A majority of all agents — and nearly all newer agents —earn most of their commissions by serving as buyers’ agents. As you build your business in the early years, use the following tips to increase your effectiveness and efficiency when working with buyers.
Qualify Your Prospects
Either prospects are motivated and able to buy, or they’re not. Agents working with low-quality buyer leads and hoping to raise buyers’ interest levels and convince them to take action, most often are wasting precious time. An agent can offer counsel on favorable interest rates, low inventory levels, and the benefits of taking immediate action, but even the most skilled salesperson can’t prompt an unmotivated prospect to adopt a sense of urgency. Quality prospects must be motivated to buy, must want or need to take action within a short time frame, and must be committed to working exclusively with you as their agent. If your prospect lacks these attributes, you’re better off saying “next” and turning your time and talent toward another prospect.
Ask For and Win an Appointment
Whether you’re working with buyers or sellers, the route to success starts with a face-to-face appointment — in your office — during which you can demonstrate your value to the prospect.
The appointment is your gateway to a new client and, of course, to a closed deal and a commission cheque. In every conversation with a qualified prospect, ask for an appointment.
Be Ready to Counter Typical Buyer Misconceptions
Buyers, especially first-time buyers who comprise the bulk of a newer agent’s clientele, often come to the transaction with limited knowledge and a lineup of misunderstandings about how real estate agents and real estate deals work.
Be ready to confront and overcome frequent problem areas
Buyers don’t understand the importance of beginning their home search by being pre-qualified or, better yet, pre-approved for a loan.
Explain to the buyers that just as they want to find the best home, the sellers want to find the best buyer. If sellers are presented with two offers, one from a buyer who is clearly in a financial position to close the deal and the other who has a bunch of financial question marks, guess which one they’ll choose.
Too many buyers have a preconceived idea of their perfect home and think that if they look long enough — they will find it.
The reality is this: Buyers don’t buy perfect homes; they turn the houses they buy into perfect homes. If you’re representing a buyer in search of ready-made perfection, you either need to help your client forget the perfection myth or you need to select another buyer to work with.
The list of buyer misconceptions goes on and on. Most buyers think they should never offer full price. Instead, they think they should always start with a low offer and come up later. And, maybe worst of all, they’re convinced they can dally because the owners of the property they want to buy will wait for them to act. When you encounter buyers with these beliefs, tell them this truth: The most disappointed buyers are those who lose the home they want by not taking early action or by not being competitive enough in the offers they do make.
Explain the Services You Provide
You can’t assume buyers understand what you do. They don’t. Nor do they know how to distinguish you from all the other agents in your marketplace.
Detail what you do and how you do it better than other agents
- Provide a complete explanation of the home buying process.
- Provide a complete overview of current and emerging real estate conditions in your market area.
- Let your clients know that you’re ready and able to assist them in selecting the best home in their price range.
You must distinguish yourself from the competition. You need to prove your excellence and convince your prospects that you offer important personal services that they can only receive by choosing you to exclusively represent their interests in the purchase of their new home.
Develop a Partnership with a Lender
One of the best ways to win commitment from buyer prospects is to bring a loan provider into the relationship early on.
The lender can determine the prospect’s financial qualifications, which spares you from spending hours with prospects that are financially unable to buy or unable to buy at the level they desire.
Ask Buyer Prospects Plenty of questions
Contrary to popular belief, prospects don’t want to listen to your sales spiel. They want to talk about their wants, needs, and desires and your benefits.
Arm yourself with a good list of questions, and you’ll be well on your way to not only gathering the information you need to do your job well, but also to establishing the rapport and confidence necessary to gain the prospect’s commitment.
To gather the information you need, discover everything you can about what the buyers are looking for in a new home. What area or areas do they prefer?
What type of home do they have in mind? How many bedrooms, bathrooms, and other types of rooms do they want? How long have they been looking? Have they seen anything they’ve liked? What are their financing arrangements and how far along are they in securing the financing? How do they want to be communicated with? What is their expectation of you as an agent?
Take Control
Buyer prospects are harder to pin down. They may be inclined to work with a number of agents. They may change their minds about what they really want. They may have lofty and unrealistic home expectations. For these reasons and more, as a buyers’ agent you need to take control and manage the agent- buyer relationship.
The first step is to convince the buyers of the value of working exclusively with one agent. The next step is to find out the buyers’ purchase and service expectations by asking the kinds of questions detailed in the preceding section. The third and most important step is to take control and guide the buyers through the home viewing, property evaluation, home selection, and purchase phases.
In the process, be ready to serve as your client’s reality check. More often than not, you’ll have to lower your buyers’ expectations regarding what their dollars can buy by gently adjusting their champagne taste buds to align with what looks more like a beer budget.
It’s Okay to Say No
If the client wants you to do something you feel you can’t, say no. If you can’t meet them on Saturday, say so. If they’re asking you to write a ridiculous offer that will only make you look bad to the other agent and seller, say no.
Guide your client toward a competitive offer. Perform at least a quick competitive market analysis to determine the value of the property. Among the factors to weigh are the home’s current value based on the value of comparable properties, regional housing inventory levels, and the competitive nature of the current marketplace. Your findings help your client arrive at a reasonable price decision and help you to counsel him as he makes a competitive offer.
After your client decides on a competitive offer, properly prepare the contract you will present on his behalf to the seller. Your goal must be to protect your client by writing terms and conditions that convey his intentions and meet his goals. Work with your client to understand all the terms and conditions that the contract covers and the language you use.
For most people, a home purchase represents the largest investment they make, the biggest purchase in their lives, the greatest and longest lasting debt they assume. The purchase agreement you write must protect them by addressing every issue: the price being offered, the items to be included in the purchase price, the amount to be deposited, the closing date, the date the offer becomes null and void, and any condition that accompanies the offer, including contingencies based on the outcome of inspections, approval of financing, and personal property transferring with the sale or other issues.
Present the offer and your buyer to the seller as the best in the marketplace. Presenting the offer favorably to the seller can mean the difference between your client or other bidders buying the house. The stronger you can position your buyer by presenting his financial capacity, superior commitment, motivation, and human connection, the more you swing the negotiation in favor of your client.
