Realtors - Out run your competition

By
Education & Training with Road to Wealth, Inc.

Creative FinancingIf you haven't checked out Todd Clark's post "Another sad day for logic...Another real estate broker turned down for a home loan" then I suggest you read it and realize that this is going to become the norm rather than the exception. It really is mind boggling that the Realtor didn't qualify for a loan because he works on commission - yet they DID give his wife a loan and she's HIS employee!

This is a prime example why creative financing is going to become more and more important in this real estate market. The new federal guidelines make it extreeeemely difficult for buyers to qualify ... the substantial down payment (20%), high FICO scores (700 or better), verifiable income and assets, etc.

I heard something interesting on Fox News early this morning ... a Las Vegas attorney predicts that the lenders are going to compensate for lower FICO scores because there are so many people who are having tremendous credit problems. Don't know if all of you know this, but if someone goes to a debt counseling company that renegotiates the repayment terms, it is viewed the same as a Chapter 13 bankruptcy because the account is NOT being paid as agreed.

With more and more people heading in this direction, there will be more and more people who cannot qualify for a home loan. So, tell me ... WHO is going to be ABLE to buy your listings? As the attorney said, if lenders don't start making adjustments there won't be anyone left to loan to. Sad, but true.

What to do? Start learning about Creative Financing ... there's no bank, no federal guidelines. No, I'm not saying don't qualify the buyer - you want to know their income, expenses, etc. because you don't want the seller to get hurt, but the seller doesn't have to adhere to the strict guidelines set down by the government because THE SELLER BECOMES THE BANK!

The time for discovering how to use creative financing in your business is TODAY! Help your buyers and sellers ... AND yourself ... by getting a jump on your competition. Yes, YOU can learn how to become an expert in creative financing. After all, what would have happened in this case if the wife was a stay-at-home Mom with no income of her own? That's right - the deal was lost!

Check out the manual just for Realtors at: Creative Financing for Realtors

Arlene Paukert
"Mrs. Real Estate"

Road to Wealth Inc.
Phone: 561-883-2222
E-Mail: Mrs. Real Estate


P.S. If you haven't already done so, sign up for our FREE 7-day training e-course for Realtors ... Whether you are a" rookie" or a seasoned professional you'll find ideas you can use. Sign up at MrRealEst8.com

Comments (11)

Sally K. & David L. Hanson
EXP Realty 414-525-0563 - Brookfield, WI
WI Real Estate Agents - Luxury - Divorce

  We work with a lender who we call "Magic"...he has forever practiced...prudently and carefully...outside the box lending...and for those who are in a box...they will find it hard to get out and sell...great post !

Apr 06, 2010 10:43 PM
Norma J. Elkins
Elite Realty Group - Morristown, TN
Realtor - Elkins Home Selling Team

I ned to find some lenders in my area that think "outside the box" - thanks for sharing!

Apr 06, 2010 11:22 PM
Evelyn Johnston
Friends & Neighbors Real Estate - Elkhart, IN
The People You Know, Like and Trust!

Great blog Arlene, I just put together a land contract for my seller.  She fortunately has no mortgage so could become the bank!

Apr 07, 2010 01:32 AM
Doug Rogers
Bayou Properties - Alexandria, LA
Your Alexandria Louisiana Agent

Let enough people be denied home ownership, and this will become a political issue. I think lending standards will ease come the next election cycle.

Apr 07, 2010 02:28 AM
George & Arlene Paukert
Road to Wealth, Inc. - West Palm Beach, FL

Sally and David:  George and I used to have a "magic" lender we used to work with all the time.  He was able to get loans through that other lenders turned down.  I think it's all in the "packaging" of the buyer.  It also helped that he had in house underwriting and didn't have to depend on outside companies.

Norma:  We found our "magic" lender just by asking around.  Check with other agents in your office and see who they use.  It may take a little trial and error, but eventually you'll find one.

Evelyn:  GOOD FOR YOU!  Land contracts are great for the sellers because they are only taxed on their capital gain for each year - not the entire sales price.  It really is a "win-win."  I bet the buyer is really happy and you are too knowing you made a commission you might not have made using conventional financing.

Doug:  You could very well be right.  If they don't ease up on the qualifying criteria, who will the banks lend to?  I always thought they make money by lending money not hoarding it.  It's been very difficult.  To change the standards will require a lot of changes - hopefully November 2010 will be the start of changing things around.

Best to you all,

Arlene

Apr 07, 2010 04:08 AM
Jill Schmidt
Aurora, CO

Thanks for sharing the information on Todd's post.  The pendulum always swings back (beyond center).

Apr 07, 2010 06:53 AM
Todd Clark
eXp Realty LLC - Tigard, OR
Principle Broker Oregon

Owner financing may have been the only way to go on this home if it hadn't been for his wife being on his payroll. Imagine if his wife had been a stay at home mom, then they wouldn't have had a choice.

Apr 07, 2010 10:59 AM
Not a real person
San Diego, CA

Creative financing was the bread and butter of the investor community several decades ago, and it appears to be making a comeback.

Apr 08, 2010 03:09 PM
William James Walton Sr.
WEICHERT, REALTORS® - Briotti Group - Waterbury, CT
Greater Waterbury Real Estate

This sounds like something that more and more realtors will need to investigate as an option for their buyers...I might need something like this for some of my buyers. Thanks for the post.

Apr 13, 2010 04:11 PM
Jim Frimmer
HomeSmart Realty West - San Diego, CA
Realtor & CDPE, Mission Valley specialist

I'm sure as soon as all the regulations are in place after this last market bust, the banks will find some creative ways around them and get back to the norm of making obscene profits off of the middle class.

Apr 21, 2010 05:51 PM
George & Arlene Paukert
Road to Wealth, Inc. - West Palm Beach, FL

That's exactly why creative financing/owner will carry is going to be even MORE important.  The "banks" will be so heavily regulated they won't be able to make loans.  Of course, the new rules won't apply to Fannie or Freddie - the real cause of the housing disaster.  Hmmmm ...

Does the financial industry need regulation?  Yes, I believe they do.  However, you can't take away the free market or else you end up with "government" taking over the whole industry - not good.  What will happen to capitalism - the basis of our economy?

We'll have to wait and see ....

 

 

Apr 22, 2010 03:34 AM