Network News

X My Profile
View More Activity

Long & Foster Adds Job-Loss Protection

People worried about losing their jobs don't buy houses. That's why rising unemployment always puts an extreme drag on home sales; both the jobless and the employed-but-worried stay away from the market.

Long & Foster Real Estate is trying to coax the employed-but-worried into the market with a new job-loss protection program. Agents throughout the company are just getting training on the new "Buy Confident" program, which will be rolled out shortly through all of the company's offices in the mid-Atlantic. Some new-home builders have started offering such protection on their sales, but it's rare for the coverage to be offered on resales marketed through a giant brokerage such as Long & Foster.

The details:


  • Sellers who list with L&F can choose to add the coverage to their listing.

  • Cost is $550, paid out of the seller's funds at closing.

  • If a covered buyer involuntarily loses his or her job during the 24 months of the mortgage, the plan pays up to $1,800 of the mortgage per month for up to six months. That's a maximum payout of $10,800.

  • It's available on all types of homes, including condos and vacation or investment properties.

  • If you've already listed with L&F, your agent can still add the coverage to your listing.

  • Buyers can find out if a home comes with job-loss protection by looking for comments written on the Multiple Listing Service entry, or by keeping an eye out for special placards on "For Sale" signs.

  • Buyers should not assume all L&F listings carry job-loss coverage.
  • I asked Glen Phillips, chief risk officer for Long & Foster, why the brokerage wasn't making the coverage available automatically to all its listings. He said coverage is one of several things sellers can do to enhance the competitiveness of their home in the marketplace, such as buying a home-repair warranty or upgrading the landscaping. "We don't have the opportunity to dictate to our clients what they spend money on," he said.


    Sellers -- Do you think it's worth $550 on top of your commission and other expenses?

    Buyers -- Is the coverage enough to overcome job-loss jitters?

By Elizabeth Razzi  |  April 16, 2009; 6:00 AM ET
Categories:  Buying , Mortgages , Selling , The market  | Tags: employment, home buyers, home buying, home sellers, job loss, mortgage, selling  
Save & Share:  Send E-mail   Facebook   Twitter   Digg   Yahoo Buzz   Del.icio.us   StumbleUpon   Technorati   Google Buzz   Previous: Update: More Guilty Pleas in Mortgage Scheme
Next: Vacation Homes And the Weekend Poll

Comments

It's a great idea, any word on how effective its been at getting people to buy cars? A couple companies have been running similar deals for months now.

Personally, nothing can replace the piece of mind of a good emergency fund, but I am the most financially cautious person I know. I certainly wouldn't want to limit my home purchase to only those listings that were offering this program, so if I didn't have an emergency fund I wouldn't start looking just because some sellers are offering this.

Posted by: kingstowne_renter | April 16, 2009 9:40 AM | Report abuse

It's a nice idea and a (relatively) cheap way to calm buyers' anxiety about entering the market, but like the protection plans being offered on car loans (check out http://consumerist.com/5194063/people-havent-returned-hyundais-bc-they-werent-yet-eligible), the restrictions probably make it all but certain no one will be able to benefit from it. Who's L&F using to underwrite it? I'm guessing AIG isn't going to come up with the money...

Posted by: crunchyfrog | April 16, 2009 12:44 PM | Report abuse

I think this needs to be expanded with the help of some federal aid - poor homeowners are already under water on homes they could not afford to buy in the first place - now we need to find qualified buyers to tie this dead-weight around more responsible necks.

Gimmicks before the eventuality that this was a bubble and the house wasn't an ATM machine ... it was a money pit!

Posted by: free_np | April 16, 2009 5:23 PM | Report abuse

The best part is ... we'll get someone that doesn't have $10,800 saved in a rainy-day fund into a $500-600k home - wouldn't that be an amazing achievement???

Doesn't it make putting a man on the moon sound trivial... This entire bubble, bust and solutions become so comical that I wonder how much longer this will go on and how much all these dead-beat loans will cost the tax payers....

Posted by: free_np | April 16, 2009 5:34 PM | Report abuse

This is just marketing.

Good marketing, but just marketing.

I think your lender has a similar program that can be rolled into your loan... but wait, don't tell your lender you might be scared of getting fired!

How is this for advice... if you aren't secure in your job AND don't have a large savings to protect you... don't buy!

Heck, renting is cheaper anyhow. Yep, even after tax breaks.

What a novel thought.

Frank
Broker FranklyRealty.com

Posted by: frank26 | April 18, 2009 11:50 PM | Report abuse

These kind of programs are popping up across the country, but this is the first time I have seen a buyer have to pay an up-front fee.

I agree with Frank: This is just marketing. What would be interesting is a follow-up in a few months about how many people have signed up. I bet the answer will be zero. If I was worried about losing my job or tight on money, the last thing I would do is fork over another $550 much less buy a home.

Posted by: cpang | April 20, 2009 2:21 PM | Report abuse

Note that it's the seller who pays and the seller who chooses to offer the coverage. Not the buyer.

Posted by: Erazzi | April 21, 2009 2:37 PM | Report abuse

The comments to this entry are closed.

 
 
RSS Feed
Subscribe to The Post

© 2010 The Washington Post Company