I realize we are in different professions, you and I.  But real estate is our common denominator.  So there is probably relevance in what I’m going to ask you:

In April of 2007 I changed my entire real estate strategy.  Did you?

What do I mean?  Let me explain.  March of 2007 was like a nuclear winter for me.  I had three closings set for the end of the month.  For two of the closings I was the buyer’s agent.  For the third I was the seller’s agent.  For all three, there was a different mortgage professional handling the transaction.

All three buyers (including my two) had marginal credit and only marginal business buying more investment property.  But my job is to give advice, not make decisions for people.  They wanted to buy, they had pre-approval letters from reputable lenders in their hands that stated all of them (remember, none knew each other) were more than qualified to purchase these said investment properties with no money down.

Remember the 100% non-owner occupant loans?  Remember March of 2007? 

My first clue that life was about to change came mid-month.  A mortgage professional I know and trust called me to give me a heads up.  Things were changing quickly, he said and he didn’t know if this loan would be able to go or not.  I asked him to keep me updated. 

To make a very long story short for your  benefit, all three loans died a gruesome death.  It was not pretty for the buyers, the sellers or their real estate agents.  And it wasn’t pretty for the mortgage guys who gave out the pre-approval letters, as you might imagine. 

So here comes April 2007.  What was I to do?  Get a job?  (I usually can’t hold one because they are so confining.)  I didn’t want to do that again.  So instead I got honest.  I had been allowing people who really shouldn’t be buying to take up my time.  That had to stop.  I had four kids to feed, put braces on and a retirement to think about someday down the line.  I had to sell homes to investors because I can’t stand “regular” real estate. 

Starting in April 2007 I quit working with marginal loan qualifiers.  Now, I’m not saying that God doesn’t love these people.  These are good people, too.  But good people won’t pay MY mortgage. 

Today, I insist on a pre-qual by one of my lenders.  A minimum of 10% down and a minimum credit score of 700, 720 for the self-employed. 

Now my business is stronger than ever.  Funny thing.  When I made the mental shift my business took off.  I haven’t had a failed closing because of financing since.  Even in this current credit market.  That’s a powerful statement when all you work with is real estate investors. 

Did you make the shift?  Or are you still chasing B or C paper?  (Is that the term?) Again, I’m glad I did.  Now it’s all blue skies and sunshine.