Selling a home based on target marketing of the end loans will help you generate more sales in this changing real estate market. Make sure the Realtor you hire understands the available finance options to help capture that elusive buyer!
In todays real estate market, it isnt just about finding a buyer for your home, it is also about the buyer finding a loan and preferably the right loan for your home.
Last year, that wasnt a problem since there was such a plethora of choices thanks to the sub prime market. Well, now that many of those lenders have gone out of business or essentially shut down parts of their Creative Lending Portfolios that may leave some sellers with homes that are more difficult to sell.
If you are trying to sell an existing home, all you can hope for is that you agent understands all the available loan options that are available to help sell your home. Dont just let them rely on the expertise of the other Realtor or the lender! Many times, if we cant convince the buyer upfront that the home is a good deal, they wont have the chance to talk to the lender.
Builders and developers should be looking for niche markets that could be served with creative finance options to help them stand out from the pack! For example, with the demise of American Home Mortgage (one of the nations largest lenders) it is getting much harder to place certain loans even if you did find a buyer.
For example: if you build a home priced over $500,000 in which the buyers loan (after down payment) may exceed the current amount of $417K authorized by Fannie Mae (FNMA) and Freddie Mac (FHLMC) you will probably be dealing with a sub prime lender for a jumbo loan. Many of the buyers in that price range were also doing stated income loans, 80/20 combo loans and other creative ways to buy the most home they could due to the increasing in property values. Since the property values have stabilized and in some price points even dropped, these investment buyers have dried up as well.
Instead, what about building homes that the masses can afford? Why not consider building homes where you can take advantage of the Boise City Affordable Housing Program or Rural Economic Community Development funds available to buyers to offset their interest expense thus increasing that pool even bigger? I know it isnt as fun or as sexy to build starter homes, but at least the builders of the homes priced under $250,000 in AdaCounty arent having to buy a birthday cake for their model homes. I recommend that you and/or your Realtor take the time to learn which banks and mortgage institutions have Community Lending Departments so you can learn how to utilize them to your benefit.
Having your Realtor know the lending process if paramount in todays market. For example, I just about lost a sale because the other agent didnt know how to structure a creative financial transaction. I helped put it together differently and explained it to all parties and we will close by the end of the month in a true win/win scenario. A good loan officer or Realtor can explain how to use existing incentives instead of trying to ask for huge seller concessions or finance incentives. I mean would you rather pay $10,000 in buyers closing costs out of your proceeds to attract a buyer or tap into IFHAs Down Payment Assistance Program for that same $10,000? Doing the later results in a lower rate than FHA so the buyer not only qualifies for more, but their payment is lower as well!
So the next time you are interviewing Realtors, make sure you hit them between the eyes with a few finance questions to make sure they know how to use creative finance techniques to help capture that elusive buyer before someone like me does and sells them my listing instead of yours!