Q: How can I make sure prospective buyers at my open house know their financing options?
A: Now, more than ever, it’s absolutely imperative your potential buyers know their financing options while they are at an open house. Needless to say, things have changed over the last four to five years when it comes to obtaining mortgage financing, but there are still many viable options available. Agents spend substantial time and resources to maximize the chances of closing their listings, and an open house can be an effective tool to interact with potential buyers one on one. Providing them with the various financing options specific to that property is essential.
Teaming up with a good lending partner is critical to ensure your potential buyers know all options available to them. Your lending partner will take the specific property information and prepare material tailored to meet the needs of the various buyers who attend your open house.
The key is to know if your property has different financing options that are better or more readily available, depending on the property type. For example, if the property is a single family home, PUD or multi-unit property up to four units, FHA financing is automatically available up to the FHA mortgage limit (maximum loan amounts differ depending on the county/state/region). If the property is a condo, the entire building has to be FHA-approved.
Of particular importance is higher priced home listings ($550,000 and higher with a loan amount of over $417,000 for a single unit). Chances are a non-conforming or jumbo loan will be needed for the majority of your buyers. A non-conforming or jumbo mortgage is not subject to Fannie Mae/Freddie Mac requirements, but also isn’t available to be purchased by them and has to be sold on the secondary market. As a result, interest rates are usually slightly higher. A good lending partner will take this into account and make sure the products and rates provided are tailored to meet the specific needs of your buyers.
In addition, a trusted, experienced lender will make sure you have jumbo products that can make your listing stand apart from the others, such as 10 percent down with no PMI up to a loan amount of $850,000 for a single-family home.
The bottom line is that open houses have a greater chance of success when agents know their listing and have a trusted lending partner to assist them with providing all the financing options available to buyers.
Jamie Simpson has been in the mortgage industry for the last 14 years and has been a vice president of mortgage lending with Guaranteed Rate since 2003. He has made his company’s President’s Club every year since 2005 and was recently nationally ranked in the top 1 percent by Mortgage Executive Magazine. Simpson lives on the north side of Chicago with his wife and three children. He can be reached at [email protected] or 773.290.0525.