Boy have things changed,,,,,

Greetings!!

Back in the 80s when I sold real estate, we had to help the house buyer find financing.  Which meant we had to know a great deal about financing and not just bank names.  We had to know which banks handled which types of mortgages.  Whether it be FHA, VA, Fannie Mae, Freddie Mac, Conventional, Fixed Rate, or Variable Rate.  We had to know how to calculate how much a person could afford to pay for a house.  How much down payment they would have and what repairs might need to be completed for the house to qualify for a particular type of mortgage.

Now that Frank and I are house hunting I am finding that real estate agents do very little.  They will not even show you a house they have listed until you are "prequalified" for a mortgage.  If you want a particular type of mortgage you had darn well better know what is available and where to find it.  You start talking various types of mortgages with some of these Realtors and they have no clue what you are talking about.

Be prepared to spend hours on the computer researching before you start your house hunting.  I can certainly see where people can get in over their heads in a hurry.  The banks try to talk you into borrowing more money, perhaps more than what you can afford.  Then you get into trouble and lose your home.  Don't over extend yourself no matter how enticing it might be.  Sure we all want the perfect home but at what cost? 

Be willing to compromise on your wants vs your needs.  I want a 3 bedroom home but I really only need 2.  I want both a garage and a basement for my ceramic business but really I can get by with one or the other.  By being willing to compromise if need be I will be less likely to get talked into something I really can't afford.  Next we need to figure what is the highest price we are willing to go to get what we want.  We need to figure out what the monthly payment would be so we know we can comfortably afford that payment.

All these things I am talking about, "we the buyer" having to do, the real estate agent used to help you do that, back when I sold.  Today, it seems the agent does nothing more than show you the houses, after you have done all the figuring, gone to the lending institution of your choice and gotten pre-approved for up to so much money on a mortgage.  You are asked to show the realtor your letter of preapproval and then they will show you houses in that price range.  Once you pick one the houses and make an offer the realtor writes up a purchase agreement and presents the offer to the seller.  And for that they collect a big fat commission!!

While researching online yesterday I accidentally discovered that at least here in Illinois, starting this year, anyone who sells real estate will have to get a brokers license.  No more sales licenses.  If I understand this correctly then anyone can have a brokers license and sell independently and will not have to be associated with a "real estate firm".  They can work in someone else's office if they want to but they won't have to.  Sounds good to me, that means the commission for a sale would be higher because I would not have to give the boss a cut.  Hmmm,,,, easier work, bigger commission, maybe I will go get my brokers licence.  Sounds like a winner to me!!

Boy have things changed.  But is it for the better, or worse???  Who gets hurt the most by this? Is it the real estate industry as a whole or the consumer who is stumbling blindly in a world of mortgages with no one to trust to guide them safely through the maze?  You decide!!

Until next time,,,,,,,Blessings!!