Looking for a potentially untapped market in your area that could help you increase your client base? According to a February survey from the National Association of Home Builders (NAHB), first time home buyers accounted for 43% of new home sales.
First time home buyers often need a lot of extra help due to their inexperience and the overwhelming nature of home buying. That’s where you come in. Here are some helpful tips and resources for working with renters and other potential first time home buyers.
Tips For Making Unbeatable Offers
Although there are a lot more first time home buyers right now, we’re also in the middle of a “low inventory” market. Here is some helpful advice, courtesy of Realtor Magazine, that can help your hopeful homeowners beat the “competition.”
- Put in an escalation clause – the buyer must be willing to go a certain amount over the best offer.
- Waive contingencies. If the appraisal comes in low, the buyer doesn’t ask for a lower price.
- Put a bigger, earnest deposit down. This last suggestion can be a major pain point for many first time buyers, so here are some resources you can share with them.
Down Payment Assistance Resources
- First time home buyer government programs available in every state
- There are also plenty of federal options available
- Here’s a list of mortgage Lenders with first time home buyer options
- See if your client can use a personal loan from friends or family (something 52% of homebuyers did last year) to get more funds for a down payment
Managing Your Client’s Expectations
As you know, the market can be fickle. Even when you help your client do everything they can to get the house they want, the low interest rates, high demand, and “low stock” market may make your client want to stretch a little too far. But according to Lutalo McGee, owner and managing broker of Ani Real Estate, and team leader of The McGee Team in Chicago, you need to ensure they don’t do this.
“You don’t want your clients to overspend or buy a house they later regret,” McGee says. “You need to prepare clients to be emotionally prepared for the possibility of finding a home they didn’t envision, or for paying more than they expected.”
McGee says once you look at the comps, pricing trends, and average time on the market, you need to be forthright with your client and tell them if they need to move on to another property that will work better for them.
What are some ways you’ve been helping first time home buyers? Let us know on social media!