With the foreclosure crisis at the top of every homebuyer’s mind, little attention has been paid to the Realtors that guide them through the process. The Nevada Association of Realtors has created a set of guidelines to educate homebuyers.
One key element to the future of the Nevada real estate industry is that homes are sold to homebuyers who understand the responsibility of purchasing and owning a home.
Home sales are beginning to show steady growth in both Southern and Northern Nevada, with savvy buyers snapping up the best deals in real estate over the past 15 years.
“There is no way to completely avoid another crisis situation in the housing market, but using a professional Realtor is a major step in the right direction,” said Devin Reiss, president of the Nevada Association of Realtors. “Realtors are not only a partner for buyers and sellers, they are the single biggest educational force among an audience that is largely uneducated about the home-buying process. And through the efforts of a recent state-wide survey, we found that a Realtor’s ability to identify healthy homebuyers is key to building up Nevada’s communities once again.”
Last month, the National Association of Realtors, in conjunction with its Nevada affiliate, surveyed 500 people in Nevada. More than 60 percent of those surveyed had personally experienced a foreclosure and an additional 24 percent had a close relationship with someone who has been foreclosed upon. Homes with a Realtor involved in the sale were nearly 10 percent less likely to experience foreclosure and homeowners were more likely to know what type of loan they had.
“We confirmed that homes sold with Realtors are less likely to go into foreclosure,” Reiss said. “But more importantly, we identified why. The tools to identify a healthy homebuyers will assist Realtors in helping clients purchase homes that they can afford now and will be able to afford in the long term.”
“The key to understanding the foreclosure crisis in Nevada is the ability to distinguish between a healthy and unhealthy homebuyer,” said Reiss. “In order to reestablish homeownership, we have to stabilize the market by avoiding situations with a high risk of foreclosure and these markers can make a difference in that effort.”
Reiss encourages all Realtors in Nevada to utilize the guidelines when working with clients. “They can also be helpful to those homebuyers who may not realize that their vision for homeownership does not necessarily match their budget and income,” he said. “The quicker we can get back on our feet with healthy homebuyers moving into these foreclosed upon homes, the better off our communities and economy will be.”
According to Reiss, The guides for a “healthy” homebuyer are:
* He or she has an income that can support a mortgage, even if that mortgage is small.
* He or she understands the risks involved in purchasing a home including life events that can make mortgage payment difficult.
* He or she accepts full responsibility for mortgage payment on time and in full.
* He or she realizes there are additional costs and fees associated with homeownership.
* He or she understands the financing options clearly and plainly and knows exactly who they can contact if problems arise with payment of their mortgage.
* He or she willing to purchase a home within their realistic price range.
An “unhealthy” homebuyer:
* He or she has an income that cannot realistically support any mortgage.
* His or her income can only support his or her current lifestyle and mortgage if no changes in income or expenses occur.
* He or she has an overly simplified understanding of risks involved in homeownership including life events that can make mortgage payment difficult.
* He or she does not understand their responsibility to pay in full and on time.
* He or she do not realize there are additional expenses.
* He or she does not understand their financing options clearly and plainly or the basic factors of who they are responsible to, who they are paying and how they can contact that entity in case of problems
* He or she is set on only considering and purchasing a home whose size and price are clearly not realistic.
“Knowledge is key,” Reiss said. “Realtors make a huge positive impact on preventing future homes from entering foreclosure, and these tools can help them educate homebuyers on what is realistically expected of them throughout the life of the home. It is one more step on our journey to recovery.”