Do these issues sound familiar? Even if your clients are a little unrealistic or inexperienced, there are ways to help them get into that home sweet home.
A seasoned Realtor® offers tips for managing some of her most common hurdles with homebuyers.
1. Not understanding the out-of-pocket costs
Magan Smith, a Realtor with more than 10 years of experience in Raleigh, North Carolina, says many clients come in with excellent credit and a low debt-to-income ratio—but no cash for a down payment or other expenses that must be disbursed when it’s time to close on the home.
"Buyers—especially first-time buyers—often do not understand how much money you need on hand to purchase a house,” Smith says.
Even if your clients are 100% financed with a no-down-payment mortgage, closing costs typically include inspection and appraisal fees, as well as the earnest money required as a show of good faith to the seller.
"In this market, I’m seeing due diligence go well above $1,000," Smith adds.
A good lender like BB&T Home Mortgage can help with this common pain point, as our mortgage pros are capable of explaining the out-of-pocket costs and the different types of mortgages available to your clients.
For your clients: Cash considerations when buying a home
2. Not being prepared for the seller's market
With a low inventory affecting many markets, Smith says it sometimes takes extra effort to get clients up to speed. With more eager buyers than there are available homes, the number of days a house stays on the market decreases.
"Here, houses hit the market over the weekend, and the buyer has to have their running shoes on ready to go," says Smith about the Raleigh market. "Sometimes, there's a line of buyers ready to look at the house."
The last family Smith worked with wanted to be in a popular school district, but she had trouble getting the husband and wife together to see the homes.
"We missed a couple of good homes because we weren’t able to get them both to see it in time," she says. "It took us six offers to get them into a house."
With the first house they made an offer on, Smith says the couple didn't want to offer full list price or put in substantial due diligence—and they lost it. She says it sometimes takes losing a good house for a buyer to really get in the game.
"They started putting in better offers on the next ones," she says. "The others we didn't get because other buyers were simply able to offer more, even though our offers were competitive."
So how can you get your clients ready for the seller’s market sprint?
"My first time talking to a new buyer, I do it over the phone or in person—I don't like to do it by email," Smith says. "I really explain the process. Then, I try to find out what they're really looking for, and, if they're looking in these hot areas, I try to hammer down: 'These are the things we have to do.' "
For your clients: It's a seller's market: Here's what that means for you
3. Getting caught up in the inspection report
Another lesson Smith finds herself regularly reinforcing with homebuyers is there is no such thing as a "perfect" house. This often comes up during the inspection period after an offer has been made.
"An inspector's job is to identify problems with the house, and even with a new property, there are likely going to be things the inspector wants the builder to address," Smith says. "Sometimes, it's something as small as a loose door handle, and buyers who are looking for that 'perfect house' may get disappointed."
Different types of houses can have different issues, too.
"In this market, you either have a slab foundation or a crawl space, so that's something right off the bat I try to educate buyers on," Smith says. "On the inspection reports in this market—with humidity and low inventory—you may see a crawl space with a little fungus or the humidity level may be too high, but those aren’t deal breakers. They're items that can be fixed."
Here's how she handles those situations.
"We try to avoid direct buyer-seller communication," she says. "I go through the summary inspection with the buyer, and we highlight the items that are most important to address and which ones are trivial. I typically contact the listing agent and follow up with our requests.
"Having another experienced agent can come into play—talking with the other agent can help," she adds.
Whether your clients are buying their first home or their third, it's not uncommon to face one of the above pain points. Use these tips to keep on cruising.
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