Buying a home has become increasingly difficult since the recession hit. According to www.RealtyTrac.com, the number of foreclosures continues to be higher than the number of home purchases. Just over 92,000 people lost their homes in the United States in July. However, it’s not impossible to buy a home. With good credit, a down payment and some expert advice on the process, any Metro State alum can buy a house.
The Office of Alumni Relations recently met with Shelter Insurance agent Emily Gardner (’05, CJC) and Assist-2-Sell real estate agent Eric Freisinger (’01, MKT), two alumni in the field of home buying, to ask them to reflect on the current situation and offer some home buying tips. Gardner specializes in helping first time home buyers find the insurance they need, while Freisinger assists people in finding and appraising the perfect home.
Insurance agent Emily Gardner sells auto, home and life insurance. Her specialty is helping first time home buyers. The 27-year-old says, “my clients relate to me because I’m not much different than they are.” Typically they are just getting away from their parents’ policies. And unlike their parents, they don’t have many asssets and so don’t need as much coverage. Unfortunately, many insurance agents will oversell them regardless. “My job is to help them better understand what kind of insurance they need and what they are buying.”
With a background in residential appraising, Eric Freisinger spent the last few years transitioning into a job as a full-time real estate broker. “Taking what I have learned the last eight years as an appraiser has allowed me to help my buyers buy their properties and not overpay for them,” he says. Likewise, he can help his sellers better determine what their homes are worth so they don’t lose money or waste time setting the price too high. “Time is money,” he adds. “It’s important to get the price just right.”
Metro State: In what ways do you help people in the home buying process?
Emily Gardner: I make sure my clients have adequate coverage, especially when it comes down to personal property coverage. Everyone has different things they need covered. Sitting down with a client and letting him know about the various options helps him find the right coverage. [For example, a Personal Inland Marine Policy will cover you if you lose your $5,000 ring anywhere. However, if your ring is covered under your Home Owners policy, you will only be able to recoup your costs if it’s stolen from the house or the house burns down. Many people don’t know this.]
Eric Freisinger: The first question I always as is how they are going to pay for their home. If they only have a certain amount of payment, I send them to Colorado Housing Finance Authority (CHFA). This a great place to learn about the real estate process. I’m not a loan officer, so that’s where I start out. Then, [when they are ready to buy a home] I take the criteria they are looking for—the price range, number of bedrooms, etc—and I plug that into a computer program that sends them automatic email alerts with active listings.
Then I give them at least three subdivision areas with one listing of areas that they have interest. Once they determine a specific area, I meet up with my clients to view as many listings as they want in order to find their dream home. This process makes everybody’s time more efficient. I also help manage the real estate process, including educating them on the appraisal process. I give them the tools they need to do research on their own to find an appraiser, home inspector, etc.
With the decline in property values in some neighborhoods, there are lots of neighborhoods where you can get good deals. In addition, you can always get a good deal with an expert realtor on your side in almost any market. It’s a great time for home buyers and investors to buy.
MS: How have things changed in the home buying process since the recession hit?
EG: It’s a lot harder for people to get financing. I get a lot of people who are looking at buying a home, and they want a quote. They think they are going to close on it, but loan doesn’t go through. As well, the premium that you are paying with insurance is based on numerous things, including your credit score. With the recession, peoples’ credit has gone down, and that can affect their rates.
EF: Loans are definitely tougher to get. There are a lot more hoops to jump through. It’s not like it used to be where if you had a good credit score, that’s all [mortgage companies or banks] cared about. Now they want to see your stated income, and equity has to be a certain amount.
MS: What are some of the positive aspects of this change?
EG: People are becoming more responsible with their financial decisions.
EF: With the decline in property values, there are lots of neighborhoods where you can get good deals. It’s a great time for home buyers and investors to buy.
MS: What are some potential pitfalls home buyers should watch out for?
EG: Companies often try to oversell you on liabilities and endorsements. [The insurance you purchase] should be based on what you have—on your liquid assets. Someone’s parents may need insurance on their million dollars, but the 27-year-old making $30,000 per year doesn’t need that. So watch out. You really need to understand what you are buying. Ask yourself if you got sued, what could they take from you?
EF: Make sure every house you consider buying is appraised. I tell my customers to always get two appraisals. Get one done for the bank and also for yourself.
MS: What other tips do you have for home buyers?
EG: It’s important to really review all your coverage with someone and make sure you’re getting all the discounts you are entitled to. You want to have all your insurance combined together. You save money overall if you bundle, which means you get discounts if you insure your cars and home with the same company.
Also consider that when you are buying a home, you’re paying for the property and the home, but you only have to insure the structure. Depending on what county you are in and how much you’re paying for the property, your home is going to be insured for $20-$30,000 less than what you would pay for both.
MS: Wow, I wish I knew that when I was buying my home! Maybe I should look into my insurance policy again.
EG: Well, unfortunately home owners insurance is tougher to change once you actually put that policy in place.
MS: Too bad. Eric, what tips do you have for home buyers?
EF: It’s important to find a good realtor who knows a lot about statistics, especially in declining or increasing markets. You want to be sure they can see how much a neighborhood is going up or down in price. For example, you have found a house you like that is currently listed for $100,000. Your expert realtor has told you that the market has been declining 1% per month and you have one comparable sale that sold 10 months ago for $100,000. First, you would make a 10% ($10,000) downward adjustment if the market was showing you a 1% decline per month in that specific area. Next, you should always analyze and set up a showing and view with your realtor as many similar listings before making your offer. For example, lets say you have three comparable listings that are listed for $90,000, $100,000 (the one you like), and $89,000. You would probably want to start out with an offer of $90,000 since the adjusted sale from earlier was $90,000 and other listings are pointing you toward that value. In conclusion, the $100,000 listing you like may not be worth the list price and using an expert realtor could save you money and peace of mind.
MS: Thanks so much for the interview!
To get in touch with Freisinger, please call him at 303-995-4282. To reach Gardner, please visit her agent Facebook page.
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