Title Insurers’ Crazy 2020 Year

It should come as no surprise to escrow and title officers – 2020 was an incredibly busy time for the title industry.

According to a recent report from the American Land Title Association, title insurers wrote $19.2 billion in premiums. That’s nearly a 22% increase from $15.8 billion in 2019. They do, however, predict that 2021 will slow down due to low inventory.

ALTA Chief Executive, Diane Tomb, explains, “Do not expect the same level of refinance activity this year, even though the residential purchase market appears to be holding steady as the calendar approaches to May. The true test of whether 2020 volume represents a unique event will be whether the historically low inventory of homes for sale continues into the summer.”

It seems, so far, that 2021 is still a bit hectic for buyers, sellers, agents, and lenders. The hope was that low inventory would work its way back to higher levels before the summer, but builders are still struggling to keep up with demand.

For more real estate and title news, stop by Alliance Title’s Blog.

Optimism Spikes: Buyers and Sellers and the Real estate Market

What two things have helped buyers and sellers have a bit more pep in their step when it comes to the world of real estate?

Vaccines & stimulus checks.

Fannie Mae’s Senior Vice President and Chief Economist, Doug Duncan, explains, “The significant increase in the HPSI (Home Purchase Sentiment Index) in March reflects consumer optimism toward the housing market and larger economy as vaccinations continue to roll out, a third round of stimulus checks was distributed, and the spring home buying season began – perhaps with even more intensity this year, since 2020’s spring home buying season was limited by virus-related lock downs.”

Fannie Mae’s current HPSI’s stats are below:

  • 61% of consumers believe it’s a good time to sell – up 55% in February
  • 53% of consumers believe it’s a good time to buy – up 48% in February

It should be noted, however, that optimism on buying is lower than selling – most note the rising home prices and lack of housing supply as the main problem.

For more real estate news, check out Alliance Title’s Blog.

Mortgage Hurdles for Buyers

Your buyer might be finding it harder to obtain a home loan approval.

The Wall Street Journal has recently reported that mortgage lenders have tightened their standards. 70% of mortgages granted in 2020 went to borrowers who had a credit score of at least 760, which is up 61% in 2019. Mortgage availability went down 35% annually in 2020.

Why are lenders making it harder for potential borrowers?

Forbearance is a major fear lenders have – to receive approval for a mortgage, some borrowers have reportedly signed statements saying they have no intention of requesting forbearance after they are approved for the mortgage.

The Wall Street Journal explains, “The meteoric growth of home prices has made some lenders reluctant to take on first-time home buyers or others they view as slightly risky. Lenders who were comfortable offering mortgages of $300,000 or $320,000 to borrowers with good-but-not-great credit histories might not be willing to lend the $350,000 or more now required to buy the same property.”

How can your buyer up the odds for their lender to approve a loan?

Shop Early

Make sure you insist that your clients begin shopping for lenders as soon as possible. Shopping around from three to four different lenders before even meeting an agent will give your buyer a better idea of what they can borrow.

Understanding and Improving Credit Scores

Here are the scores lenders look at and categorize:

Perfect Credit Score: 850

Excellent Credit Score: 760-849

Good Credit Score: 700-759

Fair Score: 650-699

Low Score: 649 and below

There are ways buyers can help improve and adjust their credit scores. They can request a free credit report once a year from TransUnion, Equifax, and Experian through this website.

Let your buyers know that they can review their credit reports for any errors – if there is an error on one of their accounts, they’ll need to refute the error with the bureau by providing documentation.

Tackling what buyers owe is a major step in improving credit scores – paying on time, and (if they can) paying more than their minimum balance, can help build up that perfect payment history that they need.

For more real estate news and tips, stop by Alliance Title’s Blog.

Employee Spotlight – Brandi Zombro

We have a new Employee Spotlight – Brandi Zombro!

Brandi is Alliance’s Escrow Assistant for our Driggs, Idaho branch. Brandi assists escrow officers in gathering documents and information for real estate transactions; she loves that the job offers constant opportunities to learn and grow!

Of Alliance’s Core Values, “Teamwork” is Brandi’s favorite. She explains, “Every member of the team plays a crucial part in the success of the company and our clients.”

When asked whom Brandi admires, she thinks of her mom. She continues, “She was very hard working, positive, and kind.”

When Brandi’s not in the office, you can find her spending time and giving love to her doggies! Brandi illustrates, “My dogs are my life, so I love to do anything with them, whether it’s hiking, fishing, or camping!”

Understanding that her dogs are an important part of her life, it now makes sense why Brandi’s favorite quote is from Bianca Del Rio (winner of RuPaul’s Drag Race season six): “I’ve got bills to pay. I’ve got dogs to put through college.” Brandi explains, “Like I said: dogs are my life. They have short lives, so I want to give them the best of everything while I have them.”

Now that you’ve gotten to know Brandi a little more, give a shout out to Alliance Title’s Driggs Branch on Facebook and write them in on your next transaction! Brandi looks forward to helping make your home closing a simple and smooth experience.

Brandi Zombro
Escrow Assistant – Alliance Title Driggs, Idaho

It’s National Fair Housing Month

This April marks the 53rd anniversary of the Fair Housing Act! This legislation prohibits any housing discrimination based off of race, color, religion, national origin, sex, disability, and family status.

The Fair Housing Act is a great reminder to come together and take action to create equal opportunities in every community. Fair housing is a crucial part of building strong, diverse, and vibrant communities.

For more on what you can do to celebrate and commemorate Fair Housing, check out the National Association of Realtors’ website.

For a free print out on Fair Housing that you can use around your office, check out The Department of Housing and Urban Development’s flyer, here.  

Companies Adjust Pet Policies with the Return to Work

After a little over a year of working from home, it looks like employees are slowly making their way back into the office with the help of vaccine rollouts.

Being at home this often has definitely started new routines and expectations – namely, for your pets. Who’s going to give them constant belly rubs and quick potty breaks if you’re not home all the time like you once were?

Companies are now considering allowing employees to bring their pets to work as they return to the office. According to a survey from Canfield Pet Hospital and OnePoll, 59% of executives state they would allow “more flexibility” for employees to take care of their pets during the work day, and 50% say they would allow employees to bring their pets to work.

Why are companies being so cool about this?

Well, with such an extended period of time being at home, employees are having a hard time thinking of giving up their space to commute and return to the office. The survey also found that 63% of pet owners report anxiety over how their pets will handle their post-pandemic work routine. Companies are hoping that these possible new pet policies will help entice them back.

What are your thoughts? Would you prefer more flexibility for your pet with returning back to the office? Let us know in the comments below!

For more real estate news and updates, stop by Alliance Title’s Blog.

Real Estate Tip of the Week: Fighting Cybercrime

Cybercrime is scary – and with one of the fastest growing cybercrimes in the U.S. being wire fraud in real estate, Alliance Title has stepped their game up to better protect your transactions.

According to FBI data, there were more than $221 million in losses back in 2019.Wire fraud is a serious thing, so it’s important that we take this cybercrime seriously.

To protect you and your assets, Alliance has partnered with CertifID – the nation’s leading wire fraud prevention solution.

CertifID adds an additional level of security to your transactions. Let’s show you how it works:

  • Your escrow agent will send you your wiring information through CertifID.
  • CertifID confirms your identity and receipt of wiring details with security questions and two-factor authentication.
  • Parties will receive confirmation that the transaction is guaranteed by CertifID.
Image from CertifID

This process helps protect all parties involved by insuring that closing funds are safely transferred and received. Every CertifID transaction is backed by a $1,000 guarantee, at no cost to you.

For more on CertifID, check out their introductory video.

Homeowners & The Important Maintenance Skills

When you finally become a homeowner – it’s a dream come true! But the honeymoon period can fade away as soon as something needs repairing in your home. Usually, as a renter, you’d call your landlord to solve the issue.

Now, the landlord is you.

Don’t fret! One of the best things about becoming a homeowner is learning all the maintenance skills you’ll need to save money and keep your home running in perfect order.

Check out our maintenance tips below:

Shutting Off Your Water

One of the highest causes of damages to a home is water – so knowing where to shut off your water is a top priority. You can ask your home inspector, a plumber, or an acquaintance with construction experience to show you where the main water valve is in your home. Being able to quickly turn off your main water line can save you thousands of dollars, if a leak ever springs!

Changing Your Air Filters

Air filters can greatly help diminish dust and allergens. Changing filters depends on who’s living in your home – if you don’t have pets, it’s suggested that you change your air filters every 3-6 months. If pets are in the home, you should change it every 30-90 days for the best results. You can usually see what size of air filters you need by taking out the old filter (the size should be printed on it).

Cleaning Your Gutters

One of the worst things you can do is let your gutters clog up! Clogged gutters could potentially mean water running down sides of your home, leading to rot. Clean gutters every year, or twice, if you have overhanging trees. Make sure to wear gloves!

Fixing a Leaky Faucet

The sound of “drip, drip, drip” enough to drive you crazy? Leaky faucets can be a quick fix for homeowners. Be sure to have an Allen wrench, needle-nose pliers, tongue-and-groove pliers, and a screwdriver. Check out the detailed guide, here.

Stopping a Running Toilet

Yes, your refrigerator is running – but your toilet shouldn’t! A “running” toilet is not only annoying, but it also racks up your energy bills. For a detailed step-by-step action on how to fix a running toilet, check out This Old House’s guide here.

Being a homeowner isn’t always glamorous. But the maintenance and home improvement tips you learn will help you become an expert homeowner!

Real Estate Tip of the Week: Understanding Real Estate Commission

There can be some confusion when it comes to how a real estate agent is paid – and some buyers and sellers might not work with an agent, simply because they don’t know how the agent’s commission works!

This is where we jump in! Check out our guide below on how to better understand a real estate commission and your part in it.

How Much

Real estate agents only earn money when a real estate deal has been completed and finalized. Some agents charge a flat fee for their work, or some charge a percentage of the sales price of the home once the deal is finished. The percentage would vary, but the commission is typically 5-6% of the home’s final sales price.

For example, on a $300,000 home, a 6% commission would be $18,000.

Don’t panic – while that might seem like a huge number, it’s usually split up into different parties. That, and an agent won’t receive any sort of payment until the buyer and seller both agree and meet at the closing table.

Who Pays

Surprise! Usually, the seller pays the full commission for their listing (seller) agent and the buyer’s agent. Remember that $18,000 number above? The seller and buyer agents usually split that, with each receiving $9,000. This equal split in commission might vary, however, depending on the agents.

What Commission Covers

Basically, the commission covers all of the hard work the agent did to help sell or purchase your home. An agent helps you price homes, market on social media and the multiple listing service, negotiate with buyers, and help bring the home sale through to closing. And they should, most definitely, help take off some of the stress from your shoulders.

When You Sign the Contract

When you’ve decided on a real estate agent, you’ll receive a contract (usually referred to as a listing agreement) where you can read all the details about their specific commission rate. Be sure to read this contract in its entirety before signing – that way you have full confidence in the services you’re paying for.

For more real estate tips and tricks, stop by Alliance Title’s Blog for more.

What is a Construction Loan?

Usually, when you purchase a home, you need some sort of mortgage to help pay for it (these are usually standard mortgages). However, if you’re ahem – building a home from scratch, these sort of “standard mortgages” might not be the best thing to help you.

Rather than standard, you might need a construction loan. But what’s a construction loan? Read on to find out more!

A construction loan is short-term or temporary financing that is paid (usually) through a serious of installments as the building of your home continues to progress.

Because, technically, no home exists, these types of loans can be considered a tad riskier. The lender doesn’t have any sort of collateral, so you’ll usually need to make a bigger down payment of at least 20%. But, while your home is under construction, you will make interest-only payments until the home is completed.

When you apply for the loan, you’ll need to make sure you have each and every detail of your home construction in place before you apply.

Finding a lender is another hurdle you’ll have to jump. You could potentially ask your contractors for a recommendation; that way you know your lender has plenty of experience with this type of loan. A lender will also help guide the borrower through the process, as well as make sure your timeline stays on track.

Just like the “standard mortgages” – there are multiple types of construction loans. You’ll need to talk with your real estate team to determine which would fit your project best.

For more on construction loans, check out Rocket Mortgage’s article.

Stop by Alliance Title’s blog for more real estate guides and tips.