How to score working with First-Time Home Buyers

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This is a presentation for Real Estate Agents talking about why and how they should work with First-Time Home Buyers.

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How to score working with First-Time Home Buyers

  1. 1. Scoring with First Time Home Buyers Unlocking Hidden Value Shashank Shekhar Arcus Lending
  2. 2. About Me <ul><li>Specialize in First Time Home Buyers & FHA Financing </li></ul><ul><li>Also an Author & Speaker </li></ul><ul><li>MBA in Marketing </li></ul><ul><li>9+ Years of Lending Business Experience </li></ul><ul><li>Featured on TV & Radio shows </li></ul><ul><li>Creating “Raving Fans” by offering legendary service & value </li></ul>
  3. 3. Agenda
  4. 4. %age of FTHBs Source - NAR
  5. 5. Home Affordability Peaks! Source – www.car.org
  6. 6. Age of First Time Home Buyers Source - NAR
  7. 7. Status of FTHBs Source - NAR
  8. 8. Primary reason for buying the first home Source - NAR
  9. 10. Lifetime of Business <ul><li>Typically stay in the home for 7 years </li></ul><ul><li>May buy ~5 properties over lifetime </li></ul><ul><li>Are more loyal clients </li></ul><ul><li>50% market share </li></ul>Translates into more potential business over lifetime than any other segment
  10. 11. Demand Drivers <ul><li>Economic & Market Conditions </li></ul><ul><ul><li>Unemployment Rate, Interest Rate, Availability of credit, Own vs Rent </li></ul></ul><ul><li>Longer Term Social Trends </li></ul><ul><ul><li>Female labor force participation rate, Divorce Rate </li></ul></ul><ul><li>Immigrant & Minority Shares </li></ul>
  11. 12. Demographic Drivers <ul><li>Household growth from Hispanics & Asians will increase (1998-2008 vs 2010-2020) </li></ul><ul><ul><li>Hispanics 3.8 millions to 4.5 millions </li></ul></ul><ul><ul><li>Asians 1.5 millions to 2.5 millions </li></ul></ul><ul><li>Married couple without children fastest growing household type </li></ul><ul><li>Followed closely by single person households </li></ul><ul><li>Source – Housing study 2009 by Harvard </li></ul>
  12. 13. Echo Boomers Effect <ul><li>Born 1981-2000 </li></ul><ul><li>This age group projected to increase by 2 million & 3.4 million* </li></ul><ul><li>*based on 2 different projections </li></ul>
  13. 14. They will reverse the decline in 25-44 age group.
  14. 15. The number of echo boomers 25-44 will eclipse the numbers of baby boomers when they were of the same age by 5.9 million
  15. 16. <ul><li>Huge surge in Starter Homes </li></ul>
  16. 18. Use of internet to search for homes Source - NAR
  17. 19. First step taken during the Home Buying process Source - NAR
  18. 21. How to reach them <ul><li>FTHB Seminars/Webinars </li></ul><ul><li>Invest in a top class CRM tool </li></ul><ul><li>Improve your online presence </li></ul><ul><ul><li>Social Media </li></ul></ul><ul><ul><li>Blogging (60% of Gen Y and 50% of Gen X read someone else’s blog past month) </li></ul></ul><ul><ul><li>Get found on Google </li></ul></ul><ul><ul><li>Videos (78% of Gen Y and 62% of Gen X watched an online video) </li></ul></ul><ul><li>Email drip campaign </li></ul><ul><li>Find a Niche within a Niche </li></ul>
  19. 22. How to work with them <ul><li>Finding Pain Areas and addressing them </li></ul><ul><ul><li>Fear of losing job </li></ul></ul><ul><li>Importance of Pre-Approval </li></ul><ul><ul><li>Pre-qual is not enough </li></ul></ul><ul><li>Doing your due-diligence </li></ul><ul><ul><li>Condo Checklist </li></ul></ul><ul><ul><li>Tax Credit FAQs </li></ul></ul><ul><li>Setting right expectations </li></ul><ul><ul><li>Explaining Normal sale/Short Sale/REO </li></ul></ul><ul><ul><li>Turn Times </li></ul></ul><ul><li>Using critical deadlines to get them off the fence </li></ul>
  20. 23. Deadlines
  21. 24. The Paradox of NOW! Highest prices BUT LOWEST payment Lowest prices BUT HIGHEST payment Sales Price $425,000 $403,750 $382,500 Loan Amount $410,125 $389,618 $369,112 Interest Rate 5.00% 5.50% 6.00% P&I Payment $2,240 $2251 $2,252
  22. 26. Hot Features of FHA <ul><li>3.500% down payment </li></ul><ul><li>3% seller concessions </li></ul><ul><li>All funds can be gifted </li></ul><ul><li>Non-Occupant co-borrower allowed </li></ul><ul><li>No reserve requirements </li></ul><ul><li>No declining market policy </li></ul><ul><li>Min credit score of 620 (going to 640) </li></ul>
  23. 27. FHA Lending is Exploding <ul><li>Now represents >30% of loans being written </li></ul><ul><li>80% of FHA purchase loans are First Time Buyers </li></ul><ul><li>1 out of 2 FTHBs are choosing FHA </li></ul><ul><li>Tailor Made for: </li></ul><ul><ul><li>First time buyers </li></ul></ul><ul><ul><li>Borrowers with little to no money </li></ul></ul><ul><ul><li>Buyers with less than perfect credit </li></ul></ul>
  24. 28. FHA will keep growing <ul><li>A recent survey of buyer attitudes found that </li></ul><ul><li>More than one-third of buyers don’t plan to make down payments larger than 10% </li></ul><ul><li>One-fifth of buyers don’t plan to put any money down. </li></ul><ul><li>Only 22% of buyers said they planned to make down payments that exceeds 20% </li></ul><ul><li>Source – Zillow.com </li></ul>
  25. 29. Unlock the value <ul><li>Embrace FTHB </li></ul><ul><li>Market Right </li></ul><ul><li>Partner Right </li></ul><ul><li>Close More Homes </li></ul>
  26. 30. Let’s Connect www.Facebook.com/LendingExpert www.Twitter.com/ShashankTweets Blog www.LendingExpertBlog.com E-mail [email_address] Cell 408.905.6261 Media www.SanJoseRealTime.com www.Facebook.com/FirstTimeHomeBuying101

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