How Work from Home Changes Are Reshaping Real Estate Demand in California

John LaRosa 03/06/2021

How Strong Was the Pandemic’s Influence on Work From Home Policies?

Before 2020, remote work was less common, often taking the form of an occasional day working from home when a child was sick or an employee couldn’t make it into work.

However, the COVID-19 pandemic changed that, with employers finding it safer for workers to complete their jobs at home. According to Upwork’s Future Workforce Pulse Report, 41.8% of the American workforce was still fully remote nine months into the pandemic. Additionally, the largest work marketplace predicted that remote work will continue through 2021. While some employees will return back to the physical workspace, a large percentage are expected to continue with remote work, a predicted 26.7% according to business managers surveyed in the Pulse report. An estimated 36.2 million Americans will be working remotely by 2025, according to the report, signifying an 87% increase from the numbers before the pandemic.

California was one of the hardest hit locations during the pandemic. Stay-at-home orders also changed the nature and location of work for many California workers. All of these changes have affected real estate demand.

Why Did Real Estate Demand Increase During the Pandemic?

As the pandemic took hold in the United States, the popular opinion was that it would only last a few weeks. People prepared to hunker down in their own homes and try to make it work. However, as the pandemic dragged on for months and now for more than a year, people had to make more permanent changes.

People had to find a workable solution. If they were living in a small apartment, had no home office, or had kids learning from home, they would invest in office space, coworking spaces, or bigger homes. Flex jobs also made it possible for people to migrate to new areas where they wanted to live since they were no longer required to report to their jobs in person.

Additionally, people who were not satisfied with their current living situation or who simply wanted a change after being stuck in the same place for so long purchased or rented new properties. Others wanted to leave COVID-19 hot spots for less populated areas and where they could safely spend more time outdoors.

Another trend is that as people lost their jobs or were furloughed, many had to make new arrangements. Many downsized to decrease their expenses.

Mortgage rates are now at an all-time low, providing yet another incentive to purchase property now.

All of these factors have culminated in an unprecedented demand for real estate during the pandemic.

Why Did Real Estate Demand Decrease During the Pandemic?

It wasn’t all good news for the real estate market during the pandemic. April and May 2020 saw the lowest number of home sales since 2007, according to the Federal Reserve Bank of St. Louis.

When shelter-in-place orders were put in place, many business owners did not have enough customers to stay open, leading to temporary shutdowns. As of September 2020, about 100,000 establishments were out of business after temporarily shutting down. Some of these businesses were sold while others are simply vacant properties.

Business owners who had performed well before the pandemic pulled back on their plans to expand after uncertainty about the pandemic arose.

With more employees working from home, business owners have stopped renting our or buying space for them to work.

Tips for Buying Real Estate During a Pandemic

If you’ve decided to take advantage of the low mortgage rates or you’re an investor looking for property during this unique time, you may have noticed that the process of purchasing a property is a lot different today. You might not have as much human interaction during the process and new rules may limit your access to the property.

Here are some tips to help you through the real estate purchase process during a pandemic:

  1. Be prepared to do much of the transaction online – New advances in technology and a desire to remain socially distanced have helped propel much of the purchasing process online. Be prepared to do much of the transaction online, including applying for a mortgage, finding properties, and even closing.
  2. Search California public records – You’ll still want to do your due diligence and find out about the property before you make an offer. Fortunately, you can search California public records to find out information about the property and who has owned it.
  3. Take advantage of virtual tours – You might find it difficult to get a real estate agent to meet you in person and give you a tour. However, virtual tours allow you to see inside a home or business without having to be physically present, which may help you narrow your search for a property.


With the COVID-19 vaccine and hope in sight, real estate investors should consider how the end of the pandemic may affect their real estate holdings while also thinking about how the pandemic has permanently shifted work culture in America.

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See What Mary Pizzimenti’s Customers Have to Say About Their Sierra Foothills Real Estate Broker

John LaRosa 09/25/2019

In Real Estate it’s All About Relationships

At PHA Realty we’re all about Education and Empowerment. These core values come straight from our Broker and Founder, Mary Pizzimenti. Not only does she run the brokerage, she also actively works with clients to help them achieve their goals in real estate today as well as success and prosperity in all their future transactions. But don’t take my word for it. Listen to what Mary’s past clients have to say about working with her and PHA Realty.

Why Isn’t Mary Pizzimenti Your Nevada & Placer County REALTOR?

If you’re looking to buy or sell real estate in Granite Bay, El Dorado Hills, Rocklin, Auburn or anywhere in Placer or Nevada County, you need to give Mary a call TODAY! She and the rest of us at PHA Realty are waiting to help you succeed in real estate.

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Bad MLS Photo Friday is Back! This One Brought Us Out of Retirement.

John LaRosa 07/15/2018

List Price: $680,000

These photos have not been altered from their original display on the MLS (slight disclaimer on that this week) and the photos are from an active listing in a California MLS at the time of this article’s publication. Yes, they’re actually that bad and they are currently being used to market the home to the public.

This one speaks for itself but don’t worry we’ve still got plenty to say about it too.

Full Disclaimer: The original MLS photos do not pixelate the subject’s face, we did that for our own reasons. Trust us, they’re just as awkward without the pixelated face.

Real Estate Photography 101

The NUMBER ONE RULE in real estate photography . . . wait for it . . . There shouldn’t, under any circumstances, ever, ever, ever, ever be anyone in your real estate listing photos. No people. Not ever. Seriously, Never. Don’t try and come up with a reason why there might need to be a person in a photo, it doesn’t exist. Unless, let’s say, there’s some feature of the home that really needs to be displayed so that its proportional size to the human form is clearly visible. I don’t know about you but every time I see a photo of a bathroom I can’t help but wonder if the toilet is actually people-sized. Am I the only one on that island?

Usually, when you see people in the photo, it’s an accident. Don’t get us wrong though, you can look back through the Bad MLS Photo Friday archives and see plenty of examples of awkward and sometimes unnerving people memorialized in MLS listing photos. That being said, we’ve never seen someone posing, smiling at the camera, in a casual manner, sometimes interacting with the setting, in almost every single photo in the listing. It’s like he was trying to get his print modeling portfolio finished while taking the listing photos.

Why does he need to show us how the technology of a table and a chair are meant to function? Were any of you previously unaware of how that contraption worked?

Oh, This Is Just Too Much

The complete list of photos includes a wide exterior, a close-up of the fireplace, a close-up of the stove, a fence in the backyard, and then several of the same photos with a man posing awkwardly (at best) in the remainder of the photos. What is going on here? Seriously, why did this happen? And in case you’re wondering, yes, these photos are all that were posted in the listing.

And what the heck is going on in the photo in the garden? Is he miming what it would be like to garden with an imaginary shovel?

? ? ?

After viewing all 8 photos of this listing I don’t remember a single thing about the home other than the man in the photos. This is the rare air we’re breathing here my friends. A bad real estate photo hunter can go an entire lifetime without a find like this one. Now let us never forget it.

Don’t let the sale of your home become a joke. It isn’t funny.

We don’t do this to make fun of listings. We do this because we take real estate seriously and we want to show our future clients how much of a mistake it can be when you don’t take this business seriously.

Your Home Deserves More Than That And So Do You

Happy Friday!


Ready To Talk About Getting A Professional to List Your Home for Sale?

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What’s Next for the NEW Silver Lake Reservoir Complex?

John LaRosa 07/06/2018
Silver Lake Reservoir in Los Angeles is going through changes. Will it become one of Los Angeles' newest parks?

There has been much ado about the Silver Lake Reservoir over the past few years as the historic namesake of this “tragically hip” neighborhood is poised to stand as a proxy in an ongoing cultural battle between public use and the sanctity of affluent neighborhoods.

A New Life for Silver Lake Reservoir

After having been emptied, retrofitted for a year, and then refilled and replaced with non-potable water as part of a federal law that outlawed open-air drinking water reservoirs, the future of the reservoir is the focus of a potentially heated debate.

Now that the reservoir no longer holds potable drinking water, and is instead a reservoir that houses part of the city’s supply of non-potable utility water, the body of water is now available to be used as a recreational park.

Potential Future Plans

Whereas the reservoir now sits behind an 8-foot tall, barbed wire fence, future plans could see the removal of such urban detractors and the installation of all manner of recreational features including beaches or docks, not unlike those found at nearby Echo Lake.

The members of the Refill Silver Lake Now organization along with the Silver Lake Forward and Silver Lake Reservoirs Conservancy were the active force behind efforts to get the reservoir refilled as quickly as possible. Some say this was done to reduce the likelihood of major changes to the structure, whereas it would’ve been less expensive to start making changes if the reservoir was empty.

As a member of the community myself, I can say that refilling the reservoir sooner rather than later was the right move for the area, especially as concerns the impact on the surrounding wildlife. As to whether changes to the complex would be harmful to the neighborhood, I am less certain, though I don’t doubt that it would create complications.

The Refill Silver Lake Now organization, seeking to continue the community momentum it had generated to get the reservoir refilled, has morphed into the Silver Lake Now organization and will likely be arguing against making any additional changes to the complex, other than those they already wish to see completed. Learn more about Silver Lake Now and get involved in the debate.

This statement from 13th District Councilmember Mitch O’Farrell’s website regarding the upcoming May 1, 2018 planning meeting, seems focused on striking a balance between the potential uses of the lake and the concerns of neighboring residents.

“The Master Plan will guide improvements and protection of the reservoirs, and seek to balance its historic character, its use as a community gathering place, its strategic location within the Silver Lake community, and its unique blend of both functional and recreational spaces.”

The meeting’s goal is to discuss the “hiring of a consultant to support the planning process.” What the plan is, exactly, remains to be seen. Read more about the planning meeting on Councilmember O’Farrell’s website.

Residents here in Silver Lake are mixed. Many celebrate new changes, like the opening of the walking path across the South Dam of the reservoir above the dog park, while others don’t care to see any additional changes to the complex for fear of the congestion-related attention.

And it does beg the question, does the neighborhood lose what made it special and cherished with these types of sweeping changes or is there anything that can be done about that when you are a part of a complicated and sprawling metropolis seeking to meet the needs of its 4 million residents?

Silver Lake may be the focus of this cultural battleground currently but this is nothing new to homeowners throughout Los Angeles. Homeowners will always fight to keep things the way they are but they are up against the machinations of a massive urban population in the midst of one of the most desirable locations on the planet. Sometimes, no matter how deep the connections, there is simply nothing that can be done to prevent change.

Nothing stays a secret forever

For all its bucolic splendor, it is easy to forget that Silver Lake resides not far from the iconic epicenter of California’s most urbanized and populated city, nearly 3 times over. When dealing with an urban, political, socio-economic behemoth such as the City of Los Angeles, sometimes there are only two choices, adapt or leave.

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CoreLogic Reports At Least Half of U.S. Metro Real Estate Markets Overvalued

John LaRosa 07/05/2018
Real estate housing markets are heating up across the U.S. Metro markets are overvalued.

CoreLogic’s latest Home Price Insights report has been released for April 2018 and the biggest news is that CoreLogic reports that half of the 50 largest metro housing markets in the United States are “overvalued.” That’s a word that may have many homebuyers running for the hills shouting about bubbles and crashes but it’s far from that simple.

Click here to read the full press release from CoreLogic

So what does “overvalued” mean?

It does not mean the same thing as a bubble. Though it is obviously true that in order for a bubble to exist some commodity has to be overvalued it does not necessarily correlate that an overvalued commodity is, necessarily, a sign of a bubble.

Bubbles always occur because of some kind of rampant fraud when it comes to housing. Though in some cases, when involving a highly specialized product, there is no fraud if a single company controls the production of the product. In those cases, the company helps falsely inflate the value by only producing a limited amount. Beanie Babies, remember them? Maybe you don’t.

Yes, Beanie Babies were like a bubble. There was overwhelming demand and then there wasn’t. So the value washed up, the bubble burst, and the people with Beanie Babies in their hands were the ones who lost out the worst. Beanie Babies, however, are not a necessity for living and at worst, their peak price was hundreds and, in a couple of cases, thousands of dollars. It’s hard to compare that to the housing market. True there was no fraud but that’s because the commodity is priced relatively low, it isn’t a necessity, and it was controlled by a single company.

When it comes to housing the only way that home prices are able to be falsely inflated during a bubble is due to large-scale fraud that must be allowed to occur at multiple levels. Mainly, the type of fraud that occurs when government regulations on the financial industry are relaxed and removed.

So if it isn’t a bubble, then what does overvalued mean and what are the consequences of that?

If a market is overvalued it means that homes in that area are more expensive than most people can afford in that area based on the prevailing wages for that area. It’s really more about wages than it is about home values. In this type of market, it is the buyer who can extend themselves to the highest price point in order to purchase who ends up setting the value of homes.  It doesn’t mean that homes are being sold for more than they are worth because the only value that you can ascribe to any home is the dollar amount that a buyer is willing and able to pay for it. Home prices are “high” because wages in the area haven’t been growing commensurate with home prices. Were wages increasing alongside the housing market, it would be unlikely that most people would be complaining about the market being expensive, except that buyers will ALWAYS be complaining that prices are too high 😉

So in an overvalued market, it is the buyers who are the ones creating the overvaluation. It is not the sellers. Here’s an example. If you put your home on the market in a “hot” area and you decide that you want to be fair and offer your home for sale for a reasonable price (which no one actually ever says). So you list the home and you get 27 offers ranging from asking price to well above asking price. Do you choose the lowest priced offer because you want to be fair? If you truly wanted to be fair you would accept the lowest price as the purchase price and then do a random pick to choose the offer that “wins”. That’s “fair”.

But you’re not going to do that, and neither is anyone who is actually selling their home. Everything in life costs money and homes cost the most money. When YOU sell your home you want to be rewarded for your hard work and persistent upkeep. You put tens or hundreds of thousands of dollars into the home (on top of paying for it) and every seller expects the biggest reward possible for that hard work. That’s how you would feel if you were selling your home.

But again, Sellers can only accept the offers they receive.

When you have a housing crisis it means you need to make more living spaces and you need to produce them in a manner that doesn’t cause prices to soar even further.

What happens when a market is overvalued?

Well if there isn’t any fraud involved then the market will do what every market does when it is overvalued. The market will respond by slowing home price increases until they more strongly align with incomes. This is called “price correction” and this is what is supposed to happen in an overvalued market. It didn’t happen in 2005 (when it should have) because the banking industry was busy collecting huge paychecks by committing the most elaborate, although ultimately quite transparent, fraud that has ever been perpetrated. Well, maybe not “ever”.

The result we’re hoping to see in overvalued markets is a slowing of price increases and in some markets small drops in value, so that home prices can return to prices that a larger number of people can afford based on their incomes.

You shouldn’t be worried about a bubble, they’re extremely rare actually, even in real estate. And they’re even rarer when everyone is worried about a bubble happening. Side note; the time to worry about a bubble, is when no one is worried about a bubble happening because they’re so busy making money. What could possibly go wrong?

You should be worried about what your government (especially state and city) is doing to incentivize increased housing production and you should be equally worried about what your government is doing to make it easier for fraud to be perpetrated and go undetected. Regulation is the only tool that exists to prevent the financial industry from doing only what is in their best interests, even when that means breaking the law.

Want to Learn More About Your Local Market? Contact Us Today and we’ll be happy to help you out…



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What’s the Best Way to Resolve a Request for Repairs in Residential Real Estate? Advice for Buyers and Sellers

John LaRosa 06/28/2018

It seems simple, right? Here’s what’s wrong with the house…fix it. Everyone’s happy. Right? Right?!? If only it were actually that simple. Read on for more info about why the proper resolution to a Request for Repairs isn’t as simple as just fixing the requested items and for a discussion about the options that are available to both parties. This article is for Buyers and/or Sellers.

Please note that the information in this article pertains ONLY to California residential real estate transactions and is up-to-date only as of the date of this article’s publication. You should always consult a licensed professional before making any decisions that pertain to any particular real estate transaction.

What is the Request for Repairs?

The Request for Repairs is a document submitted by the Buyer sometime after the Home Inspection and sometime before the end of the Buyer’s Inspection Contingency. It is by no means required and is sometimes non-existent in real estate transactions. It is a list of items that the Buyer wants repaired, wants more information about (usually documentation), or wants some other dispensation for (usually money). It is up to the parties involved and their agents to determine what becomes of the request.

The Seller Has No Inherent Obligation to Complete the Request for Repairs

Before we jump into this let’s get one key detail cleared up. The Seller is NEVER required to do any repairs to their home, regardless of the Buyer’s requests, unless and until the Seller agrees (or has already agreed) to make those specific repairs in writing or when those repairs are required by law (not many are).

There is nothing legally binding about the Request for Repairs when it is submitted. It is simply a request. In some rare cases a Seller may choose to make no response at all. Whether the Request for Repairs becomes a larger matter or whether it is resolved quickly and becomes a binding document is entirely up to the parties involved. But when it comes to contracts and negotiations, everything is up for grabs.

Why Isn’t It a Good Idea to Let the Seller Be Responsible for the Repairs?

In most cases, the Buyer will either ask the Seller to make certain repairs before closing, or they will ask the Seller to give them some dollar amount back during the closing process, as a credit to their closing costs. At first glance, it may seem like one option is easier or better but in ALL situations, the ease and/or difficulty in completing the Request for Repairs has more to do with the parties involved than it does with the volume or scope of the repairs. Put another way, personalities and our personal lives are often more relevant than logistics and dollars when trying to successfully navigate a real estate purchase and/or sale.

Here’s an example. The Seller has decided to complete the repairs before the closing but they required that the Buyer sign-off on (complete) their Inspection Contingency (learn more about Contingencies in real estate) as a stipulation of their offer to do the repairs. Simple, right? Well, if the Buyer signs off on their Inspection Contingency they have given up their right to cancel the contract due to the property’s condition. The Seller completes the repairs but the Buyer isn’t happy with the job the Seller’s contractors did.

This won’t happen every time but it WILL happen sometimes, and if you aren’t prepared for it, it can become a problem, FAST.

The Buyer can insulate themself from this by requiring a sign-off or approval from the Buyer (or better yet, a third party) in an addendum that will determine when the repairs have actually been “satisfactorily completed”. This would allow the Buyer more recourse were the Seller to complete the repairs negligently, but only to a certain extent. Having a third party as the designator of approval is the best move because it helps BOTH parties feel confident about how the results will turn out.

If you’re the Buyer, here’s an important reminder. This isn’t an opportunity for you to nit-pick every aspect of the repairs. If the Buyer agrees to let the Seller fix the repairs the Buyer is agreeing to let the Seller fix the repairs. Get it?

Hopefully, the Seller will do a great job fixing the repairs. It’s more likely the Seller will do an adequate job fixing the repairs. It is sometimes the case where the Seller does a horrible job fixing the repairs.

That’s the big problem and that’s how it is. Welcome to reality. If they do a horrible job, protest. If it’s a deal breaker (Is it really a deal breaker?) then maybe it’s time to walk. Hopefully not. (Really? Deal Breaker?)

Is There A  Simpler Solution?

When it comes to the Request for Repairs we almost always recommend the Buyer ask for a credit to offset the cost of completing the repairs, though this is still only part of a solution and depends largely on the scope of the requested items. If the list of repairs is long but most of the items are light, handyman-style repairs, the Seller may want to do the repairs themself. If the repairs involve larger changes and, specifically, subjective design aspects, the Seller may be better suited offering a credit. Don’t spend money repairing your home only to have the Buyer gum up the transaction if they aren’t satisfied with the work.

What’s the Best Way to Handle the Request for Repairs?

Well, whenever I’m representing a client, be it, Buyer or Seller, my recommendation is always to try and put yourself in the other party’s shoes. If you were the one selling the home would you consider these requests unreasonable? Or if you were the one buying the home, would you want to purchase a home with these issues? And what would make you feel better if you were purchasing a home with these issues?

When it comes to the Request for Repairs, the best move is to offer/request credits for larger repairs and to offer/request to have the smaller repairs completed before closing. That is, of course, assuming the “larger” repairs don’t involve issues that would drastically harm the value of the property.

Having Professional Guidance is ALWAYS the Right Move

Every real estate purchase is different. What’s at stake, who the parties are, and what their time requirements are; those are the questions that shape the playing field when it comes to determining how best to approach the Request for Repairs. There is no “right” answer, there are options and there are personalities. When you’ve got an experienced real estate professional on your side, you’ll get guidance and assistance with BOTH.

If You’ve Got Questions We’ve Got Answers. Give Us a Call or Send Us a Message…



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Do You Love Bad MLS Photos? We Do! Bad MLS Photo Friday is Your Weekly Dose of Bad Real Estate Listing Photos

John LaRosa 10/20/2015

It never ceases to amaze us here at PHA Realty how bad some of the photos are that we come across in the MLS while searching for our clients. Sometimes it’s completely mind boggling. Yes, the photos don’t sell the home but bad photos will prevent potential customers from coming to see the home. And guess what that means, it means the there may be less people interested in buying the home. The lower the demand, the lower the value. It’s that simple.

This Is Serious Business

It’s not as if we’re trying to sell $2 toasters on Craigslist. Who cares what the photo of a $2 toaster looks like, someone’s going to buy that toaster because it’s $2 and they need a toaster. Every time we sell a home we’re selling a one-of-a-kind product that’s worth hundreds of thousands of dollars if not millions of dollars.

When selling a home the photos should do everything to clearly communicate the best features of the home and portray it in a honest and comprehensive manner. That doesn’t always require a professional photographer but it does require some skill or at least common sense.

With that, we are proud to present Bad MLS Photo Friday. We’ll be posting our favorite of the worst photos we’ve come across on the MLS.


Click the image to view at full size.

Bad Real Estate Photos
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CoreLogic’s Jan 2015 Home Price Index Report & the Future of California’s Housing Market

John LaRosa 03/26/2015

california housing prices home price index

Year-Over-Year California shows growth in home prices that is stronger than 90% of the country while still staying relatively far below its peak value.

When you take a look at the numbers in CoreLogic’s January Housing Price Index Report you can see that California is on the strong side of two very telling metrics when compared to the numbers nationwide.

Continued Growth in CA Housing Prices is Likely, at Slower Pace

The year-over-year change from January 2014 was 5.7% for the National index. California was on the stronger side of that, posting a 7.3% year-over-year change. Even that can be considered strong growth. That number will likely continue to decline over the next year.

The National HPI is currently 12.7% less than its all-time peak reached in April of 2006, just before the market crashed. In California the market is even further away from its peak value than the National HPI. The current HPI in CA is 14.4% less than its May 2006 peak. Even though prices may be on the high side compared to incomes they’re not as high as they were and more importantly, the increases in prices are slowing.

This recent slowing of price increases means that incomes are having an effect on housing prices and that is a key distinction of the pre-bubble days.

Now that the National market is approaching previous all-time highs (some state markets already have reached their previous peaks), price increases have been regularly slowing down for the past year. Home values have rebounded out of the crash and are trying to align with incomes. This is an important stage because home prices cannot continue to shoot up the way they have over the past two years without another bubble bursting.

Sitting on the strong side of these two metrics positions California real estate to continue to show valuable increases over the next year. At 14.4% below its peak, the CA market would need about 3 years at 5% increase per year to reach that previous peak. The goal then, is for incomes to match pace with housing so that California homebuyers will actually be able to afford home prices. This way, when the housing price index reaches that previous peak price it will be because California incomes have increased as well. As opposed to lenders approving buyers for loans they can’t actually afford (that’s what happened last time).

Do Your Research – Conditions Vary by Market

These numbers or conditions aren’t necessarily present in all California neighborhoods, however. Many places in CA have reached their previous peaks and some are even seeing declines. We highly recommend Zillow’s Home Prices pages. The data allows you to get a solid understanding of what has been happening and what could be happening with prices in a specific area. Define regions by County, City, Metro-Area, Neighborhood, or Zip Code. Compare the data and trends in three different parts of California and see where they fall in relation to the state averages.

Silver Lake, Los Angeles

Land Park, Sacramento

Rockridge, Oakland

 What Do You Think is Next for California Home Prices


We’d love to hear what you think about California Home Prices and the Housing Market. Add your comments here or share the article to social media and comment there.

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How Your Real Estate Agent Should Assist You with Financing Your Home

John LaRosa 03/13/2015

first-time homebuyers feel uninformed about their loan

Have you ever heard the saying that when dealing with a serious or complex medical condition you should always have a friend or family member accompany you to the visit and see the doctor with you? The reason for this is to increase your likelihood of asking questions when you are confused. The confidence afforded by another person on your side helps create a much more open dialog about the situation. This is why real estate agents are so important for first-time homebuyers and it is one of the most important aspects of what real estate agents do.

The Mortgage Challenge infographic from the California Association of REALTORs shows that a significant portion of first-time homebuyers feel uninformed when it comes to lending. What can you and your real estate agent do to help prevent this?

Real Estate Agents and Financing

How do real estate agents assist you in the lending process? What is your real estate agent’s role in helping you obtain financing?

  • To “hook you up” with secret savings that only they know about???


  • To make sure you understand what’s going on, what your options are, and what the consequences of those options are???

When I am assisting a client who is purchasing a home with financing (a loan), it IS NOT my job to find them the best “deal” on a loan. It IS my job to make sure they understand the options they have at their disposal and what the different effects of those choices are. In doing so, we (myself, my client, and the lender) are striving to find the loan that best suits your unique situation.

Always ask questions

To return to the medical analogy, your agent should be “in the room” with you and your lender, figuratively speaking. If you are a first-time buyer and are completely new to lending you should be asking your lender (or prospective lenders) lots of questions. Your agent should be able to help you understand the situation and to interact with the lender when you aren’t getting the information or attention you need to feel informed and confident.

The lender’s responsibility goes beyond just acquiring the loan. They’re the one who knows how the lending process works, they want you to get the loan, and they should want you to get the loan that best suits your situation. It’s their job to help you understand what that means.

When a lender suggests an option it is critical that you understand the different consequences of that choice. With lending there is no universal secret that is going to save you money. There is no clandestine piece of information that no one wants to tell you about. It is better to consider the situation as a series of options with different consequences. These different options and consequences can be more or less beneficial depending on your financial situation and your long term plans.

Let’s say the lender suggests “buying down your interest rate.” This could be very beneficial to you depending on your situation. It also might not be possible in your unique situation. What’s important is that you ask the lender to explain to you (until you understand) what this choice means. Some quick questions to consider…

  • How does that change the cost of my loan, now and in the long run?
  • What is the benefit?
  • What is the consequence?

Buying down your interest rate means that you are paying an upfront fee to reduce the amount of the interest rate. You pay more money initially but save money over the life of the loan. If you aren’t planning on keeping the home long, this is not a good option. If you are trying to pay down the loan aggressively or are likely to be in the home for a significant amount of time, this could be a great option for you. You pay a couple extra thousand initially but are paying less in interest each month. If your lender can’t satisfactorily explain this to you, you shouldn’t agree to it. But you can always ask your agent for advice.

Don’t Be Afraid to Ask Your Agent

Tell the lender that you’d like to discuss the situation with your agent first. Your lender shouldn’t have any problems with that. If your agent feels like something needs to be clarified he or she should contact the lender to get clarification.

The numbers represented in the document below represent a failure on the parts of either the agents, lenders, or both. It is also YOUR responsibility to speak up when you need more information and to not stop asking questions until you understand what you are getting in to. Do that, and you will have a much more rewarding and empowering experience in financing your home purchase.

Have Any Questions? Leave Your Comments

If you have a question you’d like to ask feel free to include it in a comment or contact us directly.

And as always please share this article if you found it useful.

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