“How many lenders must I shop to be certain I receive a competitive price?”

If you have access to valid price quotes, three is usually enough. If you don’t have access to valid price quotes, you won’t get a competitive price no matter how many lenders you solicit.

Valid prices are prices that the lender would be willing to commit itself to at the time the price is quoted. Differences in valid prices posted by different lenders are small, which is why you don’t have to shop many lenders. The reason is that 95 percent of all new mortgages today are either sold to Fannie Mae and Freddie Mac, or insured by FHA or VA, so that the federal government assumes virtually all of the risk.

The residual risk to the originating lenders, that they might be required to buy back loans or, at an extreme, lose their right to originate, is small and does not result in large price differences between them. Some lenders are more efficient than others, but price differences from this source are also small.

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The challenge faced by mortgage borrowers who want to shop is that most price quotes are not valid, and soliciting them is a waste of time. Invalid prices can be quoted to shoppers with impunity because shoppers can’t say, “Yes, I’ll take it,” until the information upon which the price is based has been confirmed, by which time the market will have changed.

Valid mortgage price quotes meet all of the following conditions:

They come from the internal pricing system of the lender, which I call their “posted prices,” with no intermediation from loan officers. Loan officers are not bound to quote posted prices, and it is common for them to quote prices below the posted price, called “lowballing,” in order to induce shopping borrowers to commit to them.

They are fully adjusted for all loan features that affect the price, such as credit score, type of property, purpose of loan, down payment, etc. The list is a long one. If anything that affects the price is left out, the lender assumes whatever generates the lowest price, which may or may not hold up.

For example, many lenders price loans without asking whether the borrower wants to escrow taxes and insurance. If in fact the borrower does not want to escrow, the price will have to be raised.

They include all price components. This means not only the interest rate and points but also other lender fees that are often left out of price quotes.

They are current as of the time of the quote, not as of the day before. The borrower shopping several lenders must do so on the same day, and to be safe within the same hour of the day, since prices are sometimes adjusted during the day.

Valid price quotes are available on the Internet if you know where to look. Every mortgage lender has a website, but few provide valid prices on them. Most are designed to entice shoppers to identify themselves so that they can be contacted by a loan officer who will give them a sales pitch.

But some lenders provide valid prices on their sites while allowing shoppers to remain anonymous until such time as the shopper elects to contact the lender. These include the seven Upfront Mortgage Lenders that I identify on my website. Shopping them is doable, if a bit of a chore, because each site is programmed differently and the shopper must visit each on the same day to extract the desired price data.

Much the better way to shop is on a multilender website where the site maintains valid prices for multiple lenders, which it presents in one single format for easy comprehension and comparison. There are three of those: mortgagemarvel.com; zillow.com; and mtgprofessor.com, which is mine.

Don’t confuse multilender sites with lead generation sites, such as lendingtree.com and lowermybills.com, which do business with hundreds of lenders. These sites do not collect price data from lenders. Rather, they collect financial information including Social Security numbers from shoppers, which they sell as leads to lender clients.

These lead generation sites first identify the lenders who have indicated an interest in the particulars of a lead, and they sell the lead to the three or four lenders who will pay the most for it. The shopper then gets sales pitches from three or four loan officers who are under strong pressure to lowball the price because that is often the way to win the deal.

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With almost 80 million potential Gen Y renters due to enter the market, developers have been creative over the past 12- to 24-month cycle to meet their demands. And this tech-savvy, massive demographic is not always easy to please.

But Rohit Anand, a design principal at KTGY and Jeff Kayce, vice president of Bozzuto Group, offered insight into what Gen Y renters can expect this year during a webinar sponsored by the NAHB on Wednesday. And for 2012, Anand and Kayce say there are 12 “must-haves” for any Gen Y-friendly apartment project hoping to stay competitive and offer the greatest return:

1. Location, location, location.
Location is the key consideration for this demographic when it comes to choosing an apartment, ranking above price point and amenities, according to data from J Turner Research. Anand says it’s possible to follow the latest development cycle in Washington, D.C., along the city’s metro lines, because projects that are more than 20 minutes from business centers and recreation are not succeeding as well as those that offer an easy commute and are within biking or walking distance to entertainment.

2. When it comes to amenities, think like a luxury hotel.
Developers should start taking cues from the hospitality industry, Anand says, where an apartment complex targeting Gen Y can foster a social environment with friendly gathering areas, sophisticated entryways, and decor that emulates a trendy hotel extending throughout the property.

3. Make the most of your space and make common spaces multi-use.
Kayce says recent Bozzuto projects, including the Gen Y–friendly Fitzgerald Apartments in Baltimore, have offered mixed-use rooms that maximize space, including a fireplace lounge that doubles as an open-style business center. “By allowing one space to bleed into the next, there’s no set prescribed use for that room,” Anand says.

4. Niche amenities are key and should be specific to every project.
A dog park and wash at one property might not work at another. Garden space might succeed at a suburban property much more than an urban one. That’s why resident surveys are key, Kayce says.

5. The leasing experience today is not what it once was.
While in another cycle, a separate, private space to sign leases might have been important, Gen Y renters don’t value that as much. Kayce says Bozzuto residents at certain properties like to use the leasing space as an available lounge where they can even socialize with potential renters. But he notes that those properties still maintain private office space to deal with other resident problems as they arise.

6. Fitness is still high in-demand for this demographic.
Kayce says Bozzuto is now designing properties with up to 2,000 square-foot fitness centers.”The fitness center has become much more than a couple treadmills,” he says. “Gen Y desire holistic, relaxed lifestyles, and we’re doing fitness with an eye to that.” That means Gen Y renters aren’t going to be satisfied with a view of the parking lot by their yoga room, Anand adds.

7. Blur the lines between indoor and outdoor spaces.
Gen Y renters want to extend their outdoor options for more months of the year, even in colder climates like the Northeast and Seattle, Anand says. That means amenities like fire pits and heat lamps are high in demand, along with canopies and other covered spaces.  

8. Offer flexible unit plans, because this demographic likes to customize.
Anand compares a Gen Yer’s apartment to their iPhone: They buy the basic layout but then customize it with their own apps. That’s why he says features like movable kitchen islands and flexible walls and barriers are popular with this demographic.

9. Gen Y renters like unique finishes.
With smaller units, that often means edgy features that include glass and light. But what’s edgy today is constantly changing. “Whatever interesting finish we do for one project, is not cool enough for the next,” Kayce says. But rich, clean and unfussy finishes consistently do well.

10. Gen Y renters want sustainability, but don’t want to pay for it.
Research consistently suggests that this demographic values green living, but that doesn’t mean they are willing to pay more for it. “It’s corporately critical,” Kayce says. “Most renters will not pay for it, but do expect it.”

11. Internet marketing and social media are essential.
Sixty percent of Bozzuto’s leads for leases happened online in 2011, with drive-bys ranking next at 20 percent and referrals at 16 percent.

12. Staying creative is key in a market that could easily be overbuilt in the next few years.
Staying  fresh, creative and distinctive is key when targeting Gen Y, a demographic that will eventually have higher incomes and grow into the need for more space, Kayce says. That’s why innovation is so important. “We’ll all be in trouble if we start creating the same thing,” he says.

“Going solar” doesn’t have to cost you an arm and a leg … nor does it necessarily mean a big investment of time and materials. In fact, you can complete the small-scale sun energy project pictured here in only a few minutes—using a handful of common household items—for as little as 15¢. And, once the device is assembled, the efficient little window greenhouse can be employed to start early garden seedlings or to raise greens and radishes through the winter.

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Supplies and Construction

The first step in constructing the cardboard conservatory is to gather the necessary materials … all of which can probably be found right in your own home. If you have a closet or attic full of empty cardboard boxes, choose one that measures about 12″ X 12″ X 16″. (Folks who don’t have a ready supply of containers on hand can usually pick up cartons—for free—at large supermarkets.)

 

Next, you’ll need a 24″ X 30″ (11-gallon capacity) plastic garbage bag. For best results, the bag should be translucent white, and at least 1.75 mil thick. You’ll also want to collect a few feet of aluminum foil, some strong glue, thumbtacks or tape, a few clothespins, and a generous quantity of garden earth or commercial potting soil.

To make the simple device, cut off the top of the box diagonally, but be sure to do so at an angle that will leave a 4″ lip on the container’s front. Then glue a length of aluminum foil (with its shiny side out) to the inner surfaces of the carton’s three large sides (this protective layer helps to insulate the greenhouse and to concentrate the solar heat on your seedlings). Next, spread the trash bag out flat and slit it open along the sides and the bottom, creating two rectangular pieces of about 24″ X 30″ each. Cover the bottom of the greenhouse with one of those plastic sheets, and fasten its edges securely—with tape or thumbtacks—about three or four inches up the inner sides of the box. The plastic layer provides further insulation, and prevents any water from leaking through the cardboard. (If you want to ensure doubly effective protection, you might decide to use a whole garbage bag … but doing so could boost the final cost of your sun-grabber by as much as another dime!)