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Roy D. Barker, Jr's Blog

By Roy D. Barker, Jr | Broker in Coconut Creek, FL
  • variables of mortgage rates and the process

    Posted Under: Market Conditions, Home Buying, Financing  |  June 4, 2012 2:08 PM  |  162 views  |  No comments

    Below is a well written article about the rate process and how the process works.  it is a great article and I hope people find it helpful.

    I sometimes get calls from clients and they want us to “quote them a rate”. I wanted to take a few minutes and explain from our end why it is not as easy as looking at a rate sheet and quoting. I want to let everyone know that we are not trying to be difficult or evasive but unfortunately there are so many variables that I feel like an explanation is needed so we don’t come across as being unappreciative or difficult.  Many of the larger banks will blindly quote a rate in an effort to get a borrower in their pipeline, however what normally happens are the rate and product changes after they start to work on the file and it creates last minute issues and problems. We strive to avoid last minute surprises and problems, it serves no one to give a pre-approval not worth the paper it is printed on.    

     

    The first and most important factor is that without seeing someone’s credit it is impossible to accurately quote a rate. Credit score is a major factor in all aspects of rate and product and has never been more critical in the mortgage market. If a client is hesitant to give us permission to pull credit we can always direct them to go online and pull themselves and then forward that to us, we have success in doing that with people who are cautious and we understand why they are cautious.  

     

    The second important variable is the subject property to determine accurate tax and insurance numbers. For example, when we tell you that a borrower qualifies for 150k it is based on normal taxes and insurance. However if the property they like has a roof from 40 years ago and the insurance is 4k a year that could hurt our ratios. Taxes also vary greatly around South Florida so that is why we always like you to contact us with the property address when making an offer. It only takes us minutes to run the information thru our desktop underwriter so we know we are fine from our end.

     

    The third variable we find is on the income part of the loan process. The reason we are asking people for their last two years tax returns and w-2’s is to avoid last minute verification issues. For example someone sends us a W-2 for 80k a year but when the final 4506T is pulled at the end of the process, with most banks, it is discovered that they write off 25k a year in deductions. That is why we like to see complete returns especially with self- employed borrowers whom are often instructed by their accountants to file things in manner that is designed to maximize deductions however that hurts us in the mortgage department.

     

    One thing that is extremely appreciated is if you can provide an MLS LISTING that has very valuable information in it for our purposes. The age of the roof, shutter information, HOA and maintenance information, if there is a converted garage. All the information contained allows us to encounter some problems, upfront..    

     

    We don’t not want to seem unhelpful or pestering your clients for information but we really want to be on point with our pre-approvals before you devote time to clients. I realize that at times it may seem like we are asking for many items for a basic pre-qualification and appreciate your understanding. If we seem to be vague when talking to you on a particular scenario it is because the market changes have made credit score, assets and debt to income ratios and Loan to Value more important than ever.

     

    As Mortgage Brokers we appreciate all the business and pre-qualifications we receive from all the agents and wanted to try and explain that we are trying to serve everyone’s best interest in being so thorough.   30 percent of our deals started off with other brokers or lenders and many times the issues could have been avoided by someone doing their diligence upfront and not a week before the closing. Our upfront work is designed to alleviate those last minute issues.   

  • How do I choose a Realtor to work with?

    Posted Under: Market Conditions in Florida, Home Buying in Florida, Home Selling in Florida  |  May 19, 2012 4:42 PM  |  197 views  |  No comments

    Interesting question I just came across: how do I find a good agent to work with? It struck me hard because what a great question.  See Realtors are a dime a dozen.  In Florida the running joke is that the first three things people get when they move to florida is a Drivers License, a tan and a Realtors license.  as much as I hate to admit it, it is really true.

    I come across this a lot.  People saying well my friend has a license so I will work with them?  My relative has a license so I will work with them. The list goes on and on.  I tend to be non-confrontational with those situations because it usually will do no good; but I think to myself: would you let a surgeon work on you who passed med school but went on to work in another field?  becaue they are a friend? a relative? you may think it is crazy to corrolate the two, but is is really?  your single most important pruchase in your life is your home.  Do you really want to leave that to someone who only does it once in a while as a favor? 

    Real Estate is a complex industry that changes nearly daily.  Chosing a Realtor should have some though given to it, things like:
    • history of annual sales?
    • understanding of current market trends
    • Continuing education
    • Heres one, what is their referral base? (using myself as an example, I closed a substantial amount of business in 2011 and have client testamonials and referrals to verify my experience)
    • what about thier mortgage person? title company? 
    • Do they understand all of the volitility in dealing with the different types of sales.  See, in todays markets, it is not a simple as a sale, there are different types of processes involved in the market and a realtor who doesnt understand them is dooming you to a real touch road

    Really, the list goes on and on.  The point being, find someone who does this for a living, not a past time or a favor.  Ask questions and see what the response is.  Do they seem hesitant, unsure, or like they are just blowind smoke.  does their personality work with yours?  are they available when you need them (not that you run an agent ragged, but a reasonable expectation of service should be expected).  

    As agents we provide a service and an expertise that should be held to a higher standard.  Just like you would not use a part time surgeon to perform sugery, dont use a wanna be realtor.

  • Why Cant Realtors tell me about safety of an area?

    Posted Under: Crime & Safety, Home Buying, Property Q&A  |  May 13, 2012 10:53 AM  |  198 views  |  No comments

    As a Realtor I get these type questions all of the time. 

    • How safe is this area? 
    •  what is the Crime rate? 
    • how diverse is the population?

    To which I have to reply:  "you really should call the local sheriffs department for that information" or gere are some websites with stastical information you are asking about.  

    I usually get a funny look and a client who is unsure why there Realtor cant tell them about the comunity they live in.  In reality, as Realtors, many times we do know the answers; but legally and ethically, we can not anser them.  I work with several law enforcement officers in different local departments and really do have a pretty good understanding of the surrounding communities; but, I can not give that information out, it is not my place, nor my qualification to do so. 

    See, in the world of Real Estate, we are bound by several laws and codes of ethics that prohibit us many times giving out answers that we know the answers to.  These laws fall into discrimination and steering laws.  Most people are familiar with the Discrimiantion laws, but Steering is something similar yet very different.  See Steering is telling you about a community with regards to safety, race or any other items that may play a factor in your decision to buy or not buy in a particular area.  Should I give you advice about an area and you dont purchase, or do purchase,  because of what I said, then I am liable and can be sued on several different fronts when something goes south in the deal or after the transaction is complete. 

    As Realtors, our job is to find you a home without regard to issues that may or maynot play a factor in your decision.  We may know the answer, but we can not give it and we can not withhold showing you a home because of our knowledge of the area, that is a call the client makes.  

    It is a slippery slope and a hard one to try to explain to clients.  Usually, I just tell them that I can not legally inform them of the area and they will have to do the research on their own and that suffices...most of the time.  

    Next time you go out, try to avoid putting your Realtor on the Hot Seat as much as possible.  We are here to help, but cant do much from behind bars :O)
     

  • Florida Market is Ripe to purchase

    Posted Under: Market Conditions in Fort Lauderdale, Home Buying in Fort Lauderdale, Property Q&A in Fort Lauderdale  |  May 7, 2012 9:22 AM  |  220 views  |  No comments

    The Sun Sentinel headline for Sunday’s paper was that we have hit the BOTTOM in the real estate market. Finally, the big question has been answered.  When the paper is advertising the time to buy is now, how can we dispute that?  With the market at the bottom and interest rates at all-time lows what better time for people to invest in the Florida real estate market.   

    Dont delay and be looking for your next home now.   

    http://www.sun-sentinel.com/business/realestate/fl-housing-market-bottom-20120506,0,2555991.story

  • can I put up a satelite dish at my condo?

    Posted Under: Home Buying in Florida, Property Q&A in Florida, Rentals in Florida  |  August 29, 2011 12:13 PM  |  419 views  |  4 comments

    Just read an interesting article about Satelite dishes and Condos.  Coincidentally, it was right after I had answered a question about the same.

    Here is the jist of the article:

    in 1996, the government banned condos and co-ops from restricting people from the right to have the television signal of thier choice.  So, thats it right?  we can put up dish and directv now, whoo hooo, we won!!!!

    Not so fast.  the condo assoication can restrict the placement of dishes and antenaes so to areas that you use and frequent and have complete access and right too.  In other words, the association can tell you to take a long walk off a long pier about putting up a dish on the roof,  In return, you tell them to take a long walk off an even longer pier and put a dish in your balcony or patio.  So who wins?  well, it depends on whether you get a signal or not.  If you get a signal, you win.  If you dont they win.  See, they can not stop you from putting one in your area, (they can make resonable demands that it conform with code etc..); but, they do not have to make any concessions so you get reception and they dont have to let you drill through common areas (exterior walls included) to mount one.  If it is in your imaginary space and you get a signal, that is awesome, but if you dont get a signal,....well, I think you get the point.

    If you are like me and directv is the way to go, (not a comcast fan at all; plus I like sunday ticket), then find a place that will allow you to have it and get it in writing.  Outside of that, hope that it works in your balcony :O)

    Roy D. Barker, Jr.

    Associate Broker

    Roy@FGLRealty.com

    Roy@SandalsRealty.com

    www.FGLRealty.com

    PADI Course Director 199390

    Roy@Seavisions.biz

    www.Seavisions.biz

    (786)863-7764 Direct Line

    (239)848-7773 Assistant Direct

    (941)240-2122 Fax

    A member of Sandals Realty

     

  • can I offer less on a short sale?

    Posted Under: Home Buying in Florida, Foreclosure in Florida, Property Q&A in Florida  |  August 28, 2011 5:31 PM  |  388 views  |  2 comments

    I was working with two different clients today and in each scenario we wore working with short sale properties.  On one of the homes, there was no need to offer less as it was already agressively priced and the bank had approved the listing price.  One the other one however, the listing price was way over inflated and I suggested to my clients that they offer considerably less, which they did.

    Here is the way short sales work.  An agent lists the property for what they think will be an agressive but accurate number that is within a range of fair market value.  When an offer is made, and presented to the bank, the bank send out for a BPO or Brokers Price Opinion.  A BPO is a cheap way for the bank to get an appraisal done without paying the high appraisal costs.  Real Estate Agents do them every day and they are not difficult to do. 

    Once the bank gets the BPO back, it then uses that as its base to begin working off of.  It is not unusual to get 5-10% off of fair market value in a short sale and the banks expect that will be the case to some degree.

    In my case today: the property was listed at $160,000.00.  The comps for the area suggested that fair market value is about 139-143K +/-.  My clients offered 135k as thier beginning price expecting that the bank will counter.  When you look at the area and realize that nothing has sold for more than $143,000.00 the bank can not ask financing buyers to pay more than fair market value because a true appraisal has to be done and the financing bank will not allow for that.  Also Realize that these banks are under no obligation to negotiate and make a short sale work.

    Important to note is that the converse is true.  If an Agent lists a property for $100,000 and they get an offer for that, and the fair market value is $175,000.00 the bank is not even going to entertain that offer, meaning everyone has wasted their time.

    Being smart and understanding the process will save you a lot of head aches in the end.

    As always, I am here to answer any questions you may have.

    Roy D. Barker, Jr.

    Associate Broker

    Roy@FGLRealty.com

    Roy@SandalsRealty.com

    www.FGLRealty.com

    PADI Course Director 199390

    Roy@Seavisions.biz

    www.Seavisions.biz

    (786)863-7764 Direct Line

    (239)848-7773 Assistant Direct

    (941)240-2122 Fax

    A member of Sandals Realty



  • What is the difference between a Pre-Qualification and a Pre Appoval?

    Posted Under: Home Buying in Florida, Financing in Florida, Property Q&A in Florida  |  August 27, 2011 8:47 PM  |  353 views  |  1 comment

    I get this question alot from buyers that I work with. A prequalification is basically someone has pulled your credit, looked at you debt and taken what you say you make and made a preliminary judgment on whether or not you can qualifty for a loan. As a general rule a prequalification is not worth the paper it is written on because there is no facts behind the assessment other then basically a credit score and what you have told the mortgage person.

    A Pre-approval however is another ball game. A preapproval is given after an in depth review of financial stantements including bank accounts, tax returns pay stubs and any other assets that you may have. That is coupled with a detailed account of your debts that you have and any reconciliation of any derogatory issues that may arise and a complete review of your credit. All of these things are put together and a number is arrived at as to what you can afford and under what circumstances a loan will be granted.

    A preapproval is a much more in depth review of your finances and when you make an offer, a pre-approval actually holds weight in the consideration process of whether or not to accept an offer. When I take out my clinets, they have to be preapproved before I will write an offer because I do not want ot waste anyones time. I have seen way to many prequalifications turn out to be bogus because the truth was not completely told or something was amiss that would hav been caught on a preapproval process.

    Dont be fooled. Take the time and do it right. If you are preapproved, that means that provided appraisals come in, inspections clear and title is clear, you have what it takes to get this loan and it can be substantiated. A prequalifiation just means your credit is qualified, and that is only one piece of the puzzle.

    More and more, sellers are requireing preapprovals. I have a great lendor that would be happy to begin the process if you need it :O)
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