Even when all fifty states, U.S. territories, and Washington D.C. have passed laws mandating that all students at public high schools complete a personal financial literacy (PFL) class before graduating, there will still be a high demand for financial education assistance from the private sector. In all subjects, it is desirable to get high-quality guest speakers into schools to talk to students and explain how those subjects operate in the real world. Fortunately, the National Association of Realtors (NAR) is creating a new initiative to help teach financial literacy to high school students by having Realtors volunteer in classrooms.
With 1.6 million Realtors (certified real estate agents) in the United States as of 2022, the new initiative has plenty of potential manpower to ensure every high school economics and PFL class gets some real-world education! The new Light the Way program, part of NAR’s new Ignite Others initiative, is intended to help 11th grade (and hopefully also 12th grade) students learn financial literacy topics. It kicks off next year with the goal of guiding more young people toward the goal of home ownership.
Realtors Can Help Teach About Life’s Biggest Purchase
Getting Realtors into classrooms can specifically help by illuminating the importance of life’s biggest purchase: a house. Owning a house is considered the primary pillar of “the American dream,” but it has become increasingly difficult for young people to attain. Realtors know exactly what young people need to focus on to be ready to apply for home loans and which factors are most important when deciding to buy a home. Buying a house is a lengthy, complex process where much of one’s financial background is scrutinized.
Financial literacy is vital to home-buying because the financial records that mortgage companies demand can go back several years. This means that financial mistakes and illiteracy at a young age can delay the ability to purchase a home. It is much easier to be financially literate and maintain a good credit score and debt-to-income ratio from a young age than to try to make major improvements shortly before applying for a mortgage.
Teaching Young People About Mortgages Can Benefit All Parties
And it’s not just the students who will benefit from learning about the process of getting a mortgage and what to look for in buying a home. Realtors and home builders will also benefit, making Light the Way a win-win for schools and real estate agents. There are several reasons that home purchases and sales fall through, and Realtors – who get paid a commission on the value of the bought or sold property – do not get paid. Therefore, Realtors are incentivized to ensure that young home buyers are financially prepared to apply for mortgages.
Of course, students can benefit from knowing about the nuts and bolts of home buying and selling as well, namely the home inspection process. In recent years, the number of home buyers foregoing home inspections increased, raising the risks of buying a home with significant defects. Part of any PFL course should be an overview of the risks of foregoing pre-purchase inspections of both houses and used vehicles. With houses becoming increasingly expensive, mistakes that young people make in the buying (or selling) process could cost them for many years!