Guide To Henderson

What Is Exclusive Buyer's Agency?

Bill & Fran Jenkins

Keller Williams Realty the Marketplace REALTORS

702-845-8540 for Bill 702-860-5432 for Fran

In real estate, agents can either represent the seller or represent the buyer.  Years ago, there was only one kind of agency - agents representing sellers.  In that situation, a seller would hire an agent to sell their house.  The agent had a fiduciary relationship with the seller - meaning that the agent owed the seller: accounting, obedience, loyalty, care and disclosure.  A buyer would want to see houses and would get an agent to show them houses.  The agent worked as a sub-agent for the seller (regardless of if their name or company name was on the sign or not).  What the agent owed the buyer was: reasonable care and skill, honest and fair dealing, and disclosure of known material facts.  The seller got obedience, loyalty and disclosure and the buyer got minor consideration. 

The real estate commission decided in the mid 1980s that buyers deserved representation too, so they came up with Buyer's Agency.  Now a buyer can hire an exclusive Buyer's Agent to represent them.  When you hire a Buyer's Agent - you get a fiduciary relationship - meaning your agent owes you care, accounting, loyalty, obedience, and disclosure.  Your agent is working for you, not the seller. 

Who pays for the Buyer's Agent?  Originally, the idea was that a buyer would pay for their own agent.  That did not pan out.  So the way it evolved over time is now when a seller agrees to sell their home, they agree in the contract to pay for the Buyer's Agent - even though the agent does not work for them. 

So buyers get the best of all worlds!  They can hire exclusive representation, and the seller is still paying for their agent out of the seller's proceeds at closing. 

One misconception that some buyers have is that they can save money if they do not have a Buyer Agent represent them.  This is a false conception.  When the seller hires their agent, they agree to a certain percentage to be paid at closing.  If the buyer does not have an agent and the listing agent (or a sub agent) handles the transaction, the seller pays the full percentage to that agent.  The only person that lost was the buyer - because they no longer had anyone working exclusively for them - and still did not save any money!

Can I Do a Short Sale?

Can I Do a Short Sale?

In the course of doing business with buyers and sellers I have discovered a disturbing trend. There are sellers that have their homes for sale that are current in their payments but having difficulty selling in this current market enviroment. They have been reading about short sales and assume that if worse comes to worse they will change their listing to a short sale without any obligation to their lender. Worse still are real estate agents that do not have any knowlege of short sales and are giving erroneous and dangerous advice to their listing clients that there is not a consequence and absolved of debt by listing short sale status.

These are very dangerous waters that agents and sellers are treading in. If you as a real estate agent do not educate yourselves and educate your sellers then you are opening yourselves up to litigation for not disclosing facts about short sale qualifications. To convince a lender to accept a short sale the borrower is going to have to show true hardship usually in the form of a letter to show the lender he/she cannot pay the loan. Some examples are divorce, military deployment,death of spouse, loss of a job, bad health.They will also have to supply the following in addition to their hardship letter.

1. Copies of the past 2 paystubs

2. Copies of the past 2 years of federal income tax/W2's

3. Copies of the past 3 months bank statements for all checking and saving accounts for all borrowers

4. Copy of First and Second Mortagage monthly statements

There is much more but you get the idea. Please be careful and get educated.

Ten Tips To Avoid Foreclosure

"These guidelines will assist homeowners who are struggling to pay their mortgage and could be threatened with foreclosure," said HUD Secretary Alphonso Jackson. "We want to encourage homeowners to take action and use every resource available so that they can get control of their finances and stay in their home."

If you are unable to make your mortgage payment:

1. Don't ignore the problem.

The further behind you become, the harder it will be to reinstate your loan and the more likely that you will lose your house.

2. Contact your lender as soon as you realize that you have a problem.

Lenders do not want your house. They have options to help borrowers through difficult financial times.

3. Open and respond to all mail from your lender.

The first notices you receive will offer good information about foreclosure prevention options that can help you weather financial problems. Later mail may include important notice of pending legal action. Your failure to open the mail will not be an excuse in foreclosure court.

4. Know your mortgage rights.

Find your loan documents and read them so you know what your lender may do if you can't make your payments. Learn about the foreclosure laws and timeframes in your state (as every state is different) by contacting the State Government Housing Office.

5. Understand foreclosure prevention options.

Valuable information about foreclosure prevention (also called loss mitigation) options can be found on the internet at www.fha.gov.

6. Contact a non-profit housing counselor.

The U.S. Department of Housing and Urban Development funds free or very low cost housing counseling nationwide. Housing counselors can help you understand the law and your options, organize your finances and represent you in negotiations with your lender if you need this assistance.

7. Prioritize your spending.

After healthcare, keeping your house should be your first priority. Review your finances and see where you can cut spending in order to make your mortgage payment. Look for optional expenses-cable TV, memberships, entertainment-that you can eliminate. Delay payments on credit cards and other "unsecured" debt until you have paid your mortgage.

8. Use your assets.

Do you have assets-a second car, jewelry, a whole life insurance policy-that you can sell for cash to help reinstate your loan? Can anyone in your household get an extra job to bring in additional income? Even if these efforts don't significantly increase your available cash or your income, they demonstrate to your lender that you are willing to make sacrifices to keep your home.

9. Avoid foreclosure prevention companies.

Many for-profit companies will contact you promising to negotiate a loan work out with your lender. While these may be legitimate businesses, they will charge you a hefty fee (often two or three month's mortgage payment) for information and services your lender or a HUD approved housing counselor will provide for free if you contact them. You don't need to pay fees for foreclosure prevention help-use that money to pay the mortgage instead.

10. Don't lose your house to foreclosure recovery scams!

If any firm claims they can stop your foreclosure immediately if you sign a document appointing them to act on your behalf, you may well be signing over the title to your property and becoming a renter in your own home! Never sign a legal document without reading and understanding all the terms and getting professional advice from an attorney, a HUD approved housing counselor or trusted real estate professional.

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Four Ways To Beat The Stress Of Buying A Home....

1.  Begin with the end in mind.

Have an ultimate scenario of where you're trying to be.  What will life be like when you get there?  How will it be better than where you are now?  Dwell on that picture and write it out, fill up at least a page about how it feels in the new place.  This is imperative.

Having the goal in front of you at all times energizes you to achieve it, in spite of setbacks and frustrations.  Emotions will run high and you need an anchor.  You too must focus on that future goal when anxiety threatens to get the better of you.

2.  Be flexible.

In monetary calculations, overestimate by a thousand dollars.  In this market, anything can happen between contract acceptance and closing.  It could be the inspections reveal areas of concern that the seller is unwilling to fix or the repair costs are higher than the amount limited in the contract.

Or the interest rate changes which affect the necessary down payment and closing costs, you will need to come up with.  As your real estate team, we will strive to tie up loose ends as quickly as possible, but remember there is no perfect world.  Most buyers feel a bit overwhelmed when taking on a new mortgage and the responsibilities of a new home. 

We've seen many buyers get angry when it seems like the cost just keeps going up.  Anger is caused when reality doesn't match up with expectations you had in your mind.  So if you anticipate this happening in advance, you won't get angry.  In fact, it'll probably go better then you expected.

3.  Trust in the process.

There's just so much to do, it's easy to panic.  You wonder if it will ever work out.  In fact, when we bought our house, we couldn't eat for a day, we felt sick to our stomachs!  You think you're taking a big chance, but the truth is you're giving yourself a big chance.

Even though you can't see every step of the way, as you move towards your goals, the way opens up.  We know that you haven't moved in a long time and it's a major upheaval in your life.  But we've been there many times before, and we'll be looking out for you.  Trust that we know the way to get you there.

4.  Get knowledge.

One thing you'll probably feel during this transition time is being out of control.  It feels like everyone else has taken over your life.  The seller, your lender, the appraiser, the inspectors, they all have the power to say yes or no to your moving plans.  We'll try our best to let you know ahead of time what your expenses will be, and what the unknowns are.  We'll tie down the loose ends as soon as possible.  We'll try to get your loan approved within a reasonable time frame.  We'll educate you as best as we can and let you in "behind the scenes" so you won't ever feel stupid or out of control.

5 Things You Can Do To Qualify For a Bigger Mortgage

Say you started the home buying process backwards and started LOOKING at homes before you pre-qualified yourself for a loan.  Now you've found that none of the homes in your price range will measure up.  What do you do?  Short of robbing a bank, there are 5 things that you can do to qualify for a bigger mortgage.
1.  Reduce long-term debt
The first thing that lenders look at is your income to expense ratio.  They compare how much money you have coming in against how much you have going out every month.
We all know that a dollar will only go so far - and lenders know this particularly well.  So, if you can pay off car loans, credit cards, or any other obligations against your income, you'll have more money to spend on a loan - and a lender will let you borrow more money.
2.  Wait until you get more income
Another way to look at the income-expense ratio is from the income side.  If you have more money coming in, you can borrow more money.  If you're expecting a raise within the next year, maybe you should wait until that comes through, before asking to borrow money for a new home.
3.  Add someone else to the loan
Another way to demonstrate to a lender that he will be repaid is by having someone (with a good incomes and stable job) co-sign on the loan.  This way, the lender is looking at MORE income available to repay the loan.  Family members Bank of Dad are the typical source of someone willing to co-sign.
4.  Use financing that requires lower down payments
The basic idea is this...the more money that you have available to spend, the more money that a lender will let you borrow.  You're trading off having the money available NOW or later.  If you put a large down payment on a home now, that means you may have less income available to repay a loan later.
By the same token, if you make a smaller down payment, then you'll have more money available to repay a loan - and the lender is likely to let you borrow more.
5.  Wait for interest rates to drop
Interest rates are the price that lenders charge for the use of their money.  SO, when interest rates are high, it's because lenders are charging you more to use their money right now.
Again, it's a trade-off between now and later.  Lenders are only going to give you so much money to use over the next 15-30 years (the life of your mortgage).  They work backwards from that figure using interest rates.  If you have a higher interest rate, you have less money to spend now.
So, if you can wait for a lower interest rate, you'll be able to get more money to spend on the home you want.

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