Previously considered nontraditional buyers, single people now account for 24 percent of home purchasers. The decision to own alone crosses all age groups from young, first-timers to a growing number from the 55-and-over category. Women make up the majority of each category. The trend is expected to lead to more than 41 million single-person homeowners by 2030. It’s being fueled, in part, by the growing number of surviving spouses in older age groups, as well as the sense of empowerment a home represents to many prospective clients.

With rents rising, clients view the economic benefits of home owning as an investment in themselves and their financial future. Regardless of how prospective clients enter the market, buying while single requires some added insight for meeting the needs of this diverse group of individuals. Here are a few things to keep in mind as you begin to work with more of these clients.

Working with Single Homebuyers

• Think beyond location—think proximity. Single clients tend to look for greater life efficiencies. They want to be near the things they spend their time on: work, friends, entertainment, and health care. When showing them homes, apps like AroundMe and Walk Score can help you provide a better idea of how close they are to the services and amenities in which they are interested. While school information will still be important to the single parents among your clients, you may want to do some legwork on the before- and after-school activities they will probably need to rely on as well.

• Consider that smaller tends to be bigger with this market. Maintaining a property may be more of a challenge when the full responsibility falls on one person. Clients may need you to remind and educate them on this point and help them understand how homeowner and condo association fees may alleviate property upkeep responsibilities.

• Promote the inspection as a good learning opportunity. Encourage your clients to make the most of the inspection. This is especially useful if they have not owned before or previously depended on someone else to keep their home running. The time spent shadowing the inspector enables them to become familiar with the home. More than helping them fine-tune the sales contract and ask for concessions, the inspection can help your client pull together a to-do list and begin budgeting for it before moving in…not to mention learn how to adjust the thermostat.

• Express patience, practice understanding, and be a resource. Many single clients, especially the first-timers or those who only recently returned to a single status, may require a bit more hand-holding. They mainly need someone who understands more than the price range for a neighborhood or what homes “cost” after they are purchased. They need the kind of honest, upfront guidance that will let them embrace the next phase of their lives with confidence.

Being able to cultivate a reputation for leading single clients toward sound housing arrangements, while fueling a sense of empowerment, can help provide a steady flow of new prospects looking for similar support and direction.

While hosting an open house remains a tried-and-true way of connecting with qualified buyers and generating new client leads, results can vary.

“An open house is not just about the house, it is an opportunity to grow your sphere of influence and build a stronger farm area. If you have lots of open houses, be sure to ask around your office if any agents are looking to get more experience,” says Ruben Hernandez, President of EGA Homes.

Pump up the volume of your attendance and make your events even more effective with these eight tips.

#1 Get the Word Out

It takes more than yard signs. Make sure your dates and times are part of the MLS and use your social channels and email contacts to get the word out. Using an app like GoGo Partner can help automate the marketing process. While taking out ads in the local paper is recommended, consider pay-per-click advertising on Google, as well as ads on Facebook. You may also want to post a live stream of the house tour on your website.

“Door knock to let people know that you are hosting an open house and want to invite them to an “exclusive showing” a couple hours before you are showing to the public. This might spark conversation from neighbors who are interested in selling as well, or know someone looking to get into the area,” Ruben says.

#2 Offer an Incentive

Consider rewarding guests for giving up their time to attend. This could involve offering a discount on your services if they make an offer on the home within 24 hours, a random drawing to win a gift card to a neighborhood restaurant, or having several Loan Officers on site to answer questions about any local mortgage programs and to offer preapprovals.

#3 Put the Game On

Your open house may coincide with the big game. So, have it on throughout the house and provide visitors with the opportunity to linger and bond with the home. Offer tail-gating snacks and play up the team themes. It’s also a good idea to create an area where kids can enjoy supervised activities while their parents tour the property.

#4 Be Convenient and Be Visible

Consider expanding your hours from the traditional midafternoon time slot during the weekend by staying open longer or scheduling open house periods during weekdays or evenings. Make sure you are strategic about parking and signage to help attendees know where they need to park and find the property.

#5 Create Open House Ambassadors

Send invitations to neighbors. Perhaps offer a preview party with doughnuts and coffee and invite them to bring guests who may be looking in the area.

#6 Provide Transparency

Compile a kit that contains all the vital information that potential buyers might need to make a decision. Don’t just pull together your most current comps—list the dimensions and features of the home and have a dedicated computer set up with access to the sites that potential buyers will visit anyway to get information. By inviting them to do their comparisons on the spot, you can clarify and help guide them through their analysis.

#7 Stand Apart

Hand out DVDs or flash drives that contain a video tour and photo summary of the property. Invite the property’s architect to be on site to chat with visitors. Also consider compiling a guide to the open houses available in the area. It will help keep potential buyers in the neighborhood and enable them to make direct comparisons with the property. 

#8 Collect Vitals and Feedback

Collect information you can use for following up, such as names, email and home addresses, phone numbers, and even what attracted the visitors to the home. It’s valuable information for marketing this home, but can also be used to build your prospects list for future listings. An app like GoGo Partner can automate this process.

Taking the time to make your open houses special can improve more than your days-on-the-market stats. It helps get the home—and your services— in front of prospective buyers and sellers in a positive and memorable way. 

The markets continue to make corrections in all areas as the new administration prepares to take office, and there are only a short 10 days until the inauguration of Donald Trump. What the world, and the markets for that matter, will look like are still under debate. The 10yr Treasury and mortgage rates have certainly felt the impact, with the 10yr rising over 80bps since Election Day and now has settled around 2.38% today, up 55bps since November 7th.

What you may not have noticed is the volatility around the Fannie Mae(FNMA) and Ginnie Mae(GNMA) mortgage-backed securities (MBS) markets. Most conforming loans are pooled into Fannie MBS’s while FHA and VA loans are pooled into GNMA MBS’s. GNMA securities typically trade ½ point to ¾ point higher than FNMA’s due to the fact that their securities have an explicit US government guarantee among other things. With the uncertainty around the future of Fannie and Freddie, the price of their securities had dropped and the spread grew to over 2 points in mid-December. Since that time the spread has come back to roughly 1 point today. In simpler terms this means that conventional loan pricing has been very volatile relative to FHA/VA loans since Election Day with swings of over 1 point (25bps in rate) and increased the advantages FHA had for 97% LTV loans. Given the need to reform both Fannie and Freddie at some point I would expect more of that volatility to continue as news around reform makes its way to the headlines. Would you invest in a FNMA security that might lose its implied government guarantee? That’s the unlikely threat that lingers.

The other market nuance going through some shifts prior to inauguration is the shape of the yield (Treasury) curve. The most common method to describe the shape of the Treasury curve is the spread between the 2yr and 10yr. For most of 2016 that spread was approximately 100bps, meaning the 10yr is 100bps (1%) higher in yield than the 2yr Treasury. After Election Day that spread grew to 135bps in December and now is at 120bps. That spread change may not seem like much but think about it in these terms. 5yr ARMS are priced close to the 2yr Treasury and fixed rates are priced off of the 10yr Treasury. Which means the rates on ARMs are an additional 0.25% better in rate than fixed rates from just 60 days ago. The higher that spread, the steeper the yield curve and the greater incentive for borrowers to choose ARMs. This will be something to keep an eye on. Will sudden higher rates force borrowers into ARMs?

With the steepening yield curve and the FOMC raising short term rates, suddenly there is a lot of pressure on a bank’s asset liability manager. Banks for the past several years have fattened up the balance sheet with primarily fixed rate loans. These loans were originated at historic low rates and typically were only lasting 2-3 years (many would argue even less). Now with rising rates those loans could be on the books 10 years or more. Rising interest rates reduce the return on those fixed loans (remember the bank earns the fixed interest rate on the loan but pays higher rates on deposits when rates rise). This will put pressure on a bank’s earnings and eventually more profit will need to be priced into new originations. Some of the balance sheet advantages banks have held with near zero short term rates may dissipate and portfolio’s may not be the cash cow they have been. Would you rather own a 3% 30 year fixed mortgage that requires capital and there is potential for losses, or would you rather own a 30yr US Treasury with next to zero credit risk and minimal capital requirements at a 3% yield?

Whether the clients in front of you are married, in a relationship, related, or just partnering to afford a home doesn't really change things from your perspective. As an experienced Loan Officer, you still look for the best, most affordable way for them to access the credit they need based on their application. Your clients, however, may need help understanding how the way they apply can potentially impact the results of the analysis you do and, ultimately, the cost of their loan.

What Clients Should Know Before Applying

When working with unmarried home loan applicants, it's important to understand the motivations behind the application to help them determine if taking a different approach would be more beneficial.

Here are six things you may want to clarify for your unmarried borrowers to help them avoid undermining their overall objectives when applying jointly.

1. Confusing cohabiting with co-borrowing. Clients simply assume they need a co-borrower to get a loan or that if they are buying a home as an unmarried couple, they need to apply for a mortgage as co-borrowers. Knowing they don't, that they can borrow as singles, could change their application strategy.
2. Sometimes, two incomes are not better than one. Combining finances for an application is often done to qualify for a larger loan based on the higher total income level or to be more appealing to the lender. As you know, co-borrowing does provide a second source of repayment, and it typically boosts the overall debt-to-income ratio, possibly allowing you to offer your borrowers a better rate. This is not the case when that extra income comes with more debt, making the loan terms less attractive, in spite of the higher combined income.
3. Credit scores aren't averaged. Similarly, many clients don't realize that while income and assets are combined for a mortgage review, credit scores are not. Where clients have mismatched credit scores, with one partner having a substantially better score, they may not realize that you will be evaluating the application using the lower score. In this case, you may want to suggest that they consider waiting to borrow until the partner with the lower score takes action to improve it. The other possibility is to see if the partner with the higher score would be able and willing to apply on their own and still qualify for the loan.
4. Co-borrowing is different from co-signing. Another misconception around co-borrowing arises with family members. Often, a parent wants to help a child make a home purchase by lending their income and credit history. However, the parent won't actually be living in the home. Here, it may make more sense to have that parent co-sign the loan, rather than serve as a co-borrower, since that may more accurately reflect ownership of the property. A co-borrower is a joint owner, while a co-signer is just agreeing to be held responsible for the repayment of the mortgage.
5. Borrowing with a friend can lead to a higher down payment. Having a nonfamily co-applicant who is not going to occupy the property can conceivably impact the loan-to-value ratio, as in the case of FHA loans. Instead of qualifying for the low down payment amount of 3.5 percent, 25 percent could be required.
6. Co-borrowing isn't the same as co-owning. While borrowing together creates a joint liability, ownership of the underlying property is determined by how the title to that property is held. If the co-borrowers were to split up, they are both liable for the full amount of the loan even if the property is owned in only one name.

Laws Around Ownership Favor the Married

Unmarried clients may also not realize that the body of property law, which was written with married couples in mind, creates a slightly more complicated transaction for them. While your focus is on making sure your clients, regardless of their relationship status, will be comfortable repaying under the terms of their mortgage, unmarried clients may need to take a few extra steps outside of the loan process to ensure they are protecting and defining their own legal rights.

Typically, unmarried borrowers are best advised to have a legal professional draw up a cohabitation agreement to address their rights and responsibilities and to determine how the property is to be handled should the relationship or partnership end.