Buyer's Buyer's Everywhere, but will they commit?

By
Real Estate Agent with RE/MAX Select

I am not kidding you, I have 11 active buyers, approved and looking. I did say looking, right?  I am finding that the latest challenge for me in selling real estate is so many buyers are trying to "steal the deal". 

I am all for finding a great deal for my clients. As as matter-of-fact, I am always trying to find a home that has value to it already, or has great potential to be a viable property for future sale.

The thing is this. Our area is primarily VA Loan buyers.  If you are not familiar with the VA Loan they VA approved appraisers are stricter than, let's say, a Conventional loan.  That being said, it is not that easy to find a home that will get all the way through the buying process and complete the appraisal without some items that must be corrected prior to the loan be approved.

Herein lies the problem.  "I want a foreclosed home".  " I want a bargain". "I dont' mind fixing it up".  Okay so you want a fixer upper.  Well guess what, that is not a home that is eligible for most VA loans. 

So my new process is this.  Usually I have to spend a few days showing properties and explaining why this particular home will probably not get through the loan process. We might be able to ask for repairs, but chances are, ask all you want, nothing will get done by the REO.

Now my VA buyers are back to reality and looking at homes in their price range that are not foreclosed. Guess what? These houses are too small, not new enough, etc.

I am having to readdress how I work with these buyers.  When I get a (mostly) young couple wanting a deal by purchasing a foreclosure I bring them into the office and walk through the entire "normal" buying process. They I show them a "typical" Foreclosure process with all the conditions, etc.  I make sure they are 100% clear on the challenges, and extra expense that they can incur with the acquisition of an REO. Now about 50% of my buyers are thinking twice about this.  They are allowing me make recommendations about which homes might be in the condition they need to be to finish the process. 

This is dramatically cutting down on "wasted showings".  Not that I mind checking out houses that are available, but I am surely tired of a home that is 2,000 square feet with a 30 year old HVAC system, the roof is leaking, the paint is peeling and the carpet is torn or ripped off the floor.

I welcome your ideas for helping these buyers navigate this treterous area of foreclosed homes.

Comments (5)

Melissa Juarez
Massachusetts Buyers Broker Agency, LLC - Quincy, MA

Mary, I too have buyers who want a bargain. I always make sure to screen them because they often do not realize that a bargain today probably needs a lot of work down the line.

Jan 30, 2011 02:52 AM
Karen Anne Stone
New Home Hunters of Fort Worth and Tarrant County - Fort Worth, TX
Fort Worth Real Estate

Mary:  As part of my process of "qualifying" my buyers... in which I make sure they ARE buyers... I ask them the following question:  "If... we walked into just the right house for you today... are you ready to "go ahead ?"  If they answer "yes"... we go out looking.  If they answer "no," I have "other" suggestions for them... like maybe go to the movies.

And yes... navigating the waters of fixer-upper homes can indeed be treacherous.

Jan 30, 2011 02:58 AM
Sylvie Stuart
Realty One Group Mountain Desert 928-600-2765 - Flagstaff, AZ
Home Buying, Home Selling and Investment - Flagsta

Lol, Mary, I love your response. Great post! We need to fight for our time and industry reputation and educating and filtering people is a big part of that. Thanks!

Jan 30, 2011 03:01 AM
Wade Mattingly
WEICHERT Realtors--Bluegrass Living - Lexington, KY

We are refocusing on qualifying the buyer to make sure we don't waste time.  I think you are well on your way.

Jan 30, 2011 03:01 AM
Karen Anne Stone
New Home Hunters of Fort Worth and Tarrant County - Fort Worth, TX
Fort Worth Real Estate

Mary:  I see you are a Newbie.  Sooo... Welcome to Active Rain.  This is such a great place to meet folks, to learn, to share, to establish some relationships, and to help your business GROW.  I am glad you're here.

If you are feeling kind of "newbie'ish"... I might suggest you subscribe to MY blog.  I have been on Active Rain for over three years, and using my former-teacher'ness... I have written many Newbie tutorials that can really help you "learn the ropes."  Also... if you look at any of my "tutorials"... look at the tab words just below that post... and you will see the word "tutorials."  Click on it, and it becomes a link that opens up a lost of perhaps thirty tutorials I have written.

Take care... and again... Welcome to Active Rain.  Have a Great Sunday. <smile>

Jan 30, 2011 03:03 AM