Part II in the VR for Real Estate and Mortgage series
In my position at Freedom Mortgage, I work with loan officers and lenders all over the country on renovation lending programs. Renovation loans allow a borrower to purchase or refinance a home and include the cost the renovation right in their loan. The loan is based on the value of the property as if the work was already completed. These are very powerful programs for borrowers and are a tremendous tool for real estate professionals if they are partnered with the right company.
The training sessions I do for my clients start with the product and process of renovation lending. Then we begin to discuss how to source more renovation business and grow production. In the second part of the training I discuss the how to build renovation business. The best way, in my opinion, to grow production or start in renovation lending, is working with the real estate community to show how renovation lending helps sell homes faster.
How does this all relate to the virtual reality techniques that are my current subject discussion?
One of the techniques discussed in my training program is how to work with real estate professionals to market homes with a renovation plan. There are a number of steps to that plan. One of the steps is finding homes that may not be perfect or have some deficiencies due to the home’s condition. Often times the rooms that may need the most work are the kitchen or bathrooms, as they may be the most dated rooms in the home or have a layout that isn’t the best for the home. Coincidently, these 2 rooms may also impact the home’s value more than any other single room in the house.
Any real estate professional will instantly know, as soon as they walk in a home that a client wants to list, what needs to be done to sell the home faster. It could be a simple as freshening up with new paint, floors, or carpets, or it could be more major. Maybe a new kitchen design, updating a bathroom, or other more substantial items like new windows, a roof, or a more open floor plan. Maintenance type items are far easier for a potential buyer to understand, as they don’t necessarily need to visualize a new room with a repair or improvement. Layout changes and design changes can be far more difficult to visualize and more difficult to “market” to potential buyers.
What if a real estate professional could show a prospective buyer a potential improvement of a home they are listing to sell? How powerful would it be for a buyer to stand in the “new” room, before they ever put their offer in to purchase the home? How much easier may it be to sell the home if the buyer can literally “see” the potential and not have to imagine it in their minds eye. Virtual reality options can offer this potentially game changing tool to real estate professionals.
To take advantage of this technique, real estate professionals should be working with an experienced renovation lending loan professional and a firm that can supply the virtual reality experience for the potential buyers. The first step is for the real estate professional to understand how a renovation loan can help sell the home faster, then prepare the virtual reality experience needed. Not all homes may need the virtual reality experience, but many will be able to take advantage of this selling technique.
Statistics provided in the profession have shown that over 85% of new home buyers plan on doing some type of renovation work their home within the first 24 months after purchase of at least $10,000 or more. In trainings I have done for audiences of 15 to 20 people or for those I have done with well more than 300 people, I always ask who has bought a home in their lives. Once their hands are up, I ask them to leave them up if they did any renovation work on the home in the first 2 years. In 15 years of asking that question, nearly every hand that was up, stays up! It is vitally important for all in the real estate and mortgage community to realize the opportunity that is being missed if renovation lending is not in the forefront of your mind.
The virtual reality tool being discussed in this article is not just showing a potential buyer what a room could look like on a tablet or computer screen, but actually putting them in the virtual new room! This technique provides an image of the new room that you can send to a cell phone. The cell phone is then put into a set of virtual reality glasses, or viewer. When the client puts the viewer on, they are transported to the virtual room, just as if they were standing in that room. They can look to their left, right, behind them and see everything in the room. Imagine how powerful a selling tool this can be for a real estate professional. While a buyer is standing in the old ugly room physically, they can be transported to the beautiful new room, instantly!
This allows for the buyer to truly visualize the new look of the home. Most buyers can’t visualize the potential, so this can do it for them. It’s like selling a turnkey home, before it becomes turnkey!
For real estate professionals to take full advantage of this technique, they need to have 2 network partners. The first is a competent and experienced renovation lender and the second is a company that provide the virtually designed room!
As I have stated in the past and in full disclosure, I work for a correspondent division of Freedom Mortgage, a lender that specializes in purchasing renovation loans and I train clients nationwide on these programs and have been for over 20 years. Secondly, I am also a partner in a family owned kitchen remodeling firm and we have the technology to create the virtual reality designed rooms for any room in a home. Feel free to email me are Insights@RenovationRealm.com, if you would like to get information on how the designs are completed and cost. If you’re a mortgage professional interested in an outlet for your renovation loans, on a correspondent basis (sorry, my company does not offer the program in the wholesale channel), and want to learn more on using techniques to learn or grow your renovation production, I can be reached at the same email as listed above. More information will be given in the next installment, “Details on the virtual reality experience and where to get the designs”.