By Melissa Dorman, November 23, 2020
During these unprecedented times, it’s important for agents to do everything they can to protect themselves and their buyers from unwanted surprises. Here are a few things you can do,
With so many home loans hanging in the balance right now, even with the bigger banks, it’s imperative for agents to verify a few things about their buyer, starting with the credit score. Also, don’t forget to note their down payments. In the current COVID-19 climate, nothing beats having a lender that you can trust as a backup. Here, I offer a few tips to help you navigate the home buying process during the pandemic.
1.Verify the buyer’s credit score
Credit scores have always mattered, right? Yes! But it’s important to know your buyer’s credit score now more than ever. Be sure your buyer is aware of their current credit score and help them understand what that score means in the current marketplace.
Unfortunately, I’ve heard too many stories of lost time and resources because an agent never verified the client’s credit score or overall financial situation. Don’t make the same mistake. Check with the buyer’s lender regarding their prequalification.
2. Get familiar with current loans and who qualifies
Along the same lines, understanding the loans that are available and what constitutes a qualified buyer is just as important as the home price itself. Deals are in the air on a daily basis, with rates changing and lender guidelines getting stricter because of the banks’ liquidity, or lack thereof, due to the COVID-19 crisis.
What does all of this mean? It’s going to get a lot tougher for some buyers due to lenders adding overlays to loans. These overlays are basically revised policies that dictate new and more stringent standards. One of the most significant? Raising the minimum FICO credit score for FHA loans. Without the right score, the entire deal could be blown.
Now add in the fact that many clients are facing job losses, pay cuts, relocation issues and more, and it’s a challenging scenario — especially if they lack a down payment. However, experts say there will still be down payment assistance programs available during the crisis.
Of course, many buyers who need this won’t know where to start. As the agent, you should keep several resources on hand to lighten their burden and ease the unknowns.
Also, set proper expectations up front. Currently, lenders and loan officers are experiencing delays, and the buyer should be aware that things are moving a bit slower than normal due to the pandemic. By guiding your clients through the basics, they will have greater confidence in the entire process and in you.
3. Work with a trusted local lender
Lastly, don’t allow your buyer to get duped by a shady lender. During uncertain times, fraud goes up, including identity theft, wire transfers, risky loans, and more. Take the extra step and have a trusted lender, or several, in your back pocket, and make your lender recommendations known before your buyer goes down the wrong road.
This isn’t the time to work with someone who is not located in the area or state where you’re buying the property. Don’t go online and shop rates. It isn’t about finding the lowest rate. It’s about working with a lender who will be able to get you to the closing table — someone who won’t over-promise and under-deliver.
Follow these tips and your buyers won’t get hit with surprises. And neither will you! Plus, you’ll be better equipped to handle homebuying during these unprecedented times.
Melissa Dorman
Broker | OR & WA
She/They
Ten years ago, Melissa was living in a slum in Kolkata, India, helping over 200 women escape sex trafficking by providing alternative work at a social business.
It was there she discovered her passion for financial education as a means of empowering people to move out of poverty. After graduating from UCLA with a Masters, Melissa spent 5 years working as a Social Worker; assisting clients facing homelessness, in jail, or at a psychiatric facility.
As much as she loved the work, imagining saving for retirement on the meager salary of a social worker was becoming grim. That's when Melissa discovered "passive income." In no time, she fell in LOVE with real estate as a vehicle for wealth. Soon after, Melissa began locating off-market multi-family properties to purchase through creative financing strategies and win-win opportunities. Two years into investing, Melissa quit her day job as a Social Worker to become a full-time broker and investor. Initially, she was drawn to people in difficult circumstances, so she developed extensive experience assisting families facing foreclosure, short sales, and probate. Melissa is well versed in helping her clients overcome complex real estate challenges.
Currently, Melissa is teamed up with Super Broker, Yascha Noonberg at Living Room Realty. Together they assist clients to achieve their real estate dreams, including how to strategically buy and sell a personal residence to maximize profits. Far from the slums of Kolkata, her greatest passion now is empowering other working professionals to develop passive forms of income through buying multi-family properties in Portland.
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- T: 503-567-4697
- melissa@livingroomre.com
