Sell a house: Advice from the Mortgage World

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Image courtesy of phanlop88 / FreeDigitalPhotos.net

With the hot spring and summer market on it’s way out, I find this a good time to talk about selling homes…

First and foremost, find a great Realtor.  Second, many times a little mortgage advice can help increase the chances of selling your home by adding perspective to clients.

Joe and Julie Johnson (my defacto generic homeowner name to protect clients) purchased a very nice home in November and chose to buy before selling their current home.  With the slower purchase market it was taking longer than expected so I offered them a brief analysis they could offer to anyone that came to see the home in January.  The home sold in February and Julie called to thank me because the video I provided helped the buyers make the decision to buy now.

So what did I send her?  Nothing revolutionary.  With a lending environment where interest rates are rising and expected to rise throughout the year I put together a brief 3 minute video that could be emailed to any client.  This video walked the prospective buyer through their purchasing power in the current environment and what it could look like in the coming summer or fall.

With all the quibbles over a few thousand dollars here or there with a purchase price, helping new home buyers understand how much time factors into this equation, and how much will be lost financially by waiting until rates and home prices start to rise is a significant advantage to the home seller.  I try to help put each of my clients in the best position both before and after the mortgage itself. I believe in a lifelong commitment to each and every client.

Think the video can help you, a client or friend out?  Here it is, feel free to use this and pass it on to anyone you feel it can help: http://mcedge.tv/16jgce

-Matt

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New Homeowners: Down Payment Assistance

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Image courtesy of Stuart Miles / FreeDigitalPhotos.net

Over the past year I’ve been reminded of one thing constantly: A true, detail oriented person is few and far in between. I’m certain this pertains to some industries more than most but I see it consistently in the Mortgage realm and with Realty as well.

A young couple that was referred to me by a past client were first time home buyers and were looking to take advantage of any assistance they could find. They knew a Realtor through the friend of the family who helped them find a home in the area they were looking at.  Low and Behold, it was in the city of St. Paul and the borrowers looked to be eligible for Down Payment Assistance. The Realtor looked into everything for them and told them which amount they would qualify for, convincing them to put an offer on the house.  Their offer was accepted.

When they came to me with the Purchase Agreement and nothing but excitement about the Down Payment Assistance (DPA) Program I made sure to let them know that until we have the final approval from the program, that they shouldn’t count on the money for certain.  I said this for two reasons.  

1. Each family has to qualify for a program, the requirements vary from program to program.

2. Not all banks or Lenders accept these programs and we will need the Lender to accept the program as well.

With each of these, I make sure on my end to walk them through each step, so I fill out the application for Assistance for them while simultaneously working to get Lender approval. Looking over the DPA I realized there was a very strict income restriction, which is typical.  The unfortunate part, is that this resulted in the young couple qualifying for $2,500 instead of the $5,000 the Realtor promised them, leaving them disappointed but still able to buy the home because they had been saving up a down payment in the interim due to my advice.  I’m a geek, I read and read and read because I won’t make a promise to someone unless I’m 150% sure it’s true. 

The devil’s in the details, as they say.  I’m glad I was able to prepare them for a very serious problem before it cost them their new house. Their daughter is just starting to crawl and I bet she loves the house too!

-Matt

Small town ideals: Where I’m from and who I am.

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Image courtesy of rosezombie / FreeDigitalPhotos.net

I wanted to take a break from some of the client stories I’ve been sharing the past few weeks and share my distant background as I feel it directly shaped how I see the world.

I grew up in Winnebago, MN. The census states a population of 1400 people, I’d guess it’s more accurately under 1000 within the city limits. It’s a tiny town smack dab in the middle of southern Minnesota.  My grandparents still live there and my uncle runs the family business, a plumbing and heating shop over 55 years in the making.

All this to say that I grew up watching and learning how my family ran a business in such a small footprint successfully for so long and it’s taken the last 25 years to process and articulate what became an instinctive part of my personality.

To survive in a small town, it isn’t the flashy marketing that brings business in the door, it’s the individual relationships that you foster each day.  It’s the reciprocity of kindness and help, education and teamwork.  The proverb “It takes a village to raise a child” is the mentality of this town.  A town this small only survives on the premise of each person aspiring to be a part of the whole and pitching where they can to boost everyone up.  You don’t drive 15 miles to Wal-Mart to buy a birthday card when Nancy sells them at the grocery store. You support your friends and family and your town IS your family.

This is the same way I have built my business of 14 years.  By helping my clients succeed, I succeed in kind.  I always use the phrase, my clients are my family. I would do anything to help each and everyone of them whether it’s helping them set up a retirement account with a financial planner or referring other clients to their business.  I also offer advice and ask advice about parenting with my two young kids.

Family communication with a home purchase? Yes, I do that too!

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Image courtesy of jscreationz / FreeDigitalPhotos.net

This past August I was helping a young couple purchase their first home.  It was as simple and straight forward as could be.  Julie’s parents were kind enough to help out with the down payment by giving a gift to the young couple.

The Bank had everything they needed well in advance of closing from Jim and Julie and we had a signed gift letter from Julie’s parents.  There was only one item left for us to issue a final approval and be ready to close.

If you have purchased a home in the past 2-4 years, you may be aware of how much additional documentation is needed from the mortgage applicant these days compared to 5-10 years ago.  Obviously, a first time home buyer would not be aware of how extensive this can be until they enter into the process.  With gift funds, the money needs to be traced from start to finish, meaning we need to show the account the money came from and the account that received the money to coincide with the provided gift letter.  This is where we hit a brief impass.

Julie’s father refused to provide the account statement showing the money leaving the account.  I asked Julie if it would be alright for me to talk to him and explained to him the process and why these provisions had been put in place, he began to understand even though he didn’t agree with it (who does?).  The next big quirk was that he did not want Julie to see his financial account information as he felt it was an invasion of privacy as well.

I came up with a solution to our speed bump after a little thought.  For the same reason, he would not fax the information to me or send it digitally via email because he didn’t trust technological security. What we decide to do was a little cumbersome for Julie but it solved the issue.  We had her father seal the account in an envelope and have Julie hand deliver it so we could bypass the post office, the computer and the fax machine yet still get the information we needed in my hands.

Now, I’ll never be sure what his reasons were and I’m content with the fact that it’s none of my business. What I am content with is that despite an issue that literally could have cost his daughter the ability to buy this house, we found a solution that would calm his concerns and still let me get the required information to the Lender.

Julie and Jim are expecting Twins this spring…I couldn’t imagine them trying to fit the new additions into their apartment.