Technology can be such a blessing to buyers, sellers, Realtors and even mortgage professionals. On the other side of that coin, it could also be the root of false illusion, confusion and sheer frustration for all involved. Granted, information on financing, market values and their trends are just an internet connection away; but it is important to remember that every real estate transaction is different. The information found on the internet could fit the general profile of some select clients, but for the most part, it’s just an example of what could come to be in a perfect world. Hence, here is a gentle reminder: The world is not perfect.
Sites like Trulia and Zillow allow home buyers to browse homes in specific areas, check home prices, neighborhood features, proximity to freeways and shopping, and many other details. The homebuyers educate themselves and actually provide some relief to the Realtor. But wait. Trulia and Zillow aren’t always up to the minute. The Realtor has the most up to date information about homes that are still on the market, new listings, homes that have been sold, deals that fell through, canceled listings, and so forth.
Remember those commercials on TV where a family shows up for an open house that was advertised on a website, but actually was not on the market? That really does happen. Some folks have also fallen victim to “bait and switch” type tactics on real estate websites. Buyers will see the home of their dreams! They call the selling agent who then tells them that the particular home on the web site “just sold,” but there is another home in the area–which actually turns out to be a dud, and not even close to the gem the buyers wanted in the first place.
If buyers are working with a Realtor, but still doing searching on their own, they can present their findings to their agent who can then verify the availability of the home(s). The Realtor can also gather more details about the property from the listing agent, and pass that information along to the potential buyers, as well.
Buyers today, as they watch every penny in today’s economy (despite media outlets that have been claiming incessantly about an economic recovery in progress – a blatantly false statement) shop around on the internet to see what type of rates and loans are available. Pre-approval of loan amount, loan interest rate, maximum purchase price all have to be verified by a loan agent before even placing an offer on a home. This pre-approval process means that all documents that is required of the loan have to be collected. These documents usually include tax returns, bank statements, pay stubs, among other thing, but definitely a credit report is mandatory.
A potential interest rate can be determined based on the creditworthiness, which includes a credit score and a record of timely payments to debtors. Then the loan agent can calculate a maximum loan amount based on that rate and the amount of the down payment. Buyers, generally, must have at least 20% down plus closing costs for the home purchase and the closing costs for the loan, plus at least 6 months worth of mortgage payments in the bank.
When home buyers shop around on Bankrate.com or specific bank websites. Advertised rates they see will be for the best case scenario. Not everyone fits into the best case scenario. Rates that are advertised might be for a particular type of loan. For example, someone might see a 2.75% interest rate advertised, but not notice that it’s a graduated payment loan with an 8% cap for someone with a credit score of 800 and a pristine payment record; and that this loan is based on a particular index (like COFI or LIBOR), which also affect a loan. All those details are not spelled out under that giant flashing 2.75% rate ad. While loan shoppers can educate themselves somewhat, the best education is going to come from their loan agent who sees the whole picture, and knows the details for the best loan programs available in each situation.
The internet is a great tool for research. It offers all kinds of information for potential home buyers, home sellers, investors, and those who wish to refinance. While the information they find is valuable, it can also be a source of frustration for the Realtor or the loan agent who knows the bigger picture and will have to respond to a rapid fire of questions from clients who actually did their homework, but might not be aware of specific details, changes in laws, changes in rates, changes in programs, requirements of each program, and so on. The real estate professionals, loan agents and Realtors alike, will gather all the information relevant to a specific transaction, package it all up, and offer clients options that will work for them. Once the client decides on an option, the Realtor and loan agent will work as hard as they can to seal the deal.
Irene Tsobanakis is a Realtor with Keller Williams, Peninsula Estates. She can be reached here. Follow her on Twitter at QueenIreneKW.