A mortgage company recently conducted a consumer survey regarding the home-buying process. One of the key findings was that consumers spend more time selecting a TV than choosing their lender or real estate agent. While today’s buyers have access to more resources than ever before, the plethora of information can be overwhelming, leaving them lost and without a clear direction. This article offers three tips for real estate professionals to ensure we arm consumer with what they need to make better decisions during the home-buying process.
For real estate and mortgage professionals, the home-buying process is second nature. In contrast, for most people, buying a home is one of their most exciting and life-changing experiences. The process can also be confusing and stressful. And while today’s buyers have access to more resources than ever before, the plethora of information can be overwhelming, leaving them lost and without a clear direction. There are several key things that can help make the process easier. In this article, I offer three tips to ensure we arm the consumer with what they need to make a better decision during the home-buying process.
1. Make no assumptions
What we have discovered is that since we are used to the buying and lending process, we think it is easy and forget that most people are not up-to-date on the latest lending practices. What happens is we ask the question, “Have you ever purchased a home?” and when they say “Yes” we automatically think they know what to expect. Even when they say “No” to this question, we assume that they have a fundamental awareness of the process. According to our survey results this is simply not true. Only 59% of people surveyed said they have the financial education to purchase a home. It’s fair to say that if you are going to assume anything, assume that your customer is not familiar with the process and needs to be educated which leads to tip No. 2 — education is key.
2. Education is key
Navigating a new situation can be a challenge for anyone — and the home-buying process is no exception. As an industry pro, it can be easy to forget that many consumers enter the process with very little knowledge or familiarity.
In fact, our recent national survey revealed that 44% of today’s consumers find the home-buying process intimidating, with only 30% knowing where to even start. What’s more, many consumers admitted to lacking the financial education needed to buy a home. Of consumers who have not yet purchased, as many as 25% don’t feel prepared to make the financial decision, which can lead to risky home purchase behavior and elevated stress levels.
In the midst of a new federal administration, increased market volatility and an unpredictable housing market, buyers are even more uncertain about what to expect. Understanding their mindset from the beginning will not only help you better evaluate their needs, but enable you to better guide them through the process.
One way to educate the buyer through the process is to have a systematic approach to the buying process. While this sounds simple, if your process is not defined it can be easy to forget or be inconsistent. Document the buying process, explain it during the buyer consultation, and remind the buyer throughout the process. For example, “Remember we discussed that we are in the option period and your inspection is complete. What we will do next is review the inspection and create an amendment to negotiate repairs. After negotiating repairs, the option period will end and the lending process will continue in the background.” Create a visual representation of the process and include it in your buyer’s packet. Ask your preferred lender to do the same and include it as well. Then continually reference the process and the visual diagram as part of the education process.