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With all the talk lately about whether the housing market is improving or not comes a new study from BMO Harris Bank reporting that over 50% of Americans say they will buy a home within the next 5 years (More Buyers). I wonder if this study includes illegal aliens, or should I say undocumented visitors. I digress…
This comes as good news amid fears that the economy is not growing as it should with many consumers still having difficulty buying and maintaining homes. According to the Harris report, many consumers are willing to pay about $296,000 for their new home, with a 20% down payment. That would equate to a mortgage of around $236,000. Not bad for starters.
Most of those responding say they plan on getting pre-approved for their mortgage before shopping and that they will enlist the services of a Realtor when they decide to buy. Good news for both lenders and Realtors.
Lenders need to be prepared with online applications which will attract potential buyers looking to get pre-approved providing them ease and convenience. The more information a lender provides to prospective borrowers the more borrowers will gravitate toward their products. Information, convenience, availability and service will win the day.
This is one area where the CFPB can help. On their website, they offer a myriad of good information for use by consumers when shopping for, buying and financing their home. Lenders may link to this information or choose to utilize it to create their own educational materials. Either way a better educated homebuyer makes for a better quality loan.
Once potential buyers are pre-approved, lenders can work with Realtors providing them with qualified, interested buyers looking for homes. This will benefit the consumer, the lender and the Realtor. Once they find a home, it’s just a matter of agreeing on price, updating their mortgage information and going to settlement. This is a win-win-win for everyone.
It’s time for lenders to become more proactive in bringing the consumer into their process. Rather than sitting back and waiting for consumers to shop for, and buy a home, lenders should become much more involved in the process.
Advertise and offer information about the home buying and home financing process and options, and push for pre-approvals. Tout the benefits of being a buyer already approved for a home loan, armed with information that will help them find and buy the right home at the right price for them.
The Harris report shows that consumers are going to buy, and we know they will. It also shows that things may be changing with people preparing in advance by budgeting and getting pre-approved before they decide to shop. This is smart and may be the result of the Millennial “look before you leap” mentality. Regardless, it’s a good thing.
All lenders and realtors need to do is prepare for the business. That shouldn’t be so hard.
Loading ...If you keep on doing what you’ve been doing, you’ll keep getting what you’ve been getting. If that’s not good enough; the game is changed, play different.
