Today’s “Ask the Expert” column features Andrew Leff, National Builder and Renovation Executive with Bank of America.
Q: How can REALTORS® successfully work with builders to better educate homebuyers?
A: Recent trends in the U.S. real estate market indicate that new-home construction is on the rebound and poised to grow as we approach spring. Many industry experts estimate at least a 20 percent growth in new-home sales over the next several years.
As prospective homebuyers spring clean their finances, real estate professionals looking to grow their business should reevaluate their partnership strategy with local homebuilders and aim to develop stronger relationships as the new-construction market continues to gain steam.
Builders are also becoming more proactive in maintaining relationships through partnerships with local real estate agents and lender counterparts. Real estate professionals bring willing buyers to the table who are open to the prospect of purchasing a newly constructed home. According to the National Association of Realtors®’ 2013 Buyer Profile Survey, 66 percent of all newly built homes sold in 2013 were to people introduced to the homebuilder by a real estate professional.
Additionally, builders are relying on real estate professionals and preferred lenders to help educate prospective buyers about the nuances of purchasing a newly constructed home. For example, timing and planning is necessary for buyers in order to avoid unplanned costs, such as the potential need for transitional housing before the new home is finished. Additionally, accumulating new debt while a home is being constructed—such as buying a car or room full of new furniture before the loan closes—can have a substantial impact on a borrower’s overall debt-to-income ratio.
At a time when approximately 88 percent of buyers are purchasing their home through a real estate agent or broker, according to the National Association of Realtors®’ 2013 Profile of Home Buyers and Sellers survey, understanding these implications and communicating them to clients will help today’s buyers work through the new-construction process.
At Bank of America, our National Builder Division provides a team of lending specialists to help real estate professionals, developers and builders access products and solutions, including a long-term rate lock program (Builder Rate Cap) that secures a qualified buyer’s interest rate during the building cycle. We also process, underwrite and close our new-construction loans through specialized builder operation teams, ensuring expertise throughout the loan process. Our mortgage specialists are ready to help real estate professionals prequalify clients and build relationships with sales agents and other personnel at local homebuilding firms. Furthermore, we help real estate professionals understand local market economics and homebuilding trends through our access to robust data resources.
For your clients, getting a mortgage today can feel like finding their way through a maze. As you work to build relationships with your local homebuilders, working with a lender that offers tools, resources, personal services and building industry expertise can make a big difference in the ability to put buyers into newly constructed homes.