March, 2009
Several people have asked about the makeup of my team, now that we have moved to RE/MAX Bravo. Below is the team photo that we had made after our switch to our new company. Pictured below from left to right are: Robyn Fisher, Jeff Edmisten, and Ruthie Buck
The Edmisten Team
Category : Blog
I recently received some information from Kim Thagholm of Fairway Independent Mortgage Corporation. The information addressed issues regarding credit scores, and was so relevant to the Fredericksburg real estate market, that I asked and received permission from her to post it here. The following is the information in it’s entirety. Kim’s contact information is at the end of this post, should you wish to contact her and discuss your situation. Thank you Kim.
Credit Score Insights
Recently, I have had several clients ask “how and why” they have received a particular credit score. Often times they are frustrated because they have gotten so many differing opinions and conflicting pieces of information on how to improve their score.
Now, I may not be a credit specialist, but when it comes to rebuilding credit scores, I have helped many clients gain a better understanding and insight into how the credit scoring process works.
First, please understand that there are three major reporting agencies; Equifax, TransUnion and Experian. Each agency utilizes different evaluation software and places different emphasis on different categories. These distinctions are what produce the different scores. FICO and BEACON are references to the different systems that are used to produce the different credit scores. Banks consider the middle credit score from the three different agencies in order to evaluate and balance the credit worthiness against the credit risk of each individual file.
Here are the 5 primary categories that compose the credit score evaluation.
1- Payment history = 35% – Highest weight is put on the account with the highest monthly payment during the last 6 months.
2- Balance carried = 30% – Mortgage and installment accounts are not factored in to this category.
FYI- Don’t pay-off collections or judgments until closing. If you do, you are in effect starting the process all over again. Your score will take a hit. After closing, a lower score will not effect your credit evaluation.
3- Credit History = 15% – You need a long history of open accounts that have been in good standing. Closing those accounts even if you do not use them will hurt your score.
4- Account Mix = 10% – Ideally they like to see a mortgage, an auto loan and three to five credit cards.
FYI – A HE/LOC (home-equity-line-of-credit) is treated as a consumer loan and does not enjoy the protections (it can be called, cancelled and/or limited at the lender’s discretion) of a mortgage loan. In this discussion it is important to remember that they are treated as revolving credit unless they are or $40,000.00.
5- Inquiries = 10% – Each inquiry will take a few points off. In theory, multiple inquiries for a mortgage or a car loan with-in a 45 day period are counted as one inquiry. Inquiries for a job, for insurance, for utilities, an account over-view, a promotion or your own personal inquiry are not supposed to affect your score.
FYI – A late payment (30 days) can damage your score by at least 50 points. A late payment (60-90 days) or multiple late payments (30 days) on one account can drop your score by 100+ points.
A balance of more than 40% of your credit limit can affect your score by as much as 100 points.
If multiple accounts reach the maximum credit limit, your score can be negatively affected by 80+ points.
Here are 6 steps that you can take to improve your score and save money.
1- Ignorance is not bliss – get a copy of your report and read it.
2- Correct any reporting errors (name, address, employer, accounts that are not yours).
3- If there is a legitimate error, dispute the creditor’s claims. They have 60 days to dispute your claim.
4- Decide when it is smart to, “just pay the bill” – pride and principles can be very expensive – decide if you want to, “be right or be happy”
5- Ideally, only use 20% of available credit from your cards.
6- Pay your bills down – If you know you will be applying for a loan, pay your bills down to the 20% level, ahead of time. Being prepared and having your accounts in good order may increase your buying power and get you a better rate.
Always remember the 5 “C’s” of lending — that’s how the banker looks at you:
Capacity – your ability to repay
Character – your willingness to repay
Credit – liability management; your history of repayment
Capital – asset management; your history of accumulation
Collateral – the value of what you offer to the lender for security
Feel free to give me a call to further discuss your personal situation or send me an email. My office number is 540-972-1105 or TeamLoans@aol.com.
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Category : Blog
Every day in the Fredericksburg real estate market, people find themselves asking this question, “Should I short sale my home?” They may be transferring to a new part of the country, maybe they have lost their job, or for some other reason, just can’t afford the payments any longer. They need to “get out from under” their mortgage. Foreclosure may be looming large in the near future, and they are looking for answers.
Over the last couple of years, short sales have not necessarily been the answer, for several reasons. Short sale transactions have been taking months, and months, and months to complete. Often never reaching completion, and still resulting in a foreclosure. Many buyer’s agents have avoided them like the plague. A lot of real estate agents have been mistreated by banks in short sale transactions. Often receiving far less compensation than they were promised, and sometimes receiving no compensation at. Short sale transactions are way too complex to do for free!
Another reason that short sales have not worked so well in the last couple of years is because many agents have no idea how to do them. They don’t understand the process, don’t have the proper contacts to negotiate with the banks, and don’t have the negotiation experience to successfully navigate the torential terrain of a short sale.
Some of those things are starting to change. Short sales are SLOWLY starting to evolve into more manageable transactions. But, that evolution is in it’s infancy. Because there are SO MANY short sales on the market, agents are finding it difficult to avoid them anymore.
But, beyond the history of the last few years regarding short sales, what does a short sale mean for a seller? Some agents will tell you that a short sale won’t have much of an impact on your credit situation. The truth is that it will certainly impact your credit. From a credit score perspective, a short sale CAN bejust as damaging as a foreclosure. Not always, but it can be. Others will tell you that you can buy your next home sooner, if you have done a short sale, rather than if you have a foreclosure on your credit history. There is usually a degree of truth to that.
But, it is my opinion that the real value of a short sale is the resolution of debt. In many states, if a bank forecloses on a loan, they can seek a judgment for the entire loan amount plus damages. Meaning, that the defaulting homeowner may still be the target of collection attempts on the defaulted loan. In a short sale, any amount that is negotiated away and settled is no longer a debt that is subject to collection. That is a HUGE deal for your future.
Let me give you a working case scenario. My team just negotiated another short sale where the home owner owed the bank $280,000. We listed, marketed and obtained a contract on the home for $130,000 (current market value.) A settlement was negotiated with the bank. They accepted the short sale amount of $130,000, and paid the agents the full commission. My client’s will not be subject to any collection efforts on the remaining $150,000, as it is considered a “settled” account. This is a serious stress reliever in their life, that is already challenged enough in their current financial situation.
Now, for complete transparency sake, let me make a few statements/disclaimers. First, understand that I am not an attorney, and am giving NO legal advice or legal opinions. I recommend you consider consulting an attorney prior to doing a short sale on your home. I am speaking from my experience, and knowledge as a Realtor. Secondly, I am in no way advocating seeking a short sale, if you are able to pay your mortgage and honor that obligation. HOWEVER, if you know that a foreclosure is inevitable, then seek the assistance of a Realtor who understands how to successfully handle a short sale, and explore the options available to you. Finally, understand that no matter how great the agent is, occasionally, a foreclosure will still happen and the short sale will not occur.
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Category : Blog
As of early this week, my real estate team moved from Keller Williams Realty to RE/MAX Bravo. Transitioning from company to company is a common theme for a lot of real estate agents, and some agents do it alot. This is the first time I have changed brokerages.
Some people have asked about it, so I just wanted to clarify a couple of things. First, Keller Williams Realty is a great company. The core group of owners and administrative personnel at the Fredericksburg Keller Williams office are top notch people… the best. It’s a great company to work for, and it is a great place for new real estate agents to learn the industry.
All of that being said, RE/MAX Bravo is a great company too, along with top notch owners and administrative personnel. The RE/MAX Bravo company is just a better fit for my team. That’s it. No hard feelings toward Keller Williams, actually quite the opposite. No bad experiences, just a good decision for my team.
So, you can expect the same great service and results from The Edmisten Team, with the RE/MAX brand now backing all we do.
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