Appraisals Get New Look – Are You Prepared to Explain Them to Your Clients?

Starting September 1^st, appraisals began looking a lot different…with a lot more information, including “codes” that will be entered into a national appraisal databank called Uniform Appraisal Datasets.

 

One set of codes has to do with “quality ratings” of the home and I wanted to share them with you because your clients will be asking you what it all means.

 

• C-1 – The entire structure is new, never been occupied and has no physical depreciation

 

• C-2 – Existing home, no deferred maintenance and requires no repairs.  This rating is given if property is “almost” new or has been totally renovated.

 

• C-3 – Existing home, well maintained but evidence of normal wear and tear

 

• C-4 – Existing home, minor deferred maintenance and requires only minimal repairs

 

• C-5 – Existing home, major deferred maintenance and in need of significant repairs but the home is still livable as a residence

 

• C-6 – Existing home, severe defects that affect safety, soundness and livability.  If property receives this rating, not eligible for conventional loan.

 

If the property is rated C6, it will require evidence of repairs.  If repairs are made, the appraiser must rate the home C5 or lower prior to the loan being closed.

5 Negative Things That Agents Say to Clients

I recently read a blog regarding negative statements that we, as sales people, say all the time but don’t realize what a negative effect it has when talking with prospects and clients and what they might be thinking when you utter these words…

 

“I can honestly say OR If I’m being honest with you…”

This phrase implies that you have not been honest before, but this time you’re being honest.  Using these words do not build trust—so don’t EVER use this phrase, ever.

 

“What do we have to do to get you on the dotted line today?”

Shades of car salesmen type pressure tactics.  Your clients will hesitate, tell you they’ll need to think about it, and never speak to you again.  You’re better off asking if they have any additional questions or concerns before moving forward.

 

“I’ll try to find the answer”

Saying the word “try” does not build client confidence in you.  It’s better to say, I’ll find the answer, I will let you know by tomorrow, even if I have not yet found the answer to your questions.

 

“It’s not my fault”

Even if it isn’t your fault, you are the only person they hired to help them thru the maze of buying or selling real estate—and they are blaming you! It’s better to apologize and talk about ways to fix the problem.

 

“What you need to do is…”

The client is thinking, “Who are YOU telling me what I need to do?”  The better approach is to say, here are several options to consider, which one do you think will work for you?    

 

One more thing, pay attention to what people say to you that makes you crazy—because if it upsets you, saying something like this to your clients will turn them off, too.

When Your Clients Want to Buy Extra Land: Conventional Mortgage Rules

If you have a listing where your seller wants to sell adjoining parcels of land—and a buyer who wants to buy it—Fannie Mae may provide financing based upon the following: 

• Each parcel must be conveyed in its entirety
• Parcels must be adjoining one another
• Each parcel must be zoned residential
• Only one parcel may have a dwelling unit (limited nonresidential improvements such as a garage are acceptable)

• No excessive value given to the land
• Appraisal comps not required, but suggested
• The mortgage must be a valid first lien on each parcel

A lot is riding on the appraisal. While it might cost extra, we can order an appraisal both with and without additional parcels to determine value.  Call me if you have a listing with extra parcels of land for sale to determine if we can offer additional financing. 

Should You Save Your Money or Pay Off Your Bills

This is a debate that has been going on for a long time, but in a National Foundation of Credit Counseling survey, 89% of those polled said they are working on paying off their debt first.

However, while paying debt is a good thing, it comes at the expense of not having savings to dip into in case of an emergency.

The advice given by my financial gurus is to find out what interest rate you are paying on all of your debt, and work on paying off the one with the highest interest rate first.

So, let’s say that you have a credit card with an interest rate of 13%; start paying extra money to eliminate that debt first.  When that has been paid off, make extra payments on the next debt with the highest interest rate.

Not everyone agrees with the concept of paying off your debt first.  While the survey indicates that most people want to get rid of the debt, there is another school of thought that says that at least some of your money needs to go into savings too.

First, figure out how much money you spend every month for food, mortgage payments, utilities, clothing, etc., and make sure you have at least 6 months’ worth of savings in case of an emergency, job loss, or illness.  Take care of your basic needs first.  Don’t set up a college fund UNLESS you have the extra money to do so.  Student loan interest rates are so low these days, it’s better to let them take out a loan than have your savings account suffer.

Basically, it’s up to you.

If you lose sleep over the money you owe, start paying down that debt.

If your savings are low and you freak out because you don’t have enough in case of an emergency, then start stashing that cash.