Loan Program Tip
All right, so topic two is about loan program tips that is going to help your buyers win in this crazy market that we’re in because I was just actually talking to an agent yesterday. She’s got 17 buyers and one listing and we’re already seeing going above list price. How can we make the offer more appealing against other buyers ‘ offers? And so I wanted to share with you guys a loan program that we have. It is we have two different types of bridge loans.
And I actually don’t use the term bridge loan often with clients or real estate agents, because it can be so confusing to the client. They’re not really sure what a bridge loan is and they then formulate their own opinion of it. And so then I have to rewire that.
So but for you guys, I call it a flex loan. And we’ve got two different types. And the purpose of it is so that your buyers can make a non contingent offer, which is so much more appealing than, of course, having to make an offer with contingent on a home selling. And it is with our flex loan. So we’ve got two different types. We’ve got one that is a one time close, which of course is ideal.
And then we’ve got a second one, which is a two time close. And so the difference between the two to keep it, keep it short and sweet for you is the one time closed means that they still have to have five percent down of their own money. And they still have to qualify, carrying both mortgage payments and we can write a non contingent offer, we write the loan, we close on it.
Then when they sell their current home, let’s say it’s two months later we can amortize this loan without having to do a refinance, without having to do a second closing. We rewrite the loan amount and the principal and interest payment as if they had that down payment from the very start and then their payment goes right back down. So it’s kind of like they had it at the very beginning. Super simple. Easy. That is ideal.
The second option is what’s called the two time close. This is probably what you guys are used to as more of a bridge loan, but the two time close is zero percent down. And they don’t have to qualify from an income standpoint by carrying both mortgages, which is really cool because not a lot of people can do that. And so if you’ve got clients that are nervous about how do I time this out, I don’t want to list my house with inventory so low and my house flies off the market, and then where the heck are we going to find a house to buy?
This option could be really convenient for them. And again, we they can buy a home zero percent down. Then once they move into that home and they’re ready to sell this one once this one’s sold. The reason why there’s a two time clause is because we end up refinancing the mortgage we just did. We cover all the lender expenses and then we are able to put that permanent mortgage for them. And they didn’t have to deal with the hassle of selling and
buying. So it’s a little bit more of a headache to do the two times close. Yes, but what is more of a headache listing your house and then being stressed out if you’re going to be able to find one? And so a tip for all the agents out there is this is a common fear that people have.
I mean, if you have kids and you have dogs and you’re thinking like, how the heck am I going to time all this out? This is something that I would be putting all over social media, saying things like, if you have a fear of selling and buying at the same time, I can help you with that. And there’s different strategies. Of course, we can do leasebacks and things like that.
But this is a loan program that you can keep in your back pocket. Last summer when things were bananas, we had real estate agents using this all the time. And here’s the thing. Our CEO ran statistics and although we prequalified them, the prequalified in this way, we wrote the offer this way. Eighty four percent of the time, the client didn’t even have to exercise this program because their house sold before they ended up closing on the new home.
It’s just really a way that we can write a non contingent offer and we can truly close without having to sell this one. But it allows them to write that offer. Given the market and how low inventory is. The reality is, is that this house is probably going to sell.
So use this loan program, talk about it on social media, talk about it with your friends, with a lot of people have interest in potentially buying another home because interest rates are so low, they might be able to afford that fifth bedroom or that house with the game room or that house with the pool. But they’ve got this fear sitting and how are we going to do all this? And it feels so overwhelming.
So talk about this on social media. Feel free to connect with me after this. I can explain in more detail how some of the agents are using it for their buyers. Now we’re on to the next topic.