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Prequalifying buyers to have reasonable expectations....

By
Real Estate Agent with The Paul Kaplan Group, Inc

I think we all know the importance of financially prequalifying buyers before we start spending a lot of time and energy on them.

I'm learning its important these days, to prequalify buyers intentions regarding having realistic expectatons.  I find that because of all the media out there, buyers think people are giving properties away.  They can definitely find a great deal, but they're not necessarily going to steal the property!

I try to explain to buyers that selling prices on average, are 5 to 10% off the asking prices in general, unless a property is extremely overpriced to begin with.  But if a property is reasonably priced, it typically sells no less then 90% of asking.  And on Foreclosure properties, if priced right, there will be multiple offers and often a property will go out for more then asking.    I think many buyers are a little shocked to hear this. 

The challenge I have, is clients will have a budget of say $500,000, but will want to see properties that are listed around $800,000.  They are expecting if they like it, they'll be able to get it at their budgeted price.  Trying to educate them, is turning out to be a challenge.  Some clients just refuse to believe me...and in some cases, I'll just have to play the game and let them submit a couple of offers that they have no chance of getting, for them to finally accept reality.

Curious how other agents deal with this situation?

Jim Curry
Re/ Max Achievers - Hagerstown, MD
Realtor

I just print out some recently sold properties and show them what the asking price was compared to what they actually sold for.  This usually brings them back to reality.  I don't see any future in submitting low ball offers knowing there's no chance of acceptance. 

Aug 23, 2008 03:33 PM
Lou Ludwig
Ludwig & Associates - Boca Raton, FL
Designations Earned CRB, CRS, CIPS, GRI, SRES, TRC

Paul

I would have to agree with you it's critical to financially prequalify all of our buyers today, with the issues with conventional financing and the cost of gas

Good luck and success

Lou Luwig     

Aug 23, 2008 03:37 PM
Bob Cosby
One Source Realty - Shaw AFB, SC

The bad part about the job is that we have to do what we are asked and I too have been through the low ball process. Fortunately, everybody is becoming costumed to this and just takes the offer to the seller for a counter. We move on to another one and it gets exhausting. I really believe people are starting to understand we are not like the rest of the states.  

Always get pre-qualed before turning the keys.

Aug 23, 2008 03:43 PM
Tim Maitski
HomeAtlanta.com - Sandy Springs, GA
Editor of MaitskiREport.com

It's the same here in Atlanta.

Unfortunately, most people don't believe you until they experience losing one or two homes that they really liked.

There are great deals out there but you have to be immerse in the game and be ready to act quickly. 

I liked this post because it's exactly what I am experiencing.  I reblogged it on my blog "Just Real Estate"  It's my collection of blogs that I think are worthwhile.

Aug 24, 2008 12:07 AM