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Editor’s note: VHT Studios was acquired by Matterport in July of 2022.
Floor plans have historically been a useful marketing asset. Buyers like them, because floor plans help them visualize their movement through a house before visiting it. Plus, floor plan measurements help the new owners determine the size and placement of the furniture in each room.
So it’s no surprise that more than two-thirds of online home shoppers found floor plans to be “very useful,” according to the National Association of Realtors 2021 Home Buyers and Sellers Generational Trends Report.
Recent updates from Fannie and Freddie, however, make them even more beneficial because they ensure quicker closings, positively impacting all parties involved — buyers, sellers, agents, mortgage brokers and other stakeholders. When agents proactively acquire a floor plan, the remote appraisal and mortgage approval process can start as soon as the seller accepts an offer, saving valuable time.
The floor plan renaissance
During the pandemic, sellers and purchasers relied on floor plans more heavily than in the past as the world shifted to fully digital experiences. Once thought of as a nice finishing touch to the listing, floor plans became an essential marketing tool for agents trying to reach an audience of buyers who had limited access to the home.
The Federal Housing Finance Agency allowed appraisers to complete home appraisals remotely, primarily because of lockdowns, social distancing and a dearth of appraisers in the market. This temporary measure was implemented permanently for single-family homes as of March 19, 2022, with Fannie Mae and Freddie Mac accepting desktop appraisals.
Because appraisers no longer have to do a physical inspection of qualifying residential properties, other data, such as tax records, public records and — you guessed it — floor plans that show gross living area and other standards, are part of the new requirement.
Floor plans are saving transactions
Traditionally, when a seller accepts a buyer’s bid, the buyer works with their mortgage company to kick off the loan process, which involves sending an appraiser to assess the property. Today’s market, combined with a lack of appraisers, means this can take up to 20 days or more to get an appraisal back. This two- to three-week timeframe opens both sides up to potential issues.
For sellers, some of these issues include:
- Uncertainty about the buyer being approved for the loan if the appraisal comes in too low
- Change in the contract if the appraisal is too low
- Lost potential buyers if the original buyer is unable to move forward
- Personal setbacks, such as the inability to prepare for closing or packing
For buyers, some of these issues include:
- Lost opportunities to purchase other homes if they’re unable to secure this loan
- Personal setbacks, such as timing the selling of their current home or packing limbo
Making floor plans part of listing prep
One of the best ways to implement floor plans as an asset is to make it a part of the listing preparation process. A checklist of important items might look like:
- Secure agency and sign seller’s contract
- Recommend staging and cleaning
- Schedule top-notch photography
- Acquire a floor plan from a third party
- Schedule formal inspection
- Identify listing price
Keep in mind that for remote appraisals, Fannie and Freddie have specific floor plan requirements, including certain standards and that the floor plan must be created by a disinterested third party (not by the seller, buyer, or agents).
Be sure your floor plans are created by a well-established provider who understands the law, rights, IP, licensing and other matters. It’s the best way to limit your exposure and liability for licensing and copyright infringement.
Whether you hire an individual or a service that allows you to get your floor plan done in conjunction with your photography, getting a floor plan created ahead of the sale gives sellers and their agents the edge to stand out in a crowded market.
The evolution of the lending process to include remote appraisals only drives home the floor plan’s growing importance, elevating it from a marketing tool to a sales closer.
Brian Balduf is CEO, chairman and co-founder of VHT Studios. Follow him on Twitter.