Broker's Blog

I had the pleasure of speaking with yet another first time home buyer, today…I’ve noticed a significant increase in business from this segment due to the first time home buyer tax credit. It’s arguably the best time in history to be a first time homebuyer, so it makes sense that we’d see more people making the switch from renting to owning. What I found refreshing about this buyer/borrower is that she is truly grateful for the sub 5% interest rate on a 30 yr fixed FHA loan, tickled that she could borrow the 3.5% down payment from her 401k (pay yourself interest), and thrilled that the IRS is willing to give her $8,000 about 2 months later…that she doesn’t need to pay back if she stays in her house for 3 yrs. Why shouldn’t she stay there for 3 or more years? Her $150,000 home will cost her less per month than her apartment! To top it off, she had been declined at a broker shop which didn’t offer FHA, so she was floored to find out that she could get a competitive mortgage with a 631 credit score! I haven’t yet told her that we can close in less than 2 weeks and that are were ongoing tax/appreciation benefits…wasn’t sure she could take any more good news! :-)

I highlight this experience because it stands in sharp contrast to the clients I meet who wonder if they should wait for the government to “sweeten the pot” with a larger incentive in the future, or if something geopolitical will happen to temporarily drive rates below there already historic levels. They believe themselves to be entitled to something bigger and better than everyone else…although I’m never quite sure the reasoning behind it. I was taught that hard, conscientious work and treating others as you’d like to be treated were the pathways to success and that “a bird in the hand is worth two in a bush”. I was also taught that customer service was paramount in any business…and still believe it whole-heartedly, but I now seem to be among a shrinking segment of service providers which hold true to this belief. Ok, I’ll get off the soapbox and tie this up.

As service providers, we should do our clients the service of reminding them to take a close look at the short and long term benefits of homeownership during this historic period. When weighing the risks and benefits, most reasonable buyers (not trying to max out their house payment) will find the scale tipped heavily towards benefits and will hopefully realize that this is one occasion where the bird in the hand might be worth MUCH MORE than two in a bush!

Thank you for taking the time to read this, I appreciate your comments and feedback.