June was dubbed as National Homeowner Month by the Housing and Urban Development Authority (HUD). This is the time to highlight the importance of keeping homeownership dreams alive and the myriad benefits we offer to families, neighborhoods and communities around the country.
Homeownership continues to be one of the top wealth building actions you can take in the US. According to the National Association of Realtors, 99% of US metropolitan areas experienced a year-on-year price rise in the first quarter of 2021, with the median existing detached home selling prices rising at 16.2% per year. This shows that home equity continues to be a wealth aggregator, indicating a long trendline.
Without a doubt, the current climate continues to change as the state begins to reopen, and workplaces will develop plans to return to long distance work, taking into account the pandemic experience. But through confusion you can be a guide to your realm. Whether an individual is trying to buy or struggle with these times, here are things they can do to keep their homeownership dream alive.
Fact check for fear
It's scary to plunge into homeownership, and first-time home buyers may express the fear and uncertainty surrounding the process, especially during market shifts, by considering the transition from tenant to homeowner. If that happens, prepare to act as a trustee and respond empathically, giving clients clear and objective thoughts as they share their emotionally based fears. Below, how to provide clients with a sense of security as they share the most common fears with homeownership.
1. “You have to wait until the real estate market gets better.” There's no wrong time to buy a proper home. Historically, focusing solely on the market is not the best approach to buying a suitable home. Whether it means right or not, whether it's the right price or the right property, the market rarely works for you.
Making real estate a robust investment is a long-term factor. Earning money on real estate is one of two ways. It's about taking place at the right moment to buy a home before the price is appreciated, or holding it long enough over time, and giving your purchase investment right.
2. “There's no money for a down payment.” Many people believe that buying a home requires a significant down payment, but that's rarely true. As a first-time home buyer, options are always available that require far less than the intimidating 20% down payment that people seem to consider as the norm. Some options can be as low as 5%.
“House hacking” is also a great way to make homeownership more affordable. Simply put, house hacking means buying a property like a single family home or double, and leasing one of the bedrooms or units. The reality is that there are many legal and sound funding options to choose from, and it only makes sense to investigate what suits you, your situation, and what's right for your pocket book.
3. “I can't buy a house because my credit isn't big.” A non-perfect credit score doesn't necessarily prevent you from buying a house. There are usually two types of credit challenges. It means that you have a bad credit history or no credit history. Even if your credit score is lower than your ideal, talk to a few lenders and explore your options. You may be happy and surprised by the outcome. In many cases, debt or mortgage experts should help you solve your challenges. Often by showing how you can move or integrate your debt, or by referring to a credit counselor who plans to plan.
If you're not used to the workforce or don't regularly purchase with credit, you may not have a credit history at all. One common approach for first-time home buyers is to secure funds with the help of co-signers, such as parents and relatives, who want to withstand the ability to make payments. Alternatively, you can find lenders who are willing to use alternative forms of payment history, such as student loans, rents, and utilities. There is no better way to improve or establish a credit rating than having a mortgage and making timely payments.
4. “You need to pay back your student loan before you buy a house.” Student loan debt does not prevent you from buying a house. More than ever, student loans are a greater burden for first-time home buyers. According to a survey conducted by the Actuaries Association, “about 31% of millennials have student loans, reporting significantly higher than previous generations.” Having a loan should not hinder your homeownership journey, but they have two ways of impact on your mortgage: payment history and debt to income ratio. If you want to buy a home, it is important not to delay or pay your debts.
It takes time to lower the debt-to-income ratio. So if you want to buy a house and need to lower the ratio, you need to plan. Contact your financial advisor and save money from your monthly salary and be proactive in whether you can use it as an additional payment or increase your monthly payments.
How to calculate debt-to-income ratio: Add all your monthly obligations, including credit card invoices, student loan payments, car notes, and more. Next, multiply the result by 100 to get the percentage.
Helping at-risk homeowners
Events over the past year can leave some of your clients in extremely difficult financial situations and struggle to pay your mortgage. It's time to come from a place of care and provide resources and information to the realm about protecting your investment. Take the time to educate yourself about the resources your customers have. The National Association of Realtors offers a comprehensive, risky homeowner guide, not just a regular updated hub, as well as a comprehensive, risky homeowner guide, for free, on how Covid-19 has impacted the market and available resources.
Become an agent of change
You will address the very roots of the issue by reaching out to your local board and taking part in policymaking advocating for easy access to your homeownership dreams. In Pennsylvania, he created the real estate background by submitting HB 2412 in April 2020 using former president of the Pennsylvania Real Estate Association and current PA House member and KW Agent Todd Polinchock. Nevertheless, the governor has signed an executive order that allows businesses and employees in the real estate industry to carry out limited business-related activities.
Initiatives that change systems, such as Polinchock, are situations. The Equality Act (a bill, such as the US Congress bill, that, if passed, prohibits discrimination based on sexual orientation and gender identity in a number of areas, including housing) is a long-term marathon with the power to further promote the dream of homeownership. “We don't have federal protections for people based on sexual orientation or gender identity right now,” said Dave Gelverse, a Florida-based agent. “By having that protection, LGBTQ+ people are maintained from their homeownership dreams.”
As Gervase shows, not everyone is on an equal footing when it comes to achieving their homeownership dreams. And as an agent of change, you have the power to become part of change that makes your dreams available to all demographics. But getting up and fighting barriers doesn't happen just by billing and regulations. The newly appointed director of inclusion and belonging Julia Lachey Israel will drive change by pouring her experience into the role of volunteers. In support of moving homeownership forward in minority communities, Israel has lent its voice to the Minnesota Association of Realtors and the National Association of Realtors' Housing Opportunities Committee to establish the Twin Cities Nareb Branch.
“As real estate agents, we have the knowledge and information to help build and develop our community,” she shares. “For me, volunteering is a citizen's duty.”
Provides virtual options
As we return to some degree of similarity in normalcy, some clients may feel uncomfortable with being completely immersed in pre-pandemic times. Remove health and safety-related home buying barriers to entry by making it virtually easy for clients to connect. Virtual Open Houses are time-tested techniques for agents who deal with buyers who cannot move and see their new home. And virtual homeownership seminars like this have stepped into the forefront of how agents are doing business in a way that is compassionate towards their clients.
Free Virtual Homeowner Seminar Presentation Template
If you are an agent of Keller Williams, the KW app has made it easier than ever to allow clients to participate in real estate transactions from anywhere with phone services. You can digitize your home buying and selling experience by giving people the option to search through their postal code, school zone, or nearby features. We provide you with the best options possible via our featured list. Or schedule a virtual tour through the app.
There is still much to do to keep your homeownership dream alive. Both are about understanding that homeownership dreams are within reach, educating them, educating them, and arming our community with empowering information to change the process of achieving their dreams. Take your time this month to think about your role in shaping the future of homeownership.
What do you actively do to keep your dreams alive? Be excited and inspire.
