Helping renters become buyers in today’s market

by Brian Buffini

Being confined indoors during the COVID-19 pandemic has given many of us a new perspective on our homes. The home is our castle, but for some, it’s become a sandcastle. This rings true for many renters — they’ve been spending months stuck inside a property that isn’t actually theirs, which can lead to a reevaluation of one’s living situation. For those who are financially secure, the option of purchasing a home may become something they no longer want to delay. Recent data from the National Association of Realtors mirror this trend, showing a slight uptick in first-time buyer activity as these folks trickle back into the markets, ready for their own place.

Even though the overall existing-home sales data also reflects a market slowdown given the current circumstances, it is important to understand that this too shall pass. Homeownership is, and always will be, a cornerstone of American life. According to the NAR 2019 Profile of Home Buyers and Sellers, for example, 75% of non-homeowners in the United States believe that purchasing their own home is a key part of the American Dream and 81% of this group plan on eventually doing so.

For many aspiring buyers, homeownership still makes solid economic sense. A recent study from GOBankingRates found that in at least 50 cities in the U.S., it is cheaper to buy a property than it is to rent one. Meanwhile, data from the Federal Reserve reveals that the average homeowner has 44 times the net worth of a renter. For years, research has proven homeownership to be an effective way to not only save money, but to also increase personal wealth and net worth over time.

Still, right now, first-time buyers who want to hop on the homeownership ladder might be feeling more nervous than usual. That’s completely expected. Buying a home for the first time is always a little nerve-wracking, and that anxiety is bound to increase during a global pandemic. Now more than ever, new buyers are looking to trusted, well-informed real estate professionals to guide them on their journey. When working with these buyers in today’s uncertain climate, not only are you helping them find their dream home, but you are also increasing their confidence in the purchasing process itself. Buyers today want advice, support and reassurance that they are making the right decisions and choices at the right time. Given these circumstances, you will need to transform yourself into a voice of value in order to help the renters in your network become buyers.

Share the facts

There is a lot of uncertainty and misinformation in the marketplace right now. Instead of leaving first-time buyers to fend for themselves in an ever-changing media landscape, provide them with reliable data on the housing market and economy straight from the source. You can clear up any confusion they might be experiencing by sharing the facts and encouraging them to get news and information from trusted resources. Look for interviews with market experts like Chief Economist Lawrence Yun at the National Association of Realtors or mortgage banking experts at credible financial institutions. These professionals are leading research that shows the housing market on solid ground, despite an expected drop in sales activity due to the novel coronavirus. Be intentional with the media you consume, and share only the most credible research with your first-time buyers to reassure them that now is a safe time to act.

Explain the mortgage game

When you purchase a property, the mortgage payment becomes much more significant than the price of the home — as I like to say, you live in the payment, not the price. This monthly payment sticks with you for years, so new buyers should be strategic to make sure they secure the lowest rate possible. Explain to your first-time buyers that, because mortgage interest rates are at historic lows, now is a good time to buy if they have a secure source of income. They’ll pay less per month on their mortgage, which may make it easier to afford that home with the extra bedroom or bigger backyard or one in their preferred school district. It’s also worth noting that, before this crisis, there was not enough housing inventory to meet demand, and that will still be the case when this situation passes. This means it’s unlikely buyers will see a drop in home prices, which makes taking advantage of low mortgage rates even more vital in terms of locking in an affordable monthly payment on their dream home.

Ensure client safety

Health and safety are at the top of everyone’s mind during this pandemic. Make sure your first-time buyers understand your commitment to following health regulations during all steps of the process. Be transparent about the ways in which you will go above and beyond to ensure their safety in line with social distancing guidelines and best practices. Explain how you can arrange virtual tours and what you can do to minimize in-person contact. There are plenty of innovative ways in which you can still operate in this marketplace, so communicate clearly and effectively with your clients to ease any fears or anxiety they may be experiencing. They should be totally confident that the transaction will be conducted in a safe and healthy manner.

The world may be on pause right now, but the housing market is still moving along. Now is a great time for renters to buy a property they can finally call their own. Focus on what these buyers need to feel comfortable and confident. Provide them with the facts about the marketplace and reassure them that you will follow all necessary health precautions so they can take advantage of low mortgage rates and safely purchase the home of their dreams. By establishing yourself as a voice of value, you can help renters to understand the benefits of purchasing a home, even in these uncertain times.

Brian Buffini is a New York Times bestselling author and the founder and chairman of Buffini & Company, North America’s largest real estate training and coaching company. Learn his story at brianbuffini.com.