According to a recent survey of residential real estate agents conducted by TD Bank, nearly 70 percent of the agents polled responded that lenders should provide easier access to loan programs designed to help make homeownership more affordable. The survey, which polled more than 150 real estate agents in the U.S., will help lenders understand agents' perspectives surrounding the current housing environment and offer insight into Realtors' interaction with buyers throughout the process.
Findings show that 63 percent of agents felt that lenders should offer more information on affordability programs. While most of the respondents were familiar with such loans, they reported that only 20 percent of their buyers are aware of affordability programs.
The study also revealed that two in five agents think there is a low inventory of properties for sale, and that it is harder than ever for buyers to secure a loan. Moreover, more than half of agents believe buyers are compromising their wants simply to buy a home due to the low inventory.
“The survey findings reveal that banks need to provide more loan choices designed to meet the needs of today's borrowers,” said Malcolm Hollensteiner, director of retail lending products and services for TD Bank. “At TD, we work with each prospective buyer on a case by case basis to find the mortgage option that best meets their needs and budget. For example, to help more first time buyers enter the market we developed our Right Step mortgage program, which only requires a three percent down payment with no private mortgage insurance. In today's market, lenders must understand that mortgages are not one size fits all."
The TD Bank survey also found that:
►A quarter of agents consider properties overpriced and fear first-time home buyers are avoiding the market.
►Eighty percent of agents feel that mortgage-focused banks are easier to work with.
►More than half (57 percent) of agents responded that lenders are unfamiliar with the local market, yet just 13 percent of the agents surveyed felt that it was difficult to find a lender who knows the local market.
The survey also revealed insights into the role Realtors play in the lending process and the loan discussions they are having with their buyers:
►Sixty-four percent of buyers came to agents with questions about lending or the loan process during their last sale.
►On average, agents spent 2.5 hours discussing the lending process with their last buyer.
►More than one-third of agents recommend the same lender for every buyer. Nearly 80 percent recommended a lender during their last sale.
Realtors reported that the most important factor they look for when recommending a lender is closing on time (65 percent). Two in five agents also consider understanding buyers’ needs, not overpromising and committing to pre-approval rates important factors when deciding whether to recommend a lender to a client.
In addition to improving timeliness of closings and overall dependability of the lending process, Realtors also said lenders could make the following changes to help them and their buyers:
►Seventy-five percent believe lenders can improve communication with buyers on loan status.
►A majority (64 percent) said lenders can increase transparency throughout the loan process.
►More than a third (39 percent) are interested in lenders forming partnerships with Realtors/agents.
“What we’re hearing from Realtors is that it's critically important for lenders to work with them to help their customers,” said Hollensteiner. “The right lender will clearly outline the mortgage process early on and will be accessible, responsive and transparent. A mortgage loan officer should provide ongoing communication throughout the entire home buying process.”
