You Can Make The Mortgage Process Go Well. Consider these facts. Today more than ever before you need to be responsible to make your mortgage process go well. Federal Laws changed last week. They affect lenders and Title Companies, as well as you and your agent. Delays in closing are a huge hazard now. The new law is designed to help consumers understand better what they are receiving. There should be no last minute gotchas on rate or fees. That’s the good part. The rougher part is that everyone, including you, need to be diligent with their roles in bringing your purchase to an on time and satisfactory conclusion
What may excite a borrower is that the automated underwriting can give a quick approval. Yeah baby, you are done, you are approved.
Not so fast.
This is just step one. You have a long way to go to get to the end. It has always been a trek to the end, but with the advent of the meltdown everyone involved in your loan became fearful of making a mistake or being too lenient. This resulted in a lot of last minute issues.
Now I bring up the pressure event – the U Haul is rented and the loan must close on time. Nothing is more problematic than a delayed closing. It can actually be worse than the U Haul issue, closing late can kill the transaction. Sometimes a seller gets remorse, maybe has a better offer as a backup.
You are responsible to provide everything asked for, be it pay stubs, bank statements front and back, everything. So many of my borrowers have been slow, sloppy, even resistant to requests. And hey, your loan officer and processor might have more than your loan to get funded. Push Push push your way around. “What is the status, do you have everything, may I see the list of conditions by the underwriting” are all things you can do.
No matter what your nature, detailed or not, get involved in every detail of your loan. Make sure you see a copy of your credit report. See if anything is fishy. Fix everything fast that needs fixing or explaining. Ask your loan officer if they have a back up plan if trouble arises. I did. Doing loans was pressure packed for me. I laid awake at nights or woke up early in the morning scouring the loans in process in my mind. What if this happens, what will I do? I loved it, but it was grueling. At times I had 11 to 15 loans of my own in process. If you only knew what a gigantic list of details that created.
Don’t lie. The only loan that I had that blew up at the end was not my fault, yet I was the target of blame. The borrower was from Hawaii. Hawaii like Utah, isn’t a community property state. Spouses can buy real property separately. In Washington, where I was working, the opposite is the rule. This borrower – buyer, lied on his application. He said he was single. We came right down to closing and the underwriter conditioned a document to be signed by his wife. He was furious and wouldn’t comply. “How did you find out I was married?”. Dumb question! He made such a fuss that since I was working for a mortgage company owned in part by the real estate company he pressured the real estate company to fund the loan out of their own capital.
I will never forget the brokers statement. He too was out of step. He said he hated it – that loan officers say all the way through the process; he is approved, he is approved, he is approved and then at closing – sorry he’s not approved. He lied folks, and got caught.
I had another borrower that two days before closing came to me to back out by blaming it on me. He had $5,000 earnest money in escrow. I listened to his accusations which were many. I finally had had enough and said, “listen buddy this is all crap. I don’t know what is the real excuse but you better come clean with me right now. I have done loans for several members of your family, if you don’t come clean that’s it for the whole bunch of you.” He then humbly apologized and confessed that he had his accountant provide us with phony tax returns. I felt compassion for him, for he had already confessed this to his young wife. He said it broke her heart, both in losing this great home and in his actions. I assured him it was better to quit now and lose his earnest money than proceed with committing a crime. His conscience was his buddy even though the consequences were painful.
I once received a call from an underwriter. It was over one of our loan officers who had submitted his own loan. She tactfully said she was sending the loan back and that I should confront him over the income he claimed. I did. He blew up and threatened my with bodily harm that I should suggest that he faked his income. He said that he had filed amended returns and how dare I insult him. He was fired that moment and I informed him the underwriter had pulled a summary of all of his tax returns and I had copies. They did not match his application and he could leave now quietly or my next call was to the Feds.
So please do all you can do to make sure things go will with that you haul you have ordered. It’s on your shoulders too. Do it all, do it immediately, and do it right.
So I hop over to Harmons City Creek on Friday about lunch time and what do you know – it’s rockin! Great Music at the back street entrance.
And did I partake? No way, Kathleen fixed Italian for lunch.
But I did hang around for the upbeat music.
Larry K Cragun – Windermere Real Estate
Condominium and Residential Professional
801-244-1666 – email@example.com
What About Investing In Real Estate? An investor and real estate developer that I was once on staff for, Bill Schourup, had an important investing principle. It was based on his belief that real estate went in cycles. One can’t predict when the cycle will take place, but one can predict that there will be ups and downs in values. This was advice from over 30 years ago, when I was just a young pup. Mind you, he was an investor as well as a developer. Pretty much all of his investments were in real estate. He owned large portions of land, a shopping center, motels, pads to lease to fast food restaurants, apartments, and office buildings.
That advice was to either own your real estate free and clear or have it in debt as close to 100% as possible. The reasoning was simple. In a down market when you own it without debt your only risk is the cost to hold it. For example in land there may be taxes. Rental properties were a favorite as your risk on free and clear investments you may be subject to reducing rents.
When you have it close to 100% mortgaged the banks are more likely to work with you rather than foreclose and take the problem on their own or suffer a loss greater than working with you. An example I witnessed with a condo developer client was in the most recent down market or should I say crash. Rather than foreclosing on a building just completed construction before the crash the bank gave a client of mine in the Seattle area the right to rent the units out until the market turned back up. These were very high end condos. The client used the rent to maintain the servicing of the mortgage. Had their been serious equity that wasn’t a probable outcome.
Bill’s theory of there will always be ups and downs in the real estate market is in fact more than a theory. The concept that we never know when the down will happen is real. I was in a conference in New York City when a Harvard professor asserted that we were about to witness a crash. It was a real estate conference and he was about booed out of the building. None of the attendees bought into his premise. All of us soon witnessed the reality of his claim. If only.
What About Investing In Real Estate?
By the way, have any of you had your stock portfolio ruined in a heart beat? I have. We have. Kathleen was once a proud hold and never sell of major telecom stocks. They took a crash that have only partially recovered. One stock dropped by over 90% in value. She still holds it and yes, it has come back by about three times. If it were at $90.00 and dropped by 90% it would have gone down to just over $8.00 a share. See it triple again and she has it up to $24.0o. Not so good, right?
I sold a condo to an individual who called and wanted something better than what she was getting in the bank, which of course is about 0. She is getting a 5% return after paying the HOA. She bought it without a mortgage. This may not be the ultimate investment but it sure not risky to hold and it sure beats the bank.
What About Investing In Real Estate?
This article is a part of a series addressing What About Investing In Real Estate? I will share a variety of investing options which may or may not make sense for you.
Buyers Agency Contract, Will That Agent Want A Contract With You?
Buyers Agency Contract, Will That Agent Want A Contract With You? Yesterday I closed on a transaction where I was the buyers agent. Yes, we had a contract that I was her exclusive representative. We met a few weeks ago at an open house. She wanted to see different properties. I was willing to show her around and we spent a couple of afternoons looking at properties. It was then that I asked if she were willing to sign a contract. She seemed willing, took a couple of days to review it, and executed the contract.
Yes, we completed a transaction, and her last text to me was how excited she was about her new purchase.
Compare this with a situation a friend brought to me before I was licensed in Utah. He and his wife were looking at a home in North Salt Lake. They were moving here from the Midwest. He came to me with a buyer broker contract, wanting my opinion. The agent met them and pulled out an exclusive contract to represent them. They met the agent/broker by calling on a sign. The agent came and showed the home, he was a new agent and took the phone call at the office. (they call it floor time). There were a few issues that concerned my friend: they were unsure if they wanted to live in North Salt Lake. (They actually ended up buying in Pleasant Grove). They weren’t confident this was the right agent for them. They hadn’t seen the inside of other properties and were wanting to consider all options. It was clear that this agent didn’t know the other markets they were considering.
So what is the right conclusion about signing a contract with one agent? You could not sign anything, let that agent take a chance of having your sale. You could sign and take a chance all goes well.
It is important to know that these contracts are very binding. If you abort the contracted agent it’s probable that agent will be the one who gets paid, no matter who sells you the home. Neglect by that agent can put agents in a situation where the MLS has to arbitrate the result.
It is also important to understand the values to you the buyer when you contract with a good agent. 1- you become a high priority. So many people are willing to waste agents time, to have one offer such loyalty is highly valued and appreciated. That signed relationship will likely cause your agent to go far and beyond the normal service level to make sure you are taken care of. 2- Often, a trusted relaxed relationship that develops. You become trusted friends. The client I referenced has become an extremely important person in my wife’s and I lives. 3- The pressure is off of you when shopping on your own. You know you have an agent and if you are looking around, open houses or invites by friends to see their neighbors home for example, you take any pressure off from another agent by merely informing them that you have a contract with another agent.
Here are a couple of ways that might work for you. First be willing to sign a contract that names the homes you see with an agent, not sign for every home you consider in every market. This won’t limit you if you decide to move on to other considerations. Second, do as the example of my recent sale. Both of you invest some time together. If it is working, if you like and trust the agent, go ahead and sign the contract.
What About Investing In Real Estate – Part 3. Investing for the future, a second home or a rental home to keep. I present two, not so often stated reasons, for purchasing that rental property. What About Investing In Real Estate?
Typically it’s done for the cash flow. Sometimes it’s hoping to cash flow 5% or more and that’s what is the focus of the purchase. Consider these two reasons:
1- Buying now that rental property as the home you will move down and live in. If affordable buy it as a second home and not rent it. Buy it now. As I sell a lot of condominiums I find people in their 60’s- and older finally selling that big home with high maintenance and replacing it with a lock and leave situation, such as a condo. In downtown Salt Lake City the appreciation on condominiums has been, in some cases 25% or more in just the last three years. Those same units would have rented high enough to provide a decent positive cash flow return. The cash flow was nice but had the purpose been to own and retire to that unit the purchase price savings would have been the more important factor. I have had clients make their second home purchase for just this reason. It’s a smart decision.
2- Purchase a second home for the kids college. Young parents have four choices in planning for their children’s college expenses. 1- Pay for college costs out of ordinary income. (Add 25% to 30 for taxes) 2- Expect the student to pay work to pay for all or part of the costs.(That was my option) This could take longer to graduate with the higher possibility that the student will dropout. 3- Student loans where the student starts out in life deeply in debt. Do you know any kids in this situation? I do. 4- Pay college costs out of assets. Buy a rental property that will be free and clear. In some families the perfect loan is a 15 year mortgage to assure the free and clear result. This purpose opens the door wide open to the location and type of investment property. A good location I have guided clients to is in communities near the growing tech area called Silicon Slopes, Lehi and close by.
As an example to #2 above is if you purchased a $300,000 property with 20% down and you experienced a 5% per year appreciation that home would be worth $623,679 in 15 years. In the Silicon Slopes area rents are currently typically earning $2,000 per month.
If your child is already a college student, purchasing a property is still an excellent solution to curbing the high cost of education. The investment property can be a place for the student to live and provides a source of income (roommates) to help pay the mortgage. I have had several clients purchase in this situation.
Yes two very different worlds, and both close to downtown Salt Lake City. Both with condo living or houses. Both with reasons to live there, yet as I say, very different.
We have several friends that have come like we did and decided to make this their home. Where they end up is interesting: Lehi and Pleasant Grove in Utah County, and all the commuter traffic, some in Bountiful, some downtown, some in the Riverton and South Jordan area, and some in North Salt Lake.
There are reasons for the different selections. Living in The Avenues has it’s own flavor. It is close to downtown and the U. It is truly a community. I invite you to attend the monthly community council meeting held by the Greater Avenues Community Council on the first Wednesday of each month. It truly is a community gathering that illustrates why many choose to live here.
I recently heard interesting feedback of someone looking for a home in The Avenues which made the selection dilemma interesting, even challenging. This buyer wants the location of the Avenues but the homes, mostly because of the ages and conditions, of the homes that can be found in the nearby Eaglewood community in North Salt Lake. It will be interesting to see the decision this family makes.
I like both neighborhoods. We live in downtown. The Avenues is so convenient. While touring homes in Eaglewood I found several I wanted to buy. That’s been my weakness, even our weakness. Our kids think we are crazy, for fun we go look at homes. I found one this week in Eaglewood, two stories with an elevator. I just had to have it. It was cool. Kathleen thought it over for a short time and nixed the idea.
The next photos are just a few I took this morning of homes on 1st Ave in The Avenues. This was a random selection with the only objective of illustrating this part of The Avenues.
To illustrate the difference in settings, note this shot. FORE!
Yes, this is a golf course in Eaglewood. And here are some pics of the neighborhood.
If you are interested in newer homes within a short drive to downtown North Salt Lake may be for you. The avenues homes are vintage which many people love. Some have been updated. These in North Salt Lake City as you can see are much newer, less likely for needing upgrades. I will say, I attend some of The Avenues Community Organization meetings. The residents here are extremely proud of their community. It is a strong community organization.
If you like vintage you might love The Avenues. Otherwise, take a look at North Salt Lake.
About Larry Cragun Windermere Real Estate I write this post to share why I believe I am a great choice for you to use to find your home or condo. Thus the title Why Larry Cragun Why Windermere Real Estate.
The not too long ago photo includes my talented wife Kathleen. She is an important partner in my real estate practice. She has been an award winning and magazine published interior designer during her business career, and considered to be the best designer in whatever firm she worked for or whomever she performed her magic for. She brings to my clients an important eye on how to best present your home for sale. She is an important second opinion on home values, understanding that value is based on more than the square foot of the home. Having Kathleen as my partner is your asset.
I have over 30 years of experience in this industry, including owning one of the largest mortgage companies in Washington State, which I sold prior to the housing crash. Understanding financing is a big asset for my clients.
I am one of the most successful condo focused agents in Salt Lake City. I understand the market. I understand value. I understand the benefits one building vs another. I have sold condos from Draper and Daybreak to North Ogden.
Also, selling condominiums is not like selling homes. Their are sometimes hidden risks not all agents can spot. An important issue is what does FHA think of the property. Is it FHA approved? If not why not? There are many things to understand and many things an agent needs to help you evaluate. I am good at this.
Last year I closed on a condo in Governors Plaza. The buyer came to me off of my website: http://ItsGreatInSaltLake.com/ She had been doing research and as I mentioned the condo product that was available out there she seemed to know they weren’t what she was looking for. She mentioned that she really liked Governors Plaza. Nothing listed matched her wishes. So I went to work looking for something not currently on the market and found the right one. It was perfect for her. It took a bit of price negotiating with the seller but all went down just fine.
This buyer is another example of my approach to this business. She was defensive when we first spoke on the phone. She had talked with other agents she felt were high pressure, were trying to immediately lock her down as their client. Sensing this resistance I shared my philosophy, “if it isn’t working between us, no problem”. I won’t try and contract you with a buyers contract, except when we make the offer and it will only be on that specific property, which contract is required by Utah law. Mutual respect is the rule I try and follow and look for.
All of this was while I was licensed with MediaOne Real Estate, a subsidiary of The Salt Lake Tribune and Deseret News. In January we learned that Windermere Utah had purchased MediaOne Real Estate. At first I, as were my colleagues, were extremely concerned about what this meant for us and our clients. The concern quickly turn to excitement. Their marketing power is unlike any brokerage I have been licensed with in my entire real estate career. I began to realize that I had more to offer to buyers and sellers than before, and in fact I suggest I have more to offer now than my competition. Take for example the Matterport Camera Windermere just purchased. It provides the current internet shopper, which are the majority of shoppers the ability to actually walk through the home on line, with a beginning overhead view of the floorplan. It is amazing. I am currently scheduling filming with each of my listings to include a Matterport show for my sellers. List with me and you will have a fabulous tool to share, and for me to market with. It is at a cost to me, but man is it worth it. Here is a sample: . https://my.matterport.com/
If we meet I will share many other things we have at our disposal for you, such as the Living magazine Windermere publishes to high end and other targeted potential buyers.
To buyers, besides Matterport, besides our terrific search on my site, I have special tools to assist you. For example neighborhood news advertised at the bottom of my website. Subscribing here will provide you a monthly report by zip code of every on home or condo on market, under contract, and sold in that zip code, that month. You receive that report as long as you desire. Pretty cool for sure.
I love helping people with their real estate needs, as do most in this business. It’s a very satisfying career and I am glad to have come out of retirement to enjoy it again. I am pretty state of the art with technology, started a dotcom, am about to have a company publish an app I designed, and am grateful for finding a cool niche in Utah. I look forward to assisting some of you.
Larry Cragun – Windermere Real Estate
Residential and Condominium professional.
I came here in 2011 after a career and great life in Seattle.
Sure, Seattle has the Seahawks but it also has rain in the winter. One of the things I enjoy daily about living in Salt Lake City is the practicality of my wearing my sunglasses. It’s actually joyful for me. Even though it’s winter its bright and sunny. I love it and I appreciate it.
Now you may not think that a big deal but you also may not be a transplant from Seattle as I am. Truthfully, there are seasons in Seattle where the sun doesn’t shine from September to April.
It’s great in Salt Lake
Real Bad Mortgage Advice Radio Advertisement
Today I listened to a radio ad that I want to address. It truly is Real Bad Advice On A Radio Advertisement. The ad invites you to use the radio ad mortgage lender, buying the ad instead of using one referred by the real estate agent. It touts strengths of the advertising as being impeccable and superior. It suggests a better interest rate as a possibility. Real Bad Mortgage Advice Radio Advertisement
I was in the mortgage side of the business for much of my career. I went from loan officer for a bank, to being licensed with other banks and mortgage companies. I ended this side of the business as owner and CEO of one of Washington States, largest volume mortgage companies.
The advice was bad advice for two important reasons.
1- shopping rates is a suckers game. Interest rates fluctuate at least daily and several times a day in certain market conditions. You do not lock your rate on a shopping call. The first bank I worked for ran a Sunday ad quoting their rate. They had to have the quote in on Wednesday before. People started ringing the phone on Monday AM and it was a nightmare. The rate in the paper was no longer valid. I hated it and refused to play the game.
2- This is an extremely important reason that it was Real Bad Advice On A Radio Advertisement. When you speak with a lender or loan officer that runs radio ads the relationship is between you and that loan officer. It’s a one on one relationship. If they mess you up, don’t deliver as promised they lose you.
The ad was asking you to discard the loan officer referred by your lender. Think about it. If this referred loan officer messes you up he or she puts a steady flow of referrals at risk. Their responsibility is to more than you. The loan officer receiving referrals from an agent that can provide a lot of business will go overboard, even in busy times to not mess you up.
Now having been there and even overseeing hundreds of loan officers I have seen a lot, may be even seen it all. Crashes with peoples loans happen. In busy times lenders can get too busy. They have no control how much business comes through the door each day. They have a fixed number of staff and the loan officer only has so many hours a day, even if working long hours. You definitely want to be the preferred, real estate agent referred client.
Some examples of crashes: they forget to ask for all the documents that are needed, they are slow in ordering your appraisal, the rate they promised just went away because they were slow to lock it, there are many as it is a business with a lot of detail.
The worse one I remember was with now defunct Washington Mutual Savings and Loans. An agent brought a client to me with the statement that I was competing against WAMU. The buyer had the rate quote in writing and all I had to do was beat it and I would have the loan. In checking things out I said that there was no way that rate was possible, it was way too far under the market. FYI rates from lender to lender vary very little. I not only didn’t get the loan against what I believed was a fake rate I made the agent angry. A few weeks later the agent and client came to me for help. It was time to close and the rate was way way way higher than quoted. This was a not too uncommon of a problem back then and the government has made it more difficult to have this severe of a problem, but it can happen. I still had an angry agent friend but there was little that I could do to help at this point.
A more typical problem these days is when a local real estate Principle Broker had a transaction that couldn’t close at the last minute due to a lender saying the buyer qualified for the loan and at the last minute the loan was denied. His words, “all too often the loan officer says they qualify when the app is taken, yes they qualify throughout the process, and at the last minute, sorry they don’t qualify”.
These are only a couple of examples. It truly is Real Bad Advice On A Radio Advertisement to move people from an agent referred lender to one that advertises for your business. Even if you are getting a refinance, either use the lender that you had a successful experience with or call a real estate agent for a referral. In the later case make sure the loan officer is aware of how they referred.
This advice also applies to responding to web site lenders. I have had situations where I had to warn internet found lenders that if they weren’t going to honor the commitment they made that I will help their upset client make a complaint to the State Attorney General. It’s a sad way to get action. More often than not the issue is not meeting a closing deadline. I hate to add to my list of no no lenders local savings and loans and banks. I tell my clients that I have had and seen so many bad experiences with them that I may not want to be their agent. It for similar reasons of the problems with internet lenders with one unique one, in that with some of these you get to talk to a different bank employee all throughout the process and trust me that is really not good.
There are two lenders on this site you can count on. But more importantly, if you are buying a home, use the lender agent refers you to. You will be the priority client and that is what you deserve.
Ignore this: Real Bad Advice Radio Advertisement.
Larry K Cragun Windermere Real Estate
Residential And Condominium Specialist
Windermere Utah Acquires MediaOne Real Estate and it was quite a shock to many of us. It has been my long term attitude that the brokerage brand does not make the agent. I believed that the skill of the agent and that agents work ethic had everything to do with his or her success and therefore the success of the agents clients.
That attitude took a right turn not long after I licensed in Utah. In Utah I licensed with a similar company to those I was used to, one that gave no support but also gave me almost 100% of the commission. Upon the constant urging of Kathleen I joined MediaOne Real Estate. She saw and valued the tremendous newspaper advertising presence they had in the Deseret News and The Salt Lake Tribune. In my interview I discovered the lengthy list of backup support they provided besides their advertising. Joining MediaOne was a no-brainer.
Because of my volume I became the target for almost all of the Salt Lake City brokerages recruiters. “Sorry, I am very happy and no thanks” was always my response.
So into my business life comes the announcement. “we have been acquired”. It turns out to be good news. Windermere was not a new brand to me, my daughter was a “Windermere agent” in Seattle. In that market Windermere is one of the market leaders. The good news is that instead of losing benefits for my clients and myself we have additional benefits. I still give up a larger share of commission as in MediaOne but the marketing benefits are added upon. Windermere’s presence for referrals and marketing is multi-state. They publish a quarterly magazine of our listings to high end and targeted income earners. Their web savvy is state of the art. It was critical to all of us at MediaOne Real Estate to keep our newspaper advertising. With the acquisition it is better.
I have to admit that moving to MediaOne countered my “brand names don’t help” attitude. I can see that it’s another step of progress to now be with Windermere Utah.
Larry Cragun Windermere Real Estate
Salt Lake City Residential & Condominium Professional