What's keeping fence-sitters on the fence?
For example, buyers might be confused or misinformed on subjects like how much lenders actually require in the way of a down payment, about the level of control they have over whether and by how much their mortgage payments will adjust (30-year-fixed, anyone?), and about how relatively straightforward it is to determine whether their credit qualifies them for a mortgage (and if not, their ability to take steps over time to remediate it).
Knowing this makes it sensible for sellers to incorporate mortgage scenarios into their property marketing materials.
In the same vein, a frequent concern of buyers I encounter when it comes to the total costs of homeownership is that owners live under the constant threat of massive repair bills. The uninitiated might not understand quite how much power homeowners have to mitigate and manage that exposure through things like homeowners insurance, flood insurance, earthquake insurance, and even basic homebuying musts like property inspections and home warranty policies.
To the extent that any of these misunderstandings or misinformation are paralyzing otherwise qualified buyers who can actually afford the homes they want, it seems like education to correct these misconceptions and empower wannabe buyers should be a top priority of any entity -- public or private -- that has an interest in eliminating that bottleneck and helping buyers take advantage of today's low prices and rates.
But maybe there's another way to look at this whole thing. Maybe this whole conversation about homebuying fears is actually a very good sign that would-be buyers have learned from the mistakes of the preceding generation of homeowners and are determined not to repeat them. This fear could be read as caution -- and caution seems like a very wise sentiment with which to approach the endeavor of buying and owning a home.
Maybe these buyers-to-be have witnessed the devastation of the foreclosure crisis, firsthand or otherwise -- 36 percent of the total survey respondents personally know someone who has lost a home -- and have decided to get educated and make sure they don't hop off the homebuying fence until they are comfortable that they are making sustainable decisions when it comes to all the costs associated with homeownership.
This seems especially likely when you map their specific concerns to some of the most notorious causes cited for the housing market meltdown, including adjustable mortgages, zero-down loans and interest-only mortgages and some of the most widely reported impacts the housing crisis has had on the mortgage market (namely, the universal tightening of mortgage guidelines).
During my tenure actively selling homes as a real estate broker, I saw lots of consumers make less-than-optimal decisions as a result of their fears and freakouts. But there is a basic level of fear or anxiety about the gravity of the financial and life commitments involved in buying a home and taking on a mortgage that is not necessarily dysfunctional.
In fact, it can be an indicator that the fearful individual is actually taking the matter precisely as seriously as a prudent person would.
Tara-Nicholle Nelson is author of "The Savvy Woman's Homebuying Handbook" and "Trillion Dollar Women: Use Your Power to Make Buying and Remodeling Decisions." Tara is also the Consumer Ambassador and Educator for real estate listings search site Trulia.com. Ask her a real estate question online or visit her website, www.rethinkrealestate.com.
|Contact Tara-Nicholle Nelson:|
|Letter to the Editor|
What's Your Home Worth?