Observations From A Loan Officer: Stop Paying Rent – Build Relationships & Execute A Strategy. #4 In A Series

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I talk to a lot of  home buyers.  They understand the market relationship of low inventory and high rent.  High rents are caused by declining inventories of available homes.  It is frustrating to spend a significant percentage of monthly income on rent. Rent does not Mike Nelson - Equity Primegenerate any equity and the renter misses out on significant tax advantages of a mortgage.

 How Do We As Agents & Lenders Help These Customers?

Long Term Relationships – A low inventory/high rent market is a competitive market.  Agents and lenders are competing for buyers.  Buyers are competing for the few listings that are available, putting the sellers at the advantage. Sellers often receive multiple offers and bidding wars have become quite common. It is important that agents and lenders have strategies, outside of just the highest offer, to make their buyer the most attractive.

However, we must realize a competitive market is not necessarily a bad market.  Home owners are certainly due their return on investment.  Obviously, the renter wants to enter the ranks of home owners so they can get their return on investment too.

Mike Nelson - Equity Prime
11 Million Americans Spend Half Their Income on Rent – Kathryn Vasel @ CNN Money

Back to the question – how do we as agents and lenders help these customers?  The answer is relationships, knowledge, and execution.

The agent who understands the needs of the buyer reacts quickly in a changing  market.  The lender who has a keen understanding of all mortgage products equips the buyer to present a compelling offer relative to other bidders.  The point is this, relationships between buyers, agents, and lenders are crucial in a competitive market.

Relationships & Knowledge – Keys to Strategy

Knowledge – Understanding the connections between a buyer’s financial condition, housing inventory, and mortgage products is vital to purchasing a home.

A reputable lender has many wonderful mortgage products at their disposal.  These products  give financing options to a lot of potential buyers. Products such as USDA, VA, Conventional, FHA, and Non-Prime all have features that make buyers attractive to sellers.  If your lender doesn’t have a working knowledge of these products, the buyer will be at a competitive disadvantage.

Likewise, the real estate agent that has  knowledge of the market will give a competitive advantage to the buyer.  These agents act quickly, fulfill buyer requirements while meeting  the financial expectations of the seller.  A strong relationship between the agents, the buyers, and the lenders ensures the perfect home is financed with the right mortgage.

Mike Nelson - Equity PrimeExecute –
 The “Fun” begins once the relationships are in place.  Naturally, the “Fun”  is executing a Purchasing Plan and visiting listings.  The Purchasing Plan must match buyers needs, financial ability to purchase, and seller requirements.  A well executed Purchasing Plan will maximize the buyers ability to own their dream home.

Maximizing purchasing power relative to the available inventory requires constant communication, partnership, market research, and financial review by the real estate agent, the lender, and the borrower.  It is a team strategy that requires knowledge, relationship, and communication.   Executing a well thought out Purchase Plan usually results in happy homeowners.

Please feel free to continue the dialogue – write a comment, send me a text, shoot me an e-mail, or give me a call.  As always, Happy House Hunting!

720.213.6260 (voice & text)
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Michael Nelson - Equity Prime
Michael Nelson - Equity Prime, LLC
Michael Nelson - Equity Prime, LLC



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Mike Nelson - Equity Prime

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