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Expand your work in an affordable niche that can both increase your client base and make your community a better place to live.
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Wednesday, November 5, 2014
Author(s):
Christina Hoffmann
Although government guidelines call for spending no more than 30 percent of your income on housing, more than 20 million people pay as much as 50 percent, making it virtually impossible for them to get a leg up on the home ownership ladder, much less afford the necessities of life.
“That’s a real problem, because it puts so many people out of the market from ever owning a home,” said course instructor Linda Kody, broker-owner of Kody & Co. Inc., in North Andover, Mass.
Increasing home ownership was the challenge presented to a group of REALTORS® from around the country who attended Expanding Housing Opportunities, a course that trains practitioners to help qualified prospects realize their part of the American dream.
Course attendees, representing a geographic cross section from California to Delaware and Minnesota to Texas, identified similar conditions— low inventory, bidding wars, flat income, appraisal problems— impeding the development of affordable housing for working families across their markets.
For the REALTOR® committed to expanding housing opportunities, the affordable niche is not only a way to increase your client base but to make your community a better place to live.
How can you help these clients?
Partner with a housing counselor. Counselors help your clients resolve credit issues, draw up a budget, understand what type of housing suits their needs, and generally get prepared for home ownership. Find counselors through:
HUD’s online directory or 1-800-569-4287
Lenders familiar with local housing agencies
Local government websites
Local offices of national housing organizations, such as NeighborWorks America and HomeFree-USA
Volunteer with a nonprofit housing agency. Educate prospective buyers by speaking at home buyer seminars to explain the agent-client relationship, the sales contract and disclosure forms, and the protections that buyer agency offers.
Find sources for downpayment and closing cost assistance. Options include grants, forgivable loans, and shared equity arrangements. Under a shared equity arrangement, a nonprofit might agree to provide $10,000 for a downpayment on a $100,000 home in return for receiving 50 percent of any future sale profit.
To find financial resources, contact lenders, housing counselors, local and state REALTOR® associations, and government resources, such as state and local housing finance agencies.
Help clients obtain an affordable loan and avoid predatory lenders. Stave off problems by helping clients determine whether they can afford mortgage payments for the loan they’re pre-approved for; making sure they understand consequences of prepayment penalties and the worst-case scenarios for ARMs, if applicable; and explaining forms like the HUD-1 Settlement. To find affordable loans, visit sites such as fanniemae.com and freddiemac.com, and confer with your lender partners.
Get involved with local government to encourage workforce housing opportunities. Offices and agencies to work with in your area could include transportation boards, economic development councils, housing commissions, and zoning and planning boards.
Ultimately, your work in improving affordable housing opportunities can lead to an enlarged tax base, improved neighborhoods, and a growth in new businesses.
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Expand your work in an affordable niche that can both increase your client base and make your community a better place to live.
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