How to Qualify for an FHA Mortgage

How to Qualify for an FHA Mortgage

RECBL - Real Estate News

(TNS)-If you’re concerned about getting approved for a conventional mortgage, keep your dreams of homeownership alive by considering a mortgage insured by the Federal Housing Administration. For borrowers who meet FHA requirements, this mortgage alternative is a terrific way to buy a home with a low down payment and less-than-perfect credit.

What Are the Requirements for an FHA Loan?
In order to obtain approval for an FHA loan, the borrower must satisfy the following requirements:

Steady Employment History - Borrowers typically must have been regularly employed within the past two years. Self-employed borrowers have to prove that their business has drawn stable income for at least two years; verification, such as tax returns or company documents, is required.

Ability to Pay - This is determined by two formulas: the front-end ratio and the back-end ratio. The front-end ratio refers to the entire amount that the borrower spends on housing costs, and it must be less than 31 percent of the borrower’s gross income, with some exceptions that push limit up to 40 percent. This includes expenses such as the principal, interest, property taxes, homeowners’ association fees, mortgage insurance, and homeowners insurance. A borrower’s back-end ratio, also known as the debt-to-income ratio, encompasses all of the borrower’s debts, including the mortgage payment, credit debt, and personal loans, and it should be less than 43 percent.

Financial Soundness - The borrower must have a credit score of at least 580 and be able to afford a minimum down payment of 3.5 percent. Some institutions may accommodate lower credit scores if the borrower is able to pay a larger down payment. She must be a minimum of two years out of bankruptcy and not have a foreclosure in the past three years. All her federal student loans and income taxes must be current.

Residency - The borrower must be a lawful U.S. resident with a valid Social Security number, and she must be the occupant of the home.

What Costs Are Associated With an FHA Mortgage?
Like conventional mortgages, there are costs associated with FHA loans that the borrower has to pay when the loan closes, including lender fees, prepaid interest, inspection expenses, and attorney fees. The FHA mortgage program permits lenders and property sellers to pay some or all of the buyers closing costs.

To insure the mortgage against default, the borrower must also pay an annual mortgage insurance premium. The MIP varies based on the terms of the loan, including the principal, loan-to-value ratio, and term. On average, expect to pay 0.85 percent of the loan amount each year.

Borrowers may be required to pay a one-time additional mortgage insurance fee at the time of closing, called the Up-front Mortgage Insurance Premium. As of 2017, the UFMIP is equal to 1.75 percent of the mortgage.

Want to learn how long it’ll take you to pay off your mortgage? Run the numbers through Bankrates mortgage calculators.

What Are the Disadvantages of an FHA Mortgage?
Since an FHA loan permits a lower down payment, you can expect to pay more interest over the life of the loan than you would with a conventional mortgage that necessitates a larger down payment.

Visit Bankrate online at www.bankrate.com.

(C)2017 Bankrate.com
Distributed by Tribune Content Agency, LLC

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Home Sellers Are Making Bank in Today's Market

Home Sellers Are Making Bank in Today's Market

RECBL - Real Estate News

Home sellers are making bank in today’s market, realizing a 24.1 percent, or $39,900, gain in 2016, according to a recent analysis by Zillow.

Sellers on the West Coast - where home prices have rocketed since the recession - saw higher returns, with those in Oakland, Calif., taking home the most at 78 percent, or $235,000.

Duration is key. The average seller turning a $39,900 profit, the analysis shows, held on to their home for seven years and five months. The average seller in Oakland hung on to their home for seven years and three months.

The top 10 markets

"The housing market can change a lot in 10 years, and you see that reflected in the top 10 list," says Dr. Svenja Gudell, chief economist at Zillow. "Buying a home is one of the biggest financial decisions people will make in their lifetime, and it really paid off for sellers in these cities. Every city on this list has been growing extremely fast over the past decade, with the majority passing peak home value hit during the housing bubble."

The ability to amass wealth over the long term makes real estate the No. 1 investment for most Americans, despite proven results from stocks and other vehicles.

"It’s extremely difficult to time the market, but if you’re a longtime homeowner in one of these cities, you could potentially see a great return on your investment," Gudell says.

For more information, please visit www.zillow.com.

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Prepare Your Home for the Worst

Prepare Your Home for the Worst

RECBL - Real Estate News

No one likes to think of disaster striking their home; however, preparing for an emergency-be it a flood or an earthquake-can be the make-or-break factor for protecting your property should disaster hit.

A storm can cause electrical outages, flooding, and water damage to your home itself, as well as your systems and belongings.

To help, Gold Medal Service offers homeowners several ways to be prepared to weather a storm or severe weather conditions:

Waterproofing - Being below ground level, basements are most susceptible to water issues. Pump systems, waterproof sprays and interior drainage systems are all examples of ways to help you prepare for the next emergency.

Generator installation and inspection - Power outages are more than an inconvenience-they represent a real safety issue for your family. A backup generator can provide power for the home in case disaster strikes. Professional installation and periodic inspections will ensure that your home has power even when the lights go out.

Heating and vent inspection - Make sure the flues and vents throughout your heating systems are clean and clear of debris. Blocked vents can cause a dangerous carbon monoxide build-up in your home. If you are unsure how to check these, a professional inspection is quick and inexpensive, and will eliminate concern.

Alarm installation and inspection - Carbon monoxide detectors and smoke alarms are a must-they save lives. It is always critical to ensure the alarms in your home are properly installed, inspected, and have fresh batteries in order to provide the required protection.

Being prepared goes beyond having your homes systems ready. Some emergency preparedness tips for the family are:

• Have a plan in place to ensure your family has water, flashlights, extra food, and a few other necessities.
• Something as simple as a solar charger for a cell phone can be a lifesaver, allowing you to receive much needed information.
• A battery-powered radio is also a good backup way to stay informed.
• Know your city's emergency shelters.
• Review your insurance policies for adequate coverage.
• Practice what your family will do in the event of an emergency.

Source: Gold Medal Service

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Know Your ‘Why’

Know Your ‘Why’

RECBL - Real Estate News

If you’re like many agents, you may wonder how you can keep motivated to succeed and reach your goals. How can you tell if you’re uninspired? Do you seem consumed by negative emotions? Do you feel stuck or like you’re not living up to your potential? When a challenge arises, do you feel creatively blocked in finding a solution?

Know Your ‘Why’
A "why" is the reason someone does what they do. When an agent has a "why," they not only feel motivated, but also full of positive energy. They feel empowered to tackle the challenges that arise and see them as an opportunity to find and apply innovative solutions.

Not only that, they feel they’re living up to their full potential every day and love what they do because they can see the difference they’re making.

One of the easiest ways to find your "why" is to answer these five simple questions:

• Why am I in this business?
• What do I like about what I do?
• When do I feel fulfilled or happiest?
• When do I feel that I am maximizing my full potential?
• What does my life look like in a year? In five years?

These questions will help you assess your priorities and figure out what motivates you. When your priorities are in order, you’ll be able to define your purpose and connect your daily activities to help you achieve you goals. In the end, this will make you happier in your work and in your life overall.

5 Tips to Get Inspired
When you know your "why," you can reconnect with your inspiration whenever you feel your motivation beginning to wane. Here are some suggestions to help get back on track:

1. Visualize. Visualize the life you want to lead. When you visualize the life you want to lead, you become inspired to achieve it. Visualizing will help you continue taking steps toward making your vision a reality.

2. Get inspired by others. What do the most inspirational stories have in common? They feature people who persevered in the face of adversity. Take a moment to think of a story that inspires you, whether from the news, a book or a movie. Why was it inspirational? Your answer may help you find your "why."

3. Seek inspiration in your struggles. Everyone has faced setbacks in life, and you are no different. Look back at the struggles and setbacks you’ve overcome to find inspiration. Remembering what you’ve overcome can give you perspective and reconnect you with your "why."

4. Connect with other real estate professionals. Networking with other professionals is not only motivating; it can also help you remember why you joined the business in the first place. Connecting to your reasons for becoming an agent can help you remember your purpose, as well.

5. Disconnect to recharge. Sometimes the only way to reconnect with ones internal voice is to turn off the gadgets for an hour and get moving outside. Exercise pumps blood to the brain and encourages it to think of creative solutions to current challenges. Plus, the combination of fresh air and nature often helps to boost motivation and recharge our batteries. If you are struggling to come up with a "why," stepping out may help you discover it.

For more information, please visit www.buffiniandcompany.com.




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Get in Early on Emerging Neighborhoods

Get in Early on Emerging Neighborhoods

RECBL - Real Estate News

Buying in a hot housing market while prices are reasonable is a sure ticket to wealth. Analysts at GOBankingRates recently spotlighted 20 up-and-comers.

The top 10 are:

1. Jungle Terrace - St. Petersburg, Florida
Median List Price (as of July 2017): $239,900
Price Change Year-Over-Year: +44.5 percent

2. Beacon Hill - Seattle, Washington
Median List Price: $569,995
Price Change Y-O-Y: +31.2 percent

3. Point Breeze - Philadelphia, Pennsylvania
Median List Price: $295,000
Price Change Y-O-Y: +40.5 percent

4. Heather Gardens - Denver, Colorado
Median List Price: $278,750
Price Change Y-O-Y: +27.3 percent

5. Pinehurst - Seattle, Washington
Median List Price: $350,000
Price Change Y-O-Y: +24.8 percent

6. Hazelwood - Portland, Oregon
Median List Price: $324,450
Price Change Y-O-Y: +22.4 percent

7. Twin Lakes - Las Vegas, Nevada
Median List Price: $182,450
Price Change Y-O-Y: +41 percent

8. Fairgrounds - Indianapolis, Indiana
Median List Price: $179,900
Price Change Y-O-Y: +29 percent

9. Bayside West - Tampa, Florida
Median List Price: $229,900
Price Change Y-O-Y: +32 percent

10. Highland Hills - San Antonio, Texas
Median List Price: $135,000
Price Change Y-O-Y: +35.3 percent

Source: GOBankingRates

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4 Tips for Mastering Marketing

4 Tips for Mastering Marketing

RECBL - Real Estate News

Technology is changing the face of the real estate industry more and more every day, and it’s also changing the way real estate professionals sell homes.

While prospective buyers used to simply browse their local newspaper to find their dream home, the internet has changed the game by providing an endless supply of online tools buyers can use to facilitate the process.

Social media in particular has become the go-to medium for home searches around the world.

With that in mind, we’ve compiled a few technical considerations that will help you use technology to reach prospective buyers.

Maintain Current Relationships
While it’s easy to get caught up in the buzz, it’s important to remember that the relationships you’ve built with current customers are more important than any new web technology, smartphone app or electronic craze. In the end, it’s these relationships that will keep your business growing.

Reinforcing existing relationships with customers is just as important as updating your Facebook status or pinning on Pinterest. A simple thank you card or personalized magnetic notepad will not only provide a lasting impression and reminder of you and your business, but also go a long way toward keeping you relevant in today’s fast-paced environment.

Build Your Online Presence
Take the time to build your online presence in order to keep up with the growing population of buyers who are on social media and perusing websites and other digital sources of information that are relevant to the real estate industry. While building business via grassroots marketing strategies can still work. The potential for doing so online far outreaches any traditional marketing strategies.

Social media provides the perfect place to promote your business and current listings. As you build your online presence, you will undoubtedly attract a bigger audience, which will help spread the word about your listings.

Incorporate Video Into the Mix
Video is another great strategy that can help you boost your business. Typically drawing a larger audience than text-heavy pieces, videos provide a more effective way of building relationships with new and existing customers. In addition, videos offer a more personalized approach to promoting your business or listings.

Utilize a CRM System
Customer relationship management systems provide you with the tools you need to keep information related to your customers organized and easily accessible. A good CRM will not only ensure you’re always prepared for whatever the situation may require, but it will also help you stay on point by providing the best customer service at a moment’s notice. A CRM system can also help you capture and follow up on more leads than you’d be able to if you weren’t using one.

Technology is becoming more and more essential in the real estate industry, and it’s important that you learn to embrace it and incorporate it into your everyday business activities. Mastering the latest trends in technology and making yourself visible online will not only grow your business, but also help build upon the relationships you’ve already cultivated.

John Bunker is marketing director at RealEstateCalendars.com.

For more information, please visit www.realestatecalendars.com.

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Start Strong, Finish Stronger with a Big Q4 and Happy New Year

Start Strong, Finish Stronger with a Big Q4 and Happy New Year

RECBL - Real Estate News

We’re about to begin the final stretch of the year. Even if you’re close to reaching your goals, now is not the time to give in to distractions. While it’s necessary to plan for time off at the end of the year, now is the time to work hard to not only reach your goals, but also set yourself up for 2018, as well.

Remember: the seeds you sow now are the referrals you’ll reap in the coming year. Finish the year strong and you’ll be able to maintain your momentum in the New Year.

Start planning for next year.
We live in a time of immediate gratification; however, success isn’t immediate-it takes years of planning and consistent practice to succeed. Although the plan doesn’t need to be set in stone, it is time to start thinking about next year. Creating a practical and disciplined plan, and then committing those goals to writing, will allow you to measure where you are and what proactive lead-generating activities you need to do to make your goals a reality.

Think long-term.
When you’re busy, it can be tough to plan ahead; however, once those transactions are winding down and the contracts are signed, it’s essential to have more business in the pipeline. Keep lag time at a minimum by making time for lead-generating activities, even when you’re busy. Focusing on the long-term will ensure you keep your momentum up and transactions on deck.

Get face-to-face with clients.
The relationships with your clients drive your business. The autumn season is an ideal time to get face-to-face with your best clients. Plan a fun client party that takes advantage of the season, such as a fall hayride or pumpkin picking. Or, swing by your clients homes with a small thank you gift, such as a small pumpkin, a pie or their favorite warm beverage. Don’t forget to thank them for their business and referrals, and ask them to continue to refer you. For more inspiration, here’s a "referral recipe." Give it a try for a week! If you meet new people in the process, be sure to get their information and add them to your database.

Make time for personal development.
Stay sharp and on top of your game by taking a class or seminar. Enroll in a local or online training or register for a real estate event near you. Continuous learning not only keeps you up-to-date on the market so you can serve your clients better, it also helps you stay motivated. When you commit to growing yourself, you help to grow your business.

Continue to track your activities.
Tracking allows you to monitor your progress so you can see how far you’ve come and know how much you need to do to achieve your goals. Knowing your numbers also helps you stay motivated to succeed.

Finish strong.
The more activities you do, the closer you become to your clients and the more referrals you may be able to generate if you ask or remind them. When you focus on the fundamentals, you can be sure you’ll finish strong.

Continue your success in 2018 by setting the stage for it now. Your fourth quarter is a sprint; schedule your goals and continue to work hard by utilizing productivity programs like the Blitz: Finish Strong. You'll be glad you did when the New Year comes!

For more information, please visit www.buffiniandcompany.com.

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Real Estate Exit Strategies: Have a way out

Real Estate Exit Strategies: Have a way out

RECBL - Real Estate News

As a real estate investor and private money lender, our business sifts through leads all day long. We review the information we’ve received and the many possible real estate purchases. We have come to learn the most essential part of our process is having an exit strategy. For the strategy to work, we strive to understand our sellers; their motivation, connection to the property and their goals, as we walk through the process.

We create and hypothesize different scenarios and outcomes in order to prepare our Plan A and additional contingencies. New real estate investors sometimes don’t prepare an exit strategy which ends up leading to a negative outcome which deters the new real estate investor from moving forward in the real estate industry.

As investors, it’s critical we have planned an exit strategy and contingency plans in case our plan A doesn’t go as planned. There are numerous unforeseen circumstances which can happen during the investment which will drive up costs, extend time frames and potentially eliminate the feasibility of plan A. Therefore, we always require a contingency plan B. But, you don’t have to stop there.

Planning your exit strategies isn’t just needed for getting a loan or selling a property. Having a plan for negotiating with sellers and buyers can also affect how you may pursue each of your exit strategies.

Negotiating without a plan, just shooting from the hip, can lead to disaster as you may be giving away your best hand and there’s validity to the argument “you make your money when you buy”. Planning can not only save your current deal thousands but, perhaps, save you millions over the course of your entrepreneurial career!

As a real estate investor, you have quite a few exit strategies:

Sell the Investment. The granddaddy of real estate exit strategies is the fix & flip where you purchase a below-market property with a value add component to it. Before you even entered the investment though, you planned for predictable expenses and came up with your break-even amount needed. You then efficiently (cost and time-wise) rehab and resell the property, often to a retail buyer, for an attractive profit. Duplicating this process correctly a few times can add massive income chunks to your investment business.

Shameless Advertisement: One of the biggest expenses for flippers are real estate commissions, averaging about 6%. As a lender and real estate flipper myself, I recognized this as one of the massive downsides for my investors and partners as it consumes such a large chunk out of the potential profits.

Cash Out Refinance – Long-Term Hold & Appreciate. The second option we like is cash out refinancing your loan via a conventional lender which allows you to hold the property for positive cash flow and appreciation. If you own the property in cash then there is no need to do the cash out refi.

Long term holding of your asset may not add huge chunks of cash, immediately, to your pocket but this builds wealth over time. If you buy a property and then rent it out you may be able to create positive cash flow, when factoring in all your property’s expenses. In addition to that extra cash flow, you now have an asset that will build equity. In the future, you could either cash out by selling all your properties and profiting from equity gains or you can continue to build it alongside your other passive income rentals.

Lease Option. You can do a lease option as well. The property can most likely still be leveraged with another loan in this scenario but you would need to make sure your rental income meets or exceeds your debt service. Check to see if your mortgage allows this–most private lenders would not allow this as a balloon would probably be due before the lease was up or the option was exercised.

A suggestion is not combining the lease and option like some do. You want to have a lease so you can evict if necessary and a separate option agreement which gives them the option to purchase at your agreed upon terms. Though, an attorney may be needed to legally delineate the specifics such as purchase price, option fee, percentage of rent going toward purchase and time frame of option.

Wholesale. Typically reserved for properties you don’t fully own, rehab or finance, is the wholesale exit strategy. You may not own the property but you have negotiated an assignable contract which gives you, or your assignee, the right to purchase the property within a certain time frame for a specified price (usually under market value). You find a buyer willing to pay that specified price plus your assignment fee. You can close this in a few ways but your result should be a win/win/win situation for your seller, your buyer and, of course, yourself.

Seller Financing. You can always seller finance your investment property, yet the property may need to be owned in full before you could do that because your title would be clouded. Also, any title transfer may trigger the due on sale clause in your mortgage.

Another recommendation is doing seller financing paperwork through an attorney due to Dodd Frank regulations which govern that type of transaction.

Raise money from partners and investors. You can get money from investors or partners to pay off your investment property’s debt and get more time for other exit strategies. Before you do this, please check federal, state and local laws before you start soliciting for money from investors. The SEC dislikes when you do not have the proper instruments drawn up for solicitations. In either case, I would target accredited investors as they have more funds available for investment, are typically more savvy with their investment decisions and can stand to lose a few dollars more than the average non-accredited investor. The aforementioned is definitely in a security specialized attorney’s domain as they can draw up the legal offering documents necessary for your investment you wish to solicit.

That being said, instead of immediately seeking out passive investors you can also seek out active partners, who can not only provide you with cash, but help on some areas of decision-making that you may have been struggling with.

Nuclear Option. Talk to your lender. If you need to exit quick and your other exit strategies are not working out, what do you have to lose? You never know, they may want to partner with you, extend, or modify your loan to fit your unique situation.

There are plenty of options available for the lender to assist you with. However, I’ve noticed the correlation of how big the bank is to how little they are willing to assist the borrower. Yet, if you succeed you could get a forbearance and pay a bit later, lower your payments for a certain amount of time or modify your mortgage. Lastly, if the property has very little equity, the lender may consider a short sale, which they will NOT like but may need to do.

Pro Tip: Pay on time and communicate. As a lender, I know I’m more willing to listen if you haven’t missed any payments yet and have communicated effectively throughout the loan process thus far.

Before you enter into an investment, try to come up with your exit strategy. Here are a few questions which may help you decide on exit strategies for current and future investments:

• What are your goals? Do you want to build wealth or a larger amount of income right now with long-term appreciation? 

• What is your knowledge and experience in the various exit strategies? 

• What is the time frame you need to exit by? Time is money and you can run out of both.

• What is your negotiation strategy with your buyers and tenants?

• What profit, future rents or appreciation are you predicting on the deal?

• To whom will you market this exit strategy to, what kind of buyer?

• How will you market the exit strategy? Don’t rely “only” on the MLS.

• What are the current sale and rental market conditions like?

• How are supply and demand in your market?

One question often neglected is how will the exit strategy affect your taxes? Capital gains? If you don’t know I would suggest you question your CPA.

Knowing most of these can help you decide on an exit strategy that’s correct for your investment and your business’ needs. Nevertheless, if you don’t know the answer to a lot of these you may want to take some time, gather more information on your investment, and attend a few local REIAs to network with like-minded individuals to get more perspective.

Do you have additional exit strategies for our readers? Let us know at businessdevelopment@cashbuyerslists.com

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Boom, Baby Boomers, BOOM! One of America's Most Lucrative Demographics

Boom Baby Boomers, BOOM! One of America's Most Lucrative Demographics

With more than 75 million people fitting into the American baby boomer demographic, it is easy to understand why this group would be important for REALTORS(R) to understand.

Even more eye-popping to REALTORS(R) is the fact that more than 70 percent of baby boomers own homes, and will be looking to make homeownership changes really soon. This spells big opportunities for REALTORS(R) looking to serve the burgeoning baby boomer market over the next 10-15 years.

NAR takes a deep dive into marketing to baby boomers in its Field Guide to Working With Baby Boomers, which features, among many others, an article from Forbes Magazine entitled "7 Reasons Why Marketing to Baby Boomers Is Unique," which includes the following insights:

1. Baby boomers have money to spend. As opposed to those who grew up in the Great Depression, baby boomers are quite affluent. According to a Nielsen report, they account for $230 billion in sales of consumer-packaged goods like coffee, diet soda and magazines, and make up 70 percent of the nations disposable income. Baby boomers will also inherit $13 trillion in the next 20 years.

2. Baby boomers invented the suburbs. Suburban home development occurred simultaneously with baby boomers ability to make down payments on a mortgage and their desire to leave urban marketplaces. They still live in the suburbs, where many now own 100 percent of their own homes.

3. They plan on living in a better house as they grow older. Seventy percent of baby boomers think their current house is not the best that they can get and they are looking to upgrade. Baby boomers are setting new trends that defy traditional definitions of a "relaxed" retirement. Instead, they are diligently looking for newly constructed homes where they can continue to pursue an active lifestyle surrounded by the latest amenities.

4. Their brand loyalty is tenacious. Once they find a brand they like-one they grew up with-they stick with it; Volkswagen cars, Levi jeans, Harley Davidson motorcycles, Club Med, Noxzema, Leggs. This means that finding out what your baby boomer clients interests are will help guide you toward homes that best meet these trends, and, ultimately, increase the chances of closing a deal.

5. Remembering Woodstock - The famous music festival was a countercultural event which symbolized that the baby boomers were not going to be defined by their parent’s morals and lifestyle. They were going to think and act for they themselves-and they still want to be thought of that way. The least hint of patronizing the baby boomers will flatten any marketing campaign.

6. Baby boomers do use social media, but in a different way. As you develop your social media strategy for baby boomers, be aware that while a 20-year-old is posting photos of their night out on Instagram or Snapchat, a baby boomer is more likely to post a photograph of a new grandbaby or the new RV they just purchased on Facebook. It’s the more "traditional" venues, such as Facebook and Twitter, that are used by baby boomers, so keep your focus there.

7. Baby boomers are not old. Baby boomers do not want to be reminded of their age or be considered as old; rather, they want to be encouraged about their accomplishments and their future. They want to hear about the opportunities that lay before them to experience new chapters in their life.

Other helpful articles in the field guide include "Myths About Boomers and Real Estate," "9 Digital Marketing Strategies to Woo Baby Boomers," and "Baby Boomers Not Showing Any Signs of Downsizing." In addition to marketing resources for the baby boomer market, the field guide also provides tips on reverse mortgage basics, housing trends for the 50+ demographic, related websites relevant to this audience and links to eBooks and other resources.

View the entire Field Guide to Working With Baby Boomers resource from NAR.

To learn much more about how real estate professionals can best serve baby boomers and other 50+ client segments, please consider checking out the education, benefits, and resources offered by SRES(R) Designation. This entire month of September, the featured 25% OFF course at the Center for REALTOR(R) Development is the Seniors Real Estate Specialist (SRES(R)) Designationcourse, which is the basic requirement toward obtaining the SRES(R) Designation.

A version of this article originally appeared on NARs The Members Edge blog. The Members Edge is a blog for new members to learn all about the benefits provided by the National Association of REALTORS(R) (NAR). It is the go-to resource for everything from real estate ethics to tips for interacting with foreign buyers. The information provided in The Members Edge cultivates a capable and educated community of REALTORS(R).

For more information, please visit onlinelearning.realtor.

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College Debt Is Postponing Homeownership

College Debt Is Postponing Homeownership

College debt is having a compounding effect on how millennials perceive and plan for homeownership.

Eighty-three percent of millennials in a recently released report by the National Association of REALTORS(R) (NAR) say they are delaying their home-buying plans by a median seven years as a result of their student loan debt. Twenty percent of the millennials surveyed in the study are homeowners; 80 percent are not. The typical millennial homeowner is burdened by $41,200 in student debt, and earning $38,800 annually.

Homeownership is not the only casualty of student debt-millennials are also postponing career changes, children, marriage and retirement savings, the study shows. Forty-one percent of millennials have put off marriage; 61 percent have skipped a retirement savings payment; and 86 percent have stayed in an unsatisfying job, or taken on a second job or one outside of their field, as a result of student debt.

"The tens of thousands of dollars many millennials needed to borrow to earn a college degree have come at a financial and emotional cost that’s influencing millennials housing choices and other major life decisions," says Lawrence Yun, chief economist at NAR. "Sales to first-time buyers have been underwhelming for several years now, and this survey indicates student debt is a big part of the blame. Even a large majority of older millennials and those with higher incomes say they’re being forced to delay homeownership because they can’t save for a down payment and don’t feel financially secure enough to buy.

"Being unable to adequately save for retirement, on top of not experiencing the wealth-building benefits of owning a home, is an unfortunate situation that could have long-term consequences to the financial well-being of these millennials," Yun says. "A scenario where only those with minimal or no student debt can afford to buy a home and save for retirement is not an ideal situation and is one that weakens the economy and contributes to widening inequality."

Millennial homeowners are doubly pressured, unable to sell and trade-up due to their student debt. At the entry level, the inability to move keeps valuable inventory off-market, worsening already scarce supply in the tier.

"Millennial homeowners who can’t afford to trade up because of their student debt end up staying put, which slows the turnover in the housing market and exacerbates the low supply levels and affordability pressures for those trying to buy their first home," says Yun. Combating the issue comes down to education. Many millennials are in the dark about college costs-in fact, the study shows only 20 percent have a big-picture understanding of the expenses related to education.

"REALTORS(R) are actively working with consumers and policy leaders to address the growing burden student debt is having on homeownership," says NAR President Bill Brown. "We support efforts that promote education and simplify the student borrowing process, as well as underwriting measures that make it easier for homebuyers carrying student loan debt to qualify for a mortgage."

The study was conducted in conjunction with American Student Assistance (ASA), a non-profit guarantor.

"Student debt is a reality for the majority of students attending colleges and universities across our country," says Jean Eddy, president and CEO of ASA. "We cannot allow educational debt to hold back whole generations from the financial milestones that underpin the American Dream, like homeownership. The results of this study reinforce the need for solutions that both reduce education debt levels for future students, and enable current borrowers to make that debt manageable, so they don’t have to put the rest of their financial goals on hold."

For more information, please visit www.nar.realtor.


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7 Secrets to Making It Big in America

7 Secrets to Making It Big in America

According to two recent studies, more than half of millennials no longer believe the American Dream is possible and half of baby boomers don’t believe their children will enjoy the same level of success they have.

As the living personification of the American Dream, I disagree!

Since America wasn’t built upon a class system, people can dream as big as they wish-regardless of their social class, how much money they have or who their parents are-as long as they put in the work.

In fact, America leads the world in the area of personal growth and development. Authors such as Dale Carnegie, Napoleon Hill, Og Mandino, Zig Ziglar, Jim Rohn and Brian Tracy have influenced millions of people, myself included. If you learn from their work and commit to personal growth, you will go from making a living to earning a fortune.

So, why doesn’t everyone make it big in America? There are seven reasons people don’t achieve success.

1. They’ve stopped dreaming. More than half of people don’t think the American Dream is possible. The Founding Fathers guaranteed the pursuit of happiness; were granted the opportunity to compete. What are you competing for? What’s your dream?

2. Closed-mindedness. We don’t have news today; we have opinions. To work beyond these opinions and achieve success, we must recommit to being readers, listeners and doers. Renewing your mind isn’t refreshing your screen. Disconnect for a while and use that time to become a student of success.

3. Inconsistent work ethic. Americans are known for having a great work ethic; however, we’re not always consistent. An inconsistent work ethic leads to inconsistent earnings, which leads to fewer opportunities. Fewer opportunities will undermine attempts to build our own fortune.

4. A sense of entitlement. We live in an age where many believe they’re deserving of privileges and special treatment. A great way to catch your entitlement is to catch yourself complaining. We complain because we think were entitled to something, but most of our complaints are actually "first world problems."

5. Risk avoidance. The more comfortable we become, the more averse to risk we are. There’s a difference between taking risks and managing risks; when you manage risks, you minimize your vulnerabilities and work toward your goals.

6. The microwave mentality. Great ideas and great processes get better over time; however, we often fall prey to the "I want it now" mentality. The most successful people are able to defer gratification by resisting a smaller, immediate reward in order to receive a larger, more enduring reward in the future.

7. Lack of perspective. It’s easy to lose perspective when were inundated with news and click-bait on social media. Principles don’t change, but our tactics do.

If you want to learn more about what it takes to succeed in America, visit brianbuffini.com/ee and check out my book "The Emigrant Edge."

Brian Buffini was born and raised in Dublin, Ireland, and immigrated to San Diego in 1986, where he became the classic American rags to riches story. After becoming one of the nation’s top REALTORS(R), he founded Buffini & Company, an organization dedicated to sharing his powerful lead-generation systems with others. Based in Carlsbad, Calif., Buffini & Company has trained over 3 million business professionals in 37 countries and currently coaches and trains more than 25,000 business people across North America. Today, Brian reaches over 1 million listeners a year through his popular "Brian Buffini Show" podcast.

For more information, please visit www.buffiniandcompany.com.


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You make the call!

You make the call!

Rick Geha began his real estate career at age 22, and has been selling for over 36 years and has run, managed or owned real estate offices for the past 23 years. His love of people and mentoring their passions has led him to a successful career as a speaker, trainer and coach.

As I have ventured through my 37-plus years as a real estate agent, I have to smile at the fears that kept me from creating more, in less time.

By my 13th year in the business, I had started coaching, speaking and training, yet I was still a student of the business. I would teach a class and attend three other classes. What I found is that many others thought the way I did, had similar fears, and had the same limiting beliefs.

Real estate people-in fact salespeople of all kinds-don’t seem to like doing the most basic thing that will get them more sales. The single basic thing most salespeople don’t do; talking to people. I’m sure a good 80 percent or more of you will identify with that sentiment.

In 2005, I was told to take a good look at the 2,700 names in my database, then asked a serious question: "Rick, when was the last time you actually spoke to those people?" The question paralyzed me. It had been a while.

So, I began the task of calling, emailing and doing all I could to reach each and every single one of those people. It was exhilarating and heartbreaking, all at the same time. Over 1,200 of them had bought or sold something without me, as I had done nothing other than send them a magnetic 12-month calendar at the end of each year. Obviously, this wasn’t enough to keep them committed to me.

It was in that harsh moment of reality that I wrote an apology script, which I still share and use today. I was shocked at how willing I was to use it, in addition to how willing agents all over the U.S. and Canada were to use this script without hesitation. Why? Because at no point in the script do you actually ask for business.

The main point of the apology script is to apologize for having been out of touch for so long. You say it’s your fault, and to make sure it doesn’t happen ever again, you’re going to get down some important details and be in touch regularly. I start by getting their birthdays, their wedding anniversary, children’s names and ages, and, if you can find it online, the anniversary of the date they closed on their home. I also like to make sure I have the proper email and mailing address, home and cell phone numbers, and anything else to make a thorough file.

This script has helped me, and many others, more than I can relate. Remember: "Everything works, and nothing doesn’t!" Either way, start by talking to more people every day than you did today.

Over the past 15 years, he’s led more than 1,000 classes and workshops throughout the U.S. and Canada. He is currently a coach with Workman Success Systems. Contact him at Rick@RickGeha.com.

For more information, please visit www.workmansuccesssystems.com.

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The ABCs of FICO

The ABCs of FICO

RECBL - Real Estate News

Most people don’t think too much about their FICO scores until they want to get a loan. No matter the type of loan you want-mortgage, new car-the higher your FICO score, the more likely you’ll be approved.

Understanding the five factors that make up your scores can be the first step toward improving them. Financial experts at the Motley Fool break down where your scores come from and suggest a few ways to improve them.

Know Where Your FICO Score Comes From

Payment History - Thirty-five percent of your score is determined by whether you pay your bills on time every month.

Credit Utilization Ratio - Thirty percent reflects your credit utilization ratio-the percentage of available credit you’re using. Using less than 30 percent of your available credit can help your credit score.

Length of Credit History - Fifteen percent reflects the length of your credit history. Paying bills consistently over time can definitely work in your favor.

New Accounts - Ten percent of your score is based on the number of accounts you open. Opening too many new accounts simultaneously suggests you’re highly reliant on borrowing to keep up with your expenses.

Credit Mix - Ten percent reflects the types of accounts you have. Credit bureaus make a distinction between your credit card accounts versus student loans, car loans, and mortgages.

Three Ways to Improve Your FICO

Pay off a chunk of your balance. If you carry a balance, pay off as much as you can, even if it means you must work a second job or sell off stuff you no longer need or use.

Ask for a raise in credit limit. If you’ve paid your bills consistently, this may not be difficult to get-and since your credit utilization ratio carries significant weight, that should help to improve your overall score.

Correct reporting errors. It’s estimated that 20 percent of credit reports contain errors. If you spot one on yours-such as an error in the amount you owe or a paid-off account not shown-getting it corrected will almost certainly boost your score. Review your FICO score for free once each year to make sure it’s accurate.

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7 Millennial First Home Essentials

7 Millennial First Home Essentials

RECBL - Real Estate News

More and more millennials are buying homes, representing around 45 percent of all purchase loans, and most first-time millennial homebuyers are on a limited budget.

While you may not be able to find the perfect home that checks every box on your dream home list, you can find a home you can improve on or add to over time.

As you hunt for your first home and make the big purchasing decision, make sure your checklist of new home essentials includes the following seven musts.

1. Energy-Efficient Features
Not only is energy efficiency trendy, but it also saves you money on your power bill and reduces your carbon footprint. When viewing homes on the market, look for energy-efficient features like double-paned windows, solar panels, attic insulation, LED lighting, and ENERGY STAR appliances. When you move in to your new domicile, invest in the Nest Learning Thermostat, which helps save you money on your energy bill and allows you to control your houses temperature from your phone.

2. An Entertainment Center
Moving from an apartment to a home means more room, so celebrate with an entertainment space. Equip a portion of your living room with a comfy couch, a big screen TV, and a stereo system. Don't forget a TV package and a streaming stick to access your favorite channels, such as HBO and Starz, and streaming services, including Netflix and Hulu. Trust us-your friends will thank you, and your home will be everyone’s favorite hangout.

3. Smoke Alarms and Carbon Monoxide Detectors
A smoke alarm and carbon monoxide detector should be on every level of a house, especially near bedrooms. While walking through homes, check to see if a property has up-to-date smoke alarms and carbon monoxide detectors. You may want to install smart versions, like the Nest Protect, a smoke and carbon monoxide alarm. The system checks its batteries and performs silent tests on a regular basis so you don’t have to.

4. A Home Security System
Burglary rates have been steadily increasing over time, but installing a security system can help you feel safer and protect your new home. If you buy a house that doesn’t have a home security system, you can easily install the necessary equipment with options such as the Scout Home Security System. You can connect a door panel, access sensor, motion sensor, video camera and more, depending on your needs.

5. A Home Improvement Magazine Subscription
Whether you like it or not, owning a home comes with a lot more responsibility than renting. You’ll occasionally spend weekends and afternoon’s fixing something or working on a home project. Even though just about every project type is available on the internet, subscribing to a home improvement magazine, like Better Homes & Gardens, serves as a homeowners initiation to all house-centric projects. Along with tips for home maintenance, you can also find inspiration for your next project in the leaves of these handy prints.

6. Wallpaper
No, were not back in the 1960s. Wallpaper is back and trendier than ever. If you find a home with wallpaper, don’t leave screaming. Depending on the style, you may be able to make it look modern, or, if a room is boring and you aren’t sure how to spruce it up without breaking the bank, try a modern wallpaper trend, such as a marble pattern. If you aren’t sold on the idea, try temporary wallpapers that are easy to remove.

7. Plants
Greenery is one of the biggest home decor trends, so bring the outdoors inside with houseplants. Not only do they clean the air, but they’re also inexpensive ways to decorate a room and brighten up even the darkest of spaces. For a small room, decorate with a tall cactus or fiddle leaf fig tree to make the area look bigger. Don’t have a green thumb? Try a faux plant, which only requires occasional dusting.

These must-haves are just a few to add to your checklist for an ideal dwelling. Think we missed something? Share what other essentials you think should be on every millennials new home list.

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Know Before You Owe: A Work in Progress

Know Before You Owe: A Work in Progress

RECBL - Real Estate News

The Consumer Financial Protection Bureaus (CFPB) "Know Before You Owe" harmonization of the Truth in Lending Act and the Real Estate Settlement Procedures Act (TILA-RESPA, or TRID) has been a work in progress for several years, overhauling mortgage disclosure practices to improve clarity with the home-buying process.

With the CFPBs guidance and willingness to reduce ambiguities, lenders, real estate agents, and settlement providers have finally started adapting to the new system.

A National Association of REALTORS(R) (NAR) Survey of Mortgage Originators revealed that while TRID-related delays may still be occurring, cancellations attributed to the new processes have decreased.

When TRID went into effect in 2015, lenders were reluctant to share the new required Closing Disclosure (CD) with real estate professionals out of fear of liability for disclosing clients nonpublic personal information. Lenders claimed that sharing the CD violates federal privacy law (Gramm-Leach-Bliley Act, or GLBA); however, an exception within the GLBA allows lenders to distribute the CD to third parties, including real estate professionals.

In a new final rule issued in July, the CFPB reiterated that TRID did not amend this existing exception and explained that it is "usual, appropriate, and accepted for creditors and settlement agents to provide the combined or separate Closing Disclosure to consumers, sellers, and their agents." This language gives confidence to those hesitant to share the CD as it is "a confirmation, statement, or other record of the transaction" falling under the GLBA exception. The CFPB further clarified permissible CD modifications when necessitated by applicable state laws.

Access to the disclosure by real estate professionals ensures consumers are avoiding costly slowdowns for their real estate purchases, just as it was before TRID, when real estate professionals had access to the HUD-1. According to the NAR lender survey, only 16.7 percent of respondents reported sharing the CD unconditionally.

More than half indicated increasing fees for consumers to cover TRID-related costs, averaging $220 per transaction. When real estate professionals have access to the CD, instrumental oversight is added to the closing process, reducing errors that could result in preventable charges being passed on to consumers.

In addition to the TRID final rule, the CFPB has also issued a new proposed rule seeking feedback on how lenders use a CD to reset tolerances to reflect a valid change in circumstance. The CFPB seeks to minimize transaction disruptions and reduce unnecessary costs by easing restrictions on resetting tolerances after the CD has been provided. Such flexibility should increase lender confidence in addressing issues arising after a CD has been sent to the consumer and ensure smoother closings.

As the leading advocate for real estate professionals and their consumers, NAR supports regulatory reform measures that promote transparency, flexibility and certainty for the industry, striving to help qualified buyers with their real estate purchases.

Modifications to TRID must continue to put consumer interests first while eliminating excessive regulatory barriers for those working to further those interests and the benefits of homeownership.

Christie DeSanctis is a policy representative for business issues at the National Association of REALTORS(R).

This column is brought to you by the NAR Real Estate Services group.

For more information, please visit www.nar.realtor.

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The Joy of Travel

The Joy of Travel

RECBL - Real Estate News

(Family Features)--Many facets of travel, such as the anticipation, the experience and even the return trip, can enhance your mood. It can create an element of the unexpected and give you the opportunity to gain new, memorable experiences.

To explore the connection between happiness and travel, and what makes a destination joyous, Nast Traveler and happiness expert Shawn Achor created "The Joy Index."

Achor delved into the psychology of experiences that awe people and the physiology of adventure to explain the relationship between joy and travel, and identified the 10 most joyous places in the world. He also shared the following tips on how to make travel attainable and maximize the joy of your vacations:

Predictors of Happiness
The Joy Index combined Achors studies on travel and happiness with existing research from organizations, including the United Nations and Gallup, to identify six "happiness factors" based on the psychology of joy and travel: environment, well being, culture, connection, adventure and wonder. These six factors, which encompass everything from weather to geography and local food to the friendliness of the culture, can have an impact on the joy experienced when visiting a destination.

"The three greatest predictors of happiness are gratitude, social connection and meaning," Achor says. "If you have an amazing life but are not grateful for it, you do not have access to happiness. These three things scientifically improve happiness, but not just for a moment - they change the lens through which you view the world."

Travels Effect on Happiness
Travel allows you to discover something completely new and unique, which is why it can bring so much joy. According to Achor, the human brain craves novelty.

"The new experiences we have when we travel help us gain perspective and remind us that the world is bigger than our everyday problems," Achor says. "Another reason why traveling makes us joyful is the connection we experience. Traveling allows us to disconnect from our everyday lives and reconnect with the friends and family we are traveling with, as well as locals we meet along the way."

Maximizing Joy on Vacation
Remembering to be grateful is crucial for staying in the moment and finding joy in your trips.

"Try to think about how lucky we are to travel and experience the world. When things dont go your way, such as an inconvenient rainy day, see it as an opportunity to make your experience even more memorable," Achor says.

Putting yourself out there and engaging with the local culture can also be crucial for maximizing the joy of traveling.

"Learning about different stories of people with different cultures than our own helps us realize and understand some of the cool similarities we share and interesting differences based on our backgrounds," Achor said.

Making Travel Attainable
Achor stressed that happiness can be cultivated wherever you are, but to get the most out of a vacation, planning is crucial. Even though traveling can help increase happiness, many opt out of going on trips because of the cost. This, too, is where planning can help.

Source: Bank of America

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9 Tips to Boost the Value of Your Next Client Appreciation Event

9 Tips to Boost the Value of Your Next Client Appreciation Event

RECBL - Real Estate News

Have you ever found yourself downright impressed that the company you’ve made a purchase from followed up after the sale with a note thanking you for your purchase? I’ll bet it caught you by surprise, especially if it was truly sincere and not tied to a gimmick or up sell. Just like you, your customers and past clients enjoy the gift of appreciation.

The time of year to surprise and delight your customers, is now. Surprise your clients and referral sources, with an invitation to an appreciation celebration. Such events make prospecting fun and profitable.

When you create a connection through an enjoyable event, you ensure the power of face-to-face connections in a social setting.

Savvy agents know they can reap the rewards of referrals and customer loyalty by scheduling face-to-face connections.

To boost the value and uniqueness of such an event, here are several ideas to consider:

1. Start with a guest list: Your guest list should include your Top 50 past and current clients, referral sources and strategic partners.

2. Plan the event to occur before the holidays. Unless your intention is to throw a holiday party, avoiding the competition for dates during the busy holiday season may be your ticket to a better turnout. Other great seasonal party ideas include a picnic, a wine tasting or an ice cream social.

3. Consider co-sponsoring the event with your lender partner for the purpose of introductions and to offer options for a "no-obligation annual mortgage fitness review" to interested prospects.

4. Leverage the party to support a local charity. Consider asking for food pantry contributions or items to support veterans, seniors or local animal shelters.

5. Plan and sponsor fun activities like a photo booth or local live bands. If its a kid-friendly event, make it fun with balloons, games and prizes.

6. Set up a drawing (get names, emails and mobile numbers) for a fun grand prize drawing. If legal in your area, offer raffle tickets with the benefits going to a local charity, and have a representative for that charity at the event.

7. Dive into social media. Seize the opportunity to take pictures to post on your Facebook business page or Instagram account, or in your annual calendar/newsletter.

8. Thank all who attended. Follow up after the event with handwritten thank you or "sorry we missed you" notes. Use the opportunity to anchor the event with a save the date for your next event and include a link to the pictures and videos of the most recent event.

9. Post videos. Get a few minutes of video to post on both your YouTube account and Facebook page. Be sure to include the date and location of the event.

Everyone loves to be appreciated, and having fun while you prospect and reconnect at an event makes for great repeat business and endless referrals. The currency of the future is your database, and activities like this will help ensure your database is accurate and up-to-date. Few things are more powerful than staying in touch and recognizing and thanking those you've had the privilege of serving.

*For a free podcast full of tips for your annual event, please visit bit.ly/2uRQDZQ.

Terri Murphy is a communication engagement specialist, author, speaker and coach. She is the author/co-author of five books, and founder of MurphyOnRealEstate.com. Contact her at TerriMurphy.com, MurphyOnRealEstate.com or Terri@TerriMurphy.com.

For more information, please visit www.workmansuccesssystems.com.

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