Too Good for Up Time?

In my pre-Realtor life, I looked upon the real estate industry with disdain.

Those people have no soul, no pride! Ugh, I would never waste two perfectly good weekend hours parked in an empty house like a bottom-feeder waiting for a tasty buyer to swim by. Or worse, fritter away an entire morning or afternoon as a volunteer secretary (aka Up Time, Floor Time, 'Opportunity' Time...). Where is their dignity? And really, how hard can this job be? The bar for entry is not exactly high. Someone as educated, brilliant, and worldly as myself could surely be running circles around the masses without much effort.

One day during that time I was chatting with my friend Lori, a very successful businesswoman and a pretty terrific person. She's also one of the classiest people I know. Which is weird, because she's also a Realtor.

She's so good, she makes real estate look good.

At that point in my life I was growing dissatisfied with my career and looking to do something new. Lori suggested real estate. I spit out my coffee.

You must be joking--those people eat their young! ...Well, except of course you. ...Hmm. Perhaps it is worth exploring another perspective...If I could do business the way Lori does, maybe I would consider it.

Fast forward through a few weeks of intense coursework and no-joke studying, and there I am, newly licensed, stepping through the door of Lori's office.

I found out very quickly that real estate doesn't much care how many degrees you have, or if you're pretty, or can speak French. That's all well and good, but real estate is more interested in what time you get out of bed, how fast you respond to email, how thick your skin is, how many phone calls you can make, and what makes you give up (or keep going).

I learned that doing well means going outside my comfort zone. If I want business I have to go find it; and when I look everywhere, including floor time, open houses, on the phone, etc....I eventually find it. Some people think it's just dumb luck when that 'random' new client 'just shows up'; but I go back to the old saw: The harder I work, the luckier I get.

I'm not gonna lie, I still get antsy at a quiet open house. But I always bring along a stack of thank you notes, my laptop, and the latest issue of Realtor Magazine so that my time is never wasted. And I wasn't entirely wrong about the soulless bottom-feeders; they're out there. But they're everywhere; every industry has their own version.

The biggest lesson I've learned is that a successful career in real estate demands the highest level of character in the form of focus, courage, faith, integrity, perseverance, commitment, and sacrifice. The best people in this business are people I really like to be around. They are smart, ambitious, and yes, very classy.

Not Particularly Great Mortgage News

This just came to my inbox. Kind of a big deal...

Good Afternoon William Raveis Sales Associates,
If you are working with clients aiming to buy and finance a home in the near future, you’ll want to be sure to close the transaction before the end of the year.  There are several changes on the horizon for the mortgage industry that may make it more difficult and more costly to obtain a home mortgage.  To beat these changes, buyers should aim to sign an agreement by November 1st  so they can allow time before the holidays for an orderly 2013 closing.

Here’s what to look out for in 2014:

Tighter Guidelines on the Amount You Can Borrow
In January of 2014, a new mortgage rule from the Consumer Federal Protection Bureau (CFPB) goes into effect.  The rule, which impacts the entire industry, introduces a concept that will discourage lenders from making mortgage loans where the debt to income ratio exceeds 43%.

So what does this mean? If these rules were in effect last year, roughly one-fifth of all home-owners would have had to either increase their down payment or buy a less expensive house.  William Raveis Mortgage estimates that the implementation of this rule alone could negatively impact the maximum amount that a buyer could borrow by about 5%.

Negative Impact to Interest Rates
It is widely assumed that interest rates cannot stay at historical lows.  The Fed has already begun pulling back on their strategies that have kept rates artificially low, and we have seen rates jump upwards in excess of 1% since the summer.  In addition to the financial and monetary factors that will push rates upwards, there are regulatory factors that will negatively impact rates as well.  Firstly, the role that Fannie and Freddie play in the mortgage market will be diminishing.  We have seen these entities decrease their maximum loan amounts, and they are scheduled to drop even further in 2014.  The government is hoping that private investors will fill the void, but with few entities in this arena, we can expect that private investors will want a higher return on their investment – pushing interest rates to borrowers upward.

What Action Can you Take?
1.     Make sure to inform your buyers of these regulatory changes.  Sellers will also be interested, as the potential pool of buyers may be impacted by these changes. For more on this see http://files.consumerfinance.gov/f/201301_cfpb_ability-to-repay-summary.pdf

2.     If you are near your maximum mortgage amount and deciding on a closing date, make sure to schedule the closing before the end of the year.  Signing an agreement in early November will assure a smoother transaction.

3.     If your buyers aren’t going to buy before year’s end, make sure that they are pre-approved again, in accordance with the changes, so they can confirm their maximum borrowing amount.

Please feel free to contact any William Raveis Mortgage Banker for further explanation or assistance.

Best Regards,

Ryan


Ryan Raveis
Executive Vice President
Direct: (203) 925-4553

Realtors are People Too!

Click on the image to go to the Raveis Blog post about Katie Clancy