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A NEW PARADIGM FOR BUYERS AGENTS. TAKING CONTROL OF YOUR BUSINESS

By
Real Estate Agent with Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate 303829;0225082372

IMPROVE YOUR LEVEL OF SERVICE AND SELL MORE REAL ESTATE BY TAKING CONTROL OF YOUR BUSINESS.  Use your time wisely and save it for serious home buyers.   

We often read about agents who show properties to buyers for months and sometimes years.  That's very nice and may result in a sale.  OR NOT.  However, in the long run, I believe that buyer's agents will improve their business and income if they take control of their business and establish ground rules for the agent and the buyer. 

GRANT ME THE FOLLOWING PREMISES:

  • Real estate agents know the listing inventory far better than the average consumer.
  • Real estate agents understand market value far better than the average consumer.
  • Real estate agents are more familiar with mortgage financing than the average consumer.
  • Real estate agents are more familiar with the Contract of Sale than the average consumer.
  • Real estate agents have observed more home inspections than the average consumer.
  • Real estate agents are more familiar with real estate settlements than the average consumer.

EXPERIENCE IS THE AUTHORITY.  Given the above, why do so many licensed real estate practitioners permit consumers to control the home buying process?keypad

THE INTERNET EMPOWERED CONSUMER often believes that they are, through "their own research on the Internet", experts in finding, buying, financing, inspecting homes listed for sale.  I dispute that premise.  A consumer who is a first time home buyer, second time home buyer, home seller, etc. cannot possibly have the knowledge and experience of a real estate agent or broker who has closed or managed 5-20-100 or 500 sales transactions for buyers or sellers.

ARE WE MANAGING OUR BUSINESS or ARE WE A WALKING KEYPAD? 

The walking keypad syndrome manifests itself when a licensed real estate practitioner permits a consumer to

  • Select the homes to tour.
  • Obtains loan approval without consulting with the agent.
  • Contacts the agent an hour before they wish to see a house they found on the Internet.

Many consumers believe that, because of all the information and free advice found on the Internet, that they are competent to make real estate brokerage decisions without consulting an agent.  Free advice is not always good advice.

THE NEW PARADIGM FOR REAL ESTATE BUYERS AGENTS:

The Internet presents use with wonderful opportunities to offer our services to buyers who conduct their search for homes on the Internet.  However, don't be fooled.  Most consumers use the Internet to FIND HOMES, NOT AGENTS.  We welcome buyer contacts from our blog or web page.  However, the Internet empowered consumer is not likely to have your best interest in mind.  Agents must learn to engage Internet leads or referrals with friendly helpful services.  However, we must maintain control.  car

DON'T BE A TOUR GUIDE.  Make sure the consumer is qualified for the price range for homes about which they inquired.  We have a duty to the home sellers to make sure that buyers touring their home is qualified.  

Just because a consumer calls does not mean that you must run out and show a property to a perfect stranger.    Experienced agents know that if they run out and show a house to a consumer without some pre-qualifying discussion, not only may the agent be wasting their own time, but how much respect can a buyer have for an agent that is willing to admit them to any house anytime?

If a consumer will not give you income information to qualify them for the price range, they cannot be taken seriously.  Folks cannot test drive a vehicle without providing a drivers license and often a credit report permission.  Why should be take folks in homes without knowing that they qualify for that price range? 

DON'T PUT BUYERS AND AGENTS AT RISK OF INJURY.  Schedule home tours when there is sufficient time to avoid rushing.  Don't let the buyer persuade you to look at "just one home" after dark or in peak rush hour for the area.  House numbers are hard to find and walking unfamiliar properties in the dark is dangerous.  Internet empowered buyer

DON'T LET THE BUYER ARRANGE THE TOUR.  Arrange the tour route based on geography and not the ones that the buyer want to see first, etc.  I have spoken with buyers who want to prioritize the tour.  The agent has the tools to arrange efficient tours and not backtrack all around to get to homes.  The agent is the one who makes appointments and needs to schedule accordingly.

 

DON'T MEET STRANGERS AT A LISTING.  If possible, meet buyers at an office or convenient location and drive them to properties.  This gives the agent the opportunity to have a friendly conversation with the buyer.  Nothing bonds a buyer and an agent better than a friendly conversation.  Concurrently, you aren't sending a consumer to a listed property without an agent.

DON'T BE A DOORMAT.  At peak traffic times, it is possible for a buyer to be delayed.  Based on the weather, time of showing, traffic, etc., have a reasonable wait time, 15-20 minuted pre-determined.  If the buyer has not arrived without calling, cancel the appointment and go about your business.  Waiting an hour for a buyer to show is not going to make them show. 

LEARN TO IDENTIFY SERIOUS BUYERS FROM LOOKERS.  Always ask a consumer if they are working with an agent.  Last minute calls from consumers who want to look at one home on short notice is a clue.  They are usually already working with an agent who can't accommodate the buyer at the desired time.  Don't be a stalking horse for other agents.  If you try to recruit the buyer for yourself, you'll have nothing more than a disloyal buyer. 

AVOID LONG BUYER AGENCY AGREEMENTS.  Buyer representation agreement that are for 3-6-12 months are an invitation to the buyer to look, look, look for 3-6-12 months.  Short initial Agreements encourage the buyer to look now and make decisions.  The agreement can always be extended if the parties, buyer and agent, are working well together.  However, a short initial agreement gives the agent an opportunity to make sure that the buyer is serious, qualified, available, accessible.  Long agreements don't make buyers loyal.  All that does is give the agent the contract on which to pursue litigation if the consumer buys with another agent or on their own. 

SCHEDULE TOURS EARLY AND OFTEN.  Let the buyer understand that, to help them find the best home for their money in their preferred location, you, their agent will be out previewing and researching homes for them to view.  If the buyer is not willing to schedule future tour dates, they may not be serious buyers.  If at the end of 2-4 weeks the agent doesn't believe that there is a likelihood that the buyer is ready, there is not need to do any more previewing or research. 

NEXT!! 

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Comments (93)

Boston Condo Guy
Boston Condo Guy - Boston, MA

This is a hard stance, but one that appears to be, at the end of the day, very respectful of not just your time, but everyone's time involved in the transaction.  Qualification has to take place at multiple levels within a transaction.  As you pointed out, is a Buyer qualified financially to look at a property, is key.  Also, has the Buyer's Agent qualified the particular property that they are showing to their Buyer, if not, everyone's time, including the Listing Agent, is wasted.

Oct 27, 2008 09:08 AM
Lenn Harley
Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate - Leesburg, VA
Real Estate Broker - Virginia & Maryland

Paul.  Ah Ha!  I'll bet you will remember now when someone wants you to work in a way that is not condusive to home sales.

Jim Q.  Time management is critical in all markets.  Thanks.

Frank and Jodi.  I have to laugh when a consumer tries to value property.  Sucks, most agents can't.

Pam.  I don't work from an office and neither do most of the agents in my network.  However, we absolutly verify the buyer's identify. 

Brian.  You're right.  Not worrying where your next client is coming from helps.  But, investing time in developing that flow of business can't be done if we're showing folks 50 houses.

Pippa.  You're not alone.  Those buyers are more difficult to come by these days.  I was out for 4 hours today and when I got back, I had two messages from buyers interested in homes and 3 calles from agents looking for buyers. 

Boston Guy.  It is credital to qualify a buyer.  I'm not taking any buyer in someone's home unless I know that they are qualifed for that price range. 

Oct 27, 2008 10:30 AM
DJ Swanepoel
Real Estate Wiki - Los Angeles, CA

Great post Lenn, thank you. One smaller aspect that stood out was the assertion that people look on the internet to find homes, not agents. I think this is true to some extent, but I know a lot of Realtors get excellent business from their websites.

Granted, this could always be because a client stumbled onto their listings while looking for a home:) I know in my case if I was looking for an Agent, the first place I would look is online, but I think the same is probably true of most of my generation (20 somethings).

Oct 27, 2008 10:42 AM
Bryant Tutas
Tutas Towne Realty, Inc and Garden Views Realty, LLC - Winter Garden, FL
Selling Florida one home at a time

Lenn, I completely agree the buyer is in default. And as with the other 3 escrow disputes I have right now the money can just sit at the title company until it rots. A normal deposit in my area is $1,000. To little to sue for or to make it worth my sellers time to fight. So it sits.

Oct 27, 2008 10:50 AM
Lenn Harley
Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate - Leesburg, VA
Real Estate Broker - Virginia & Maryland

DJ.  I do excellent business from my web sites too.  But, I don't fool myself that it's becasue of my stunning good looks or scentilating personality on the phone. 

9 out of 10 contacts are interest in properties. 

If a buyer calls me and says the magic words,  "I'm looking for a buyer's agent".  He will get me and not one of our agents. 

 

Oct 27, 2008 11:08 AM
Loreena and Michael Yeo
3:16 team REALTY ~ Locally-owned Prosper TX Real Estate Co. - Prosper, TX
Real Estate Agents

Lenn - What I have learnt from being a buyer's agent is the profile of a serious buyer and a "just say I'm serious" are a worold of a difference. The things they do, the things they say are different. It became so clearly now that I have a few escrows (as buyer's agent).

Oct 27, 2008 11:18 AM
Frank & Jodi Orlando
Frank & Jodi Orlando Get Us A Home Realty Atlanta Homes Sale - Cumming, GA

Lol, Lenn, that is the difference between the ones we keep and the ones we forward. Looks good, smells good, sounds good, IT'S MINE!!!

Oct 27, 2008 11:20 AM
Tom Davis
Harrington ERA,DE Homes For Sale, $$ Save $$ Buy Today ! - Dover, DE
FREE Delaware Homes Search!, $$ Save $$ - Find Homes! Delaware Realtor

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Oct 27, 2008 04:58 PM
Alexsandra Stewart
Remax equity group - Portland, OR
Broker - Portland Oregon Real Estate

Lenn -- really great post.  i loved the straight forward, point by point, factual -- this is the way it is stance.  It's clear that if I am out with an unmotivated, not qualified buyer -- I may miss the one is really is ready.  i have a series of questions I ask to qualify the prospective buyer -- and it helps.  there are times i've asked if they have been working with another agent, I find out they just want to see this house because their agent is out of town -- well who is covering for that agent? You are right - have to see it right away usually is a red flag. There were some good reminders for me in this post -- and i am seriously thinking about the shorter BA as an option.

Oct 27, 2008 05:15 PM
Janet Guilbault
Platinum Home Mortgage Company - Walnut Creek, CA
San Francisco Bay Area Direct Mortgage Lender

Gosh, Lenn, I am a few days late with this reply, but I am starting with a new company who makes every loan officer, no matter how long in the business, take gobs of training including being FHA certified. I am exhausted and ready to go back to doing loans.

So Lenn: What would you rather have? A client who comes in with a real lender approval that has gone to a local mortgage broker...but one you do not know?

Or someone who comes in without any contact with a mortgage broker? That way you can qualify them yourself and send them to someone you know....

Which client is more likely to be dead serious about buying a house? I think it is the person who has gone to the mortgage broker first.

I am guessing you would rather send them to someone you know and qualify them yourself, because that would give you more control and security. I am in disagreement with this because I know all the steps between calculator and lender approval and frankly, I believe a lender approval trumps the Realtor's calculator.

Please understand that this in no way diminishes my respect for you and any Realtor who understands how to qualify a client who has NOT been to see a mortgage broker.

I believe that the person who is already lender approved (not just pre approved by a mortgage broker) gives you a better leg up even if you have no idea WHO the mortgage broker is. You have stated in your post that someone going to a mortgage broker first is somehow causing you a loss of control. That could be the case, but not always.

Please do not use the example of a random Internet loan company. I am on record as being in full agreement with you that this is a risky way to go, and not a good situation.

Oct 28, 2008 04:33 PM
Lenn Harley
Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate - Leesburg, VA
Real Estate Broker - Virginia & Maryland

Janet. 

"Keep your eye on the goal".

The consumer wishes to buy a home.  The mortgage loan facilitates the purchase of a home. 

The consumer, once they have viewed some properties for sale and has identified the location, style, type and general home market for their price range, is then, and only then, ready to commit to a lender. 

Once we have identified some prospective homes for sale, I introduce my buyer to several loan officers who give excellent service and are with mortgage companies that offer good rates and have a full menu of loans. 

I contact the loan officers, brief them on the buyer's needs to make sure they know the where, what and when the buyer wishes and needs to buy.  Does having this control make my job easier?   You bet it does.  It also results in better communication between the buyer, the agent and the lender.

You wrote:  "I am in disagreement with this because I know all the steps between calculator and lender approval and frankly, I believe a lender approval trumps the Realtor's calculator."

You still believe that "lender approval" is essential before a buyer should tour homes, learn about neighborhoods, visit schools, compare commute times, learn about property condition and inspections, review a contract of sale, estimate closing costs, and tour more homes. 

I disagree with that.  We do not need a loan approval prior to any of the above.  The calculator qualifying is quite sufficient to determine a safe price range and that is what we do.   

Once the buyer has acheived their goal, finding a home they wish to buy, that is the time to take the second step on the home buying process, selecting a mortgage company. 

Keep your eye on the goal.

Oct 28, 2008 10:36 PM
Lenn Harley
Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate - Leesburg, VA
Real Estate Broker - Virginia & Maryland

Alexsandra.  Indeed.  Wise use of our time is more essential in slow times than at any other time.  It's 6:37 a.m. now and I have already deleted two contacts from my mail this a.m.   Their price was so low that I wouldn't even ask one of our experienced agents to spend time with them.  

I want our agents to use their time wisely and if they arent' working with a qualified buyer in a price range that is going to pay them for their time, they could use the time for CE or, just go fishing.  That's important too.

Frank and Jodi.  We are in business and earn our yearly income buy selling homes.  We have to run an efficient business.

Loreena.  Thanks for that thoughtful comment.  I LOVE being a buyer's broker. 

Oct 28, 2008 10:48 PM
Larry Brewer - Benchmark Realty llc
Benchmark Realty LLc - Nashville, TN

Lenn - I reblogged this for my blogging class. This is perfect in every way. Thanks for sharing.

Oct 29, 2008 02:45 AM
Lenn Harley
Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate - Leesburg, VA
Real Estate Broker - Virginia & Maryland

Larry.  Thanks.  I appreciate your reBlogging.  Spread the word.

 

Oct 29, 2008 02:58 AM
Sonja Adams
Keller Williams Realty - Purcellville, VA

Lenn - I agree with everything you are saying and always schedule my homes in the order that works best for the day...the one thing that I am always hesitant is picking up a stranger and putting them in my car or meeting them at a house alone.  Because of the safety issues, I usually work something out so I'm not alone if I'm worried about the person.  So, as a rule, I try not to meet one stranger alone.

Oct 29, 2008 03:36 AM
Lenn Harley
Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate - Leesburg, VA
Real Estate Broker - Virginia & Maryland

Sonia.  Actually, I insist on meeting buyers at a convenient place simply to have a few minutes alone with them before they see the house.  It gives me time to provide the agency disclosure, brochure packet, etc. and chat before they are pre-occupied with the home.

I verify folks before making an appointment. 

Oct 29, 2008 04:55 AM
Benjamin Clark
Homebuyer Representation, Inc. - Salt Lake City, UT
Buyer's Agent - Certified Negotiation Expert

Lenn - You know I pretty much tell people not to call me unless they are buying within 90 days. It has made me more productive and has attracted clients who are ready to take action.

Do I ever work with people who will take longer? Yes. But as you said, I get to set the ground rules and I may charge a retainer fee.

There is a lot of wisdom in the comments as well.

Oct 31, 2008 06:15 AM
Brenda Harmon
Century 21 Beal, Inc College Station, Texas - College Station, TX

Lenn,

How do you work if you don't work out of an office?  I agree with your post with the exception that I do want my buyers to have lender approval.

Nov 05, 2008 04:25 PM
Lenn Harley
Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate - Leesburg, VA
Real Estate Broker - Virginia & Maryland

Brenda.  I haven't worked out of an office since 1994.  The how can't really be defined simply.  If a buyer is nearby, I pick them up and we tour.  Like many agents, I've written contracts on the hood of my vehicle, in Starbucks, etc. 

Fact is, an agent's physical office is not always convenient for buyers and discourages buyers from working with an agent who is tied to that location. 

Just because the agent wants the buyer to be lender approved doesn't mean that the buyer is ready to do so.

 

Folks want to look at homes.  They didn't contact me to talk with a lender.  When we need a lender's letter is plenty of time for that. 

Nov 05, 2008 09:56 PM
Lenn Harley
Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate - Leesburg, VA
Real Estate Broker - Virginia & Maryland

Benjamin.  Good practices.  I only charge retainer fees to NTT folks because they pay me directly. 

I charged a $500 Retainer fee to my first buyer under a BA Agreement in 1993.  Haven't done it since. 

I have found over the years that agents use the BA Agreement as a way of commiting the buyer to their broker and not as a way of serving the buyer.  Same thing with the retainer fee.  Agents charge a retainer fee to make the buyer stick with them for fear of losing that money.  That's just not my way of selling real estate. 

In fact, I use that paragraph in the Agreement as a public relations item emphasizing that I don't charge a retainer fee.  I make it clear to buyers that if they want my services, they will work closely with me to find their home of choice.  I also only work with one or two buyers at a time and keep them busy working to find their home.  Most buyers succeed in a matter of 1-3 weeks. 

Next!

Nov 05, 2008 10:02 PM