As a real estate agent, you’ve probably experienced something like this: You’re exploring a new lead that’s looking to own a home, but they’ve only ever been renters. The daunting amount of money they’d be putting into a house makes them lean towards renting – but you know better. You know the obvious benefits of being a home owner – but do your clients?
Buying vs. renting seems to be a constant debate. Arm yourself with quick facts and stats to help make your clients decision easier. Especially for first-time home buyers, these facts can make or break their decision to become home owners. Turn your indecisive first-time home buyers into raving fans of home ownership by keeping them informed, prepared, and confident as they purchase a home with you.
1. Paying Rent is Paying Someone Else's Mortgage
As renters, your leads are being money-conscious. Their objections often revolve around how much they need for a down payment. A great talking point would be mentioning that every time they pay rent, what they pay to the landlord is only paying the landlord’s mortgage. It’s a great investment for them – but no investment for a renter. Rent vs mortgage may even be similar in price – but with rent, they also risk that rent price rising over time due to factors out of their control, unlike a mortgage that will stay the same for as long as they have it. Here’s a helpful quote from Christina Boyle, SVP of the Single-Family Sales and Relationship Management organization at Freddie Mac, who explains it like this: “With a 30-year fixed rate mortgage, you’ll have the certainty & stability of knowing what your mortgage payment will be for the next 30 years – unlike rents which will continue to rise over the next three decades.”
2. They Get a Tax Break
Homeowners can deduct mortgage interest and property taxes when filing annual tax returns. These savings can really add up, and drastically help to offset the cost of the mortgage. Many home buyers are aware of a tax break but are unaware of how large those savings really are. Be sure to let your leads know: oftentimes, this tax break can make owning a home the same price, if not cheaper, than renting.
3. They Will Have the Freedom to Modify Their Home
You might ask leads who are currently renting: “If you want to make your house a home, why are you renting?” As a homeowner, they may not be considering that they would have the freedom to make renovations or permanent modifications to their home, or even rent it.
This is an often-forgotten benefit to your leads. They should be aware of the benefits of monetizing their home when they are the owners as well – many homeowners are getting creative with AirBNB’ing sections of their home, renting out basements, or even renting the entire home as an investment property. Owning a home means more than just the ability to paint walls without asking a landlord – monetizing the home by renting is an often-overlooked perk.
4. They Will Build Equity = Instant Savings
When a homeowner pays their mortgage, they are creating a built-in savings account. With every mortgage payment that’s made, more of the principal is paid down, meaning they own more and more of their home with each payment. As their real estate agent, you have to inform them of what you already know – many first-time home buyers may not understand this concept.
Renters are simply throwing that money at a landlord. When they own a home, the owner is essentially required to invest in their own home, so it’s like forced savings that benefits the owner directly (not the landlord).
This forced savings helps them to invest in their future without giving it a second thought. Explain it this way: “You can build a nest egg, and invest in your home, putting your money to good use AND into safe keeping.”
Educating your home buyers, especially your first-time home buyers, is an invaluable way to put your best foot forward as a professional real estate agent, build trust as a resource for them, and win their business. Their research online can only take them so far- your input as a professional is crucial. Turn renters into leads, and those leads into clients for life.
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