There’s a lot of competition between lenders looking for your business, and you deserve to find the best fit for you. An article on Investopedia said a Google search for “mortgage lenders” yields around 72 million results. Here is the daunting list of things to think about when choosing a lender.
- Is this the person I’ll talk to throughout the process?
- Is this lender a good fit for my style, needs, and personality?
- Are they available for questions?
- Is the lender available to coordinate with me and my agent?
You Can and Should Shop for a Lender
It’s illegal for a lender to scare you against shopping for a loan, but that doesn’t stop some lenders from hinting at a non-existent danger. When a lender first pulls your credit, it will show up on your report as an inquiry. A few additional inquiries by other lenders won’t harm you. Lenders recognize you are shopping for a loan.
Will They Work with My Agent?
A lender who will work with your agent is probably the most important factor. Why? Because having timely access to your lender (including weekends and after hours) can help you win the house.
You need a prequalification letter from your lender to support your Offer. Most Listing Agents require a prequalification letter accompany all offers, and not all prequal letters are created equal. A good Listing Agent calls the Buyer’s lender and gets to know their lender. As a Listing Agent, I inquire about research done prior to issuing the prequalification letter. I also try to get a feel for two things: 1) the ability of the lender to close on time and 2) how reachable they are.
Is Your Lender Available to Coordinate with Us?
Timely access to your lender can play a big part in the acceptance of your Offer. Here is just a couple of ways.
- Provide you with a property-specific estimate of the monthly payment. Property tax can make a significant difference. I’ll provide the information to your lender.
- Provide you with a property-specific letter to submit with your Offer.
- Answer questions from the Listing Agent and help sell your Offer.
- Coordinate with me to structure the most competitive Offer.
Here are a couple of examples of questions I might want to pursue.
- What can the Buyer offer and still have their desired monthly payment? If the property taxes are lower than anticipated, the lender can help us decide if we can offer more and still have your desired monthly payment.
- How much “Seller-paids” does the Buyer need? (See note below.)
Types of Lenders
The type of lender you’re most likely to deal with is an intermediary who works between the borrower and the lenders. They shop the various lenders and find one fitting your situation. They do not set the terms of the loan. Most lenders will have a variety of products to offer, so I recommend focusing on service. However, I highly recommend you get a local lender who knows your market.
The Internet lenders (or highly advertised non-local lender) are getting better at competing with local lenders. They’ve stepped up their game both at understanding the different markets and at being available. But it helps to have someone in your own time zone. In addition, it’s likely a local lender will offer the same incentives as the Internet lender.
Most lenders are competing on service and good reviews, but you’ll see other enticements too. Closing quickly has become the hot promise, and it’s common to both Internet lenders and local lenders. A local lender has a better chance of realistically assessing those time delaying factors no lender can control. Many times a lender will advertise themselves as “VA experts” or something similar, but I’ve found that to be more of a tagline.
Be skeptical of offers of reduced fees. The fees a lender can charge are set by regulation with both maximums and minimums. But you should be aware that some banks don’t feel the need to compete on fees because they are counting on client loyalty to sell their loans. In other words, your bank could charge more for your loan, but they could also offer incentives like help with Closing Costs.
I have the names of several lenders, and I’m happy to discuss further.
Note: “Seller-paids” (also known as Seller Concessions) are negotiated monetary amount implemented for the Buyer at Closing. These concessions are used to help the Buyer with their Closing Costs. When several Buyers are making offers for the same property, reducing the requested amount of Seller Concessions makes you more competitive. The amount a Seller can contribute to a Buyer’s Closing Costs is limited by the Buyer’s loan.
One of my Sellers loves attracting birds to her yard, and I thought I’d share some of my experience as well as some research to help aspiring birders.
The basic list of “equipment” needed is water, food, and shelter or safety.
According to the Bird Watching HQ blog, “providing consistent fresh water will attract more birds than just hanging a bird feeder.” Here’s a link to a website with a variety of DIY ideas. You can also find them a wide variety at local garden stores, Home Depot and Lowe’s. One concern in San Antonio is mosquitos. A fountain or moving water might be a good idea, and keeping equipment clean is essential for bird health.
Different types of birds like different types of feed, so you’ll need to investigate. For example, thistle attracts finches and chickadees. This site gives a handy list of types of seed and the birds they attract. And check out this website to find out about the wide variety of suet and the birds you can attract.
Birds will push the cheaper seed out in order to get to the more desirable seeds. Fortunately, doves like to feed on the ground, but you can buy feed treated to eliminate sprouting of the leftovers. This site discussed DIY treatments to prevent the discarded seed from sprouting.
Oh, the joy of watching the birds at feeders! We’ve all probably seen the tube feeders with perches at different levels and nectar feeders for hummingbirds. Below is a list of types of feeders from my research.
- Hopper Feeders. This type probably has the largest reservoir and usually has some type of “roof.”
- Tube Feeders. Probably the most common type.
- Thistle Feeders. Specifically, for the small thistle seed popular with finches and chickadees.
- Platform Feeders. For ground feeding birds. Some type of screen allowing rain or dew to drain away is very important to prevent degradation.
- Nectar Feeders. The nectar feeder needs to be thoroughly cleaned between refills to protect Hummingbirds from illness.
- Suet Feeders. Designed for specialized feed and attractive to woodpeckers.
- And many more including Corn Ear and Peanut Wreathes.
Check out this blog for more details and pictures.
Shelter or Safety
My bird-loving Seller has a yard with several trees and plants, and birds need a place to perch while they check out the scene. The blog Bird Watching HQ also mentions using native plants, and this makes sense. If you look at a birder guide, each species has an identified range, and you’re more likely to attract birds with plants familiar to them. Migrating birds will also be attracted to local flora.
Birdwatching is a stimulating activity for cats but keep them indoors. Also, keep in mind other types of animals that might chase away the birds such as squirrels or other competitors.
Another safety feature is keeping things clean. Nectar feeders for hummingbirds should be thoroughly cleaned between refills, and birdbaths need to be regularly cleaned.
Other Fun Bird Things
The YouTube site LesleytheBirdNerd has some delightful and instructive videos. The first video of hers I came across discussed Blue Jay behavior. Did you know they are related to crows and ravens? Who knew? Also, check out this video from Smarter Every Day where he investigates the science of hummingbird flight.
Earlier this year we were concerned about rising mortgage rates, but fortunately, rates are still at historic lows. If you’ve been in your home for a while or just have a rate higher than currently in the market, it may be time to refinance.
Here are some reasons to think about:
- Lower your interest rate.
- Lower your payment.
- To move from one loan type to another. (I’ll elaborate later in this post.)
- Shorten the term of your loan.
- Tap equity to use for investment, debt consolidation, or to support college for a child or grandchild.
Reducing your mortgage rate by 2% could make you a good candidate. Here’s a link to the article where I pulled the 2% number.
Why Move to a Different Type of Loan
You may also be a good candidate if you took out a loan with a balloon payment. This is one example of a loan type where you could benefit in moving to a fixed rate loan.
You may have bought your home with a little higher interest rate in order to get the loan. (For example, to offset the lower credit rating you had at the time or get better upfront cash terms.) Refinancing is definitely worth looking into for many reasons, and a lower payment is only one thing to consider.
There is also a VA loan product to reduce your interest or refinance your loan and remain in a VA product. One of my clients was able to use this product to set himself up for a VA assumption when he gets ready to sell next year. I’m not going to post a link here because it’s best to start with a reputable lender and avoid the advertisements a search will bring up.
A lender can help you make the best decision for you, and I’d be happy to provide you some names and numbers. Contact me if you’d like the names of the exceptional lenders my clients have worked with.
All those real estate websites and apps help me help my client, but buyers need to be savvy. Some sites fail to keep out the fraudsters and even if the property is properly listed, a buyer could be setting themselves up if they aren’t careful.
Agents Buy Leads
If you request information on property showing on Zillow, Homes.com, or just about any site, the agent getting your information paid big bucks for it. Sometimes the lead will go to multiple agents. These leads are expensive and agents are going to work to make it pay off for them. Many agents have their own website and putting in your information on these sites limits your exposure.
You’ll Get Bothered
It’s probably no surprise that if you enter your contact information, you will receive follow up from an agent—perhaps multiple agents (See 1 above). Contacting an agent directly and setting up a relationship can eliminate the craziness. Sure, a good agent will put you on a contact list for follow up, holiday greetings, or whatnot. But once there is a relationship, the wise agent doesn’t make a nuisance of themselves.
Just Click and Get a Showing — Nope, There’s More Involved
First off if you do get connected with the Listing Agent, you need to know that they work for the Seller. That means their loyalty and accountability is owed to the Seller and anything you disclose will be disclosed to the Seller. Many times agents will refuse to show properties without the buyer signing a Buyer’s Representation Agreement. That means you’re in a contract. Any broker or agent can show you houses listed by other brokers.
(I often do not write a Buyer Representation Agreement until my buyer is ready to make an offer. And I love that my broker guarantees to let the Buyer out of the Representation Contract at any time for any reason.)
Still More Before You Get a Showing
Zillow and other sites will often quote a payment amount for a property showing on their site. It’s not a true representation—at least not entirely—and this is one of the reasons to get preapproved before looking for your new home.
Nothing breaks my heart more than the disappointment of potential buyers when they realize they have been looking at houses outside of their price range (or mortgage payment comfort level). The second heartbreaking experience is losing out on their dream home in our fast-moving market because they don’t have the preapproval. A buyer will also have a better understanding of what their true payment looks like once they’ve spoken to a lender. And shopping for a mortgage will not affect your credit rating like a store card or car loan does.
All the Information is Online — Not in Texas
Texas is a non-disclosure state, that is, sold prices are not publicly listed. What does this mean for the buyer?
- In Texas, Zillow’s Zestimate is generally only correct 6% of the time.
- You can’t be sure you’re not paying too much for that property. Market statistics for similar houses in the neighborhood is only available through an agent with MLS access for the local board.
- The Listing Agent (who works for the Seller) has no incentive to cut a buyer a deal—they’ll likely want both sides of the deal. (A buyer’s agent is paid from the Seller’s proceeds.)
Look at What Hiring an Agent Can do for You
- Hiring an agent means you’ve got an experienced real estate negotiator on your side.
- Hiring an agent means you’re hiring market and neighborhood experience.
- Hiring an agent means you’re hiring transaction experience.
- Hiring an agent means you’ve got someone watching the deadlines and answer questions.
- Hiring an agent means all the proper forms. (Some forms are not available to the general public.)
- Hiring an agent means hiring the experience that can help you avoid pitfalls.
The Witte Museum is located a little north of downtown San Antonio and is adjacent to Brackenridge Park (itself an experience to be treasured). The Witte’s website has this tagline “Where Nature, Science and Culture Meet.” From my experience of The Witte, I have to say it lives up to their tagline.
The newest exhibit is “My Heart is Not Blind.” Photographer and documentarian Michael Nye’s presentation on people dealing with visual impairment. This exhibit is part of their Changing Exhibit Gallery and will be at the Witte until March 31, 2019.
Planet Pioneers is an inactive exhibit exploring extraterrestrial experience. Would you survive? Looks like a lot of fun.
Other exhibits listed on the website (linked here) are listed below.
- The Birds and the Bees: Pollinators in Nature, Science and Culture (through March 17)
- McLean Family Texas Wild Gallery
- Kittie West Nelson Ferguson People of the Pecos Gallery
- Naylor Family Dinosaur Gallery
- H-E-B Lantern Valero Great Hall Orientation Gallery
- Laura and Sam Dawson Gallery
- Acequia Madre and Diversion Dam
- Russell Hill Rogers Texas Art Gallery
- George West Trail Drivers Gallery
- Naylor Morton Research and Collections Center
- H-E-B Body Adventure
- Robert J. & Helen C. Kleberg South Texas Heritage Center
What’s your entertainment style? The Tobin Center might just be the place for you. Below are the genres listed on their website. If you drill down into the “Music” category, the results are as diverse as a Sinatra tribute to a tribute to Michael Jackson’s Thriller. The Tobin Center is truly a wonderful place. Here is a link to their website.
The Tobin Center for the Performing Arts is located downtown at 100 Auditorium Cir, San Antonio, TX 78205. The parking garage is located nearby in the triangle of 4th and Taylor Streets.
Looking for an interesting tour? Try these three San Antonio area distilleries.
Alamo Distilling Co.
621 Chestnut St. 78202
Reservations required at least a day in advance
Has an events Facebook page
Ranger Creek Brewing & Distilling Co.
3834 Whirlwind Dr. 78217
Tour times every Saturday at 2 PM
Private tours available, 10-person minimum, 60-120 minutes depending on tour
Rebecca Creek Distillery
26605 Bulverde Rd. 78260
Tours, events and parties available
Merch available and online
Difficult topics for a blog post, but since I promised to define them, here we go.
Earnest Money is a deposit made by a real estate Buyer to show good faith in a transaction. The money is held at the title company until closing. In the San Antonio market, Earnest Money is approximately 1% of the Sales Price of the Contract.
At closing, the money is returned to the Buyer. Either the amount the Buyer is required to bring to closing is reduced or the title company will pay the money to the Buyer.
If the Contract is terminated, both parties must sign the Release of the Earnest Money before the title company is allowed to release the money. The party receiving the Earnest Money is determined by the termination reason. The title company may delay until they have held the funds at least 10 business days from the date of deposit.
The Option Period takes the property off the market for a fee to allow for inspections of the property. The Buyer has the unrestricted right to terminate the contract so long as the termination paperwork* is sent to the Seller before the end of the Option Period. The Seller is obligated to the terms of the Contract but may be willing to renegotiate.
The length of the Option Period and the cost (Option Fee) are negotiated as terms of the Contract. In the San Antonio market, the period is 5 to 10 days and the usual cost is $10 per day. The Option Fee usually returns to the Buyer at closing, but this is also negotiable. Any termination of the Contract after the Option Period results in the Buyer losing the Option Fee.
*As of this writing, the end of the Option Period is set at 5:00 p.m. on the last day of Option Period by the Texas Real Estate Commission.
Buying your first home can be exciting and a bit anxiety ridden. Here are a few things to know when you’re ready to start.
Many people think that shopping for a mortgage will hurt their credit rating, but it’s much different than taking out a store card or even financing a car. Mortgage lenders can account for the inquiry from other mortgage lenders so it won’t hurt your rating. In fact, your lender can suggest things—sometimes very small things—that will make your credit better. Here are a few other reasons to get preapproved:
- You’ll know approximately how much house you can buy. Avoid the heartache of falling in love with a house you can’t afford!
- You’ll have the required preapproval letter. Listing Agents won’t even look at your offer without one!
- Your lender can help your agent know how much to request in closing cost assistance. Very important not to leave any money on the table by asking for too much!
- You may be eligible for an assistance program. You may be able to afford a home quicker than you thought!
Set Realistic Goals
Being realistic only means being willing to make concessions. A dedicated agent understands that you will need to shop a few properties in order to prioritize your list of features into the “must have” and the “would be nice” lists.
Select the Right Agent
Make sure you find an agent who is accessible, communicates well with you and makes your best interest a priority. She or he should be able to do the following:
- Explain the process (repeating as often as necessary)
- Explain the documents
- Structure your offer to best meet your goals
- Provide suggestions for professionals
- Keep track of and communicate important dates
- Communicate with you regularly
Get a Professional Inspection
Professional Inspectors are not only trained in what to look for but also have the experience to anticipate problems with a potential property. After looking at a bunch of properties, or getting starry-eyed over that one house, it can be easy to miss details that the professional is trained to see. It’s definitely money well spent.
Prepare for a Few Upfront Costs*
- Earnest Money: Usually about 1% of the Sales Price and will be applied towards the purchase.
- Option Fee: Usually about $100 depending on the length of the Option Period. This fee can be forfeited if the buyer leaves the contract before the Option Period is over, or it can be applied towards the purchase.
- Inspection Report: This varies by the size of the property. Plan on at least $350.
- Appraisal Fee: This charge comes through the buyer’s lender. Some lenders charge for it at the time of the appraisal and some make it part of the closing costs. Plan on at least $500.
- Specialized Professionals: Sometimes a home inspector will suggest getting an AC professional, a roofer, or some other tradesman to give an opinion.
- Other costs, such as for a survey, can usually be rolled up into the buyer’s closing costs.
*Earnest Money, Option Fee, and Option Period will be discussed in a later blog post.
Looking to buy a new home for the New Year? I would love to help!