Three Creative Home Buying Strategies for Residential Real Estate
A real estate industry veteran since 1996, Nobu Hata is a student of real estate sales, marketing, communication trends, consumer trends, social media and technology in the real estate industry, having adapted new school techniques to several real estate sales companies. prosperous.
Nationally, there is a continued decline in mortgage applications, fewer home visits and fewer online searches, all signs that a portion of burnout buyers are choosing to sit on the pews in this late spring/early summer.
Although buyers will likely continue face bidding wars, they are potentially not as intense or as frequent. In 2021, valuation contingencies with conventional and all-cash loan deals were increasingly necessary to win a deal. But nowadays, a buyer can be a little more flexible with the terms of a purchase contract, even if the price is still outrageously high.
Now, that’s not to say the demand isn’t always there – it is, and it’s particularly driven by two groups: older millennials, aged 32 to 41, as they reach the point of their career and personal life where they plan to take that next step, as well as young millennials/Gen-Z cuspers, ages 23-31.
This means for our current environment that with higher rates, buyers may reduce their purchasing power compared to last year. Yet industry experts generally agree don’t time the rates market and buy when the time is right for you, whatever that looks like.
People everywhere are getting creative when it comes to owning property. Here are three methods and tips for effectively searching for accommodation:
BFFs… and owners?
Look, we’re in this weird environment for the long haul. It’s not going to calm down anytime soon. Many people cannot afford to buy a house on their own. So we see friends, siblings, or even business owners coming in together to buy investment or vacation property to get a foothold in the market.
A 2022 survey by Realtor.com of more than 1,000 adults in the United States reported that nearly one in three Americans have bought a primary residence with someone other than their spouse. What’s more, more than half of Americans have or would consider co-purchasing with a friend or family member.
Risky, of course, for the friendship or relationship, but there are questions you can address early on that will help you determine if it’s a solid idea:
- Who will primarily own the house?
- What are your credit scores to see what you can both buy?
- Are you both ready to get married in regards to the house if one wants out of investing?
- How and who will manage ongoing finances, such as tax breaks, shared expenses, and maintenance?
- Is this relationship secure?
Help customers come in with their eyes wide open when faced with a situation like this. While this may make the purchase more feasible, splitting the money is difficult to manage over time. Each party must come to the table with honesty and be willing to show financial statements so everyone knows the reality.
Help buyers control their emotions to search smarter
Competition and bidding wars aren’t going anywhere, and they’re easing off a tiny bit. Help customers think creatively and strategically about where and when to look. If possible, wait until after Labor Day, when markets traditionally cool off at the end of summer vacation and school resumes.
Buyers may also consider waiting until you see more inventory available. Again, in doing so, this move also implies a degree of uncertainty as to whether interest rates will continue to rise or fall with house prices in general.
If buying with a mortgage, buyers need to line up their financing well in advance to quickly lock in rates when they find their dream home. Don’t let them find any lender in the market. Find one that can answer the following questions:
- What types of home loans do you offer?
- How do you manage the subscription internally?
- What is your average loan processing time?
- What will my interest rate and annual percentage rate be?
- What is the loan estimate?
Have an understanding of proptech (and possibly cryptocurrency as well)
In its most basic definition, proptech uses technology to overcome challenges and provide solutions specific to the real estate industry. Proptech’s goal is to leverage technological tools to make services more efficient and effective for agents and buyers. In this market, an agent must know how to help buyers understand and use it before, during and after the transaction.
Proptech can involve a host of processes and applications, including 3D virtual tours of homes and neighborhoods, interactive floor plans, augmented reality staging, AI chatbots, verification of reviews actual homes rather than computer-generated numbers, or using big data with machine learning to catalog photos to make informed choices.
Since so much of your customers’ information – through social media usage coupled with web and home search behavior – is compiled and used in algorithms, they are as big a target as a beneficiary of big data. As an agent, you can help them protect themselves online by helping them decipher big data and technology.
Blockchain and cryptocurrency in real estate have begun to open avenues to evolve the home buying process. Blockchain technology makes it possible to tokenize and exchange assets with cryptocurrencies.
While real estate nationally and internationally is beginning to see a disruptive evolution with blockchain acting as a driving force, the technology is still in its infancy in real estate itself. But as the industry catches up to the concepts of blockchain-driven, fast, verified, encrypted and simplified transactions, the cryptocurrency that powers the transaction of tomorrow is emerging today as a part of many consumer investment portfolios and as collateral for real-world mortgages.
However, the regulatory landscape is changing in these areas. Therefore, it is important to have a thorough understanding of these issues to guide your clients through a volatile process whether they wish to use crypto in their home purchase or if your selling clients choose to accept it.
Buying a home is difficult, but it’s not impossible. As a knowledgeable expert with a fiduciary duty to your clients, it is your job to help buyers weigh and evaluate their options.