Every week, we ask a real estate professional for their Short List, a collection of tips and recommendations on an essential topic in real estate. This week, we talked with Amy Tierce (NMLS# 15695), a regional vice president for Wintrust, on how agents can appeal to first-time sellers – and boost inventory in the process.
How do we get more inventory in the market? Let’s serve first time sellers!
With inventory extremely low, potential sellers fear that they will sell their home, and then be unable to find another home to purchase in the required time period.
That is a major factor keeping the inventory of homes on the market at record lows. Many potential sellers are letting fear keep them out of this hot market!
Here are several things you should consider discussing with your client:
4. Have Them Talk to a Licensed Lender – The first thing you need to determine is if your seller can buy without selling first. There are two factors in play here: one, can your seller qualify carrying the mortgage on their current home along with a new mortgage? And two, can they come up with a down payment without selling first? A qualified advisor can work through those questions and create strategies that can get your seller to the right answers; they may be surprised at how easy it is to qualify with today’s competitive rates.
If they determine that your seller can buy without selling…then go for it! If your seller cannot, then keep reading.
3. Sell Now and Rent! – There are pros and cons to this approach.
Pros: Your seller has the money in their pocket to buy when they are ready. Therefore, they have time to explore different areas and neighborhoods. They can do it all at their own pace. They gain the freedom from home maintenance, overhead and expenses.
Cons: They have to move twice. Rents are high, so they could be eroding their newly gained equity. What if they never find another place they want to buy?
2. Sell and Live with Friends or Family – Many people end up living with family to save money and gain time to purchase the next property.
Pros: Your client is ready to buy when they find the right property, and they have the time to look and explore all options and neighborhoods.
Cons: Again, they have to move twice, and this time around, they have the expense of storing their furniture (which is, generally, cheaper than renting a property). Of course, there is also the fact that they are living with friends or family!
1. List with an Extended Closing Date – List your client’s property with an “on or before” closing date that is six months out. That is especially good for properties that appeal to first-time buyers, because they don’t have property to sell and generally have more flexibility with dates.
If the buyer is concerned about the potential for rising interest rates, a long-term rate lock can be utilized, and your seller can offer to pick up the cost associated with the long-term rate lock.
A 90-day lock generally does not come with additional costs to the buyer, so your seller can then close on the sale of their home and rent it back from the buyer for up to 30 days, which gives your client months to find a new home and move.
Pros: Your client moves only once and has the time needed to seek out their next home.
Cons: You’d need to find the right buyer willing to work with your client, and you would need to keep them engaged for the term of the contract. If your seller absolutely cannot find a home in the time frame, they will have to either rent or live with family and friends.
A 25-year veteran of real estate, Amy Tierce (NMLS# 15695) is the regional vice president for Wintrust Mortgage in New England; a division of Wintrust Financial Corporation (a $20-plus billion financial services company based in Chicago), Wintrust offers a full product menu of programs, and Tierce is excited to grow the Wintrust footprint in the Greater Boston area while exploring new talent, recruiting new individuals and creating a team of dedicated individuals. Before joining Wintrust, Amy built Fairway Mortgage into one of Massachusetts’ top lenders.
Wintrust Mortgage is a division of Barrington Bank & Trust Company, N.A., a Wintrust Community Bank NMLS #449042, an equal housing lender.