Real estate agents see business edge with homebuyer education
If the fall housing market remains brisk, real estate agents will have plenty of new clients with varying levels of knowledge and preparation. Is my credit in order? How much home can I comfortably afford? How much should I put aside for a down payment? Am I ready?
Those questions reach beyond the purview of many agents — but are important nonetheless, notes Dawn Lane, a broker with Professional Realty Group in Las Vegas.
“I want an educated buyer more than anything in the world,” Lane tells REALTOR Mag. “If we take that minute to really educate our clients about what’s expected before we even put them in our car, it’s going to be easier for them to go through the transaction.”
For some buyers the knowledge gap is very real.
A recent study examining consumers’ understanding of mortgage qualification criteria reveals consumers are confused by the requirements and unfamiliar with resources that can help them.
The good news is independent expertise could be a click or phone call away.
Homebuyer courses — whether taken online or taught in classrooms — cover the basics like budgeting, credit, shopping for a mortgage, home inspections, insurance, how to work with a real estate agent, and what to expect at the closing table. For borrowers who need more in-depth advice, one-on-one services are available through HUD-approved housing counseling agencies nationwide.
These services are “useful for all clients — those entering the market for the first time or even making a second or third home purchase,” notes REALTOR Mag.
Many real estate professionals try to act as full-service providers able to solve any problem or answer any question, notes Joe Weisbord, director of credit and housing access at Fannie Mae, whose HomeReady® mortgage requires prospective buyers to take a HUD-approved homeowner course. Because “people don’t like to admit what they don’t know,” he says.
“Connecting clients with unbiased information to help them understand choices they’re going to make is good business,” Weisbord says. “It’s less likely that unknown circumstances will arise that will lead to the sale falling apart.”
Aiding Adult Learners
HomeReady mortgage borrowers complete an education course from Framework Homeownership that costs $75. The course draws on research of best practices in online learning. “We’ve learned that content tied to emotional information is more readily retained,” Framework’s president Danielle Samalin tells REALTOR Mag.
Framework employs motion-graphic videos and homebuyer stories, among other content. “Most people complete it within a day of signing up,” she adds.
Framework gets high marks from first-time and repeat homebuyers, says Weisbord.
Fannie Mae is expanding options for people facing barriers to homeownership. The company recently widened its support for borrowers who complete 1:1 counseling with a HUD-approved housing counseling agency, he adds. In-depth programs “position buyers who may struggle with the lending process to successfully purchase once they’ve built up their savings or repaired their credit,” according to REALTOR Mag.
“The counseling industry is very excited about this change and happy to be recognized for the great work that they do,” Weisbord says.
Homebuyer courses aren’t sure-fire ways to help clients qualify if they’re not ready. Some might be told they’re not ready to purchase. That’s still good for the agent in the long run, Lane tells REALTOR Mag. “I’m not afraid of losing [a client]. If someone wants to rush and make a bad decision, I don’t want to be a part of that. It’s important in our business to take our clients through a rigorous fact-finding mission.”
Making a sale today may be a short-term win, but the way to build a real estate career is through a chain of referrals, Anne McCulloch, senior vice president for credit and housing access at Fannie Mae, tells REALTOR Mag. “And people who don’t succeed are not the best referrals,” she adds.
For Lane, referring clients to these courses is a way to make her value proposition, as a real estate professional, stronger. “Every time you provide something for a client, you build that bond,” she says. “It’s a way to separate yourself from the herd, a long-term relationship-building opportunity,” she tells REALTOR Mag.
Source: Help Clients Get Smarter About Ownership by Beth Franken, published on REALTOR Mag, October 2016.