Interesting headline right? I get asked sometimes what Realtors are like. Are they honest or just money hungry?
The truth is, most Realtors are good people, with a good ethical and moral core that seek to do right by their clients. However, there are a few who I wont name (publicly) that really don't do right by their clients, and here is how. (Naming them publicly is just inviting a lawsuit)
When you list a home, its the Realtors job.....remember, you are paying them.....to market your home with the expectation that their marketing efforts will ultimately get it sold.
What gets homes sold is good marketing. Having plenty of pictures on Zillow, Trulia, the MLS, and every other site.
Now lets back up a second. Realtors are required to have at least 1 photo under a listing in the MLS or we get fined. That's why there is always a 1 photo minimum.
Back to what I was saying. If you see just 1 picture of a home in your price range and in your area, you're going to be far less likely to want to view that home than if it has 25 photos. Most people don't give a home with 1 picture any thought or consideration.
So our area has about 3-5 Realtors who consistently put 1 photo on a home when they list it. The result is their homes sit longer and sell for less. Are there legit reasons for putting just 1 photo? Yes. However, this small group consistently doing it are lazy and doing the bare minimum and frankly screwing their clients.
Example: I had friends who sold their house and I watched it in the MLS. In 6 months, it never had 1 interior photo despite having a beautiful kitchen and bathroom. It was listed by one of those above mentioned Realtors. It finally sold for about $20,000 less than my valuation. They walked away from their mortgage instead of walking away with 20 grand in cash. Sad.
We'll talk about other ways Realtors can screw you that I see another day. Like I said, most are amazing people, but there are a few I wish we could run out of the profession.
How much money do I need to buy a home?
Okay, so generally, there are three things you'll be dropping money on when you buy a home.
1. Home Inspection 2. Down Payment 3. Closing Costs/Appraisal
A home inspection usually runs $300-$400 in my experience. This is not a part of the process you can bypass. If you're my client, you're getting a home inspection and odds are I wouldn't sell a home to somebody that didn't unless they are an investor.
The down payment varies from 0% to 5%, with most people either paying no money down through a rural development loan or a veterans loan, or 3.5% down through an FHA loan. Most of my clients have either put no money down or 3.5% but some opted to put more down. It's generally up to you whether you put more down. If this sounds confusing, I'll hook you up with a mortgage lender who can better explain it.
Generally, I encourage clients to ask the sellers to pay their closings costs, and the sellers always have. This prevents the client from coming out of pocket for that money. If the sellers agree to pay closing costs, you still pay for the appraisal ($350-$400) up front but get reimbursed at closing. Their are sometimes a few small costs that aren't paid for at closing, and this may cost you some money.
What I encourage people to do is try to get a loan with no money down (if they can qualify). That way, you can come to closing with no money (which is pretty awesome).
Of course, all of this is pretty generalized information and EVERY situation is different.
*Note: Don't forget that sometimes you have to put up $500-$1000 in earnest money when you put in the contract on the house. However, you get this money back at closing.
Example: I had a client that purchased a $120,000 home in Broadmoor using the down payment assistance program. So they ended up spending just the $345 on a home inspection and that was it. I think they came to closing with like $52, or somewhere in that range.
***Disclaimer: I am not a mortgage lender, mortgage broker, home inspector, hell I'm barely a Realtor. This post is just for informational purposes. Questions? Let me know.
Is Shreveport a buyers or sellers market?
To make this determination, I look at the absorption rate. The absorption rate tells me how much inventory is on the market and how fast it is selling.
National sources point to an absorption rate under six being a sellers market, over six being a buyers market, and equal to six being balanced.
Within the City of Shreveport, the current absorption rate is 7.2, suggesting we are currently in a buyers market.
There is more evidence supportive of this, but I'll keep this post short and save that for later.
The upside to 7.2 you might ask? I'm GLAD you asked.
The absorption rate is decreasing slowly in this geographic area, meaning some of the inventory is selling off and we are headed toward a more balanced market.
If you're looking to buy within the City of Shreveport, now is a good time to get moving. The higher the absorption rate, traditionally, the better price you can get on a home.
How Much Do Real Estate Agents Get Paid?
I get this question ALL THE TIME. I'm a believer in transparency so here is your answer!
Residential real estate agents work 100% on commission. We don't get paid unless the house sells. The agent that lists the house gets 3% of the total sales price and the agent that brought the buyer/represents the buyer gets 3% of the sales price.*
So if my buddy Paul listed and marketed a $100,000 house and I had a buyer that I showed the home too, that decided to buy it, and ultimately did buy it using me as their agent, then Paul makes 3% and I make 3%. That's $3,000 for me and $3,000 for Paul.
Now, we don't just pocket that $3,000. The brokerage we belong to gets a cut of that. Since RE/MAX (or whoever the brokerage is) supplies me with an office, phone, the assistance of the administrative assistant, etc. I give the brokerage a cut of my commission. This is referred to as a "split."
Splits typically are 50/50, 60/40, or 70/30 in the Shreveport market. Let's say you're with a good brokerage where the split is 70/30. That means I keep 70% of the $3,000 and the brokerage gets 30%. So therefore the brokerage gets $900 and I get $2,100.
So I get $2,100 to pay rent, buy beer, and head to the casino right? Not quite. Throughout the year I still have to pay for expenses like MLS fees, board dues, A LOT of gas, advertising, signs, lock boxes, etc. etc. All of that runs into the thousands, if not tens of thousands of dollars at times.
Real Estate can be an AMAZING career choice if you really enjoy helping people and are self motivated. It can be a terrible career choice if you're not driven to succeed, don't like people, or can't handle the fluctuation of knowing where the heck your next pay check is coming from.
Questions? Drop em in the comment section.
So anyway, that's how we get paid.
***Not mentioned in this post are things like caps, transaction fees, and side ways to make money. I'll tackle those another day.
*3% is the number I used because that seems to be the average in this market.
Can I Buy A Home With No Money Down?
Can I Buy A Home With No Money Down?
I get this question a lot, and the answer is more of a “maybe” than a yes or a no.
Recently, I had a client purchase a $150,000 home and he brought no money to close. Seriously, not a dollar. He walked into the closing, signed the paperwork, and he left a homeowner.
If you are a veteran or purchasing a home outside the Shreveport-Bossier City limits, in places such as Greenwood, Blanchard, or any other rural area, you may qualify for a no money down loan. If you meet income requirement, you may also qualify for the Louisiana Down Payment Assistance program that allows you to purchase a home with as little as 0.5% down payment.
All of these, of course, are subject to other requirements. One of the biggest requirements that seems to disqualify people is credit score. Based on which loan you have, you need at least a 620 or 640 credit score to qualify. Another big one is debt to income ratio. If your debt is too high vs. your income level, the lender may ask that you pay down some of that debt to qualify for a loan.
I see more and more lenders promoting their 0% money down home loans as a method to appeal to today's younger generation. If you want more information or would like to speak with a lender that specializes in this type of loan, call or text me at 318-455-5333.
*Disclaimer: This blog post is simply a reflection of my experiences, I am not a mortgage lender.
Dogs and Buying Homes
Dogs and Buying Homes
What do dogs and buying homes have in common? A lot, actually.
Believe it or not, 65% of my clients listed “accommodations for my dog(s)”, or some variation of that as a top 5 consideration for buying a home. Seriously! I went back through my files to count. Usually, this is as simple as asking “does this home have a fence” and “is the backyard big enough for the dogs?” However, it is a question people ask themselves.
Realtors shouldn't ignore the fact that more than 40% of households in Louisiana own at least one dog.
I actually had a client whom I had found the perfect house for. It was everything she wanted….except for one thing. The backyard was too small for her Bae Bae*. We ended up getting her a house with almost everything she wanted, with a bigger backyard. Her dog was that important to her.
So when searching for a home, I know that if clients have dogs, to always take that into consideration.
What do dogs and buying homes have in common? If it isn't perfect for the dog, it isn't perfect for the client.
*Dogs named changed to protect the innocent
Make 2017 Your Year To Buy A Home
Make 2017 Your Year To Buy A Home
Owning a home is part of the American Dream. A place that you can call your own. Where you put down roots. Unfortunately, due to heightened lender regulations and requirements, it has become much more difficult to own a home over the last few years.
If your goal is to own a home, here are some basic tips and requirements:
1. Get your credit score above a 640. Credit score prevents a lot of people from buying.
2. See if you can qualify for a no-money down loan. There are a lot out there! If you have a 640+ credit score, there is a chance you do!
3. Get in contact with me at least 60-90 days before your lease runs out. You can purchase a home in 25-30 days, but big purchases are best done without haste.
4. Get your debt as low as possible
5. Let's talk about what kind of loan you want, before you start applying for loans. Different lenders in the area are better at different types of loans. Some also offer programs others don't.
These are just a few tips. Feel free to call or text me at any time with questions at 318-455-5333.
The Miracle Home® Program, exclusive to RE/MAX LLC., allows a RE/MAX Associate to make a donation on behalf of each transaction to Children's Miracle Network. The partnership underscores Sales Associate involvement in the communities in which they live and serve. RE/MAX Sales Associates are unique in that a majority of the donations received by Children's Miracle Network from RE/MAX are the result of Associates' hard work rather than solicited from customers.