Have you tried to make an offer on a home only to be told that it has already sold ten minutes after it hit the market? Or maybe you are in a bidding war over the same property? On Real Estate Mortgage Shoppe today, you will hear some stories about how other home buyers like you have cleverly used strategy to come out on top. And it’s not always about price!
Let’s stay in touch! Subscribe by emailing me at Jo@JoGarner.com to get our weekly real estate and financing updates—podcasts, show notes and other resources. We will not sell your email address. Let us know what part of real estate interests you.
To Your Success,
Jo Garner, Mortgage Loan Officer (901) 482-0354 jo@jogarner.com
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Good morning, Memphis! Welcome to our internet listeners and podcast listeners across the 50 states! You’re on Real Estate Mortgage Shoppe. I’m your host, Jo Garner, Mortgage Loan Officer. You can connect with me at www.JoGarner.com. Subscribe to our weekly podcasts with show notes by emailing me at Jo@JoGarner.com. Our general topic is HOW TO GET A HOT REAL ESTATE DEAL IN A HOT MARKET. Tell us YOUR story. We have a few ideas to share from people who have figured out the code for getting the winning bid on a hot real estate deal. If you have a question or comment or a short story to tell about your real estate deal, text me at (901) 482-0354 or call us while we are live on August 12th, 2017 and join us on the air.
TALKING TOPICS
Have you tried to make an offer on a home only to be told that it has already sold ten minutes after it hit the market? Or maybe you are in a bidding war over the same property? On Real Estate Mortgage Shoppe today, you will hear some stories about how other home buyers like you have cleverly used strategy to come out on top. And it’s not always about price!
INTRODUCING TOM KING, REAL ESTATE APPRAISER
Expert appraiser and regular co-host on Real Estate Mortgage Shoppe—Tom King welcome back in the studio. Tell our new listeners a little about yourself and what you do in the real estate appraising business. We’ve been missing you.
MORTGAGE MARKET NEWS
Tom, after almost 30 years in the mortgage business, one of the most rewarding parts of the job is still the joy of being on the home buying journey with my clients who are, not just buying one of the biggest investments in the life, but they are buying a home where their family will make history and memories to pass down from generation to generation. The other part of this job that motivates me is being lender to real estate investors who snag some really hot deals on price or on terms and start building their wealth one property or two or three at a time. Over the years I have watched some of these investors start small and now.
Part of the secret to getting the hot real estate deals in any market is being able to recognize opportunity when it knocks. This week opportunity is knocking loudly for homebuyers and people with refinancing strategies available that will work this week even though it may not have made sense a few weeks ago.
Mortgage rates are bumping along the curb at around a 9-month low. Rates slumbered near the lowest levels since November 2016 today, after a key economic report showed subdued inflation. Rates may be dozing at the moment but it is no time for YOU to sleep. This is a perfect time to snatch a hot real estate deal made even hotter because of the low costs of funds to buy it. If the restructure on your current mortgage or your plans to cash out to restructure your overall financial pictures did not seem to work for you a few months ago, call me and let’s do your numbers now. Connect with me at www.JoGarner.com . Email me at Jo@JoGarner.com or call me the old fashioned way at (901) 482-0354.
WHERE TO FIND HOT DEALS FROM THE APPRAISER’S VIEWPOINT
Tom, you are a 40 year veteran appraiser in the Memphis and surrounding area. What is your advice to homebuyers on how to find hot real estate deals in the Memphis area?
Work with an experienced, reputable real estate professional who knows the market well and checks the listing database frequently throughout the day.
Drive around the neighborhood at different times of day. What is your gut feeling?
Look at the comparable sales in the area over the last few months. Is the value going up or down or staying the same.
Hire someone like Tom King, an experienced appraiser to do a preliminary appraisal on a property that really interests you. A privately acquired appraisal cannot be used by mortgage companies but it can point you in the right direction on the value and trends for the neighborhood. Tom King works in West Tennessee. His number is (901) 487-6989.
Several weeks ago I told the true story about a successful real estate investor John Majalca from the San Antonio area who knew how to spot hot real estate deals. He got started investing in 2001 and retired in 2006 with $35,000/month in income—that’s $35,000 per month in income. His secret? He was not afraid to buy homes with foundation problems at a deep discount, fix the problem for a fraction of the value and rent the house at the top rent rates. John told Inman News, “One man’s issues are another man’s opportunities.”
If the home you are interested in purchasing just has some minor cosmetic issues or simply needs updating, you may still have some competition from other offers but you can get in with regular conventional or economical government programs. If the house has major structural items or over $5,000 in repairs affecting the habitability of the home like plumbing, electrical, roof issues, rotted wood or problems with heating air, call me and let’s look at a special renovation and repair loan for you.
These renovation loan programs are a little more expensive but if you are walking into $20,000 or $30,000 equity when you are done, that’s still considered a hot deal. Lenders tend to require these major repairs to be done before closing when they affect the habitability of the house. If you know how to use the renovation and repair loan programs, you are miles ahead of your competition in most cases. Call me and let’s look at which program would work best for YOU. But you have to talk with me personally so I can work with you personally. Call me at (901) 482-0354 or send me an email Jo@Jogarner. You can find my online loan application at www.JoGarner.com on the Evolve Bank and Trust icon. MAKE YOUR PLAN. LET’S WORK YOUR PLAN. IF THE DEAL WORKS FOR YOU TODAY, DO IT TODAY.
We are about to go to break, but stay with us. We will be sharing some winning plays people make to win against competing home purchase offers. Call us while we are live at (901) 535-9732. We want to hear from you too!
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QUESTIONS ANSWERED BY TOM KING:
- If the listing agent has the house priced very reasonably for the neighborhood, what is usually an acceptable amount to offer over the sales price on a home listed for around $150,000 in the Memphis area?
The value of a home is based on what other houses like that house in that neighborhood have been selling for in that neighborhood. If you other homes like your house that are selling for $2,000 to $3,000 more than you listing price in the area, you may be able to offer a little more than the listing price to beat out other people making offers on the same house.
- What are some good ways to find out which areas are hot and going up in value? Ask an experienced reputable real estate agent who checks the online home listing directory multiple times per day. Some houses sell within just a few minutes
- What are signs that the neighborhood is a plateau on value and is not likely see a lot of appreciation in value?
- What are some examples of real estate deals you have seen lately that were hot deals for the buyers? The sellers? Get a home inspection early so that all repairs can be fixed or negotiated early in the process. It takes a week to get the inspection back from the home inspection company. Sometimes the findings on the ho
- What type repairs do you see that lenders generally require to be repaired before closing? Heating and air systems, duct work, electrical, plumbing, roof, rotted wood, broken glass other structural issues. These repairs connected with the habitability of the home are usually required to be fixed before the closing by lenders. Smaller cosmetic repairs like cleaning, painting and minor stuff, can usually be handled after the closing if needed.
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QUESTIONS ANSWERED BY JO GARNER:
- What is the most common winning strategies of your clients who get their real estate offers accepted?
THE most common winning tactic is to remove contingencies from the offer like having to sell a house before buying the house you are offering to buy. Sellers will likely accept an offer from someone who does NOT have to wait for their house to sell first. The cleaner the pre-qualification letter the buyer hands the seller, the better chance he has of getting the seller to accept his offer over someone else’s.
Some of my clients come to me after being already worn out from driving around finding homes, making offers on homes and getting beat out by someone wanting the same home. Time for a little strategy—just like planning a play in a game of sports. Sometimes the strategy is to find alternative sources of funds to cover the move-in costs without having to ask the seller to pay for the buyer’s closing costs and prepaid taxes and insurance.
- Where ARE some of the other places your mortgage customers go to find money to close?
Great question! This one is good for people buying their primary residence, a vacation home or investment property. I know it’s hot out there in the real estate market but grab that shovel over there and let me show everyone some places you can dig to find pay dirt.
Gift From Family: Gifts can come from family members or employers. The amount of the donation varies according to different loan programs. The donor will be required to document the source of his funds and that the money is a gift to the donee not requiring repayment. If the family member giving the money does not want to cash in a certificate of deposit or stock fund, he can borrow against the asset to give to the donee. Gift funds cannot typically be used for investment property.
Borrower’s Forgotten Assets: Whole life insurance policies or annuities may have a cash value that can be borrowed. Many times the borrower does not realize the insurance she purchased years ago has a cash value that can be borrowed to pay the move-in costs.
Loans secured on other investments like certificates of deposit, stocks and bonds, and durable assets such as cars can be used as acceptable sources of funds to close as long as the loan is secured on an asset owned by the borrower. The payment must be added into the debt-to-income ratios for qualifying purposes unless it is borrowed against a retirement fund. IRAs, 401(k)s and Retirement Funds. There can be heavy financial penalties for pulling money from these sources. However, many companies allow the homebuyer to borrow against these assets with no penalty. The repayment terms may be calculated in the borrower’s debt-to-income ratio.
Sale or Cash Out Refinance of Existing Real Estate Property can generate needed funds to close on another property. Lenders will require the Closing Disclosure or sufficient proof of the source of funds.
Tax Refunds can provide a surprising source of closing funds.
Government agencies offering down payment assistance to homebuyers who qualify under their guidelines. Tennessee Housing Development Agency have programs that provide down payment assistance to borrowers. In some specific areas Tennessee Housing Development offers $15,000 in assistance. Some of the well known programs are City of Memphis Down Payment Assistance, Shelby County Down Payment Assistance, Rural Housing, Mississippi Bond money, H.E.L.P. For the down payment assistance grants and loans, the borrower is required to meet a minimum or maximum annual income guideline and sometimes are required to be first time homebuyers. First time homebuyers are defined as buyers who have not owned real estate in the last 2 to 3 years.
You can also check with Rob Chrane at Down Payment Resource, supported by Housing Finance Agencies across the country, for assistance programs in YOUR city and state. http://downpaymentresource.com/about/leadership/
- Here’s a typical scenario. I changed the details a little to protect my client’s privacy. A lady calls me and says, “ I listen to you all the time on the radio. You say ‘make your plan. Let’s work your plan.’ Right now I need a plan. I have two middle school aged children. The apartment where we live is too small and too cramped. But I have tried and tried to find a house but the seller always picks a different offer and not mine. I am so tired of trying. What am I doing wrong?”
After asking this lady questions I find out that she is a single mom trying to raise two junior high aged children while trying to work full time. She has been driving a different way home from work several times a week to look at houses. When she sees one she really likes, over and over again, she is told by the realtor, “I’m sorry. That house is already under contract.”
Another time this same lady got so excited because she found a house that would be perfect for her and her children that was not already under contract. The realtor helped her write an offer for the home, but the prequalification letter from this aspiring homebuyer’s banker had included two stipulations. The first stipulation on the preapproval letter was for the sellers to pay all of the buyer’s closing costs and prepaid taxes and insurance. The second was for the borrower to pay off a small bill appearing on the credit report.
Even though this single mom offered full price for the home, the seller accepted the offer from another person because the other person did not ask the seller to pay any of the buyer’s cost. The net profit would be more for the seller even though the winning bid was for a slightly less sales price.
Here is how we formed our winning play. First of all, this hard working single mom and I went treasure hunting for the money to pay her closing costs and prepaid taxes and insurance so she would not have to ask the seller for one cent. She could have used one of the many down payment assistance programs, but she chose to borrow against her 401 k instead so she could move if her work required it.
Between her tax refund and borrowing some funds from her 401k, she had enough to pay off the small bill that needed to be paid off and still have enough to pay her down payment, closing costs and prepaid taxes and insurance. She offered just slightly over the listing price and got her offer accepted. Even with offering a little more for the price, this single mom locked in a low fixed interest rate with a total house payment that was less than what she had been paying for the cramped apartment. What a celebration when she and her two children were able to move into their own spacious home!
- Other strategies I have seen win over the sellers are personal letters written to the sellers by the aspiring buyers letting the sellers know the true reason why they would like to buy their home. The buyer offers at least close to the listed price for the home and is able to connect emotionally in some way with the seller. For instance, I have seen sellers accept my client’s offer because my client knew the seller was a military veteran and my client was a veteran also.
- Right now for people who qualify for down payment assistance and if they are buying homes in the eligible areas for the Tennessee Housing Development $15,000 down payment assistance program, it is a common strategy to use part of the $15,000 to cover closing costs and prepaid taxes and insurance that the rest of the money to be applied to a large down payment. This strategy relieves the seller from having to pay extra costs for the buyer.
- Another good strategy is to find out before the negotiation on the offer about the reason the sellers are selling their home. What part of the real estate transaction is important to them? Closing in less than 30 days? Being able to make a bigger net profit.
- Pick a reputable, experienced realtor and lender and title company.
- Real estate investors and people buying their own primary residence both can stand to get a hot deal real estate deal in a hot market without having to fend off competitors if the home buyer knows what kind of fixer upper properties to purchase. I told the amazing story of a real estate investor who knew how to spot deals and went from zero income in real estate to $35,000 per month net profit in a short time. If you missed that story, go to www.JoGarner.com on Monday and click on this podcast.
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REAL ESTATE TIP OF THE WEEK
Go ahead and get a professional home inspection done so that you already know what repairs will be an issue. This way you can go ahead and get the repair fixed or negotiated into your real estate transaction ahead of time. Frequently the mortgage process gets put on hold while the buyer waits on an inspection. More time is lost while the cost of the repairs uncovered by the inspection are negotiated on who will pay for them—the buyer or the seller. Save lots of time so that your closing is not delayed by getting the inspection done early.
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ANNOUNCEMENTS:
- Talk Shoppe offers free networking & education to anyone interested in real estate or in business. Talk Shoppe meets every Wednesday 9A-10A August 16, 2017 at Nova Copy Conference Center in Memphis, TN. This week Talk Shoppe presents: Cathy Faust, M.S. CFCS Extension Agent III Family & Consumer Science and Andrea Jacobo, Community Health Extension Agent Shelby County Extension-“Focusing on Families, Fitness, Food & Finances” cfauste@utk.edu (901)-752-1207.
- Talk Shoppe events are free thanks to advertisers like Mary Lou Nowak of Mid-South Home Helpers. Mary Lou specializes in providing excellent non-medical help in the home of your elderly or handicapped loved ones in their home. www.homehelpershomecare.com (901) 414-9696
- Thank you to Talk Shoppe supporter, Jana Cardona, Executive Director of Business Network International of the Mid-South www.bnimidsouth.com Build your business by a system of referrals.
- Welcome to Elvis Presley fans invading Memphis this week. Have a great time! Make some great memories! We are happy you are here!
- FOR THIS PODCAST OF REAL ESTATE MORTGAGE SHOPPE AND MORE, GO TO JOGARNER.COM
- Real Estate Mortgage Shoppe reminds you that MAKE YOUR PLAN. LET’S WORK YOUR PLAN. IF THE DEAL WORKS FOR YOU TODAY, DO IT TODAY.
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SPECIAL NOTE: REAL ESTATE MORTGAGE SHOPPE RECOMMENDS THAT YOU CONSULT WITH A FINANCIAL, LEGAL OR OTHER CERTIFIED, LICENSED PROFESSIONAL BEFORE ACTING OR INVESTING ON ANYTHING YOU HEAR OR SEE FROM THE CONTENT ON THIS SHOW OR BLOG POSTS. THE INFORMATION WE SHARE ON REAL ESTATE MORTGAGE SHOPPE IS GENERAL IN NATURE MEANT FOR GENERAL EDUCATIONAL PURPOSES ONLY.
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RE-JOINERS:
- Lee Ann Foster of Neuro Source Memphis, TN Dr. Dale Foster and Lee Ann Foster have recently been recognized on WMC Action News 5 for their outstanding work helping veterans train their brains to overcome the effects of PTSD without prescription drugs. Visit neurosource.net for more information!
- Troy and Lynn McDonald, Bartlett, TN insurance agents with Erin McDonald Insurance Agency (901) 849-7101 Lynn stays top producer because of her excellent customer service to her insurance customers.
- Bernice L. Ross, Texas author and real estate syndicated columnist with Inman Real Estate Radio.
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ABOUT TOM KING
Tom is a well- respected and sought after appraiser in Memphis, Tennessee. He is a second generation appraiser with 40 years of experience. He has been elected to the Memphis Area Association of Realtors Board of Directors three times.
Tom is a certified residential appraiser in Tennessee. He have appraised over 20,000 homes in his career. A graduate from the University of Tennessee with a degree in real estate, Tom is also a Certified Relocation Professional (CRP). Tom also has vast experience in dealing with the county and state boards of equalization and in valuations of property for tax appeal purposes. (901) 487-6989
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About Jo Garner
cell: (901) 482 0354
Twitter: @jogarner
Jo describes her job description: “As a mortgage loan officer, my job is to give my client the benefits they want from their financing terms– listening to my client and determine what’s of the most value to THEM– What is their comfort level on a house payment, how much are they comfortable paying down, what type of financing do they need to get the house they want to buy or refinance. Different clients have different priorities in life—some are buying their first home with very little down payment funds. Some are recovering from medical challenges, divorces or preparing to send children to college and some are embarking on a long term goal of buying properties to build rental income. Whatever their personal priorities are, my job is to put together a mortgage with comfortable terms that will help them achieve their goals.”
Jo Garner is a mortgage officer with extensive knowledge in tailoring mortgages to her customers who are refinancing or purchasing homes all over the country. She offers conventional, FHA, VA or other loan programs for refinancing and purchases.
Jo can help you look at rent vs buy, when it makes sense to refinance, how to get the best deal on your home purchase financing.
Jo Garner has been in the real estate/financing business for over 20 years. She got her start in Portland, Maine where she first began her real estate career. She received her real estate education from the University of Southern Maine and was personally mentored in San Diego, California by Robert G. Allen, author of Nothing Down, Creating Wealth and The Challenge.
On moving back to West Tennessee in 1987, she went into business buying and selling discounted owner-financed notes secured on real estate. In 1990 Jo went to work for a residential mortgage company and has been a mortgage loan officer for over 20 years.
Her goal is to offer excellent, affordable service to her customers, tailoring the loan programs to the specific needs of her clients.
In addition to her work in the mortgage field, Jo Garner is the primary sponsor and founder of Talk Shoppe in Memphis. www.TalkShoppe.com Jo is host of Real Estate Mortgage Shoppe and currently publishes on her blog at www.JoGarner.com