SIgn of the times... (for sale, real estate, mortgages)
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Apparently things are so tight with the real estate industry right now, that agents are actually taking loans out from a third party via the escrow company while a house is in escrow. Essentially borrowing from commissions from a transaction that has not yet completed.
How times have changed and I doubt the the ethics involved. The NAR should be all over this if they had a leg to stand on.
Saw that in today's paper as well - when I read the headline I wondered "what do they need the money in advance for?", but I guess things are so tight they need to borrow...weird!
Saw that in today's paper as well - when I read the headline I wondered "what do they need the money in advance for?", but I guess things are so tight they need to borrow...weird!
Yup. Not to trivialize the current economy or situations, but this literally is no different than someone using a cash advance store for a payday loan.
I am sure there are some agents that are still driving Mecerdes and BMW's using this service. Whereas the cash advancer store folks take the trolley.
Goes to show you how upside down things are right now and who can afford what.
Anyone getting their head around this has to be thinking of the vast amount of homes owned by banks gone unfunded and not for sale. Guzillions. The economy is really only a faith based modern machine now.
Apparently things are so tight with the real estate industry right now, that agents are actually taking loans out from a third party via the escrow company while a house is in escrow. Essentially borrowing from commissions from a transaction that has not yet completed.
How times have changed and I doubt the the ethics involved. The NAR should be all over this if they had a leg to stand on.
I read that article....well, as much as I could stomach. I mean, you are really doing something financially wrong if you have to resort to stuff like this. Yikes, I gues this is the new norm for Americans who cannot or will not live within their means.
I am sure the same old saying applies now as it always has: 20% of the agents make 80% of the money. Plus any agent who has been in the business for less than 15 yrs probably never realized for how long they will have to live on their savings (if they have any) once a good time market's bubble bursts. A lot of them if they stick it out till the next time, will be better prepared after learning a lesson or two on this one.
Yup. Not to trivialize the current economy or situations, but this literally is no different than someone using a cash advance store for a payday loan.
I am sure there are some agents that are still driving Mecerdes and BMW's using this service. Whereas the cash advancer store folks take the trolley.
Goes to show you how upside down things are right now and who can afford what.
I've said it before and I'll say it again. I sure as heck wouldn't want to be a realtor heading into the future. Not only because of the horrible economy but more so because of the technological advances with companies like Redfin that rebate part of the commission.
The traditional model of realtors definitely will change heading into the next decade. Most of the wise realtors already have shifted out of the industry or have 2nd jobs.
Case in point, I was emailing with a few realtors over the past year. I was mostly looking on my own and didn't want to hassle with realtors. I was looking on Redfin, realtor.com and other websites looking at the areas I was interested in.
I did email with a realtor for one of the houses I was interested in. She ended up selling the house but I told her that I'd sign an exclusive agreement with her if she rebated back the same amount that Redfin did. I know I could have used Redfin but she was always honest, quick to get back and seemed like a hard worker.
Voila. She agreed to it but had to get her company's approval. I explained to her I'd be a very easy client, I had tons of real estate experience. This was a traditional realtor but she realized that companies like Redfin are definitely competition. Her company quickly agreed.
Easy deal as I looked at houses with her less than a week and made an offer on a house and as long as the inspection clears this week, I'll close by the first week in July.
These companies that are making these loans sound like they are making GREAT ROI. The only potential problem I see from talking to some local realtors is many deals are falling apart at the 11th hour.
Personally, I feel real estate will definitely fall all throughout 2011. I used that argument when recently making an offer and got a significant discount from asking price plus I'll get a portion of the buyer's agent realtor's fee rebated. I'd encourage anyone buying to ask their realtor to rebate back part of the commission same as Redfin.com.
The only potential problem I see from talking to some local realtors is many deals are falling apart at the 11th hour.
Yes not sure about nationally, but here in SD from some people I am in contact with, its VERY true. Where they were telling me its the most susceptible is JUMBO financing range. The buyers dont have enough down for a conventional loan so they are "attempting" FHA financing for an SFH at 3.5% down with a ceiling of $697,500 (which IMHO is way too high). The FHA needs to get their act together because they set that loan limit when the market was doing well. The changes that they did make were not reflective of the changing times.
Some of it is also from incompetency at the lending institutions and others are because the buyers did something ill-advised, last minute.
Buying furniture, cars....large ticket items that often are checked last minute with credit checks or bank statements before COE.
I am glad the banks are at least being consistent lately. Lets face it, its not new news that lenders are doing this these days. Why even bother altering your finances further to throw red flags so that they can take even more time to ask what that purchase was or where that money went?
Yes not sure about nationally, but here in SD from some people I am in contact with, its VERY true. Where they were telling me its the most susceptible is JUMBO financing range. The buyers dont have enough down for a conventional loan so they are "attempting" FHA financing for an SFH at 3.5% down with a ceiling of $697,500 (which IMHO is way too high). The FHA needs to get their act together because they set that loan limit when the market was doing well. The changes that they did make were not reflective of the changing times.
Some of it is also from incompetency at the lending institutions and others are because the buyers did something ill-advised, last minute.
Buying furniture, cars....large ticket items that often are checked last minute with credit checks or bank statements before COE.
I am glad the banks are at least being consistent lately. Lets face it, its not new news that lenders are doing this these days. Why even bother altering your finances further to throw red flags so that they can take even more time to ask what that purchase was or where that money went?
Shmoov,
Spot on target. And even when nothing really changes or big ticket items aren't purchased, lenders are still backing out at the 11th hour. I recently had it happen to a client of mine. And my realtor just had it happen on her property she was selling. The bank changed their mind a few days before closing. The horrible thing is in some cases, sellers of houses are going out and closing on another purchase as they think it's a done deal. So they hold 2 mortgages!
There is still a lot of incompetency at the institutional lenders. I think it's a horrible mistake for those with only 3.5% down payment to be buying houses.
The sooner the government gets out of supporting the market the faster they will reach true fair values, IMHO.
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