seller to determine so that you can really get a low price.
2. Do not include any closing costs or allowances, even if the buyer needs these things. You will add these to the best price that you get and then put them in the contract before you go binding.
3. If a close date is an issue for the buyer, state that you will be willing to pay $1,000 more in the asking price if the Seller will close on that specific date.
4. Be easy on the special stipulations that are already pre-printed in the agreement. I see a lot of agents go overboard here and they really frustrate the seller.
5. If you feel the Seller is dirty and that you want the house cleaned, do not add that in the first round of negotiation, add it on the second or third round after you have gotten the best price. Simply add the concession back into the sales price or pay for the cleaning yourself, which will result in a better job.
These steps will produce a better transaction for you as a Buyer wherein the Seller will feel good that you are moving into the house that they have loved. Many of our Buyers are greeted with dinner, flowers and many more extras when they have been respectful of the Seller’s feelings and not insulted them with a clouded offer. After all, isn’t what you pay for the house the most important thing? All the other stuff can be added later, when the time is right.
Thank You for visiting my Blog.
I can be reached at 678-770-6203 and vinoreilly@comcast.net
