It Takes a Village to Sell or Buy a Home
By Bill Primavera
The Home Guru
While those of us involved with real estate sales may have lulled ourselves into the belief that all consumers are better educated about buying or selling a home because of the Internet, that is not necessarily the case, according to Irene Amato, owner of A.S.A.P. Mortgage in upper Westchester.
“Home buyers, especially first-time home buyers, don’t always have the kind of information they need to avoid some serious pitfalls,” Amato said recently at a seminar presented for realtors. “They need the expertise of a team of specialists to help them, and that team should be assembled by the buyer’s real estate agent at the very beginning of the house hunting or sales process.”
When she distributed an outline of the topics to be covered, it was in a foreign language, Italian to be exact. Someone asked if she might have given us the wrong document. Amato smiled and said, “No. This is to demonstrate my point that when many people go to buy a home today, we might as well be talking to them in a foreign language.
“The reason I got into the mortgage field myself was that I was overwhelmed when I went to get my own mortgage,” Amato continued. “I didn’t know what the lender was talking about, and I just signed all the papers he placed in front of me, not really knowing what I was signing.”
For buyers, Amato recommended that they see a mortgage broker before they contact a realtor about buying a house. “Many people just don’t know how much of a house they can afford,” she said. “They can waste a lot of time looking around for months, only to find that they can’t get the amount they need.”
Amato further advised that the buyer should not be lured into going only for the best rate offered when seeking a mortgage, but to pick the professional they like best. “Some lenders will say anything to get the business, but then buyers find that, when it’s time to buy, they may not get the promised rate, and the closing costs can be higher than estimated.
“And, there are pre-qualifications based only on what the prospective buyer tells the lender, but many times there is really no employment, assets or credit check,” she continued. She called this kind of pre-qualification worthless if the lender does not check this information. To demonstrate how lax lending institutions can be, she said that she called one lender asking for a pre-qualification for herself, but gave the wrong name and social security number, only to get a call back shortly after saying she was qualified.
“Loan officers who work for banks require no state test or license, just a registration number, so there really is no form of quality control or licensing,” Amato advised. “Some of them just don’t pay attention to a prospective homebuyer until that buyer comes to them with a real deal and asks for the mortgage. If the buyer is not properly qualified, it can be a big waste of time for the seller, the realtor, and certainly the buyer.”
Amato pointed out that realtors should act as a referral service that sends clients to the experts in each discipline involved with the transaction. “A lot of buyers don’t know anything about money in escrow, or such terms as PMI insurance or a COS,” she said. Most of us in the room looked at each other and then asked, “What’s a COS?” “Contract of Sale,” she responded.
“A mortgage broker can better advise them,” she said. “Just as one example, buyers probably don’t know that they can purchase a home as an investment property as part of their 401K. But, buyers also need to know such basic things as having to come up with the required down payment within a week of getting an accepted offer, and they need explanations for such things as having to pre-pay one year’s insurance for the current year, plus having to make monthly payments for the following year, so that it won’t be a big surprise.”
Amato’s biggest satisfaction, she said, is turning a first-time homebuyer’s dream into a reality. She shared a story about a buyer sent to her recently who had run into a problem when ready to buy. “He had a pre-approval from a bank, but didn’t know he needed 3-1/2 percent down for an FHA loan and didn’t factor in the closing costs,” she said. I kept asking questions to see how to get around this, and one of those questions was, ‘Wait, are you a veteran?’ Incredibly enough, no one at the bank had bothered to ask him that question, but with this knowledge, I was able to put a product together that he could handle,” she beamed.
Amato urged realtors to assemble a good team of experts for their clients, from the mortgage broker to a good accountant, to explain such things as tax benefits, and to have a list of other suppliers to recommend, from lawyers to handymen. And for buyers and sellers, Amato advised that they use their realtors as “the source of the source” for all their needs in preparing to buy or sell, especially in today’s real estate environment which can be more complicated.
“It’s all about having the best information from specialists who know best,” she concluded.
For anyone contemplating a first-time home purchase, or anyone who knows someone who is, contact Irene Amato at 914-736-9230. Her website is: www.asapmortgageinc.com.
Bill Primavera is a licensed Realtor® (PrimaveraHomes.com), affiliated with Coldwell Banker, and a marketing practitioner (PrimaveraPR.com). He can be emailed at bill@PrimaveraHomes.com or reached directly at 914-522-2076. Follow him on Twitter for housing market updates at Twitter.com/NYHomeGuru.