Episode 2 of “Success From Scratch” is here.
In this week’s episode, team leaders, Prakash and MaryJane Mathew will share some best practices on how they started and how it got them to where they are right now – a successful TEAM.
“The secret is with the basics, practice makes perfect!” -Prakash & MaryJane
Episode 1 is out!
Welcome to our first episode of success from scratch. Each Wednesday we will highlight a staff member, partner or?top producer just like you.
For this week’s episode, ?watch and learn how our very own Joe Potts, started in the real estate industry and how he managed to be a wildly successful team leader today.
His secret? Find out by watching this:
“If it’s not on your schedule, it doesn’t exist!” – Joe Potts
Selling a home can be a difficult task for even the most seasoned of sellers. There is so much that goes into the process of placing a property on the housing market. First, the owner needs to get the home in condition to present it to potential buyers. From there, taking proper pictures that display your residence in its best light is a must. These are the images that are going to grab the attention of those that are searching through the housing market. Unfortunately, even the best pictures don’t ensure that your property will be seen. After all, you are competing with your neighbors for the attention of a select few.
As with any competition, it is important to find an edge. This is where an experienced realtor can be your ace in the hole. With an extensive list of interested buyers, as well as the knowhow to market your listing to a greater audience, real estate agents make it their mission to get the most money for your property. When you have a team of skilled agents on your side, the competition gets left in the dust!
Think you have to wait three to seven years after a foreclosure before you can get a new loan? You may be able to cut that in half.
Typically, you have to wait for years after a foreclosure to get the financing necessary to buy a new home, but you may be able to get a loan much sooner if you improve your credit score, budget and save. Throw extenuating circumstances into the mix, and your wait time could be even less.
Were you one of the millions of Americans that suffered a foreclosure in the last several years? If so, you are well aware that it leaves a black mark on your credit and prevents you from obtaining the financing to purchase another home for three to seven years, or longer depending on how you handle your money after the foreclosure.
But, you may be able to drastically reduce your wait. In fact, if you are able to prove that you experienced an “economic event” that caused your household income to fall by 20 percent of more for a period of at least six month, you may qualify for financing within a year. You must be able to demonstrate, though, that you have fully recovered from that event and agree to complete housing counseling prior to closing.
Whether or not you have experienced a life-changing economic event, you can take steps to shave off time from that seven-year waiting period. Here’s what you need to do.
Improve your credit score.??
A foreclosure can cause your credit score to drop by up to 150 points. In order to qualify for another home mortgage, you’ll have to compensate. Start by paying your bills on time.
Thirty-five percent of the points that make up your FICO Credit Score, the standard credit-scoring model used in today’s lending environment, is based on your payment history. Just to reiterate: that’s more than one-third of your credit score. If you have a poor payment history (in other words, a lot of late payments), you’ll have trouble qualifying for any loan because your credit score demonstrates you are a risk. The folks over at?USnews.com?agree, saying, “Accounts that are 90 days late will have a bigger negative impact on your score than those that are 60 or 30 days late. So pay off the most past-due accounts first, and gradually catch up on all your payments.”
Reducing your debt can also have a big impact on your FICO Credit Score. In fact, at 30 percent, a lower debt to income ratio the second largest factor in determining your credit score. Having some debt isn’t necessarily bad, but how you manage it can be. Visit?MyFICO.com?to learn exactly how debt can affect your score.
Other factors used to determine your credit score include how long you’ve had credit, the types of credit you use (retail, installments, etc.), and whether you’ve opened any new accounts.
Create a budget.
Having a budget is key to turning your finances around. Without a budget, it’s easy to miss payments or run out of funds before the next paycheck arrives, necessitating a credit card withdrawal that increases your debt and ultimately impacts your credit score. The good news is setting up a budget is relatively easy.
First, record all your sources of income. Then, gather your financial statements, including bank statements, utility bills, credit card bills, and any other payments. Add to that a list of your monthly expenses, such as car payments, auto insurance, groceries, utilities, housing costs, entertainment, and anything else you spend money on. (Be specific.) This should give you a good indication of what’s coming in and what’s going out.
Next, total your income and expenditures and make adjustments as needed. You may find you need to cut out that double latte, or you just might find that you have some extra money every month that you can use to first reduce your debt and then to create an emergency fund. An emergency savings fund of three to six months’ worth of living expenses is key to demonstrating to a lender that you are prepared financially to manage a mortgage again.
There are several great programs and tools out there that can help you get your finances back on track, including?Dave Ramsey’s Total Money Makeover?and?Mint.com.
Choose your future housing wisely.
Let’s be honest: you probably lost your house in the first place because you bought more house than you could afford or because you didn’t have a savings buffer set aside to help you get through a financial hiccup. Your newly established budget should help you avoid repeating that mistake.??Once you know how much money is coming in and how much is going out, you will know definitively what you can afford to pay for housing. Note: you should limit yourself to house payments of no more than 28 percent of your total income.
Save for a down payment.
Again, if you want to buy a house again as soon as possible after you have go through a foreclosure, it’s essential that you have a budget to help you improve your credit score and save money. Once you have your emergency account fully funded, you need to save for a down payment on your next house. How much you’ll need in the bank depends on the cost of the house you intend to purchase (since the amount of the down payment is a percentage of the purchase price) and the type of loan you will be getting. Typically, for a conventional loan, you’ll want at least 20 percent to avoid private mortgage insurance.
Use extenuating circumstances to your advantage.
The FHA made it drastically easier for homeowners who’ve suffered a foreclosure to get a new loan by shortening the wait time if there’s been extenuating circumstances. But what qualifies as an extenuating circumstance?
First, the “economic event” that led to the foreclosure must have been something beyond your control such as a job loss or illness. Also, the event must have reduced your household income by 20 percent or more for a period of at least six months. This must be documented by an FHA-approved mortgage lender using tax returns, W-2s, terminations notices, employment letters, and more.
You also have to then reestablish your credit for a minimum of 12 months after the foreclosure with no late payments or other issues, and complete at least one hour of HUD-approved housing counseling.
If you complete these steps, you will be well on your way to re-establishing a promising credit score and securing a new mortgage – even after a foreclosure.
The number of times a particular property is scheduled for a?home?showing?is a good indication of how much interest buyers have in that listing. Similarly, tracking showings on a nationwide basis can offer a big-picture look at home buyer trends and the level of overall interest in buying a house.
According to recent numbers collected as part of the ShowingTime Showing Index, home showings increased 7.3 percent year-over year in September, with big increases seen in the Northeast and Midwest. In fact, the Northeast saw the biggest annual increase, rising 11.5 percent over the same time last year. The Midwest rose 8.3 percent and the West was up 7 percent. The South was relatively flat from last September, though that is likely due to the impact of recent hurricanes rather than any regional lag in buyer demand.
Taken as a whole, the data suggests that there is growing interest in homeownership among Americans, with significant increases in the number of home showings across nearly every region. However, since home sales aren’t showing equally large gains, it could be an indication that there are a lot of interested buyers but not as many homes available for them to buy.
A?report?released by?Down Payment Resource?shows that 61% of first-time homebuyers purchased their homes with a down payment of 6% or less.
The trend continued among all buyers with a mortgage, as 73% made a down payment of less than 20%.
An?article?by?Chase?points to a new wave of millennial homebuyers:
“We teamed up with Google to help us better understand what customers are searching for and how the home buying landscape is evolving.?We found that millennials?and first-time homebuyers?are making a big splash in the market, and affordability remains top of mind.”
Among millennials who purchased homes, David Norris,?Loan Depot’s Head of Retail Lending,?said:
“It’s clear from the survey results that Millennials have a lot of anxiety built up about the home buying process.
There is good news, however, as there’s more flexibility than most Millennials think regarding how to qualify for a loan and what’s needed for a down payment.”
If you are one of the many millennials who is debating a home purchase this year, let’s get together to help you understand your options and set you on the path to buying your home. I can also recommend?a local lender to help with your Mortgage Loan?pre-approval. Call me at 972-800-7369.