Solving Real Estate Problems Part I: Down Payment

solving problems

The number one reason to hire a realtor is to solve a problem.  As I share the story I’m about to tell you keep that in the back of your mind as I share my client’s recent experience with a competitor realtor:   It’s year end 2018 and my clients were at a Christmas Holiday party.  My clients were enjoying the festivities when they met a competitor neighborhood realtor.  They shared with this realtor that they were still renters living in a duplex and were actively looking at single family homes for sale.  The competitor realtor asked them about their plans to buy real estate in 2019 so they replied that they were ” . . . actively looking for a seller that will accept a smaller down payment or that will accept the down payment assistance we qualify for.”  The competitor realtor was a bit surprised and said “well if you don’t have the down payment it will be hard to buy a house in this market.  Inventories are very tight.  You might want to just wait till you can save enough for the down payment and continue working on your credit.”  At first glance that sounds like great advice – right?  I would challenge that and tell you hands down – WRONG!  Whose problem did this realtor solve?  In fact, when my client asked my opinion of this advice I responded “well, do you feel the realtor solved your problem?”  They obviously said no, to which I then reminded them that like many services professionals, it’s not about the badge one wears but the person behind the badge.  I continued, “your going to meet realtors who have never found creative solutions to solving real estate problems.  They are so intently focussed on how they closed their last deals that they simply cannot think beyond that because of their fear that they won’t get paid.  And THAT, is really the problem that they are focussed on solving.  Not yours.”  On a bigger scale let’s take the situation with the Los Angeles (Anaheim) Angels.  The Angels don’t own Angel Stadium, the city of Anaheim does.  But that hasn’t been a problem for the Angels who, as a professional baseball organization are essentially renters.  Through all the options on leases and lease contracts that the Angels management must negotiate, agree upon and ultimately enter into, the Angels still find a way of showing up on game day to a packed crowd.  A lot of creative juggling, but they make it work.  On a smaller scale, my clients have done the planning that it takes to buy a home.  They know exactly what down payment they want to make and the down payment assistance they are going to use when they find a home they are excited about.  But they aren’t just focussed on the house, they want the deal that they want.  Not just price, but terms!  The competitor realtor’s advice lacked the focus to solve a problem and instead would have sent my away clients off confused and frustrated.  The real estate market is going to do whatever it’s going to do.  It’s not a controllable factor by any one person.  Therefore strategizing how a home will be bought or sold and if the timing is right is what buyers and sellers depend on when they work with a realtor.  Planning is essential in order to getting what the buyer (or seller) wants.  There are times traditional methods will work just fine and times when creative methods work fine.  Either way doesn’t really matter, so long as I’m solving my clients problem and they are getting what they want IS what matters.

If you know someone with a real estate problem or questions feel free to email Paul at his email address at buyorrentmyhomes@hotmail.com.

Paul Krause is a full time real estate professional with Keller Williams in Los Angeles California, DRE #01835890 and CSLB #1029575.

Down Payment Assistance Through Grants, Part II

MR_Blast

I wanted to follow up my last discussion about mortgage assistance.  All week I have been speaking with potential new home buyers who have shared down payment affordability concerns.  The California Association of Realtors has recently shared this link which I want to pass on which can help potential home buyers with additional resources to find down payment assistance.  CLICK HERE:  http://bit.ly/2orSGPP

Down Payment Assistance Through Grants!

Buy v Rent

Recently I heard from some customers that rented a home in a very nice neighborhood that they want to begin the process of stepping up into home ownership.  But there was one problem.  When my customer’s spoke with their mortgage lender they were told they would need a seasoned down payment in order to qualify for the mortgage.  Although it is not uncommon for lenders to want to see a home buyer with some skin in the game, there are programs today that can even help with a home down payment!  So what is a seasoned down payment?  Simply put, its the amount of money that is in your bank account that will be used to cover the down payment and has been in your account greater than 2-3 months.  The reasoning behind the seasoning requirement for this article is not important because what my customer needed is to find the amount of money they don’t have saved with the amount the lender demands to qualify for the mortgage.  The loan my customer wanted was the First-Time Home Buyer loan which only required to have 3.5% of the purchase price in their savings account as a down payment.  Having only been able to save up 1% of the amount (because my customer is renting an expensive house) I told them about programs that are available that could help them obtain a grant towards the down payment.  And best yet, would not have to pay the grant back!  Not everyone will qualify for a grant, but just typing in “house down payment assistance” yielded no less than 2 million results!  Although no one has the time to research (nor will they need to) I am familiar with at least 20 programs in Los Angeles that home buyers can research to determine if they qualify for a house down payment grant.  It is important to note that no matter what direction you chose for down payment assistance, it is vital to communicate which program you chose with the realtor your working with so that when your offer to purchase is submitted that appropriate closing deadlines are planned so that you have enough time to receive the grant funds to fund your escrow.  To become more familiar with down payment assistance this Freddie Mac resource written by Danny Gardner is a perfect first step to understand the options home buyers have available to them.  Go here—–>  http://bit.ly/2od7yBQ