It's interesting to prowl around the internet these days. Anyone in search of ways to promote a website or a profession will stumble across a seemingly endless number of articles touting the advantages of Social Networking. Regardless of the industry, harnessing social networks seems to be the dominant idea behind effective website promotion. Lists of Social Networking sites are published. Discussions on the merits of each, the effectiveness of each and the usability of each abound. Yawn...

Let me clarify that

Social networking works. I won't try to argue that point. What's interesting is the fact that many people think social networking is new! It's not. It's been around for hundreds or thousands of years. Social networking existed long before the Internet came along. It worked quite well in medieval Europe, and it was effective during the infancy of the United States. Social networking is alive and well in the political arena although LinkedIn is not the venue. The "Old Boys Club" is a social network!

Real estate professionals were social networking in the 70's (and before)

Blogging didn't exist in the 70's but social networking was a big part of day-to-day business in the real estate industry and many others. Think Rolodex! Everybody had one. Computers were rare; an expensive new toy at the time. Cell phones didn't exist, never mind PDA's. Yet the top professionals in the real estate arena shared a common trait. They all had a "list". On the list were the names and contact information of other professionals in related industries. This network of inter-related professionals collaborated to fine-tune the intricacies of a real estate transaction.

"No man is an island"

Has anyone not heard that saying? It's been around for so long nobody really knows how old the saying is. That saying has been passed down from one generation to the next for years. And all it really means is that life (and business) is almost impossible when you "go it alone". We need the social aspects of life. Socializing makes life more fun. It smooths the way in interpersonal communications and simplifies business transactions. It keeps us connected. It keeps us mentally healthy.

Slow down and take a deep breath

Many, many people seem to be literally running to keep up with each new way to harness social networks on the Internet. It makes my head hurt.

Networking is nothing more than building relationships. It's no different than getting to know your barber or having regular coversations with the check out person at your local grocery. Your barber and the grocery checker just might call you when they need the services of a real estate professional because you took the time to know them. Internet social networks only work well for people who take this same approach. Building relationships takes time. Internet social networking is the same as face-to-face networking in that respect.

It's better to have a short list of contacts who know you well, than a long list of contacts who barely recognize your name. Doesn't it make sense? Which group of contacts is more likely to call you when they need help?

The real advantage of internet social networks

For people who live in small communities or others like me, who are simply homebodies, the power of internet social networking really becomes apparent when you consider the sheer number of folks you can reach. It is truly amazing. I have contacts, friends and professional relationships all over the United States due to my activities on websites like ActiveRain.  Before the internet, this would have been all but impossible to achieve.

Yet, in the final analysis, each and every one of these relationships took time to develop. Just like the relationship I have with my barber!

The interwoven and overlapping responsibilities of Real Estate Professionals baffle clients frequently and the professionals themselves often. Who is responsible for this or that? When something goes awry, who's feet will be in the fire, who's career on the chopping block?

Many of us have had a nightmare or two about making a mistake in our chosen career. Mistakes have the potential to cost us money. time or even our job. And, of paramount concern to the client,  the mistakes a real estate professional might make, whether he/she is the mortgage broker, the processor, the agent or anyone else involved in the transaction, can cost the Client money.

Let's leave the discussion about WHO is responsible for a mistake aside for a moment and focus on a more elemental concern. Our Clients need to know SOMEONE is acting as a safety net! Does it really matter who provides this service? I don't think so. If we all accept as fact that we are ALL responsible for our clients financial safety, the confusion surrounding who does what in the transaction becomes less important. The client's safety net (us) remains intact. We should all (in my opinion) take on the responsibility of learning more than the minimum necessary to do our individual jobs. We should all (in my opinion) go a step (or two or twenty) further than we are required to. If we do, and the net develops a hole, WE can act as  the failsafe, the "plan B", the contingency plan, the Safety Net.

If you have gotten this far and you are scratching your head wondering where this little diatribe is headed, the next paragraph will explain the very real situation that prompted me to think (and then write) about Safety Nets, and why you want to be one.

I overheard a conversation last week between two Loan Officers (good ones). One was asking the other about ways to offset a $1000 earnest money his client was in the process of losing. The two were discussing ways to credit this lost money back to the client on a future transaction. The client is still in the market for a home, but this particular transaction is dead in the water. The property itself (two manufactured homes on one tax parcel), was the stumbling block over which the purchase failed.

The loan officer felt lousy about his client losing the deposit. The financing contingency window of time had passed. The Realtor had let the buyer and loan officer know the seller was demanding the eanest money.

Not really expecting to find anything overlooked, I asked to see the Purchase and Sale Agreement. While reading it, I mumbled a question, "when did your client waive his Finance Contingency?". The Loan Officer responded, "he didn't, it expired". That got my attention!

In all fairness, let me point out that the Purchase and Sale, the Financing Addendum and many other forms used in Washington State are difficult to understand. AND I live with a Realtor. When I have questions, I can pick up the phone to get the answers.

In the example above, neither the Loan Officer nor the Realtor understood the Financing Addendum. The contingency must be formally (in writing) waived or it remains in effect. This had not been done.

After explaining why this clients earnest money was not in jeoporday to the Loan Officer, I called my in-house Realtor resource and confirmed what I believed. The seller had not demanded the Finance Contingency be waived, the buyer had not agreed to waive the contingency, therefore the cotingency remained in place and the buyer's earnest money was safe. The next phone call was to the selling Realtor. We discussed the relevant paragraphs in the Finance Addendum. Surprised, he agreed with me that the deposit needed to be returned to the Buyer. I suggested he confirm things with his Broker. The phone call ended on an upbeat tone.

It is far too easy to think that the Purchase and Sale Agreement is the purvue of the Realtor. As Loan Officers, we need to understand this document in all it's detail. It's a confusing document. Each one is slightly different. It is tedious to learn how to understand the legalese contained within its pages.

But folks, sometimes the net has a hole in it. When the net has a hole, WE need to be the Safety Net! Wasting time and energy discussing who is responsible for what simply distracts all of us from the responsibility we share; protecting our client's best interests.

Ready or not, it's here.  The New Year, the New Millennium (not so new now) and the newest waves of change in the Mortgage Industry are here today with even more changes right around the corner.

As I look around my office day after day, I see experienced mortgage professionals struggling to adapt to the almost overwhelming number of changes that have occured in the last two years. Trapped in the rut of "the old days", many loan professionals waited for things to "come back" while filling their hours complaining around the water cooler about how tough things have gotten, or regaling younger loan originators with now-outdated pearls of wisdom about how to be successful in our industry.

And day after day I watch the anxiety level rise in this same group of professionals as their well-ordered ideas about how things should be continues to erode. Because our industry will never be the same again! Thank goodness for that. Changes were badly needed and the time for them is upon us. Yes, it's tough to keep a level head when every loan program seems to have changed (or so it seems), yes, it's unnerving to watch the number of transactions dwindle as consumers withdraw from a market they don't understand, and yes it's infuriating to lose a transaction to a competing lender, suddenly aggressive with marketing, who prospected your client right out from under your nose!

Yet nothing has changed at all. There are still many consumers who wish to sell their properties right now, regardless of market conditions. There are many more consumers who have very good reasons to refinance. Their family finances took no notice at all of the crazy mortgage market. They still need to consolidate debt, add on to their house or adjust for the expense of a looming college tuition bill. More than ever, clients need us to walk them through the confusing process of mortgage financing. They want, more now than ever before, to be able to trust us. They need, even more than in the past, educated reassurance that they are not making a financial misstep. They demand (and have every right to) that we diligently stay on top of all the changes that are happening in this market that may pose financial danger to their families. Will you be there for them? Or will you be distracted by "the good old days"? Your clients are hoping for the former, not the latter.

During this same tumultuous time, I have had the pleasure of coaching/mentoring two young loan officers, fresh in our industry. Both 24 years old with no real previous experience. They came into the game with boundless enthusiasm, barrels full of energy, an endless supply of "old guy" jokes (since when was I old?) and a foam football. They were treated with courtesy but not taken with any seriousness by our more experienced staff. Comments like "What will they do when they run out of family members to refinance?", were common. But these two young men brought three things to the game that have proven the nay-sayers wrong so far. They brought enthusiasm, they brought energy and they brought NO visions of the "good old days". They are doing quite well in a market that the pros still lament daily as "tougher than I've ever seen it". The foam football enjoys plenty of air time in their office, much to the annoyance of several older loan officers.

Our two newest loan professionals happily and naturally do what many of us have forgotten to do. The talk to their friends, they talk to their families, the talk all the time about their exciting new career! They send letters and email. They take people to lunch. They meet people in their living rooms at 7:00 PM, when it's convenient for the client! They simply have no time to hover around the coffee pot trading horror stories, they are too busy. Their supply of family members was exhausted in the first 45 days. Yet yesterday, when I counted, there were 17 working files between them! Hmmmm...makes you think doesn't it?

I'm enjoying the contrast between the old and the new. The difference is nothing more complicated than attitude. When you are new in the industry, there is nothing to look backwards at. You have no history (or should I say baggage) to distract you. Everything is fascinating. Challenges are not annoying, they are exciting! Market changes don't freak you out when you are new, they are interesting curiousities. Two floor calls for the day is not a bad day, it's two fresh prospects! And rather than hearing "I got killed on this deal at the last moment", I hear "Hey Mark, I closed another one today! And I am meeting with my client's mother (or sister or uncle or friend) tonight to talk about a refinance". Who do you suppose the clients find more enjoyable to work with? The anxious, gray-haired fellow irritated about the last-minute underwriting condition, or the smiling, energetic newbie who calls to say "I need just one more thing for the lender, we're almost ready to close your deal".  

Don't get me wrong, it's not all rosy in the "Juniors'" office. They are dealing with the same upsetting issues as the old pro down the hall. They have Account Execs who don't know their own program guidelines, unreasonable underwriting conditions in the eleventh hour and documentation the AE said would be fine, but the underwriter decided was not acceptable after 6 days in underwriting. They have had the $150,000 surprise on a title report. They have their fair share of low appraisal values. Sounds like a normal loan originator's office doesn't it? It is a normal office, the Juniors just don't "get it". Or do they?

Business is out there. Clients are looking for mortgages. Everything is new, yet nothing has changed. Is it exciting, or is it unnerving? You get to decide! For me, I prefer the enthusiasm I find in the "Juniors" office.

Would someone send me a foam football for my office?

Does that title get under your skin? Good! I want to talk and you are welcome to talk back. Take off the gloves, remove the blinders and let's just sort this out once and for all. Plagiarism is OKAY in some situations.

Getting you to click that Blog Title link is the only reason for the Title at all. I'll dispense with the "defense of plagiarism" issue in this short paragraph. Plagiarism is theft and is never "Okay" or defendable. I just wanted to get you to read this article and selected the most aggravating title I could think of to get you here.

Now that we have that out of the way, I would like some feedback and ideas. ActiveRain is loaded with bright minds and clear thinkers. We have a problem. There has to be a solution (or several solutions). I'm hoping this post will act as an informal round table to problem solve the plagiarism problem. What do we do?

The Problem As I See It 

The number of plagiarized post and images is increasing. I don't think this is because we have a bigger proportion of thieves, I think it is because we are growing and have so many members. In addition, any network of this size is bound to attract the spammer crowd. Some of them will do anything to build backlinks or content. I think there are 3 types of plagiarizers (plagiarists ?).

The Real Thief

Doesn't give a damn who owns or who created what. Believes the internet is a candy store where whatever can be gotten away with, should be taken advantage of. No moral fiber, lowest of low, shallow end of the gene pool. These people are playing a numbers game. They know the'll get busted. The also know they will get away with many of their activities without prosecution, so they "play the numbers". Sometimes it works, sometimes it doesn't. They get internet exposure to the sites they are trying to develop in the interim.

The Lazy Thief

Writing isn't easy for many of us. The Lazy Thief doesn't even try. It's too much bother to learn the skills and the Lazy Thief wants instant gratification. So the Lazy Thief simply copies someone elses hard work and hopes it doesn't get noticed. More than likely their Real Estate business is run the same way. Cutting corners and bending rules becomes a habit.

The Internet Rookie

This is the only group I have some empathy for. (empathy, not sympathy). The Rookie is new to the game, sees it's value, wants to play in the game and does not give forethought to what they are doing. The Rookie thinks "wow, this is a great article, I wish I could write this well, I'll use this to get started...". When the Rookie is found out, they are often terribly embarassed (and they should be), and genuinely contrite. They steal once, learn the error of their ways in a most public manner and never transgress again. It's painful to watch. These are not bad people, there are often good people making very public mistakes.

Our Current Solution

We have the flagging system. It does not seem to be working well. I believe the backlog of flagged posts is significant.

We have the moderators. We (the moderators) watch for cut-n-paste constantly. What we want to do is to read what's posted and get the good articles featured in a timely fashion. What we often end up doing is spending time playing policeman (or woman). It's frustrating, irritating and very time consuming. When we find what appears to be plagiarized content, we can't just jump on the member. First of all, we have to be sure the content is plagiarized. Then we need to contact AR. Moderators cannot delete or "sandbox" a post.

We have the members. When a member finds their own content stolen, all hell breaks loose. When a member finds a friend's content plagiarized, they notify their friend. But there is no coordinated action. A post about plagiarized content can easily get overlooked and that is not acceptable, is it?

Now It's Your Turn

There must to be a better solution! What are your ideas? Should we ask to have the software rewritten in some manner. Should we form a volunteer group (akk, I don't like that one). Should we ask ActiveRain to get the whole network signed up with Copyscape?

Let's get some ideas on the table. Simple ideas are okay. Complicated ideas are okay. Let's just get some organized brain power working here. Between the group (50,000 brains = lots of brainpower), we should be able to come up with the solution.

Remember What Mom Said

"If you are not part of the solution, you are part of the problem". Get involved. Throw out your idea. Even if it seems crazy or impossible. We are the network. You are the network. We can make it change for the better. One of us just may have a solution ActiveRain hasn't thought of .

Kitsap County Real Estate 

If you are one of the many American homeowners who have survived a foreclosure, there are things you can do right now to set the wheels in motion for the future purchase of a home. A foreclosure is not the end of your dreams of owning a piece of real estate. A foreclosure is a stumbling block. It is a very large stumbling block, but it can be overcome with some consistent effort and a willingness to re-prove yourself to potential lenders.

Yesterday while preparing to write this article, I searched for lenders in the US who have loan programs for borrowers with a foreclosure in their recent past. I found 72 such loan programs in about half an hour! A foreclosure will not stop you if you are determined to own a home again. It will slow you down.

The good news is obvious. It appears that many lenders are already prepared to make new mortgage loans to people who have had a foreclosure in the recent past. My guess is that within the next 2 years we will see more and more mortgage lenders create programs for this group of borrowers. The loan parameters will be strict but for homebuyers determined to reestablish themselves as homeowners, lenders will be waiting to fill the breach with a new mortgage. 

Pay your rent on time, all the time

Your rental payment history will be critical when you apply for the next mortgage. It will be looked at carefully as an indicator of how you pay for your housing needs. Keep in mind some landlords keep very good records and some do not. You will need a complete history of your payment pattern so make sure your landlord will be able to provide it when you need it.

Pay off any collections that may have accumulated

A foreclosure is not usually the only item of derogatory credit that shows up on a credit report. More often there will be other accounts that suffered late payments, bills that went to a collection company and accounts that were closed for non-payment.

Get aggressive about tracking down any creditor who has reported a collection on your credit report and get them paid. Expect to be treated poorly at first. Remember that the majority of the people a collection agency talks to are trying to avoid paying for their collections. The collection agent will probably assume you are the same. Once the collection company sees you are trying to resolve your debt with them, you should find them more helpful and polite. Just don't expect it at first.

Try not to take ill treatment personally. Remember what you are trying to accomplish. Take pride in the fact that you are attempting what many people wont. You are reestablishing good credit.

Pay any judgments you have acquired

Treat any judgments as you would collections. Contact the creditor and see if you can work out some way to "satisfy" the judgment. Negotiation of the balance is sometimes possible. Payment arrangements are also possible.

You want a letter stating that your judgment has been satisfied. Even if this document in not recorded at the courthouse, it will serve as proof that you paid the debt. The underwriter will want a copy of this proof. If you can get your credit report altered to show your judgment has been satisfied, you will be once step closer to your goal of homeownership.

Start a savings plan

At a minimum, you will want to have all the funds necessary to pay for your closing costs and pre-paid items (property taxes, homeowners insurance etc). If you can save money for down payment, all the better.

You should set a minimum target of closing costs + required reserves (see above). This is one of the reason's it's prudent to establish a relationship with a loan officer early in the process. The loan officer will be able to tell you what amounts to expect for both of these items. 

Contribute to your retirement accounts

Regular deposits to a retirement account indicate someone is planning for their future. Deposits over time indicate self-discipline. The ability to make regular deposits indicates someone who is earning more money than what they require for basic living expenses. All of these indicators help strengthen your financial picture as someone who is a good credit risk borrower.

In addition, as I mentioned above, retirement account balances can be used to prove you have sufficient reserves to handle potential financial problems while continuing to make a new house payment.

Contribute as much as you can to your retirement accounts during the time you are rebuilding after a foreclosure. Don't forget you can reduce your retirement contribution later if you need to.

Establish new credit

There is a fine line to tread with regard to new credit. On the one hand, you need to show you have established (and paid for) new credit, on the other hand, you don't want to give the impression you are working your way right back into a debt problem.

Here is one idea of many for establishing new credit. This technique costs very little, does not require a credit review (in most cases) and can be paid in full whenever you decide the time is right.

It is a very good idea to gain some new creditors as soon as you can after a foreclosure. But you must be ruthless about getting this new credit paid on time or you will create a new problem. If you can manage your new debt well, it will improve the overall picture of your creditworthiness when the time comes to apply for your next home loan. One well-know guideline to follow is the 29% guideline. Don't let any credit card balance exceed 29% of the available credit line. If you exceed the guideline, your credit score will drop.

Monitor your credit report

It can be emotionally difficult to look at your credit report after a foreclosure. If you only remember one thing from this article, remember this. Your credit report after a foreclosure is not a reflection of your character. This credit report is simply your starting point for the future. Try to view it like a roadmap. You cannot get from Seattle to Boston without a map that shows both places. You begin in one town, you follow the map and you will end up in the other town. But you must look at both places to get where you want to go.

As you work your way towards buying your next home, make sure you get updated copies of your credit report. It is very satisfying to see the improvements to your credit that will occur. This will also give you early warning if something pops up on your credit report as time passes. An early warning will allow you to correct discrepancies before you apply for your next home loan.

Find a loan officer with whom you feel comfortable as early as possible

Although it can be hard to share your credit difficuties with a loan officer, it will help you tremendously to have access to a loan officer while you are rebuilding. Take some time to interview a few likely prospects before you actually need a loan. Look for someone with experience handling credit challenged files. Many loan officers specialize in this area. Ask if they are familiar with the government loan programs like FHA. Watch for someone with empathy and a non-judgmental approach. It is not necessary to discuss the details of your situation with a loan officer on the first visit. Simply explain that you are currently working at correcting past credit problems and explain that you know it will take some time. Remember that you are interviewing the loan officer, not the other way around.

Another Real Estate Article from SoundBiteBlog

This article is short version (hard to believe, isn't it?) of an article on my other blog. After receiving an email from an ActiveRain reader looking for information on foreclosures, I started working on this post. Her email pointed out that there is currently almost no information on the internet to help people AFTER a foreclosure.

So...Dawn in CA, here you go. Thank you for the email and the idea :)

Growing your wealth with real estate

If you can relate to this question, congratulations! You are on your way towards building a Real Estate "Portfolio". Almost all of America's most affluent people are heavily invested it real estate. It is a cornerstone of many asset-building strategies. Real estate investments are historically stable and safe. Kitsap County real estate in particular has shown itself to be the perfect wealth-building vehicle for many Washington homeowners.

The thought of owning two homes in Kitsap County can be exciting. The thought of having two mortgages on the other hand can be rather intimidating. One of the first questions many folks ask is "Will the bank allow me to have two mortgages at the same time?". The answer fortunately, is "yes". Banks are just careful about how they decide who can afford additional debt and who may be venturing too far into dangerous financial territory.

The criteria an underwriter uses to establish an approvable new loan is fairly simple. The borrower is allowed to count rental income. But they are not allowed to count all of the rental income. This creates a safety margin that keeps both the borrower and the bank out of trouble. Consider the following example to see how it works.

• The old loan balance - $155000
• The old loan payment - $1200 / month
• Taxes - $150 / month
• Insurance - $50 / month
• The projected rental income - $1300 / month
• The projected monthly loss - ($100 / month)

Many people would be happy to have real estate in their portfolio with this scenario. The annual tax benefits more than offset the negative cash flow each month. In addition, the property will continue to increase in value over time. Now take a look at how an underwriter will view this same scenario while building in a financial safety net.

• The old loan balance - $155000
• The old loan payment - $1200 / month
• Taxes - $150 / month
• Insurance - $50 / month
• The projected rental income - $1300 / month
• Less a vacancy factor of 25% - ($325 / month)
• The projected monthly loss - ($425 / month)

This "paper loss" of $425 each month is then applied against the borrowers gross income just like a car payment or student loan would be. If the borrower has enough income to handle a new mortgage payment, plus all their other financial obligations and the $425 loss, the new mortgage is likely to be approved. The 25% that an underwriter subtracts from the gross rental income is intended to compensate for any vacancies, repairs to the property, maintenance on the property and unexpected expenses. Some loan programs will allow more than 75% of the rental income to be counted, but they are uncommon (and riskier for both the bank and the borrower).

Even if this $425 per month loss raises a borrowers debt-to-income ratio too high to allow a loan approval, it may still be possible to keep the old house as a rental and buy a new home to live in. There may be a $425 car payment that could be paid off by refinancing the old home prior to making it a rental. Or credit card debt could be eliminated with a refinance. Each situation is different. If you are considering becoming a landlord, your favorite loan office will be able to compare different possible solutions for you.

Keep in mind that the underwriter will require proof that you have a new tenant. The homeowner will need to provide a copy of a lease agreement or a rental agreement as part of the loan approval conditions.

Insurance and the old lender.

There are a couple of additional items to check before making a decision like this one. The first item is to check with your insurance agent to see if the insurance policy you have on the home currently will need to be altered if the home becomes a rental. The insurance premium is likely to be higher for a rental than it was when the house was your personal residence.

If you live in a neighborhood with an active Homeowners Association, check your CC&R's (codes, covenants and restrictions) to make sure you are not restricted from turning your home into a rental. 

And finally, it is wise to dig out the old mortgage on the property and read it carefully. It is very possible that you are required to let the lender know that you are moving out of the home. When the original loan was approved, it was approved under the belief that you would be living in the home as your primary residence. If the situation changes, the lender will probably have a clause in the mortgage document requiring you to let them know of the change. As a homeowner you have the right to do what you want with your asset (the home), but the lender also has the right to protect its investment. A loan on a rental property is riskier for the lender.

John and Mary are frightened and more than a little upset. They need to ask for an extension on the closing of their new home purchase because the financing is not ready. They made an offer on their new home 26 days ago and had no idea their Loan Approval Letter was not worth the paper it was written on! Now their Earnest Money is at risk and the money they already spent on a moving company is in question. In addition, they have already paid for the appraisal.

When is a loan approval not a loan approval?

This is not a frequent occurence. It does happen often enough that savvy Realtors® and experienced sellers are somewhat wary of Mortgage Pre-Approval Letters from loan officers they don't know through previous transactions. The reason they are wary is simple. Experienced Realtors® know that Pre-Approval Letters are written by loan officers, and loan officers can't approve loans!

This is the follow up article to yesterday's post on pre-approval letters and why a buyer should have one.

Colleen Kulikowski of Orlando asked for a more detailed explanation of pre-approval letters and potential pitfalls to offer clients in her part of the country. (The link above will open in a new window)

Another Real Estate Article from SoundBiteBlog

Loan officers don't approve loans!

Just as Realtors® don't approve acceptance of offers, loan officers don't approve loans. Lenders approve loans. In both cases, the Realtor® and the Loan Officer are acting as facilitators of the transaction. Neither of them has the authority to legally bind the parties they represent.

A Pre-Approval Letter is such a strong buyer's tool because it means that a Lender has reviewed the buyer's application and supporting documentation (pay stubs, bank statements, W2's etc.). In addition, the Lender has agreed in writing, that they will loan money to the buyer if they find an acceptable property. Loan officers can confirm to a buyer that they will be able to get a loan. The Lender will confirm that the buyer is actually approved for a  loan. This approval will have loan conditions to satisfy, but it is a real approval. The predominant condition will of course be that the buyer finds a piece of acceptable  real estate! Pre-approvals are issued without an address.

Your chance of being viewed as a Serious Buyer skyrockets when the seller and the Listing Agent are presented with tangible proof that you, as a buyer, prepared for this transaction in advance. The Pre-Approval letter indicates that you have taken the time to sit with a mortgage professional, discuss the details of your financial situation, applied with a Lender and been approved by that Lender, before looking at homes.

Understanding why Pre-approval Letters are crucial is necessary for real estate buyers. (opens in a new window)

Another Real Estate Article from SoundBiteBlog

	<--- Welcome to the party The First Annual ActiveRain Birthday Party in Seattle was a resounding sucess! Zillow was there, RainCityGuide was there, the MortgagePorter was there, F5 Networks was there, as well as SoundBiteBlog (shameless plug). It was like a who's who of Washington Internet Real Estate personalities. Lydia (I think) chose a beautiful spot for a springtime water-view barbeque to host the event. She couldn't have chosen better, in my opinion. Magnolia Park is small enough that it doesn't get over-full on a beautiful weekend, with a panoramic view of the Puget Sound. The park has terrific grass lawns and huge, old trees to filter the sun. AR had reserved the covered cooking area.
	<--- The SoundBiteBlog Gang. The first thing we saw on arrival was the long picnic table loaded down with food. I think everybody brought something! This was not your average hamburgers, hotdogs and chips fare. We had everything from appetizers to desert. If I had tried everything available, I would have staggered home. There must have been 5 different kinds of pasta salad (all really good) fruits and vegatables, lemon bars and beer, and of course a Birthday Cake for ActiveRain!
	<--- Caleb and company Here's some tidbits from the conversations: Matt met his wife online, romanced her and married her! (they spend way too much time online). If you haven't figured it out yet, Lydia IS in charge! Ask her, she'll set you straight. She's a born organizer and a terrific hostess. Everyone was made to feel welcome. Caleb is just as engaging and smart in person as he is on the network. His ideas and views go way beyond his years. He has a great smile that is on his face most of the time and talks a mile-a-minute when you get him on something he's passionate about. Then he laughs at himself for getting carried away!
	<--- Our wives flirting with the camera More tidbits... Toby Barnett is way younger in person than his profile picture! Toby writes for the Seattle PI Real Estate blog, if you didn't already know. He's another guy with a full-time smile on his face. Betsy Talbott is just as vivacious and insightful in person as you'd think from her writing. She brought along her husband, Wayne(oops) Warren. He's just as out-going and fun as she is! Wayne ( I shouldn't be allowed) Warren works for F5 Networks and says "We make the internet run!", with a great big laugh at his own flamboyant claim. Betsy's husband clearly loves to laugh and share stories about life with Betsy. I don't think she'll ever lack attention!
	<--- Photo of the crowd More tidbits... ARDELL is ARDELL! There is only one and you cannot mistake her for anyone else! I thinks she greeted everyone with a smile and a handshake! Then, as you'd expect, she settled into animated conversations with numerous people about all the topics she loves. Real Estate, blogging, Seattle life and Project Blogger.
	<--- The ferry ride to the party More tidbits... Ben Wiseley (the code monkey) is married to a German lady who runs her own Translation Company (she can swear at him in at least 4 different languages). He's a big bear of a guy who teamed up with James to keep the hamburgers and hotdogs coming. He's even more friendly in person than he is on the network.
	<--- Another shot of the gathering More tidbits... Rhonda Porter, who I was intimidated to meet in person, and her husband were about as friendly and easy to talk to as neighbors. Rhonda's been one of my favorite writers for a long time. Between her articles on RainCityGuide and TheMortgagePorter, she spends time keeping up one of the nicest neighborhood blog sites I know of. Her husband is in the Title Industry and told us he was in diguise for the day, so I won't blow his cover here!
	<--- Rich and Janice Rich J and his beautiful wife Janice drove over with Marie and I. We should do more things together, we always have a great time. Janice likes to remind me that she and I get along so well because she is a fifth-grade teacher and I will never grow up. Marie surprised me with a custom embroidered SoundBiteBlog polo shirt to wear to the the party/barbeque. Between the new shirt and the new "No Cry Babies hat that came in the mail from Cyndee Haydon of Florida, I was "stylin' "!
	<--- The big dog heads home. After begging and pleading Rich gets to drive us home in his wife's stylish ride. He looks pretty darn good in it doesn't he?  All in all, it was a great time. We had great food, excellent company, tons of conversations and Mother Nature was showing off in the Pacific Northwest.

Edit (06/04/07) Betsy Talbot got some great photos of the barbeque/gathering/birthday party. She is a much more thorough photographer than I am. Tech Tip: Don't take a camera that you are not familiar with to the party. You'll end up with 30 photos you don't want to show anyone!

Now, I don't mean to offend anyone with this post but here's an all too frequent scenario from the Loan Officer's point of view.

John and Mary Renter decided that it makes good financial sense to buy a home and let their landlord find someone else to pay for his investment. They spoke with Laura the Loan Officer and worked through the different loan options. They decided on the program that made the most sense and they went through the fat stack of papers that Laura prepared for them.

Laura let them know what she would need to get the loan closed. She doesn't need anything special, she just needs the standard items like paystubs and bank statements and W2's. She sees them out of the office with a smile and an agreement to meet in two days when John and Mary will drop off the needed paperwork.

John and Mary then call their Realtor® to schedule some time to look at the nice homes that are for sale in their neighborhood. This is the fun part! We all have a little bit of the voyeur in us, so it's interesting to see how other people live. Plus John and Mary get to pick out the type of house they like. Is a split level appealing or maybe a rambler? It would be nice to buy something where the neighbors have nice gardens. And of course the schools must be checked out. They want the best education possible for the kids. They find one they like and write up an offer.

The weekend passes and then it's back to work for both husband and wife. The thoughts of down payment money and closing costs are starting to cause some anxiety. The day to day business of children, pets and grocery shopping must be attended to. Monday evening they receive a friendly call from Laura the Loan Officer reminding them that they were to have dropped off some papers and asking them to re-schedule a time to do that. Oops! Life is very busy when you are buying a home. Right after that phone call another comes in with the news that their offer has been accepted! The problem is starting to develop.

After the homework is done that night, Mary gathers up what she can find. One of the banks statements is missing, but no problem, John can stop on his way home tomorrow and get a print out from the bank. But one of the W2's has also gone astray and John is no help at all with that. Mary takes care of all the bills. Mary decides she must look a little harder because she knows she hasn't thrown anything out in years so it must be just misfiled. She does find it eventually, but it is Friday before it turns up. The problem is gaining momentum.

Saturday and Sunday go by in a flurry of visits to the property to meet the home inspector and phone calls from family wanting to know how the house buying is working out. By the time Sunday is over, some of the household chores have fallen by the wayside. John and Mary go to bed excited and tired out. The paperwork has not been delivered to Laura and a week and half has gone by in the blink of an eye. On Tuesday Laura calls and is sounding a bit stressed out herself. John and Mary wonder why. This is what she does for a living so why should she be anxious? Right?

This sounds like a perfectly normal scenario doesn't it? It is a perfectly normal scenario. The problem is that now Laurie the Loan Officer only has 2.5 weeks to close the transaction! She is understandably concerned. Can it be done? Yes, it probably can. As long as no surprises happen. But it would have been much more of a sure thing if John and Mary had provided the paperwork on day two. And if a problem arises, this house of cards could get wobbly in a hurry!

If you are buying a home or thinking about it, remember this story. You will be very busy during the month it takes to close your purchase transaction. But, behind the scenes, there are many people who depend on you to get your documents into the Loan Officer as quickly as you can. The transaction will get stalled at some point awaiting these critical papers. You can't stand back and watch as everybody else handles your file. Getting a mortgage is not a spectator sport. It is a hands-on, full-contact situation.

And you are one of the key players!

Another Buckwheat Article from SoundBiteBlog

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