IN THIS ISSUE:
  • Market Stats as of today!
  • New LuxManor Video "Does an Attic Fan Keep Your Home Cooler in the Summer?" (~1 minute)
  • Jim Roy's article on rental history now factoring in mortgage approvals.
  • August random thought
  • Home maintenance reminder (kept in by popular demand)
The Market is Still a Powerful Seller's Market

Here are the residential sale numbers in the DMV:
Coming Soon: 898 homes.
Active listings: 10,486 homes.
Under contract: 7,944 homes.
This is still very much a seller's market and the summer has seen a bit of a slowdown. Will things pick up in the Fall as usual? LuxManor Real Estate believes the answer is a big YES.
Trailing Twelve Months Market Statistics
Average Sold Price: DC Metro Area
Video: Does an Attic Fan Keep Your Home Cooler in the Summer?
Answering one of life's big mysteries, Jim Roy explores the concept of attic fans. Is he a fan? Is this just a bunch of hot air? Check out this short video to find out how they work and if they help with your home's efficiency.
Lenders May Begin Factoring in Timely Rental Payments When Qualifying for a Mortgage
By Jim Roy
Current lender practices
When applying for a mortgage to buy a home, lenders will pull an applicant's credit. The underwriter will use this as one of several factors in determining if the loan will be approved or rejected. Lenders will also evaluate the person's income, review assets, taxes filed, collect the W-2, and and look into the value and often the condition of the home being bought (the collateral).
What does your credit report show?
A credit score is, in my professional opinion, the best way to know if a tenant will pay his/her rent on time. When I pull someone's credit to qualify a potential renter, I can see the person's credit score number (between 350 and 850), all late payments, judgements, bankruptcies, criminal history, and any evictions.
What is generally not seen?
Late payments on rent are not automatically included in the credit report but may be found by contacting the tenant's landlord. If the tenant has been a problem and/or owes rent, that landlord may be very motivated to make his problem my problem. This is why I put far more reliability on credit over a landlord reference.

Years ago, I spoke with a landlord. I even recall his name, Austin. Austin swore up and down that his tenant would be great for my property and always paid on time. Later that day I received the eviction report and Austin had a pending eviction on this "perfect tenant". If he had not filed for eviction, I would not have known the rent was late.
How is this going to change?
Fannie Mae (and eventually Freddie Mac) will be able to look at bank statements going much farther back in time, starting on September 18, 2021. As of now, it will be with the buyer's permission. They buy up a lot of loans from different banks and small mortgage brokers so most borrowers will be affected. Lenders would rather deny a loan than risk it not being bought on the secondary market. 

This new policy may come as a terrible surprise to people who have been late on rent and planned to solve their housing needs by giving notice to their landlord and buying a home.
Who is affected?
Tenants should be aware of this new policy so they're protected months or years from now when they're ready to become a homeowner. I recommend getting the word out as soon as possible.

Landlords will like the fact that there is another motivation to pay rent on time. It's in everyone's best interest now that this is a factor.

Younger and low-income borrowers who may not have much in the way of credit but pay rent on time may actually be the biggest beneficiaries. Some loans are rejected due to insufficient credit history or score. This policy could greatly assist first time buyers using a reliable factor to determine credit worthiness.

Many view Rental payment history as the best indicator of likelihood to repay a loan.
My advice on planning for your future
My advice will be boring. Frankly, it all starts with living well within your means. Pay your bills on time. Establish credit early in life by getting a credit card and paying the full balance off every single month. Pay your rent on time and don't risk an eviction. Save for a down payment as well as your retirement by investing.

Yes, these seem like common sense and not a fun way to live today. Delay gratification; it will be worth it. Skip the avocado toast or pleasure trip to Europe on your last dollars.

When was the last time we heard a song on the radio (Spotify for my younger readers) espousing my recommendations? What schools make this part of its core curriculum? Like most of us, you likely didn't learn any of this from society, the media, your school, and maybe not even a parent.

Educate yourself and take good care of your future self. You're going to be that person in the not to distant future. Make sure your future self thanks your younger self (that's you now). Then it will be all the avocado toast in the South of France you can handle (assuming they have that there).
August Thought: My friend said he accidentally rode the back of a large sea mammal but it wasn't a whale or a dolphin. I'm pretty sure he did it on porpoise.
Home Maintenance Reminder
I know it's still summertime but the crack on this front porch will get worse as the temperatures drop.
Water will get in here, freeze, and expand.
Winter is coming and it will not be the time to try to fix it.
Act now on issues like this.
Contact a LuxManor Realtor with any real estate related questions for quick and reliable answers. We work with some of the best lenders and title companies in the business who can assist our clients on all real estate matters. 

For more information or to speak with a licensed Realtor, contact Jim Roy at 301-986-9401 or Jim@LuxManor.com.