Throughout the past year, news of a tight housing market and low inventory levels has dominated news headlines. As a result, the imbalance between high home buying demand and available properties has continued to grow. With such an insufficient supply of homes for sale, it’s therefore important for real estate agents to enhance (or even increase) their properties through one simple strategy: renovation loan programs. Here’s how incorporating a renovation loan into your real estate listing can benefit you.
According to the National Association of Homebuilders, many first-time buyers are skipping the starter home and focusing on bigger, more extravagant properties. This has added even more strain to the industry, as starter homes now sit on the market while larger properties sell within days. By adding a renovation loan to the listing, however, realtors have the ability to show first-time (and even repeat) buyers the potential a property has, no matter the size. In fact, great indicators that you should incorporate a renovation loan into the listing are phrases like “has potential,” “location, location, location,” and “handyman special”. By highlighting the renovation potential for properties receiving these comments, realtors therefore have the opportunity to increase sales as home buyers begin to consider properties they may not have considered before.
In addition to increasing sales, renovation realtors have the potential to reduce a home's time spent on the market as they add loans to their real estate listings - but which loan is right for the listing? The most popular loan options include the FHA 203K and Fannie Mae HomeStyle Renovation programs. FHA 203K loans are basically government-backed loans offered to borrowers looking to purchase damage or older homes and make repairs to fix them up. Similar to the FHA 203K, the HomeStyle Renovation Loan Program is an easy and economical way for borrowers to purchase and renovate (or even refinance and renovate) a home without the hassle of getting a second mortgage or home equity line of credit. When deciding between the two, you should select the loan you add to the listing based on the audience to which you are selling. To learn more about the difference between FHA 203K and Fannie Mae HomeStyle, see here.
Overall, there are many benefits to incorporating a renovation loan into your real estate listing. For more information about how to increase sales as a renovation realtor, or to learn more about mortgage options, contact one of our mortgage specialists today.
