I have the privilege of talking to many would-be home-buyers, that’s what I do. You would be surprised how much they understand the market relationship of low inventory at particular price points and high rent. High rents are partly caused by declining inventories of available, affordable homes.
It’s frustrating to spend a significant percentage of monthly income on rent – and rent doesn’t generate any equity. To add insult to injury, the renter misses out on significant tax advantages of a mortgage.
How Do We As Agents & Lenders Help These Customers?
Long Term Relationships –It is important that buyers develop long term, trusting relationships with real estate agents and mortgage lenders.
Agents and lenders are competing for buyers – and buyers are competing for the affordable listings that are available, putting the sellers at the advantage. Sellers often receive multiple offers and bidding wars have become quite common. It is important that agents and lenders have strategies, outside of just the highest offer, to make their buyer the most attractive.
However, we must realize a competitive market is not necessarily a bad market. Homeowners are certainly due their return on investment. Obviously, the renter wants to enter the ranks of homeowners so they can get their return on investment too.
Back to the question – how do we as agents and lenders help these customers? The answer is relationships, knowledge, and execution.
The agent who understands the needs of the buyer reacts quickly in a changing market. The lender who has a keen understanding of all mortgage products equips the buyer to present a compelling offer relative to other bidders. The point is this, relationships between buyers, agents, and lenders are crucial in a competitive market.
Relationships & Knowledge – Keys to Strategy
Knowledge – Understanding the connections between a buyer’s financial condition, housing inventory, and mortgage products is vital to purchasing a home.
A reputable lender has many wonderful mortgage products at their disposal. These products give financing options to a lot of potential buyers. Products such as USDA, VA, Conventional, FHA, and Non-Prime all have features that make buyers attractive to sellers. If your lender doesn’t have a working knowledge of these products, the buyer will be at a competitive disadvantage.
Likewise, the real estate agent that has knowledge of the market will give a competitive advantage to the buyer. These agents act quickly and fulfill buyer requirements while meeting the financial expectations of the seller. A strong relationship between the agents, the buyers, and the lenders ensures the perfect home is financed with the right mortgage.
The Execution Phase
Execute – The real fun begins once the relationships are in place. Naturally, the nest step is executing a Purchasing Plan and visiting listings. The Purchasing Plan must match buyer’s needs, financial ability to purchase, and seller requirements. A well-executed Purchasing Plan will maximize the buyer’s ability to own their dream home.
Maximizing purchasing power relative to the available inventory requires constant communication, partnership, market research, and financial review by the real estate agent, the lender, and the borrower. It is a team strategy that requires knowledge, relationship, and communication. Executing a well thought-out Purchase Plan usually results in happy homeowners.
