What will it cost me?

By
Real Estate Agent with The Property Shoppe, LLC

I showed a foreclosed home today to a previous client.  He was looking for a potential rental property in an area where houses will (eventually) appreciate in value since he may be looking to sell the house down the road.  He chose Albrightsville, Pennsylvania. He has access to an entire construction crew and has bought fixer-upper homes before which turned out to be good investments for him.  I found a winner -- good neighborhood, big house, only a few years old and repairs needed are minimal.  The price was unbelievable -- couldn't believe it hadn't been snatched up after 6 days on the market.  A steal at asking price and even though I knew he'd insist on a septic inspection, the sellers were open to it.  My buyer had just refinanced his house and pulled out money precisely for such an opportunity.  Yet, he wanted to lowball his offer.  I couldn't believe it!  He had lost out on a good deal a few weeks ago, even though he offered full price.

My buyer was not used to the low interest rates available to him.  He was calculating that his monthly payment would be much higher than it actually is. 

I have recently started a practice of showing prospective buyers different financing scenarios as they are viewing my listings.  I've hooked up with a local mortgage banker to provide flyers showing 3 financing options -- 0% down, 20% down and 3.5% down - amount needed for closing; monthly payments, etc. and included pictures of the house.  I posted these charts in each house and provide extras that the buyers may take with them.  I think they are always pleasantly surprised by the smaller-than-expected monthly payments. 

 

Comments (7)

Michelle Gibson
Hansen Real Estate Group Inc. - Wellington, FL
REALTOR

Kelly - The first brokerage that I worked for had an in house lender who would prepare these mortgage sheets for us and it was definitely a nice tool to add to my feature sheets, which I should really start doing this again.  Thanks for the post!

Jul 17, 2009 02:17 PM
Ron Tiller
Star Referral - Grand rapids MI - Grand Rapids, MI

Don't forget to include the APR. RESPA says so.

Jul 17, 2009 02:27 PM
michelangelo vasco
mvp realty inc. - Manhattan, NY

Kelly, While rates will vary from one buyer to the next and even day to day I also find it a good idea to give potential buyers different options to consider. I have noticed that low offer buyers will not change that stratagy no matter how good the deal is or what their actual cost are. NICE JOB OF MARKETING ON YOUR PART

Jul 17, 2009 02:38 PM
Norma Brandsberg
Marks Realty Co. Inc., Lynchburg, VA, 540-586-9496 - Forest, VA

So did he get the house? What about the low offer?

Jul 17, 2009 02:42 PM
Chuck Carstensen
RE/MAX Results - Elk River, MN
Minnesota/Wisconsin Real Estate Expert

Payments are pretty low now with the low interest rates!  Good job!

Jul 17, 2009 04:06 PM
Vickie Nagy
Coldwell Banker Residential Real Estate - Palm Springs, CA
Vickie Jean the Palm Springs Condo Queen

Great idea. I haven't been involved with sharing expected payments as I don't have a lender that works with all my buyers. Perhaps this is a policy I should examine.

Jul 17, 2009 04:18 PM
Sasha Miletic - Windsor Real Estate
RE/MAX Preferred Realty Ltd. - Windsor, ON

Hi Kelly, Good post. Thanks for sharing.

Best - Sash

Jul 17, 2009 05:47 PM