This has been a year of upheaval for real estate, but now that we are nearing the end of 2020, we can look back and see how we made it through after adapting quickly and becoming more flexible in how we do business. Looking ahead, I see two trends that emerged in 2020 that will continue into next year.
First-Time Buyer Expertise Will Be Crucial
Real estate made it through the pandemic with the help of multiple forces that seemed to align all at the right time. Technology, of course, was the foundation that let us all continue doing business, while low interest rates made it feasible for more buyers to obtain a mortgage. But it was the segment of buyers at the lower price tiers that helped buoy the market enough to see us through. The same is going to be true for next year, too. First- and second-time buyers are much more comfortable with technology, so compared to older buyers, watching an agent give a video tour is not likely to turn them away from buying a house. Also, since they most likely aren’t looking for a forever home, they understand that it doesn’t have to meet all their criteria, so they may not feel the need to visit the house in person.
As a side note, these video tours can save agents time, proving beneficial even if you aren’t required to use them due to social distancing rules becoming more relaxed in your area. Since video tours let you “show” buyers a home they may not necessarily want to buy, your buyers can come to that conclusion without taking up your time with an in-person showing.
Mortgage Expertise Will Be What Closes Deals
When it comes to first- or second-time buyers, obtaining a mortgage tends to take more time and requires more advice from a professional. This is where we can demonstrate our added value by letting buyers know about mortgage products they may not be aware of—or those they don’t think they’re eligible for. Low down payment mortgages are going to become popular options for lenders, and I predict that we’ll see even more “professional mortgage” products come on the market. These are loans where someone nearing the end of their training for a high-income profession, such as physicians or lawyers, will be approved for larger loan balances based on their predicted income a few months down the road. I’ve seen more than a few young buyers commit to buying a home sooner than they thought they could based on these types of products.
With interest rates staying low for at least another year, we can expect even more buyers at lower price tiers to try to buy a home this coming spring. Even if they won’t have as much of a down payment saved up, they will have higher purchasing power based on the lower rates. Marketing your services to younger buyers will be one way to see success next year. Knowing the mortgage options that are available as well as you know your neighborhoods is another.
Allen Alishahi is president of ShelterZoom, the technology company behind DocuWalk. For more information, please visit www.docuwalk.com.