Help For Underwater Homeowners
Approximately 22.7 percent of all U.S. homeowners owe more on their homes than what they are currently worth*. At the same time, almost ¾ of them have an above market rate on their mortgages, adding to their financial burden. Because they have negative equity, they’ve been virtually locked out of refinancing their mortgage.
We have just introduced DU Refi Plus, a refinance program specifically for homeowners who are “underwater.” It allows borrowers to refinance their primary residence into a lower interest rate, or lock in a more stable fixed rate loan, even 125% LTV!
Here’s what you need to know about DU Refi Plus:
- The existing mortgage must be currently owned by Fannie Mae and have closed on or before May 31, 2009, with full documentation**.
- Mortgage insurance will not be required regardless of the new loan-to-value IF the original LTV was 80% or less.
Of course, you are in the business of selling homes, so you may wonder why you should share DU Refi Plus with your customers.
Take a long-term view… when the market rebounds, many homeowners will want to jump back into the market after holding off for so long. If you’ve helped clients in the past, even though you didn’t directly benefit from the refinance, you have enhanced your credibility as a real estate resource that puts the needs of your clients first.
Find our complete details on DU Refi Plus by talking with one of our loan officer today!
*Mortgage News Daily
**Final eligibility for the program is determined by Fannie Mae desktop underwriter
How Sellers Can Compete Against Foreclosures
Foreclosures seem like the deal of the century, so how can a traditional seller compete against them? Surprisingly, sellers have several advantages over foreclosures; the key is to know what they are and then communicate them to potential buyers.
Five Ways to Compete Against Foreclosures
Sell sooner than later.
For a while there was a lull in new foreclosures being added to the market. Although foreclosure auctions are still down from last year, activity is beginning to pick back up, and may likely add a greater number of homes to the market as the year goes on.
Outstanding Condition.
It’s not enough to paint or clear out clutter. Buyers are pickier now – they can be. Foreclosures have lower price tags, but they come with an extraordinary amount of work. The contrast of a home in perfect condition against a foreclosure that requires repairs may be enough to sway a buyer.
Price for small profit vs. windfall.
Buyers need to be prepared to receive lower offers than they want. Everyone is looking for a deal and homebuyers will not pay a premium for any home, no matter how beautiful it is. That’s particularly true when selling against the foreclosure down the street.
Include key words in the listing.
Foreclosures are full of uncertainty. It can be a long and discouraging process. Contrast that with the simpler transaction of buying a home with no title problems, no structural problems or repair needs, and a certain closing date. Word the property listing to highlight these benefits including such things as long-term owner or pristine condition.
Pre-listing inspection.
What would you rather buy – a home that’s move-in ready or a house that may require repairs, rehab, or at the least, a lot of sweat equity to make it livable? Sellers have that advantage over foreclosures that can be in poor condition. But that advantage disappears if an inspection turns up something unexpected. By having a professional evaluate a home in advance, the sellers can address anything that may be a deal-breaker.
Sources: Agentgenius.com, trulia.com
Mortgage Minute Video September
View the first episode of the Mortgage Minute. It features Jill Belconis, President of Shelter Mortgage. In this series she talks about appraisal regulations, and how our In-House Appraisal desk makes the process as smooth as possible. She also heads to the streets to see how much every day people know about the financing industry.
Let us know your thoughts on the topics, and any topics you would like to see in the future!
Rates Are at Historic Lows
Mortgage rates are back at historic lows! This is due to the recent movement in the market. Many people are taking advantage of this opportunity to save on their monthly mortgage payment. Shouldn’t you?
Rates today could mean savings of hundreds of dollars each month! It’s unknown how long these low rates will last, so be sure to take advantage of this opportunity to lower your payment, finally purchase the home of your dreams, or look into an investment property.
Don’t let your friends and family miss out on this chance either. If you are not in the market, they may be. If you have any friends or family in need of mortgage financing, we would be happy to work with them. A referral is the highest compliment we can receive!
Don’t delay! Contact us today to take advantage of this significant opportunity now!
Appraisal Changes Coming
Appraisers are gearing up for a big change September 1st – and that change will affect you and your customers. It’s called the Uniform Appraisal Dataset (UAD).
This new rule requires appraisals to be done in specific ways if the loan is to be sold to Fannie Mae or Freddie Mac. The goal is to standardize the reports so they are consistent between appraisers and market areas. It requires new software, new coding, and new data to be collected, so the changes may initially slow delivery times as appraisers get familiar with the new requirements.
Key Changes to Appraisals Include:
Standardized descriptions of property: Today, one appraiser might input “brick” for a home’s condition and another may write “average.” Hardly apples to apples. The UAD requires standard descriptions for a property’s condition, quality, view, and location:
Examples:
- Condition and quality will be scored on a scale of 1 to 6 (C1-C6 and Q1-Q6) with 1 being the best.
- Property views/location will use standard codes of A, N, or B – adverse, neutral or beneficial. A further list of codes provides more information, such as Mtn = Mountain or BsyRd = Busy Road.
New information: Additional data must be included by the appraiser:
- Number of days on the market for subject property and comparables
- Bathroom and kitchen improvements, including type of work and when it was done
Numeric data inputs: Dates, dollar amounts, number of rooms, lot size must be entered in specific ways.
- For example, appraisers that describe a bath and a half as 1 1/2 must now input it as 1.1… 1 full and 1 half. Two and a half baths will now be 2.2… two full and two half baths.
- Lot sizes below one acre must be converted to square feet.
What can real estate professionals do to help?
A key thing is to include necessary information in your property listings to save appraisers from spending time hunting it down themselves.
Our in-house appraisal desk is up to speed on the UAD format and will be working closely with our appraisers to keep the process moving smoothly. If you want to know more, please give us a call today!
QR Codes for Business
You can’t miss them, they’re everywhere! QR codes are popping up in magazine ads, on signs, in mailers, even on T-shirts.
A QR code is a quick response bar code. It’s square and contains a random assortment of markings encoded to link you directly with an advertiser’s online content. To use a QR code a person must have a smartphone with a camera and a QR code reader app, which can be downloaded free. Popular uses of QR codes are: deliver online coupons, email signup, sweepstakes entries, and links to product videos.
The question for real estate professionals is: Are QR codes a hip marketing trend or a valuable tool for providing information to buyers? The answer may be both
In the latest Mobile Barcode Trend Report by Scanlife figures show QR code use dramatically increasing. Active users grew by 850%, and the number of QR codes scanned grew by 810%. So, it’s definitely a growing technology.
However, as cool as QR codes are, advertisers are still searching for ways to use it and increase sales and awareness. Here are some promising opportunities to think about:
- Business cards: Include a QR code that links to a welcome video in which you reintroduce yourself. “Thanks for scanning the QR code on my business card. I’m glad we’ve connected. I would like to be a resource for you in the real estate market, whatever you might need… advice, information, or an agent when you are buying or selling a home…”
- Facebook link: Make it easy for prospects to “like” your Facebook page or to friend you. Include a QR code on sales materials that links directly to your wall. Make sure to tell prospects what they can expect if they “like” you. Weekly market commentary? Discounts or free upgrades when building a home? Free tickets to a local home or remodeling show?
- Property signs: Forget typing in a property listing’s URL or writing down the phone number. All interested buyers have to do is hold up their phone, scan the code, and they’ll be taken directly to your listing itself. It’s believed that many buyers will not consider a home unless they can first view it online, and QR codes make that easier than ever.
QR code usage is highest among users 25-34. These users are early adopters who also happen to be the same age as first time homebuyers! That alone makes it a technology worth considering!
Source: Scanbuy
Low Rates – Good for Everyone
The Federal Reserve made an unusual promise last week – it committed to keep the Fed Funds Rate near zero until early 2013 in hopes of stimulating the economy and housing market. It’s unprecedented – and gives prospective buyers and current homeowners a window to buy a home or refinance with a very low interest rate, which results in lower monthly payments.
Do you have customers who have hesitated to buy because they don’t have a sizeable down payment? Because both home prices and interest rates are low, buyers need a smaller down payment, which can help them get into a home with less saved.
In addition, there are many programs like FHA, USDA, and VA loans that offer low or no down payment options for those who qualify. This is a historic time for all home buyers, but particularly first time home buyers who don’t have another property they need to sell! Make sure you are reaching those customers with this news!
For clients for whom you’ve already helped to buy a home you can build goodwill and cement your relationship with them by letting them know how a refinance may relieve some of their monthly payment or allow them to reduce their term and pay off their mortgage sooner. It can be as simple as a courtesy call or email – it’s a gesture that shows you want to help them with all of their real estate needs, even when it doesn’t directly benefit you with a deal.
Fixed rates remain very low – and some adjustable rate mortgages are even lower! Give us a call today and find out how you can leverage this time of incredible opportunity into closed deals!
Maximizing Referrals
Word-of-mouth. It’s vital to the success of most businesses, but particularly to real estate professionals who rely on it to expand their customer base. Articles, blogs, videos all give ideas on things you can do to connect with your customers, but sometimes they are so tactical, they overlook the big picture.
Here are some big picture ideas for developing new referrals:
1. Revisit your referrals sources:
A good referral source is someone who is around other people who express a need for your service. So, get back to the basics. Think of what you deliver to clients. Such as: first time homebuyer counseling, short sale expertise, or knowledge of particular areas or neighborhoods.
Write down a profile of the customers who need that type of service. Then write down everyone you can think of who has contact with those type of customers. You may find you have referral sources you hadn’t realized.
2. Make it obvious:
Share testimonials and tell stories about customers you’ve helped to move into a home. Give examples. It’s much easier for a referring friend or acquaintance to identify a potential customer when you give them specific situations.
3. Motivate them to make referrals:
In real estate, this can be tricky, but a warm, handwritten thank you note is always appreciated and a referral back to them is especially valued.
4. Increase your visibility:
You know this one – more exposure to more people generates more referrals. It gets your name out there and builds on any other marketing or word-of-mouth already happening. It also cements your tie to the community you live in. This is particularly important for real estate professionals, who are often chosen for their knowledge and familiarity in the local area.
5. Develop an impeccable reputation:
This may almost seem too obvious to be in this article, but ultimately, if you don’t conduct yourself with honesty and integrity, negative word-of-mouth will outrun any positive buzz you work to create.
Source: www.marketingprofs.com
Pictures Can Make a Sale
With so many homes on the market all competing for a relatively small pool of buyers, how do you make your listing stand out? When buyers are making snap decisions about which homes to pursue based solely on internet listings, how can you be sure your properties are appealing enough to generate interest?
It may come down to the photos! Most home sellers don’t hire a professional photographer – they rely on their real estate agent, so here are key things you should know about how to take great photos:
- Quality vs. quantity: Some properties feature 20 photos, but not one of them is attractive. Often, they’re dark, out of focus, or neglect to show key areas of interest to buyers. Error on the side of fewer photos done well vs. lots of photos that are shot poorly.
- Prioritize exterior shot: This photo is all about curb appeal. This is the main photo that appears in MLS and it’s what determines if a buyer looks deeper into the listing. To take the best possible exterior shot, take it from 10-20 feet above the street level and with the sun behind you, illuminating the front of the home. If it contains a porch or entryway that’s always in the shadows, consider shooting the photo on a hazy or cloudy day so the contrast is minimal.
- Seasons matter: It’s August, but your listing still shows snow piled up on the roof? That’s a big no-no. It immediately lets the buyer know that the home has been listed for a long time, and plants the seed that something is wrong with it. Consider taking new photos in the spring and fall, to keep it fresh and current and to show the landscaping at its best.
- Stage the rooms: You’ve been told to remove all clutter and personal items when showing a home. That’s true, but when photographing a room, a few personal items make the photo livelier and more interesting. Just remove them again when you hold your open houses or bring clients through the home.
- Angles and lighting: You don’t have to be an architectural photographer to take decent photos if you do two main things. Work with your lighting and use angles appropriately. Inside, turn on as many lights as possible when taking a photo, and fill in darker rooms with additional lights. Draw curtains or blinds, making sure they are level if sunlight causes problems with the photos. Shoot rooms from an angle to make them appear more spacious.
- Pets don’t sell homes: Your sellers may think their pets are cute, but buyers usually do not. Be sure dogs and cats, and their food dishes or litter boxes are hidden.
Sources: Wall Street Journal, www.realestate.msn.com
7/1 ARM Means Stability and Low Rates
Homebuyers are looking for stability, yet they want to find a great deal. Do they want the assurance of a steady, fixed rate mortgage that’s locked in? Or, do they want the lowest rate they can find, often found in an adjustable rate mortgage (ARM)?
Our new 7/1 ARM gives your buyers the best of both, a rate that’s fixed for 7 years, and one that’s lower than most 30-year fixed rates! Right now, rates are in the 3’s!
Plus, because the 7/1 ARM is a portfolio product, which is an in-house investment, we can offer your customers more flexibility with rates, terms, and underwriting.
Who might benefit from a 7/1 ARM?
- Buyers who plan to move or refinance within 7 years
- Those who want a lower starting payment now, and anticipate increased income in the future.
- Buyers who recently had their house on the market but now want to remain in the home and refinance into a lower rate or receive cash out.
- Buyers with non-traditional credit.
- Those who want to deal with a local bank instead of multiple servicers.
ARMs continue to be a wise financial choice for many buyers.
Stability, lower rates, flexible underwriting, local servicing.
These are just a few of the reasons the 7/1 ARM may be right for your customers. Talk to them about it, or contact your loan officer for more details or ideas for marketing the 7/1 ARM!
