Working With Single Home Buyers

As a broker, you’ll meet all kinds of clients who range in age, home buying experience, income and lifestyles. Each client is unique and has their own personal goals and roadblocks when it comes to homeownership. The different categories they fall into can also tell you something about them. For example, studies have shown millennial home buyers are active on YouTube and Facebook, expect quick responses and prefer to work with brands that align with their values.

By studying the many different types of home buyers, you can better tailor your messaging and marketing to specific clients and address their concerns to help win their business.

Our sister company Rocket HomesSM surveyed just over 1,000 singles to find out more about the home buying landscape of single home buyers. Here’s what we learned from their study and how you can apply it to working with this specific group of clients.

About Single Home Buyers

The study found that out of the 1,047 singles surveyed, more than half were already homeowners, not first-time home buyers. Only 38% didn’t own a home. Of those who owned a home, 71% made the purchase on their own.

Desire To Buy A New Home

Of those surveyed, 45% wanted to buy a home, but more than one-third were not financially able to do so.

Down Payments

When it came to down payments, they believed they needed an average of about $25,309 and, on average, had about 57% of that money saved. Single women had less money saved than single men.

Barriers To Home Buying

It may not be surprising to learn that finances are some of the most significant barriers to home buying. 

For single home buyers in poor financial health, the top three barriers were:

  • Waiting for home prices to go down
  • Wanting to avoid debt
  • Needing to save for a down payment

For those in good financial health, their barriers were:

  • Waiting for home prices to go down
  • Waiting to find a home that met their criteria
  • Wanting to avoid debt

Takeaways From The Single Home Buyers Study

With a highly competitive real estate market and rising interest rates making affordability out of reach for some, these barriers may be even more challenging to remove. But now that you know the big ones, you may be able to prepare for such objections.

Waiting For Home Prices To Go Down

According to Business Insider, while appreciation may slow this year, home values are not expected to drop. There are a few ways to work with these clients who are waiting. First, be honest with them about the state of the housing market, but remain positive. If they need a home to live in or want to buy in the next year (and are in a good place financially to do so), trying to time the market may be a fruitless venture. It’s a changing market, and even if prices decrease eventually, we can’t say what interest rates will do. And right now, they’re predicted to increase a few more times in 2022.

Explain to your client that even at a lower sale price, they may still end up spending the same or more on their payments with a higher interest rate. That’s because they’ll be paying a higher interest rate, which could make their payment higher and mean they pay more in interest in the long run.

For example, the monthly mortgage payment for a 30-year mortgage on a $250,000 loan at a 6% rate is $1,499. If the interest rate was 5%, the client could purchase a $280,000 for the almost same monthly payment: $1,503.

Wanting To Avoid Debt

It can be hard to sell the idea of taking on a large, long-term debt like a mortgage to someone who wants to avoid debt. There’s no getting around the fact that the client will be taking on debt when they get a mortgage. But while your client may not see rent as a debt, you can help them see the drawbacks of paying rent and the pros of paying a mortgage.

For example, rent is still a monthly payment they’re required to make. If they don’t make the payment, they could lose their home, apartment or other living space. And point out too that the rent they’re paying isn’t going anywhere. When you’re making a mortgage payment, your money is going toward your benefit. It’s going toward building equity in your home.

If this is the case, it may be important to point out that their rent could possibly be higher than their mortgage payment. Depending on where they live, the type of place they’re renting and the type of home and loan they’re looking to get, they could end up paying less on their mortgage payment than their rent.

Needing To Save For A Down Payment

Some clients may still believe that a 20% down payment is required for a mortgage. Dispelling that myth is the first step. Next, it’s important to talk to your client about all the options they may have. There are many different types of loans and programs available that allow for more flexibility when it comes to down payments. From VA loans that may allow 0% down to FHA or conventional loans that require as little as 3% – 3.5% down, your clients may have opportunities they weren’t aware of. And if they’re first-time home buyers or fall into another qualifying category, they may be eligible for a first-time home buyer program or other down payment assistance program or grant.

Waiting For A Home That Meets Their Criteria

This one can be tricky because it is a personal choice. And if your clients are in a position where they can wait, that’s just what they may choose to do. But it’s important that they understand the current market. With such limited availability, they may not be able to be as picky as they want, especially if they’re not in a position to wait for the perfect home at the perfect price to come around.

Clients need to be realistic about what inventory is available and how competitive the market is. Even if they find a home that meets all of their criteria, that doesn’t mean they’ll get that house. They could be competing with tons of other buyers that have waited for this “perfect” home too.

Talk with your clients about needs versus wants and also have them list out their must-haves, nice-to-haves and deal-breakers. It may help them prioritize a little better and find a home that meets their needs.

If the features they want can be added later, that could be an option too. In fact, after 6 months, clients may be able to do a cash-out refinance to help create the home they love. And, as a bonus for you, this could result in repeat business.

Get More Tips On Working With All Types Of Home Buyers

There are many types of clients you may encounter in your broker career. Single home buyers have many of the same goals, fears, roadblocks and questions as any other client. And each individual client will have the own individual wants and needs, no matter what group they fall into. The most important part is that you listen carefully to each client and tailor your service and product to their situation. If you’re just starting out or need a fresh perspective, contact your Account Executive to work through various scenarios. You can also sign in to the portal to see what great messaging we have in the Marketing Hub.