To determine the top concerns of prospective homebuyers, realtor.com asked them. Put another way, realtor.com wanted to know what about buying a home made homebuyers most afraid or most reluctant to take the plunge.
As an attentive real estate agent you may want to consider speaking directly with your prospective buyers about some of these concerns from the get-go.
- Prospective homebuyers are concerned they cannot afford a home.
- Homebuyers fear the “black hole” of homeownership – no vacation, no new clothes, no food beyond mac & cheese/ramen/beans & rice because ALL their money goes towards the house.
- Reality…according to Bill Golden, an agent with RE/MAX Metro Atlanta Cityside…
- There are many down payment assistance programs to help first-time buyers (see last week’s post about loan assistance programs).
- The best way to determine financial readiness is to talk with a loan officer.
- Or, enter income, debts and other financial information into an affordability calculator from realtor.com, LendingTree, Zillow, etc.
- Prospective buyers are afraid they can’t buy a home they like.
- Today’s low interest rates mean more purchasing power. Prospective buyers will pay less over time.
- Reality…according to Tyler Ferguson, owner of Stone Reinvented…
- “With the economy being in a downturn, many fantastic properties are being sold for under value.”
- Many buyers are afraid they will buy a “money pit.”
- Reality…hire a good home inspector to flush out possible problems with water damage, electrical wiring, plumbing, foundation, mold, HVAC systems, etc.
- Home inspectors can also advise prospects about the cost of potential repairs…repair costs can also be used as leverage in negotiating for a lower sale price.
- Prospective buyers are very reluctant to overspend and be taken advantage of.
- Crystal Green, an agent with the Level Group in Manhattan, advises prospects to hire a good agent.
- “A good agent will know the price points of the areas and can back up those price points with historical data and comps.”
- Many prospects are afraid to buy during an election year.
- Green said, “If you’re feeling confident you’ll remain in the country (and not move to some other country) regardless of who gets elected and you’re fairly confident you’ll remain in a home for 3-5 years, you should net a profit from a resale.”
- Some prospective buyers think it’s “safer” to rent.
- It’s true that renting does not require a commitment to a mortgage payment, a down payment, property taxes, etc. BUT…
- Use a rent vs. buy calculator to actually crunch the numbers and see what makes the most sense.
- Scott Forman, divisional vice president with Cross Country Mortgage, said, “Rent money disappears without allowing you to build any equity (in the house) over time. That is what is truly scary.”
- Forman also believes that by paying $100/month more on a monthly mortgage payment than a monthly rent payment, a renter could actually own their own home, get homeowner tax deductions And build equity.
Also read: https://timandjulieharris.com/2019/09/30/low-interest-rates-bolster-august-existing-home-sales-and-refinancings.html, https://timandjulieharris.com/2019/09/28/record-high-average-fico-scores.html, https://timandjulieharris.com/2019/09/20/win-over-fsbos.html