So there has been a lot of talk about this new law that the president has signed, and I know that we all want this law to fix the subprime lending issues we are having. There are quite a few laws that are slated to go through the senate, which have already gone through the house, but unfortunately this law is not really going to be helping us. Why not? Good question. Well this law has quite a few drawbacks.

First, this law is only for those individuals which were on an ARM not for loans which just had an increasingly high interest rate to begin with.

Second, the individual must be able to pay the starter rate. This is a large issue and you will know why if you have been in my subprime class, which I suggest everyone to come. I will be teaching it in January at GCAAR. The reason is that a majority of the issues that we have seeing in terms of subprime defaults are individuals whose loans had not even reset yet. They were not even able to the starter interest rate - so this law will not help them.

Third, there are specific dates that the borrower must fit into. The subprime ARM must have been originated between Jan. 1, 2005, and July 31, 2007, and the reset for the ARM must occur for the first time between Jan. 1, 2008, and July 31, 2010.

Fourth, the borrower can never have been late on their payment by more than 60 days in the last 12 months.

Fifth, when the first reset on the ARM is supposed to occur, it has to be more then 10% of the current starter rate.

Sixth, the borrower’s credit score cannot be higher than 660 and it cannot have improved more than 10% since the loan originated.

Seventh, this law only deals with own that are owned by securities, otherwise known as mortgage backed securities. It does not deal with loans that are currently owned by banks, individuals or investors.

Eighth, the loan cannot have reset already, the first time that it is resetting must be during the dates given above.

Clearly, the program is only for a limited group of individuals. It will not help individuals already having issues, but it prevent this from continuing to occur. Basically, this law was created for individuals who are going to be having their first reset of their subprime ARM and they will not be able to pay the new higher interest rate. These individuals must also not be able to refinance their loan due to their credit score or income. If the meet the requirements set forth above, their starter interest rate will be frozen for five years. During that time the government’s hope is that the individual can be able to refinance their loan. The best possibility for refinancing the loan would be the FHA loan, only once the loan limits are increased. This is a great law for the individuals that fit into this narrow category, but for now we have to wait for laws to pass that help the individuals that are currently suffering. If you have clients currently having issues, below I have given resources that you can contact.

If you have questions or comments on this law please don’t hesitate to contact me and/or comment below.

Thanks so much and see you in an upcoming class!

Prabhjit Singh
Further Resources:

http://www.995hope.org/

Resources from NAR for your client

I get this question in my classes all the time. Agents tell me about clients that don’t want to purchase, and they are scared about the market. They tell me about clients that they have shown a ton of houses to, but they are too picky. They tell me about clients that should be motivated to buy, because they need a place to live and are already selling their house. So they ask - how do we sell a house to them?

The truth of the matter is that what we as real estate agents do is not sell houses. The buyer either wants to buy or not buy. What we do is facilitate the process - so it is smoother and in the best interest of the buyer. We use all of our knowledge and experience to educate the client throughout the process, so in that way they make the most educated decisions they can. At the same time, we inform them of everything they will need to do so that there are no surprises.

So if we don’t sell houses to clients, how do we get them to buy? You don’t. What you do is determine if they are interested or not. Certainly there are ways to overcome some of the objections that they have, but at the end of the day the agent should never try to sell the client on the house. Why? This generally comes off making the agent look bad. It seems as though the agent is only interested in their own best interest. You advise the client what they should do based upon all of their information. When you speak to the client get to know everything you can about them. What is their family, job, life situation? What is the reason they want to buy a home, and specifically now? Only if you look at the client in a full picture will you be in a place to advise your client as to what they should be doing.

So how do you overcome objections then? Overcoming objections are pretty simple if you are strong and do not waiver. Simply stated you look at what they are telling you, and you change the view and give support. For example, if they say they are looking for a property that is the cheapest house you need to help them define what cheapest house means. If they are currently renting, and they live in an apartment for 5 years looking for the cheapest house, how cheap is that house when you add all the rent that was paid out? As well, how many houses really fulfill the desires of the buyer? There are very few. The best house and cheapest house is the one that fulfills their needs. Of course the agent will be there to help the client negotiate and get the best price possible for that house.

You need to be strong when you have clients that aren’t sure of what they want. You need to be able to overcome the objection, and then step back. Allow the buyer to tell you what they think based upon what you have told them. Allow them to make that decision for themselves, so they do not feel like they have been pressured. At the same time, if that client is just wasting your time you need to be able to say - no! Do not be mean and arrogant about it, but be honest about how you make a living and that this is not working for you.

In the long run the agents that are most successful are those that understand how to gauge their clients. They understand where they are coming from and they get them ready to buy a house by maintaining their expectations. They then educate them throughout the process so they make the buyer make all the decisions. By doing this it allows one to really become a great real estate agent.

The Rempower website has had quite a few additions in the last few months. If you have not checked out the Downloads section under the Resources tab - you will be quite suprised at the addition of new documents. Please check it out here

As well, we have added a new Podcast. It discusess the ten steps to be a more successful real estate agent.

Download Here

If you have any questions/concerns/comments please do not hesitate to email us at info@rempower.com Thank you for listening!

Also don’t forget to check outMy Odeo Channel (odeo/1fe8da79a3d961dc)

Well it is that time again when you need to start acessing what your goals are. How was your last year? Did you make the commission you wanted to make? Did you spend the time that you wanted to with your family? Do you feel closer to the life that you would like to lead? If not, are you ready to make the changes that will allow you to make those changes? These are important questions to be answered.

When you have answered these questions you can then be ready to put together your business plan. Oh no did I say business plan? Yes business plan for real estate agents. Why does a real estate agent need a business plan? One simple reason - if you don’t have a business plan you are a driving a car with no directions. What happens when you have no directions? You get lost, you may get into an accident while trying to get directions, and the list goes on. But the largest issue with having directions is you have used all your energy and money, but you have gotten no where. If anything you are now upset and frustrated. Expecially with the market we currently have. The individuals that have direction and purpose by having created a business plan will succeed.

For the rest of the blog entries up to the new year I will giving you all information to help you understand different fascets of putting together your business plan. If you do put together your business plan as I have instructed you - you will be successful - no question. But you need to be very honest with yourself. Do what is comfortable for yourself and works with your personality. The last thing you want to do is try to force yourself to do certain actions. You will not only hate doing it, but your results will be very poor.

The following is a podcast by Prabhjit Singh, GRI on Goals - listen to it and have pen and paper! If you have any questions, comments or concerns please do not hesitate to email us at info@rempower.com

Download Here

Also check out our Odeo Channel (odeo/1fe8da79a3d961dc)

This is a different post then any of the previous ones which I have written before.  Why?  Unlike the other posts which were about law, this one has to do with a skill that I believe every real estate must have.  To be a good real estate agent means to know how to listen.  Listen how you may ask?

First, a individual must understand how to listen to their gut.  Your gut does not lie to you - it tells you the truth.  If you meet a client and it seems strange, either an unsafe situation or that you have a nonmotivated seller/buyer your gut will will tell you.  You also have to be able to listen to what they are saying, behind what is coming out of their mouth.

Second, one has to trust what they are listening.  Your instincts do not lie to you - no matter what anyone tells you.  Determine if they are really serious or not - if you know they are not you have to have the guts to say “No thanks.”  Being able to say no by far is the largest lesson any real estate agent can say.

I will talk to you all soon - please keep an eye on this blog

Please email me with any comments/concerns/questions at info@rempower.com