Did you know that first-time homebuyers make up 34% of today’s housing market? That means about one-third of your clients will require some extra TLC to deal with the stress of buying a home. While the whole process involves pressure — 40% of homebuyers call it the most stressful event of their lives, and 33% admit to having shed tears at some point — closing and finances are the two areas most likely to impact your clients.
You can reduce stress for your clients in these areas by providing them with insights and educational resources as soon as they start looking for a home.
Help Clients Navigate the Closing Process
Closing is the finish line of the homebuying process, but hiccups at this stage in the game are common and especially frustrating. Educating clients early on reduces the stress that can come from these hiccups. It also allows you to wrap up your relationship on a positive note, leading to more referrals and repeat business. Here’s how you can help clients prepare for closing:
- Explain title and escrow in layman’s terms: Share educational resources on the title and escrow process as well as title insurance. You should also be prepared to talk about technical aspects, such as easements. Divulging some of the things that can go wrong during closing (such as a lien on a deed) won’t change the circumstances should they arise, but awareness can mitigate the stress.
- Define the timeline: Letting your clients know how long closing will take and when it will occur helps them plan ahead. Share the major milestones on the journey to purchase their home and what they mean. Also inform clients of their options for signing based on your state’s laws. If signing has to be done in person, let them know ASAP.
- Walk through the Preliminary Title and Insurance Report: Set up a time to walk through this document so they feel prepared when it comes time to sign. Doma provides an example guide— as well as many other resources— that you can share with clients to help make closing go smoothly.
Increase Your Client’s Financial Awareness
Considering that a house is one of the most expensive purchases your client will ever make, it’s only natural that they’ll feel stressed about it. Here are some ways to increase your client’s financial awareness early in the homebuying journey:
- Explain the impact of ongoing financial choices: Your clients may not realize that their loan pre-approval amount can change depending on spending decisions they make after they’ve been pre-approved. Advise your clients to be careful where they place their money in the months leading up to making an offer to minimize impact to their credit.
- Show them hidden costs: Make it your responsibility to ensure your clients understand all the costs associated with buying a home. For example, don’t assume that their lender has explained what their monthly payment will look like once PITI (principal, interest, taxes, and insurance) are factored in. Other examples of costs that may not be obvious to first-time buyers include an earnest money deposit, home inspection, and closing costs.
- Provide a list of the necessary paperwork: Letting clients know in advance what financial paperwork they’ll need to provide can prevent delays during closing. Pay stubs, tax returns, and student loan documents are examples. Ask questions about your client’s financial situation to uncover any other paperwork they’ll need.
Educating clients on the closing process and finances removes stress from the homebuying experience, but there are other areas you can invest in as well!
To learn more ways to support first-time buyers in today’s hyper-competitive market, check out our executive brief, “Help First-Time Buyers Close with Confidence”.