Arthur Gary – REEA Spotlight Member!

Congratulations to Arthur Gary, today’s Spotlight Member on the REEA homepage!

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What Worries Real Estate Buyers – – do you know what your clients are worried about?

Written by Walter Boomsma, instructor. See his blog.

According to a recent study by Redfin, buyer’s worries have changed slightly. Of course, that makes sense because we all know the market changes constantly. Last year (2014) buyers were most worried about inventory. This year “prices” are in the number one spot. Actually, the worry seems to be more about prices rising and affordability becoming an issue.

Some will suggest that reflects an improving market with good news for sellers. Others will suggest that buyers are showing a lack of confidence in the general economy.

According to the survey of 3,500 buyers, the top five worries this year are:

  1. Prices (prices are rising or too high)
  2. Competition from other buyers
  3. Inventory (there aren’t enough houses to choose from)
  4. Selling my current home first
  5. Having enough for a downpayment

You might find it interesting to compare that with the top five worries last year. It will not take too much creativity to support your current opinion of the state of the market and the direction it’s taking. But you’ll have to rationalize some things. For example, the fourth worry of buyers last year was that mortgage rates might rise before they could buy–that didn’t make the list this year. Another concern last year that didn’t make the list for 2015 was “fatigue” — referring to buyers finding the process difficult and tiring.

Most know that all generalities are false. In this case, that’s especially true because “worries” are very personal. So while how those 3500 people felt is mildly interesting, real estate licensees should be much more focused on a much smaller number–the number of clients you are working with.

You want to know a lot about your client. Most of those things are basic and concrete. The questions you ask probably include things like, “What is your price range?” and “How many bedrooms?” and “How much land?”

Those are certainly important conversations. But why not ask “What are you worried about?” Some will say, “Nothing,” partly because they are overwhelmed with excitement and haven’t thought about the concerns. It might be tempting to accept that answer. But aren’t there some things a buyer should be worried about?

One of the saddest listings I ever took involved a couple in the middle of a divorce. The short version of their story was they visited Maine and fell in love with our great state. They spent the last few days of their vacation finding a real estate licensee and then a house. It was a very smooth and speedy transaction–their agent handled “everything” while they went home to pack. The realities started showing up after they were settled in their new home. One spouse was forced to return to their home state to find employment that wasn’t available in the vacation area they’d bought. The other found work, but it involved a long commute with resulting childcare and expense issues. Thus began the breakdown of the family. The home they purchased was not an “easy sell” so by the time they realized their mistake, the market was not in their favor.

A little “worrying” during the process might have made a world of difference in the outcome. Personally, I think the licensee who represented them in the purchase should have noticed there were some things they weren’t worried about and raised some of the issues they weren’t seeing.

Of course, licensees also find themselves representing worriers. Folks in the real estate business like to focus on “making it easy” and “getting to closing.” If that’s the case, remember that it’s easier to smooth the road if you locate the bumps and potholes. No matter how you cut it, a discussion of worries with clients (buyer or seller) just makes sense.

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Positive Trends

Image courtesy of njaj / FreeDigitalPhotos.net

Image courtesy of njaj / FreeDigitalPhotos.net

All reports indicate that January was a very strong month for real estate and there is a lot of optimism for 2013. Maine is seeing some signs of the real estate market rebounding, after many years since the industry has been associated with positive economic trends.

How long will this trend continue? According to Bankrate.com, mortgage fees are rising. However, there is no need to worry just yet. Interest rates are at historic lows and some reports show a shortage of inventory due to the high demand. Many experts suggest now is the time to buy low. This isn’t the time to wait for a better deal. It’s time to act.

If you want to know more about Real Estate Financing, consider taking our correspondence course, Real Estate Finance Today. This course is intended to present an overview of the basics of residential real estate financing, including a discussion of the important current trends in mortgage lending. This updated edition introduces residential real estate financing basics and mortgage lending trends. Real Estate Finance Today discusses new affordable loan products, government influences on real estate finance, and special financing alternatives, including seller financing and loans for self-employed borrowers. This course is approved for 3 clock hours of continuing education by the Maine and New Hampshire Real Estate Commissions.

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