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At It AGAIN!

At it Again! Homeownership--What it Once Was...

SHOCK! The media is at it again! Today's front page real estate section boasts that 'Homebuyers face new scrutiny when securing loans.' Okay, my dander is up AGAIN!

The article, in a nutshell, is playing on the reader's fears that homebuying is not what it once was. Here are the main points along with, of course, my counter-points:

Buyer Awareness

1. You can no longer secure a 100% mortgage loan. Yes, I had investors who did this but, this article is that it is focused on the homebuyer seeking a primary residence. I am forever ragged about the homebuyer advice that I give my clients--I am old-school and believe that you should put 20% down on your home. I know that's not always possible and I don't require that my clients do this but, I do recommend this. The 100% mortgage loans are what got us into this mess to begin with!

2. More money is needed at Closing. Isn't homebuying an investment? Why wouldn't you put money into an 'investment'? When we invest in the stock market, don't we put money into our favorite stocks in order to watch (hopefully!) them grow? With homes, growth is appreciation that I think requires, at least some, form of monetary investment.

3. Proof of income is required. Remind me--why should we EVER have been allowed to secure a mortgage without this?

4. The Federal Government can assist you. Once again, are we that desperate to get folks into a mortgage? There are some programs out there that allow a buyer to pay back this government assistance and I do agree that there are exceptions but, once again, isn't that what got us into this mess to begin with? The government insisting that every red-blooded American be a homeowner, whether they were qualified or not?

No Exotic Loans

5. A good FICO score is important. No DUH! The problem has been that too many Americans don't think that it's important to keep up with your score and be certain that it is in good standing at all times. What is so wrong with this requirement?

6. Stay away from exotic loans. Lastly, and please forgive me for repeating myself too much here but, isn't that one of the things that got us into this nationwide mess to start with?

The American Dream

What is so wrong with going 'back to the basics?' Isn't homeownership the 'American Dream?' Daily, I focus on my dream of retirement and daily, I review what needs to be done in order to achieve that goal/dream. When I was first thinking of buying a home, I saved and saved and saved so that I could buy my 'dream home.' Granted, it wasn't the same 'dream home' that I focus on today but, it was my dream and my goal that I worked tirelessly to achieve. When I did finally achieve my goal, I thought my heart was just going to burst with pride! The same with my first car and every one thereafter. Same with any purchase--we work hard, stay focused and achieve our goals. It really is quite satisfying!

Back to Basics

Why have we changed to become a nation that is not held accountable for anything? If you have a buyer who can't put down the required funds to purchase a home, whose credit score is not what it should be and who has other debt that needs to be taken care of BEFORE buying a home, why not set them up with financial counseling? Not only is this action an investment in their future, but yours as well--they're going to remember that you helped them and you're going to check in with them on a regular basis during this time of 'credit repair,' and when they're ready, you're going to be there to sell them their dream home!

And, if you have buyers who ARE ready, that has been 'scared away' by the negativity in the media, explain the reality to them! There's simply nothing wrong with going back to the basics that our parents and grandparents taught us! This is a POSITIVE action! Let's be advocates of making homeownership what it once was. What's wrong with 'what it once was'?

Debe in Charlotte

About the author:

Debe Maxwell is a Charlotte Residential Real Estate Broker, Certified Neighborhoor & Relocation Specialist, ABR & e-PRO who can assist you with the purchase and/or sale of real estate in the Charlotte NC Metro Area. If you're relocating to or from any other area of the country, Debe connects you with any member of her team of relocation professionals in your destination or exit city of choice. The destination service is of no cost to you! The Maxwell House Group's quality service guarantee puts this team far ahead of the competition; providing unsurpassed customer service is their #1 priority! Debe Maxwell -- Helen Adams Realty -- 704.491.3310

Disclaimer: All information provided by this author is strictly an opinion, is not guaranteed, may be based on information collected from several sources, which may or may not be deemed reliable at the time of researching this article and may be time sensitive.

Let's go shopping for Charlotte NC homes for sale!

Posted by Debe Maxwell, Realtor® - Charlotte NC MLS - Charlotte NC Neighborhoods on 10/26/2008 12:57 PM

Comments (23)

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Originally posted at: Charlotte NC Luxury Home Source: At It AGAIN!

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23 Comments on At It AGAIN!

OCT

2008

Debe- Such excellent points you've made here. I cannot understand for the life of me why people do not see the truth that owning a home is a good investment and requires commitment from them! If you are financially invested in your home you will treat it like the asset it is. So much of our housing meltdown is due to people who just thought "oh, hey let's buy a house" and did so without looking at the whole picture. Our media is so driven with 30 second stories that we really have to look to see the whole picture.

Agent like you who educate their clients on the whole spectrum of homeowership are the ones that are fighting the good fight and should be the ones that are getting the media attention!

Best,

Scott

Hi Scott! Thanks! I believe that it IS a prideful act that truly does make us appreciate what we've 'invested' in! if you look as the homes that have gone into foreclosure, they are not well maintained which is reflective of the mentality of the buyer--they bought because someone GAVE it to them and they have no drive to care for the property.

As for me--I'll never get the media attentiion because I'm too POSITIVE for them! ;-)

Debe in Charlotte

Debe - I think I would be glad not to be hounded by those wolves (media that is)!! They don't want the good news at all. It has always boggled my mind that people want to buy things they can't afford. I'd rather do without than go into debt.

Someone in the media wrote about the foreclosure mess here in North Texas and said that North Texas has more $25,000 "millionaires" than any other area of the country. It's true when I look at people I KNOW who don't make anywhere near what they drive or live in!

Debe -- IT is time for back to the basics. I think that this period of adjustment will be a good thing for the most part. I have always made it a point to meet with clients and have them complete a thorough assessment before deciding whether it is a good time for them to buy! A couple of clients have saved money for several months or a year and then came back and bought a home they knew they could afford. They are always happy they waited a little longer to make a purchase.

Debe-This is an excellent post and very well presented. I love the passion and knowledge you bring to your blogs. Awesome job. Keep up the great job!

Debe,

Interesting, I was recently talking to a lender who has been in the business as long as I have. We both agreed with your post. What's the big deal? I did pretty well when people actually had to qualify for loans and have some money. Like I said in a previous blog which I got hammered for. Today's media have turned, in many cases, into journalistic shock jocks.

Linda: You're so right! That's what they're all about! All we hear about is how many foreclosures we have and truthfully Charlotte DOES have the highest rate in NC but, it's a SMALL segment of Charlotte where the properties are located and now we've ALL got to worry! ARRGGH! Makes me crazy!

Joan: Thanks! The pre-interview is just as important as taking them on the tour of homes! You must pre-qualify them, let the lender do the same, and be certain that the buyer is capable of making this step without future hardship. That's our JOB!

Pat: Thanks! OH, I'm passionate all right--especially about my faith, family, friends and CHARLOTTE NC! When the media, who reside here, do our city such an injustice, I do tend to get my dander up and rant so that people can hear the TRUTH about our city's economics!

Larry: Absolutely! It's called pride and if you do find a foreclosed home, 9 out of 10 times, you'll notice that they are in horrible condition--that should say it all right there! When you're given something, you don't care for it as well as if you had worked hard to EARN it!

Debe, I agree that the pendulum has swung back to the basics and what is wrong with that?

Hi Gary! Absolutely nothing, my friend! Thanks for stopping by!

OCT

2008

Very well said. You are absolutely right, of course. It is not a civil right or entitlement that every American should be able to buy a home regardless of their financial situation. Every American SHOULD have the OPPORTUNITY to buy a home if they have earned it. And they do.

Debe not following these guidelines is what got many folks into trouble. Excellent reminders on how to get the mortgage market working the way it should.

Debe, Nice post. If buyers sit down and talk to a good loan officer before looking for homes, they will know what is involved and how they can improve their score or save enough to buy a house.

Hi Janna! Thanks! My boys are of the generation of 'entitlement' and it just drives me nuts! I don't understand how my own children, whom I've raised to take pride in your possessions and earning their way turned out to have this entitlement sense! However, the recent economical climate has raised many questions with even them (19 & 20). I'm hoping that this becomes a national enlightenment and that we soon do go back to the basics!

Hi Bill! Well, thank you! I do agree, it is so much more rewarding when we follows these very simple and 'old fashioned' criteria for everything that we purchase. We all need to understand the meaning of pride!

Thanks Gita! I have a wonderful lender whom I recommend often to first-timers. She sits with them and clearly explains their financial status and what it will take for them to become homeowners. Sometimes she even sends them to classes and my clients LOVE her! Then, when they're ready, they give me a call and you just wouldn't believe the pride that they say that they feel at the Closing table! It truly is heartwarming to know that they are comfortable AND knowledgeable regarding their responsibilities. This is alot more than I can say for those who just walk away from their 'investment' which was just given to them.

Debe,

There is absolutely nothing wrong with going back to basics and beinging some stability back into the market.

The media has got to find something wrong with everything that is going on no matter how good the process is. Remember "If it bleeds it leads" is their motto.

Thanks Don! I love your 'bleeds/leads' comment and oh, how true it is! I am forever frustruated when I've just spoken with a buyer and then the following morning the paper comes out with something that is TOTALLY opposite of what I've told the clients. It makes me look like a 'pushy' salesman and that, I'm NOT! I tend to take longer to prepare first time homebuyers than any agent that I know! I want them to be 100% ready to buy because I don't want them losing their home or falling behind on their mortgages. I keep up with all of my clients and so far, not ONE has experienced a short sale or a foreclosure. To me, it's worth the extended time to do it right!

Hi Debe...Some Good Points are made in your post, Many People already live by these standards, In fact most of America's Millionaires put themselves on a household budget. Most of them do not Buy New Cars, they buy second hand cars. Why buy a New House, there are lots of Good Older homes. Saving is the key to everything, I do think we need to splurge once in a while, so we do not become too focused of not spending in the fear of not having anything. I learned a long time ago you can not take it with you, although many try. Be wise and buying what you can afford is the key, sometimes 100% financing will work, it all boils do to your ability to Make the mortgage Payments.

Great Graphics, did you do them yourself?

Cheers, thanks for sharing!

Debe-Girl, the heavens have just opened up and the angels are singing. I AGREE 100%. We have a "must have it now society", including our children. I had a wonderful life growing up, working for extras that my parents said no to. Taught me responsibility. We need to stop spoon feeding society and allow them to have some pride of ownership. That happens when you WORK for what you have...save, and be proud.

This is fabulous! It should have been featured. I once heard someone say that this generation wants everything the day they step out of college that it took their parents 20 years to achieve. There is something very wrong with that way of thinking. I think it has a lot to do with the 'drive-thru' mentality of our time. No one wants to wait for anything. GBU!!

I agree with Elizabeth and just flagged your post for a feature. I'm old school also and never could understand why the lenders TALKED my clients out of putting more money down. I could not understand why people were getting these loans with rotten credit. We saw this one coming; didn't we?

Hi Debe -- really good post! Reminded me that I saved for my first down payment too. took several years, but I got there. I think the basics is where we need to me, work a little longer with buyers, do a little more counseling or coaching over a bit more time --well that's okay! Going to thank Linda for pointing me in your direction --and will be back.

Fred: You're SO right--I used to work with a heart surgeon who had more money than he knew what to do with and late one night we were all headed out to the parking deck where he was sitting in his car trying to get it started--it was a 15-year-old Volvo that looked like it was ready for the junk yard and had finally met it's Maker. I offered him a ride home in my old Volvo (it wasn't nearly as old as his but, old none-the-less!) and he said he was going to have to break down and purchase another one--but, he would be shopping at the USED car lot! I always knew that a car was a bad investment but, that really struck me that even a man who could purchase a fleet of new cars and not notice the funds missing from his account, was actually not too 'proud' to purchase a used car!

Yes, I created those graphics as I didn't have any good photos to go with this post! As always, thank you so much for stopping by! You took me down memory lane!!!

Hi Elizabeth! Yes, this entitlement generation may have just been saved by this 'recession.' My husband and I sat both of our boys down about a week ago and discussed our national economy at length. We want them to understand what is going on and how they can avoid ever being in debt (other than a mortgage) so that they won't wind up like alot of Americans right now. I think it FINALLY set in with them as they've both made comments since about how they're 'cutting' back!

Hey SIS! I think you got it right--we do have some ancestory that we just haven't discovered yet--we do think alike more often than my brother, my blood, and I actually do! I love it--the 'drive-thru' mentality--how true it is and we just keep enabling one another to live this lifestyle. I want things to change so that my college-aged boys can understand what the 'basics' are!

Marchel: Thank you both for the flag! You know--I had a lender do just that--as I told him, 'behind my back' and he is no longer getting referrals from me! What happened, I had done my 'routine' credit lecture and my clients had decided that they would put down 15% and put the rest into the first year's insurance, taxes (without escrowing) and window treatments. They had agreed that they didn't want to live FOR their house, rather IN their house. The lender, evidently getting a bonus for selling a different package, talked them into a 100% loan--and this was a relatively last minute change! I was so shocked that my clients had gone for that but, they told me that he had told them that they could put that money aside and have it earn interest OR BUY NEW FURNITURE! That lender has not gotten any more business from me! He closed on time, got the job done but, did a HUGE disservice to my clients.

Sorry to rant--that was what came to mind when I read your comment! Thanks for stopping by!

OCT

2008

Hi Alexsandra! Thank you so much and thanks for adding me as an associate as well. Yes, when you worked for quite some time to save, that gave you the pride of ownership--of which some of our younger generation have never had. I know that if we do get back to basics, it will give them a better sense of satisfaction! And, doesn't working with buyers for a longer period of time truly pay off in the end?! It always comes back tri-fold as they appreciate what you've done for them and they are the BEST referring clients!

Debe I agree whole heartedly with you on this. I will go one step further and say they should make a buyer put down a minium of 5% and up to 2% can come from a relative. Also the buyer should have to pay their own closing cost as well

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