Why aren’t more homebuyers buying houses this year?
Sales records are being broken in popular real estate markets from coast to coast. Yet, far more could be buying homes. For real estate investors, this is an amazing time to buy more inventory. So what’s really holding other retail side buyers back from purchasing? What are they thinking? How can real estate investors help get more would-be buyers into homes?
Here are a few reasons there aren’t as many homebuyers purchasing homes as there should be:
1. Perception of Hard to Get Mortgages :
The media, including real estate professionals, has made the perception of getting a home loan so difficult and unpleasant that many don’t even want to try anymore. They might have their finances in order, have good credit scores, and may even really want to buy a home they’ve had their eye on. However, the perception is that they’ll be demanded to jump through so many hoops that it won’t be worth it. No one wants to subject themselves to that; not when they can just stay put in their comfortable, but slightly overpriced rental.
In general, consumer mortgage loans have been tough to get over the past few years. They even appear tougher to land than investment property and business financing. According to those on the front lines, that is changing. In fact, we are seeing some loan features and programs that are pretty close to subprime. Carlos Gonzalez in Tampa, FL even says his firm no longer needs to offer in-house financing or zero down home offers because 100% financing and low down payment home loans have become so easy for their customers to get. It might still be a quirky process, but it is getting easier.
2. Can’t Get an Answer:
It remains absolutely bewildering to most that real estate sales people spend so much on advertising, yet can’t answer any of the responses they get. It is great that real estate pros have so much money to throw away. Though, one might think they could save themselves the busy work and donate that money to charity instead of killing their reputations by snubbing leads. There can be many reasons that Realtors and investors don’t answer. Maybe they are just too busy, their processes are fragmented and they don’t check all the places messages are coming from, or maybe they are just scared of picking up the phone. In some cases, maybe a property has already sold and they just don’t see the point in taking the time to answer. Nonetheless, there are all terrible excuses.
If you don’t answer, you don’t only burn that prospect and everyone they know (forever), you burn the industry too. If you can’t answer, find another gig. Save yourself a ton of stress and money. Ironically, a lot of the business is simply going to those that answer. They may not have the best homes, or house deals, but they are there. You can never pre-judge a prospect. They might be asking about owner financing or a discount in an email, but they may actually be a cash buyer with millions in the bank. That listing may be sold, but if they are motivated they might be ready to sign a contract on something else, today. They might even seem broke, but they might be left a six figure inheritance or win the lottery tomorrow. Good luck crawling back to beg for their business when you couldn’t have the courtesy to answer them yesterday.
3. Ugly Houses:
Realtors have reported that ugly houses are getting neglected. We aren’t even talking about burnouts, or crooked old houses with caved in roofs and out of control landscaping. To make the leap, many home buyers are really insisting on a great looking property. Real estate investors know there is value in distressed homes. That’s where they add their value. But end buyers don’t all want to be weekend warriors. Few couples can rarely agree on taking on a major house project. Your job is to find the houses that have been neglected, and to fix them up accordingly.