Category: General

I’m
not sure who invented the snooze button on an alarm clock, but I’m willing to
bet that 99% of you have whispered a silent prayer of thanks once or twice for
the genius of that woman or man.  The
snooze button allows us to more gradually transition from a dream state to
reality, if you will, and sort of prepares us to take on a new day.  (Wow, that sounded REALLY corny!)  I have a point, I promise.

Any
realtor/lender worth her/his weight in goose down comforters is always on the
lookout for potential clients whether it’s in line
at The Home Depot buying PVC pipe, sitting at a local Starbucks sipping on an
overpriced beverage, or attending a local church carnival where the most
exciting “ride” is a tall sweaty guy who’s spinning kids around like a
helicopter.  They’ll strike up a
conversation and somehow find out that the person they just met lives in AN
APARTMENT.  Bingo!  But then the new acquaintance utters THAT
phrase: “Yeah, I just signed a 12-month lease.”
A good realtor/lender will smile, hand the person her/his card, and say,
“Give me a call when you’re ready to move.”
But a great one will say, “Good!
You’re in the PERFECT position for buying a home.”  They are?

When
someone has just signed a 12-month lease, they’re warm and comfy under the
covers, and they’re dreaming of living in a home one day –
and at this point, it’s not a reality.
If they get too comfortable, though, they wake up halfway through month
11 to a notice from their landlord/apartment manager that it’s time to renew
their lease – it’s a metaphorical alarm clock with no snooze button and no gentle
transition.

That
first meeting between the great realtor/lender and the person who’s renting is
like the alarm clock going off and being able to hit the snooze button.  Just before hitting snooze, the
realtor/lender plants the seed in the renter’s mind that buying a home is THE
next step –
nothing more, and the renter returns to blissful slumber and dreaming of being
a homeowner.  Three months later, the
alarm goes off again in the form of the realtor/lender saying it’s time to look
at the renter’s credit so there’s sufficient time to do any repair or scrubbing
–
and it’s time to hit the metaphorical snooze again.  At the six-month mark, the alarm goes off,
and it’s time to start a casual internet search to determine what types of
homes and areas the buyer likes and what it will take to qualify for them –
hit the snooze bar again.  Nine months
into the lease, the alarm sounds, and it’s time to start looking at homes
because credit has been repaired and the buyer has a good idea of what she/he
wants and knows what she/he is qualified to purchase.  When the 12-month lease is up, the buyer
wakes up to the reality of being a homeowner.

If
you’ve never heard of the comedian Brian Regan, go to YouTube and look him
up.  I’d say I’ll wait, but you might be
a while –
he’s got a lot of great stuff that’s absolutely hilarious.  As a stand-up comedian, he travels a lot, so
it was inevitable that the airline would lose his bags at some point.  When they did, he decided to tell the story
as part of his act –
I’ll do my best to recreate it here:

“Oh, hi.
Yeah, my bag?  I gave it to you a
few hours ago, and now it’s not spinning around on that thing over there, so I
was wondering what sort of hell on earth I should prepare for.”  The clerk at the desk said, “Yeah, if it
doesn’t come in on this afternoon’s flight, it’ll come in on tomorrow morning’s
flight, and we’ll deliver it to your hotel.
But don’t worry, we have this for you.”
He reached under the counter and produced a small see-through bag with a
zipper on top with a label that read “essentials kit”.  “Oh, THESE are the ESSENTIALS? Then I over
packed.  I thought I needed all those
things I meticulously put in my suitcase.
I stand corrected.”  If that was
really the essentials, then you would never need to go to work again.  “Whatever happened to Harry?”  “Oh, he doesn’t need us.  He happened upon an ‘essentials kit.’  He opened it up, and it was filled with food,
shelter, and love.”

Obviously,
his delivery makes this far more hilarious that just reading it, but I still
think it’s funny, and it leads me to my point for this week’s column.  In the real estate and mortgage world, many
people do “over pack” and overlook that there are just a few essentials to
getting them into a home – quite often, they over pack with excuses.  Someone once taught me that, if you take away
someone’s excuses, you help them see their goals more clearly.  Here are three excuses people use –
quite often, it’s subconscious –
when they choose to continue renting rather than purchasing a home, a goal they
should be able to see more clearly:

1.     “I
can’t get together enough money for a down payment because rent is so high
and/or I have student loans.”  These are
reasonable and viable factors to consider, but I’ll ask you this: how much do
you THINK you need?  I’m willing to bet
your answer will range between 10-20% of the price of a home.  There are so many down-payment-assistance
programs and loan products requiring only 1% or 3% of the purchase price, that
I could bore you for hours –
let’s not.  Suffice it to say, Excuse #1
is dead.

2.     “I
can’t get a loan because I don’t have a ‘conventional’ job.”  Sure, in 1965 when all the groovy cats were
looking to buy houses, most of them worked a 40-hour-a-week job for “the man”
and could qualify.  We’re in the 21st
century, folks!  “Conventional”
jobs are quickly becoming the minority, and smart lenders are LOOKING for ways
to lend to people like you.  Don’t go
your local bank: they’re still stuck in the old days with shag carpet from
1965.  Enough said: Excuse #2 is dead.

3.     “There
aren’t any available homes.”  While I’ll
agree with you that inventory levels are low, they’re not at zero.  Now,
when you say there are no houses, that statement usually ends with “that have
the chef’s kitchen I want” or “with the party patio that my friend has.”  Continuing to rent isn’t going to make those
dream houses appear –
in fact, that will push them farther out of reach.  With values continuing to increase, if you
buy now and wait a bit, your house will most likely appreciate to the point
that you can pull out some of that equity and put in that chef’s kitchen or
party patio.  Excuse #3 is dead.

Remember,
take away the excuses so you can see your goals more clearly.  That’s the “essentials kit” you need –
I can’t help you, though, if your airline loses your bags.

Today’s
edition of Priority
Pulse may
seem a bit elementary, but a refresher might be a good thing –
especially if you either overindulged watching Sunday’s Super Bowl or the
result didn’t go your way.  Below, I’ve
included a Loan Application Checklist.  Can
you correctly explain why each item is required?  You need a “C” or higher to pass –
if you don’t, we can give you some tutoring.

PROPERTY INFORMATION (if you already have
a house)

oPurchase
agreement

oIf
you are selling your current home, copy of listing and/or contract

oIf
you have sold your current home in the last 6 months, copy of settlement
statement (HUD 1)

INCOME AND ASSETS

oPay
stubs for the last 30 days –
most recent

For the last two years:

oNames
and addresses of each employer –
for full
two years

oW-2s
/ 1099s

oStatements
for each bank, mutual fund, and/or investment accounts for last three months
(ALL pages)

If you have made any large deposits to
your accounts:

oExplanation
and source for deposit

If large deposit was a gift:

oSigned
gift letter (lender can supply)

oCopy
of gift check

oCopy
of deposit receipt

If you own more than 25% of a business:

oCorporate
or partnership tax returns

oPersonal
tax returns (all schedules)

If you own rental property:

oTax
returns (all schedules) for the last two years and current rental agreements

oYear-to-date
Profit and Loss

Retired, Disabled, Social Security:

oPension
Award Letter

oSocial
Security Award Letter

oDisability
–
provide proof of three year continuance

If you are counting child support as
income:

oCopy
of divorce settlement or child support order

oCopy
of child birth certificate

oProof
that money has been received for the last 12 months

Explanation of credit report anomalies,
including:

oLate
payments, charge-off collections, judgments, and/or liens

oBankruptcy
filed within last seven years (bring a copy of your bankruptcy papers)

oIf
renting, need landlord name and phone number

oInquiry
letter

VA LOANS

oCopy
of Form DD-214, Report of Separation

MISCELLANEOUS

oPhoto
ID and proof of Social Security Number

oResidence
addresses for the past two years –
ALL

oIf
you are not a citizen, a copy of the front and back of your green card or visa

oName
and number for home owners insurance

oDisclosures

This
past week, word had reached my ears that the federal money available for
homebuyers in a certain grant program would run out by April 1st
of this year –
despite the date, I’m fairly certain it’s not intended as some cosmic April
Fool’s Day joke.  At any rate, a real
estate agent that I’ve worked with for many years felt it would be a good idea
to make a big deal of this and put together some Facebook and Instagram
posts letting potential homebuyers know that time is running out.  No argument here.  Anyone who’s sort of been sitting on the
fence about buying a home could use a little nudge, and this might be just what
they need.

After
I had created the posts and put them out there, I started to think about what
will happen once this federal grant does run out.  What will potential homebuyers do who need
help coming up with a down payment?  And
you know what the next thing was that popped into my head when I asked myself
that question?  A scene from the movie
“Men in Black”.  I’m sure you know which
scene.

Agent
J (Will Smith), in pursuit of the guy in the Edgar suit (Vincent D’Onofrio),
has fired his laser gun in an attempt to stop the guy in the Edgar suit.  Agent K (Tommy Lee Jones) quickly pulls J
aside and admonishes him: “We do
not discharge our weapons in view of the public!”  J, frustrated by being stopped in his
pursuit, complains that in times like this, the rules need to be thrown out the
window, and K responds with, “There’s
ALWAYS
an
Arquillian
Battle Cruiser, or a Corillian
Death Ray, or an intergalactic plague that is about to wipe out all life on
this miserable little planet, and the only way these people can get on with
their happy lives is that they DO NOT KNOW ABOUT IT!”

So,
I now return to the question: What will homebuyers do when this federal grant
program runs out?  And to answer it, I
invoke the wisdom of Agent K: There’s ALWAYS a federal grant program or a
state-sponsored incentive to help homebuyers –
and there always will be in one way, shape, or form.  Of course, rather than keeping the public
FROM knowing about them, we need to shout this from the rooftops so we can all
get on with our happy lives.

According
to an annual survey conducted by NeighborWorks
America, 71% of Americans
were unaware/not
sure
about down-payment-assistance
programs.  The same survey revealed that
77% of those
with student debt said they had never heard or were unfamiliar with loan
counseling programs from nonprofits.  In other words, if all these folks hear about
is one federal grant program, and it’s about to run out, it’s likely a high
percentage are just going to give up and keep renting.  So, while we keep the Arquillian
Battle Cruisers, Corillian
Death Rays, and intergalactic plagues in check, let’s help homebuyers know they
have options –
and always will!

Every
few weeks or so, I take a look at my email “junk” folder out of morbid
curiosity.  It’s borne of a few things
I’m thinking at the time: (1) how good is the filter I have in place; (2) is
there anything in there that should have come to me in my regular folder but
didn’t; and (3) how many millions of dollars have I
missed out on because I didn’t respond to the Nigerian prince with my banking
information in time –
that one’s always a kick in shins. I
think I’m smart enough to determine what’s junk and what’s not without the help
of a filter/folder (but it is nice to have something do it for me).  We
as humans are equipped with an internal “junk mail” filter in our heads –
some are better than others –
that we use every day.

In
the real estate world, this could not be more true for both agents and
customers.  Before I go on, though, let
me explain that just because something is viewed as junk mail doesn’t mean
there’s no intrinsic value to it –
but there IS NO VALUE to it if it doesn’t get opened.  Can we agree on that?

Don’t
kill the messenger, my agent friends, but the following items/practices have
become or are quickly becoming “junk mail” in the eyes of a potential customer:

•  Facebook
posts for listings/open houses

•  Facebook
Live videos/Instagram
Stories

•  Offers
of a free market analysis

•  A
YouTube video about a certain program/initiative

There
are a lot more things that fit into the this category, but I think you get my
drift.  (Let me say once again: these
items aren’t worthless –
there’s some great information contained in them –
but if they’re not being opened, then they’re not bringing much value to the
table.)  The reason they’re seen this way
is there’s NOTHING that makes them stand out –
ESPECIALLY at first glance.  You can sit
there and say, “That doesn’t apply to me.
I’ve had a number of people call me off my Facebook posts/offers of a
free market analysis.”  I’m not going to
argue that, but I will say this: if your posts looked like all the others, then
the fact you got someone to call was either down to luck, plain and simple, or
you’ve done something to find favor with the Internet gods.  (I’m leaning more toward the former but won’t
rule out the latter –
wouldn’t want to jinx myself.)  With that
said, though, I’ve seen some very effective methods that agents have employed
to make themselves and/or their messages stand out.  I’m not going to give away their secrets, but
I can certainly help you come up with your own ways to avoid the “junk mail”
filter in customers’ heads.

The
“junk mail” dilemma applies to customers, too, I assure you. If
you want a top-notch real estate agent to represent you in the purchase of a
home, you’re going to need to make yourself stand out, too.  Seriously, do you want someone who’s just
going to put you in a car and drive you around or someone who’s going to have
an arsenal of talent and experience fully at your disposal to take out the
competition and clear the board FOR YOU? If
you’re using phrases like “I’m not sure if . . .” and “I don’t know if it’s the
right time . . .”, this won’t cause your potential agent to get up and walk
away, but she/he is definitely going to start mentally sliding you over to
her/his “junk mail” folder.  If you
REALLY want their attention and make sure you land squarely in their “Inbox”,
THIS is the very simple statement you should open with: “I’ve already been to a
lender, and I’m qualified –
not just prequalified –
for $XXX,XXXX.  Let’s go look at some
houses!”  But hurry before all those
folks with money from the Nigerian prince go looking at the same houses!  It’ll be a kick in the shins if you don’t.