The 2022 housing market is looking as if it will be another competitive one for potential homebuyers. Help your buyers be successful.
Buyers Need To Have Their “Ducks in a Row” in 2022
Jessica Lautz, vice president of demographics and behavioral insights with the National Association of REALTORS® (NAR), said, “If (potential buyers) want to get in (to the housing market) next year or before interest rates rise, get your ducks in a row now.”
Prices are projected to rise again in 2021, not to the frenzied highs of +19.5% in 2021, but by +11%, according to Zillow. Inventory, down -18% y/y in November 2021, according to Redfin, is projected to be even lower in 2022. And, rising interest rates, now almost a sure thing since the Federal Reserve announced three rate increases over 2022, are already fueling competition.
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What Real Estate Agents Can Do To Help Clients Now
- Agents, tell your clients that “…rates are still historically and extremely low now and it is still a great time to buy. If (some of your clients) need more time,” said Kevin Parker, vice president of field mortgage with the Navy Federal Credit Union, “I don’t think they are going to have a big difference in pricing.”
- Discuss paying down debt with your clients. As you know but they may not, lenders look at a potential borrower’s debt-to-income ratio or the amount of debt relative to income when calculating a loan. If your clients have no debt, encourage them to put whatever cash they have into savings that will help with a down payment.
- Encourage your clients to check their credit scores. As you know, but they may not, credit scores determine the type of loan your clients will get, how much they’ll need for a down payment and the interest rate they’ll be offered. Also encourage your clients to get a copy of their credit report so they can check for any errors and/or unpaid bills. Errors and unpaid bills most definitely affect credit scores.
- Your potential clients already have a real estate agent, right? You as their real estate agent “…will,” according to Jeff Tucker, Zillow’s senior economist, “be able to provide insight on the granular conditions in neighborhood and cities…”
- Encourage your potential clients to contact a mortgage lender so they can, at the very least, find out what they need to provide a lender in order to qualify for preapproval. (As you know, but your potential clients may not, your potential clients ought to get pre-approved for a mortgage before they begin their home searches.) Encourage your clients to use online calculators to learn what they can afford and whether or not it makes sense to buy or rent. Coach your potential clients about closing costs and down payment realities.
- Encourage your potential buyers to research low down-payment options such as FHA loans, loans associated with the US Department of Housing and Urban Development and local down-payment options.
- Encourage your potential markets to enter the housing market now in order to get a jump on listings opportunities that may come up just after the holidays. Zillow’sTucker said, “The competitive nature comes back pretty quickly after the holidays are in the rearview mirror. That is why this is a great time to prepare to be able to move quickly as the home shopping season ramps up.”
Thanks to CNBC.
