Financing continues to be a major challenge in today’s market. If you’re struggling to find clients who are ready, willing and able to buy, the 2009 NAR Profile of Buyers and Sellers — which is based on survey data from a sample of 9,138 participants who purchased a home between July 2008 and June 2009 — contains some very helpful data.

Tighter underwriting requirements, appraisal issues and higher downpayment requirements mean fewer buyers today are able to qualify for financing. Credit-card companies are either lowering people’s credit lines as they pay off their bills or canceling them completely. This has the effect of lowering the amount of credit the consumer has available.

It also results in the consumer having a higher percentage of debt vs. available credit. The overall effect is that it lowers consumers’ credit scores, making it more difficult to purchase. Given the current situation, it’s more important than ever to be able to identify the buyers who are the most likely to close a transaction in 2010.

Financing continues to be a major challenge in today’s market. If you’re struggling to find clients who are ready, willing and able to buy, the 2009 NAR Profile of Buyers and Sellers — which is based on survey data from a sample of 9,138 participants who purchased a home between July 2008 and June 2009 — contains some very helpful data.

Tighter underwriting requirements, appraisal issues and higher downpayment requirements mean fewer buyers today are able to qualify for financing. Credit-card companies are either lowering people’s credit lines as they pay off their bills or canceling them completely. This has the effect of lowering the amount of credit the consumer has available.

It also results in the consumer having a higher percentage of debt vs. available credit. The overall effect is that it lowers consumers’ credit scores, making it more difficult to purchase. Given the current situation, it’s more important than ever to be able to identify the buyers who are the most likely to close a transaction in 2010.

1. Not everyone needs a loan
One of the best ways to develop your business in 2010 is to carve out a specific niche such as retirees, investors or a specific subdivision. Almost no one has a niche, however, in working with all-cash buyers. Yes, they still exist. In fact, according to the 2009 NAR profile, 8 percent of all purchases were all-cash transactions.

The big differentiator is age. Only 2 percent of the participating buyers ages 25-44 paid all cash, compared to 13 percent of baby boomers (ages 45-64).

The biggest opportunity is with those 65 and up, the survey results suggest. A whopping 36 percent of respondents in this group paid all cash for their purchase. This coincides with the fact that despite the tough market, approximately 35 percent of all Americans own their primary residence free and clear.

Prospecting opportunity: Specialize in working with people who are moving from their large family home to a smaller home when they retire. You can often identify these potential sellers by searching the public records for people who purchased their homes before 1990. Many title companies have software that will sort this data and provide it to you at no charge.

Clearly, the longer they have been in their home, the more likely the owners are to be near retirement. Best of all they may not need a loan.

2. Work with first-time buyers to avoid contingent sales
There is no question that the move-up part of the market is still challenging. Even though many sellers would like to sell, they may be locked in to their present home due to being upside down (owing more than the home is worth) or being unable to qualify due to tighter lending standards.

The great news about working with first-time buyers is that they don’t have a house to sell. In fact, the percentage of first-time buyers participating in the survey jumped from 41 percent in 2008 to 47 percent in 2009.

Prospecting opportunity: Because 78 percent of all first-time buyers participating in the survey were renting an apartment prior to purchase, it’s a good idea to create a marketing campaign that highlights the costs of renting vs. buying. For example, "Did you pay your landlord’s mortgage again last month?" or "Stop rent increases dead in their tracks." Provide free reports on your Web site that highlight the advantages of owning as opposed to renting.

A whopping 67 percent of all first-time buyers participating in the survey were under 35. To earn the right to do business with this growing group of young buyers, become an active part of the online conversation. This does not mean promoting your services. Instead, consider sites such as Facebook and Twitter to be similar to a social gathering where you meet others who share common interests.

Gen X and Gen Y want to get to know you in a social environment prior to doing business with you. Dump the vanity marketing that focuses on you and your accomplishments. Instead, show up as an interesting, fun person who also happens to be a competent and likable real estate professional. …CONTINUED

3. Structure your marketing campaigns to fit your target market
The top four reasons first-time buyers purchased in 2009 included "desire to own their own home" (62 percent), "affordability" (10 percent), "change in family situation" (8 percent), and "first-time-buyer tax credit" (6 percent), the survey found.

Prospecting opportunity: Any first-time-buyer marketing campaign you create should address these reasons that buyers purchase. For example, "Still dreaming about owning your own home? Low interest rates and the first-time-buyer tax credit make your dream of homeownership more affordable than ever before. Visit www.mywebsite.com to learn if you qualify to buy your first home now."

4. Best type of financing for first-time buyers
In 2009, 55 percent of all buyers participating in the survey used an FHA-insured mortgage to finance their purchase as compared to 23 percent of repeat buyers. Twenty-nine percent used conventional financing and eight percent used VA financing (guaranteed by the U.S. Department of Veterans Affairs). Nationally, the FHA backs roughly 30 percent of all home-purchase loans and 20 percent of all refinance loans.

Prospecting opportunity: Conduct a first-time-buyer seminar and educate your first-time buyers about the requirements and the advantages of using FHA-backed financing to purchase. You could also post this information on your Web site or blog.

5. Real estate — still the best shelter
Of all buyers in 2009, 87 percent believe that real estate is a good financial investment, according to the survey. Fifty-four percent believe real estate is better than stocks and another 26 percent believe it is as good as stocks.

Prospecting opportunity: Create a marketing campaign that says, "Real estate — still the best shelter. In a recent survey, 87 percent of all people responding ranked real estate as a good financial investment. Put your money in an investment you can live in."

Understanding what is wanted and needed in terms of financing will help you close more transactions at the best possible rates for your buyers.

Bernice Ross, CEO of RealEstateCoach.com, is a national speaker, trainer and author of "Real Estate Dough: Your Recipe for Real Estate Success" and other books. You can reach her at Bernice@RealEstateCoach.com and find her on Twitter: @bross.

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