For many clients looking to buy for the first time, the path to homeownership is full of potential hurdles, from rising prices, tough loan limits, and massive competition among other eager would-be buyers, it can seem like an impossible feat.
For these clients, homes in their price ranges are often highly coveted and stories abound of buyers having made offers on numerous homes, only to be shut out time and again by multiple offers that drive prices up and out of their budget.
As a real estate agent or broker, you can be in a position to help these clients by demonstrating the importance of your experience and education. As an agent with extensive experience and good industry relationships, you can help find them homes that may not be listed yet and then negotiate a winning offer.
A key first step for first-time buyers is a preapproval. Many real estate agents won’t even take clients out to tour homes unless they have received their preapproval amount from a lender. Even if a client is only casually looking, make sure they talk to a lender before they head out on a house hunt. You don’t want a client to fall in love with something and lose out on owning it because someone else was already preapproved and they first had to start pulling your paperwork together. Nor do they want to fall in love with a house that’s out of their budget because they weren’t sure of where their purchasing window was.
If there are rental homes in your target area (and there probably are!), a client might have an opportunity to buy a home that isn’t even on the market yet—and might not be listed for sale anytime soon. For these clients, we can demonstrate how we can serve as a go-between to initiate a conversation about the potential of purchasing. Some rental home owners may want to sell but be reluctant to take the steps to update the home and get it on the market.
Clients in this segment might have better luck purchasing a home that isn’t updated or staged as they often stay on the market longer. A home that’s a real fixer-upper can be a great buy thanks to the 203(k) loan, which packages the home loan and money for needed repairs. There are a number of improvements that can be made with a 203(k) loan, including bathroom and kitchen remodels, additions, HVAC, plumbing, and flooring. Luxury improvements are not included.
Clients also can look outside their target neighborhood. For young families that are looking to get their foot in the door and make sure their kids have access to great schools, looking just outside their target neighborhood can be a great way to go.
Another option is a transitioning neighborhood. As an agent, it is important to help clients find an area that is going to appreciate — and is also going to meet their current needs.
The obvious draws of buying a home in a transitioning neighborhood are: more affordability or more home for the money, and the possibility to make some money as the neighborhood changes.
Clients also can raise their budget to achieve their goals. Even an additional $20,000 can open up more options.
Lastly, clients can go back to their lender. If they have already been looking for homes at the top of their approval range, they may want to have a conversation with their lender. There might be a way to reconfigure the loan options to get more money to spend.
