Here’s the deal plain and simple: Throughout much of the country, we’re still in a sellers’ market. Inventory is still slim pickings and many homes are getting multiple offers.
Buyers are also feeling the crunch of slowly (but surely) rising interest rates. As if that wasn’t enough, as the credit standard rises, more buyers are just simply giving up on buying a home for fear of getting rejected when applying for a mortgage. In fact, in a recent study from loanDepot, 46 percent of potential homebuyers have opted not to apply because of that fear.
The survey also says the fear of rejection is keeping potential buyers from even taking any steps to see if they could get a home loan. Of the 30 percent of the population who want to buy a home in the next two years, 74 percent haven’t pursued a mortgage or taken any action to see if they could get a loan at all.
What’s more, half of all Americans don’t even know what the minimum required FICO score to qualify for a loan.
The segment of potential buyers hit hardest according to loanDepot is younger buyers. Nearly half (48 percent) of all potential homebuyers who don’t currently own a home are between the ages of 25 and 34, many of whom are potential first-time buyers.
So what’s a Realtor to do when handed this sack of lemons? Here are four tips to make some tasty summer-time lemonade.
1. Polish up on your credit education. If you stop and think about this situation, it’s really a great opportunity to become a better Realtor, the Realtor of choice in your farm area. With a little time and effort, you can get a good handle on the basics and eventually be in a position to help your clients correct their credit reports and improve their credit scores. You don’t have to become an expert in credit scoring and credit repair, you just have to know enough so you can offer clients the information they need to do the work themselves.
2. Hold a credit seminar. Why not partner with a lender and hold a seminar in your area to explain the market and nuances of today’s credit market? This automatically makes you a go-to resource for consumers. It positions you as an expert and increases your credibility. Plus, oftentimes libraries will have space they’ll let you use for free or at a very reasonable price.
3. Get to know a great credit repair company. Do your homework though. Some in that industry aren’t as ethical as you might like. But the good ones are worth getting to know, and they can be a big help. In general, go after the companies that have been in business for at least three years. And check out their Better Business Bureau rating. Also, look for accreditation from a third-party national organization, such as the National Association of Credit Services Organizations
4. Stay in touch. Nothing lasts forever and that includes bad times. Always stay in touch with potential buyers just as you would potential sellers. If you don’t have a drip system that helps you stay in touch, get one and use it with prospective buyers. Work with them to ensure they’re taking steps to get their credit on track. By going the extra mile, you’ll begin to develop a reputation that stands out among your competition.
Let me hear from you. What’s the market like where you live? What are your buyers telling you? Do you have a pipeline of buyers? How can you help buyers to capture more business this summer? Do you have a plan?