Navigating Uncertainty: How Real Estate Professionals Can Protect Their Clients

The housing market is always evolving, but the scale and scope of the Trump Administration’s executive orders—at least one of which has been rescinded—along with its stated priorities, have created widespread uncertainty about federally funded housing programs, federal jobs, and the availability of resources for home construction and repairs.

According to a recent HousingWire article, Down Payment Resource estimates that enforcing the federal funding freeze could impact roughly one-third of the 2,466 U.S. homebuyer assistance programs. The article also quotes Mortgage Bankers Association President and CEO Bob Broeksmit, who urged the FHA, VA, and USDA to provide clear assurances that loans from these agencies will remain available.  

Additionally, the new administration has proposed tariffs, and ongoing labor shortages in the construction and home repair industries—both of which rely heavily on immigrant workers—could drive up the cost of new builds and renovations, further tightening an already constrained housing market.

Furthermore, quite a few federal positions are being restructured or eliminated, and if a buyer’s job status changes before closing, lenders may reassess their loan approval. Since lenders verify employment just before escrow closes, a sudden layoff could cause a deal to collapse, potentially putting the buyer’s deposit at risk.

Strategies for Navigating Market Instability

Contingencies are Key

For buyer clients using federally backed programs like FHA or VA loans or certain kinds of down payment assistance that use federal funds, financing contingencies may become even more important.  

Longer financing contingency periods that reduce the time between removing the contingency protection and closing, can lessen the risk that the funding source goes away. You could also consider including a special carve-out specifying that while the buyer is removing the financing contingency, they retain the right to cancel if government funding issues arise. That will show the seller that the buyer is not looking for an easy way out and is otherwise very solid with financing.  

Before removing any financing contingency, double and triple-check with the lending institution or third-party provider to confirm the availability of funds. This extra layer of verification can reduce the chance of last-minute surprises that could jeopardize your client’s deposit. 

Address Employment Risks Early

Many buyers don’t realize that lenders verify employment status just before escrow closes. Explain that lenders typically verify employment right before closing, and any changes in employment status (e.g., from full-time to part-time, permanent to temporary) could impact loan approval.

Encourage clients to be transparent with their lenders about any potential changes in their employment situation. This open communication can help avoid potential issues at the eleventh hour and prevent the risk of defaulting on the contract and losing their deposit.

Check in with your client as the day for removing financing contingencies approaches. Suggest that they confirm their employment status with their employers before removing those contingencies.

Stay Informed and Be a Resource

The real estate landscape is shifting rapidly, and staying updated is essential. Realtor associations frequently provide legal updates, and industry publications such as HousingWire and Inman News offer in-depth real estate-specific insights. Additionally, if you are a REALTOR, your state association may have a legal hotline that you can call for information about policy changes and best practices.

Proactively educating current clients about potential challenges builds trust as you become a valuable advisor. While you absolutely should be having one on one conversations with your clients about these risks, you can also show your value to prospective clients by sharing this information in newsletters and on social media.  

Advocate for Homebuyers and Communities

Beyond individual transactions, real estate professionals can share their knowledge in ways that can help influence housing policies that impact their clients and communities. Government officials who aren’t directly involved in helping people buy and sell homes may not fully grasp how their decisions affect homebuyers, making advocacy from buyers agents critical.

Here’s how you can get involved:

• Become an advocate for policies that benefit the communities you serve. Attend city council meetings and voice concerns on housing policies. Engage with local, state, and federal officials to share your insights and experiences as a real estate professional.
• Join your Realtor association’s advocacy efforts and take part in campaigns that address housing issues.

Final Thoughts

Rapid changes and uncertainty can be unsettling, but real estate professionals play a crucial role in guiding their clients through these challenges. By staying informed, utilizing contingencies wisely, fostering open communication, and advocating for their communities, real estate professionals can minimize risks and ensure successful transactions even in uncertain times. Remember, your expertise and guidance are invaluable assets for your clients as they navigate the complexities of the current real estate market.