So, let’s talk mortgage

As of this morning the rate for a 30-year fixed rate conventional mortgage is 3.75% (APR 3.826). A 15-year fixed rate is 3.25% (APR 3.38). This can vary with specific situations of course, but the general idea is this: money is really cheap these days. Now is a great time to get a loan and buy a house. 
 
That said, not all mortgages are created equal. In fact, they can be very unequal, and there are scenarios you need to avoid.

On-line Lenders
I’ll not mention names here, but I think you can figure it out. The concept: go on-line and get a loan without even having to put on shoes and leave the house. Easy-peasy! Just a few clicks and you’ve got a mortgage! Well, folks, it’s never that easy. There are always issues that need to be ironed out. And when that happens, you need a bit more help than you can get from someone in a cube farm looking at your account on a screen for the very first time. You need a local expert, who knows you, knows the market, and can work creatively to get the job done. I’ve had three experiences with borrowers using on-line lenders. All three were a mess.
 
Big Bank Lenders
Maybe not as scary as the on-line type, maybe, but still … just don’t!  In this case the problem is bureaucracy – death by committee. Too many layers, and not enough accountability vested in one person. Everything happens in slo-mo. Again, a local mortgage company (non-banking) can generally do a better, less expensive job, and can act faster than a bank in the case of a glitch. 
 
So, what to do?
Consult with your realtor – I’d be a good choice! – and get a recommendation for one or more local lenders – someone you can walk in, sit down, and talk to – who work for a mortgage company (not a bank). Mortgage companies are set up to do nothing but make mortgage loans. They’ve got local presence, a ton of expertise, and an absence of bureaucracy. In my experience, they almost always do better – cost-wise and process-wise.
 

Scary Stuff

Buying or selling a house is a big deal. It usually involves fairly intense emotions and it always involves a lot of money. If things don’t go right, it can get really terrifying. A realtor’s job is to be a buffer and take the fear out of the process – handling slowdowns, rough spots, and u-turns that can come up along the path to closing. But it can get scary at times. Even for me.

In honor of the Halloween season, a few examples of things that make real estate transactions scary.  

BOO!

Lousy Lenders
All lenders are not created equal. Beware of on-line lenders and big banks. They can make things scary. When a problem pops up along the way (and something quite often does) or if you have special circumstances, you need focused attention and personal service. On-line you’re at the mercy of someone in a cube farm who has never met you and may be looking at your case for the very first time when you call in. Big bank lenders usually have layers of bureaucracy that can slow things down and screw things up. Decisions are often made by someone other than whom you’ve been dealing with. Stick with a local lender at a mortgage lending company and you can avoid a lot of scary surprises.
 
Non-permitted Repairs
I’m sure we all know someone who’s just great with tools. “Loving hands at home” is a nice concept in theory and sometimes in actual practice. But when it comes to renovations, it’s always best to stick with the pros. One thing pros do is apply for the proper permits to do the work. When I see additions and obvious modifications to a house, I generally advise my buyer clients to check on building permits. If they don’t exist, it might be time to back away and look at another house. Who knows what could be lurking beneath that new siding? Or underneath that added storage room? Or in that electrical panel box … Yikes!
            
Shared Driveways. And other shared things …
Here’s a recipe for conflict: try sharing a driveway with your next-door neighbor. This can work – for decades, even. But if one party doesn’t play by the rules, the arrangement can become a disaster overnight. It’s all fine … until it isn’t. In one situation I know, neighbors sharing a driveway in the Whitland area came to blows and one of them drove stakes down the middle of the drive, preventing either party from using it. This is a major reason reason I generally don’t show attached HPRs. The potential for conflict is absolutely ominous. 
 
Always remember that good realtor will help keep the spooky stuff at bay.

Location, location, location

It’s the oldest real estate cliché there is. The three factors in the price of a house are location, location, and location. That isn’t totally true, of course. Condition has a lot to do with it as well. But …
 
Lately, the old cliché has come back to me. Big time. 

I got my real estate license five years ago in November, and landed in a market that had lost its mind. My first attempt at a deal started on December 26 with a call from a friend who had seen a new For Sale sign that afternoon and wanted the house. I was coming down with the flu and losing my voice, but I helped her write an offer the same day. We didn’t get the deal because there were five other offers within 24 hours. My client offered asking price, but most of the others were higher.

And so it went for several years. If you wanted a house priced under $500,000 you had to be ready to jump into the game immediately. And bring your biggest, boldest offer.

In the past 18 months or so, our market has cooled a bit. Inventory is up a little, prices – or price increases, at least – have eased. And yet …

Right now, I’m working with a couple shopping in the $800,000 range. In the past three months they have lost out in three multiple offer situations. In one, they offered $50,000 above asking and still did not get the house.

Over the same time period, I’ve worked with several buyers whose budgets top out at $350,000 and they’ve had plenty to look at. We’ve made offers and gotten deals.

So, what’s driving this upside down situation? The only thing that matters it seems – location.

My $800K clients are looking close to town, between the Vanderbilt campus and Belle Meade/Green Hills. Inventory is low, demand is high, and things are nuts. My other clients have looked in a variety of neighborhoods, and in most of them the action is a little less intense.

So, what do we learn from this? With location, flexibility is the key to happiness.

I’m sure, sooner rather than later, my $800K clients will be living in their new house and the long, hard search will be fading into memory. It’s a matter of time and patience.

But those with less time and patience will have it easier if they are happy looking in a variety of areas. If you have your sights locked on one specific neighborhood, it’s a pretty good bet others do as well, and the competition is going to be fairly stiff, regardless of the price point.

There are lesser-known neighborhoods all around us, still convenient to town, that offer interesting, livable houses at reasonable prices. Bordeaux, Glencliff, and Madison come to mind.

So, look around with an open mind.

I can help.

How to Win at Real Estate

How do we win? That’s a good question, and a lot of people I work with have it in their minds if not on their lips.
 
The answer, of course, depends on how we define win. 
 
To some – both realtors and their clients – a win means beating the other side. Taking something away. Scoring all the points. If there is a winner, there has to be a loser. I see it differently. And glad to say, most of my clients so far, do as well. A true win is a win for everybody. Neither side gets everything, and everybody gets something. 
 
So how do we go about winning?

My approach echoes the excellent life advice contained in the concept: everything you need to know about life, you can learn in kindergarten.

Play nice with others
I always try to use my best manners as I navigate a deal. Getting testy (and I do now and then!) is one thing, but letting it show is another. Direct and firm, sure, but always pleasant! And it goes beyond this. I always try to see things from the other side’s perspective. It helps me see what might be motivating attitudes and actions of the other party as we negotiate. And it helps me explain things to my clients who can get anxious – and even testy – if things don’t go smoothly.

Share
I try to share the burden with the agent on the other side if I can do so without derailing my life. Why not? Doing something to move things along, even if it’s the other agent’s responsibility, can go a long way toward a win for everybody if there’s a snag in the process later on. All parties – buyers, sellers and their agents – want to get to closing. Lightening the load for the other side might get my side closer to the goal.

Finish what you start and pick up after yourself
I try always to keep everything tidy. Meet contract deadlines. Return paperwork promptly. Let the other side know what’s going on. Carry the deal all the way to close, leaving nothing dangling, nothing strewn about, nothing unfinished. I’m not perfect in this regard, but I work at it every day.

Generally speaking, this approach results in smooth negotiations, closed deals, and happy clients. It also results in other agents who’d be happy to bring me a deal the next time. Win, win, win.

If this approach to life and real estate appeals to you, I’m your guy.

How to buy a house in a crazy market

Eight months ago, right here in this email blast, I quoted a broker speaking about the Nashville market. His prediction: by the fall of 2019, we will have shifted from a sellers market to a market tilted slightly in favor of buyers. 
 
I don’t think this is happening. 
 
True, inventory has loosened a bit, but interest rates are holding at historic lows, and some buyers are still having trouble getting what they want. The general idea usually is that the higher the price, the slower the market. It stands to reason. But …
 
I have clients shopping in the $600,000 - $800,000 range who recently lost out in two multiple offer/over-asking-price situations in the space of two weeks. On the other hand, I have a client who is shopping in the $200s and has many good options to choose from right now – so many that choosing may be a little difficult.
 
Makes sense. Not!

So what do we do? We remember Four Ps.

Place
Desirability depends on many factors of course, but location is a biggie. There are certain areas of town buyers are clamoring for. And houses fly off the shelves. Find a similar house in a less desirable neighborhood, and you’ll get a better deal. You also might have a minute to think things through before jumping in with an offer.

Price
It’s not so much how many dollars are being asked, as whether the asking price is right. Ask more than the market will pay, and the property will sit there until the price drops to the right level. Price it right and it will move. This is true at all price points. And this: buyers looking to avoid a feeding frenzy, can look for listings that were overpriced and have been stuck for a while. Sellers get hungrier the longer a house sits on the market, and a good deal could be had.

Patience
This has to do with attitude. In a market that seems to be going in several directions at once, buyers sometimes have to accept delays, derailments, disappointments, and other trials along the path. Keeping calm and carrying on is the only way to do it.

Persistence
And this is about carrying on. Focusing in on the task and staying with it will eventually get you where you want to go. This means looking at every opportunity and being ready to roll when the right thing appears. Snooze and you might lose.

And another P might stand for real estate Professional – that would be me, and I’d love to help you get where you need to go.