Over the years I have realized that many real estate agents are relying on lenders to provide all of the financial calculations for potential home buyers.
Years ago, one of the skills Realtors developed early in their career was how to consult with buyers, obtain their income and debt information and show them price scenarios to help them position themselves in the market.
In those days, Realtors were proficient with a financial calculator. Realtors would help buyers maneuver towards available inventory and properly calculate purchasing power for condos vs. single family home and structure transactions to give their buyers the best possible outcome.
Over time, Realtors began to give up more and more of these skills by having mortgage lenders do the financial calculations. Thereby, relying on the responsiveness of the lender to provide timely information to them and their home buyer.
However, lenders are not always available, especially evenings and weekends when many Realtors are meeting with prospective home buyers and showing property.
In today’s market, it is better for Realtors to develop foundational financial skills so they are more knowledgeable, more comfortable and more confident when it comes to matters of Real Estate Finance.
The more you know as a real estate professional about the various loan programs and products available, the better you will be at guiding your clients to a property that will meet the criteria of their financing.
Early in the relationship building process, you can assist your home buyers in understanding the loan approval process and help them evaluate how much home they can afford.
This will maximize your time in showing them properties that will meet their needs and budget.
When your client is ready to complete the loan application, you can prepare them by explaining the typical documentation involved, providing them with referrals of reputable lenders you trust and answering their basic questions as they go through the process of obtaining a mortgage loan.
You already ask your clients several questions to determine their needs, including the type of home they want, desired location, property features, etc, but that is only half the picture.
To provide the best possible service to your home buyers, assist them in determining their borrowing power and the purchase price range that fits within their comfort level for total monthly housing payment.
By understanding your home buyer’s financing goals, you can better guide them in understanding the myriad of loan products available to them in the purchase price range most comfortable for them.
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