Editorial
Front Page - Friday, December 24, 2010
Chattanooga real estate agent works unique niche
David Laprad
Crye-Leike real estate agent James Downey has a knack for finding niches in the housing market to serve. He’s currently helping people with past credit problems or no credit at all get into a home.
- David Laprad
Place Crye-Leike agent James Downey in front of a seemingly impenetrable brick wall, and he’ll find a way through it. He’ll step back, take in the big picture, and then move in close to examine every square inch until he finds a small opening no one else saw. This skill has served him well in his profession. While many agents are doing their best to survive in a challenging market, Downey has found a niche that actually grew out of the current housing situation.
He’s used this approach since obtaining his real estate license in 1991.
“I researched the market and discovered you could pay a homeowner for the equity he’d acquired in his house and take over his payments. That law ended in 1989, but you could still do that on properties financed before that time. It was a niche in the market. I advertised it, and it turned out really well,” he says.
Downey rode that gravy train until it ran out of steam three years later. His next niche: getting people into a residence with no money down.
“We were still in a recession at that point, so I teamed up with a new investor at Quail Hollow Condominiums who’d let people do a lease-to-purchase with no money down. I sold quite a few condos over there,” he says.
Downey found his next niche – first time homebuyers – in the mid-’90s. By the early 2000s, he was producing $7.5 million in annual sales. He’s still working the same angle today, although when the market hit a brick wall in 2007, he had to find a niche within his niche.
“My key to selling houses is to learn about the programs that are out there to help people get into a house. So at the moment, I’m working with people who haven’t owned a house for three years or who have had a foreclosure, or who have had a bankruptcy, and they want to start over. If you haven’t owned a home in three years, you’re considered a first time homebuyer and can quality for a number of programs,” Downey says.
For example, lenders approved by the Tennessee Housing Development Agency will accept a credit score of 620, whereas other lenders rarely go below 640, Downey says.
Downey can also help people with no credit score by using alternative credit sources such as utility bills. He even helped to secure financing for someone who was making payments on a gravesite and a veteran who’d been dishonorably discharged.
“We’ve all made mistakes, but there’s still hope out there. Some people won’t believe it until they’re holding the keys to their house,” Downey says.
Downey says securing a niche in a competitive market isn’t easy. An agent must put a lot of time into identifying an area in which he or she can do business without an immediate return on the investment, spend a considerable amount of money on advertising, and utilize a bit of ingenuity.
“You also have to work on your past customers. About 60 percent of my clients call me when they’re ready to buy another house,” he says.
Once Downey settles into a niche, he rarely works outside of it. For example, he currently pours most of his energy into acting as a buyer’s agent. While he does list houses occasionally, he says it’s not his forte.
“There are people in this area who are good at listing houses, and that’s all they do. I’m not good at that; I’d rather sell,” he says.
Offering a specialized service allows Downey to become skilled in his area. One of his specialties is calculating how much house a person can really afford – a process that involves asking wrong questions until he asks the right one.
“I had a well educated, top of the line lady earlier this year tell me she could afford one price, but not another. Then I asked her if she had any storage. She said was paying $150 a month on storage, but had forgotten about that when deciding what kind of house she could buy. I told her a nicer house would still cost $43 less than her rent and her storage bill combined,” Downey says.
Downey says he loves looking for things other people don’t see and finding ways to help his clients achieve what they want. While he doesn’t feel personally rewarded, he says he enjoys making his customers happy.
“Of course, there will always be people you can’t make happy. I run into a couple of those a year. One guy came to the closing and accused me of not telling him he was going to have to pay interest,” Downey says, shaking his head.
One of the reasons Downey has succeeded in his current niche-within-a-niche is he knows the housing market inside and out.
“I know which companies look for what, and which underwriters are the most strenuous. I keep the current interest rates in my head, and I know where properties values are lower and higher. I can tell someone who’s looking to buy a $130,000 home in Hixson that his taxes will be cut in half if he moves ten miles down the road to Soddy Daisy, which will help him qualify for more of a house. That’s all a part of the package,” he says.
Downey was born in North Chattanooga and attended Chattanooga High School. He sold awnings at his first job and then worked for Red Food for ten years. When he was 30, he put his house in the Brainerd area up for sale, and his listing agent talked him into going to real estate school. Although he says 2010 has been hard, he’s looking forward to better days.
“The recession hurt people financially, and while the underwriters are still tight, they’re starting to look at the big picture: the kind of backup buyers have, whether or not they have established credit, and when they don’t, if they have good letters of credit from their phone, cable and power company. Things are getting better in terms of financing,” he says.
Whether the market is up or down, or the path to homeownership is clear or obstructed, Downey will surely find a way to serve his customers and make a living in the process.
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