Interest rates are at record lows. Home prices are down.
The 800-pound gorilla in the room that's keeping home sales down is buyer confidence - or should I say lack of confidence in their own financial security. Prospective home buyers are worried about higher federal and state taxes, declining investments, higher cost of living, sacrifices in their lifestyle, and job security.
Overcoming this feeling of financial helplessness is no easy task, but "Job Loss Protection" is one solution that's being offered. Here's what you need to know about it:
All "Job Loss Protection" plans are not alike .
Curious to see what has been written on this topic here on ActiveRain, I did a blog search and found many different plans described. Among them...
Mike Berrios - FREE Job Loss Insurance with Integrity Home Finance - Offered by his company, Integrity Finance, at no cost to the consumer. Read for more details.
Alan Kross - Job Loss Protection for Buyers Relocating to Virginia - Pays up to $20,000 - Pays up to $2500/m for eight months. Read for more details.
Mayra Espinosa - First-time homebuyer's job layoff and disability Protection Program - Offered by California Association of REALTORS Housing Fund . Pays up to $1500/mo for six months. Read for more details.
Terry Edwards - New Buyer Protection Plan Offered By Bank Of America. No cost to the borrower for 12 months. Read for more details.
Just from browsing these few randomly-selected articles on ActiveRain, it's apparent that "Job Loss Protection" plans differ from state to state and company to company. In California, for example, it appears the protection is limited to first-time buyers. In some cases it's funded by the lender and, in others, by the seller/builder. It could pay as little as $1200/mo or as much as $2500/mo - and that's just looking at these few posts.
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Long & Foster Real Estate, Inc., the largest privately-held residential real estate company in the nation, has just rolled out "Job Loss Protection" as one offering in our BUY CONFIDENT program.
In the press release announcing this plan last week, Mary K. Weddle, the company's executive vice president says "Long & Foster is proud to be one of the first real estate companies to offer job loss protection to help buyers and sellers make real estate decisions with a greater degree of confidence.”
Long and Foster's "Job Loss Protection" is obtained through the Rainy Day Foundation, whose mission is to "Protect Homeowners from the Unexpected." They do this by offering programs to:
- Keep homeowners from becoming delinquent
- Make homeowners current if they are delinquent
- Create long-term financial stability
These are wrapped into their Homeowner Education and Loan Protection (HELP) program, which offers financial counseling and emergency relief to homeowners, including "Job Loss Protection." This is a very brief synopsis of HELP, and I encourage you to read all the details on their website.
I know you're worried about that "800-pound gorilla" because I work with home buyers nearly daily and hear the concern in your voices, see it in your eyes. This program will help address your concerns but don't assume it's available for every home or every buyer.
Here's What You Need to Know about "Job Loss Protection" when you buy a Long & Foster listing:
- Job Loss Protection is availabe with many Long & Foster listings, but not every listing because it is an option selected (or not) and funded by our home seller clients.
- Job Loss Protection is not an option for home buyers to purchase at their own expense.
- To receive "Job Loss Protection" home buyers must be employed 30 hours+/week and not self-employed, active-duty military, or an independent contractor.
- It pays up to $1800/month for six months to eligible home buyers.
- Good for two years (first two months excluded, but claims made on the last day of coverage will be paid over the next six months).
- Primary residence, second home, or investment property eligible.
- Additional details will be provided by your Long & Foster agent.
I think it's obvious why any home buyer would want "Job Loss Protection" - it adds a level of confidence in the area that seems to be the largest obstacle to home sales today. It helps knock out that "gorilla in the room" or at least buyers' concern about job security.
If this is something that interests you, contact me at Long & Foster REALTORS in Crofton. I'll be happy to show you several homes that offer this "Job Loss Protection" in Annapolis, Bowie, Crofton, Crownsville, Davidsonville, Fort Meade, Gambrills, Millersville, and Odenton.
I think this a great idea whose time is NOW!
Images: Istockphoto.com
Copyright 2009. All rights reserved. Margaret Woda
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Margaret Woda is a licensed Associate Broker in the Washington, D.C. - Baltimore - Annapolis area. She specializes in Anne Arundel, Howard and Prince George's Counties, Maryland, including Fort Meade, Andrews AFB, and the U.S. Naval Academy. If you enjoyed reading this post, check out Focus On Crofton and Your Online Relocation Package for Anne Arundel County.
Copyright 2006-12. All rights reserved.
DISCLAIMER: Information contained in this post is deemed reliable on the date of publication, but it is not guaranteed and it is subject to change without notice.
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Margaret Woda, REALTOR and Associate Broker
Direct: (301)346-2923 or click on EMAIL
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Long & Foster Real Estate, Inc., 2191 Defense Hwy., Crofton, MD 21114 (410) 721-1500
Margaret,
Sounds like a good idea to relieve customer lack of confidence...A 'kind of AFLAC'...Home Style...!!! Thanks, Fran
It does sound like a good idea. Am going to looking at this.
Margaret - This is the first time I've ever heard of a program like this. Buyers should be encouraged that there are plans like this being offered.
I have heard of similar plans like this not only regarding home ownership, but car ownership to. For instance if you buy a car you have no payments for 12 months and if you lose your job in those 12 months the company takes the car back with nothing owed, any time in those 12 months.
Hmmm.i....interesting, haven't heard this before.
Patricia Aulson/Portsmouth NH Real Estate
If I may throw one more plan in the mix please -
Genworth Mortgage Insurance offers (thru lenders who have signed up) job loss protection as a borrower benefit of private mortgage insurance. There is not a bump in rate / fees /points. It is part of the same basic MI premium. The coverage provides that if you lose your job within 3 years of settlement, your mortgage will be paid up to $2,000 a month for up to 6 months. Please feel free to ask any questions you may have.
wow! definitely a great idea! Thanks for sharing.
Margaret, I have been doing some research on these products - Awesome that your company has jumped in.
I am also trying to do some research on this. Thanks for all the information.
These are great programs for uncertain economic times... Wonderful article, Margaret!
Margaret: This sounds like a great opportunity.. I would love to get more information on details of this type program.
Hi Margaret -- The problem I have with all these marketing gizmos is that the fine print is never disclosed, it would be nice to see the full contract on the web with all the costs, risks, pros and benefits laid out, not just the positives.
Wow, great post Margaret. I had no idea there were so many JLP Plans. Thanks for the info.
Adri
Adriana - You're welcome. If this market doesn't improve soon, we'll probably see a lot more of them.
Chris - This is a blog post, NOT a contract, so of course it hits the highlights and not the details - although it certainly does provide a fair amount of information for anyone interested in the program my company offers. I assume you clicked through on the links I provided and read the many pages of information about the Rainy Day Foundation and the HELP program? If you still have questions, I'm sure someone there would be happy to answer them.
Roland - Long & Foster is an industry leader, and that's one of the reasons I returned to them in this market after 20 years with a national franchise. But this program is not exclusive to them... click through on the links I provided to learn more.
Jesse - Thank you. I know that "Job Loss Protection" is one of the reasons my daughter got her mortgage through Bank of America last summer, so obviously it can make a difference in a customer choosing one lender over another, or one broker or one home over another...
Kristi - I hope the links in this post help in your research.
Jo - Hopefully my sellers will agree, since this is only a seller option - at least with my company.
Alice and Jim -'Couldn't help noticing your company name. "Loveless" is my maiden name.
Steve - Yes, by all means. Thanks for providing that info!
Sherry - Sorry, I have to delete your comment - If you have any questions, please read the ActiveRain community guidelines.
Patricia - I suspect we'll see this more often if the unemployment concerns don't go away soon.
David - You're right. I've seen those too. GREAT idea!
Donna and Norma - What is it they say... Necessity is the month of invention?
Fran - Good analogy!
Great post with lots of insight.
Some mortgages from Bank of America have insurance and some workers are unaware of it. They also sometimes waive overdraft fees if requested. Car notes too like with Americredit. It never hurts to ask.
Aloha, Lana
Margaret - this is really great information for buyers, and something they probably all, regretably, need to think about. I am pleased that we have a program here in CA, but as you accurately point out it IS only for first time buyers. But I believe there are other programs out there. Someting every buyer should ask about.
Jeff
Margaret,
I didn't know these plans existed. Thank you I have bookmarked this post. I hope you include this information in an email newsletter....I found it very helpful.
I expect several lenders will be offering programs like this to be competitive. Find the best one for you or just call Margaret she seem to have all the answers.
Margaret, what a great idea to "boost confidence" to highlight job loss programs and their differences. No excuses not to buy now.
Hi Margaret...What an impressive selling feature. That should appeal to a number of buyers.
Kate
There's another one in California through the California Association of Realtors that I did a post on a few weeks ago.
Job loss protection is a great idea. Never thought of it with homes. Like it though.
Interesting concept Margaret. It would be great to know how effective this is for putting a buyer on the fence into the market or buying a particular home.
Bill - We're just rolling this out, so I don't know the answer to that. But I do know it was a factor in my daughter getting her home financing from Bank of America last year, since it was the only thing to differentiate one lender from another.
Chuck - I think we're going to see more of solutions like these if things don't turn around pretty soon.
Christine - That looks like a good program. I saw several posts on it, and the one thing that seems to differentiate it from ours (aside from the fact it's a statewide program vs. company program) is that L&F's is not limited to first time buyers. It looks like California's is.
Kate - We'll see! I hope my sellers opt to offer it.
Gary - That's the idea!
Hi Margaret,
Thank you for a great post. It is great for getting buyers off the fence. Great job.
Jerry Gray CRB,CRS / Prudential Carolinas Realty / Winston Salem, NC
Sounds like a great idea and that is the top concern keeping buyers on the fence these days. Very timely post.
Margaret,
I saw the LONG & FOSTER plan covered in an INMAN news article the other day and have been intending to research more about it. Thanks for providing additional links. Isn't it ironic how REALTORS, due to our Independent Contractor status, are ruled out. We're always available with answers but there are rarely any for us!
The California Association of Realtors is providing one for free. I have bloged on it. Is it perfect, no. Is the price right, yes! It is one of the best tools CAR has provided.
Wow, now that's not thinking like a Realtor, it's thinking like the client. What a wonderful idea, and what a value added service.
What is the world coming too, you can lose your job now and sat on your butt for almost a year.
Car payment MADE
Kids tuition Made
Hospital bill made
and now your house, all the while drawing unemployment, collect benefits from charitable organizations. Does anyone think about who pays for all this. US he working people that are on commission and have no benefits or small business owners. We think this is great but bailouts are unconscionable.
This is how the government teaches people to rely solely on them and quite thiking for ourselves.
Hi Margaret~ I love this idea. I didn't know there was such an opportunity. How expensive is something like this?
FILLED with information. Great job Margaret and congrats on the featured post.
Hi Margaret - This is a very interesting program. Thanks so much for sharing!
Thank you for acknowledging the elephant in the room. After reading all the ernest posts here on Active Rain for more than a year I feel I've taken in a lot of valuable information that would be very applicable to the former way of life in the USA. All of the superior marketing ideas, enhanced customer service, new business models are not going to really make a difference to significantly reduce the inventory of homes and falling values unless an effective way to address buyer's lack of confidence and anxiety over job security.
Now I know real estate is local. I just hope most of you never have to face the kind of horror show we have been watching for several years here in Michigan. I've watched lots of responsible, successful ,folks who had great credit scores, plenty of equity in their homes (talking 30,40,even 50%) lose thier jobs and in the current national economy their net worth. You bet people are scared, and they'd be fools not to be.
At least you have offered a tool that may be a step in the right direction. Government is not going to get us out of this. The famous tax credit for first time buyers is WAY too limited(why only first time buyers, with such limited income restrictions?) What's $8000 when none of us can really say if the house someone buys today is not going to be worth less than that by the end of the year?
I've read stories, strategies and advice from many superior people in the real estate business in Active Rain. Harnassing that power effictively and coming up with a plan that works is what could contribute to a healthier market.
Cecilia - Elephant, gorilla... who cares. Yes, Michigan has been a nightmare (my brother is one of those people who lost a bundle on the sale of two properties when he left Chrysler for a new job in Calfirnoia with Kia. And, as he says, California is the only place worse off than Michigan. 'Bet job loss protection costs more in those states than the $500 with my company in the Middle Atlantic.
Christianne - You're welcome.
John - Thank you!
Vickie - Based on the AR posts I found, it can be as low as FREE (if someone else is paying for it) - with my company-wide program, it cost the seller $500 at settlement. If the buyer is not eligible (military, retired, self employed) the seller pays nothing.
Charles - Well, in the case of the L&F policy, benefits are limited in amount and timing. I don't see where this is a lot different than disability, car, healtth or home insurance, if something unexpected happens. I'll bet you have those.
Joe - That's what we gotta do... think like a buyer.
Gene - I noticed several posts about that program and think it's something REALTORS across the country should offer. In our area, my company is at the forefront with it.
Kimberly - I know... I thought the same thing. But I guess we're not at risk of losing our jobs.
Lyn - Hopefully it will get some of them off the fence... at least the ones who are considering my listings.
Jerry - Glad you found it helplful.
Terry - All the answers... I don't know about that. It does seem that specifics vary, depending upon who is ofering this benefit. I think the Rainy Day Foundation might be a better place to turn for those answers.
Rebecca - The closest thing I get to a newsletter is my local community blog, and I plan to write something for it next week. I wanted to wait until there were some comments on Activerain so I could address any common questions on FocusonCrofton.com
Jeff -Hat's off to the California Association for offering this. I would think some of the larger companies (your local version of Long & Foster) would jump in to fill the void by offering it for other buyers.
Lana - They say "necessity is the mother of invention" and I think this offering is exactly that!
Sorry it took me a while to catch up, folks. I value your comments and didn't forget you!
What a great idea to assist sellers in this market. The tough job is convincing the seller of the additional benefit for the cost.
Scott, you're right, but most sellers expect to pay some closing costs or drop the price, and this is only $800. In this area, there's a fair chance the buyers will be military and the cost will never kick in.
Margaret....wow, wow! This could really be a win win situation! Get the Buyers to act, and get the listings to move. I'm going to look into this more. I only glanced at the website, but I presume this could be offered here in GA?
In this market we need to innovate to stay afloat!
Thom and Ray - Click through on the link for Rainy Day Foundation. My company is working with them and their HELP Plan, and some of the other AR posts indicate they are, as well. 'Don't know if they only work with companies or if they're available to individuals. Even if it cost more for an individual, I think it's worth making available to our sellers. (As I understand it, the cost would be prohibitive to offer it to buyers directly)