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bridge loan

The Advantages and Disadvantages of Bridge Loans

By Alexandra Swann, GenEquity Mortgage and Member, CCAR’s REALTOR®/Lender Committee

With the summer home buying season drawing to a close, more and more buyers and their agents inquire about bridge loans. Sellers faced with multiple offers do not want to take an offer with a contingency to sell an existing home, and buyers often do not want to be faced with making two house payments. A bridge loan sounds like a great alternative—and for the right buyer, it can be.

How does a bridge loan work?

The term “bridge loan” can mean a couple of different things in the industry, so when talking to a loan originator, you need to be specific on exactly what you want. A bridge loan is a type of financing that eliminates the need for a contingent offer, making it easier to win a competitive bid. Since there is no contingency, bridge financing can help with shorter closing times.

Types of Bridge Loans

There are currently two popular uses of the term “bridge loan,” as well as a new third type—each with its own advantages and disadvantages.

 Short-Term Home Equity Line of Credit

The first type of bridge loan is a short-term home equity line of credit against the equity in an existing home, which can then be used as the down payment on the new house. This is most common when the prospective buyer has a home with a lot of equity and a small first-lien balance or no balance at all. The new bridge loan is attached behind any existing first, and the buyer suddenly has access to the equity in the house.

Advantages:

This type of bridge loan can solve the problem of not having sufficient down payment because the funds to close on the new home are tied up in the current home. Home equity loans in Texas have no prepayment penalties, so when the house is sold, any first lien and the bridge loan are both paid in full. The only real expenses to the homeowner are any closing costs and the interest paid on the bridge loan during the months until the original primary sells. Also, the buyer is getting a permanent loan on the new primary immediately.

Disadvantages:

The buyer is making two house payments until the original home sells, which can deplete assets and strain income. In Texas, home equity loans are capped at 80% of the value of the property, so the borrower will not be able to access all of the equity. Most importantly, Texas cash-out loans are for primary residences only, so for a borrower to take out a home equity loan knowing that he/she is planning to immediately buy a new primary is dishonest.

Portfolio Loan

The second type of bridge loan is a portfolio loan which is offered by several of the smaller regional banks. In this type of loan, there is no dishonesty because the lender understands that the loan is for the purpose of purchasing a new house. The lender qualifies the borrower and then orders two appraisals—one on the current primary and one on the new purchase.

Advantages:

Like the home equity loan above, this type of bridge loan can solve the problem of not having sufficient down payment because the funds to close on the new home are tied up in the current home. It is set up to have no prepayment penalties; when the house is sold, any first lien and the bridge loan are both paid in full. As before, the only real expenses to the homeowner are any closing costs and the interest paid on the bridge loan during the months until the original primary sells. Furthermore, the buyer is getting a permanent loan on the new primary immediately.

Disadvantages:

As with a home equity loan, the buyer is making two house payments until the original home sells, which can deplete assets and strain income. Most lenders of this type of bridge loan also cap the loan at 80% of the value of the property, but in some cases, the lender may go as high as 90%. This is very rare, however. Regardless, the borrower will not be able to access all of the equity.

The New Bridge Loan: A Short-Term Loan on the New Primary

The new, third type of bridge loan is not really a bridge loan, but because it is being sold to REALTORS® as a bridge loan, the REALTOR®/Lender committee felt we should include it here.

With this loan, the lender assesses the equity in the current home as the future down payment on the new primary and then makes a short-term loan on the new primary at 100% of the purchase price. The borrower does not have any payments on the new home for a set period of time—usually six months—while he/she is waiting to sell the prior home. The borrower is responsible for six months of interest payments, but these are generally “rolled” into the costs for the prior home. So when that home sells, the bank is paid, the lien is released, and the current home is refinanced into a new, permanent, fixed-rate mortgage.

Advantages:

The advantages of this type of financing are obvious. The buyer is able to purchase a new home without first selling the former home, without the financial pressure of two house payments, and without having to qualify with two house payments.

Disadvantages:

If for any reason the borrower’s prior home does not sell during the period set by the bank, he/she is going to be making two house payments plus interest. This could be a huge issue for a borrower who really does not have the financial resources to make both payments. Although we are accustomed to a red-hot housing market in most of DFW, remember that we have buyers coming in from all parts of the country, and those housing markets may be much cooler than ours. If the house being sold has not been priced or marketed properly, the buyer with the bridge loan may find themselves in a financially disastrous situation. Another major concern is that the qualifying situation may change during the period between the home purchase and the refinance of the new home. There are no guarantees that the buyer will qualify for the refinance, and the terms after the initial period can be quite onerous. The last major issue is that the buyer is not locking in the rate and terms of the permanent mortgage when buying the new primary residence. If rates rise or values decline, which are not unprecedented, it could be terribly painful for the buyer at the time of the refinance.

Determining if Bridge Loan is a Good Option

Bridge loans are simply tools; they are not inherently good or bad. Like most mortgage products, they are highly appropriate for some buyers and extremely inappropriate for others. No borrower should ever take a bridge loan if he/she really cannot afford to make two payments. If the buyer really does not have strong cash reserves or the income to support two house payments, that buyer needs to sell his/her house before buying a new one. Better to miss out on the perfect home today than to buy that home and be unable to make the payments nine months later. It’s always better to be safe than sorry. 

For these and other questions about lending, contact the REALTOR®/Lender Committee at RealtorLender@ccar.net.

NTRIAF

Give Now to Help Hurricane and Flooding Victims: Monetary and Item Donations Being Accepted

The Collin County Association of REALTORS®’ heartfelt thoughts and prayers are with those affected by Hurricane Harvey’s devastation. CCAR’s North Texas REALTORS® in Action Foundation is in the process of aiding victims. Here’s how you can help:

MONETARY DONATIONS

CCAR’s North Texas REALTORS® in Action Foundation (NTRIAF) is accepting financial donations to assist the victims of the devastation left behind by Harvey. In addition, money donated will also help with the ongoing cleanup, repair and support of local communities impacted by Harvey’s destruction. NTRIAF is a recognized 501c3 nonprofit organization, and financial contributions are tax-deductible to the extent allowed by law. Donate to NTRIAF here:  www.HelpNorthTexas.org/donate.

 

ITEM DONATIONS

REALTOR® offices across the Metroplex are collecting items to aid the victims of Hurricane Harvey. Offices accepting donation items are listed below alphabetically by city. A list of crucial items needed can be found further down the page.

ARLINGTON
JP & Associates: 701 Highlander, Suite 155 – Arlington, TX 76015

DALLAS
Keller Williams Dallas Preston Road: 8383 Preston Road – Dallas, TX 75252
Donation times: Monday (8/28)–Tuesday (8/29): 9 a.m.–5 p.m. and Wednesday (8/30): 9 a.m.–Noon

FORT WORTH
JP & Associates: 1200 Summit Pkwy, Suite 500 – Fort Worth, TX 76102

FRISCO
JP & Associates: 6136 Frisco Square, Suite 200 – Frisco, TX 75034

MURPHY
Keller Williams Central: 104 N. Murphy Road – Murphy, TX 75094
RE/MAX Dallas Suburbs: 418 Village Drive, Suite 100 – Murphy, TX 75094

PLANO
RE/MAX Dallas Suburbs: 3915 McDermott Road, Suite 100 – Plano, TX 75025
VIVO Realty: 5200 McDermott Road, #135 – Plano, TX 75024

RICHARDSON
Keller Williams Central: 501 W. President George Bush – Richardson, TX 75080

These are the CRUCIAL items that are needed:
Wheelbarrows
Large black trash bags
Gloves for outdoor use
Face masks
Brooms
Paper products: Paper towels, toilet paper, paper plates, plastic forks and spoons
Mops
Windex
Rubber gloves
Water testing kits
Dog and cat food
Rubber boots
First aid kits
Flashlights
Bleach
Batteries (all sizes)
Blankets
Shampoo/body wash
Soap
Bug spray
Toothbrushes/toothpaste
Underwear (new) for men, women, and children
Socks (new) for men, women, and children
Feminine hygiene products
Diapers
Aspirin
Non-perishable food
Bottled water

If you belong to a REALTOR® or Affiliate office that is conducting a donation drive, please forward the information to editor@ccar.net so that your office can be added to the above list.

sellers

3 Common Costly Mistakes Home Sellers Should Avoid

Selling a home can be just as emotional as purchasing one. Ask any first-time home sellers. Between the anxieties of getting close to, if not exactly, the market value of the home and getting it prepared to place on the market, the prospect of things going wrong is conceivable. In a recent survey conducted by the Texas Association of REALTORS®, there are several common mistakes sellers make.

For some, the presence of substandard remodels can raise flags during the inspection and either jeopardize the sale of the home or require more money to fix. Dishonesty by not disclosing known issues with the property is another; this could lead to a lawsuit.

Even when a seller has a decent offer on the table, problems can still arise. Greediness is most likely to fault when he or she rejects reasonable offers in anticipation of higher offers. Then, there are sellers whose emotions can endanger negotiations. Yes, the house most likely holds a lot of cherished memories for the sellers. However, those moments do not warrant any merit in the home selling process or the buyer’s bottom line. While these situations are familiar, here are the top three costly mistakes sellers make:

1. Renovation costs are not recouped. There are necessary expenses that yield a worthwhile investment. Then, there are unnecessary expenses the seller either never recoups or end up costing the seller by way of repairs or credit for repairs. According to the 2016 Cost vs. Value Report by National Association of REALTORS®, some of the projects that offer the best return on investment include attic insulation at 123%, new garage door at 101%, master suite addition at 58%, and bathroom addition or remodel at 57%. The seller can spend too much money renovating the property and find that they have simply over-improved for their neighborhood. In some situations, they opt for finishes that cater to their specific tastes, rather than remaining neutral to suite a wide range of buyers.

What you can do: If possible, discuss such improvements with the seller prior to them investing their funds. Share data with them so they can educate themselves on determining what projects would yield the most return on their investment.

2. The home is overpriced. Since Texas is one of several states where disclosure of the sales price is not required, the accuracy of the value of a home can be questionable. When sellers overprice their homes, they usually seek out a REALTOR® willing to go along with that price. This might hurt your sellers’ chances to sell quickly, even when they are presented with a good offer or one that can be negotiated. They find themselves not wanting to budge on the price, especially if the offer is within days of the property being on the market. They have the illusion that more offers will come, or they anticipate a bidding war. By doing so, they take a risk of the house remaining on the market longer than expected and, ultimately, accepting a lesser amount than what they were originally offered.

What you can do: Once you meet with the seller to discuss price, present comparables in the area that are similar to theirs. Explain that the house down the street that is $50,000 more than theirs has an extra bedroom, bathroom, and a swimming pool, thus warranting the higher price. Invite them to an open house so they can visually analyze their competitors. This will hopefully provide them with a better understanding of what buyers might be comparing their house and their price to. Be honest with your sellers and if they value your expertise, they will take your suggestion and rethink the asking price.

3. The home requires basic repairs, or it is in an unsightly state. A common complaint REALTORS® hear from buyers concerns the condition of the seller’s property. Since most buyers start their home search online, they seek properties they can see themselves moving into that usually require minimal to no work. When sellers place their homes on the market, they need to appeal to as many buyers as possible, so the condition of their homes is crucial. Whether they are simple repairs like painting walls neutral colors, decluttering the home, or fixing minor issues, the money spent will help with the showings. A messy property or one permeated with pet or cigarette smells can deter otherwise interested buyers.

What you can do: While most sellers prefer not to spend money on a property they will soon place on the market, they need to appeal to buyers. Unless the property is one that is sold “as is” or is clearly a fixer upper, now is the time to have a frank conversation with your seller. Explain how making simple changes and prepping the home for sale will be money well spent in the long run.

Collin County CCAR Pulse Stats

Market Shows Early Signs of Steadying after Record-Charting Year

While the real estate market in Collin County remained strong during the month of July, it began showing early signs of stabilizing after a year of record-breaking sales.

According to data from the latest Collin County Association of Realtors (CCAR) Pulse report, three areas that are beginning to show signs of a balancing market include new listings, inventory of homes for sale, and days on market. New listings increased 4.8 percent in July compared to last year, and the supply of available homes rose 13.5 percent from July 2016. In addition, the average number of days a home was on the market last month was up 6.7 percent to 32 days.

“Seeing the amount of new listings increase in July, coupled with inventory going up, could mean that the Collin County area is very slowly making its way to a balanced housing market, which is a good thing,” says Jonna Fernandez, CCAR Chief Operating Officer. “Six months of inventory is considered a balanced market. At the beginning of this year, our inventory was only at 1.8 months—an extremely strong seller’s market. Seeing the supply of homes at 2.7 months for July is encouraging.”

Although the housing market may be showing some very early signs of stabilizing, there are still many indicators of our years-long seller’s market. Median sales price is up 8.5 percent to $305,000, which has also impacted how much home buyers can afford. Currently, the median household income is 113 percent of what is necessary to qualify for a median-priced home under prevailing interest rates. This is a 10.3 percent reduction in housing affordability from last year, when household income was 126 percent of what was needed.

“It is no surprise that we see the housing affordability index has decreased in the past year, given the strong seller’s market that we’ve experienced” notes Fernandez. “When you have multiple offer situations, homes often sell for more than their list price, thereby increasing the median sales prices of homes over time. An increase in home prices, means that a potential buyer with a median household income is finding it more difficult to find a median-priced home.”

wallet

Qualified No More: How Fall Events Wreck Havoc on Buyers’ Lending Status

By Sam Brock, Supreme Lending and Member, CCAR’s REALTOR®/Lender Committee

Your buyers have finally gotten an offer accepted on the perfect property, in the perfect neighborhood, with the perfect school district. Congratulations! They’ll be closing in September, you will have a new listing in their existing home, and you luckily have buyers ready for it as soon as it hits the market. When the contract is submitted to the lender with whom they prequalified in May, you receive an email reply simply saying, “Call me on this, ASAP please.” What could the lender need? They did the prequalification already; you know the lender does a great job, and you know the borrower looks good. What in the world has happened?

The months of August and September are wrought with opportunity for your buyers to damage their mortgage qualification status. Through what would normally be viewed as sound, financially prudent decisions, buyers can negatively affect their ability to qualify for some of today’s most widely used mortgage programs. Here’s how:

Credit Cards: Retailers flood consumers with ‘Back to School’ and ‘Labor Day Savings’ sale ads, and then pile on the discounts for opening a store credit card when they check out. For some buyers, a single inquiry can cause their FICO score to decrease below acceptable levels. For others, the new account’s monthly payment may increase their debt-to-income (DTI) ratio over what is allowed by guidelines. Even if the promotion states that there are ‘No Payments for 6 Months,’ the lender will have to ascertain what the new payment will be and add that to the list of monthly liabilities used in calculating the DTI. This can be especially detrimental with larger purchases such as appliances.

Auto loans: Traditionally, auto makers release their new models in September and October, which means dealerships are motivated to move their current inventory to make room for new models. There are often great deals to be had in August and September, and financing terms can be very attractive, but the DTI change can be a deal breaker. With many loan programs, an installment debt, such as a car loan, can be left out of the DTI calculation if there are 10 months or less remaining on the loan. If your borrower’s qualification includes a debt being omitted because of the length of time remaining, a new car loan, even with a lower payment than his or her existing car loan, will force the payment back into the DTI calculation, potentially causing that individual to exceed allowable guidelines. Again, the inquiries, especially if the buyer did what he or she should and shopped rates with multiple lenders, can cause his or her FICO score to decrease.

Student loans: Cosigning for a college-bound child’s student loans may appear relatively harmless, but changes to agency guidelines over the last few years now oblige lenders to include 1% or more of the outstanding balance in the DTI, depending on loan program. Even if the payments are deferred, lenders have to include a monthly payment in the DTI ratio. The payments that the parents and child have no intention of making until later can damage their qualification status.

Tax returns:  Many taxpayers file extensions for their personal and/or business tax returns in the spring, with the plan to file later in the year. As we all know, these extended returns must be file by October 15. If they haven’t gotten around to it yet, a loan closing in early October can easily be extended past that date. There are no exceptions available in most cases, and an unfiled return or a filed return with an outstanding balance due can cause a lender to keep a purchase from being able to fund.

The bottom line is that in the constantly evolving landscape of mortgage guidelines, everyone has to keep everyone else in the loop when making financial decisions.  Lenders, REALTORS®, and buyers have to be vigilant and communicate openly until the loan funds.  Through open, honest communication with all parties, great local lenders, like those in the CCAR REALTOR®/Lender Committee, can keep your buyer’s hopes of homeownership alive and well, no matter the season.

Real Estate

From Little House of Horror to Conceivable Contender

Anyone who has ever gone house hunting has encountered at least one of these in their search: A house of horror. If it isn’t written on their faces the moment they pull into the driveway, it will be by the time you turn the knob and invite potential buyers inside.

It is understandable if an undesirable home is being sought out by an investor skilled at transforming an ugly house into a profitable gem. The situation is also ideal for DIY enthusiasts who don’t mind rolling up their sleeves. Or, individuals who buy fixer uppers only to tear them down to acquire the land from which to build their dream house. Then, there are the rest of us—traditional buyers who prefer to walk into houses and envision how we can transform them with minor touches. We shouldn’t be tempted to strike a match, throw it, and run out.

If your seller places a buyer-repellant house on the market, we can only imagine what you, the REALTOR® in charge of selling that home, must contend with. The open houses are unfruitful, the ridiculous offers don’t even warrant a response, and yes, the excruciating wait and marketing efforts don’t yield the result you or the homeowners envision.

Hope, however, is not lost. Here are several simple solutions that the sellers can implement to sale their home faster and for a higher price tag.

Turn a once terrible reveal into a great deal.

Quick fixes like pressure washing the exterior of the house and landscaping the yard can make a property attractive to home buyers.
Quick fixes like pressure washing the exterior of the house and landscaping the yard can make a property attractive to home buyers.

It is one thing to not have enough bedrooms or bathrooms, a generous backyard, an updated kitchen, and the three-car garage that makes buying the house a deal breaker. However, it is another if the house in question meets all requirements but appears to be in a questionable state, even if nothing is structurally wrong with it.

Sometimes what a buyer can and cannot see causes red flags to emerge. Does the abundance of pet hair or pet smells have them concerned about the cleanliness and the air quality of the home? Are the dingy walls or orange carpeting drawing away from otherwise coveted features like coffered ceiling beams, crown moldings, or original hardwood floors? Does the sight of an overgrown jungle-like backyard and slanted storage shed have them envisioning weekend days spent slaving away just to access the space?

While the age of a home can explain stains and cracks a buyer sees, those details are oftentimes attributed to a lack of proper maintenance. It can be hard for the seller to see and think like the buyer. Since they are accustomed to their way of life, they might not notice the saturated scent of cigarette smoke that lingers on buyers’ clothes even after they emerged from the property hours prior. Although the seller fixed water damage, they might be oblivious to how potential buyers view visible stains and patches as out-of-pocket expenses they will accrue to remedy the situation.

When you meet with your seller to discuss placing the home on the market, be honest with them. Discuss what improvements they can make to not only get top value for their home, but also make someone walk in and fall in love with it so much they are tempted to buy it. They can avoid unnecessary scares with a few smart repairs. The wall patches, dull walls, and dated cabinetry can be livened with fresh paint. The gutters can easily be reattached. The shrubbery can be manicured for curb appeal. The low water pressure can be solved by a skilled plumber. The bathroom tiles can be caulked. If it helps, invite them to see other  comparables in their area to see how their house stacks up with one that is nicely presented.

Unclutter the clutter.

Sometimes, it isn’t the house itself that is the problem. As stable as a structure can be, buyers can get the illusion that something is amiss. They instantly chalk any imperfection with unforeseen problems that diminishes their interest in the house or results in a lowball offer. No one wants to feel as if they are standing in a construction site, a hoarder’s haven, or a childcare center gone awry.

Crowded kitchen counters and bathroom vanities tend to signal lack of storage space. This is also true for messy, overpacked closets and cluttered children’s room. Simply put, when a house is listed on the market, it shouldn’t look like it would have belonged in an episode of Clean House.

Time is a commodity, so it is understandable if your sellers are busy people. However, if they are motivated to sell the house, they should also be open to your suggestions. Suggest hiring a home staging professional who can help par down excess items or an experienced organizer who will transform their chaos into an organized system. If space is still an issue, the seller can pack up items not used on a daily basis and relocate any excess furniture into a storage unit while the home is on the market.

While bringing in professionals may be required in some situations, most homeowners would prefer to not spend an arm and a leg each time they turn around. More than likely, your seller will balk at the thought of spending any more money on a property they hope to relinquish themselves from soon. Motivate them with this obvious fact: They can sell faster and for a larger amount if the buyers don’t walk in immediately adding up what they must spend out-of-pocket to bring that property to their livable standards.

profile

Perfecting Your Online Profile

With thousands of newcomers relocating to the DFW area each year, the traditional standby of selecting a REALTOR® through recommendations by relatives, friends, and co-workers is null and void. In most cases, these individuals relay on a stranger—you—to help them plant roots in their new surroundings. This is why having an impressive online profile is critical. Establishing an initial impression that exudes professionalism and competence goes a long way in starting to build trust with that potential client. Here are six steps to creating a well-crafted, succinct profile that will help you put your best foot forward and market yourself.

1. LEAVE YOUR PHOTOS TO THE PROFESSIONALS. Yes, your Maltese puppies are cute, the images from your last vacation look inviting, and that Parent of the Year Award your child gave you is adorable. However, the first and most prominent image your potential client should see is you, so make it count. Your profile photo should reflect the person with whom your clients are hoping to do business with—you. A professional headshot is worth the investment. The photographer will know the best angle to make you look your best, the aperture setting to ensure you are the focus of the image and not your surroundings, and the ideal light to even out your skintone. While a session usually costs $100-$250, some photographers offer styling and make-up for an additional fee.

headshots

OTHER THINGS TO CONSIDER:

  • Avoid a full-length image. Instead, opt for a traditional bust shot (from the chest area and up) or a three-quarter length shot.
  • Don’t allow accessories to overpower your image. Keep it simple, and par it down. Remember, you are the focus.
  • When your clients meet you for the first time, they shouldn’t question whether or not they are meeting the same REALTOR® whom they originally contacted. As important as it is to have a professional headshot, it is just as important to update it every couple of years.

2. MAKE A LIST AND CHECK IT TWICE. The thought of writing your profile might leave you feeling a little anxious. You’re not a writer; you’re a REALTOR®. Take a deep breath. It’s not as difficult as it appears. Like everything else, it takes preparation and practice. On a sheet of paper, begin to list all of your designations and certifications, accomplishments, awards, and organization affiliations. Do you specialize in historic houses or commercial real estate? New to the real estate industry or is real estate a second or third career move? Then find ways to highlight your previous background. Were you in sales or customer service? Were you responsible for negotiating financial matters? How many hours of educational classes have you taken? Use the knowledge and experience gained to your advantage by highlighting them.

3. SHARE, BUT BE WARY OF OVERSHARING. Take your hint from the saying: “What happens in Vegas stays in Vegas” and apply it to your profile. What happens in your personal life should remain in your personal life…kind of. The main goal of your profile is to make connections. Whether you are a new REALTOR® starting out or an experienced one, one way to connect with potential customers is to find things you might have in common with them. Give them a glimpse of who you are because those details might be how they relate to you. Are you a volunteer for community organizations? Are you involved in a sports league? Are you an avid golfer, gardener, or beekeeper? Have you lived in other states? What traits do you have that can be an asset to them if they pick you to represent them in the buying or selling process? By nature, people are drawn to those whom they feel they share similarities with. Use this to your advantage and make a personal connection with them.

THINGS TO CONSIDER:

  • Did you graduate from the local high school? Have you lived in the community for most, if not all, of your life? Can you give them an inside scoop into the area because you are a resident yourself? Use this opportunity to emphasize your connection to the area and establish that you are an expert.
  • Know where to divide your personal life from your professional life; it is ideal to have social media accounts set up solely for your career so you do not unknowingly bleed the line between the two worlds. Use caution with what you choose to divulge about yourself. Your information is easily accessible since it is on the internet.

4. KEEP IT SHORT AND CONCISE. As you view your list and start to write your profile, continually edit it. Your potential client isn’t looking to read pages from your autobiography. Value their time by creating a concise profile that doesn’t surpass 400 words. Ideally, profiles should be between 200-300 words. Make every word, phrase, and sentence count.

THINGS TO CONSIDER:

  • Stay clear of industry-related jargon. You are not writing your profile for other REALTORS®; you are writing it to win over new clients. You want to avoid talking over their heads.
  • Check your grammar, punctuation, and spelling. Any glaring error will detract from the professionalism you hope to exude.
  • Enlist the help of co-workers and friends to read your profile and offer your input.
  • One of the common questions asked, is whether you should write in a first-person or a third-person point-of-view. While there is technically no right or wrong answer, most REALTORS® write their profiles in the third-person to maintain an air of professionalism and formality.

5. PROVIDE POINTS OF CONTACT. It should go without saying, but other than your image and an insight into who you are, potential clients should know how to contact you. List your telephone numbers, business address, and email. Also, note which method is your preferred method of contact and note what times it is best to reach you. The person shouldn’t feel as if they are participating on a scavenger hunt to reach you. Make it easy for them. If your number or email changes, update it immediately.

6. STAND OUT WITH MINOR TOUCHES. Think of ways you can enhance your profile that makes it even more attention-grabbing. In addition to your profile, consider including a “Get to Know Me” or “Why Choose Me” short video clip. You can also include honest reviews from prior buyers and sellers you worked with and allow their testimonials to help solidify your credibility.

THINGS TO CONSIDER:

  • Update your profile to keep it current and relevant.
  • Add active, professional social media accounts as they are marketing tools you can use to promote and also showcase your accomplishments. If you are not consistently updating your social media accounts, forgo adding it.

If, at the end of the day, you are still struggling with your profile, seek a copywriter or skilled writer to compose one for you. The ultimate goal to creating an effective profile is to get you results by adding value to your business. There is an abundance of real estate professionals who potential clients can procure on their behalf. With your profile, you can tell them exactly why they should choose you.

Collin County CCAR Pulse Stats

Collin County’s Real Estate Market Hits Several New Milestones in May

Collin County real estate continued to build momentum in May, setting records for new listings, listings under contract, and median sales price. Data from the Collin County Association of Realtors (CCAR) is indicative of the busy housing market that has witnessed a significant boost in the past few years.

“DFW, in general, is in a strong seller’s market right now,” says Jonna Fernandez, CCAR Chief Operating Officer. “The boom in the Collin County real estate market can be attributed to many things, including the companies and corporations that have chosen to relocate here, the great school districts, employment opportunities, and much more.”

A record-breaking 6,919 homes were listed during the month of May. This was a 17.6 percent increase from May of last year, making it the highest number of new listings ever recorded in a single month. Year-to-date, new listings are up 8.1 percent.

Median home prices also experienced a surge, rising to $319,678—11.1 percent higher than in May 2016. This is the highest median sales price ever recorded in CCAR history. The intense interest in Collin County can be credited to the area’s growth.

The number of listings under contract also increased 6.4 percent last month, as compared to May 2016. This is the highest number of listings under contract ever recorded in a single month.

Year-to-date, projected closed sales are up 12.6 percent, with no signs of slowing down as an influx of new residents and a spike in new home construction are expected. Fernandez said this offers an optimistic outlook for Realtors and their clients.

“There are no guarantees in real estate; however, we see the rest of the year definitely continuing with the seller’s market we have now,” she says. “May through August are always strong months for real estate, as most people plan their moves to occur during this time of year. While the end of the year may not necessarily be record-breaking as compared to the summer months, it will still remain stronger than what we’ve seen in years past.”

loans

Approving Buyers Just Got Easier

By Jake Perry, Fairway Independent Mortgage Corporation and Member, CCAR’s REALTOR®/Lender Committee

Fannie Mae just made it easier to qualify borrowers by making it less challenging to exclude debts they are not paying. As many of you know, one of the most common problems lenders face is overcoming high debt to income ratios (DTI).

Along with credit, capacity as it relates to DTI very commonly causes a loan to not be approved. Capacity is defined by Freddie Mac as “Lenders look at your income, employment history, savings, and monthly debt payments, such as credit card charges and other financial obligations, to make sure that you have the means to take on a mortgage comfortably.”

Often, the cause of the high DTI is not even the borrower’s debt. It’s simply debt for which they cosigned for someone else.

How many of us have had clients that we could not approve because they co-signed for a car, a credit card, or a student loan? In a lot of cases, the buyers didn’t even co-sign; they were borrowers for their adult child or relatives, but they don’t make the payments. Good lenders ask detailed questions up front about these debt obligations. If a debt is reliably paid by somebody else, it seems only fair that a lender would ignore that debt. Until now, Fannie Mae required that the debt be counted unless it was co-signed, not when the debt did not include the third party on the debt.

Fannie Mae recently made changes to enable lenders to exclude debts that the borrower does not pay. This includes non-mortgage debts like installment loans, student loans, and some other monthly debt,- as defined by Fannie Mae.

Documentation must be provided that the debt has been paid by another party for the previous 12 months. The other party does not have to be obligated on the debt as it was in the past.

This change to DTI is a tremendous shift. It means that some of your buyers will have more opportunities to buy the house that they want. They no longer have to settle for a less expensive house that they really didn’t want or, in some cases, be a buyer instead of a renter.