For Home Buyers, Agents Are Key to Financial Planning

Financial planning is key to buying a home. It’s also an undertaking that makes many home buyers anxious. Naturally, clients will lean on you to help them figure it out. Here are key takeaways from Zillow Group’s Consumer Housing Trends Report 2018 on what buyers expect of agents — and how you can stay one step ahead.

Buyers see agents as strategic partners

Agents are essential! The majority of home shoppers recognize the high value of working with a real estate agent. Seventy-four percent of buyers use an agent, and 83 percent say guidance through the overall home-buying journey is among the services they value most.

Your referrals matter

Buyers do their homework, but they are receptive to recommendations. While shoppers rely on referrals from friends, family, neighbors and colleagues to find an agent, you’re the first stop for financing referrals. Half of buyers who rely on referrals turn first to their agent.

How buyers find financing

There’s no single pathway to financing. Buyers use an average of 3.2 resources during their search, with 55 percent of those who get a mortgage using online resources, 64 percent turning to a financial institution and 62 percent using referrals.

Referrals are especially key at this step in the process. Buyers who use agents are far more likely to use referrals to find their lender than those who don’t work with an agent (67 percent versus 44 percent, respectively).

Most buyers go with the first lender they contact

While buyers aren’t shy about doing their own research, especially online, the majority don’t shop around when it comes to lenders. More than half (54 percent) of buyers who get a mortgage only contact one lender. This shows just how important agents can be as a trusted partner and a source of information. A little effort on your part can go a long way in what’s likely to be one of the biggest investments of your clients’ lives.

The myth of the 20 percent down payment

Make no mistake: Saving for a down payment is the largest barrier to home ownership — and 54 percent of the buyers in Zillow’s survey told us they’re concerned about qualifying for a mortgage. But despite common beliefs, a 20 percent down payment isn’t a requirement for homeownership. Just over half of buyers put less than 20 percent down on their purchase.

This is especially true for younger buyers, who are less likely to have equity from the sale of a previous home or other forms of financing. Sixty percent of millennials put down less than 20 percent for their down payment.

Stress with your clients the importance of meeting with a financial expert before dismissing the possibility of buying a home.

Financing contingencies

While most buyers waive some safeguards to make their offer more attractive, 76 percent of buyers do include contingencies in their offer. In fact, 29 percent make financing a requirement in their offer, which could help alleviate concerns for shoppers with financial frets.

Get a head start

Whether or not your clients are actively looking to buy right now, it’s smart to start planning ahead. Encourage the potential shoppers in your network to get pre-approved for a home loan. That way, they’ll be ready when the right property pops up.

Setting clients in the right direction for financial planning is an opportunity to help them feel fully confident in their home search — and chances are, the goodwill will lead more business back your way.

What other expectations do home buyers have? Get the latest in Zillow Group’s Consumer Housing Trends Report 2018.