Chuck Ziegler, a mortgage loan officer with Pulaski Bank in Johnson County, has a memorable sales pitch: He wants to be “your mortgage consultant for life,” as he puts it. And with some clients, that’s certainly the case. He’s been doing home loans for 39 years. “I have always enjoyed being part of helping people finance their home purchase. It is a fun and exciting time for them, and I found out early in my career I could contribute a lot to my customers by giving them information, answers to their questions and the best loan options available.” In that vein, Ziegler recently answered some questions from MetroWire about the lending business in residential real estate these days:
The financial crisis had a profound impact on residential real estate deals. What impacts are you still seeing?
With the sub-prime meltdown and near collapse of the financial industry all aspects of home lending have changed. Fannie Mae and Freddie Mac have tightened their guidelines over and over in the last 24 months and are tightening still. Credit Bureaus have changed their formulas for FICO scoring. Missing a monthly minimum payment on a department store account or bank credit card of $20 could cause a loss of 80 or 100 points from a FICO. Two years ago a 680 FICO was rewarded with the very best rate on a conventional loan, and now that takes a 740. In fact, a 680 score has a 1.50% fee of the loan amount by FNMA for a 30-year fixed loan with a 20% down payment. There are plenty of funds available for home loans if buyers meet the “cookie cutter” guidelines so the loan can be delivered to Fannie or Freddie. If the buyers don’t fit into that niche, then many are turning to an FHA-insured loan, which is less restrictive. FHA has made major changes tightening their guidelines but they are nowhere near as restrictive as the conventional loan.
What kind of buyers are you seeing so far this year?
My customers are 60% first-time buyers so far this year, with the rest equally split between people moving up to their 2nd home and people who have owned multiple homes and have reason to buy again at this time. The primary price range is $150,000 to $250,000, and the tax credit is driving most first-time buyers.
What are buyers most concerned about when they go through the lending process?
Today, buyers have basic questions like “will we be approved?” or “what amount we can qualify for?” or “at what price we should purchase to make the payment fit our budget?” Up until two years ago I would get one primary question when a buyer called, and that was: “what is your interest rate?” The system was broken, and everyone came to believe there was no limit on the price of home they could buy. If one lender would not finance it, others would. Now I see people being responsible and setting their own limits rather than buying at the highest price they could qualify for.
What are some common mistakes you see real estate agents make in bringing their deals to lenders?
Two things occur that cause difficulty. One, the buyer doesn’t get loan approval before signing a contract on a house. I occasionally get a call from a Realtor whose client says, “Don’t worry about my financing as my credit is perfect and I can get a loan, so let’s go look at homes.” They go look at homes, write a contract and then call to get an approval letter after the fact. This will delay the contract being submitted, and sometimes the client has some issues they didn’t know about and can not get the needed approval. The second difficult issue for Realtors is quoting an interest rate to a client. Because interest rates can vary greatly based on credit score or loan program, the quoted rate may set up unrealistic expectations. That can lead to disappointment or, again at the worst, a client deciding not to go forward with their home purchase. My recommendation to Realtors is to always introduce their clients to a home lending partner for loan approval at an early stage. In response to the question “what are interest rates?” Realtors can say that rates are at historic lows and their lender will be able to give them specific quotes for their home financing.
Good Stats: Zip Code 66217 outperforms the rest in 2009
According to the Kansas City Regional Association of Realtors, the best-performing area in Johnson County last year wasn’t Mission Hills or Old Leawood or somewhere out south: the best-performing housing appreciation was ZIP code 66217, encompassing Lake Quivera and the I-435 corridor. The average resale prices of existing homes in that ZIP code in 2009 was $359,800, up 12.7% from 2008.
Tuesday tour brings out agents to network
Agents flocked to Susan Fate’s Reece & Nichols listing in Mission Farms this week for a bite and a chance to tour the $1 million-plus home that’s exquisitely decorated and positioned next to a small lake and mature trees. Above, Fate (center) with Jill Elder and Katie Rhoades of Prudential.
Chris Collins and Kirk Blinzler with Keller Williams stopped by Fate’s listing, too, but not before stopping in Sara Armer’s listing near 105th and Mission Road. Armer (below with Mary Sharp of Reece & Nichols) served up the ever-popular Planet Sub for guests.
Also on tour day, Gwen Caranchini stopped in to chat with Don Payne (below) and his wife Mary Payne at their listing at 3021 W. 81st Terrace. The Paynes were serving up a Mexican buffet to lure agents to the ranch that boasts a large backyard and updated kitchen.
Mary Payne and Sherri Trotter with Capital Federal.
