The residential real estate market is no stranger to floor plans – they are often part of the home buying process, usually as a marketing asset on a listing. However, in recent months, floor plans have grown significantly in importance for sale, going from a must-have to a must-have for real estate professionals.
Why have floor plans become a secret superpower? And how can real estate professionals take advantage of them before they become SEO issues? Keep reading to find out.
What has changed?
It’s no secret that we are currently in a seller’s market. Although forecasts indicate the market is bottoming out, low inventories and rising prices mean the tough times will continue. Used as a marketing tool, a floor plan can make a listing even more appealing to buyers, and especially in today’s market, as sellers expect buyers to make an offer immediately.
But to understand why floor plans are more important than ever in the home buying process, it’s important to look at the current market environment.
Floor plans and office appraisals
During the pandemic, the Federal Housing Finance Agency allowed appraisers to perform home appraisals remotely (known as office appraisals). This temporary measure has been implemented permanently for single-family homes effective March 19, 2022, with Fannie Mae and Freddie Mac accepting office appraisals.
Since appraisers no longer have to perform a physical inspection of eligible residential properties, other data, such as tax records, public records, and — you guessed it — floor plans showing living area gross and other standards, are part of the new requirement.
In addition, this news highlights the shortcomings of the traditional evaluation process.
Where Traditional Assessments Go Wrong
Traditionally, when a seller accepts a buyer’s offer, the buyer works with their mortgage company to initiate the loan process, which involves sending an appraiser to appraise the property. Today’s hot market combined with a lack of appraisers means it can take up to 20 days or more to get an appraisal. This two to three week delay opens both parties up to potential problems.
For sellers, some of these issues include:
- Uncertainty about buyer’s approval for loan if appraisal is too low
- Change of contract if the evaluation is too low
- Potential buyers lost if the original buyer is unable to move forward
- Personal setbacks, such as inability to prepare for closing or packing
For buyers, some of these issues include:
- Lost opportunities to buy other homes if they are unable to obtain this loan
- Personal setbacks, such as the timing of the sale of their current home or the packing of limbo
why it matters
Remote assessments reduce the waiting period to days, resulting in faster closings. Because floor plans are a requirement in the remote appraisal process, they are now more important than ever.
How Floor Plans Give Agents an Edge Over Their Competition
Instead of waiting for the property to sell and an appraisal to be needed, real estate agents who proactively acquire floor plans at the time of listing gain an edge over the competition.
Floor plans have always been a useful marketing asset. Buyers love them because floor plans help them visualize their movement through a home before they visit it. Plus, floor plan measurements help new homeowners determine the size and placement of furniture in each room. It’s no surprise, then, that more than two-thirds of online homebuyers found floor plans “very helpful,” according to the National Association of Realtors 2021 Generational Home Buyer and Seller Trends Report.
Fannie and Freddie’s news, however, makes them even more beneficial as they ensure faster closings, which positively impacts all parties involved – buyers, sellers, agents, mortgage brokers, etc.
When agents proactively acquire a floor plan, the remote valuation and mortgage approval process can begin as soon as the seller accepts an offer, saving valuable time.
Additionally, for brokerages that have a preferred mortgage arm or mortgage company, fast closing is even doubly appealing.
Make floor plans part of the process
One of the best ways to implement floor plans as an asset is to incorporate them into the listing preparation process. A checklist of important items might look like:
- Securing the agency and signing the seller’s contract
- Recommend staging and cleaning
- Program quality photos
- Acquire a floor plan from a third party
- Schedule a formal inspection
- Identify the listing price
Keep in mind that for remote appraisals, Fannie and Freddie have specific floor plan requirements, including certain standards and that it must be created by a disinterested third party (not the seller, l buyer or agents). Make sure your floor plans are created. by a well-established provider who understands the law, rights, intellectual property, licensing, etc. This is the best way to limit your exposure and liability for licensing and copyright infringement.
Whether you hire a person or a service that allows you to complete your floor plan in conjunction with your photography, having a floor plan created before the sale gives sellers and their agents the advantage of stand out in a crowded marketplace.
The evolution of the lending process to include remote appraisals only underscores the growing importance of the floor plan, elevating it from a marketing tool to a sales tool.
How does your team implement floor plans today?
Brian Balduf is CEO, President and Co-Founder of VHT Studios.