Education is Key in the Housing Market
With the number of homes for sale remaining limited, however, that makes competition among agents and brokers rather fierce. The result is a boon to home buyers and sellers in the form of more detailed, helpful information readily available as part of the home buying and home selling processes.
In fact, if you want information from Premier Service Real Estate, which has offices in San Leandro and Milpitas, you won’t even have to call or visit. Their web site, www.premierservicerealestate.com, provides a wealth of information, from shopping for a lender to investing in real estate to qualifying for that first home.
That educational component is a key part of Premier’s business, according to owner Brian Garlington. “It’s important because, quite frankly, a lot of people out there are not doing that. A lot of people want to buy a house or get financing, and they’re wondering where the resources are.”
Garlington says many clients hire him because the information they get is what they really need before they engage a loan officer or real estate agent. “A lot of agents will say, ‘Oh, OK, get pre-approved and we’ll talk to you then.’ But people have questions, and don’t want to be put off,” he explains.
Garlington also says that a large part of his success is that the education is offered at no obligation, in a very low-key manner. “Sometimes, people want the information, but they don’t want to go through the quote-unquote hassle of talking to an agent. Sometimes, people are requesting this information at two or three o’clock in the morning. It gives them flexibility,” he explains.
The importance of an educational component has also given rise to new services by companies that serve the real estate industry.
You might consider that the next time you visit your mortgage broker to purchase or refinance a home. Experian-Scorex (part of Experian, the credit reporting organization), recently released ScoreRight(TM), a software tool sold to mortgage brokers and banks to help customers understand the ramifications of their own personal credit status and decisions.
While general education about credit scores and handling credit well are commonplace, Experian’s Matt Schwab, Director of Product Development, says that the company wanted to go beyond generalizations.
“What’s been missing is that educational component as to what can be simulated and what can affect a credit score. It’s always been left to rules of thumb – pay down your bills, make at least your minimum payments. This uses a consumer’s own data,” Schwab explains.
While the company does not guarantee that a home loan applicant will automatically afford a home or get preferable refinancing terms if they act on the simulation, Schwab says it offers borrowers a pretty clear picture of what is likely to happen when they take specific actions.
“They can see, ‘What if a balance was paid off here? What if I moved a balance from one account to another? What if I missed this payment?'”
Schwab notes that, even for three people who all hold the same credit card and the exact same balance, the action of paying off the credit card would have different results. “If all three people paid off the card, you would have three different impacts on the scores, because of all the various factors that go into credit,” he explains. This makes a tool such as ScoreRight(TM) all the more valuable, as even seemingly similar situations probably won’t have the same results.
The tool also works in reverse, Schwab notes, allowing borrowers to see what it would take to raise their credit scores by, say, 50 or 100 points. “The user could use the tool and say, ‘Tell me some scenarios for increasing my score by 60 points,'” Schwab explains.
The tool also compares credit reports from the three major reporting agencies, Experian, Equifax, and TransUnion, providing additional information to the borrower.
While Schwab cautions that the tool provides likely scenarios only – “It’s not a fix-it tool and it’s not credit repair,” he admonishes – the tool might change the way you view a trip to your bank or mortgage broker. “We believe it helps lenders take a more customer-centric approach,” Schwab concludes.
