Once again LeRoy Houser has a great blog entry about credit scores and short sales (as in, how a short sale affects a person’s credit). Here’s the article and follow the links for more detail.
Most states now have a pre-licensing course for those seeking a license to sell real estate (usually called Principles of Real Estate or something similar). The subject matter covers everything from how to measure the square footage of a home to how to write a sales contract. However, most of the agents I’ve had in my Short Sale & Foreclosure classes over the past several years have had no or very little knowledge about credit scores, which can make or break a real estate deal in a nanosecond—even at the closing table.
There’s also a lot of confusion about the effect of a short sale transaction and/or a foreclosure on a person’s credit score. I’m convinced that many of those who sell their homes short are shocked to discover that the effect on their credit score was the same as if the property had been lost to foreclosure. I’m not an expert on credit scores, but I know who the experts are—so the objective of this blog is to introduce you to two invaluable sources of updated information that you can pass along to your customers and contacts.
1. Check out this recent article that appeared in the Washington Post, written by Kenneth Harney, entitled “Short sellers may take a big hit on their credit scores, fairly or not.” It’s one of the best articles I’ve read on the effect of a short sale on a seller’s credit score and about who does and doesn’t control what goes into a credit score calculation. Take a read: http://www.washingtonpost.com/realestate/short-sellers-may-take-a-big-hit-on-their-credit-scores-fairly-or-not/2012/09/06/b3e49cc0-f6ad-11e1-8398-0327ab83ab91_story.html
2. FICO (Fair Isaac Corporation) is a leading source of helpful information for both real estate agents and their customers, and I believe that including the source of this information in a newsletter or on a website could have a positive impact on an agent’s professional reputation. There are many myths about credit scores that are dispelled on the FICO website, along with much helpful information regarding how to improve and maintain credit worthiness. FICO’s Credit Education page can be accessed here: http://www.myfico.com/CreditEducation/FactsFallacies.aspx
The role of a real estate agent has gone from being the source of homes for sale to the source of all real estate information—and this customer wants more information from us than most customers we’ve had in the past. They can find the home to buy on the Internet, but they want to know how to buy it and help with decisions and problems. The information we present on websites and social networks and in newsletters extends our reach to people we’ve never met via those who pass along the material to help someone they know. The source of the information truly becomes the source of the sale, so the more information you give to the right people, the more sales you will make.