New Buyers Agent? Be sure to Convey these 3 Mortgage Warnings to your Buyers
As a new buyers agent, you may still be learning the ropes. Now is the time to cultivate good habits and avoid making the mistakes that many other agents make.
One of the most prevalent among the latter is assuming that your clients know what they need to know during the home buying process.
In reality, most first-time buyers know little, if anything, about buying a home and are counting on their agents to guide them through the process.
Do them a solid and share with them the following 3 warnings.
1. Getting preapproved for a mortgage is non-negotiable
“For 41% of recent buyers, the first step that they took in the home buying process was to look online at properties for sale,” according to the NAR’s Profile of Homebuyers and Sellers.
Yes, the prospect of buying a home is exciting, and without knowledge of the process, some folks jump right over the baby steps of shopping for a lender, loan preapproval, and interviewing buyers’ agents. They hop in the car and start looking at homes for sale without even knowing how much home they can afford.
It’s a recipe for disappointment
Knowing how much they can spend is paramount, both in avoiding wasting your time and theirs.
Then, there’s the fact that sellers and their agents want to see a preapproval letter.
Experienced agents know well the couple that fell in love with a house they found open on a Sunday afternoon only to learn later that it was way out of their price range. Nothing you show them after that will stack up.
2. Help them understand the home loan process
Check this out: “41% of Americans who’ve never owned a home believe 20% down payments are required,” according to Maggie Davis at lendingtree.com.
These people are first-time homebuyers who are absolutely clueless about down payments. Yes, 20% down is best for the borrower, but a smaller down payment certainly doesn’t prohibit them from buying a home.
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So, although it’s a given that agents should counsel their buyers that they need to see a lender before looking at homes, they also need to warn their clients about the out-of-pocket costs involved in the purchase of one. Then, give them the good news about low-down loans and down payment assistance programs.
3. About that final credit pull
Because they aren’t fully tutored on the mortgage process, many newbie homebuyers rightfully assume that once they’re approved for a mortgage, they will remain approved.
They can relax.
Many are so eager to get started shopping for furniture, new appliances, and other items for their new home they run up hefty credit card tabs. Additional credit changes their ratios, and they may find themselves without a home to fill with all those purchases.
Remind your clients that it’s not a done deal until it closes. Changing jobs, making large purchases on credit, and allowing credit inquiries after loan approval have all proven detrimental to many buyers. The lender’s soft pull just before closing should be explained fully to your buyers.
Yes, we all wish that mortgage professionals would pass these warnings on to your clients, but they typically don’t.
Just consider these warnings as part of what we know will be the amazing customer service you will provide all of your buying clients.
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