Home buyer education courses can help consumers — and elevate your business.
Every real estate agent wants a well-informed home buyer who’s prepared to take on the responsibility of home ownership. Of course, not everyone is enlightened about the homebuying process when they seek your services. One way to get your clients ready for the transaction is to refer them to homebuyer education courses before they launch their search. And as cooler weather and the winter doldrums approach — bringing with them a slower real estate market — now may be the perfect time to encourage potential buyers to take a course so they’ll be ready to hit the ground running when next spring’s busy season hits.
You may conduct free homeownership readiness classes for prospective clients yourself, but many pros might want to send them to community programs. Homebuyer courses aren’t just a benefit to consumers; they’re good for your business, too. “I want an educated buyer more than anything in the world,” says Dawn Lane, SFR, a broker with Professional Realty Group in Las Vegas. “If we take that minute to really educate our clients about what’s expected before we even put them in our car, it’s going to be easier for them to go through the transaction.” That means fewer delays and faster commissions for you.
These courses, many of which are now being offered online by lenders and nonprofit community organizations, are useful for all clients — those entering the market for the first time or even making a second or third home purchase. Many real estate professionals try to act as full-service providers able to solve any problem or answer any question, notes Joe Weisbord, director of credit and housing access at Fannie Mae, whose HomeReady program requires prospective buyers to take a HUD-approved homeowner course in order to qualify for a loan. But “people don’t like to admit what they don’t know,” he says, and your clients may not always come to you if they’re embarrassed about their lack of knowledge.
By linking them to a course providing “independent, unbiased information that helps them understand choices they’re going to make,” you’re helping meet your clients’ needs while building trust.
For nervous first-time buyers, those with poor credit, or others who need extra attention while learning the homebuying process, pointing them to a course can also be a great way to solidify the client-agent relationship. Homebuyer courses aim to demystify credit-score requirements, budgeting, shopping for a mortgage, home inspections, insurance, and maintenance, among other items. This takes the pressure off you, and you can spend your time honing in on the type of properties your clients are interested in. You’ll be ready to go once they are, and “it’s less likely that unknown circumstances will arise that will lead to the sale falling apart,” Weisbord says.
But homebuyer courses — many of which are free, but costs can fall along a range of up to $100 — can also convince a prospective buyer that they’re not ready to purchase. That’s still good for the agent in the long run, Lane says. “I’m not afraid of losing [a client]. If someone wants to rush and make a bad decision, I don’t want to be a part of that. It’s important in our business to take our clients through a rigorous fact-finding mission.”
The in-depth programs position buyers who may struggle with the lending process to successfully purchase once they’ve built up their savings or repaired their credit. That could help them secure a more competitive mortgage rate and lead to a bigger home sale later on. “Today’s sale might be critical, but the way to build a real estate career is through a chain of referrals,” says Anne McCulloch, senior vice president for credit and housing access at Fannie Mae. “People who don’t succeed are not the best referrals.”
For certain lending programs, including Freddie Mac’s Home Possible Mortgages, completing a HUD-approved homebuyer education course is mandatory. A newly revised course called Framework, a joint enterprise of the Housing Partnership Network and the Minnesota Homeownership Center that is available to consumers nationwide, draws on research of best practices in online learning, says Framework president Danielle Samalin. “We’ve learned that content tied to emotional information is more readily retained,” she says, adding that Framework employs motion-graphic videos and homebuyer stories, among other content. “Most people complete it within a day of signing up.”
Other lenders are offering education resources with incentives. In May, Wells Fargo debuted a new program called your FirstMorgage, which includes a 1/8 percent reduction on mortgage rates for buyers with down payments of less than 10 percent if they complete a homebuyer education course.
For Lane, referring clients to these courses is a way to make her value proposition as a real estate professional stronger. “Every time you provide something for a client, you build that bond,” she says. “It’s a way to separate yourself from the herd, a long-term relationship-building opportunity.”
October 2016 | By Beth Franken |REALTORMAG.COM