“America’s housing dream is broken,” claims a CNN.com headline. The New York Times wants us to know that “The Housing Market Is Worse Than You Think.” Finally, CNBC.com resorts to the scary stuff with an article about “… how much equity U.S. homeowners have lost since May.”
Is it any wonder that homebuyers, already fatigued by competing with multiple buyers, watching home prices skyrocket (seemingly overnight) and, now, escalating mortgage rates, are beyond frustrated?
Is it impossible, as many think, to buy a home? While it may be challenging, you and I both know it’s not impossible. At least not for many Americans. They just need a lot of educating, counseling, and, maybe, a whole lot of hand-holding.
Are they aware of the ins and outs of mortgages?
Naturally, you’re hesitant to get too deep into the mortgage weeds when advising clients. After all, you’re most likely not a financial expert and, therefore, shouldn’t be counseling clients about financial subjects.
You can, however, suggest that they get to know and understand the following concepts and strategies and talk them over with a lender:
- Discount points – Discount points, also known as points, lower a borrower’s “… interest rate in exchange for paying an upfront fee,” according to the experts at the Consumer Finance Protection Bureau. Pass the link on to your clients for an excellent description of buying points and the pros and cons of doing so.
- Adjustable-rate mortgage – The loan of choice for the past few months, adjustable-rate loan applications have “… more than quadrupled since the start of the year,” according to Melissa Dittmann Tracey at nar.realtor. This may be the ideal solution for a buyer who plans on staying in the home for a reasonable length of time. Get the house with an ARM and then refinance into a fixed mortgage when rates drop. This strategy is not without risks, however.
- Help them strategize coming up with a heftier down payment – Yes, this is a tough one for an agent to suggest. It may mean putting a hot buyer on hold for a time. April, however, is right around the corner, and if your client is expecting an income tax return, depending on the amount, it could go a long way toward helping to lessen the impact of a higher-than-expected mortgage rate.
Keep an eye on the news
If ever there was a time for Congress to act quickly, it would be now. Several bills remain in the works from last year that can greatly ease the pressure on hard-hit, moderate-income homebuyers.
Keep an eye on Congress because if any of these passes, it could be a boon for your clients.
- The First-Time Homebuyer Act of 2021. Introduced in late April 2021, this act revises the IRS code to provide first-time buyers up to $15,000 in tax credits. At the time of this writing, the act sits with the House Ways and Means Committee.
- Downpayment Toward Equity Act of 2021. This program will be administered by HUD to “… states and other entities to provide qualifying assistance to certain first-time, first-generation home buyers in purchasing their first homes,” according to the bill’s text.
- LIFT Homebuyers Act of 2021. Introduced in September 2021, The LIFT Act will provide 20-year fixed-rate mortgages for “… first-time, first-generation homebuyers whose incomes do not exceed a certain amount,” according to the bill’s text. These loans will be offered by Rural Housing Services or the Federal Housing Administration (FHA).
Homes & Life Magazine is the ultimate “Coffee Table Lingerer”! …and it costs less than sending a greeting card! – Click Here
2. The Free 12-Month Done-For-You Strategic Marketing Plan
The Real Estate Marketing Planner is a powerful 12-Month-Guide that strategically defines what marketing to do and when. Four key market segments include niche Markets, geographic farming, sphere of influence, and past clients. – Click Here
3. The BusinessBase, SOI building system
The most effective thing you can do to build a real estate business is to become more visible, more likable, and remembered more often. The BusinessBASE™ not only checks all of these boxes but is also a business-building machine. In two easy steps, you can begin to build a robust sphere of influence that will provide you a lifetime of repeat business and referrals. – Click Here
4. The Free Interactive Real Estate Business Plan
The Free Interactive Real Estate Business Plan allows you to enter your business goals for this year and get a breakdown of how many prospects, listings, closing, and so on are needed to reach your goals. – Click Here
5. The Become a Listing Legend Free eBook
Ready to take a vertical leap in your real estate career? If you’re looking for inspiration…and the tools and methods to dominate a market and go to the top in real estate…you’ll find them in this free book. – Click Here
6. The Take a Listing Today Podcast
Watch the ProspectsPLUS!, Take a Listing Today Podcast for actionable content to help you get more listings. – Click Here