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Getting a Pulse On Homebuyers

October 6, 2014
From Loan Officer Joy James

From Loan Officer Joy James

Real estate professionals were recently asked in a survey* to sum up what they are observing in the market when it comes to buyers’ knowledge, decision-making, and temperament. What they shared highlights opportunities to provide more effective information and communication that may lead to more deals.

What Did Real Estate Professionals Say?

  1. Most buyers don’t know much about affordable loan programs.  Most of those who responded knew about these programs, but said just 20% of their buyers did! Clearly, there is a huge disconnect. Why don’t buyers know about options that could help them get into a house sooner? If more of them were aware of loans like zero down USDA loans, VA loans or FHA options, would there be an increase in housing activity by new buyers?Takeaway: There is an untapped market of people who may be interested in buying, but think they cannot due to financial limits. What an opportunity! Sharing information with potential buyers about loan programs should be a priority. Ask your loan officer to partner with you to provide information and materials to communicate regularly about these programs.
  2. Real estate professionals spend significant time talking with buyers about financing. According to the survey, 64% of them talked about mortgages with their last buyers, and on average they spent about 2.5 hours on the topic.Takeaway: Real estate professionals are often the first point-of-contact when it comes to mortgage discussions, and it’s something that can take up a lot of their time. What can lenders do for their partners to make that time more efficient and effective?  How can they extend services to help real estate professionals in that aspect of their deal?   It seems wise to simply ask these professionals what they need from a lender. It’s well worth it… the survey learned that 80% referred their buyers to a lender, and one third always recommend the same lender.
  3. First-time homebuyers are hesitant to enter the market, and loans are hard to get.

Of those who responded to the survey, two out of five cite low property inventories and the difficulty in securing a home loan as reasons first-time homebuyers are staying out of the market. A quarter of respondents said inflated prices is also another factor they worry is keeping buyers away. More than half surveyed said they think buyers are compromising on amenities and the home they choose because there’s not enough of a selection to begin with.

Takeaway:  Anything a lender can do to communicate the mortgage process clearly and methodically to buyers and real estate colleagues can set the right expectations.  Underwriting is more strict than it was a decade ago, but many homebuyers are being approved. Since rates are still very low, this is still a great time to buy a home.

* http://realtrends.com/blog/only-one-in-five-home-buyers-are-familiar-with-affordable-loan-programs

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