Real estate education opportunities continue to expand across the country.
Just a few short months ago, the Nashville housing market was doing its best impression of the L.A. housing boom of the early 2000s. Prices were skyrocketing and the influx of homeowners from across the country into Music City was unprecedented. Locals were cashing in, sometimes doubling their initial investment, with one heart-stopping caveat – where to move and what to buy next in a sellers-market?
Many Tennesseans struggled to find their next home after the initial windfall of cash. It begged the question of how much the general populous knows about the mechanics of real estate, especially when it concerns themselves.
New Sector Influences
Real estate isn’t immune to the advancements in technology across most sectors. Apps that provide personalized searches, assist in lending practices, and create moment-by-moment market opportunities have changed the experience for those selling homes and those buying them.
Some are tacking in a different direction, believing that most home buyers and sellers need a refresher course on the internal workings inherent in win-win outcomes.
Knoxville Real Estate Professionals Inc, an award-winning firm headed by Jon and Dawn Powell, hold firm on their belief that the industry needs to double down on market education. “There are key moments in one’s life, and home ownership represents one of the fundamental goals of most adults across the country. We have found that our intentional focus on educating our clients has served all of us for the better,” says Jon C. Powell GRI, Master GRI, ABR.
The Powells’ approach has resulted in being named among the top 10 real estate agents in Tennessee in customer satisfaction by The American Institute of Real Estate Professionals for the past four years. “It’s great to be acknowledged by your collective peer group, but the lasting impact results when we see our clients gain confidence through the knowledge they are acquiring during the process,” says Powell.
The process of buying a home has developed a sheen reflecting an industry unfamiliar to Jon Powell. “You can turn on the television and see realtors basking in their success. The keyword being their success. The glamour you might witness on a 30-minute show of the opulent doesn’t accurately represent the core needs of the American homebuyer,” quips Powell. “It is our fundamental belief that most buyers benefit from establishing a baseline knowledge with their partner-agent.”
The firm’s Homebuyer’s Journal serves as a textbook bringing their clients up to speed on the foundational pillars of real estate. The feedback they get from clients solidifies their commitment to education over sales. “It has been increasingly clear that the time we take with our clients, focused on education, is not representative of their collective and former experiences with our sector,” shares Jon Powell.
Education Personalized
The real estate market establishes participation parameters right out of the proverbial gate. There are homes that one can afford and those that are outside the realm of reasonable attainment without significant sacrifice. As a result, the demand for sub-market education has increased across the country to represent first-time homebuyers, those relocating, investing, or a part of a segment of the population with options outside of the general scope of opportunity.
A glaring challenge is the rising age of first-time homebuyers struggling to find footing during a challenging market. Jessica Lautz, the deputy chief economist and vice president of research for the National Association of Realtors (NAR), believes first-time buyers will trend beyond the current average age of 36 and beyond.
The scarcity of inventory and volatile mortgage rates are forcing would-be-buyers into savings hibernation to build up adequate savings. "It makes sense that they would have to save for a longer period of time unless they have family help," Lautz said.
Just five years ago, NAR’s research revealed findings further illuminating the need for foundational education to support homeownership for first-time buyers. The report found that 16 percent of renters believed they would struggle to qualify for a mortgage due to a lack of financial knowledge. A slightly smaller percentage (13%) said they had difficulty identifying the initial steps in the home buying process.
Dawn Powell finds that the dearth of financial and basic home-buying requirements is increasing due to the complexity of today’s financial marketplace. “Today’s buyer has more choices than ever before or, better yet, access to opportunities provided through technology supporting the home-buying and lender-matching apps and services.
It can be overwhelming, especially considering the amount of debt most Americans carry into the home-buying process,” says Powell.
Habitat for Humanity, a national non-profit, requires financial education as a prerequisite to becoming a Habitat homeowner. The internationally recognized non-profit courses focus on building up knowledge areas centered on budgeting, credit cards and credit reports, debt and loans, saving, and investing for the future.
California, known for the sheer number of assistance programs for first-time homebuyers, is a leader in leveling the playing field and minimizing the anticipated reticence many have in a process that can feel unattainable.
In Rhode Island, Governor Dan McKee announced the RI Statewide Down Payment Assistance Grant offering $17,500 in down payment and closing cost assistance to first-time home buyers. The objective is to remove financial barriers to homeownership that rising housing costs have amplified in the state. “As we seize the moment to make significant investments in housing and communities across the state, this down payment assistance program is an important boost for families looking to make their home in Rhode Island,” adds Governor McKee.
As a concept and practice, financial literacy continues to gain steam throughout a cross-section of America looking to educate constituents around their respective sector. The transient nature of an ever-more hybrid base of professionals across the U.S. has fundamentally changed the nature of home buying for many increasing the need to understand the shifting and complex financial ramifications of a credit-card boasting generation of first-time homebuyers.
Younger generations are approaching home ownership as they are their careers, unafraid to bounce from home and job until they find the right fit. The days of settling down and establishing roots have slowly shifted to an approach of impermanence. To succeed, these fearless up-and-comers will likely need a steadying hand educating them on the nuances of one of the pillars of adulthood.
Housing Finance Agency states that financial literacy is essential when purchasing a first home. “Becoming a homeowner drastically changes the way your budget works, and understanding how your budget will change is key to managing your finances for the future,” says Madison Fisler Lewis, APR. Learning to adhere to the 28% rule of monthly gross income while managing budget, debts, rising rates, and credit history are added components to a home-buying education.
The Powell’s and organizations like Habitat for Humanity are staking their missions on curriculum with life-altering implications in-hand.
Interviews have been edited and condensed for clarity.
