Countdown to Compliance - What you need to know for Aug. 1

Real estate is a people business. Some of the best agents are not technologically inclined and they have to make an ongoing effort to ensure they properly dot the i's and cross the necessary t's of paperwork. It is fine if your natural talent is face-to-face interaction with your clients or negotiating effectively. But to best represent your clients, you must also understand the new mortgage disclosure forms and be able to explain them to your clients.

Director of the Consumer Financial Protection Bureau (CFPB) Richard Cordray is quick to point out that the new rule was approved 21 months in advance of the August 1, 2015 implementation day. Nobody in the industry can say they were not given time to prepare. Here are a few things all real estate agents need to know.

The Consumer Financial Protection Bureau

Congress formed the CFPB in response to the many people who lost their homes during the 2008 market collapse. The main purpose of the CFPB is to protect the American public from unfair and deceptive practices like the predatory lending that contributed heavily to the housing market bubble of 2006 and the subsequent credit crisis that occurred when that bubble burst. In an effort to help the public better understand their financial products, services, and rights in these matters, the CFPB seeks to simplify required forms and use plain language in all required documents.

The CFPB website has a resource center to answer any questions you may have about forms or the TILA-RESPA Integrated Disclosure rule. It includes sample forms, webinars, and compliance guides. Do not just rely on word-of-mouth information you may receive from other agents or mortgage professionals.  

Initial loan estimates

From August 1, 2015 and going forward, borrowers will receive one Loan Estimate form instead of the separate forms for the Good Faith Estimate (GFE) and the disclosure form mandated by the Truth-in-Lending Act (TILA). This new form is three pages and borrowers should receive it along the same timetable that they had previously received their GFE.

Closing Disclosure form

The HUD-1 Settlement Statement is also combined with the final TILA-mandated form to become one Closing Disclosure form. This form is five pages. It includes terms of the loan and the financials of the sale closing.

Could affect closing date

The new rule mandates that borrowers have some time to review the Closing Disclosure in detail prior to signing. When the rule goes into effect, borrowers will have three days to review the form. That three days stars from the time they receive the form. If it is mailed, the three days start three days after it is mailed. This could result in a total of six days if the form is mailed instead of hand-delivered to the borrower.

No more line numbers

In an effort to make the Closing Disclosure form easier for borrowers to understand, the familiar line numbering of the HUD-1 is gone and in its place the charges and fees will appear under one of the following seven categories:

• Pre-paids
• Taxes and government fees
• Escrow paid at closing
• Origination fees
• Services the borrower did not shop for
• Services the borrower did shop for
• Other

In each of the categories, the individual charges are listed alphabetically. They are divided into columns for the seller, buyer, and other. There are also columns indicating payments made before closing and at closing. It is possible that your clients will get more than one Closing Disclosure. If your buyers receive their Closing Disclosure several days in advance of the closing and final walk-through of the property, another will be necessary to show and adjustments due to issues found during the walk-through or other circumstances. The CFPB requires that any change in the numbers be re-disclosed, even if the changes occur after closing, such as changes to the actual amount of recording fees.

What is Title Insurance? Fundamental Facts Every Home Buyer Must Know

Have you ever thought you lost something important?

Maybe it was your car keys, a precious photo or an important document.
Remember the sick feeling in the pit of your stomach when you realized it wasn't where it was supposed to be and you couldn't immediately find it.

Remember the sweaty hands and racing pulse as you tore the house apart, searching anxiously for the missing item?

What if the object you lost was your house?

Consider the following scenario:  You found your dream home in the neighborhood you have been wanting to move into.  The home is being sold For Sale by Owner and the owner is willing to give you a great deal for a speedy closing.  Hurriedly you put together a closing and forgo getting title insurance and other documents.  Shortly after you move in, the real owners of the home (who had been traveling through Europe for the past month) show up and demand you move out of their house.
If this scenario were real, all of the money that you had spent on the transaction would be lost unless you were able to catch the crooks who impersonated the real homeowners.  The thing that could have prevented this terrible crime would have been title insurance.
What is title insurance? Simply put, Title Insurance is insurance put on a piece of property during the sale of the property to protect the buyer of the property in the event there is a defect in the title.  Defects include fraud, erroneous boundaries and possibly forgotten easements that suddenly come into play. It is estimated by the American Land Title Association that one out of every three titles has some type of defect.

Types of Title Insurance
There are three main types of title insurance, Lender’s policy, Owners Policy and Enhanced Policies.
Lenders Policies are typically required by lenders when there is a mortgage on the property.  These policies typically only cover the lender and their investment should any type of claim be issued against the property.
Owners Policies cover the new owner of the property and their heirs for as long as they own the property.  While the lenders policy only covers the lender for the amount of the loan on the property, the owners policy covers the purchaser for purchase price of the property.  The owners policy covers title defects that occurred and are in place pre-closing.
Enhanced Policies protect the new owner of the property against all of the things that the basic owners policy does, but it often adds post closing elements to the coverage.  Post closing elements may include: building permit violations, restrictive covenant violations, mineral extraction coverage and easements.  For a complete list of possible coverages, make sure to check with the title company in the area you are purchasing the property.

Basic Facts about Title Insurance
While each state may require different types or coverages based on their needs, there are basic elements that are consistent in every state.
The first consideration is that paying for title insurance is a one time event. Rates for title insurance may vary from state to state, but it only needs to be purchased once and the policy will last as long as the owned by the policy holder.  The cost for the policy can be paid for by the buyer or seller of a property and is often a negotiation item during the transaction.
The second item that is consistent in all transactions is that the buyer has the right to select the company to purchase the title insurance from.  The Real Estate Settlement Procedures Act gives home buyer the right to choose whom they want to provide their settlement services. This can be a negotiation item during the transaction as well.

Protecting Your Investment
For many people their home is their biggest investment and it makes sense to do everything they can to protect it.  Title insurance of one of the best low cost purchases that can be made that provides years of protection.
Choosing the right policy is as simple as speaking with your local title company representative about what is common in your area and getting either their basic or enhanced policy.  Often the difference between the two policies is minimal and worth considering the additional expense.
Like other types of insurance, Title Insurance gives you the piece of mind to keep that sick feeling out of the pit of your stomach should something turn up and challenge your ownership.

Creative Real Estate Marketing Ideas

Many real estate agents and real estate companies use the phrase "If it ain't broke, don't fix it" as an excuse to not deviate from the marketing methods they have been using for years and, in some cases, decades. But failing to implement fresh real estate marketing ideas not only limits your business opportunities, it also does a great disservice to your clients. The real estate industry is one of the most competitive on the planet. In a strong market, sellers are competing with many sellers. In a slow market, they are competing for the very few available buyers. Use these creative marketing ideas to ensure a stable business model for yourself and to provide your clients with the best real estate service they can find anywhere.

Go beyond virtual tours
You are not just selling the house in your videos and slideshows, you are selling the lifestyle that comes along with it. Go beyond the tired virtual tours with generic narration. One of the best real estate marketing ideas is to make a movie that shows people enjoying a barbecue in the backyard or film a cooking demonstration that showcases the amazing features of the large kitchen.

Content is still king
Your prospects will not read every word of your blog post or every blog post you make. You still need to keep creating fresh content on a regular basis. They will be more likely to leave and find another source of real estate information due to lack of content than they are to stop following you due to too many updates.

Give them a reason to share
It is not enough to ask people to share your Facebook post and other social media feeds. There has to be something topical about it that will be of interest to current residents of your market area and to potential residents. Always keep news about your community upbeat and always be looking for new real estate marketing ideas in your daily life.

Make obtaining referrals a priority
Most real estate agents obtain some amount of business from referrals. The National Association of Realtors says that 53 percent of first-time buyers found their agent by referral and 36 percent of repeat buyers were referred to their agent. Let past clients know how much your appreciate their business and do not be shy about asking for the referral in all of your future communications with them.

Keep your automated task personal
Your time is valuable. That is why you use autoresponders and automated systems to make blog post and social media post. Remember that the time of your prospects and clients is valuable too. Keep outgoing messages fresh, personalized, and constantly updated. You show people how much you care about them and your own business before you ever speak to them in person.

Maximize your conversion of prospects
All real estate agents get busy at some time and begin cherry picking prospects. Without a thought, they allow lower-tier home buyers to fall by the wayside. Do that, you will eventually end up standing idly with the other agents at the coffee machine and complaining about the slow economy. Focus more on converting available prospects than spending money to attract a higher volume.
Only a small percentage of real estate agents truly think outside the box and depart from the traditional template real estate marketing ideas that are utilized by the vast majority of agents. Keep in mind, only a small percentage of real estate agents thrive and establish a secure business that they can rely on for steady income year after year. Real estate agents tend to be passionate people. Don't ever lose that passion that you had when you first became an agent. The best way to keep it alive is to constantly challenge yourself and take some risk.

Social Marketing for Real Estate Agents

One of the most cost-efficient and highly effective methods a real estate agent can use to grow their business and generate referrals from clients is also one of the trickiest to utilize. Information on social media can be shared and viewed thousands of times in a single hour. It can keep your audience

updated on the latest available listings, increase your website traffic, help you convert more prospects to clients, and strengthen the relationship you have with existing clients. Keep these tips in mind as you embrace social media and incorporate it in more areas of your business life.

Be yourself
As a real estate professional, you know that you can sometimes do everything right and say all the right words, but still not make a connection with some prospects. You can't worry about them. The most successful agents specialize in a price point or area of service. Targeted marketing for real estate agents does not have to be forced. Your time and efforts are best focused on the people you effortlessly meld with and who share your common interest. Talk openly about community activities, the school play your child is in, or the little league team that you sponsor. When you are open and show your personality, people are much more likely to engage and respond. The U.S. has over 175 million people on Facebook. You can't be all things to all of them. Know your audience and be genuine.

Focus on your area
People relocating to a new area often feel ignorant about the city they will soon be calling home. By being a resource of interesting information about the area, you will attract prospects to your Facebook and Twitter feeds. People want to feel knowledgeable and empowered. They will be grateful that they can learn about the area without having to ask hundreds of questions. By listening to the home buyers you interact with on a regular basis, you get a good feel for the issues and facts that are important to them. When you address these points in your social media feed, you begin forming a bond with prospects and take steps toward becoming a trusted source of knowledge they feel comfortable trusting as their real estate consultant.

Maximize available features
Facebook pages for businesses can simplify a lot of marketing for real estate agents. You are able to instantly share photos of new listings and easily add videos. Post that include photos get the most attention and result in more likes, comments, and shares. You are then able to thoughtfully respond to all questions and comments from prospects. You should take advantage of this opportunity. Discussions on your page can motivate others to join in and open a dialogue with you.

Stay upbeat
Many home buyers are able to choose where in the country they are going to live. You want to make the most of every opportunity to market your area to potential residents. The best marketing for real estate agents involves sharing your enthusiasm for your local community and displaying your knowledge about the area. Your passion will make you much more appealing to home buyers. Whether it is first time buyers, home sellers, or retirees who are looking to downsize, everyone wants their real estate transaction to be something they feel good about and celebrate. Your upbeat post and optimism will be contagious and bring people back to your page repeatedly.

Don't expect to become a pro overnight. You should definitely not give up on social media marketing just because it does not bring you the results you initially expected. Make it part of your routine to invest some part of your day learning about and incorporating social marketing into your business. It is more than just a new marketing opportunity. It is rapidly becoming an essential aspect of marketing for real estate agents.