Bernice Ross
Whether your clients are first-time buyers, homeowners listing their property in a red-hot market or global buyers transacting in the U.S., are you able to articulate how you can help them save money on their real estate transaction?
When you ask agents how they keep more money in their clients’ pocketbooks, some say they’re good negotiators. Others provide coupons to save money on moving costs and home improvements, or perhaps a list of where to get rebates on energy saving appliances.
What else can you do? Check out the list below that can help you earn your clients’ gratitude and future referrals for years to come.
First-Time Homebuyer Assistance
According to Rob Chrane of DownPaymentResource.com, 87 percent of non-homeowners believe that they need to have at least 10 percent down and of that group, 30 to 35 percent believe they need 20 percent down. These people are usually ecstatic to learn they can purchase much earlier than they have planned, especially with increased interest rates looming on the horizon.
While you probably know about FHA low down payment programs, did you know that there are grants (i.e. gifts of money that do not have to be repaid) that veterans, educators and others from the helping professions may be eligible to receive? The average grant is $10,000, but these can be as high as $30,000 to $40,000.
Boomerang Buyers
“Boomerang buyers” are former homeowners who lost their homes either in foreclosure or sold in a short sale and who have kept their payments current. Most do not know that they can qualify to buy a home as a first-time buyer (provided they haven’t owned a property in the last three years) with a reduced down payment and down payment assistance. If you represented any clients in the past who meet these criteria, it would be wise to advise them of this great opportunity to become a homeowner again and to stop paying their landlord’s mortgage rather than their own.
Give Your New Listing More Market Time
Research from NAR has consistently shown that listing a property on Friday produces the highest net price for the seller. In Greater Boston’s heated seller’s market, avoid presenting any offers until the following Monday at 5 p.m. This gives your sellers additional exposure that can result in a higher price. Furthermore, it often increases the buyer’s willingness to pay more as they anxiously await Monday afternoon.
By the way, if you only have two offers, say one at $280,000 versus one at $250,000, counter them both at $285,000 or $290,000. There’s a good chance the buyer with the higher offer will raise their price. (There are two exceptions: first, if you have asked everyone to bring their best offer and second, if you have openly discussed what the offers are with both sets of buyers.)
Help Mom Keep Her House
There’s nothing more heartbreaking than seeing a senior forced out of his or her home because they can no longer afford the taxes, the payments or their spouse has died. HECM loans are available to seniors ages 62 or older.
The borrower can place one of these on their current home if they have approximately 52 percent in equity or they can purchase a new home. The advantage is that there are no payments. Instead, the monthly payments are tacked on to the principal each month (think negative amortization loan) and are not due until the person dies or sells the property. Any remaining equity is returned to the owner or to their estate.
Borrowers do have to qualify; however, the money they save from using a HECM can be used in calculating their ratios.
Save Buyers Thousands
If you’re working with buyers who are from outside the U.S. and do not have green cards, you absolutely must advise them to see an immigration attorney who specializes in tax law for foreign investors in the U.S. prior to writing an offer.
If your buyers purchase and take the property in their own name, they will be unable to deduct depreciation on any investment properties, they will be ineligible to do a 1031 tax deferred exchange and the entire amount of their sale proceeds will probably be subject to both state and federal income tax, even if the home they purchase is now their primary residence. Furthermore, they may be creating a tax liability on their income outside the United States.
The typical way this is handled is through establishing an off-shore LLC, but remember, you cannot give them tax advice. If possible, find an attorney in your market area who is a specialist in this field.
When you put money in your clients’ pocketbooks, chances are they will reciprocate by enthusiastically telling their friends and families about how you helped them – and is there any other better way to market your services?
Bernice Ross, CEO of RealEstateCoach.com, is a national speaker, trainer and author. She may be reached at Bernice@RealEstateCoach.com.
