How to transition renters to homebuyers

While seasoned homeowners might seem like the obvious target for real estate professionals, a significant portion of the market that often gets overlooked is renters. But before you write them off as an irrelevant segment for new business, it’s worth exploring why these non-buyers choose the route that they do. Are they frustrated by the financials? Leary about long-term commitment? Defeated by the market?

Whatever their personal reasons may be, renters deserve information to help them make an informed decision about whether or not transitioning from renter to homebuyer is possible. This is where you come in.

Weichert® will help you identify specific concerns renters often have. Understanding their point of view (POV) is key to supporting them. We’ll also equip you with tools and tactics to effectively address these concerns.

Renters’ POV: “Buying a home is not affordable.”

When it comes to buying a home, renters might feel a down payment and closing costs are insurmountable. Highlight government-backed programs, like Federal Housing Administration (FHA) loans with lower down payments, and discuss closing cost assistance options from lenders or sellers. Utilize online mortgage calculators to show the potential long-term savings of homeownership compared to rising rents.

Many renters may also worry they aren’t financially prepared. Emphasize the importance of a mortgage pre-approval and connect them with lenders who specialize in working with first-time homebuyers. Partner with financial advisors to offer workshops for renters on budgeting, saving for a down payment, and understanding credit scores.

Renters’ POV: “I can’t compete in this market.”

For many renters, the dream of homeownership feels increasingly out of reach. They’re caught in a challenging cycle. Rising rents eat away at savings needed for a down payment, while bidding wars inflate the price of the homes they desire.

Frustration mounts as they watch their peers (often with help from family) secure homes, while they remain locked in a cycle of escalating rent payments. According to Yahoo Finance, more than half of all renters are paying over one-third of their income toward rent. This is a sobering statistic.

As you know, bidding wars are more common in some areas than others. Help renters to consider exploring suburbs or up-and-coming neighborhoods. Show them that there’s a strategy for bidding on a home, which may include a mortgage pre-approval to make their offer more attractive to sellers. They might be surprised by what they really can afford.

Renters’ POV: “It’s too much commitment.”

Renters may value the flexibility of moving freely; something they may feel is impossible with homeownership. Debunk that myth by discussing the benefits of long-term stability and the potential for building equity, which can act as a financial safety net. Highlight areas with good resale value, ensuring they can choose a home that suits their future plans. Showcase “starter homes” that offer the flexibility of renting out in the future if desired.

Renters may also fear the responsibility of maintenance and repairs. Provide resources on basic home maintenance and highlight the benefits of home warranties. Partner with local home inspectors to offer free consultations for pre-purchase inspections, easing anxieties about potential repairs.

Renters’ POV: “I don’t see the benefit of switching from renter to homebuyer.”

As you take steps to reach renters and educate them about the transition from renter to homebuyer, effectively communicate the benefits. Let them know that buying a home is a great way to:

• Build equity. Owning a home means building equity, a valuable financial asset that grows over time. Contrast this with rent payments, which may be viewed as “throwing money away.”
• Create stability. Homeownership offers long-term stability. You don’t risk sudden rent hikes or unexpected lease terminations.
• Personalize your space. Owning means you can personalize your space. Highlight the freedom to paint, renovate, and make the home your own.
• Gain tax advantages. Explain potential tax deductions homeowners can benefit from, such as mortgage interest and property taxes.
• Establish roots in a community. Homeownership can create ties to a community that can last for decades. Educate about the schools, houses of worship, and clubs and activities that create lasting connections.

By understanding renters’ concerns and providing clear information, you can guide them to realize that the dream of homeownership can come true. Demystifying homeownership for renters opens a whole new world of potential buyers, leading to a thriving and successful business.

Weichert is here to support you. Reach out to start a conversation.