For many of your clients, buying a home will be the largest expenditure of their lives. Help your clients make the best home buying decision possible. Pass along these secrets to them.
- Interest rates are rising. Currently, the 10-year Treasury indicator, which serves as a proxy for mortgage interest rates, stands at 3%. 3% is lower than the average of 4% but the 10- year Treasury indicator has increased by roughly 0/6% just since the beginning of 2018. Mortgage interest rates have also increased some 0.6% since the beginning of the year. All this means that, if you are prepared to own a home, begin your search process as soon as possible because it’s highly likely mortgage interest rates will continue rising throughout the year.
- Expect to pay near the full asking price. Home inventory supplies are at historic lows; homes are selling for record level prices. Prepare yourself for a bidding war on a well priced home in good condition with desirable amenities.
- Be prepared to make an offer quickly. With confidence running high about the economy and home inventories low, the housing market is highly competitive. Make sure you are prequalified so you can make a meaning offer, an offer you can back up, quickly on a house you like.
- Work with professionals. That means working with professional real estate agents who know how to guide you through the buying process and get you your best house for your best price. That means working with professional lenders who know how to guide you to your best home loan.
- Know when to walk away from a transaction. Remember your finances throughout the transaction. If you wind up in a bidding war for a property you love, don’t get carried away in the process. Remember you have to pay for the property over a very long haul.
- Understand the requirements of buying a home. There are many more rules for buying a home today than there were just 15 years ago. Know the rules (the credit rating, debt to income ratio, credit score
- If your finances are tight, know your loan options. Just like home buying rules, there are more loan options available today than there were 15 years ago. For example, there is TD Bank’s Right Step program, which requires a down payment of only 3% when your household income is lower than 80% of the area median income.
- Research government programs for home buying help. Here are just two of such programs…the Federal Housing Authority, FHA, offers loans with down payments of just 3.5%. Ask about seller assistance programs where the seller helps pay for closing costs.
- Go online to get general information about houses for sale, neighborhoods, prices, etc. but have a professional real estate agent corroborate that information. Online real estate accuracy rates range anywhere from 80% to 3.6% in some locations.
- Check out foreclosures. The foreclosure rate in the country is now at a 12 year low but, even still, there are some 676,500 homes encumbered with foreclosure. The main problem with foreclosed houses is lack of information about them. Banks that own foreclosed properties have no obligation to disclose any information. On the other hand, foreclosed homes can potentially be purchased at substantially discounted.
