Buying and owning a home is a dream for many Americans. Unfortunately the experience can be stressful — especially for first-time buyers in this market. It’s one of the biggest transactions anyone can make in their lifetime. But that doesn’t mean it shouldn’t be exciting.
The 2020 NAR Home Buyer and Seller Generational Trends Report found that first-time buyers made up 33% of all home buyers, a number that has remained fairly consistent over the past several years. Additionally, Ribbon’s data revealed that in the Atlanta, GA market, the number of first-time homebuyers has doubled year-over-year! That’s a lot of first time buyers. With a steady flow entering the market each year, there are bound to have similar roadblocks.
Fortunately, they have you to support them through these difficulties and keep their eye on the exciting parts. Here are some common challenges first-time buyers are encountering in this market and how top agents are helping their clients find (and secure) their dream home.
Low housing inventory
Going into 2020, the housing inventory was already low. However, due to the record low mortgage rates and pandemic, buyers flooded markets (rural, suburban, and city, alike) resulting in one of the lowest levels of single-family homes in history. This hasn’t been an easy challenge for anyone, especially first-time homebuyers.
How you can help: Stand out from the crowd
Stay on top of your target market and be ready to pounce when new properties come up for sale. Once ready to make an offer, lean into what makes your client different.Try writing a letter. A personable, well-written letter might give your client the edge they need.
Saving up for a down payment and closing costs isn’t easy, especially for first-time homebuyers. Having a weaker credit score or not having 20% saved for a down payment shouldn’t delay homeownership. ATTOM Data Solution’s 2020 Home Affordability Report also showed that the median home prices for single-family homes and condos are less affordable than historical averages.
There are still plenty of housing markets that are more affordable options and some markets are even taking actionable steps towards housing affordability, such as Atlanta’s Housing Affordability Action Plan. There are also options to reduce upfront, out-of-pocket expenses.
How you can help: Be knowledgeable about first-time homebuyer programs
There are state programs for first-time homebuyers such as no or low-down-payment programs. There are also competitive mortgage rates for first-timers. If your buyer fits the requirements for one of these programs in your state, it could lessen the initial financial burden. If your client is buying on rural land, they could qualify for a USDA loan or if they’re a military veteran, VA loans don’t require a down payment. Sharing this knowledge can help ensure your buyer is able to make an offer that’s in their budget.
Bidding wars in an ultra-competitive market
First-time homebuyers can be up against stiff competition when the market becomes this busy. Bidding wars have become table stakes and sellers are looking for easy, secure, and high value sales.
How you can help: Make an all-cash offer
Sellers prefer an all-cash offer and it could seriously make your client stand out amongst the competition. You might be thinking an all-cash offer is nearly impossible for first-time homebuyers, but that isn’t necessarily the case.
We can help. You can increase your buyer’s chance to win by 3x with RibbonCash Offers. Ribbon can turn your client’s offer on their dream home into an all-cash offer with no contingencies, help you coordinate the closing, and give your client 180 days to secure financing for the original price. It’s a win for everyone.
Want to learn more? Let’s chat! You can speak with Ribbon’s experts about our program and how it works.