Timely Words -- Good Advice!

Real Estate Agent with Doug Ashley Realtors, LLC

I want to share an email I just got from one of the most dynamic lenders I have used recently, Nic Gills with National City Mortgage.  He is young, dynamic, ethical, energectic and such a positive person.  Very timely information here... Enjoy, and shared  with his permission!


I wanted to try to absorb some of the changes to our industry before writing this (each day we see more).  I think we are in a new real estate / mortgage world and the concept of these changes are here to stay.  Everyone (realtors, lenders, builders, appraisers, attorneys, etc..) will need to adjust their business to deal with these changes.  The government has really pushed for change and as foreclosures get worse we expect much more government intervention. 

1.  Appraisals

Ok... If you haven't felt this already... you will shortly and in my opinion this will not let up.  The government has made it really clear to banks and brokers that they want a COMPLETE separation between lenders and appraisers.  They want to stop all communication between originator and appraiser and want the appraiser to be a non influenced third party.  While in theory this sounds good it leads to a service problem.  Good, ethical, lenders have always "handled" this process not by influencing value but by influencing service.   We made sure the appraiser was professional, fast, and knew the area.  We are out of this loop now.  The job of a listing agent just got much harder (and you thought it was hard to sell a house $100k over market!!).

Here are some suggestions.  First, meet the appraiser in person (the idea of giving a lock box combo and not worrying about it will lead to lots of frustration).  Second, be prepared with comps and be prepared to defend your value.  Third, be nice (I know he was an hour late but you yelling at him isn't going to help).... To prevent that get their cell phone number when he calls to schedule so that you can communicate (remember banks may not have the number).    

2.  Tightening of Products / Guidelines (Marketing)

We started to see this last year but again it is not going to let up.  Fannie Mae / Freddie Mac have added more pricing hits to condo's and Co-ops, tightened their underwriting engine, and increased credit score requirements.  Today's borrowers need better credit, more down payment money, and stronger income.  Now this is not to say we do not have 100% financing anymore, as we still have Rural Development and VA loans, which still do offer no down payment.  However, like I tell everyone, the loan has to "make sense".  If you understand this isn't changing then to be successful you need to attract borrowers that match those requirements.  This gets back to well thought out marketing.  I get asked all the time so here are some of my suggestions.  PLEASE do NOT think I am trying to tell you how to do your job, I am just trying to help with some ideas.....that being said....

First, remember the laws of attraction (good buyers know other good buyers, etc..).  There are 50 million classes out about organizing an A database vs. B database etc..  They are right.  If you are not getting good buyers then look at who you are marketing to and adjust that. 

Second, try marketing to good companies.  Doing a first time homebuyer class that you marketed in the newspaper may not lead you to good buyers, but a sponsored lunch to Hilton hotels (I read in the paper that they are relocating there corporate office to this area) will lead you to more people that may qualify. 

Also, you could try to market to the more expensive apartment complexes.  Many people are just not aware that you can buy a house for only 3.5% down (FHA) and in some cases no money down, and we can even see about getting your deposit back!  The media, which always seems to hurt us more than help us, has made it sound like no one qualifies anymore and that is just not the case.  As I have always said, if the loan makes sense, I can figure out how to make it work.  If you are marketing to an apartment complex where the tenants rent is $1,300-$1,500+ a month, you and I both know we can find them a house with the same payment, and the countless other bonuses to owning vs. renting.  I know you all try and up sell your rental calls, well take that a step further, make some flyers and throw them around an apartment complex.  I talked to a friend of mine last night, who lives in D.C and is spending $2,300 a month in rent!  There are plenty of people out there like that, it is all about word of mouth and educating people on the process.  This friend of mine and her fiancé' work in respectable offices in D.C, probably work with a lot of well qualified potential buyers, and they can spread the word.  If you do a good job, sincerely care and help your clients, go the extra mile to get them into a home and offer great service, believe me they will tell their co-workers, friends and family.  There are plenty of mortgage brokers and realtors out there who do not do this, and just think of their commission checks.  My clients tell me stories of their lender not explaining things to them, they did not know their rate was going to adjust and there would be a pre-payment penalty, not to mention they spent the extra thousands in closing costs.  I hear it all the time, and remember if you referred them to a lender like that, they associate that lender with you.  My business model is quality, make a little on a lot, it will come around to serve you much better in the long term, and you will find that you make more money by just doing the right thing.(well at least I hope!)  I am in this for the long haul, this is my career, I do not really advertise, but I get all of my business from caring about my client and their best interest, and all of my business is referrals and repeat customers.  I am sure this is how most of you get your business as well.  We live in small, close knit communities and people talk, take advantage of that!   

Finally, try new things!  We have the time now.  When the market turns around those of us who are left will be on top of the world, most of our competition is falling out.  Hang in there!  I am always here to help in any way possible, my job is to help you sell houses, we need to work together in a slow market like this. 

Hope this helps and I will try to update you as things change (I am sure they will).  Rates are great (low to mid 5's) so we have that going for us!  Hope all is well.  Call me if you need me. 


Nic Gills

National City Mortgage



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