Ultimately, realtors rely on the lender to advise buyers about their financing options. Yet, it is equally beneficial as a realtor to be knowledgeable about current creative financing solutions. Using Tactic #10 from SHIFT (Keller), realtors can guide their clients to ask their lender for creative financing options to purchase their preferred home.
Gaining Financing Knowledge
Now take a deep breath. Realtors do not need to know every nuance of creative financing. As Keller stated, “You only need to have a clear understanding of the market, the players, and their options. With this knowledge, you can effectively expand the choices for your buyers and sellers and leave the details to your financing specialist.”
The best and easiest way to keep on top of your knowledge is to meet individually with two loan officers each week. Schedule them ahead of time so that it is a standing appointment. Use the time with the loan officers to discuss and work through any issues the market, you, or your buyers are facing or anticipating.
Creative Financing Basics
Here are a few basic ideas and options to consider with any transaction:
- Options for sellers should include contributions or concessions, buydowns, or owner financing.
- Options for buyers may consist of family member contributions/gifts, co-borrowing depending on credit scores, and IRA or 401K funds.
- Options for lenders include Government Funded or Bonded Programs like low-income first-time homebuyer programs, municipal or regional grants, and merely resubmitting loan applications through automated programs to review needed qualifications.
Current Issues and Trends
An expensive market. Combat this by making sure the buyer truly understands what they qualify for financially, how much they can afford for a down payment (or receive from down payment assistance), and closing costs. Encourage a buyer to continue saving, consider their wants versus needs, and expand their search to additional neighborhoods.
Lower than ever mortgage interest rates. This is great for all involved. Buyers will want to lock into low rates, and sellers will benefit from motivated buyers.
Millennials are a majority percentage of current buyers. Be sure to keep up with technology, such as virtual tours, highlighting the location and perks, and understanding what millennials want in a home. According to Housing Economics.com, this includes a laundry room (86%), patio (81%), garage storage (80%), and a walk-in pantry (79%). Working in conjunction with loan officers, buyers, and a seller’s real estate agent is the best way to find creative financial solutions for a successful transaction. Have you had a recent breakthrough or know of some fantastic financial resources for buyers? Add a comment below or send us an email.