Bailout Making it Harder for Loans … or Helping?

By now I’m sure that most of you have heard of the recent government bailout plan that is being worked up. At first it was a limited condition plan for over $700 billion, well that has died and is now being worked up in a revised version. So how will this affect you?

Well, first you have to understand the reason why…why is the government spending $700 billion right now when our economy is hurting? Well the simplest answer is that if they don’t step in, we would see a complete destruction of the economy, even from its current state.

As it stands right now, lenders are (out of necessity) tightening up there guidelines on their loan programs. I’m sure you have experienced this if you have tried to qualify for a home recently. This is one of the main reasons for the government’s actions; plus they need to bailout these companies and get some bad “paper” off there books. Therefore taking the pressure off of the companies and opening up the market to encourage growth.

Now, don’t think that the government is just paying some money to get companies back on their feet…oh no, they are taking over assets as a result. The biggest assets will be existing home loans. They are taking over current homes that may be in default. Now how they treat these defaulted loans is yet to be seen…and will determine the future direction of the economy.

So for now, it would appear that this will help benefit our economy (as seen from today’s stock market gains). The most important thing is that it should free up some lenders to start lending money…but you can be sure the guidelines will still be tight. Not as tight as they have been over the last 12 months, but tighter than they have been in the distant past.

I want to let you in on a secret…actually I have completely run out of space, so I will have to let you know next week. Sorry ;)

Benefits of Having a Real Estate Agent Represent You!

In the world of companies like MLS 4 Owners and Redfin, the do-it-yourself buyer and/or sellers have been popping up everywhere, worse than the dandelions in my backyard! But does this direction really save you money as once thought?

Well, let’s think about it…if you were to get sued for $300,000 would you protect yourself or hire an attorney to protect you? I don’t even know if I have to ask this question, we all know the answer…you would hire the professional to protect you! So why would you not do the same with the biggest purchase in your life?

From the listing perspective…

Usually what I hear from clients that are listing their home is that they want to save money. On paper this makes sense; with a listing agent costing upwards of 3% plus you have to factor in the buyers agent for an additional 3%, your now forking over a grand total of 6% in fees? Ouch, right! Let’s look at the alternative.

Consider this, on average FSBO (For Sale By Owner) homes sell for an average of 6% less than homes listed by a real estate agent. So using an agent literally pays for itself, not to mention the legal protection that you are receiving through the negotiation process and finalizing the paperwork.

From the Buyers perspective…

Well, this is an easy one…you don’t pay for it! Remember in the previous paragraph I said that the listing agent has to factor in the buyers agent cost, yes…this is your agent if you’re the buyer. So when you buy a home using an agent, the seller is paying your agent! You’ve gotta love that.

Again, since this is no money out of your pocket for this protection, why would you not want it, however, it amazes me how many people still list and buy without an agent. It could get you into serious trouble.

Now, quick plug for me as well, the same applies to using the right mortgage broker. Do you choose to use someone that has withstood the test of time in the industry and has your best interest in mind, not to mention the best programs on the market? Or someone that sits behind a desk and gets paid whether they close your loan or not? I’ll let you decide.

If you have any additional question about the buying or selling process, feel free to send me an email. I always love to answer questions!

Also, if you can think of any other benefits of working with an agent post them on my blog. I would love to hear your prospective!