The Quest Begins - A First Time Homebuyers Entry into the Hemet - San Jacinto Real Estate Market
I suppose it happens everyday. A nice family, or even an individual decides that now is the time for them to get involved in the real estate market and buy their first home and quit paying rent forever. It happens in every market, everyday.
Today it happened right here in San Jacinto CA when a I received a phone call from Megan who told me she and her husband, Ryan, had been reading my ActiveRain blog, along with several others, and decided they liked my personality and thought that what I had to say was legitimate. Megan said she knew that if anyone could help them, I could.
OK, I was a bit flattered. I guess we all like to hear nice things being said about us and receive praise for our work. Let that be a lesson - we should all praise one another more often.
THE PHONE INTERVIEW
I am not one who likes to spend much time ‘qualifying' a prospect on the phone. I feel people are much more open and honest face to face. It might have to do with my dozen years experience in the Collection Agency Industry that makes me self-conscious of my direct phone skills that I just don't want to scare anyone off.
So after a moment or two of idle pleasantries I ask the most important question, "Has any other REALTOR® shown you any homes for sale?" I find this to be much more useful than, "Are you currently working with any other agents?" No one understands the concept of ‘working with' - yet I hear agents ask this all the time.
Then I want to know about their finances. No, I don't ask if they have been pre-approved with a lender. Rather, I take a bit more subtle approach and will comment that, "Buying your first home is an exciting time in your life. Most people today will spend hours in preparation, long before they ever speak with a professional in the field - buyers today are more educated and better prepared than any time in the past, thanks mostly to the Internet. The information on the Internet can be both rewarding and confusing at the same time -often very ambiguous when you move from one site to another. What was your biggest challenge?"
This is a great opportunity to let them talk and for me to evaluate their level of preparation for the challenge they are accepting. If I don't hear anything about money at this point - and usually I do - I'll ask if they have a price range in mind for their new home and once I get an answer I'll ask how they came up with that number. It seems as if most will have a dollar amount to spend but not a monthly payment.
Nine times out of ten they will have offered some hint of financing preparation by this point. Now I need to know if they have actually sat down with a lender to see how much home they actually qualify for. Every now and then, a first time homebuyer in the Hemet - San Jacinto marketplace will have a strong committed relationship with his or her own lender. I take this information and save it for later use.
My objective is to make the appointment and meet Megan and Ryan in my office - not learn everything about them on the phone. So, as soon as I am ready, I'll say, "Megan, if you and Ryan can make it to my office, I can make some time to meet you both at 5:00 and I can spend quality time answering all of your questions when I explain everything you are in for, if you are truly committed to buying your first home. Will this afternoon work or should we look for another day?"
I like my first appointment set for 5 - I give the impression that I am staying late just to accommodate them and get them into my schedule. Just as if you wanted to see a doctor for the first time today - you go when they can make time for you and 5:00 says this is a special time. I also emphasize that I will answer all of their questions and educate them on the entire process - this is a huge initial value. No matter how much Internet research they have conducted or how many of their friends and family members have bought houses in the recent past - they have received conflicting information and are not sure of what is going on.
PREPERATION
The Sales process when done right is never done as an impulse. Your first time buyers should not be allowed to buy a home on impulse any more than a successful REALTOR® should ever meet with a client unprepared and just ‘shoot form the hip' because they have done it so many times in the past.
My first objective is to contact my lender of choice and put them on notice that I have a first time buyer intake appointment later that afternoon and ask them to be on standby for a preliminary pre-qualification interview.
The second step is to run a market report of SOLD homes in three different categories that I feel may meet the needs of my new buyers. I never provide ACTIVE information, until the first time home buyer is ready to start looking at homes for sale and they can't do that in this market until they have been approved by a direct lender. It is important for the buyers to see the reality of the market and how it is changing.
I will also make certain that I have the latest research from AltosReseach printed out for them as a handout. When I meet with Megan and Ryan and give them this, I will ask them to study this and to make sure they subscribe, for free, to this service on the home page of my website - JohnOcchi.com
THE FIRST OFFICE APPOINTMENT
It should go without saying, but I double check to make sure the office is clean and orderly, yet it looks like it has been worked in all day. I call this ‘organized clutter'.
Meg and Ryan are met by my receptionist and seated on our leather sofa. The tables are full of home type magazines - decorating, remodeling, landscape...anything to do with housing and nothing about politics or gossip. Sorry, no PEOPLE or Newsweek magazines in my office.
Just like in a doctors office, my first time visitors are handed a clipboard with several sheets of paper that they are asked to complete and told that I will be with them in a few minutes, that I am finishing up a negotiation for another one of my clients.
My forms gather basic contact information and allow me to figure out what is important to them in their dream home.
I never keep them waiting long - rarely do they have the opportunity to actually finish completing the paperwork. If the office is near vacant, I'll sit right there with them in the reception area and chat, going over their paperwork - completing the unanswered questions and reviewing what they have shared. I will take dubious notes so they know I am paying attention to them.
Once I have gathered the information I feel is important, I will ask them permission to share my insights into the current real estate market in the Hemet - San Jacinto Valley and how it has a direct impact for what they are looking for.
This will lead into the conversation on the entire process and how important the right financing is.
THE LOAN OFFICER
For the transition to the loan officer usually I will use the analogy of the REALTOR® being the conductor of a symphony orchestra and that my job is to coordinate all of the moving pieces so they work in unison to produce a smooth and seamless escrow. I'll explain in detail, the importance of the relationship between a real estate agent and their preferred loan officer. I explain that we do not exchange any money for referring one another and that if I ever refer them to anyone that I have a vested interest in that it has to be fully disclosed.
I'll explain the relationship side of the equation that loan officers will look to their real estate agents as a steady source of new business, so that whenever I make a referral they know they have to do the best job possible - not necessarily to please the client but to please me - their source for future business. They know the only way to do that is to please my buyers.
With that being said, I emphasize that unlike a lot of real estate agents who are going to question their buyers on every aspect of their financial situation, I really don't care. My job does not require me to get involved in all of the unique nuances of your personal financial situation, they are told. My loan officers are the only ones who need to dig into your situation...and dig they will. Once satisfied they have a loan that will work for you, they will generate a Approval Letter only contingent on the actual property you want to buy appraising for the value offered. I'll emphasize how strong this strategy is compared to all of the offers I see as a listing agent where buyers have barely had more than a preliminary conversation with the loan officer.
Just before I call the lender, I'll make the joke that I am a bona-fide shopaholics that I inherited that personality flaw from my mother. If after reviewing your information the loan officer gives me a dollar amount to spend, believe me, I can help you spend it.
While the first time homebuyer is speaking with my loan officer, I'll excuse myself and make my own call (I always have someone to call), giving them the privacy to get personal. Believe me, I really don't want to know - I have enough stuff on my mind without getting too deep into other peoples personal problems. My loan officer will tell me everything I need to know.
WRAP IT UP
Now that my first time homebuyers have had a few quality minutes with my lender it is time to wrap things up. I have already educated them to the process of buying a home and closing escrow and I have started the loan approval process. Now I shift to the current market and explain why I have SOLD homes for them to look at and not ACTIVE listings. I share the market data and ask them to sign up on my website.
I confirm that they know what documents the lender needs and ask if it will be a problem for them to send everything back to the lender this evening, so we can get the process moving along. If not, I get a commitment as to when that will take place - just as my lender already has.
I will then quickly go through each of the vendors that I work with and explain why and again emphasize that I earn nothing from them except respect and gratitude for sending business their way which translates to savings and enhanced service for my clients.
The first time buyers will have a few more questions that I answer. Then I go in for the close...
ARE THEY COMMITTED?
It is important to know that the first time buyers who found me on the internet, contacted me, set the appointment to meet in my office, came prepared to my office and started the loan approval process with my loan officer is committed to moving forward.
I explain that I only work with buyers who are committed to working with me. I'll say that I hope they have received value by meeting me and know that I will continue top perform,
By only working with buyers who are committed to working with me I am able to commit more quality time to buyers rather than chasing every rabbit down every hole. I then go to the clipboard and pull out the bottom page - a buyer broker agreement and ask them to sign.
Next time we get together, Ryan and Megan will have been manually underwriter approved for a loan they are comfortable with and we will start the shopping process.
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