Real estate agents are experts at guiding consumers through the negotiations and paperwork involved in the homebuying process. Yet, once buyers have signed on the dotted line, walked into their new homes and closed the door behind them, they too often are left with a false sense of security that all the surprises are over.
But typically, that’s not the case.
As most veteran agents can attest, home expenses don’t stop the day the closing documents have been signed, and these costs extend well beyond the monthly mortgage payment. However, too many homebuyers fail to anticipate the expenses that pop up unexpectedly once they’ve moved into their new abodes.
What homeowners need
A recent independent survey of 5,000 U.S. consumers sponsored by Ally Home, the direct to consumer mortgage arm of Ally Bank, spotlighted several areas around which homebuyers wish they’d known more prior to purchase. These highlighted areas of concern provide opportunities for agents to offer sage counsel to their buyer clients.
The two top areas of concern shared by survey respondents were ongoing maintenance and upkeep costs associated with owning a home, with renovation costs following closely behind. Although these might seem like obvious costs that homeowners should be prepared for, they are areas consistently overlooked.
For instance, here are the top survey responses when asked, “What do you wish you knew before you bought your first home?”:
- “How much to put aside for emergency home repair” and “renovation costs” were the two top responses (tied at 28 percent of survey respondents each)
- “Maintenance activities” came in closely behind at 27 percent of survey respondents, followed by “finding trusted home repair professionals in my area” (24 percent of respondents)
- “The neighborhood feel” and “how to perform basic DIY” were tied at 22 percent of respondents apiece
These survey responses spotlight the tremendous opportunity for real estate agents to extend their value as counselors to the homebuying public. Agents and lenders have always been trusted advisers when it comes to the housing market and common hurdles that come with purchasing a new house, but that’s not where our industry’s expertise needs to end.
How to help your clients
Real estate agents today can position themselves as trusted, value-added counselors to their clients. They can help them think past the process of the initial sale and truly prepare new homeowners for the long-term costs of homeownership, which will set them up for ongoing success.
Agents understand that emergency repairs, general upkeep and renovation work are routine expenses for which homeowners need to be prepared, yet as the survey results showed, more than a quarter of respondents felt unprepared for these costs.
Because five of seven areas where survey respondents reported feeling unprepared are all connected to post-purchase home costs, agents can help give buyers peace of mind by helping them estimate how much money they should set aside for these expenses. After all, the need to fix something in the home tends to arise out of nowhere.
For instance, agents, together with lenders, can play a guiding role in helping consumers assess how much house they can really afford while still enabling them to have money in reserve for unexpected expenses.
Agents can also encourage consumers to work with their lender to find mortgage products that are the best fit for their particular situation or loan products that come with the option to open a home equity line of credit to help pay for home repairs or renovations.
Agents should take it upon themselves to provide guidance to their clients in all these areas. This guidance will position you as the go-to expert and help clients remember you long after the sale, especially when their friends and family need a referral.
The role of the real estate professional is expanding to that of a real estate counselor, creating opportunities for the agent to extend his or her value by providing sound advice so clients can understand the full picture of the long-term homeownership experience.
This new role for agents can create deeper, more meaningful relationships with buyers and establish the foundation of a long-lasting client-agent partnership.
Diane Morais is president of consumer and commercial banking products at Ally Bank. You can follow Ally on Twitter or LinkedIn.
