Tag Archives: exclusive buyer office

Tighter Lending Rules Keep Some Buyers Out

In response to the current situation in the mortgage market, where foreclosure rates are at an all time high, lenders across the board are tightening up their lending requirements, making it more difficult for buyers to qualify for a mortgage.

Gone are the days of 100% loan-to-value mortgages. While some may see this as a barrier to homeownership, it is actually a blessing, because nothing is more financially devastating than a foreclosure on one’s credit history. According to Carolyn Said of the San Francisco Chronicle, who interviewed a number of larger lenders, explained that the new standards fall into the following areas:

Ability to repay. Buyers are no longer being qualified at the low initial rate. They must qualify for the loan payments at rates equal to what the loan would be if it reset at a higher rate.”

Down payment. Lenders want buyers to put some money down, even as little as 5 percent or 10 percent. Loans for 100 percent of the price are very hard to get.”

Credit score. Credit scores range from the high 300s to the low 800s. Borrowers with a credit score above 680 are likely to qualify for a reasonable deal. Between 660 and 680, they may qualify, but the deal could be pricey. Potential borrowers with a score of 620 or less need to raise their scores before they can qualify.”

Income and income verification. Producing proof that a borrower has a job is key; "stated income" loans are much more difficult to get. Also lenders are unlikely to approve a loan in which the home buyer will spend more than 45 percent of his gross income paying off debt, including paying the mortgage.”

Cite Source from Realtor Magazine,click here.

While these changes may delay homebuying plans for some buyers, this is actually a blessing in disguise–because these new standards will cause buyers to improve their financial situation before taking on the huge financial burden of taking of a mortgage. It will also benefit buyers in the long term, because these new standards will ensure that they stay on path to a healthy financial future. For buyers who are financially capable of maintaining mortgage payments, but who do not qualify due to credit scores, there are still alternatives available such as lease-to-own.

However, buyers need to keep in mind that a mortgage will come into the picture, at some point in the future. Therefore, buyers who choose this route should plan to financially position themselves during the lease period in order to qualify for a mortgage when the lease period is up. Buyers should also have a decent down payment–at least 10% of the purchase price–to demonstrate financial capability to sellers who would consider lease-to-own arrangements.

Bottom line…

While it is now tougher to qualify for a new mortgage, the path to homeownership is not dead in the water. It just takes more long-term planning and financial considerations on the part of buyers, which will only help to benefit them over the years. It is well worth the peace of mind that buyers will have–knowing that they have made the right moves to make sure they can stay in their homes, and stay on the right path to a secure financial future.

How to Hire the Right Exclusive Buyers Agent in 5 Easy Steps.

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Unfortunately, buyers often make the mistake of working with the first agent they come into contact with. The following information offers a practical and easy system for searching out potential candidates and selecting the right exclusive buyers agent for the job at hand.

Buyers need to know what options they have available to them, and not let others make these decisions for them. Isn’t there enough of that going on these days?

With knowledge comes the power to make the best practical decisions possible, real estate decisions included.

Step 1: The Search – According to the National Association of Exclusive Buyer Agents (NAEBA), only ½ % of all real estate licensees are truly buyer‘s agents. The best way to begin looking for an exclusive buyer‘s agent is to do a search online using the term "exclusive buyer‘s agent" and including the desired property location. A prospective buyer should visit at least 3 to 4 web sites and pay attention to details like professional impression and the overall message communicated in the web site. Buyers should ignore hype that comes from biased sources. For example, a biased source will choose one particular agency to handle all of their real estate inquiries to the exclusion of all others, instead of having a directory of several buyer agencies. This takes away from a buyer‘s right and freedom to choose the best representation for them. In truth, one size does not fit all; therefore, relying on biased sources is quite questionable.

Step 2: The Interview – After finding the best two or three candidates, the next step is to set up an interview. At the interview, a buyer should pay attention to detail and ask plenty of questions. Buyers should ask candidates to address any concerns, and be prepared to discuss real estate goals in general. The goal here is to uncover enough information about a particular agent in order to get a feel for each personality interviewed in order to make the best choice. When concluding the interview, buyers should inform all candidates of when they expect to make a final decision and then notifying each candidate by phone or e-mail, regardless of whether or not the candidate was successful in landing the job.

Step 3: The Selection – After concluding the interview process, which can occur online, via e-mail, in person, or over the phone, the selection process begins. The main goal of this step is to determine the best candidate for the job by considering the comfort level of buyer during the candidate‘s interview, assessing the candidate‘s level of knowledge and expertise, as well as, seeing whether personalities between buyer and candidate click or clash. Buyers should be aware of how an agent handles their questions and concerns. Does the agent seem honest, workable, and flexible? Does it seem like the agent is trying to push their own agendas, trying to use money as incentive or bait, or discouraging buyers from interviewing with other exclusive buyers agents? These are all important considerations. As small as they may seem, these traits reveal the quality of an agent‘s character and the nature of their motivations. This is good for a buyer to know upfront.

Step 4: The Exclusive Buyer Agency Agreement – After buyer determines the best exclusive buyer‘s agent to work with, the next step is making the working relationship official through an Exclusive Buyer Agency Agreement. There are currently many misconceptions about this type of agreement. Some buyers are reluctant to sign one because they do not understand what it is for and why it is important for them to have one with the right agent. An Exclusive Buyer Agency agreement establishes the boundaries and ground rules of a working relationship between a buyer and their chosen agent. Without this agreement addressed upfront, important issues become a matter of chance and fate. Buyers and their agents should negotiate the terms until they both feel good about the agreement. Expectations are set and mutually understood. A proper Exclusive Buyer Agency agreement avoids misunderstanding and unwelcome surprises, as well as, prevents wasted time and effort. Buyers and their agents should spell out the details of how they should work together in writing, before actually starting to work together.

Step 5: Getting Started – Once an agreement is in place, buyers should meet with their agent to review goals and options based on the information discussed at the interview. In this step, the agent prepares the buyer for what is ahead. The agent will help buyer determine affordability, shop for the best financing, find the best properties that fit buyer‘s criteria and qualifications, help negotiate for lowest price and best terms in favor of buyer, and manage buyer‘s side of the transaction to closing while watching for, and handling, problems that may arise. The bottom line is that an exclusive buyer‘s agent is a buyer‘s best friend in real estate, and buyer‘s should make sure that they choose the right one for themselves.

Suzette West, RECS, EBA
Exclusive Buyers Agent Seattle