INTRODUCTION
First contact is usually from an advertisement of some sort. From there you’ll have to take an active role and set up an appointments to show you are a trustworthy agent.
You have to learn to turn an inquiry into a meeting where you can display your knowledge about the process and your listings. Be helpful and informative. With a little luck you will keep the buyers as your clients through the process.
Once you have procured your buyers, you have to service them. Taking down their needs and show them homes that fit their criteria.
Important to guide a buyer through his/her concerns, which may be first time jitters or concern over a higher payment.
SETTING THE APPOINTMENT
Contacts will come in all forms, but mostly from phone calls. It’s good to get the callers info and even better to set up an appointment. When in the office you can have “floor time”, this is when incoming calls to the office are directed to your desk. A lot of money (ads) is spent to get these prospective buyers to call, it’s up to you to turn them into clients.
While in the office it’s always a good idea to have a list of switch properties. These are listings within 20% of the one being inquired about. Just in case the potential buyer hears something that turns him off the one in question. Having the list handy helps in many ways. If a caller calls with a number of bedrooms in mind, but the discovery of a pool puts them off, you can suggest a similar property with the same number of bedrooms.
Price is a factor that you should be clear about as soon as possible in the conversation. Don’t be pushy, but knowing the price will save you and the client a lot of time. Some clients call because that have seen the home but have no idea of the price. Informing them of the price and then asking what their budget is allows you to refer to the list and suggest a switch property.
Pay attention to what generated the call as this will point to what information the buyers has been exposed to. Ads = the general dimensions of the home. Calling from “For Sale” sign = they like the area. It’s a good idea to have a map nearby showing the listing so you can refer to it if area is a criteria.
There will also be calls from the internet. Either from your site, firm’s site or a guest access to the MLS. These calls are the best because the buyer has been exposed to the largest amount of information and if the call comes in the buyer is REALLY interested. Usually these calls end in meetings. Internet reaches more people than any other form. Even buyers relocating from outside the area have access to your listing through the internet.
Here’s a list of hints when taking buyers calls:
• Don’t give too much more information than you are given. Buyer may gather needed info and use another broker. Information is important in finding switch properties. Less info will entice buyer to meet.
• Get callers name and contact information. This way you can call back if you don’t have all the information in front of you.
• Answer a question with a question. “Does it have a pool?” “Is a pool necessary?”
• Find out type of property and why the buyer is in the market for a home.
• Keep phone calls short, better to meet face to face.
• End conversation with an appointment. Ask best time and place, don’t ask “Wanna meet?” Most likely get a no.
• When setting up appointment, mention the switch properties, this will get the buyer interested in a meeting.
• Set up meeting either at office or buyers home. Office is better as it’s easier to search the MLS and other properties.
Questions to ask buyer:
• Do you own your own home?
• Are you selling your house?
• Where is current home?
• When do you need a new home?
• How large is your family?
• What other areas are you interested?
• What is your budget?
When buyers call, offer to meet later that day or the next. Don’t offer a choice. Call the morning of the meeting to remind them. Inform of other properties in the area (switch). Do not offer to show additional properties if you have none.
Make sure the meeting place is clear for both parties. Office preferred.
When a buyer calls from an ad, they may continue to call other ads. To stop them continuing to search alone, ask what other properties he/she may be interested in and offer to address them at the meeting. Stops the buyer calling other agents and increases interest in meeting.
Reluctant Callers
Some callers are reluctant to give any information. Make sure you offer to show the property and inform about new listings in the area. Don’t be pushy, be sincere.
If caller won’t give name. Offer to email the caller an information pack. You’ll need email address and name. Or offer to gather more information on the property and call the buyer back. Once the caller realizes you are not harvesting names and want to help, they’ll be more likely to offer contact info.
Those callers contacting you from the internet will be happy to give you their email address, because it’s more anonymous.
Some callers are reluctant to meet, and only want the address of the property. Give them the address. Then call back after a few days. Either the property will interest them more, or they will need new input (switch).
Be sincere. Follow up. Don’t be pushy. Deliver on a promise. Remember happy clients refer. Bad experiences are passed on.
Use callsource.com to get background information on reluctant callers. Use this service judiciously.
FIRST MEETING
Make sure you remember the clients name and have the correct pronouncement as well. Make a good impression. Capable, genuine and sincere will gain confidence.
Start with the qualifying process where an in-house mortgage specialist will consult with your clients. During the wait time… about an hour this gives you ample time to discuss the steps you will be taking with the client:
• Listing agreement
Explain that you are either the listing agent or have access to listings where you will be conducting your search (MLS).
• Marketing
Agents advertise the properties, which brought the buyer here.
• Deposit Receipt
When an offer is to be made, purchase contract referred to as deposit reciept.
• Acceptance
When the seller is in receipt of the offer and terms. The seller has option to counter.
• Escrow
Once all terms have been accepted, escrow is opened. The deposit has been placed into a trust and all inspections are carried out. All deposits and payments are funneled through here.
• Financing
Once escrow is opened the buyer qualifies for a loan. Upon completion the money is deposited into escrow.
• Title Search
When escrow is opened, a search is done on the title to determine if the title is clear and able to be transfered.
• Ancillary Activities
Inspections, repairs, improvements,insurance and reports, must be completed before the close of escrow.
• Final Settlement
Before closing all money is disbursed to needed parties and instruments are recorded.
Qualify the Buyer
Sometimes clients will be drawn to a home that is beyond their budget. Once qualified, the agent and buyer can focus on the properties within the qualification range. Find out what drew him/her to that particular home, what are ‘must haves’ and which are ‘deal breakers’.
Three step process:
• What are clients needs and interests? Requirements or desires?
• Financial status? What is the client qualified to borrow? What is monthly budget for mortgage? What kind of down payment? What type of financing can buyer qualify for? Does buyer qualify for any special programs?
• Reason for purchasing new home? First time? Upgrade? Relocation?
Qualification Form
Use this form to update clients changing needs as the house hunting progresses. It serves to remind the agent about all the unique particulars about each client. This is a working-form and will need to be updated regularly. Use it to keep track of reactions and dislikes to help target the correct property for your client.
Qualifying Financially
The more you know about qualifying the better you can serve your client. Make yourself aware of programs, loan types and qualifications. Have the ability to address concerns the buyer may bring up.
Housing-cost-to-income (front-end qualification)
Housing costs cannot exceed 28% of total gross income.
Total payment/Gross income =< 28%
Long-term debt (back-end qualification)
Long term debt cannot exceed 38% of gross income.
Long-term debt/Gross income =< 36%
CHART
Self-employed buyers will have a harder time qualifying for a loan. He/she will have to produce the last two years of income tax returns. Most likely that buyer will have to pay a slightly higher interest.
Discuss down payments. They differ depending on the program .If the buyer decides to pay for PMI the rates may be slightly lower. There are even some programs where the buyer can qualify for 100% financing with no down payment. Best to discuss with mortgage professional.
Pre-qualifying
Important to get buyer to pre-qualify. This shows shift from ‘house hunting’ to serious buyer. If you manage to get client to pre-qualify with you they are likely to remain with you as agent. Also it saves you and buyers time.
If you are waiting in the office for qualification to take place… use time to go over purchase agreement. Also explain that upon offer a ernest money deposit is placed. Remains un-cashed until seller accepts offer an then it’s placed into escrow.
Outline the agency-client relationship as pertains to the situation. If your broker is not the listing agent explain what a buyers listing is. (exclusive representation).
Explain what happens after the buyer has made an offer. I may be:
Accepted
Be negotiated with counter
Rejected
After you have compiled all this data you are ready to show your client. Put together an information pack. When you find homes the buyer may be interested in, contact the seller for more information. Then set up an appointment. Clients interests can be a big selling point. ie. A large yard might not be a must… but for an avid gardener…
SHOWING THE PROPERTY
Get to know your property before you show it. A good agent will know about things unseen by the buyer. Age of roof, water-heater, plumbing. Also neighborhood details, local schools, transport, shopping.
Stay within the buyers budget showing properties outside of the budget will only make budgeted homes look bad. Don’t show your own properties unless they fit.
If the property is occupied, call ahead and warn the seller. It gives them time to prepare the property to be shown. In the mean time you can schedule vacant homes on lockboxes.
For out-of-towners show as many as you can in the time alloted. 3-4 for the locals is as many as you want to show before you need input to better shape your showings. Be aware of clients energy level and time constraints.
Some agents choose to place the “best” home in a specific spot on the showings list. Remember “best” is according to the buyers choices not your opinion.
The neighborhood can also help sell the home. Driving a certain route to the home will slant the buyers opinion. Drive past points of interest you know the buyer has listed as important.
Create the correct mood. Have the seller adjust the home to suit the season. Fire on in winter, cool-drinks in summer, etc. Park on the opposite side of the street, allow buyers to take in curb appeal. Follow clients around, prompting them to think where certain items may fit in the home. Engage all members of the buying party. Ask children which bedroom they like best. Tree house in the yard? Ask the buyer how he/she visualizes the use of various rooms. Don’t assume. What’s the first meal going to be chef? All these tips help the buyer feel like they already own the home.
Features are easy to tout. But it’s best to sell the benefits of the feature.
e.g. Large living room with high ceilings…
– Great for large furniture
– Perfect for entertaining
– Can fit large pieces of art on the wall
A typical benefit may not be the same from buyer to buyer so tailor your highlight of the selling point of each feature. Don’t assume.
After each home, discuss what the buyer liked and didn’t. Also ask why. Also get opinions about surroundings and neighborhood.
Treat the sellers home with care:
• Don’t allow smoking during the showing, while in the home.
• Follow sellers requests, such as when to show the property.
• If another agent is showing the property, wait until that have finished
• If the property is a “call first” make sure to call seller and inform them of intention to show.
• Leave home exactly as it was found, including position of items. Always make sure to secure property before leaving.
• Do not make negative comments about the home while inside. Seller may overhear.
• If you discover a problem in/with the home, notify listing agent/broker right away.
• Always leave business card.
• When calling another office, identify yourself and affiliation.
When viewing multiple properties, use the opportunity to compare the different features of the homes. This will clearer idea of clients taste.
Tie-downs This is when you end a statement with a leading question.
Good phrases to use are…
• …isn’t it?
• …can’t it?
• …don’t you?
These help in getting feedback and making clients think of possibilities.
Final Tips
• Begin and end in the best room in the house.
• Allow buyers privacy to walk around.
• Stand along the walls of smaller rooms to make seem larger.
• Buyers normally follow you around. Take them to the best vantage points.
• Eliminate your taste/personal opinion from the equation.
• Answer questions and concerns right away. Don’t wait.
• Use friends that buyers brings with as allies, don’t undermine them.
• Highlight any features that will leave a lasting impression.
• Show homes in order, leaving the best till last. Remember, best, as your client describes it.
• Engage children in the process and where appropriate use them as helpers.
• Use simple language
RETAINING POTENTIAL BUYERS AS CLIENTS
After some meetings and a day of showings, head back to the office to sign exclusive agreement. Best to request at the time buyer is making an offer. Alternatively if they don’t find anything they like and would like to see more properties.
It’s a difficult moment to ask for exclusivity. Be honest, state you will work for them until a house is found and do the leg-work to filter out all homes not meeting the buyers criteria. Disclose that you will be working with other buyers at the same time. Good to point out that seldom a crossover as clients always have different taste. Turn a potential negative into a positive. If you have been delivering 110% client is likely to say yes.
ANSWERING + OVERCOMING OBJECTIONS
When a buyer voices a concern, it doesn’t mean it’s negative, in fact it means they are interested.
Prepare yourself, get to know the property and anticipate questions. Act, don’t react. Some questions typically asked:
• How old is the roof?
• What is the condition of the foundation?
• Is the neighborhood safe?
• Are the schools any good?
• What is the distance to stores?
Before making the offer, make sure the buyers is comfortable with disclosures, etc. Always good for the agent to point out issues before the buyer notices. This reassures the buyer and creates a problem-solving dialogue.
5 Buyer Objections
• Procrastination
If the buyer says,”Not really…” or “think it over…”, this usually indicates that there are questions the buyer needs answered or needs to ask. It’s best to agree with the buyer and go over any objections the buyer may have.
• Price
Sometimes the buyer feels the price is too high. remind him/her that the house has been priced, at or below, the market. Remind the buyer about the benefits of the property and how well the home fits the buyers criteria. Remind the buyer that property values almost always rise.
If the monthly payment is too high or the buyer, go back to the mortgage specialist and brainstorm on how to get a better rate or a new program. Possibly a different lender?
• Insecurity
Sometimes the buyer is worried about being tied down for a long period or that the market is too high. Remind them that they can sell at anytime and most likely for a higher price.
• If the buyer likes the house but the location is less desirable. Do some research on planned development and improvements. Remind buyers that if the neighborhood improves, the home value will increase.
• Prejudice or Personal Bias
“I wanted a house that…” or “I prefer…. Try to find the positive counterpoints to the objections.
OBTAINING THE OFFER
Buyers seldom announce they are ready to make an offer. You have to ask them… but when? Listed below are some approaches.
• Expression
Excited buyer glances or positive or positive statements suggest a possible offer. Back up these positive indicators with action statements. “…and it could be yours in 30 days”. Even offer a short escrow.
• Question
When the buyer makes pointed questions around making an offer. Answer questions with questions. “What would you like to happen?”
• Self-Sale
When the buyer starts defining functions to certain areas of the home, they are in fact selling themselves on the house.
• Minor Point
If buyers offer is imminent, carry around the contract and start to ask certain questions about the property. Then when it comes time to sign, the buyer will be familiar with the questions.
• Scratch Pad
Use a note pad to calculate mortgage payments and cost. Offer various solutions, make buyer feel part of the process.
• Fatal Alternative
When buyer shows interest, ask buyer a general question regarding occupancy, title or other vague question. If the buyer gives an answer. You can ask to make an offer.
• Affirmative Yes
Ask questions you know will get answered yes. Then ask for offer, after so many affirmations, why not?
• Negative Yes
If the buyer is tentative, run through what the problem could be. After you get a bunch of no’s, then you can narrow down and focus on why the buyer is not coming through with an offer.