A blog about the Sunshine Family's life and times transitioning from Big City life to Small Town Texas life. Oh yea, I have a husband, two young adults and two emotionally needy pets.
Bliz was kind enough to raise such a wonderful daughter who invited me to her wedding last weekend. It gave me a chance to enjoy fall weather, see a beautiful bride and hang out with my most favoritest human in the world. All is good.
But this isn't a blog documenting how much wine I can consume in a weekend, now is it? (For the record about three glasses). It is a blog about the adventures of rebuilding our lives from financial ruin of our accidental business. Bliz plays a big part in that. The accidental business part, not the financial ruin. She had to look on helplessly as a spectator to our train wreck.
Bliz was my bookkeeper for the accidental business. She was also my confidant and on one occasion, my travel companion to West Georgia where we spent a silly weekend doing I don't remember what. She is the reason I started blogging. She would have been my alibi--at least she was willing to do so--on the 376,981 occasions I was ready to strangle Mr. Former Partner.
For all of the above, I will be forever grateful.
This past weekend I got to relive why I adore her so much. She reminded me of the fun times we had with the business. I guess there were good times, but I may have blocked them out, as the sting of failure still lingers. But four days with an amazing human being like Bliz and I might be ready to take on another accidental business down the road. Maybe.
A few years ago, I started having mandatory meetings with future buyers. My feeling was, if they couldn't sit down for 30 minutes over a cup of coffee and discuss their home buying process, the legalities of shopping for a home and my role as their agent, it was probably not going to be a good fit. My thinking is, I am going to spend a portion of a million dollars on where I will be living for a few years, I might want to know a thing or two about how I got there. I would like to think others would too. Besides, with the crazy real estate market, a lot of buyer decisions are being made very quickly with very little time to think. It is better to know upfront what the consequences are of those decisions.
At first, my mandatory meetings weren't mandatory if I had a client I had represented before or if they were someone who had purchased a home in Arizona before. But, now they are. Period. And I have to say, my clients are better educated and have their expectations set early*. It makes for a smoother sale.
Usually.
This past month, I sat down with two of Dee's Felon Friends and talked with them about what the process entails. Both were gracious and sweet. The information is overwhelming, and I admit, a bit of a brain dump, but I think it is necessary. Both agreed with the previous statement. Today when I met Doug at the Cracker Barrel, he asked if I had any questions of him--specifically his past. No I didn't. I had met him a few times before and is my Felon of Choice. I would rather know the man who is rebuilding his life than the one he used to be.
Hopefully today was beneficial and the rest of the purchase process will be quasi-smooth sailing. There are a few hiccups right now. He was thinking of changing jobs (NO!). Turns out his divorce isn't finalized (a problem). But he is prequalified, has a down payment and wants to move forward with his life. Today was that first start.
* For the record, the "home selling shows" on television are fake and buying a home in the Phoenix metro area is nothing like this.
It is Monday afternoon. I still haven't reached Dee--and I can't imagine she will be thrilled with my news. I am not happy to give it to her. Of course, Dee is one of those awesome types who doesn't blame the messenger/real estate agent because she has a slight mess. I am grateful for that. You would be astonished at the number of folks who would hold me personally responsible for what I am about to write.
Brett was my termite guy go-to for years. Actually, he was my home inspector's go-to for years. A super nice guy, he owned his own pest control company. About three years ago, on Christmas Eve, his wife was involved in a tragic and freak accident which changed his world. Now the sole parent to his 3 and 6 year old, he started outsourcing his work. He hired a staff and stayed home to raise his kids. He still owned the company, but it was apparent to him he needed to be Daddy right then and there.
In the past few years I spoke with him once in a while, including last July when Dee had the home she was buying treated by Brett's company and they missed one side of the house. Brett took care of everything as cheerfully for me as he had for the past 15 years. A week later, he had a tragic and freak accident and his babies--now 9 and 6--are orphans.
One of Brett's in-laws, who lives in Texas and apparently knows the value of pest control companies in the greater Phoenix metro area, turned down two "low" offers that I am told were right in line with the going market for purchasing pest control companies. Word got around that this relative was taking over and nobody from this point forward has any interest in buying his company. Which brings me to this question: what is the pest control company truly worth? He worked out of his house and had some letterhead, chemicals and employees who have since moved on.
So, Dee, and the myriad of other customers who had termite warranties from Brett are out of luck. And that really stinks, because Dee has termites at the house she just purchased. Plus she is out of town and doesn't know her termite guy is no longer in business. Today I called the State and asked a few questions, like what is a customer who has a warranty for pest control when the company closes its doors supposed to do. Wayne the Bureaucrat put me on hold twice and then gave me the name of Brett's insurance company. No phone number. No contact info. Just a name. He said, "good luck!" and hung up as quickly as he could.
All of the above will need to be explained to Dee. This isn't my job to do this. But I have the info and Dee needs her house treated, so I did it. I suspect what will happen is Dee has to pay out of pocket for her home to be treated--just like all the other customers who had termite warranties with Brett.
Mrs. Hufflepuff sent me an e-mail inviting me to join the Woman's Council of Realtors. I am marginally interested. Actually, marginally is a stretch. Actually, interested at all is a stretch. I went to one meeting and found the speakers to be offensive. Plus, it struck me that there were more men there--trying to pick up women--than women. Plus, why have a "woman's" council? I mean, why not just have a council?
Jane is now treasurer of the local chapter, which nets her a trip to Boston in two weeks. She has also gone on a few other trips in the name of the WCR, but from what I can tell, that's where the membership money goes--trips for officers. I am being cynical, I know. I am sure they do something else in the community and I am just not seeing it.
The truth is I don't know what I want to do--but not about WCR necessarily--I mean about life in general. I say this often and it gets me nowhere. My inability to make a decision about my future is weighing heavily, but I am still not moving forward. Nor am I committing to any new path that might move me in any direction. It is an endless frustrating cycle that I can ride to the end of my life if I am not careful, which does nothing for my anxiety about the fact I have yet to make a decision about my future. See how this works? It is paralyzing.
I want off this crazy train. I am not sure the WCR is less of a crazy train. Perhaps it is parked at the Crazy Train depot, and it is one path I can look at. But then again, maybe I could hop on, become an officer and get a trip to Hawaii out of it.
Remember those Midwest folks from a couple of weeks ago who wanted to buy a house? They couldn't keep their story straight and might have omitted some pretty specific details about their lives, which caused them not to buy a home? You know, the ones who went out with another agent to find a rental home after conveniently forgetting the truth when I took them out to buy? Yea, those folks.
Well, those folks are also selling their home in the Midwest by themselves, because real estate agents cost too much. They are saving a bundle I am sure! However, they had a teensy hiccup with their sale and called me today. They had questions that only a real estate agent could answer. And, given I am one, why not ask me? Certainly I wouldn't mind.
Just for the record, I minded.
Anyway, my answer was for them to call their attorney (who I am sure will be happy to answer their question at his hourly rate). I am not licensed in their state nor have I been hired to represent them. And frankly, they got themselves into this mess, not my problem. Okay, I didn't add those last two sentences, because Karma and civility need to be practiced even with those who don't deserve it. But darn! I sure thought it.
Anyway, their sale is swirling quickly out of control. It is causing stress. And by the way, they lost the rental home they were looking at here--because, I was told, the agent they used didn't go to bat for them. With all of the drama, they have one added feature: no place to live here and they are about to be homeless there. Good luck to them.
Did millions of Americans not learn their lesson in 2004? Please! No. Just No. Just because something is shiny doesn't mean you should pick it up.
Thousands line up for zero-down-payment, subprime mortgages
www.cnbc.com
Magdalene Altidor lost her home to foreclosure during the subprime mortgage crisis, but this week she was first in line at a four-day event in Miami where borrowers with poor credit were offered no-down payment, low interest rate loans.
"I left home, it was about 4 a.m.," she laughed. "I'm ready to purchase a home."
The event is one of several being held in cities across America this year, run by the nonprofit, Boston-based brokerage Neighborhood Assistance Corporation of America, or NACA.
"It's a national disgrace about the low amount of homeownership, mortgages for low- and moderate-income people and for minority homebuyers," said Bruce Marks, CEO of NACA. "In the loans that we've originated in the past 6 years, zero foreclosures."
Marks and NACA were front and center during the subprime mortgage crisis, holding mass mortgage modification events across the country with banks and servicers. Bank of America was there then and the bank is with NACA now, backing the program with $10 billion in mortgage commitments.
"It's total upside," said AJ Barkley, senior vice president of consumer lending at BofA. "We have seen significant wins in this partnership. Just to be clear, when we get those loans with all the heavy lifting here, we're over a 90 percent approval, meaning 90 percent of the people who go through this program that we actually underwrite the loans."
Borrowers can have low credit scores, but have to go through an education session about the program and submit all necessary documents, from income statements to phone bills. Then they go through counseling to understand their monthly budget and ensure they can afford the mortgage payment. The loans are 15- or 30-year fixed with interest rates below market, about 4.5 percent.
"That's what's going to help people who've been locked out of homeownership to really become homeowners and to build wealth," said Marks.
Critics of the program argue that with no down payment, no skin in the game, these borrowers have no reason not to walk away should their homes lose value. That's what happened during the financial crisis. The difference in this program is that the borrowers cannot be investors. In order to get the loan, they have to live in the home.
"People have skin in the game in a real way," said Marks. "The people that walk away are higher-income people who look to homeownership as an investment, just like buying stocks and bonds. Working people look at their investment in homeownership for their family, for their neighborhood, for themselves."
Quentin Carswell is a first-time homebuyer who tried to get a loan from a traditional bank.
"They tell you they have a lot of first-time homebuyer programs, and then once you get there they tell you these outrageous numbers. It's hard for normal class people to afford to get into a house, and you know put $20,000, $30,000 up for down payment. That's a lot of money."
He and his girlfriend were in line early in the morning as well, prepared with an armful of financial documents.
So far more than 10,000 potential borrowers have shown up at various NACA events in cities like Charlotte, North Carolina, and Atlanta, according to Marks, and more are planned. NACA receives a $3,000 commission on each loan.
Timothy Trumble |
NACA Online Operations Potential borrowers who are participating in the NACA Homeownership event in Miami, Florida.
While the Veterans Administration offers no-down payment loans to veterans and their families, there are few other programs like this. Most low-down payment programs require mortgage insurance, which can be costly. The NACA program does not.
Following the financial crisis, lenders locked up, requiring much higher credit scores and at least 3 percent down payments. The subprime mortgage crisis was precipitated by lenders offering no-down payment loans with short-term "teaser" rates as low as zero. They asked for no documentation, and sometimes tacked interest onto later years of the loan, so-called, negative amortization loans. The NACA loans are all fixed rate with full documentation.
Another big difference today is the housing market itself. Home prices have been rising strongly, and there is a critical shortage of entry-level homes for sale. If a borrower finds themselves in financial straits, it is far easier today to sell the home quickly.
Altidor is confident she can make the low, monthly payments this time around. A small price, she says, for something far more valuable.
"I think a home, 10, 15 years from now, that's an investment," she said. "Homeownership is freedom."
So Dee and her Merry Band of Felons are branching out. I am grateful for the work, and the Felons are very nice folks. Dee, instead of buying homes for Felons to rent, is encouraging the Felons to buy their own homes. So far she has three who are looking. I am the agent.
This past weekend Dee wasn't available so I met with the felons to look at homes. But before I look at homes, I always have a pre-home buying clinic, explaining all the stuff (if it wasn't a violation of their parole and were allowed to be on the Internet and see for themselves) Zillow says is wrong. Two of the felons were there, and one of them wanted to look at properties. Now, even though these are nice folks and I have never felt the least bit threatened, I am certainly not stupid. Marty came with me. He is a licensed agent, so I had a cover. But I am pretty sure the Felons would have been shocked if I had shown up by myself.
We looked at two homes. One was 600 square feet, overpriced and under contract (but he really, really, wanted to see it). The other was in such horrid shape, there are no words. There aren't even bad MLS pictures to share, because the agent hasn't bothered, or isn't able to take pictures. The good news is we are well aware of the condition of the roof because it rained like crazy. It needs a new one.
Nothing but goodwill game from Saturday's outings. But that is usually where these adventures start.
I was hanging out with Jane in her office the other day. Mrs. Hufflepuff said to me, "Are you ready to give up and come work for us?" I am sure that must have sounded much better in her head. But let's face it, Hufflepuffs should not try to make jokes. Even bad ones.
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On the same day, I went with Jane while she showed a home to some strangers. The couple was nice and hopefully Jane can convert them into clients. The house was a big of a dump. Ok it was a lot of a dump. The good news is it isn't selling very quickly so Jane might have a chance to hold it open.
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I got a text today from someone who identified himself as Doug. He wanted asked if he should pursue looking at homes marked "pending." And more to the point why am I sending him pending listings? I have no idea who Doug is. Nor am I sending any listings to anyone named Doug. But after a bit of digging I figured out he was one of Dee and her Merry Band of Felons' friends. Unfortunately they didn't explain the basics of conversation in the state penitentiary while Doug resided there. However once he realized he forgot a bit of the niceties, Doug sweetly backtracked.
I had buyers this week. They came from the Midwest. I spent three days preparing for our meeting on Wednesday. There were extensive phone calls with them and Bulldog (their kick-ass loan officer) about how to make a sale work. Because of weird circumstances--an open chapter 13 bankruptcy--there was a lot of back and forth with their lawyer's paralegal too (their lawyer was too busy to take our calls). I made arrangements for Buckaroo to be picked up at school while I would be out. And, I changed my dental appointment because it was inline with the 48 hours they were here and would only be available to see homes.
I ran comps on every home they wanted to see. I called every agent whose home we were showing upfront and explained the chapter 13 bankruptcy and what we would need if my buyer wanted their client's home and what a contract would need to look like. I got buy-off from six different agents--in this hot real estate market--they would cooperate and be amenable to the strange circumstances my buyers would need. SIX agents agreed to go to bat to make a sale work under these conditions. This was all before I even met them in person.
Six agents.
It was my intention from the beginning to make their marathon home-buying circumstances pleasant. I hope I did so. I wish they would have afforded me the same courtesy. Instead they misrepresented themselves. They changed their story a few times. They distorted the truth. Their idea of reality and the bankruptcy court's were not in sync. In fact, when the smell test started turning sour Wednesday afternoon, I stepped away and called Bulldog, asking her to hunt down their attorney--not the paralegal--with a few questions I had. She did. Now armed with more facts, the attorney's answers looked nothing like the picture my folks had been painting. If instinct hadn't kicked in, I might have actually written a contract, allowing them to commit fraud. But the attorney explained this wasn't happening. No matter what they said.
By the way, one can purchase a home when one is in a Chapter 13 bankruptcy. My folks can't because, well, they omitted a few major facts to their attorney, Bulldog and me.
After all that, Yesterday, I offered to show them rentals. What the heck! A few bucks here and there still wouldn't hurt. They declined, saying they would be getting an apartment instead. But thanks.
Today I found out from the woman who referred them to me that they went out with a different agent and got a rental home yesterday. Of course they did! I couldn't perform miracles so they sold some other agent on their plight and went with them. I wonder if they mentioned their open bankruptcy before they put the application in. Probably not.
It is official. I am a cold, callous individual with little sympathy. I discovered this about myself when I found this story.
Here's a wild idea to a potential renter with "low income." Live within your means and humble yourself a bit. Yea, there are some obvious suggestions in here (roommates, find a stupid landlord who will feel sorry for you or sucker someone who loves you into to co-signing--which doesn't mean the renter will STILL be able to afford the place, but they will then have someone else on the hook for their sense of entitlement).
I promise the rest of the article is a bunch of chrome-plated crap.
Renting Apartments with Low Income [Or No Income At All]
Alex
If everyone had an annual salary of $80,000 and more, there would be no need for this article. However, we live in a different kind a reality where an average American earns only about $44,148 per year or $859 per week as stated in the recent report of the US Department of Labor. Given such an income and the ever-growing prices for long-term rent, it should come as no surprise that low-income citizens spend nearly half of their salary on housing. While this statistics is worrisome in its own right, turns out it is only half the problem. What is really alarming is that the vast majority of low-income Americans are having hard times qualifying for rent.
Put Yourself in a Landlord’s Shoes
At first glance, it might seem that a below-the-average income should not be a burden on someone’s efforts to secure a place to live (assuming this person has enough money to cover rental expenses). After all, we all have the right to shelter. However, if you try to look at this question from a landlord’s perspective, you’ll surely see why a proof of income is such a big concern for the majority of them.
In nearly all the cases, landlords are somewhat dependent on the money they receive from renting out. It’s just another form of business, and they want to be sure they’ll get their paycheck on the 1st of a month. So here is the logic most landlords follow: the higher a tenant’s income is, the more likely this person is to pay rent in full and on time. In light of this, it becomes rather evident why rental agreements usually revolve around a tenant’s ‘proof of income’ and ‘credit history’.
But What If Your Current Income Level is Just Not Good Enough?
With a few exceptions, a landlord accepts a rental application if a prospect’s gross salary is at least three times the monthly rent. In the real estate world, this principle is sometimes referred to as ‘3x the monthly rent’ rule. If you don’t meet this condition, there are two approaches you may choose to follow:
Search houses for rent without proof of income. Some landlords might not require a proof of income (it doesn’t happen often).This might be the easiest solution out there, but it will limit your choices significantly.
Make your rental application impossible to reject. They say what lacks in X, makes up in Y. Compose an application that will showcase your best qualities to a landlord and anticipate their possible objections.
The first approach is undeniably easier. However, as experience confirms times and times again, those who choose the second one are more likely finish the race as champions. So waste no more time and let’s find out how to rent without proof of income.
Below you will find five tried-and-true ways to work around strict qualifications for a rental agreement:
1. Take Advantage of Your Good Credit
Your current income is surely important, but equally important is how good you are at managing your finances. Your credit history is the best way to make your landlord see what a trustworthy and serious person you actually are. More often than not, landlords take a good look at a prospect’s credit rating. So if you boast a good credit score, it can sometimes make up for a lack of income.
2. Find Yourself a Co-Signer
If you have no choice but opt for renting without income, finding a co-signer (aka lease guarantor) is the direction you should be thinking. If you’ve ever had a co-signer for a car loan or a mortgage, then you’re likely to know how it works. A lease guarantor signs on in order to provide more security for a landlord. This approach is especially popular among student renters and recent college grads and is generally safe. However, keep in mind that your lease guarantor will be responsible for your unpaid rent. 3. Get a Statement from Your Bank
Renting without income might be not a problem if you have large amounts of savings and can provide a bank statement as a proof. This might be a good approach to follow if you find yourself in between jobs at the moment.
4. Consider Offering a Higher Security Deposit
If for some reason you cannot provide a rental proof of income, a smart approach would be making a custom offer to a landlord. To make your application attractive to a landlord, you may offer a slightly higher security deposit. If you need to secure your tenant’s qualification for a couple of months only (before you find yourself a new job), paying more in security deposit might be your saving grace
5. Take Advantage of Networking
An efficient but commonly overlooked approach is to find a landlord among the people you know. They say anyone is only 5 handshakes away from the president. If this holds true, you’d need even fewer handshakes to find a landlord among your friends or your friends’ friends. Take advantage of this fact and you won’t be on a losing side. If it’s not your friend, but a friend of your friend who rents out, ask the first to vouch for you. Personal recommendations work wonders, they really do.
6. Search for Already-Occupied Shares
If you agree to live in a shared rental, search for renters looking for a roommate. The thing is that if you’re moving in mid-lease, you are basically taking over another person’s spot. This means that you’re likely to make a deal directly with a current resident of a rental. More often than not, tenants in search of roommates are looking for a good person, not for someone with a certain annual income. However, make sure to ask your prospective roommates if subletting is permitted by their lease.
For the Finals
Qualifying for rent with low income is just as hard as renting with low credit score. However, armed with all the information from this article, your chances to secure a place to live are definitely higher. So take the most out of the advice you’ve just get, and may a lack of income never stand between you and a perfect rental.
So I have these folks who are coming in from the midwest to buy a home. Except I am probably not going to be the selling agent. Why? Because they are thinking Globe AZ is where they want to live. For those of you who know where Globe happens to be, I am so sorry. For those of you who don't, it is about an hour East of Mesa. It is a mining town, established when the Old West was the New West.
Nevertheless, there are homes for sale in Globe. The prices are better than those in the Phoenix metro area. And the real estate agents have a more relaxed feel to how they conduct business. But, I have to tell you, if I were selling my $200,000 home in the area, I would still want my house to show like the rockstar it is.
There are few homes in the Phoenix MLS that feature Globe (Globe has their own MLS with lots more houses available), but just for fun I did a bit of digging. Mind you, these photos below are from several houses.
Polly Pointed out there is a dude (mid-right center) in the photo. Does the guy come with the house? Or is he a creepy stalker? Also, is this a photo of the telephone pole? I mean, if you wanted a picture of the mountains, why not take it from the other side of the telephone pole?
All this picture tells the buyer is that they get the opportunity to purchase their dream home with garish curtains.
We think that is an AC in front of the house. Note to agents: MOVE THE TRASH CAN before taking the photo.
I don't know if the agent is selling a 5th wheel or a hunting shack. The price was $195,000.
What's worse, the fact the agent didn't bother to rotate the picture or the fact the owner didn't finish painting the wall?
Gross. I can deal with outdated. I can't deal with gross.
There's a house there somewhere.
There is nothing wrong with this picture. There is something disturbing about decorating a baby's room with antlers.
A pretty kitchen. See! There are agents who can take nice MLS photos. Even in Globe.
Timothy Trumble | 
