Buyers

Don’t Forget The Homeowners Insurance

By Stephanie Goedl
June 26, 2019

Don’t Forget The Insurance

Have you ever had a real estate transaction that was held up until the buyer could obtain homeowners insurance? In this episode of our podcast insurance agent Michael Williams of Williams Insurance discusses the importance of starting the insurance process early and situations of fire-risk, flood insurance and past claims that could hold up the transaction.

Why Order The Policy Early?

Homeowners insurance is such a big piece of owning a home but it’s usually one of those last-minute items buyers think of in the home buying process. It really shouldn’t be. Michael suggests that once you open up escrow the buyer should contact their insurance agent. It’s not that hard to get an initial quote even before escrow or the lender start requesting information. One of the main reasons to start the process early is due to the fire exposures in our state. Unfortunately, the wildfires have been tremendous and Michael explained that they are reshaping how the industry works. He said that people are going to be very shocked to see their premiums change and a lot of non-renewals. Houses that you wouldn’t think are fire-risk are going to have a much more difficult time getting coverage.

Fire-Risk

I was in Sacramento recently for the annual California Association of Realtors conference and this was a hot topic. Fire-risk on properties is impacting the housing affordability. I asked Michael about the how the insurance industry is dealing with this. He explained that there is a system called “Fireline” that assesses the “score” of the house and the likelihood of exposure to a wildfire. That number combined with a special hazard square that they come up with determines whether a carrier wants to write a policy for a house in that area. The mapping for that is changing and also the acceptable scores are changing. Michael said carriers used to be much more lenient than they are now. Houses that you wouldn’t think have a brush exposure are getting denied.

There are a number of things that come into play when a home or area is “scored” through this system. They look at road access, utility quality, the wind and a number of different things that go into deciding whether it’s acceptable. Michael told us about a program the state runs called Fair Plan and how the insurance carriers partner with this government fund for hard-to-place risks. It can be a lot more expensive, on average a 25% increase over what most people expect their premiums to be. They will take higher risk properties but it’s more complicated and there are multiple layers of the policy.

Here’s a scenario that happens more often than you think and it is the exact reason you should encourage your buyers to start the insurance process early:

You’re nearing the close of escrow, the lender is requesting proof of homeowner’s insurance, you’ve removed contingencies and the buyer learns that the property is in what the insurer considers a high-risk area. Two things could derail this transaction – 1) The policy is more expensive than they can afford or 2) The property is uninsurable. What do you do now?

Flood Insurance

Another thing to consider is if the property is going to need flood insurance. Michael explained that they are re-mapping the flood zones which means that flood insurance is another policy that could be required by the lender. Homes that have not been required in the past to get flood insurance are now needing it. He reminded us that this requirement will be an additional cost to the buyer, so it‘s in everyone’s best interest to call the insurance agent as soon as possible to avoid surprises at the close of escrow.

Past Claims

Michael explained that insurance companies also look at “claims history” on the property. The claims history of the property made by the prior owner could affect the eligibility and rate for the buyer. Not all carriers have that stipulation but a number of them do. Another thing to keep in mind is the claims the buyer has had at their current property could actually follow them to the new property they are purchasing. This could also affect the rate and insurability of the property.

We hope this information will help you guide your buyers as they start the homebuying process. You don’t want to hold up an escrow with something that could have been avoided with a little bit of forewarning. Knowing these potential hold ups will allow you to get your buyer on the right track from the start.

Listen to the show to discover more about the insurance process for homebuyers.

 

Stephanie Goedl

About the author: Stephanie Goedl is Chief Operating Officer and Broker/Owner of CENTURY 21 Discovery. If you are interested in becoming part of the CENTURY 21 Discovery team or would like more information about our services or training we provide contact us at 714.626.2069 or Careers@C21Discovery.com.

 

Michael Williams is the president of Williams Insurance in Fullerton, California. They have been around since 1941. They are a Property and Casualty Agency that handles home, auto and umbrella policies as well as commercial, health and life insurance. You can reach Michael at 714-526-5588 or mwilliams@williamsinsurance.com.

The Buyer Interview

By Joe Lins & Stephanie Goedl
January 29, 2019

The Buyer Interview is the initial meeting with your buyer to find out what their real estate goals and aspirations are. This is important because once you figure out what your client wants you can do a better job of finding that property for them. Our value as a Realtor is finding the house that is good for them. The only way you can do that is by asking questions and building buyer loyalty.

Listen to our podcast to learn what questions to ask when interviewing buyers.

Listen to the podcast here:

 

Watch the video of the podcast here:

If you would like a copy of our Buyer Interview Questionnaire we would be happy to share it with you! Just email us at Careers@C21Discovery.com. To get the latest podcast episodes subscribe on iTunes, Google Play or Podbean.

About the authors: Joe Lins is President, CEO and Owner of CENTURY 21 Discovery. Stephanie Goedl is Chief Operating Officer and Broker/Owner of CENTURY 21 Discovery. If you are interested in becoming part of the CENTURY 21 Discovery team or would like more information about our services or training we provide contact us at 714.626.2069 or Careers@C21Discovery.com.

Stephanie Goedl

Pre-Appraisal Checklist

By Chris Smith
July 24, 2018

There are some things you can do to help ensure the home appraisal process goes smooth. See this checklist provided by the residential appraisal management company PropertyRate.

 

About the Author: Chris Smith is a Senior Loan Officer (NMLS  #253394) with New American Funding. For more information about home financing you may contact him at 714.401.5921. 

Protect Your Clients From Wire Fraud

By Chris Smith
June 28, 2018

Real Estate agents are often the first line of defense in preventing wire fraud. Let your clients know upfront how you communicate. You may want to add a disclaimer on your email signature stating that you never send sensitive financial information via email. Insist they do the same. Here are some additional security measures your clients should take:

 

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About the Author: Chris Smith is a Senior Loan Officer (NMLS  #253394) with New American Funding. For more information about home financing you may contact him at 714.401.5921. 

 

 

 

 

*Reprinted with permission from New American Funding. Licensed by the California Department of Business Oversight under the Residential Mortgage Lending Act – License #4131117 Broker Solutions Inc. dba New American Funding (NMLS #6606) Corporate Office is located at 14511 Myford Road, Suite 100, Tustin, CA 92780. 800.450.2010

 

 

Home Buying: Is this the right time?

By Mariella Reyes
April 19, 2018

I recently had the opportunity to sit down with Ismael Chavez of TEAM ChavezHomes at CENTURY 21 Discovery to discuss if this is the right time to buy a home.

“Clients always ask me if this is a good or bad time to buy their home,” CENTURY 21 Discovery’s Real Estate agent, Ismael Chavez says. Eleven years after, buyers entering the market are still shaken up by 2008’s housing bubble. According to Chavez it’s unlikely another bubble will happen again soon because of the fixed interest rates the circumstances are different.

Photo Credit: Marlon Marshall Parungao

Ismael Chavez began his real estate career in 2007, right before the market crash. “Those were dark times for the real estate industry, but the experience made me a stronger and better REALTOR®. I care about my clients,” he says. Shortly after the housing bubble, he expanded his practice and formed his team of agents operating under the business name of TEAM ChavezHomes at CENTURY 21 Discovery located in Fullerton, CA.

Chavez is optimistic about the future of the industry.

Ismael, what are some tips you can give future home buyers and sellers?

“It’s a seller’s market; we get many buyers but we have a shortage of homes for sale. It’s a great opportunity for those who’ve been thinking of moving and selling their homes. Although there’s never a wrong time to buy, home buyers will have to be competitive and focused during their search!”

We’ve added some extra pointers for both Buyers and Sellers below.  Happy house hunting.

About the Author: Mariella Reyes, is an Independent Content Writer for TEAM ChavezHomes of CENTURY 21 Discovery.  She’s worked as a content writer and producer for brands in the industries of escrow, mobile, fashion, plastic surgery, and beauty, and was the Marketing Coordinator during her time on the Board of Directors for Lean IN Los Angeles in 2016-2017. You can contact her at: mariella.reyesm@gmail.com

 

Prequalified or Preapproved: Which Is Right For You?

By Nicole Johnson of New American Funding*
September 13, 2017
Originally published on September 12, 2017

(Photo courtesy of New American Funding)

This is it. You’re ready to make the move into homeownership. From all the online searching you’ve done, you know you need to get “pre-something-ed” to prove you are a serious buyer. However, which is it: prequalified or preapproved? Both sound good, but they serve different purposes.

Getting Prequalified

When you ask a Loan Officer to perform a prequalification, you can do it online, by phone, or in person. They’ll ask you to share information, often verbally, on your credit, your income; assets (savings, investments, retirement accounts the amount of equity you have in any real estate you currently own); and the amount of debt you owe.

It’s a conversation that helps establish some financial parameters before you start looking at and making offers on homes by helping you answer two key questions:

  • What price range should I be looking in when I start my search?
  • Am I ready to do this, or do I need to save more or pay down more debt?

While the process is useful, especially for first time homebuyers, it isn’t rigorous enough to distinguish you from the other attendees at an open house or when you request a showing. The reason is that the letter is based off something akin to a “best guess” by the Loan Officer, it’s not reviewed by an Underwriter, and doesn’t address the question that matters most to sellers, Real Estate Agents, and to you: Can they/we expect to be approved for the type of mortgage needed to buy this home?  To answer that, you need to be preapproved.

Preapprovals Open More Doors

The preapproval process is like a test drive before you submit your application for a mortgage. The Loan Officer and an Underwriter will verify the facts and figures you discuss, along with your credit history. This process can also help pinpoint things you might want to improve—or errors that you’ll want to correct—before entering the formal application review process. Loan Officers will also begin looking for mortgage programs that might apply to your financial situation. The preapproval process is more rigorous than a prequalification and because it is fully underwritten, helps ensure your home buying process with go more smoothly.

In addition to ordering your credit report, Loan Officers may ask for copies of:

  • Last year’s W-2s.
  • Current pay stubs.
  • Brokerage and other savings account statements.
  • Your monthly expenses.
  • A current mortgage statement and homeowner’s policy (if applicable).

Once you are preapproved, you’ll receive a letter to share with Real Estate Agents and sellers. After you have an offer accepted on a property, you will still need to officially apply for a mortgage. That review process will involve a deeper dive into the information you’ve already provided, as well as into the specifics of the property itself. Fortunately, having a preapproval also means faster service and turn times to get you into your home sooner, so the official mortgage application is likely to be easier than with just a prequalification.

Why Bother Getting Prequalified?

The prequalification process takes very little time or effort on your part. Any cost is typically limited to that of ordering a credit report. When you already have an idea of the area where you want to look and what type of home you can afford, skipping the prequalification step can make sense. Its best use is as a preliminary step for those who need a starting point.

By comparison, for most buyers, a preapproval is a step they shouldn’t skip. Having a letter from a lender that states you are preapproved can be especially helpful in neighborhoods where the existing home inventory is tight…and when the home you are looking at is perfect. Being preapproved makes it easier for the seller to accept your offer over that of a buyer that hasn’t taken this extra step.

*Article reprinted with permission from New American Funding. Licensed by the California Department of Business Oversight under the Residential Mortgage Lending Act – License #4131117 Broker Solutions Inc. dba New American Funding (NMLS #6606) Corporate Office is located at 14511 Myford Road, Suite 100, Tustin, CA 92780. 800.450.2010

Marketing a Listing

By Suzy Lins
April 19, 2017

Don’t be a secret agent with a listing nobody knows about! As soon as you take a listing let everyone know about it. First, you need great photos of the home. Hire a professional photographer. You can hire a good photographer for about $200-300. For more photos or larger homes the price goes up. Get a video made of the listing too. Century 21 creates a video slideshow set to music for every listing that has 6 or more photos. If you have a high end listing consider getting a drone video. Keep in mind that these images are in investment in you and your business. You’ll be able to use them when you go on your next listing presentation because that would-be client will not be impressed by photos taken on your phone vertically.

Now that you have your photos, maybe a video or drone images too, this is how you get the word out.

Email blast

Send an email to your database to let them know about the listing. The email should include a great visual image of the home or an embedded video with some details and the price. Include a Call To Action (CTA) in the email like: “Call/Text me for a tour” or “Do you know someone looking in this neighborhood?”

Send an email blast like the one above to all the agents you know. Add the agents in your office to your database as well as agents you meet at Open Houses, Broker Previews, etc.  The CTA should obviously be different, something like: “Do you have a buyer looking in this neighborhood?”

Facebook
To promote your business or to create an ad on Facebook you need to have a Facebook Business Page. Use these strategies to get the word out about the listing via Facebook.

Make a JUST LISTED post on your business page. Again, use a great visual image or video of the property. Don’t stop there. After you make the post go back and BOOST it to target the specific area and demographic that you want to reach beyond your Facebook followers.

Another option is to create an ad on Facebook about the JUST LISTED property. Creating an ad from scratch, rather than boosting a post, allows you to put multiple images in the ad (carousel ad) or a video plus you can target the ad to reach a more specific demographic. Here’s an example of what I mean: You have a $2 million+ listing on a golf course – target the ad to reach people with the income level needed to buy that home who like to golf AND who are likely to move.

The great thing about advertising on Facebook is that for dollars a day you can get your listing in front of the right people. An added bonus is that you have the option for your ads to appear on Instagram too. When Facebook bought Instagram they added this option. You need to have an Instagram account in order for your ads to appear there.

Other Social Media
If you use any other social media channels for your business get it out there too.

For Instagram, place an ad discussed above or you can post an image of the property with details. Instagram does not have the ability to include a hyperlink in the posts. Instead, direct them to your Instagram profile and include a hyper link there back to the property website.

For Twitter or Google +, post about your new listing with a link back to a video of the property or a property website. At Century 21 every listing automatically gets a Unique Property Website that has a URL using the property address. If you have a YouTube channel, upload the property video and share it on your social media sites.

Meet the Neighbors

After you take the listing get out there and introduce yourself to the neighbors on either side of the home. There’s something called the 5-5-5 rule. Knock on the door of the 5 houses to left, 5 houses to the right and 5 houses across the street and let those neighbors know you just listed a house on their street. Invite them to an upcoming Open House and ask if they know of anybody who has been looking to move into that neighborhood. This is a great opportunity to ask them if they’ve considered selling their home. If so, they’re going to be watching very closely how you market their neighbor’s property.

Print Marketing
Some “old school” marketing would be a “Just Listed” postcard to people who live in that area. You can mail it but if you door drop it yourself it’s a great way to meet people in the neighborhood. You can also place an ad in the local newspaper showcasing the listing. Print marketing is expensive compared to online marketing so use it wisely.

Open House
Now that you got the word out about your new listing you need to have an Open House. Again, you need to get the word out about it. Use the same tactics listed above for an email blast, Facebook post and BOOST and a Facebook ad. Just tweak it for the Open House. Next, create an EVENT on Facebook. List the date & time of the Open House along with all the details and invite your friends. Promote the Facebook event by selecting your audience and budget and you’re good to go.

Make your Open House an event. Make sure you have a lot of signs directing people to the property. Add some balloons and include food. Invite the neighbors to the Open House. Do a give-away for a gift card for people who sign in and give you their contact info. Consider doing a Facebook LIVE video from the Open House too.

Broker Preview
Put it in your office caravan or local broker preview. At CENTURY 21 Discovery we have regular sales meetings followed by a caravan of our new listings. At our meetings the agents have an opportunity to “Pitch” a property that is not on the market yet. We also have several broker previews in our area that allow agents from any office to place their listing on the weekly caravan.

Most of these marketing strategies cost very little except time and creativity on your part. You’ll be a real estate marketing guru and your seller is going to love you! Do you have any marketing strategies to add? Please share in the comments.

 

About the author: Suzy Lins is the Communications Director for CENTURY 21 Discovery. For more information about CENTURY 21 Discovery you may call (714) 626-2000.

What Drives Mortgage Rates?

By Chris Smith
September 27, 2016

There are many things that drive mortgage rates available to Buyers. Some things are out of your control: National Employment Patterns, the Stock Market, actions of the Federal Reserve, natural disasters and geopolitical or global events.

Let’s focus on the things you CAN control to get the mortgage rate that fits your budget and allows you to get into that home you want.

what-drives-mortgage-rates

Credit Score
The better your credit score the lower your interest rate. Having a high credit score makes you a more favorable borrower in the eyes of the lender. First, find out what your credit score is. Then try improving your credit score before you start the loan application process. Talk to your loan consultant on ways you can improve your score.

Down Payment
There are a lot of low down payment options for borrowers. What you may not know is that if you increase your down payment on the home you are buying you can secure a lower interest rate. This can ultimately save you more money over the life of the loan.

Size of the Loan
The amount of money you borrow can impact the interest rate.  A larger loan amount will usually have a higher interest rate. The reason for this is because paying back a larger loan amount will likely take long and there is more at stake for the lending organization.

Type of Property and Occupancy
Loan pricing is slightly lower for single family homes compared to condominiums. Owner occupied loans also have lower rates than non-owner or investment properties.

The best way to understand all your options regarding interest rates is to talk to a loan consultant BEFORE you start your home search.

chrissmith2014

 

About the Author: Chris Smith is a Senior Mortgage Consultant (NMLS  #253394) with New American Funding. For more information about home financing you may contact him at 714.401.5921. 

Do’s and Don’ts During The Loan Process

By Bill FitzMaurice
May 19, 2016

You found your dream home and your offer was accepted. Congratulations, but before you start packing for your big move there are some definite Do’s & Don’ts we recommend buyers to follow as they go through the loan process.

DO:

DO ask donor(s) for gifted funds as soon as possible, if being used towards your down payment. Ask your Loan Officer about the necessary steps and documentation for gifts.

DO stay current on all your payments: mortgage, car payments, credit cards, student loans and any other debt.

DO continue to use your credit as normal. Changing your pattern may raise a red flag, causing your credit score to go down.

DO wait to make a major purchase such as a new car, boat or appliance until after your loan has funded.

DO keep copies of all important financial documents so you will be ready to provide if asked: check stubs, W-2’s, tax returns, bank and investment account statements, rental agreements, etc.

FemaleOnComputerDON’T:

DON’T keep cash in a safe or an overseas account if you plan to use these funds as a down payment. Ask your Loan Officer how and when would be the best time to put funds into your U.S. bank account if needed.

DON’T close credit card accounts. Keeping accounts open after you have paid them off lowers your debt-credit ratio. If you close a credit card account, it may appear that your debt ratio has gone up.

DON’T apply for new credit or give your personal information to anyone else who might run your credit report. Multiple credit inquiries may hurt your credit score.

DON’T make career moves. Your mortgage lender must verify your employment, so it’s crucial to maintain employment status.

DON’T make large deposits into your back account unless 100% necessary. If you must, save the documentation showing where the funds came from. Keep a “paper trail”.

Make sure to discuss any changes in your financial situation with your Loan Officer right away.

BillFitzmaurice2014(2)

 

About the Author: Bill FitzMaurice is a Senior Mortgage Consultant (NMLS #290216) with New American Funding. For more information about home financing you may contact him at (949) 291-1770.

Closing on a home? Don’t Forget the Insurance

By Michael Williams
April 29, 2016

Congratulations! You found your clients perfect dream home. You used your years of experience, professional expertise and pockets full of patience to satisfy every one of their unique requests. So, why it is still stuck in escrow? Your client is saying it’s that pesky insurance agent!

InsuranceBlogimage1… But the real holdup might be that “perfect home”….

Below is a 3 part checklist that will help you identify potential hang-ups with your client’s home insurance.­­

1.      Location, Location, Location.
It’s not just important to REALTORS®. Insurance companies have three main location related exposures that can complicate securing a policy. Distance from Brush, proximity to Coastline or placement in a Flood Zone.

  • In wonderfully sunny Southern California, we don’t have to worry too much about wind or hail, but we can never forget about brush. A good rule of thumb is to use an online map service such as Google or Bing and measure the distance from open land to the home. A standard acceptable measurement for brush exposure is 1500 ft.
  • For our lucky friends on the coast, the average rule is 500 ft from the shore. Again, the best course of action here is to measure with an online map.
  • Finally, the wild card is a Flood Zone. Because you often cannot visually predict where a flood zone will be, a helpful site is FEMA’s mapping tool. Simply type in the address and it will return a flood zone score.

2.      The claim history matters: both buyers and the home.
This section often surprises many people. But the ability to insure the home is based off the loss history of both the buyer and the home itself. Insurance companies split blame for losses between the owner of the home and the structure itself. For example, when a water loss occurs, a point is assigned to the address and the owners. Getting as complete of a disclosure list as possible can help determine whether that home has a history of losses. In the state of California, water losses are the number one cause of loss and it is now almost universal for preferred market insurers to deny a home because of 2 or more water losses. If this is the case you can assume that insurance will double in cost and take a minimum of one week to place.

3. Good Bones vs. New Homes.
Age of the house is big player in acceptability. Some buyers want new construction and that’s great! But, others want classic charm. That beautiful home built in the 1920’s comes with its own host of potential hiccups. Many insurance companies won’t even write a home built prior to 1950. But the ones that do, require proof of complete upgrades to plumbing, heating, wiring and roofing. And it’s not just the cute cottage that could be a problem. Many Carriers are looking for upgrades on any home older than 20 years! So find out if the bones of that house beyond their useful life.

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As every realtor knows, no two purchases are the same. And while the client should always get the house they want, it’s best to build in that little bit of extra time should one of the items above be a potential problem. Simply call the insurance agent a bit early. A little planning can make for a much smoother escrow.

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About the Author: Michael Williams is Chief Operating Officer at Williams Insurance Company in Fullerton, CA. If you would like more information about insuring a home please call him at 714.526.5588 or visit the website at www.williamsinsurancefullerton.com