Being a real estate broker is about more than just getting new listings and showing houses. Real estate agents focusing on improving their prospect’s ability and financial well-being have higher odds of building a successful business. 

The client’s credit score is critical for mortgage approval and impacts realtors’ business significantly. If you are a buyer’s agent, your client’s credit score is relevant and can affect your ability to grow your real estate business. 

This post highlights why realtors and buyers’ agents need to assist clients in improving creditworthiness. 

By helping your leads through the credit rehab process, you are improving their ability to fund a property while growing your business. 

Better Client Credit Score Earns Higher Commissions

Your client’s credit history may not be long enough, or the score may need to be higher. In either of the above scenarios, the mortgage lender will most likely offer a lower loan, limiting the client’s spend on home buying. 

Helping clients settle for an “okay home” is not what outgoing real estate agents want because it may not pay a good commission. 

You want to get paid handsomely for the deals you close, so you want the homebuyers to qualify for higher amounts to have a higher purchasing power. 

Thus, one approach for growing your business is to help buyers with less-than-amazing credit scores improve it and, ultimately, earn higher commissions. 

When Clients Get Unfavorable Loans It Can Reflect Badly On You

Potential homebuyers who have a low credit score may seek advice from you. Thus, you should be prepared to offer advice that will not affect your customer service reputation. 

For instance, these clients may ask you how homebuyers can improve their credit scores. 

Also, they may want to find creative home financing options for people with low credit scores. 

As a real estate professional, you must be prepared to offer them the best advice and warn them about risky loans. 

Working with a client who has secured a non-prime loan shows you support risky financial behavior, which might reflect badly on you.

Therefore, advise your clients on how to improve their credit scores. Also, make them aware of the factors that impact their credit score, including:

• Credit history length
• Debt-to-income ratio
• Debt-to-available credit ratio
• Repayment history
• Public Records

 That way, you can help your clients improve their credit scores and, ultimately, increase their property affordability so you earn higher commissions. 

Clients’ Access To Creative Real Estate Financing Options Benefits Your Business

Creative home financing options include an FHA loan, VA loan, USDA loans, portfolio loans, and private money lenders. 

Creative home financing options favor those who do not qualify for conventional loans. Besides, these home financing options may provide cheaper credit and higher loans. Access to more affordable home financing and higher loan limits improve clients’ affordability, which means higher commissions. 

Thus, considering advising clients on these creative real estate financing options opens new opportunities for your business. 

Focus on finding out the prospect’s current credit score and credit history so you provide the best advice regarding creative home financing options.

How Real Estate Brokers Can Help Clients Improve Creditworthiness 

We have looked at different ways clients’ credit score impacts your business. Now let’s focus on how a real estate or buyers’ agents can assist clients in improving their creditworthiness. 

• Encourage Potential Clients to Start Thinking About Financing Early

New homebuyers must factor down payments, closing costs, insurance, etc. 

Financing all these may seem impossible, especially when credit history is short enough.  

It goes without saying, but the earlier one starts planning their finances, the sooner they can consider a purchase. 

Unfortunately, for younger individuals, the common perception is you need to have already accumulated a significant portion of life savings before considering financial planning. 

However, the reality is that starting a financial plan is better at any age than not completing starting one at all. 

If you are a real estate agent, encouraging potential clients to start thinking about creative home financing options early enough can open up new opportunities for your business. 

Starting financial planning early helps the buyers spread the investment journey over a long period. The home buyer also makes necessary adjustments to raise enough money for down payments. 

Ultimately, by encouraging and helping potential clients plan their finances early, you mold your future clients and prepare your business for success. 

• Educate Prospects on How Their Credit Score Impacts Their Home Affordability

Credit score awareness is another important aspect of preparing prospects and helping them purchase a property. 

When applying for a mortgage, real estate lenders look at credit scores to determine the borrower’s qualifications. Typically, you will get good business from clients with excellent credit scores. 

Thus, educating your prospects on improving their credit is a significant step towards growing your leads list. 

With today’s technology and tools, there is no reason for any homebuyer or real estate agent to get surprised by a credit turn-down when applying for a mortgage. 

Here are essential steps to help make the credit process easier:

• Encourage your clients and prospects to keep checking their credit history and score
• Go over the credit score report together and identify any mistakes or false entries
• Advise your prospects to take care of late debts immediately
• Educate prospects about credit counseling services

Thus, educating your prospects about credit score and why it matters to their home affordability matters greatly. 

• Work With Mortgage Lenders to Help Prospects Access Credit  

Your prospects are an asset to mortgage lenders. If you can get mortgage lenders to lower their interest rates and overall cost of borrowing, you are building your leads portfolio. 

You can ask a mortgage lender for a rate match or a rate beat from the mortgage lender. A rate match is where the mortgage lender agrees to match the interest rate another lender offers for the same loan product. 

Conversely, the rate beat is when the lender agrees to offer a lower interest rate than another lender for a similar loan product. 

The rate match or a rate beat works best when your prospect has written proof of the competing offer. 

• Organize Credit Repair Seminar For Realtors

Have you ever had potential homebuyers with less-than-optimal credit scores? Your real estate leads may need help understanding how credit works and the pitfalls to avoid when shopping for a mortgage. 

Thus, you may organize a credit seminar to train potential home buyers to budget or get out of debt. 

Organizing credit repair seminars for potential buyers is also a chance to connect mortgage lenders with prospects and negotiate cheaper credit for your prospects. 

Conclusion

Access to credit when buying a property is often daunting for many people—ensuring a good credit score and meeting the requirements to qualify for a mortgage matter exceptionally. 

Are you a real estate agent looking to grow your lead portfolio? Consider working with prospects and helping them increase their credit score and access mortgages at lower interest rates. 

Helping prospects qualify for a mortgage and access lower interest rates prepares your business for more tremendous success.