Could Your Credit Score be Hurting You?

Informed consumers considering a home purchase today want to do the right thing and plan ahead. Many do not seek immediate professional guidance from a Realtor or a mortgage loan officer. Instead, they hunt for hours online, looking at numerous websites for available homes for sale. They also consult websites to find the best interest rate and terms for future monthly mortgage payments. Many consumers feel betrayed, cheated and at times embarrassed to learn that the credit scores they counted on, to get that specific interest rate for their loan, are not used by mortgage lenders. When shopping for a good mortgage interest rate, consumers also need to know their credit score, and utilize an online mortgage calculator to compute future monthly mortgage payments. Consumers accept the provider’s terms and conditions to get a free credit score. Terrific! Unaware that in exchange they just received a meaningless credit score that lenders never use. They also handed over their Non-Public Personal Information (NPPI) to that credit score provider for life. Look at available credit scoring products available to consumers today: 

- FICO credit score from Fair Isaac Corporation/myfico.com, range 300 to 850

- Plus Score from Experian, range 320 to 830

- Trans Risk Score from TransUnion, range 300 to 850

- Equifax Credit Score from Equifax, range 300 to 850

- Vantage Score from all three bureaus, two ranges, 300 to 850 and 501-990

What is a FICO Score?
In 1958, Bill Fair and Earl Isaac, a mathematician and engineer, formed a company in San Rafael, California. They created tools to help risk managers make a better decision when taking financial risk. Today, 90 percent of all lenders use the FICO score, first created in 1989 by Fair Isaac, and it’s the only score Fannie Mae and Freddie Mac, the Federal Housing Agency and Veterans Affairs will accept in underwriting loans they guarantee. 

What is a Consumer Score?
The three credit bureaus, in their understanding of the credit scoring model created by FICO, decided to create their own scoring models, and in 2004 – 2006 they unveiled the “consumer” scores: Plus Score, Trans Risk Score, Equifax Credit Score, and Vantage Score. However, these are not genuine FICO scores, and mortgage lenders don’t use them. Consider this comparison: Would you buy a watch that gives the approximate time of day? The three credit bureaus work with major financial institutions, professional organizations, comparison sites, personal finance businesses, clubs such as Costco, AAA, Sam’s Club, and many data-mining brokers to bombard consumers in the race of the free credit score mania, all with the enticement of a “consumer” score that is not used by lenders, in hopes of obtaining subscriptions or fees from consumers. Fees that are totally unnecessary!
Know Your Score

Gaining access to one’s own credit report and credit score prior to loan approval with no strings attached could be helpful, and at all times beneficial. With little effort, inaccuracy of information can be instantly corrected at the credit bureau level, and with a few simple steps, credit scores could be enhanced. For example, paying down revolving account balances before a creditor’s statement-ending date (the creditor later updates account information with the credit bureaus), thus reducing revolving account balances at a particular point in time, will positively add more points to a score. It’s priceless. 

More Information

Consumers have a legal right to access their annual credit report at no charge once a year from annualcreditreport.com, a site sponsored by the three major credit bureaus: Experian, Equifax and TransUnion. These reports provide all the basic consumer data, but do not reveal a credit score. If you have a need for the FICO credit score that is actually used by mortgage lenders, myfico.com is the website to visit. For $19.95 per bureau, consumers can purchase a customized credit report with a genuine FICO score. Additional websites to visit: the Federal Trade Commission (ftc.gov) and the Consumer Financial Protection Bureau (cfpb.gov) for true answers to questions about any financial concepts, financial products, dispute and complaint submissions, and much more.

For assistance with credit, feel free to reach out to me...

David Demangos

Global Property Specialist

858.232.8410
David@AwesomeSanDiegoRealEstate.com
www.AwesomeSanDiegoRealEstate.com
Our Team Goes to Extremes to Fulfill Your Real Estate Dreams!

Buying a Home is 38% Less Expensive than Renting

In Trulia’s 2014 Rent vs Buy report, they explained that homeownership remains cheaper than renting throughout the 100 largest metro areas in the United States; ranging from an average of 5% in Honolulu, all the way to 66% in Detroit, and 38% Nationwide! The other interesting findings in the report include:

Even though prices increased sharply in many markets over the past year, low mortgage rates have kept homeownership from becoming more expensive than renting.

Some markets might tip in favor of renting later this year as prices continue to rise faster than rents and if – as most economists expect – mortgage rates rise, due both to the strengthening economy and Fed tapering.

Nationally, rates would have to rise to 10.6% for renting to be cheaper than buying – and rates haven’t been that high since 1989.

Bottom Line

Buying a home makes sense. Rental costs have historically increased at a higher rate of inflation. Lock in a mortgage payment now before home prices and mortgage rates rise as experts expect they will. 

David Demangos

Global Property Specialist

858.232.8410
David@AwesomeSanDiegoRealEstate.com
www.AwesomeSanDiegoRealEstate.com
Our Team Goes to Extremes to Fulfill Your Real Estate Dreams!

What Does it Take to Become a Successful Realtor?

This was posted on a private site and made so much sense, I had to share it and made my own adjustments from what I have experienced. 

Several times a year Realtors are approached by people who want to become a Realtor. Many of them think it's a great way to supplement their income while they keep their day job. A lot of others are interested in a career change. You're about to get a heavy dosage of what it's like to start a real estate career. 
 
1. Passing the exam is fairly simple. Creating a business with real income comes by understanding the stuff below.

2. Now that you have your license, be prepared to lose friends and get your feelings hurt. Most, if not all of your friends and family will avoid using you the first year or two that you're licensed. Simply put, you don't know what you're doing. Earn your battle scars. Even after you've gained experience, you'll have friends and family who will not work with you because you're a friend or because you are family. Don't waste time trying to figure it out.

3. If you don't spend money you won't make money. You needs to spend THOUSANDS to create a business. Most of what you are thinking is a cute and new idea has already been tried a thousand times. You will do what every new agent does... spend money (A LOT OF IT) on the wrong things. Over and over again. 

4. You and your smart phone will become inseparable. You will have to get up from eating, watching a movie and sleeping to take calls, return emails and respond to text messages. Of course you don't have to do this, but you also don't have to make any real money in this business. You'll get out of it what you put into it. Ignoring a call could be a $20,000 mistake, or more.

5. Be prepared to be second guessed, doubted, questioned, accused and lied to repeatedly. Buyers and sellers have the propensity to lie just like you and the guy next to you at the grocery store. People have perceptions about lawyers, mechanics and police officers. They have them about us too. Even after years of experience there will be clients who will second guess your every move. This will never go away.

6. You will show thousands of houses. Showing a house isn't just about unlocking a door. Sometimes you get rained on while showing. Sometimes the house says active on the market when it's already under contract with another buyer. Sometimes you are late to the appointment because of traffic. Maybe your buyer will be late. The number of things that can go wrong are practically endless.

7. Almost nobody will respect your time. Almost everyone thinks you are over paid.

8. Expect people to ask for kickbacks both legally and illegally. Buyers and sellers will often want to haggle with your commission.

9. You will pay taxes. A lot of taxes. Expect to pay for the gizmo you use to unlock doors. You will pay for this yearly along with dues to three different associations. You'll pay for signs, lock boxes, tools, equipment, cameras, advertising for both you and your listings, leads, websites and on and on and on.

10. You will pay for your own health and life insurance. There is no 401k matching in real estate. You are an independent contractor. In fact, YOU will PAY to be at your local real estate office! The broker will take money from you. You will also pay for an office if you want one. Your phone is your costs. Your internet is also your costs. So is your paper, pens and everything else imaginable. You're running a small business. It's ALL your costs. You'll also pay for errors and omissions insurance.

11. You will get screwed in this business. It's not for the naive, light-hearted, ignorant or thin skinned. You will work your rear end off and sometimes not make a dime.

12. You will deal with a certain number of psychopaths each year.

13. You will meet criminals, convicts and felons, especially if you work in the leasing industry.

14. Strange men and women will ask you to meet them at houses RIGHT NOW.

15. You might get a gun pointed at you while showing a house or two. Sometimes rabid Pitt bulls will chase you down.

16. Expect to get towed at least once.

17. Eventually you'll get in a wreck while showing. You better hope your clients aren't with you. Is your auto insurance updated correctly?

18. There is no disability insurance. So, if you break a leg while playing softball you're screwed. It's going to hurt your business.

19. You might get sued even when you are not at fault.

20. When you become successful your competitors might file complaints on you because they are jealous. You won't like this.

21. As you show houses you'll be in questionable neighborhoods from time-to-time. You need to learn self-defense, carry a gun or a can of mace. Everyone should be concerned about their safety.

22. Be prepared to leave a social event early to run and show a house or to get yelled at by one of your clients for something you did not do. It doesn't matter, you are the chew toy sometimes.

23. It's likely you'll get audited by the IRS. You have too many write offs and once again... you make too much money.

24. Lawyers are annoyed by Realtors.

25. Expect to list homes and never sell them. No agent sells every home they list. You will waste time, money, energy and resources.

26. Your signs will be stolen, spray painted and eventually played with by the local kids.

27. Your flyer box will always be empty because kids, passerby's and neighbors will take too many. Sometimes they'll take all of them in one day. Then you'll be chastised for not having flyers in the flyer box.

28. Did I mention you'll deal with at least two crazy people each year?

29. EACH real estate transaction you work means you are likely dealing with at least 8 different people. You're responsible for 15-20 things. You will wake up in the middle of the night thinking about paperwork, clients and your business.

30. You will become an unlicensed therapist, divorced lawyer and counselor. You aren't allowed to give legal advice, and you shouldn't. You aren't a doctor, but everyone will unload their personal lives with you. You will sometimes live their life.

31. Your spouse will at times hate what you do for a living.

32. Your wife/husband will despise the fact that you are always on your phone.

33. When you're sick... you still work. There's no floating holidays.

34. While on vacation.... you still work. You can get an agent to cover your business, but NOBODY will care for your business the way you do.

35. Sometimes when you make mistakes it costs people money. You can't just apologize.

36. You have to have a nice car. You must wear nice clothes.

37. When you first get started everyone will know you don't know what you're talking about. It's a fact. This sucks. But if you stick it out, you'll be okay. 75% of the new agents don't make it. 

38. You get to work with agents! Not all of them are put together correctly. A lot of your problems in this business will be because of the other agent. You will get upset, angry, pissed and offended. Ego's are here too.

39. Wait for it... friends, neighbors and family will ask you for real estate advice while they are involved in a real estate transaction... YOU aren't. 40. Other Realtors will give your client advice when they aren't supposed to. Every buyer and every seller knows an agent somewhere.

41. Each market is different. Very different sometimes, but that won't stop friends and family from influencing your client. Your client will become confused at times.

42. You have a better chance of meeting E.T. than you do working real estate part-time and being successful. It takes time, effort and money to be a part-time Realtor. In fact, being a part-time agent can be even more difficult.

So why do agents do this?

You'll have the amazing opportunity to reap what you sow. You can work when you want. No matter how bad your boss is (client) you are only working for them for a certain period of time. You get new bosses all the time. You can make a real difference in a lot of people's lives. You literally help shape dreams. YOU can be the difference in someones life as they look to sell and buy a home. And not all clients, buyers and sellers are bad. Most of them get it. It's awesome when everything works out.

And sometimes the money can be really rewarding.

David Demangos
858.232.8410
Locally Known, Globally Connected
Luxury Home Marketing Specialist 
Global Property Specialist 

www.AwesomeSanDiegoRealEstate.com 
David@AwesomeSanDiegoRealEstate.com
Our Team Goes to Extremes to Fulfill Your Real Estate Dreams!

Should I Rent My House if I Can’t Sell It?

Rents are skyrocketing and homes are still at great prices. These two situations are also causing some sellers to consider renting their home instead of selling it. After all, a homeowner can get great rental income now and perhaps wait until house values increase even further before selling.This logic makes sense in some cases. There is a strong belief that residential real estate is a great investment right now. However, if you have no desire to actually become an educated investor in this sector, you may be headed for more trouble than you were looking for. You should answer the following questions to make sure this is the right course of action for you and your family. 10 Questions to ask BEFORE renting your home 1.   How will you respond if your tenant says they can’t afford to pay the rent this month because of more pressing obligations? 2.   Because of the economy, many homeowners cannot make their mortgage payment. What percentage of tenants do you think cannot afford to pay their rent? 3.   Have you interviewed experienced eviction attorneys in case a challenge does arise? 4.   Have you talked to your insurance company about a possible increase in premiums as liability is greater in a non-owner occupied home? 5.   Will you allow pets? Cats? Dogs? How big a dog? 6.   How will you actually collect the rent? By mail? In person? 7.   Repairs are part of being a landlord. Who will take tenant calls when necessary repairs come up? 8.   Do you have a list of craftspeople readily available to handle these repairs? 9.   How often will you do a physical inspection of the property? 10. Will you alert your current neighbors that you are renting the house? Bottom Line Again, renting out residential real estate is historically a great investment. However, it is not without its challenges. Make sure you have decided to rent the house because you want to be an investor, not because you are hoping to get a few extra dollars by postponing a sale. Who do you know looking to buy or sell a home? Call David. David Demangos Keller Williams Realty Cell: 858.232.8410 Realtor® BRE# 01905183 www.AwesomeSanDiegoRealEstate.com San Diego Real Estate Elite - Global Property Specialist - Green Specialist -ALC Committee - CIPS Our Team Goes to Extremes to Fulfill Your Real Estate Dreams! Download The #1 Real Estate Live Home Search App Below Awesome Home App

Millionaires Use Real Estate Agents

Do as I Say… not as I Do

This adage could be no truer today after it has been reported, in a recent Herald Tribune article. That when it came to selling his Florida mansion, Al Bennati, the longtime chief executive of BuyOwner.com, has chosen to list his home with a local real estate agent. BuyOwner.com is one of many websites out there now that encourage home owners that they do not need to enlist the help of a professional agent to be able to sell their home. They go as far as to tell homeowners: 

"BuyOwner.com allows you to reach the most potential buyers in the shortest amount of time, in the most effective (the Internet) and most cost effective manner (no commission!) possible."

Let’s break down that statement:

Myth #1 – The internet is the most effective way to sell your home

Many have said that, with the introduction of home search on the internet, hiring an agent is no longer a necessity. When the time came to list his own home, Bennati went against his own advice saying:

"To sell a home of this magnitude, it needs to be done by a person and a company that reaches buyers of this caliber."

Myth #2 – FSBO’ing is the most cost effective solution

Without proper exposure to the “right kind of buyers” your home will not sell. Many real estate professionals have elaborate strategies to get your listing in front of exactly who needs to see it.

The most recent Home Sellers’ and Buyers’ Profile Report from the National Association of Realtors revealed that, though 92% of buyers search for a home on the internet, 90% still use a real estate professional.

Bottom Line

Two separate people made fortunes convincing others to sell their home through their FSBO sites. Yet, when it came to selling their own home, they recognized the value of using a real estate professional. There is a reason the real estate industry has been around for centuries: it performs a valuable service.

Who do you know looking to buy or sell a home? Call David!

David Demangos
Keller Williams Realty
Cell: 858.232.8410
Realtor® BRE# 01905183
www.AwesomeSanDiegoRealEstate.com

San Diego Real Estate Area Expert / Green Specialist / ALC Committee
Our Team Goes to Extremes to Fulfill Your Real Estate Dreams!

Download The #1 Real Estate Live Home Search App Below

Awesome Home App

The Dream Lives On: The Future of Home Ownership in America

In his paper, Eric Belsky reveals five financial reasons people should consider buying a home.

Here are the five reasons, each followed by an excerpt from the study:

1.) Housing is typically the one leveraged investment available. 

“Few households are interested in borrowing money to buy stocks and bonds and few lenders are willing to lend them the money. As a result, homeownership allows households to amplify any appreciation on the value of their homes by a leverage factor. Even a hefty 20 percent down payment results in a leverage factor of five so that every percentage point rise in the value of the home is a 5 percent return on their equity. With many buyers putting 10 percent or less down, their leverage factor is 10 or more.”

2.) You're paying for housing whether you own or rent. 

“Homeowners pay debt service to pay down their own principal while households that rent pay down the principal of a landlord.”

3.) Owning is usually a form of “forced savings”.

“Since many people have trouble saving and have to make a housing payment one way or the other, owning a home can overcome people’s tendency to defer savings to another day.”

4.) There are substantial tax benefits to owning. 

“Homeowners are able to deduct mortgage interest and property taxes from income...On top of all this, capital gains up to $250,000 are excluded from income for single filers and up to $500,000 for married couples if they sell their homes for a gain.”

5.) Owning is a hedge against inflation.

“Housing costs and rents have tended over most time periods to go up at or higher than the rate of inflation, making owning an attractive proposition.”

Realize that home ownership makes sense for many Americans for many social and family reasons. 

Who do you know looking to buy or sell a home? Call David!

David Demangos
Keller Williams Realty
Cell: 858.232.8410
Realtor® BRE# 01905183

www.AwesomeSanDiegoRealEstate.com
San Diego Real Estate Area Expert / Green Specialist / ALC Committee
Our Team Goes to Extremes to Fulfill Your Real Estate Dreams!

5 Reasons to Hire a Real Estate Professional

Whether you are buying or selling a home, you need an experienced Real Estate Professional to lead you toward your ultimate goal. In this world of instant gratification and Internet searches, many sellers think that they can For Sale by Owner or FSBO. The 5 Reasons You NEED a Real Estate Professional in your corner.

1. What do you do with all this paperwork?

Each state has different regulations regarding the contracts required for a successful sale, and these regulations are constantly changing. A true Real Estate Professional is an expert in their market and can guide you through the stacks of paperwork necessary to make your dream a reality. Remember, there are over 200 tasks/disclosures/advisory's the need to be understood and completed.

2. Ok, so you found your dream house, now what?

According to the Orlando Regional REALTOR Association, there are over 230 possible actions that need to take place during every successful real estate transaction. Don’t you want someone who has been there before, who knows what these actions are to make sure that you acquire your dream?

3. Are you a good negotiator?

So maybe you’re not convinced that you need an agent to sell your home. However, after looking at the list of parties that you need to be prepared to negotiate with, you’ll realize the value in selecting a Real Estate Professional. From the buyer (who wants the best deal possible), to the home inspection companies, to the appraiser, there are at least 11 different people that you will have to be knowledgeable with and answer to, during the process.

4. What is the home you’re buying/selling really worth?

Not only is it important for your home to be priced correctly from the start, to attract the right buyers and shorten the time that it’s on the market, but you also need someone who is not emotionally connected to your home, to give you the truth as to your home’s value.

According to the National Associates of Realtors, “the typical FSBO home sold for $184,000 compared to $230,000 among agent-assisted home sales.” Get the most out of your transaction by hiring a professional.

5. Do you know what’s really going on in the market?

There is so much information out there on the news and the Internet about home sales, prices, mortgage rates; how do you know what’s going on specifically in your area? Who do you turn to, to tell you how to competitively price your home correctly at the beginning of the selling process? How do you know what to offer on your dream home without paying too much, or offending the seller with a low-ball offer? “When getting help with money, whether it’s insurance, real estate or investments, you should always look for someone with the heart of a teacher, not the heart of a salesman.” – Dave Ramsey

Hiring an agent who has their finger on the pulse of the market will make your buying/selling experience an educated one. You need someone who is going to tell you the truth, not just what they think you want to hear.

Bottom Line:

You wouldn't hike up Kilimanjaro without a Sherpa, or replace the engine in your car without a trusted mechanic, why would you make one of your most important financial decisions of your life without hiring a Real Estate Professional?

Who do you know looking to buy or sell a home? Call me!

David Demangos
Keller Williams Realty
Cell: 858.232.8410
Realtor® BRE# 01905183

San Diego Real Estate Area Expert / Green Specialist / ALC Committee
Our Team Goes to Extremes to Fulfill Your Real Estate Dreams!