Relocation Tips & Tools

Sniffing around the edges of the so called “3rd party relocation” business there appears to be a belated recognition on the part of those providers that getting greedy with referral fees is costing them.  Of course the relocation business is in as much disarray as the rest of the real estate industry.  Many relocation service providers got caught short paying top dollar for employee home purchases as the local market declined.  Part of the root of that problem was the relocation companies asking for as much as 40% for a referral fee.  By the time the participating real estate brokerage recovered its cost of obtaining and maintaining the business, the average fee paid to the Realtor® was 30% to 35% of the total cooperative commission. Many productive and experienced Realtors® do not want to work for that level of compensation, so the referrals have been going to the brokerages less experienced sales associates.  20 years ago, relocation business generally was referred to a select group of well trained and experienced sales associates.  Quality control was tight, and transferring employees were well informed about the buying opportunities, knowing the sale was not that far away.  Let’s face it, experience shows, and experience expects to be justly compensated for that experience.

That 20 year comment I just made in the preceding paragraph is popping up all of the time lately.  It seems as if the entire real estate industry is stabilizing around the business operating principles of 20 years ago. You know, well trained people, experienced management, long view ownership, ETHICS!, things like that.

One of the most frequent questions I hear from my Realtor partners is “What’s the best thing I can do to help my buyer’s make the right loan choice?” The answer is twofold: First, it’s not about the rate! and second, only refer the borrowers to qualified mortgage professionals–it’s our job to help them make the right loan choice!

The interest rate is not the most important part of the loan! What lenders sell is a commodity, but that commodity is the single largest debt most of our customers will ever have and putting the borrower in the lowest rate available may cost them thousands more than the loan should (can anyone say “Option ARM?”). There won’t be much difference between pricing on the same loan product from one reputable lender to the next, and the right loan a competitive rate is far better than the wrong loan at a lower rate.

When buyers hear “You should call three lenders to get a rate quote and good faith estimate,” it perpetuates that erroneous myth that rate matters most. It’s so much better for them to hear “You should seek qualified evaluations of your financial picture and choose between the most comprehensive mortgage plan offered to you.”

If a loan officer simply responds to a buyer’s rate inquiry with a rate quote, before developing a thorough understanding of their financial behaviors and goals, the loan officer has failed to meet the borrower’s most basic needs and contributed to the myth-conception about the importance of rate. A qualified mortgage professional will function as a trusted advisor, analyzing short and long-term financial obstacles, goals and opportunities and will structure the mortgage to maximize the borrower’s cash flow, liquidity and tax advantages.

The most professional originators will have the experience to analyze real estate equity and investment returns, cash flow, debt, as well as the financial markets and their impact on rates, and will have an understanding of the sections of the IRS codes most applicable to borrows. Further, the best mortgage professionals will have a comprehensive knowledge of credit scoring and how to work with the borrower to get the most out of the FICO’s–the difference between a 679 and 680 FICO could be $85 per month on a $250,000 home! And finally, in this era where FHA loans now comprise more than 50% of the closed transactions (compared to 12-15% one year ago), it’s also important to work with FHA approved lenders.

Please bust the myth-conception about the importance of interest rate and promote the borrower’s interest in finanical education and wise decision making regarding their mortgage!

While cruising the blogisphere today I discovered (second-handly) a great new website called ZipSkinny. My friend who writes the Cleveland Real Estate News, Carole actually got it from Have Coffee Will Write who got it from … who knows?

Regardless of who’s responsible for uncovering it, I must confess, I love this program. Currently in BETA, like so many good tech tools this program delivers data my customers ask me about quite often. In fact there is hardly a day that goes by that I’m not asked, “how many children in the neighborhood?”

ZipSkinny works instantly, just plug in a Zip Code (here I’ve used Denver 80210) and up comes the demographics for the area, age, education, Social, Income, occupation, martial status and median age.

Another nice feature is ZipSkinny will allow you to compare up to 20 zip codes! What a cool tool! My relocation buyers will absolutely love having the ability to compare all the neighborhood potentials!

I enjoy having just more resource to assist my customers in finding the perfect home, in the perfect neighborhood, in the perfect Metro Denver Mile High City, the most affordable city in the West! OK, so it’s been a good day, let me enjoy the moment…

kk

Becoming a homeowner may be old hat for some who have owned a home for years and are familiar with the expenses of homeownership. Then there are those who are first time buyers and not familiar with what owning a home entails.

The most basic expenses are the mortgage, taxes and insurance. Then come utilities, gas, electric, water and sewer. Typically these expenses are billed on a monthly basis. Sometimes the present homeowner is willing to share (and show) their monthly bills. Seeing the hard copy is very helpful in assuring the future buyer what to expect.

However, if the seller is long gone or has not kept their utility bills there is another way to find out what these costs might be!

Call Xcel. In Denver metro most homes are serviced by one company, Xcel Energy. It makes investigating utility costs quite simple. One call and a few minutes on the telephone you can determine what the average bills, high and low are for a home.

Of course previous usage may not be the same as for the new homeowner. Everyone uses power in a different way, some like to be cooler in winter than others so that will effect the bill. In any event having a benchmark for possible consumption is a good way to eliminate unexpected surprises.

You can reach Xcel Energy at 1-800-895-4999