Category Archives: Industry Talk

What is an Alternative Brokerage? Who is an Alternative Real Estate Agent?

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One of the great challenges of being on the “bleeding edge” of change in any industry is identifying the words to be used in discussing the new model. The real estate industry is, at more than a century old, steeped in history and culture. So it’s even more of a challenge to create a dialog that accurately captures the essence of a particular innovation and the characteristics that distinguish it from the old way of doing business. It’s hard to create new meanings for words that have long-standing and well-understood definitions.

One term used to describe real estate firms that are working to change the industry is “alternative.” But absent some definition, the term is meaningless. So what is, exactly, an “alternative brokerage”? And who would be an “alternative agent”?

Does use of the internet define Alternative Brokerage?

One possibility: A firm that leverages the internet to more efficiently provide client services, and passes at least some of the savings back to the consumer. The second clause is important. Every real estate broker by now has leveraged the internet, in particular by sharing their listings not just with other brokers but with the public via the internet (a change driven by anti-trust efforts of the Department of Justice). So simply using the internet cannot be considered alternative.

But passing the savings created by this efficiency back to the consumer? Now that’s new. On the other hand, though, there are lots of brokers out there now who will negotiate unique fees with their buyer clients and who will then rebate the balance of the seller-paid commission to the client at closing. These brokers recognize the fact that most buyers now do at least some of the home search themselves. Does that make their real estate firm an alternative brokerage?

No. If that’s the case, then the term “alternative” doesn’t begin to describe the many distinctions between the new business models that are emerging in the real estate industry and the traditional way of doing business. Agents (legally now called brokers, previously licensees) have been independent contractors, each largely responsible for their own real estate practice (independence is the hallmark of being an “independent contractor”). Every agent must be licensed through a managing broker, who remains responsible for the agent’s conduct. That agent then either pays a flat fee to the managing broker (i.e. a desk fee), or splits in some percentage with the managing broker (and firm) the commissions earned. One managing broker can be responsible for two hundred or more agents in the office. Each and every one of those 200+ agents is responsible for finding their own clients and generating their own income.

So the traditional model is defined in part by independence for the agents and limited oversight. If one agent in the office decides to charge a lower fee, does that make the whole office “alternative”? Clearly not.

It’s more than the internet. Modern business principles define an Alternative Brokerage

Therefore, the definition needs to be expanded. Here’s another possibility: A real estate firm that operates as a modern business and passes some of the savings realized by those modern efficiencies back to the consumer. This definition still captures “leveraging the internet,” clearly a hallmark of operating as a modern business. But what about the notion of branding and efficient marketing? In the 21st Century, there are more efficient means of advertising the firm’s services and acquiring new clients than making each agent responsible for their own business.

Finally, a modern business is more likely to value the brand and the resulting need to provide high quality service every time to every consumer. Many of the new real estate models employ their agents. This gives them a far greater degree of control over their agents’ conduct and the services they provide. While generalizations cannot be drawn about any particular agent, there is no dispute that the bar to entry into the profession is quite low. A modern business structure reduces the risk generally that a consumer will be poorly served by a real estate agent.

So operating as a modern business, and passing the savings realized by the resulting efficiencies back to the consumer, seems to define an alternative brokerage. Which begs the question: Can an alternative agent only work for an alternative brokerage? I think so. Otherwise, we once again define “alternative” way down, such that it’s only a shade off traditional. In today’s real estate industry, where there lots of alternative brokerages – as defined here – that definition just doesn’t convey reality.

What say you, RCG community? What is an “alternative brokerage“? Who is an “alternative broker”?

Ask not what your client can do for you…

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Bill Gassett wrote a blog post a couple of days ago titled “Things Buyers Do That Real Estate Agents Hate”. I happen to know and like Bill and would not normally engage in a “correction”, point-counterpoint post with him. However one of my clients posted Bill’s article on his facebook page with this tag “Ardell DellaLoggia? Thoughts?”

Since my thoughts are more than will fit in a facebook comment…I am writing the full answer here. My facebook comment answer was:

I like Bill…and his piece is somewhat right…but for ALL the WRONG reasons. The only thing I “HATE” that a client does, is something that is against their own best interests OR anything that hints of fraud or discrimination. I would never HATE something one of my clients may do because of how that might impact me vs them or the public at large. Writing a point counter point to Bill’s piece…be back with the link when I am done.

Bill Gassett’s post has 13 points and I will use his point captions…but with my answer vs his. To compare to his answers…read his post in conjunction with this one.

Things Real Estate Agents Wish Buyers Wouldn’t Do

1. Buyer Calls Listing Agents On Their Own

Even MORE “wrong” than the buyer doing that is the real estate industry still using the term “Listing Agent” vs Agent for the SELLER. The main reason a buyer should not call the Seller’s Agent is the ONLY job of that agent for the seller is to answer your questions, and listen to what you say, to and for the seller’s benefit and not yours. In multiple offer situations, what the buyer may have revealed about themselves to the Agent for the Seller during that call could cause their offer to not be accepted…even if they would otherwise have had “the winning offer”. It’s like asking your wife’s attorney questions during a divorce. After warning you that they represent the other party…their job becomes to use what you are saying to THEIR client’s advantage, if you continue to talk after they ask you not to do that. Perhaps we need a miranda-type warning:

“I represent the seller and not you. Anything you say can and will be used to further my client’s best interest and not yours.”

2. Buyer Asks the Listing Agent to Show Them the Home

Same answer as 1 except even worse. Now not only do your words help further the seller’s best interest, but your general demeanor and body language as well. Not a good idea for a lightweight to get into the ring with Joe Frazier.

3. Ask Real Estate Agents to Show Them Properties Before They Are Pre-approved

It does not serve a buyer’s best interest for them to succumb to multiple and unwarranted credit checks needed for a pre-approval, because the act itself will lower their credit score. There are many contradictory versions of whether or not and when that is true. But a homebuyer’s loan costs and mortgage interest rate, when they do purchase, is directly tied to that credit score. If they are shopping for an agent while viewing 3 to 5 properties with different agents before they are ready to choose an agent and property, then getting 3 to 5 pre-approvals through those agent’s many and varied preferred lenders could seriously harm the buyer for years to come. EVERY real estate agent learns how to qualify a buyer as part of their required education for licensing. There is no reason an agent can’t qualify a buyer well enough to show them enough properties to decide if they are well suited to working with one another, usually 1 to 3 properties. The potential damage to the buyer has to outweigh the potential damage to the agent in this case. If the buyer tells me they have worked at Microsoft or Google for 5 to 7 years and have a salary of $200,000 and a credit score of 760 and want to look at houses costing $500,000…I don’t need a lender to run a credit check that I believe will lower the buyer’s credit score by about 25 points. Many of my clients fit that scenario and are well qualified and are buying below their means. If I worked in an area where 9 out of 10 buyers who come to me can’t get a mortgage…I would feel differently. An agent needs to consider the harm to the buyer and not just protect themselves from “wasting their time”.

4. Buyer Asks to View Property Outside of their Price Point

This involves more than the buyer and the agent, as the main reason NOT to show properties outside of a buyer’s price point has more to do with licensing ethics and sellers. We as agents have “The Keys to the Kingdom”. Having access to enter people’s homes is a HUGE privilege that comes with a responsibility not to abuse that privilege. Since I have been in the business for almost 25 years, I can’t say that I have never had someone ask me to enter a $2 Million listing for “the fun of it”, as example. My answer is no because my access to people’s homes is to a given purpose and “fun” isn’t one of them. If there is an Open House, well that’s an open invite. But using my access key to enter someone’s home for other than the purpose of buying it…answer has to be no. The main reason I don’t like Bill Gassett’s answer vs mine is many agents do, and often, make appointments to see homes to value a home they are soon going to be listing. If the home is occupied, I don’t think it is right to do that unless I disclose to the seller that I am not there for the purpose of showing their home to a prospective buyer. But MOST agents do think seeing the home to help them list a competing home in the neighborhood IS a legitimate reason. When you think about the seller cleaning for you and leaving their home for you…you have to agree that for them to do that to help you do your job for a different seller, is clearly not OK…in my book.

5. Buyer Does Not Respect The Agent’s Time By Calling Last Minute

I don’t get this one at all because in a hot market we have to be very “Johnny Jump Up”. Anyone who doesn’t want to jump through hoops to get their client the house they want, just shouldn’t be in this business. Often “the early bird gets the worm” around here. Last Minute is really First Minute in a hot market. I can’t tell you how many times my client got the house they wanted because we were there “Johnny on the Spot” and the first offer in. To hell with respecting the agent’s “time” and schedule. Whatever makes the most sense for the client to achieve their objective is the ONLY respect factor in the room! End of Story.

6. Buyer Looks At Home 5 Times and Does Not Make an Offer

Thank God they stopped themselves from buying a home they didn’t want, I’d say. Really? If it takes 5 times for them to know they don’t want it…then 5 times it is! This is just ridiculous, Bill. Sorry, you know I like you, but Holy Caboley! I have in fact had a client or two say they were going to buy a house because they felt badly FOR ME if they didn’t because of all the time and work I had invested in the endeavor up to that point. I was aghast that they would put me before their family’s best interest. I love those people…but Oh My God! No!

7. Buyer Not Researching Where They Want To Live Before Asking Agent to Show Them Homes

Duh! Isn’t looking at a few homes in various areas part of that “research”? Another “I don’t “GET” what Bill is getting at…or I don’t agree. Hard to say which.

8. Buyer Makes Unjustified Low-ball Offers

That’s a tough one to answer as everyone’s definition of “unjustified” and “low-ball” is different. If the market has already proven by lengthy days on market that the asking price is the wrong asking price, then basically it’s time to ignore that asking price in the offer. There are too many considerations here. If the buyer and I decide the price is $100,000 over-priced, and that happens often, and it came on market at that price 5 minutes ago, and my clients really want the house at the correct price, then the strategy of how we get that house for them at the right price is very important. I get Bill’s point here, but if you accept that person as a client, then…well…if you don’t like the way the client is acting you need to help that client find an agent better suited to their needs. This may be a reason to drop a client or not accept them as a client in the first place. But you don’t get to continue a bad relationship. Once you view your client as “an unreasonable low-baller”…it’s time to part ways. Breach of relationship, I’d say. There’s another agent who might love that client…release them so they can find a more compatible agent to work with.

9. Buyer Wants To Make An Offer Contingent On The Sale Of Their Home

I have to quote Bill’s Opening words on this one ” Sellers are not going to accept an offer with a home sale contingency 99% of the time.” Another Duh! If you knew your client needed to sell before buying, and you took them to see homes they now want to buy with a home sale contingency…whose fault is that? The time to have this conversation is NOT after you brought them to see the house and now it’s time to write an offer and you don’t want them to have to sell their house first. Why did you bring them to a house they now love…and then tell them they can’t buy it? Mean…just mean. ALSO AND IMPORTANT if the forms are available to make a contingent offer…and they ARE…then guess what? It IS sometimes OK to make a contingent offer and sellers DO sometimes take them, for sure! Might have to buy new construction, as example, to do a contingent offer. But if your client needs to do a contingent offer…then you have to figure out how to make that work. If you can’t…then drop them so another agent who does know how to do that can help them achieve their goals.

10. Buyer Asks To Negotiate Items That Were Visible Prior To Inspection

Huh? If the house needs a new roof, and I could tell that before the inspection, the buyer can’t negotiate that as part of the Home Inspection Negotiation…why? That’s just wrong. Of course the buyer can negotiate items “that were visible prior to the inspection”. Why not?

11. Buyer Expects the Home To Be Perfect After the Inspection

Now I just feel like someone Turned Back Time. Who died and made the agent in charge of what is and isn’t a “reasonable” request? If it hinders their objective to ask and sometimes it does, then we have to figure out how to meet the buyer client’s needs without risking losing the house, if getting that house is the client’s primary objective. The buyer in escrow is protected from the seller viewing their request “unfavorably”. That is why we do the inspection when IN escrow vs at time of offer. In fact your #11 explains why your #10 makes perfect sense to you. You seem to be more worried about the other agent’s seller client than you are about your buyer client? Do you not have Buyer Agency where you work? You do. Take the seller’s agent hat off when representing a buyer please.

12. Work with a Buyer’s Agent for Months and then Buy a House Through a Different Agent at an Open House

I have never had that happen to me in 24 plus years, not with another agent. But one time about 22 years ago I had a buyer client who got cornered by a seller at a ForSaleByOwner Open House. It was kind of funny too. I was doing their Open House on the property they needed to sell in order to purchase. They called me all excited “We Just Bought a House!!!” They were so happy. Had already signed the contract with the seller who had contracts AT the Open House for buyers to sign. It took them a few minutes after telling me their great news to realize what happened. LOL! They were so happy…how could I not be happy for them? They started apologizing once they realized that I basically felt like they just punched me in the gut. But I told them that THEIR goals and happiness was truly my foremost consideration. It happened. I was truly happy for them. I picked myself up…dusted myself off…and proceeded to help them in any way I could. Now as to Bill’s tale of woe…yes…I have seen that happen to many other agents. Most of the time it is the agent’s fault. Sometimes it is the seller agent’s fault at the Open House just like that FSBO Seller in my example. Sometimes it is the Buyer’s Agent who was not realizing that it was a one sided relationship for way too long. In any case this is usually a “look in the mirror” problem and not the buyer’s fault.

13. Buyer Works With More Than One Agent

You really can’t marry the first frog you kiss. Most of my clients are committed at first contact because they are referred to me by friends and family who highly recommend me. But buying a home with an agent is a very personal thing, and without a good personal referral a buyer needs to try a few agents on for size before choosing one. Also…it is sometimes hard not to use more than one agent if you have two completely different geographic options. I don’t have that problem here in the Seattle Area, but I did when I worked in PA and people often made a choice between Yardley PA and Princeton NJ. No one agent could do both. Any agent should know if a buyer needs to use more than one agent to best serve their interests and should actually be recommending that they use more than one agent if that is what is needed. They should be the first to tell the buyer to do that if and when it is needed.

Again…not to pick on Bill Gassett here, and the ONLY reason I have gone through this point by point is because my client happened on Bill’s post and asked me for my thoughts. I saw no way to do that without covering all of the points…and to do that on facebook where my client asked the question…well, too long. So I am posting a link to this post there now.

Buying a House in Seattle 2015? Check out Quill’s free Home Buying Class

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2015 Home Buyer Class

Free Home Buyer Seminars offered by Alternative Brokerage in Seattle

Are you thinking of buying a house in Seattle in 2015? Or perhaps it’s time to sell your home? Either way, you’ll learn some great information at Quill Realty’s free House Buying Seminars for 2015.  We ‘re offering a free home buyer class – great for sellers too – on the fourth Wednesday of every month through June, from 7p – 9p here at the Quill office in Georgetown. Whether you’re a first time homebuyer or a seasoned veteran looking to “move up,” you’ll learn something valuable at these free real estate classes. Topics will include the current and anticipated future of the real estate market, common real estate legal issues (including from the seller’s perspective), and real estate search tips for finding “the one” (and other good marketing tips for sellers). All from the unique perspective of a consumer-driven, alternative real estate brokerage.   Continue reading →

VERY “Walkable”…but is it SAFE to walk there?

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walkscoreI am very happy to report yesterday’s news that WalkScore has added a crime overlay, something I have been asking for since WalkScore first came about.

Local residents often roll their eyes when they see an awesome walk score attached to an area where it is simply not very safe to walk after dark AT ALL. Not a big problem for local residents, but what about the many people relocating to The Seattle Area who are relying on various internet tools to guide them in their search for a home in their new City?

I have not tried the new tool out extensively, but from what I have seen the crime grade does NOT reduce the walk SCORE, so a previous score of 87 will still be a score of 87. BUT if you take the time to study the color coded crime map after viewing the score, you will be better able to judge an area now than ever before. Previous to this change I have always recommended that people use Homefacts.com to pull the crime data and photos of local registered sex offenders. Not sure if the changes to walk score will replace that need or not, but I am very happy to see that they are finally acknowledging that some very “walkable” neighborhoods as to their scoring…are in reality sometimes not very safe to walk in at all.

Try it out, as I will, and let me know what you think.

Costco Signs Major Lease With Vulcan – Issaquah

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costco vulcanJust received a press release that Costco is leasing 176,656 sf of space from Vulcan (Paul Allen) Real Estate at Sammamish Park Place in Issaquah. Sammamish Park Place is a 3 building complex totalling 586,823 sf with the other two buildings being occupied by Microsoft.

This complex was built in or around 2000, so I am wondering who left that Costco is replacing. I don’t see any stories on this move yet, but will post a link if and when someone else picks it up with more info.

The Death of Mortgage Blogs

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iStock_000017972256XSmallThere is a buzz going on among fellow mortgage bloggers about how days may be numbered for mortgage blogs. This is as a largely the result of guidance issued by federal regulators late last year specifically on social media. When I first read this guidance, my initial response was “so what? This is pretty much what lenders are supposed to be doing anyhow”… stuff like properly quoting rates, not being misleading to consumers, etc.  It’s also my opinion that this seems to be written in favor of mortgage banks and not mortgage companies. The big banks seem to not want loan originators who have or express their own opinions.

After more thought and discussion with other mortgage bloggers, I can see the real issue is the compliance factor. Many mortgage companies are already stretched with the cost of compliance with just the day to day operations of originating mortgage loans. It’s my understanding that some lenders have made the decision to just not allow their loan officers to have any independent sights or social media sights (like Facebook or Twitter) as this is the easiest route…no extra compliance cost (additional personal hours) and less risk.

Blogs typically have information released freely and quickly. There are times that I have done “live post” when I’m covering an event, such as the Fed testifying before Congress or to illustrate how something like that may impact mortgage rates. I’m not sure it’s feasible for a compliance officer to be able to regulate and approve everything that a loan officer says or does with social media – imagine a person having to approve any comment or update you put on Facebook or Twitter… it’s simply not realistic and it’s no longer “you” being social or in the moment – it’s you-approved by your employer.

The thought of me no longer being able to blog or to no longer have my  blog, The Mortgage Porter, which I began back in 2006 is absolutely depressing. I really enjoy writing and sharing information with my readers about mortgages, including the process of financing a home and various mortgage programs. At times, it’s even been therapeutic by allowing me to vent or “rant”.  Blogging and social media has brought me so many wonderful opportunities and experiences that I would not have had as a non-blogging mortgage originator.

When I began my blog, it was because of a lack of information, or actually because the wrong information was being shared by the media about loan officer licensing. I never dreamed anyone would read it or that people would actually decide they want me to be their loan officer because of the information I freely shared with them – information that they could not find anywhere else!  I use my blog to share information with potential clients – like “what is a letter of explanation” and sometimes, I’ll write a post just to address an answer to a clients question… if they’re asking it, odds are somebody else is searching for that answer too.

I fully agree that content on mortgage blogs must be compliant – however doing away with mortgage blogs is a travesty.

Less information and less transparency is never good for the consumer.

Good thing I have a back up career! 

Stay tuned.

Seattle RE BarCamp will be here soon!

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seattle

This year Seattle RE BarCamp is actually going to be south of Seattle at the Center Point Conference Center in Kent (south of Southcenter Mall and north of the Showare Stadium)… so technically, we’re calling this “Greater Seattle reBarCamp”.  Regardless, this event will be taking place on March 13, 2014.

This event is an “un-conference” where topics (which tend to be about social media or related to real estate) are decided by the attendees the morning of the event. You literally submit topics on subjects you would like to learn more about (such as word press, for example) or perhaps you have a great idea that you would like to brain storm with a group of like minded people… the possibilities are endless. The only thing really not allowed are presentations or sales pitches.

This years event is going to be cozier than our last Seattle RE BarCamp (which was humongous)… so we are charging $10 for tickets in advance – which will include a boxed lunch from Alki Bakery.  If you decide that you’d rather show up the day of, without a ticket, the cost will be $20 assuming we’re not sold out (as I mentioned, space is limited).

Jay Thompson will be kicking off the event with a quick “rules of the road” to refresh attendees on how to get the most of your REBC experience. Drip coffee and some pastries are being provided by Alki Bakery (first come/first serve).

Want to join us?  Learn more here… and buy your tickets!! 🙂

Carpet Credits do not help sell your home

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I think most people know that offering a carpet credit does not work…except that many sellers and real estate agents still fall back on the language “$5,000 allowance for carpet” as a lazy way out.

1) It doesn’t work because once people see filthy, pet stained carpet, they don’t buy the house period unless it is a super discount of well over the cost of replacing carpet.

2) It doesn’t work because the seller’s idea of what carpet will cost and the buyer’s idea of what carpet will cost is not nearly the same.

3) It doesn’t work because many areas where there is carpet in the home will not be replaced with carpet by the new owner. If there is nice fresh clean carpet there, they will buy the house and change some areas to wood later. But if there is dirty filthy carpet there then they have to come up with the money right away to put wood, and that is usually not practical for many people buying a home.

Back in the 90’s through 2004 or so the answer was easy. You went to Home Depot and said “Realtor Beige” and you were done. But Realtor beige went out of style. Realtor Beige was replaced with caramel colored or sage frieze, but that fad only lasted about 18 months on the sage and never worked for higher end homes.

If you have filthy carpet then you have to replace it with clean carpet. You don’t want to spend a ton of money on that carpet for a lot of reasons, not the least of which is that the buyer may cut it out and throw it away in short order in some, but not all, of the places where you put it. You need a nice clean blank canvass that someone can live with for two to five years. If you have a higher end home costing $700,000 or more…stop reading now. This is more for the standard $450,000 or less townhome or split-entry or tri-level. Once you get to a full and newer two story home costing $650,000 plus…different answer. This answer is also good for condos, apartments and rental properties.

Below is a picture of the carpet. I might not choose this color, which is a fleck blend, but this carpet is so low in cost that it only comes in one color. 🙂 You want to minimize cost and maximize clean and odor free and utilitarian type serviceable for most people…i.e. neutral as to color but not too white-light.

carpet

Let’s jump straight to cost since cost is the reason why I use this carpet over and over again. It is a Home Depot product called…uh oh. They don’t have it anymore. 🙂 I am writing this post for a client so I will proceed with a suitable replacement carpet and update the costing. The carpet I was using was only 55 cents per square foot and then it went up to 62 cents a square foot. But the option is not currently available and the lowest priced replacement is 90 cents a square foot. Let’s allow $1.00 a square foot for a “twist” carpet. There are several options at Home Depot between $.90 and $.98 cents a sf. The benefit of a twist carpet is it has a thicker look without added cost and the padding is not meant to be bouncy thick. So you can use cheap padding at about $4.50 a square yard.

Rough cost for a whole house of 1,200 to 1,500 sf is $2,500 all things included IF you do it the way I am suggesting below. Of course not all of the floors in the house are carpet. The bathrooms and kitchens are not carpet. The last 1,750 sf house had 1,460 sf of carpet. That is the one in the picture. The one I’m working numbers for up right now is a 1,500 sf house so I’m estimating 1,200 sf of carpet. The total price should come out the same at $2,000 to $2,500 as the carpet price went up but the house is smaller.

I haven’t found anyone that can beat Home Depot prices and I’ve shopped around. Once I found someone who could match the price with a higher quality carpet, but higher quality is not always better as many of those colors have gone out of style…as in too light or too white. You are better off with current color cheaper carpet.

Get new padding!!! Often we are trying to freshen up not only look but smell. Even without pets you have “dusty old house smell” or cooking odors stuck in the carpet and padding. Not worth the savings usually to not get new padding.

TO GET LOWEST COST pull the old carpet and padding out yourself. Leave the tack boards (wood strips around the room edge with nails sticking up.

1,200 sf of carpet at 90 cents to a dollar a sf is $1,200. Padding should be about half that cost, so $1,800 for carpet and padding. Usually Home Depot has a whole house installation special for about $100. I don’t know how they do it, but they do. That special may not always be running, but let’s assume you have some flexibility in timing. STEPS are additional! so if it is a one level condo or apartment or a 1 story home you can still bring it in for $2,000 including installation and tax. Steps cost about $8 each for a simple box step. The properties I have done are either a 14 step tri-level or a one flight up 2 story. But a lot of steps like an extra full flight up or down you have to add $8 per step or thereabouts.

In the job I am costing and the one in the picture there are about 14 steps for a total extra cost of $110.

So “Hall Up, Master bedroom and closet, 2 additional bedrooms and closets, additional up hall closet, family room, and stairs”. $1,200 carpet, $600 padding, $110 for steps, $100 for installation is $2,010 which is exactly what it cost for the house in the picture including the tax with the cheaper carpet. So plan on $2,500 for a little wiggle room.

If you are a seller, spending $2,500 for new carpet is MORE EFFECTIVE than giving a “$5,000 carpet allowance”. Your home will sell faster and for more money and cost you half as much or less. A buyer thinks carpet will cost at least $10,000, so they won’t like your $5,000 offer for new carpet. Don’t be lazy. Spend the $2,500 on new carpet vs a “sorry my carpet is dirty credit”.

Lower Conforming Loan Limits

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Publication2 (1)

Back on December 12th, Rhonda posted that FHA etc Loan Limits would be coming down to the same level as previously lowered conventional rates. This came up in a recent discussion I was having with a client and thought the news, which I believe became effective 1/1/2014, should be highlighted a little better, as this is very important news for some people.

Not surprising to us inside the industry. But definitely important to anyone thinking about buying with minimum down and even for those who were not aware of the previously lowered limit for conventional financing.

Disclosure: I am not a lender. Just bringing this news to the forefront now that these limits have become effective so that more people heading out to buy a house in 2014 are aware of the changes.

I also think it is interesting to compare our loan limits to the much lower limits around the State of Washington.