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One Thing Every Homeowner Should Know

WE know it. But it is not common knowledge, "out there".

It is a monkey wrench that too often undoes the plans ordinary people make.

It happens like this:

"I think we should try to sell our home..."
"Well, we've listed it, but this market just isn't that good, and we are not getting the offers we hoped for."
"Well, the listing is expired - that didn't work - why don't we just refinance, and take some cash out, and make our home nicer, for now."
"Mr. Mortgage Lender, may i refinance my home, and take some cash out?"

AND THEN "Mr. Mortgage Lender" becomes the bearer of the bad news, that lenders will not allow a homeowner to refinance, and take out equity, until 12 months have passed after the expiration of a listing for sale.

From the Lender's side, this is because it takes a while for new loans to become profitable - lenders do not want new loans to quickly be paid off. They want long-term relationships with borrowers.

And listing a home for sale gives a lender a hint that the homeowner is certainly thinking about NOT staying in the home.

Homeowners ought to know - and our community ought to tell them - LISTING a home for sale has consequences, EVEN if it does not sell.

Posted by Bob Gilbert on 07/03/2008 07:37 AM

Comments (5)

refinancing, listing, cashout

Post is included in group: Active Rain Newbies
Post is included in group: Mortgages

5 Comments on One Thing Every Homeowner Should Know

I agree we should always tell listing clients this information. I try to evaluate there goals and then advise on this if they think they would want to stay.

07/03/2008 07:40 AM

by Laura Jefferson, Lexington/Columbia SC Realtor (Acquire Real Estate)

When I go to a listing appointment and I hear

"I think we should try to sell"

I immediately stop everything and pretty much start over with the words.

"OK, before we go any further"

What is it, try to sell or sell - there is a big difference.

let's talk about it now.

Anne Hensel

Real Estate Broker ABR, E-PRO,

C-CREC, TRC, ASR, RECS, AHS

St. Petersburg Florida

www.AnneHensel.com

07/03/2008 08:10 AM

by Anne Hensel Real Estate Professional buy or sell St. Pete

I agree. I think a couple major obstacles for consumers is having agents who don't take the time to educate them properly on the consequences of the market they are in and secondly, having agents who do not have enough familiarity with financing. In my opinion, you cannot be a good Real Estate Agent without knowing the in's and out's of financing.

Jacqueline Cliff

Real Estate Agent ABR

Licenced Loan Officer

Lynnwood, Washington

07/03/2008 09:50 AM

by Jacqueline Cliff/ Real Estate Agent and Loan Officer

Bob, great information for those planning to take out equity - especially if they plan to sell their home. Good post. ;-)

07/11/2008 06:32 PM

by Mesa, Arizona Real Estate *** Teri Ellis, Broker, ABR,CRS,GRI,ePRO,MRE (Homes Arizona Real Estate LLC)

Bob, you are right, this is something every potential seller should take into account before they list their home. There rae however a few major wholesale lenders who will refinance homes 1 day after the listing is off the MLS. So it may take some extra work, but there are still options for these home owners.

07/14/2008 08:33 AM

by Peter Thompson - Chicago Mortgage Insight (Professional Mortgage Partners)

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