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Real Estate Made Easy, Part Two - Working with Buyers

Jan. 27, 2007

Tagged with: working with buyers

Real Estate Made Easy
Part 2 – Working With Buyers

    Prior to leaving the air-conditioned comfort of the office to view properties, an experienced and professional Agent will accomplish five fairly simple and routine functions:

1. Identify the financial neighborhood the Buyer is qualified for.

If you can learn to pre-qualify your Buyer based on their Gross Monthly Income, and Outstanding Debts, you’ll be ahead of 90% of the Agents working today. It’s simple to determine, and will take you about five minutes with your clients. We’ll go over this in more depth in a future post.

2. Identify the financial neighborhood the Buyer is comfortable with.

These first two conditions may sound similar, but they can be VERY different. Your Buyer may be able to qualify for a certain amount, but may be very uncomfortable with the monthly payment required to meet that amount. You need to find your Buyer’s comfort level, and be willing to work with that.

3. Identify the geographical neighborhood the Buyer is comfortable with.

You’ll need to spend some time with your clients, quizzing them about the kind of area they’re looking for. What elevation? In town? Outside of town? Quiet and private, or within walking distance of shops and restaurants? You can save yourself days of driving around looking at properties that don’t work for your clients if you can narrow down these basics before you ever get in the car.

It would make absolutely no sense and would be a major waste of both the Buyer’s time and the Agent’s time to begin showing property until both Buyer and Agent have addressed and are comfortable with the first three concerns.

4. Know the total inventory of properties available that will fit your client’s needs.

This is where your knowledge and professionalism come into play. Do you go to every Broker Caravan so that you know all the available properties? Do you know all the subdivisions (and their CC&Rs) and the condominium complexes (and their Association Rules & Regs)? Which complexes allow pets? Which ones have pools? Do you check out the updates, new listings and changes on the Multiple Listing Service every day? Knowledge is Power. The more you know, the better you can help your clients. All that remains is to match the Buyer’s needs and suitability with the Agent’s extensive knowledge of available inventory to identify the optimum property.

5. Have the Buyer sign a Buyer’s Representation Agreement and a Dual Agency Form prior to looking at property.

    The signed Buyer’s Representation Agreement will ensure that the Agent will be paid if the Buyer buys any property from any source (like a For Sale by Owner property) during the term of the Agreement. You would never consider representing a Seller without a signed contract, why would you do it for a Buyer? Both Buyer and Agent benefit from having their mutual responsibilities spelled out – in writing- before entering into a business arrangement. Everyone would therefore know what is expected of them, and what their responsibilities are.

    The Accredited Buyer Representative Course is HIGHLY recommended if you need more convincing about this changing area of real estate.

    The signed Dual Agency Form satisfies the legal requirement that the client was informed upon first contact as to the concept of Agency and how it works.

    Once an Agent masters the above concepts - given that sufficient inventory exists, it should be only a matter of days before a happy, satisfied Buyer is in Escrow with the property of their choice.

Scenario #2:

    Don’t bother to ask the Buyer any pre-qualifying questions. Take days or weeks showing the Buyer every listing in town before making an offer & opening Escrow. Hope the Buyer can afford what they just bought. Pray that the Buyer doesn’t experience Buyer’s Remorse and cancel the Escrow because they really didn’t understand or feel comfortable with the entire process. Curse and moan because the Buyer bought a home from a FSBO or Developer and now you won’t get paid – after spending weeks showing them every property for miles around.

Which way of doing business makes more sense to you?

    The choice of the above alternatives would seem to be a no-brainer; however, it is amazing how many Agents make a career (usually a very short one) of choosing the second alternative! In my humble opinion, this is the #1 reason why – according to NAR statistics – 85% of new agents are out of real estate within the first three years.

    Hopefully, this will help you to be among the remaining 15% of Agents that enjoy a long and fruitful career in this very demanding profession!

I hope you’ve found this information helpful! Until next time – Take Good Care!

Jay J. Spadinger, REALTOR, BIC, ABR
Hawaii State Educator
Rainbow Properties
Akahi Real Estate Network, LLC
www.rainbowproperties.com
www.jayhawaii.com

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Real Estate Made Easy, Part Two - Working with Buyers