We all mentally categorize our client database. This lender has a few that I am sure you have thought of but have clarified and shared tips on what to do with them
I recently came across The "Other" Shadow Inventory by JPhilip Faranda that discussed all the buyers out there working with Realtors/agents, looking at properties but who will probably never result in the purchase of a property. But it was Karen Fiddler’s Buyer's On The Fence.....Waste Of Time Or Pipeline that struck home for me.
While JP may be presenting the realities of his experiences in his market, for me, here in my market, today’s fence sitters and shadow buyer inventory are future buyers/borrowers. Like Karen, I too have several different client pipelines and while some of these are active pipelines for current clients and borrowers, others are for active prospects or future clients and borrowers. However, I don't consider any of these folks a waste of my time.
I have my escrow pipeline, which is pretty self-explanatory and there is my active pipeline; those who are pre-approved and actively looking to get into escrow.
Then there’s my hold pipeline; those I wasn’t able to pre-approve for one reason or another but who just need a little time to take care of a few matters. Of course, I have my prospect pipeline of those who I've spoken with but are not ready to start the process yet.
Then there is my pending pipeline and this is for those who are pre-approved but are not actively looking for one reason or another. It’s this pipeline that concerns me the most because these people are capable of buying but have chosen not to. This pipeline has been getting larger of late. For most of my borrowers, they seem to have fallen into three primary groups:
JOB ENDANGERED: These are folks who were pre-approved and who eagerly started their home search, tremendously excited about the prospect of buying their first home.
Months later and completely consumed with getting into escrow, their employers suddenly started laying off select groups of people and my borrowers became increasingly uneasy about making any kind of buying decision.
Before where they could make a decision to place an offer after spending all of 10 minutes in a home, they became paralyzed to make any offers at all – and rightfully so. These folks feared for their jobs and livelihoods and found themselves having little energy and motivation left to make the most expensive decision in their life. Can’t say I blame these folks for wanting to feel more comfortable about their jobs (or finding new ones) before buying a home.
JOB JUGGLERS: First and foremost, my job jugglers are those borrowers who have more than one job. For these folks though, unfortunately, I wasn't able to use all of their income as qualifying income. These are folks who are also pre-approved and who initially were also actively looking to get into escrow.
However, after having spent months scouring two counties for suitable properties in their limited price range, they came to the realization that they were going to have to put their home search on hold until they are able to use all of their income as qualifying income.
BURNED-OUT & DISILLUSIONED: This is the saddest group of borrowers I have. These are folks who are also pre-approved and for quite awhile were actively out there looking to get into escrow.
However, these folks have become completely exhausted by all the crap and nonsense one has to go through in order to buy a home. They’re burned-out on looking at properties, their disillusioned with the process and they just need a break.
These were buyers who spent months looking at dozens of properties, making offer after offer after offer….losing out on bidding war after bidding war. Some of these folks even won some of those hard fought bidding wars and actually made it into escrow only to discover that the property that they wanted was just a thinly disguised money pit with several hidden and very costly repair issues. Unfortunately, these were issues that neither they could afford to take on nor the sellers were willing to rectify.
Some even learned that the over list price that they fought hard to get accepted by the sellers was actually an over-priced offer for the area and once again, they couldn’t afford to make up the difference and the sellers refused to meet the appraised price. Don't even get me started on those who spent months waiting for a short sale only to find out their offer was rejected or to experience some really questionable acts by the short sale lenders (that's a whole other post).
Are these folks fence sitters or shadow buyers who will never buy anything? NO!!! I speak from experience when I say that. In the past year, I have seen several of these borrowers come back to update their files and begin their search again, especially the job jugglers and the disillusioned. Unfortunately though, I have also moved more of my active borrowers into these groups.
Just spoke to one of my disillusioned buyers yesterday about updating their file and getting back out there. Next month, I have one of my job jugglers who will now be able to use all of their income as qualifying income, which will put them in a much more realistic price range. In November, I have another job juggler getting back out there and in January another. Just closed an escrow recently on one of my disillusioned borrowers that sat out for a little while but eventually got back out there.
I don’t consider these folks a waste of my time – not at all. All of these folks took that first step in becoming a serious buyer - speaking with a lender to see what they could afford to purchase.
The home buying process is not a simple process and it's because it can get really complicated and convoluted, that borrowers and buyers today need real professionals to assist and guide them through the process - however long it takes. I promise, I will not consider you a waste of my time if you are not prepared to buy immediately.
For more info on how to get pre-approved for a mortgage loan that suits your needs, please feel free to contact me, Donne Knudsen, at 805.206.9123 or firstname.lastname@example.org.
Serving low-medium income individuals and families as well as first time buyers with their mortgage needs including down payment assistance
Los Angeles County -- Ventura County
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