Takeaways:
- Open your eyes to tenant representation.
- Educate renters on how to become homeowners by becoming a resource in your market.
- Getting the word out and follow-up are two key components in both strategies.
If you’re a new agent who would like to start making income right from the start or an experienced agent who is looking for new sources of clients, I’ve learned strategies that can help you achieve this goal in your market.
Part 1 of this series underscored the primary reasons millennials might be reluctant to buy, including a lack of understanding of how to tackle the purchase and qualification process, misconceptions about the percentage of down payment required, plus fear of rejection due to tough lending standards.
Open your eyes to tenant representation
I recently spoke with Zach Schabot, the executive vice president of Bamboo Realty. One of his top recommendations for both new and experienced agents is to open your eyes to tenant representation.
He doesn’t mean getting into property management. Instead, it’s about helping people who are just getting started, or are moving into a rental for other reasons, to find a rental property.
This approach has been a particularly beneficial for his new agents. His new agents no longer have to wait months to get their first commission check.
Instead, their rental commission checks are issued shortly after the lease agreement is signed. In fact, some of his new agents who have specialized in tenant representation have hit six-figure incomes their first year in the business.
In terms of where to meet clients who are leasing, many real estate offices receive requests for rental properties. Because most agents don’t want to work this market, consider pursuing these leads instead.
To do this, familiarize yourself with the major apartment subdivisions that provide both short- and long-term rentals, and that will pay you a commission.
A primary reason this approach is so effective is that short-term rentals allow people to test out an area or lifestyle before they decide to buy.
Moreover, as your younger renters grow in their careers, they typically evolve from renting to becoming first-time buyers.
All you have to do is to stay in touch, as well as provide them with information on resources to help them with their down payments.
Educate renters about how to become homeowners
Matt Barker, co-founder of the Barker Hedges Group at Re/Max Results, explained how his agents help renters become homeowners.
“We used to do mailers to apartment complexes but are now Web-focused. We created MinnesotaFirstTimeHomeBuyer.com six years ago, and through blogging and word of mouth, it has become known as a useful resource for first-time buyers.”
If you visit their site, you can see why. They have aggregated everything a buyer would need to begin their journey to homeownership.
They hold buyer seminars and provide plenty of print resources for buyers to educate themselves. But most importantly, they provide a rich array of resources for assistance for both down payments and special loan programs for first-time buyers.
“Minnesota has a high number of down payment programs, and we have educated our team about the programs,” Barker said.
“DownPaymentResource.com (which provides resources for down payment assistance throughout the U.S.) has been a huge help in expanding our reach.”
Barker’s website includes links to city, county and other down payment assistance resources. As a result, many first-time homebuyers contact them up to a year before they are ready to purchase.
In addition to DownPaymentResource.com, HSH.com has compiled a list of homebuying assistance programs for borrowers in each state.
Programs vary from state to state and are usually targeted to first-time buyers who have never purchased or repeat buyers who have not owned a home in the past three years.
For example, California has eight different statewide programs. These include:
- First-time buyers.
- Repeat buyers (CalPlus and CalPlus FHA).
- Mortgage credit programs that help new owners reduce their federal income tax liability.
- Energy-efficient loans to fund home improvements that make homes more energy efficient.
- Down payment assistance (ranging from junior loans of $7,500 to $15,000 to assist with down payment fees).
- Job-specific programs for groups such as teachers, firefighters and police.
Barker explains how this approach has created a competitive advantage for his company: “Most agents won’t put the time in to educate the consumer, but this is our passion and helps us give back.
“Our customers are often looking for one year out or more, so the follow-up is key. We are customer service-focused in our follow-up — in fact, so much that we are in the process of hiring licensed customer service agents to increase our touches with the consumers.
“There are no magical scripts. Instead, we focus on learning more about someone’s situation. When you come from a customer service angle, the buyers will let down their guard to work with you.”
In terms of where to find first-time buyers, Barker says they are everywhere. Getting focused on a segment and extending the effort is key.
Blog on your website, amp up social media, use your sphere, door-knock — get the word out any way you can.
If you can use a new source of regular income, working with lessees and first-time buyers may not be easy, but can be a source of both immediate and long-term income.
One of the best things about being in real estate is seeing the happiness your clients experience when they walk into their first home — a home they wouldn’t be in without your assistance.
Read “The real reasons millennials aren’t buying homes: Part 1.”
Bernice Ross, CEO of RealEstateCoach.com, is a national speaker, author and trainer with over 1,000 published articles and two best-selling real estate books. Learn about her training programs at RealEstateCoach.com/