News from our Affiliates Committee...June 2021

Gibby Kirby reduced cropped

“Adding a 2D floor plan along with high quality photos presents the most complete picture of your listing ”

 Prepared by Gibby Kirby, GK3 Studios - Real Estate Photography

815-341-9399        email:  This email address is being protected from spambots. You need JavaScript enabled to view it.   www.gk3studios.com

High quality photographs are key to presenting a listing to prospective buyers, but there is another tool available to ensure buyers are given as much information as possible before they even step foot onto the property. 2D Floorplans are not new to real estate photography, but they have recently been making a huge impact with buyers and sellers, and real estate agents are taking notice.  A 2D floorplan supplements the listing photos and allows the buyer to get a bird’s eye view of the property and its layout.  Listing photos allow the buyer to see how the property looks, what the finishes and features are, and the overall condition of the property.  A floorplan allows them to see how the space is laid out and if it matches what they are looking for.  It allows them to see all the rooms in relation to each other, without having to see the property in person.  The floor plans can also come with or without room measurement, so buyers get an idea of the size of each room to better plan for their needs.

According to Zillow, 2D floorplans are the 2nd most important feature for a listing, right behind photos.  Also, according to Rightmove.com, 1 in 5 buyers ignore a listing without a floor plan and having one increases click thru and time spent looking at the listing by 52%!  Most buyers begin their home search online, where they are inundated with properties and information from countless sellers and realtors.  For sellers, even in a seller’s market, it is vital to capture the attention of as many buyers as possible and floorplans do just that.  In addition, it can help your sellers weed out the buyers that may not be as interested in the property by providing buyers with more visual information and data on the property.  Gone are the days where the only way to see a property was to schedule a showing.  In a seller’s market, where properties are scheduled back-to-back for the entirety of the day, this can help sellers make sure that the people that are scheduling appointments are already extremely interested in the property.

During the last year, COVID has changed our industry.  We have seen an increase in the number of virtual showings and open houses.  We have more buyers making offers sight unseen, especially now that the market has become so fast and competitive.  Accepting an offer that is sight unseen can be a little uneasy for a seller, but by providing the very best marketing features for your listing, you can give assurance to both the buyer and seller.  Floorplans offer a fast and efficient way for buyers to get a feel for the flow of the property, without having to spend an extended period of time navigating a virtual 3D tour, which can be complicated for buyers who are not as tech savvy as other buyers.

If you haven’t tried a 2D floorplan yet, I highly encourage you to do so.  It is quickly becoming a marketing staple for listings and is in high demand with buyers. The floorplan, along with high quality photos, will provide a complete picture of a property, and will benefit not only your seller, but buyers as well.

 

Maureen Broderick cropped reduced

"What borrowers must know when applying for a home loan"

Prepared by Maureen Broderick, Sr. Mortgage Lender, Fifth Third Bank, NMLS #698316

815-258-3811                  email:  This email address is being protected from spambots. You need JavaScript enabled to view it.                    www.53.com/mortgage

There is a common expression in the mortgage industry that consolidates all of the things that underwriters are looking at before they approve a home loan.  The mortgage/real estate world calls it the “3 C’s of Underwriting” which refers to Credit, Capacity and Collateral.  As these 3 categories have evolved over the years, underwriters have continued to use them as a basis to make sound loan approvals on a borrowers’ mortgage.  Even with the pandemic, the “3 C’s” have been the main focus in dealing with this unprecedented time of lending.  It is important for applicants to put their best foot forward when applying for a home loan so that their application is approved.  A denial could cause them to search aimlessly for another lender to work on their loan which can result in further damage to their FICO score by having multiple pulls of their credit report.

The “3 C’s of Underwriting”……..

Credit—One of the most important factors that help determine whether or not an underwriter would approve a loan application is the applicant’s credit. To check this, the underwriter pulls their credit report which contains a history of such things as bankruptcies, past foreclosures, delinquencies if any, or other important information.  To ensure that the application is not rejected on the basis of credit, make sure that credit card bills are paid, monthly installments are paid on time and they take the time to review their credit report on a periodic basis to check for errors. 

Capacity—Another important fact that underwriters consider at the time of processing a loan application is the borrowers’ capacity to repay the loan. To determine the payback capability of a borrower, underwriters take into account such factors as income, cash reserves, debt-to-income ratio, assets, loan program requirements, and more than is alerted to the underwriter in DU or LP…the automation systems the underwriters work with in approving a loan. What underwriters mainly look for here is a stable source of income.  In the pandemic, the underwriters were constantly concerned with income stability due to job loss or lost wages or pandemic unemployment wages (which weren’t stable).  Income requirements that indicate a stable income may vary for W2 hourly wage earner, salary with commission income earners, W2 salary income earners and the self-employed borrowers fluctuating income sources.  With the extension of the due date on tax returns, the underwriters had to require profit and loss statements (P& L’s) for self-employed borrowers to determine stability of income plus 2 years of tax returns if the income had declined.

Collateral—Before approving a loan, lenders need to determine the actual value of the property on which a borrower is wanting to take out a mortgage loan.  It is important for a lender to ensure that the approved loan amount is less than or equal to the value of the property.  This aids the lender if the borrower defaults and the lender must recover that loan.  One main benefit of a home appraisal is that it verifies the condition and the value of the property.  Both the homeowner and lender benefit from the appraisal.  There are those occurrences when the automated underwriting systems will allow a waiver of the appraisal.  However, the borrowers must agree to that and the underwriter permit it under the loan program chosen.

I believe that sharing the “3 C’s” with your home buyers in this very active Spring and soon to be Summer real estate market will enhance their chances of getting a quick loan approval.