Two prospective clients stand before you, a nice couple intent on building a life. And you’re at an open house, hoping to find a buyer for your client. Maybe they’re the one?
They’re not, they tell you, and your heart sinks for a variety of reasons of which you’re all too familiar. Your buyer will be disappointed; the couple is a little crestfallen (as they love the house) and you are discouraged because you don’t want to waste your time either.
Forecast ahead and start to build a different kind of buying cycle for yourself and your business.
One that starts with the lovely couple right in front of you.
Sit them down and help them write a checklist of the things they need to do to become pre-approved prospective home buyers. Not only is this the right thing to do, getting people on track to their home purchasing dreams, but you will likely gain a future customer this way.
1. Commit to Following the Checklist
The first step to making buying a dream home a reality is the simplest: determine to have a checklist. Then make sure your would-be buyers follow it.
2. Clean up any Credit Issues
A lot of clients don’t realize what’s even on their credit report, that through ignorance they allow their financial reputation to be sullied. They might not also realize when they dispute erroneous findings, it is a fairly easy way to get these debtors off their credit report, which raises their FICO score within a few short months. There is no better time to eliminate penalties, and to ensure all old debts have been paid than during the pre-buying period. Recommend your potential buyers also refrain from opening any new credit cards until after closing on their new home.
3. Resist A “House Poor” Existence
Your clients eyes may sparkle when they tour the refurbished farmhouse with the granite countertops and travertine tile, but it’s important to get them excited about homes they can actually afford. Buyers who somehow manage to finagle their way into homes out of their price range, soon may find themselves curbside when the bank forecloses. Encourage your buyers to calculate a total mortgage payment, using a mortgage calculator. Then remind them to add in taxes, utilities and insurance for the most accurate estimate of what they can expect to pay each month.
4. Don’t Forget Loan Fees
Home buyers sometimes forget to calculate in closing fees when they’re planning for the purchase of their new home. When they find themselves ready to sign the purchase agreement, suddenly they feel helpless as they kiss visions of their new home goodbye. They haven’t saved or planned for the closing day, and so they have no choice, but to cancel the whole thing. Help your buyers forecast how much they can expect to pay out of pocket for closing costs, for appliances they may need to have installed and for any other expenses their lack of experience precludes them from realizing. First time home buyers may also qualify for financial assistance and down payment assistance.
5. Build Savings
Making a habit of saving for the big purchase is one of the best things you can urge your clients to do. Not only will you ease the stress of their upcoming purchase, but you may also have helped them to adhere to this habit for the rest of their lives. Homeowners average about 2.5 to 3% annually on their home’s upkeep. It is prudent to get them used to putting money away so they can afford to pay for the maintenance of their investment.
6. Know Your Financial Position
Your buyers should be intimately aware of the amount of house they can afford, and they should be prepared to walk away if necessary. They need to have their paperwork in order so they can earn that pre-approval letter. With all the financial and paperwork details handled, they will be better able to find the house that is just right for them, one they will be able to enjoy for years to come.