Price Drop or Rate Drop?

$25k Decision: Price Drop or Rate Drop? How to Bring Affordability Back Affordability is crucial in today’s market. If a seller has $25,000 to help close a deal, should they drop the price or reduce the interest rate?➡️ Price Drop ($25k Reduction)New Price: $850,000Monthly Savings: $152.46Income Needed to Qualify: $12,461.58/month ($149,538.98/year vs $153k)Effect: Helps bring in buyers qualified for $850,000 but only saves a small amount each month.➡️ Rate Drop ($25k to Lower Rate)Interest Rate: Reduced from 6.5% to 5.25%Monthly Savings: $558.94Income Needed to Qualify: $11,516 /month ($138,195 /year vs $153k)Effect: Makes the home affordable to buyers, originally approved at $785,000, significantly expanding the pool of potential buyers.➡️ Key TakeawayPrice Drop: Attracts buyers at $850,000.Rate Drop: Attracts buyers previously qualified at $785,000.For Buyer's Agents: Use this strategy to help clients afford higher-priced homes without overextending their budgets. Negotiating a rate reduction is often a better solution than a simple price cut to make homes more affordable.Let’s work together to bring affordability back and make the market work for everyone!

Cost Of Waiting

Why Waiting to Buy a Home Could Cost YouThinking of waiting for the “right time” to buy?Waiting often costs more than acting.Rent = Money GoneOwning = Building WealthReal-Life Examples:2006 buyers still gained $169K2014 buyers gained $225K2019 buyers gained $158K People who bought, even in uncertain times, came out ahead. Renters didn’t.

Appraisal Gap: Bridging Value Shortfalls

Navigating Appraisal Gaps with Confidence: A Strategic Approach for HomebuyersAre you a homebuyer eager to make a competitive offer on your dream home but concerned about the possibility of an appraisal gap? An appraisal shortfall, where the property’s appraised value is lower than your offer, can potentially increase the cash needed to close the deal. Loan Officers can offer strategic solutions to help buyers confidently navigate this challenge.A proactive approach to managing situations where the property’s appraisal does not meet the contract price is invaluable. This strategy helps maintain the buyer’s initial interest rate, keeps monthly payments within budget, and minimizes the extra cash required at closing.Here’s how Loan Officers can help manage potential appraisal gaps throughout the home-buying journey:1. Initial Consultation Stage:This is an opportunity to set clear expectations by discussing the possibility of an appraisal gap. By showcasing their expertise in handling such situations, Loan Officers can build trust with buyers and position themselves as problem-solvers.2. Offer Stage:When buyers make an offer, especially with a higher down payment, having a solid strategy reassures both the seller and their agent. It signals that the buyer is financially prepared to address discrepancies between the offer price and the appraised value. This reassurance can make the offer more appealing by reducing the risk of financing issues disrupting the sale.3. Post-Appraisal Stage:Loan Officers can act swiftly to keep the escrow intact and the transaction on track if an appraisal gap occurs. This quick response ensures all parties remain engaged and committed to closing, helping to prevent delays or deal disruptions.This approach not only assists buyers in overcoming financial obstacles but also strengthens the transaction, making it more robust against common real estate challenges. Loan Officers can deliver comprehensive support that benefits everyone involved by incorporating this strategy into pre-offer consultations, negotiation tactics, and post-appraisal solutions.

Offer | The Digital Offer

To help your offer stand out, I call the listing agent and provide a summary of how we’ve structured your loan. By providing them a clear understanding of your financing and helping build confidence in your offer. My goal is to communicate the strength of your offer in a way that increases your chances of getting it accepted.____________________________________________________________________Here is a sample of what they first see...Hi Brandon,I just left you a voicemail about the details of our offer. Steve Realtor has submitted the offer via email, but here are the details from the lending perspective.Here are the details of our buyers offer and qualifications. Purchase Price: $618,000Down Payment: 10%Loan Type: 30Yr Fixed ConventionalSeller Concession: $18,000Closing Date: 21 Days or SoonerKey Strengths: Excellent CreditIncome: Fully VerifiedAssets: Seasoned and SourcedKey Contingencies (explain waived ones)Pre-Underwriting CompletedTBD Underwriten ApprovalItems Included: Our Pre-Approval Letter (which you can download)A video highlighting our financing plan and strategy. Thank you,Troy Root