Selling Your Home by Expanding the Customer Base
Marketers for any business want to know as much as possible about their “customer base”—the population of potential buyers who might be attracted to their product. If you are in the process of selling your home, the speed at which you succeed and the amount of profit that results will greatly depend on how effectively you appeal to your offering’s customer base: the folks who might be interested in your property.
When you take me on as your selling agent (a good idea, for sure!), you’ve relieved yourself of the vast majority of the burden of marketing. It’s what I do as a full-time job—and I’m successful at it. You can certainly let your friends and family know that you are selling your home (and what a great place it is) if you choose, but the lion’s share of marketing to the public at large will be well and energetically handled by your Realtor®.
Yet there is one step you can take that might be extremely beneficial to your marketing campaign. It has to do with that customer base we were aiming for: specifically, it has to do with widening it. It’s where the FHA comes in.
The Federal Housing Administration was created back during the Great Depression to spur home construction. By offering government-backed insurance that encouraged banks to offer home loans, it created jobs, helped families find proper housing, and spawned a host of other beneficial side effects. The FHA doesn’t actually make any loans itself—but it does assume most of the risk.
Today, due to a variety of economic factors that have made qualifying for a home loan somewhat difficult, it’s fair to say that the size of the customer base has not grown even as fast as the slow-motion economic recovery. Along with other factors, banks have been timid about lending due to the potential penalties for not following strict guidelines. The customer base—measured by how many potential homebuyers can easily get mortgage loans—has lagged. This situation has improved lately, but some still complain that home loan resurgence remains sluggish. Likewise, growth in the customer base.
For anyone selling their home, one way to expand the customer base is to make your property what you might call “FHA-Friendly”—that is, transparently a good candidate to qualify for an FHA loan guarantee. This isn’t the place to go over all the details about how that can be accomplished, but if your asking price is within FHA guidelines for our region of California and you are confident no serious defects will be found during the home inspection, much of the goal will have been attained.
If you will be selling your home this fall or winter, now is a very good time to give me a call. FHA-friendly or not, we’ll make sure your customer base is primed and ready!
Top 6 Frequently Asked Home Buyer Questions
Like careful consumers who are investigating any major purchase, home buyers need to address some of the same basic queries. Among home buyers, those who already own homes may think they have different questions than do first-timers, but even for those who have successfully navigated the process before, if it’s been a while since then, some basics may need refreshing:
- Should I buy or rent? This is quite rightly the lead question any home buyer needs to answer. It’s not one that many residents who are already home owners spend a lot of time on since the answer for their own family has already been a “yes.” For them, unless some major changes have come to pass, they can safely assume that homeownership is still a no-brainer.
Here is one of my listings. Only $304,000 for 2 bedrooms, 2 bathrooms, and your own 2 car garage. What a great way to stop renting and become your OWN landlord.
- How do I get started? Get a mortgage pre-approval. Although a lender’s pre-approval isn’t a requirement, getting a green light in advance can’t help but create a positive atmosphere with sellers and their representatives. It demonstrates serious intent—and in a competitive situation could even wind up winning the day.
- What’s the right credit score to buy a house? 620-650. Okay, okay—I know there’s actually no number that’s truly the “right” credit score for all circumstances. It depends on so many possible outside factors that the exceptions are too numerous to list. That 620 number (and higher) does seem to be one that lenders like to see; with 580 the common minimum low down payment FHA qualifier…but that can even be less in order to qualify for the FHA 10% down payment program. The only bullet-proof answer for the “right” credit score is—the best one you can build!
- How much will the down payment be? This one depends on the property you choose, the home loan you select—and also, to a degree, on how much you want to pay. It used to be common sense that you should pay as much as you can afford in order to minimize the amount of interest you wind up paying over the life of the home loan. But with interest rates as low as they are today, some financial gurus are less confident about that advice: there may be more lucrative ways cash can be put to work.
- How much do I have to pay my agent? Nothing. The buyer’s agent fee is paid by the seller.
- Should I use a real estate broker? This answer comes from the HUD.gov website: “Using a real estate broker is a very good idea.” As HUD says, “the details involved in home buying, particularly the financial ones, can be mind-boggling.”
Needless to say, that last Top Home Buyer FAQ is a personal favorite. It’s really just another way of saying, “call me!”