As many as 10 million Americans were forced into foreclosure when the housing bubble burst. Now, 1.5 million Americans, or boomerang buyers, are poised to re-enter the market. Get to know this group of potential buyers and find out how you can best help them by finding out what it is they most expect from you.
To start, what, exactly, is a boomerang buyer?
A former homeowner who has gone through a “short sale,” a foreclosure or a bankruptcy. These individuals have been saving for the down payment and the expiration of the waiting period in order to qualify for a mortgage again.
Who are they as individuals?
Generally, in their 40s and 50s, these people have worked hard to re-establish good credit. For the most part, they are pretty savvy, understanding that interest rates and home prices have risen in most American markets.
2017 was a key year for boomerang buyers.
Why? Seven years have passed since foreclosures peaked in 2010, meaning 1.9 million homeowners who faced owner-occupied foreclosures between the start of the housing crisis in 2007 through 2010 will have met the seven-year period after which the Fair Credit Reporting Act requires derogatory information to be removed.
Motivation is strong.
According to Kent Temple, broker/owner of Keller Williams Realty in North Carolina, homeowners who have been foreclosed on already know what it’s about. They’ve been through the process—which has often been a hellish one—and are willing to do whatever it takes to be able to purchase a home.
How can you help these buyers, and help your business, as well?
Naturally, knowing your audience is critical. That’s half the battle. If you’re determined to reach this segment, make sure the content you include in your newsletters and on your website, along with the stories and videos you choose to share on social media, puts a laser focus on your marketing efforts for this group.
Important Information to Consider
These “on-the-rebound” buyers need low-payment loans.
According to a blog by Kristine Yao of CoreLogic, comparisons of the buying preferences between boomerang buyers and non-distressed, owner-occupied repeat buyers show that boomerang buyers are, on average, four times more likely to finance with FHA loans than the latter.”
Boomerang buyers feel “forgotten.”
Print and television marketing tends to favor baby boomers and millennials as the primary targets. Focus on Generation X, and you’ll be one of the few marketers who targets this forgotten segment of homebuyers.
These former homeowners are currently renting.
If you’re not already doing so, harness your customer relationship marketing to target apartment complexes, condos and townhome communities in 2018. Be sure to point out the advantages of owning rather than renting, and let them know about down payment assistance programs at the local, state and national levels. Incorporate support materials like charts or other visuals showing these potential buyers that they can own a home for what they currently pay in rent. Your preferred lender can help you with these. You can also offer information on getting reliable home warranty coverage for home appliances and system components through American Home Shield®.
As the millions of potential homebuyers—or boomerang buyers—are poised to re-enter and ignite the real estate market, make sure you’re there to help, and benefit from their motivation to be homeowners once again.
For articles like this, please visit the American Home Shield® blog at www.ahs.com/home-matters.
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