resources
The Commission Gap: Narrowing The Gap, Closing The Deal
Dear Esteemed Real Estate Professionals,In an evolving landscape where commission transparency is becoming paramount, the art of structuring real estate transactions is undergoing significant changes. While optimistic about promoting transparency, these changes introduce new challenges, especially when including commissions in sales prices, potentially leading to appraisal shortfalls.We recognize these complexities and are committed to providing solutions that maintain transparency and equity and safeguard the financial structure of transactions for buyers and sellers. To this end, we are thrilled to introduce a groundbreaking strategy: The Commission Gap.The Commission Gap is explicitly designed for real estate professionals like you, who navigate the delicate balance of incorporating commissions without jeopardizing transaction viability due to appraisal discrepancies. This playbook offers a comprehensive guide on utilizing The Commission Gap to bridge cash-to-close variances and uphold financing terms, even when property valuations come in lower than expected.Key Components of The Commission Gap Strategy:Integrated Commission Planning: Learn how to seamlessly include commissions in the sales price while minimizing the risk of appraisal shortfalls.Appraisal Gap Mitigation: Strategies to utilize The Commission Gap to ensure that discrepancies in appraisals do not derail the financing or necessitate significant additional cash from buyers.Adaptive Financing Solutions: Tailored financing options that work with The Commission Gap, maintaining affordability and transaction momentum.Digital Empowerment: Leverage cutting-edge technology to enhance and offer clarity, streamline processes, and reinforce the effectiveness of The Commission Gap approach.This playbook is more than just a guide; it's a new paradigm in real estate transactions, empowering you to navigate commission-related challenges with confidence and innovation. We are eager to support you in adopting The Commission Gap as a standard part of your transaction toolkit, ensuring every deal you manage is as smooth and successful as possible.We look forward to transforming potential obstacles into opportunities for seamless, equitable, and efficient real estate transactions in partnership with you.Warmest regards,Joe DeMarco
Agent Playbook : Financial solutions to todays Biggest Challenges
Dear Agents!Navigating the intricate real estate and home financing world can be daunting as the landscape undergoes transformative changes, particularly with affordability, values, commission conversations, and increasing lowball offers. I've assembled this playbook to illuminate solutions to our market's most pressing challenges.Consider this an educational tool and a resource you can share with your your buyers. It's designed to answer some of the pivotal questions they may have about the nuances of purchasing real estate under your expert guidance.⚡️ AFFORDABILITY SOLUTIONS ⚡️Home affordability is a cornerstone in our industry. My team and I are equipped to devise financing solutions that cater to a diverse range of potential homebuyers. By securing favorable rates or introducing unique loan products, our goal remains steadfast: making the dream of homeownership feasible for more individuals.Example video on the sidebar: ➡️.......................................................................⚡️ APPRAISAL GAP SOLUTION ⚡️We have a remedy when a property's appraised value doesn't measure up to the anticipated list price. Our appraisal gap strategy is tailored to bridge this disparity, ensuring that you, as the listing agent, can secure the most competitive offer for the property. I've incorporated a video detailing our approach to this challenge for a more comprehensive understanding.Example video on the sidebar: ➡️.......................................................................⚡️ COMMISSION GAP ⚡️There are times when specific commissions might fall short. Fear not, as our Commission Gap initiative ensures a seamless transactional experience. We meticulously structure the financing to cover all associated costs, eliminating the possibility of any unforeseen financial hitches.Example video on the sidebar: ➡️.......................................................................⚡️ The Cost Of Waiting ⚡️Does it actually make sense to wait out the market???.......................................................................Example video on the sidebar: ➡️
MortgageCoach
FHA mortgages just got a price cut. Beginning March 20, mortgage insurance premiums will be lower on most FHA loans, making payments more affordable and qualifying easier. If you or someone you know hasn't acted because of high rates or low income, now is a good time for another look. I'll be happy to help. Check out the presentation to see what the difference can be. I can do any comparison amount for you please connect with me.
Loom
Fannie Mae & Freddie Mac have recently introduced Loan Level Pricing Adjustments. That announcement can be found here (https://singlefamily.fanniemae.com/media/33241/display). You may be wondering: -What are Loan Level Pricing Adjustments? -Who do they effect? -How can I inform my Buyers & Sellers based on the recent announcement? -HomeReady & HomePossible Programs plus 100% AMI Please find an interactive Loom video presentation above as well as PDF One Page Resource guide in the sidebar. You can explore the Area Median Income Guidelines by address for Fannie Mae & Freddie Mac's HomeReady & HomePossible programs below. o Fannie Mae HomeReady - https://ami-lookup-tool.fanniemae.com/amilookuptool/ o Freddie Mac HomePossible - https://sf.freddiemac.com/working-with-us/affordable-lending/home-possible-eligibility-map
WHY PAY OVER ASKING !!!!
Why Might you consider offering more than list price for that property you want to own????? A seller paid buydown just might be the difference in your budget or in what you qualify for, for your dream home for your family.
Max Seller Concessions.
Hello, With all the mortgage rule changes, it can be difficult to keep updated on exactly how much money a seller can contribute to helping a buyer purchase a home. So i wanted to put together a little chart and video to share with you. If your a home buyer or buyers agent, this is going to be extremely important if you are trying to negotiate seller concessions for buy downs. Thank you.
Buyers Guide To Rate Buy Downs
Hello, If you're a buyer trying to purchase in today's market, you might have heard of a "rate buydown." But, you might be like most consumers with how they work, which one to select and why it would benefit you and your family. What Is a Buydown? A buydown is a mortgage financing technique with which the buyer attempts to obtain a lower interest rate for at least the first few years of the mortgage or possibly its entire life. 1 A 2-1 buydown, for example, is a specific type of mortgage buydown that allows homebuyers to save on their interest rate for the first two years of the loan. Buydowns can also use a 3-2-1 structure as well. 3-2-1 Buydown? In a 3-2-1 buydown, the buyer pays lower payments on the loan for the first three years. For each of the first three years of the mortgage, the buyer's interest rate would increase incrementally by 1% annually. The total interest rate would apply beginning with the fourth year of the mortgage loan. While the buyer received savings from the lower interest rate in the first three years, the difference in the payments would have been made by the seller to the lender as a subsidy. 2-1 Buydown? A 2-1 buydown is structured the same as a 3-2-1 buydown; however, its discount is only available for the first two years. So you would have a 2% interest rate reduction for the first year of the mortgage, then a 1% discount for the second year. Your interest rate and monthly payments would increase until your loan reaches its actual percentage rate. This happens in year three of the loan. At this point, your monthly mortgage payment would reflect the real loan rate. You would pay upfront for the 2-1 buydown at closing; theoretically, the money you save over the first two years would cancel that payment. Temp Buydown Pros and Cons Whether it makes sense to use a buydown to purchase a home can depend on several things, including the amount of the mortgage, your initial interest rate, the amount you could save in interest over the initial loan term, and your estimated future income. How long you plan to stay in the home also can come into play in determining your break-even point. Pros * A buydown temporarily reduces your interest rate, saving money and lowering your monthly payments during the initial loan term. * Choosing a buydown may allow you to pay less for the home than the seller's listing price. * It could make sense for homebuyers whose income will increase in the years to come. Cons * Once the buydown rate ends, your monthly payment could be higher than expected. * You could struggle with monthly mortgage payments if your income doesn't increase. .................................................................................................................................................................................................................... Attn: Realtors Buydowns for Open Houses: Do you have an Open House Coming Soon? If so, let's get Buydown options out to potential buyers Buyer Motivation: Do you have Buyers that have left the market until the following year?
2/1 and Perm Buy Downs.
Hello, With all the noise out there in the market place, high interest rates, low inventory, 2/1 buydown, perm buy down, I wanted to hopefully provide a solution whether it be temporary or permanent to help seller and buyers get excited about real estate again. Lets not let this push us to the sidelines and wait until the market may or may not get better or get to the point that it helps you. Now is the time, not later I promise you.
Lets not wait for this to happen!!!
With the positive news from Fannie Mae today, here are my reason for not waiting until this event may happen. Hello, Are you a buyer that has gone to the sideline to wait to purchase a new home or has been delayed from entering the real estate market? If so, I'm sure your reasons could be valid, but I wanted to ensure you have all the information on whether this is a wise choice. The main issue, I assume, would be " affordability " from the significant rise in rates that has lowered your buying power or knocked you out of qualification. You might think this is a negative, but I wanted to highlight this exact issue and show you that it is an excellent thing for you as a potential home buyer. In the video above, I've laid out the domino effect of the increase in the rates market, which allows you opportunities that have not been present in the last few years for home buyers. The lack of affordability and inventory is an exciting and challenging dynamic in this market, making it completely different. What I mean by that is that usually, these two forces don't line out together in this magnitude. For example, when affordability issues last crept into the market, the housing supply spikes with the pullback of buyers, which we experienced recently in 2018/19. The main issue that has caused a much-needed pause in our housing market has been the spike in rates, which caused our affordability issues. So we should focus on the opportunities that present you as a home buyer now vs. just six months. ........................................... Six Months Ago vs. Today Six Months Ago: Buyers competed against 10+ offers per property. Buyers had to release all loan, inspection, and appraisal contingencies. Buyers had to convert their loans into " cash offers " to compete. Buyers had to overbid on their offers to compete. Buyers had to settle on whatever home came on the market. Buyers are being delayed in converting their " cash overs " into loans in this high-rate environment. Today: Few Buyers, which means less competition. Buyers can write offers with and maintain their contingencies. Buyers with minimum down payments can purchase again. Buyers can get fair value or even undervalued properties with their offers. Buyers have more choices of homes than buying whatever comes to market. With help from lenders like myself, we can structure much better terms, like buying down the rate.
Buyers – How To Maintain Your Pre-Approval, As Rates Increase
Hello, As if the market was not tough enough on buyers as it is, now the higher cost and movement up in rates will really knock some buyers out of the market. But, that doesn't have to be the case, as rates and costs increase. This video lays out a game plan for how to get that old pre-approval back from that lower interest market.
What Matters Most – Rate Reduction or Price Reduction?
When you’re buying a new house, there are two things most home buyers will focus on: the interest rate and the home price. The home price is the total amount you pay for the house, and the interest rate is the amount you’re charged to take out a mortgage. Both play an important role in determining whether it’s a good time to buy and the type of house you can afford. But when it comes to the interest rate vs. home price, does one matter more than the other? This example and videos will explain how the two work together and some things you should consider as you’re house hunting. The home price, your down payment, and your interest rate will affect how much your monthly mortgage payment is. If you buy a more expensive house, your monthly payment will be higher. And higher interest rates will cause your monthly payment to go up as well. Scenario 1: Lower Interest Rate So, which is more important – the home price or your interest rate? Let’s consider a scenario where a buyer opts for a lower interest rate and higher home price. Because the interest rates are lower, the buyer can afford to buy a bigger house, which they assume will appreciate in value. They purchase a $400,000 home and put down a 10% down payment. The loan term is 30 years, and their interest rate is 3.25%. Not counting homeowners insurance and taxes, their monthly payment will be $1,567.00. Scenario 2: Lower House Price In another scenario, the buyer prioritizes a lower home price and purchases a $300,000 house instead. By buying a lower-priced home, they’ll be able to build equity faster, which will allow them to refinance more easily. And when you run the numbers, their monthly payments are considerably lower. Keeping all other factors the same, their monthly mortgage payment will be $1,175.00. That’s a monthly difference of $392.00. Of course, lower prices may only come as a result of higher interest rates, so while we’ve kept the rate constant for the purposes of comparison, it will be important to run the numbers yourself based on what’s happening in your market. The Bottom Line The ideal scenario is to buy a home when both interest rates and home prices are low, but that isn’t always possible. So, as you’re considering home prices vs. interest rates, it’s important to keep in mind that one isn’t necessarily better than the other. At the end of the day, it comes down to your goals and priorities as a buyer. Are you focused on buying a bigger home, or is your goal to keep your monthly payment as low as possible? If you buy a home with high rates or a high listing price, make sure you run the numbers, so you understand the short-term and long-term financial implications.
Countering Low Ball Offers!!!!
As a seller or listing agent in today's market, you must prepare for low offers. I think you first need to understand why a buyer would submit a lower offer. The main reason is affordability, which is at all-time lows due to a rate spike. So, don't take it personally when a lower offer comes your way; understand why and use this strategy to help this potential buyer afford your home without giving away the farm. The key is payment, and a buyer's goal is to achieve the lowest payment to obtain the loan the lender has qualified for them. These videos I've put together show the Seller Buy Down strategy I use to help the agents and sellers I work with achieve the payment the buyer needs but at two-thirds the cost of a lower ball offer.
Interest rates, Home prices, Affordability.
Interest rates, Home prices, affordability, all the things screwing up the housing market. I’m here to help erase all those things and get your buying power back and help you get those rate we were seeing 6-8 months ago. check out the presentation to the right to see how we can help.
Buying Your First Home: Do you know your numbers & options yet? | Rent Vs Own Report
Did you know that a home owners net worth is 33 times greater than that of a non-homeowner? If you think about that for a second, it really is an astounding fact and one that greatly favors buyers. We know that the decision to stop renting is not always an easy one, there are both lifestyle and financial decisions to consider with both scenarios. Being in the mortgage business we might be a bit biased toward purchasing, but according to our recent survey of national home buyers, 92% said that they believe that owning is a better long-term financial decision then renting. If you find yourself in this scenario, there are several key questions to consider that can help guide your decision. Also, there are numerous misconceptions that should be examined as you might actually be able to purchase a home and not even realize it. 7 Questions To Consider: 1) How long do you plan to live in the city in which you are looking to buy? The length of time you plan to spend in a home is a big factor in deciding whether to rent or buy. While none of us have a crystal ball, if you like the city you live in and your current job situation is favorable then you might consider owning. Depending on the market, 3-5 years in a home is a manageable length of time to appreciate and not take a loss. 2) How much do you currently pay in rent? People often think if their rent is the same as their potential mortgage payment they should consider buying a home. In assessing a home purchase, it is helpful to consider uncommon and unplanned costs. For example, mortgage insurance and taxes are often not factored in by first time home buyers. If you have never purchased a home you might not know to include these. Other unplanned costs are things such as lawn care, utility bills, daily home maintenance and long-term maintenance that for a renter are done by the landlord. 3) What is your annual income and how much debt do you currently have? Often when people are dreaming about their new home they get caught up in the excitement and might overlook not only the unplanned expenses but the impact of already accumulated debt. A good rule of thumb is you want your mortgage payment (including taxes, insurance, and association fees) to be 25% or less of your annual income. Your total debt (mortgage + other debt) should be 40% or less of your income. 4) How much savings do you have as a cushion? While not a necessity, one factor to consider is having a savings cushion not only for a down payment but for unplanned expenses. 5) Do you have pets? If you have pets you might find it more difficult to rent a space that fits your needs. Additionally, pet deposits can quickly add up so this could be a consideration for buying as that money could be spent on the home or the down payment instead of paid to your landlord. 6) Do you have children? If you are starting a family, or have children, owning a home can often be the best route for a variety of reasons. Once again, making an assessment about the mortgage payment, unplanned expenses and your overall financial situation are critical in this situation. 7) Are you a veteran? If you are a veteran, there are numerous loan options that could be available to you that are often low money down, easy to qualify and reasonable interest rates. 4 Advantages of Home Ownership: Now that we have explored the questions to consider and common misconceptions, let’s review the advantages of each. Home ownership has four primary advantages: 1) Homeownership can help build wealth through equity. If you have difficulty saving for long term expenses (college, retirement, etc.), think of owning your home as a long term savings plan. Yes, you still have to pay for interest on your loan, but over time you are actually putting your money into an investment vehicle. You are building valuable equity in your home that will add to your net worth over time. Remember, Every month that you make a mortgage payment, is another month that you’re paying down what you owe on your home. Not only does that decrease the amount that you owe over time, but it also increases the amount of equity (or value) that you have in your home. 2) Tax Benefits of Home Ownership. When you own a home, the tax code usually allows homeowners to deduct their mortgage interest from their tax obligations. For many people this is a huge deduction, since interest payments can be the largest component of your mortgage payment (especially in the early years of owning a home.) 3) Predictable Payments. One of the advantages of owning your own home is that you will typically have more stable monthly mortgage payments year over year. Landlords often increase rent with every lease renewal. While there may be some variation based on taxes or your loan product, it's traditionally more stable than renting. 4) Lifestyle. Homeownership gives privacy and the ability to make your space your own. Creating your own home environment can also be a source of pride and accomplishment. Depending on your circumstances, the value of creating your own lifestyle can be priceless. 3 Advantages of Renting: Renting has three primary advantages: 1) Short-term commitment. One of the advantages of renting is the flexibility and the the ability to make a short term, limited, commitment. Most leases are for 12 months so if your job or lifestyle requires you to relocate you have options. 2) Low Maintenance. Every home is bound to have a maintenance issue or two during your tenure. The nice thing about renting is the burden of repairing and maintaining the property is limited. Additionally, the costs associated with maintenance are not your financial responsibility. 3) No/Low Down-Payment. Unlike purchasing a home, renting usually requires less money upfront. While there are numerous low down payment programs for purchasing a home, is most circumstances the dollar amount required to obtain a rental is less than if you were to purchase. Typically, a rental will require a refundable security deposit, a refundable pet deposit and the first month’s rent in advance. Conclusion: While owning a home has numerous benefits and is often considered the American dream, preparation and readiness are an important part of the equation. After pondering the questions and considering the advantages of owning versus renting you could decide that renting is better in the short-term. If that is the case, you can begin to plan for the future and owning a home. It is never too early in the process to find an expert mortgage broker who can help you through the process of preparing to own while you rent.
Fed Rate Hike!!!!
What impact did the Fed rate have to mortgage rates today. Hello, I wanted to get this video out to explain the Fed Rate Hike today and how that will impact you. What? - The Fed increased rates today by.75 bps Why? - They need to do this to slow down inflation, which means they need to slow down the speed at which the economy is growing. When? - They started today. How to protect yourself? - You need to review and convert all of your short term debt ( equity lines, credit cards, etc.) and move into long term debt ( mortgages, e.g., 30 Yr Fixed Loans )
Price Drop vs. Rate Drop ( SBD )
Hello, If you're buying in today's real estate market, we understand the challenges you've been facing with inventory over the last few years. But, the higher interest rates are causing affordability issues to bubble up in our market. So with that said the listing agent for this property wanted to help with those new affordability issues. The Agent and his seller have agreed to provide the buyer with TWO choices to help them purchase this home. Choice 1: You and your family can take $10,000 off the sales price Choice 2: You could offer the total price, and I could help you structure the same $10,000 discount on the contract to avoid predatory lending, and get it approved here inside the bank, to buy down your interest rate, called a Seller Buy Down. The video above lays out all the options to help you make Victoria St. more affordable in today's real estate market.