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Supporting the Budgeted Buyer in Today's Market

Written by Posted On Thursday, 28 September 2017 09:40
Supporting the Budgeted Buyer in Today's Market

One of the main points we discussed in this months Facts and Figures call was the impact the housing inventory shortage is having on home prices. The combination of soaring demand and limited supply available has provided a wonderful environment for clients looking to sell their home – sellers get to enjoy fewer days on market and the ability to capture a greater percentage of the original listing price.

With that said, the steady rise of home prices means buyer dollars don’t get the same amount of house today as they would have last year. For many millennial and budgeted homebuyers eager to achieve their American Dream, this has forced the option of remaining renters back to the forefront of conversation.

In our last podcast we shared an astonishing statistic based on the research of the National Association of Realtors, and I want to share it again with you here as it is more prevalent than ever:

  • 90% of home-buyers are in the research and educational phase of the purchase cycle (6-12 months), and 10% are in the transaction phase, meaning they are buying in the immediate future;
  • Very few real estate agents spend time capturing buyers and sellers in the research and educational phase;
  • As a result, agents spend 98% of their time and money competing for that 10% of the market that’s in the transaction phase;
  • So, the true opportunity for business growth lies within cultivating prospective clients in the education and research phase…which is the path least explored.

Consider this for a moment: At the time of this report, it was concluded that 90% of home-buyers are in the research and educational phase of the purchase cycle – these are the prospective home-buyers seeking to become homeowners but not yet ready to make an offer. If rising home prices have begun to displace those of your clients previously under the belief that they could afford to buy a home now because they feel their budget no longer allows it, how much larger has that portion of the market grown? The further prices rise, the more people have to consider their immediate options – and it is our responsibility to ensure they have all the information they need to make the best decision.

The #1 opportunity in today’s market that will differentiate the good real estate agents from the great ones will be whether or not they go fishing in this less crowded pond.

Buyers typically rely on the real estate agent as their primary source of information – agents are the first person they reach out to when a decision is made to shop for a home.

As an agent, have you discussed your clients financial circumstances, educated them on the true dollar amounts required for downpayment or the various loan programs designed specifically with the cash-constrained buyer in mind? Do they know that there are programs that require as little as 3%, or in Finance of America’s case 0% down? Most mortgage lenders have a suite of programs designed to allow these same buyers to pursue their American Dream in today’s environment – but if they don’t know it’s possible because they haven’t yet been educated as to their existence, they will likely elect to remain renters and postpone their homeownership dreams until the market realigns with their misconceptions.

Our solution is one we’ve been working with our realtor partners on for years, and we are happy to share with you what has worked successfully for them – lead the charge in homeowner education. Host luncheons and events for prospective homebuyers with the tools and resources they need for making an educated decision as to the factual nature of their situation. Become the source of information when those buyers in the research phase prepare to take the leap. Share articles on social media, pass along episodes of The Shot or our Blog that cover these specific topics to your prospects. We are committed to helping you do this, so when you decide to take the next steps in becoming the leading resource for your communities home-ownership needs, we are here to help you with your next event and make sure you have everything you need to get the next deal!

The views of this blog, “Your Morning Shot” podcast, and on this site in general are solely those of the authors, Matt Weaver (NMLS-175651) and Zack Lewis, and do not express the views or opinions of Finance of America Mortgage. This is not a commitment to lend. 

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Matt Weaver

Matt Weaver NMLS# 175651 is a tenured mortgage professional located in Boca Raton, Florida. Considered an expert in his field, Matt Has successfuly closed 10,000+ transactions over his 20-year career primarily focused on the purchase market. He is currently the Vice President of Sales for Finance of America Mortgage, the first lender ever to be endorsed by Mike Ferry, considered to be one of the Most Influential People in Real Estate by the National Association of Realtors. 

Matt has consistently sought to go above and beyond the standard practices for becoming a respected mortgage professional, and credits his consistent levels of production to thinking outside of the box. A visionary, Matt built his mortgage business on delivering the most trusted pre-approval process in the industry and investing where others cut back by building out the operational side of the business to cater to the real estate agent sales cycle. As a result, Matt is frequently ranked as one of the top 200 Loan Originators in the country according to Scotsman Guide and Mortgage Executive Magazine. This same mentality is what lead Matt to become one of the only mortgage offices in the country with a dedicated research analyst on staff, reletlessly pursuing creative new ways to provide value to the bottom line of his realtor partnerships. 

As a result of Matt's commitment to the power of homeownership and emboldened vision for ingenuity within the industry, he has been asked to commentate on news outlets the likes of CNBC and Bloomberg Radio, sitting on the board of the Affordable Housing Committee of Boca Raton, founding the Just 1 Brick Campaign partnered with Habitat for Humanity, and co-founding the Generation O Project - a non-profit organization dedicated to freely sharing the significance of homeownership and laying the ground work for cultivating the next ownership generation. 

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