It appears that the mortgage rate hikes have resulted in first-time buyers and others on tight budgets getting priced out of the market.
But there may be a way around this challenge.
Even though fixer homes aren’t as rock-bottom cheap as in the past, they can still present value to this pool of buyers.
And there are various loan programs that support the fixer home purchase. Let’s take a quick look at the two most popular: FHA’s 203(k) loan and Fannie Mae’s HomeStyle® Renovation Mortgage.
The FHA 203(k) Rehab Loan
If you haven’t had an opportunity to work with FHA rehab-loan buyers recently, there are a few changes you may not be familiar with.
The FHA 203(k) product, for instance, has new names for its two tiers:
The 203(k) Full loan is now known as the 203(k) Standard.
The 203k Streamline is now known as the 203k Limited.
Along with the new names came some small changes to each product. For instance, “Repairing or removing an in-ground swimming pool is allowed on both 203k Standard and 203K Limited loan programs with no dollar limitation as to bid amount,” according to the pros at Amerifirst Home Mortgage.
Other notable changes include:
The 203(k) Standard now allows for foundation work to take place even when the home isn’t going to be razed.
The Limited program now requires that the buyer submit a work plan wherein “… one or more contractors will provide the cost estimate or bids.”
Other changes were also made, and you can review them at Amerifirst Home Mortgage’s website.
Fannie Mae
Fannie Mae’s HomeStyle® Renovation Mortgage is a conventional loan backed by the GSE. The advantage this presents for your struggling clients is that “As a government agency, Fannie Mae exists to help make housing more affordable to mid- to low-income borrowers …” and those with “… poor credit histories and scores,” claims Lauren Bowling at Rocketmortgage.com.
This product is also ideal for those clients seeking a multi-unit home, such as a duplex, triplex, or quadplex, Bowling adds.
Naturally, there is a lot more to learn about these loan products, and you’ll find this information online at:
PLUS: When you have time…below are some marketing tools to help support your success.
1. Put Your Real Estate Business a Step Above with Your Own Branded Magazine
Homes & Life Magazine is a customizable magazine with rich, full-color content and a sharp, professional aesthetic. It includes compelling, direct response-driven articles written by real estate industry experts and engaging lifestyle content. Send out Homes & Life Magazine in Just Minutes – No Minimums Required. Or we’ll ship it to you. Homes & Life Magazine is the ultimate “Coffee Table Lingerer”! …and it costs less than sending a greeting card! – Click Here
2.The Free 6-Month Done-For-You Strategic Marketing Plan
The Real Estate Marketing Planner is a powerful 6-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 Free Interactive 6-Month Real Estate Business Review
The Free Interactive 6-Month Real Estate Business Review allows you to enter your business goals for the remainder of the year and get a breakdown of how many prospects, listings, closing, and so on are needed to reach your goals. – Click Here
4. 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
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.
The First Time Buyer Series is shown above. To see more designs, Click HERE.
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.
PLUS: When you have time…below are some marketing tools to help support your success.
1. Put Your Real Estate Business a Step Above with Your Own Branded Magazine
Homes & Life Magazine is a customizable magazine with rich, full-color content and a sharp, professional aesthetic. It includes compelling, direct response-driven articles written by real estate industry experts combined with engaging lifestyle content. Send out Homes & Life Magazine in Just Minutes – No Minimums Required. Or we’ll ship it to you.
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
One thing that hot and heavy real estate markets bring is anxiety for buyers. In slower markets, homebuyers have time to leisurely view homes for sale.
Today, they have to act so quickly they let common sense fall by the wayside. Remorse sets in and, can you blame them?
Buying a home is a huge financial commitment and feeling rushed or challenged in a bidding war can make even the strongest buyer develop lingering doubts.
Think about buying a car. Unless you walked onto the lot knowing exactly which make, model, and year you wanted, you may have had to do some comparison shopping. When you finally narrowed down the choices to one, did you hear that little voice in your head that questioned your choice?
The First Time Buyer Series is shown above. To send a one-time mailing, Click Here. To send a recurring campaign, Click Here.
“Am I making a huge mistake? Maybe I should choose the Nissan instead of the Honda.”
That, my friend, is known as “cold feet,” and it’s the first symptom of a full-blown attack of buyer’s remorse.
Knowing the signs puts you in a position to help your client and save the deal, so let’s unpack this.
Watch out for these warning signs
Not all buyers prone to remorse will exhibit the same symptoms, but do pay attention if any of the following occur:
The buyer is concentrating on the minutia when deciding whether to make an offer. “Asking about when the roof was replaced or how old is the water heater are good questions and the buyers are thinking straight,” suggests Conor MacEvilly at myseattlehomesearch.com.
“But when they start asking about the wine stain on the living room floor, the hairlike crack in the kitchen ceiling, and the dripping bathroom faucet before making an offer, you are probably going to end up with one extra picky buyer …,” he concludes.
The buyer complains of feeling “rushed” or pushed into making an offer. Whether this is because you are actually rushing them (please don’t) or market conditions are putting pressure on them, pay attention to this warning. This is the time to remind them that contingencies are their friends and that nothing is a done deal until those are removed.
Deal with it
Always insist on a buyers’ consultation session before viewing any homes for sale. This is your opportunity to learn more about them and to get a feel for their motivation. It’s an important factor when judging whether they will stick with a deal.
During the consultation, ask them their reasons for buying a home. Here is what you should hope to hear:
Their monthly housing payment will remain stable (at least with a fixed rate loan)
Build wealth
Tax advantages
Freedom to own a pet and make changes to the home
Starting a family or a growing family
Need a larger home to accommodate an aging parent
Just moved to the area and need to move quickly
Want to cut their commute time
While there are others, these are strong motivations for a homebuyer. When feet appear to be getting cold during the buying process, remind your client what motivated them to buy in the first place.
PLUS: When you have time…below are some marketing tools to help support your success.
1. Put Your Real Estate Business a Step Above with Your Own Branded Magazine
Homes & Life Magazine is a customizable magazine, with rich, full-color content, and a sharp, professional esthetic. It includes compelling, direct response-driven articles written by real estate industry experts, combined with engaging lifestyle content. Send out Homes & Life Magazine in Just Minutes – No Minimums Required. Or we’ll ship it to you.
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 when. Four key market segments are included, 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 it is 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
Too many Americans who want to buy a home feel they can’t because they don’t have the cash to put 20 percent down on the mortgage.
Yes, we know that 20 percent is “so yesterday,” but the general public is still operating under this illusion, specifically first-time buyers.
In fact, according to a NerdWallet.com survey, 44 percent of Americans think that the 20 percent down payment figure is written in stone.
Sadly, the respondents who don’t currently own a home said that what’s holding them back is the lack of this large down payment.
It’s safe to say that the down payment is one of the biggest obstacles to home buying today. And, it doesn’t have to be.
Get the word out to renters that there are various first-time homebuyer programs that many can qualify for.
We rounded up four that we think agents should bone up on.
1. Fannie Mae’s 3-percent-down mortgage
Launched a few years ago, Fannie Mae’s Conventional 97 is a brilliant alternative to the FHA-backed loan. In fact, it is “among the most in-demand programs for today’s homebuyers,” according to Dan Green at TheMortgageReports.com.
Conventional 97 is what FHA used to be — ideal for both the first-timer and repeat homebuyer who lacks a large down payment. While borrowers are still required to purchase mortgage insurance, the premiums “are usually less expensive than those of comparable FHA home loans,” according to Green.
4 Mortgage Options, Direct Response Report, Click Here
Best of all, according to Tim Lucas, editor at MyMortgageInsider.com, borrowers can qualify with scores as low as 620, and “gift funds can be used for the down payment and closing costs.”
Speak with your preferred lender to learn more about how to sell this to potential homebuying clients who think they can’t afford the down payment for a home.
2. Freddie Mac HomeOne℠ loan
If your preferred lender isn’t among those conventional lenders approved to offer the HomeOne loan from Freddie Mac, it’s time to add another to your vendor list.
Like Fannie Mae’s loan, it allows you to help your eligible first-time homebuyers achieve the dream of homeownership.
Features include:
No income limits
No geographical limits
Allows for the purchase of a single-family home, condo or townhome
Buyers are required to have at least 3 percent for a down payment and a credit score of at least 620. If first-time buyers, borrowers must agree to attend a buyer education course.
Naturally, there is more to know about Freddie Mac’s HomeOne loan. You can get the details either from your preferred lender or online at SFFreddieMac.com.
3. Freddie Mac Home Possible®
Freddie Mac offers an alternative to the HomeOne loan and that’s the popular Home Possible mortgage. This program is ideal for your lower-income buyers who lack a big down payment and require “flexible sources of funds.”
These sources can be family members, employer assistance “secondary financing and sweat equity,” or a combination of these, according to Freddie Mac’s website.
Your buyer’s qualifying income (on an annual basis) cannot exceed 80 percent of the AMI.
There’s a 3 percent down payment, but unlike other similar programs, a borrower can quality for 105 percent LTV with Freddie Mac’s Affordable Seconds®.
Consider mentioning Home Possible to your very-low to low-income buyers, move-up buyers, and retirees.
4. HomePath Ready Buyer™ program
Another Fannie Mae program, HomePath Ready Buyer, offers 3 percent down payment assistance for qualified borrowers who agree to participate in an online homebuying course and then purchase a HomePath property.
The bonus for agents whose clients use this program is that you end up with a client prepared for the process.
It’s important for you to understand your part in the process as well. Your client will need to request a course completion certificate and then you’ll need to include it when you submit the offer on a HomePath property.
“The request for closing cost assistance must be made at the initial offer in the HomePath Online Offers system,” according to information on the HomePath website.
The website includes the verbiage the buyer’s agent needs to use to make the request for closing cost assistance for the buyer. You’ll find that when you scroll to the bottom of this page.
Your buyer must not have owned a home within the past three years, they must agree to reside in the home as their primary residence and take possession within 60 days of closing.
There are plenty of other programs out there that will help you to assist reluctant buyers who think that they can’t buy without a huge down payment. Learn about them, then use them in your marketing.
Ready to generate some new listings to show your newly converted buyer clients? Launch a Get More Listing Campaign
They’re currently on sale 10% OFF the first month – (sale ends 8/14/21).
Get More Listings Scheduled Campaign (shown above). Learn more, HERE
TO LAUNCH A GET MORE LISTING CAMPAIGN:
Hit “CLICK HERE”, below, to schedule your campaign (from a desktop or laptop computer).
Use promo code: LIST10 to save 10% off the first month.
And, remember, YOU DON’T PAY for each mailing until it actually goes out (cancel or change each mailing up until the night before it goes out).
Please reach out to our support team at 866.405.3638 with questions or if there is anything we can do to help you with your success.
PLUS: When you have time…here are some helpful resources we’ve made available to support your success.
1. 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 when. Four key market segments are included, Niche Marketing, Get More Listings, Geographic Farming, and Sphere of Influence. –Click Here
2. 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
3. Become a Neighborhood Brand
Become branded in a specific neighborhood with a 12X15 marketing piece sent automatically each month to an exclusive carrier route. Watch this video to learn more or Click Here.
4. The Free Real Estate Mailing List Guide
The Real Estate Mailing List Guide outlines the top tools for generating targeted prospecting lists including Baby Boomers, Empty Nesters, Investors, Lifestyle Interests, High-Income Renters, Move-Up Markets, and more. The Guide also defines done-for-you marketing campaigns to match these markets. –Click Here
5. 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 Free Online ROI Calculator
Consistency and automation are the keys to success. Discover how effective direct mail marketing can dramatically increase your bottom line. Enter your statistics in our Free online ROI Calculator and click the ‘CALCULATE MY ROI’ button to see your results instantly! –Click Here
7. The Free Real Estate Marketing Guide “CRUSH IT”
The “Crush It” Guide includes easy steps to launching an effective direct mail marketing campaign, how to create a targeted prospect list, the perfect way to layout marketing materials for success, seven opportunities available to target in your area right now. –Click Here
