As the housing market continues its steady recovery, home mortgage lenders are seeing the emergence of a new group of homebuyers—the shadow buyer. This new group consists of two separate types of buyers.
The first group includes those who were previously involved in a short sale of a home and have been parked on the homebuying bench for 3 or so years. During that time, they were focused on cleaning up their financial portfolios so they would be ready to hit the ground running when their required bench time was complete.
The second group is a new phenomenon and one for which many industry insiders have yet to develop an effective plan … the shadow buyers from Generation Y.
While laying low in the background, the shadow buyers have been knocking down their debt and slowly accumulating and securing resources for down payments. They are now beginning to emerge and are flooding the market, taking advantage of great deals and low rates on smaller homes and condos across the country.
Working with the Shadow Buyers
To prepare for this unknown volume of shadow buyers, many in the industry are beginning the process of digging through their files and reaching out to those identified as previous clients who had to sell using a short sale. Many who found themselves in a previous short-sale position are now eligible to return to the market and are being preapproved by home mortgage lenders.
Industry experts are also guiding home mortgage personnel to seek out alumni associations to connect with shadow buyers who could have been keeping a low profile for the past few years as they paid off student loan debt while living at home with family.
So, what’s the trick with working with these new shadow buyers? Finding them! Having been told they were unable to qualify for so long, many have been pushed to the side and have been pulled from the “active target lists” of potential and prospective homebuyers. Once located, educating them about their options will be the first task in working with this group.
Over the course of the next 2 to 3 years, the shadow buyers will become the group to watch and the group to set the pace for the next stages of the recovering housing market.
Marcus McCue |
EVP & CBDO