CFPB Has Fallen (jk), CRMs Save Us, and Seller Contributions
Tuesday Tips for Realtors 2/18/2025
Too busy to read? Watch this quick overview!
Top Story: CFPB Changes
It isn’t falling, but it sure is changing! The Consumer Financial Protection Bureau (CFPB) is shifting gears under the new administration. Director Rohit Chopra's departure signals a move towards industry collaboration. Operations have been paused for restructuring to what many are thinking will be a shift to focus on guidance over penalties. Key areas affected include mortgage policies, fintech regulations, and data privacy.
We may see changes to regulations like HMDA reporting and the Qualified Mortgage Rule. However this doesn’t mean the lending practices will go back days to before the crash. Not even close, but we may see some policy changes that improve confidence in the market which could spark some positive traction for the real estate market. Critics of the move worry about weakened consumer protections, but nothing is currently supporting that concern.
Staying informed is crucial for realtors. How might these changes affect lending practices, available loan products, and overall housing market stability? I'll continue to monitor the news and keep you updated as much as possible.
Top Business Growth Tip: Importance of a CRM with Task Management
A Customer Relationship Management (CRM) system with task management is essential for real estate success. It centralizes client interactions, property details, and deadlines. However, the task management features are where you'll benefit most!
Any good CRM helps you to:
Never miss a client follow-up
Streamline your workflow
Prioritize your daily activities
Instead of remembering every client's detail, a CRM with task management will keep you on track and they are so much easier to navigate compared to years ago. Spending less time on manual processes and managing your business means more time growing it (or time for you if growth isn’t your thing in life right now).
Research CRM options that cater to real estate. The sooner you implement a system, the sooner you can see its benefits!
REMINDER: Just keep it simple! Something to keep a list of people, set tasks, and keep notes is all you need. Worry about the fancy stuff later, for now make sure you eliminate any chance of you forgetting to call someone weeks or months down the line.
Top Lending Tip: Seller Contributions
Seller contributions can be a powerful negotiation tool. The key is knowing when to ask and the maximum amounts allowed. It can be much more cost-effective for a client to offer contributions than to drop the price, so weigh your options!
Here are maximum contribution amounts by loan type, but always be on the same page as your lender and what they offer (could be more/might be less depending on the investor):
Conventional:
3% for down payments less than 10%
6% for down payments of 10-25%
9% for down payments above 25%
FHA & USDA Loans: 6%
VA Loans: 4% of the purchase price, plus reasonable and customary loan costs.
When should you ask?
In a buyer's market
When the buyer is stretching their budget
As an alternative to a price reduction
Be mindful that seller contributions can't exceed closing costs. If there's excess, consider a rate buydown to save your client even more money!
Important: Always consider party relationships to avoid inducements to purchase. This topic doesn't come up often, but I thought it was a good one to bring up. Inducements occur when a party with an interest in the transaction provides something of value to the buyer as an incentive to purchase the property. Such inducements can jeopardize loan approval.
With this strategy, you can assist buyers while closing more deals but always ensure compliance with lending regulations.
Quick Rate reference guide for 2/18/2025:
This is for visuals to help you see where rates are. Over the coming weeks and months, I will provide trends to show where rates are headed, giving you more comfort in how your clients are priced based on their qualifications. These are never final, always subject to client scenarios, and subject to change. Thank you for using common sense when reviewing! 😊
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