We all know not only how difficult our market is, but what little clients we do have that are interested in buying a home and are qualified to buy a home are difficult to come by.
Sometimes we also don't recognize that, in addition to finding those clients, we also need to know who we are working with. After all, time is money, especially in these challenging times.
In addition to keeping up with the lending guidelines, learning about REOs, short sales, etc, I am sure I can speak for all of us when I say that arguably the most challenging part of the past 3 years has been managing our time. I have found the main factor that seems to drive how our time is managed and controlled is the type of client we are working with. I have worked with many types of clients, and I have found that they all have their specific categories. Here they are:
(1) THE EXPERIENCED AND UNDERSTANDING CLIENT:
These are generally second-time buyers or possibly buyers multiple times. They understand the housing market and have kept up with changes in not only the home values but also the fact that lending is not as easy as it is used to be. They don't seem to question realtor fees or lender interest rates or closing costs. They understand that realtors and mortgage professionals need to make a living.
These are the clients to really really go all out and service for. Staying on top of their transaction, attending the closing, and providing a gift for them at closing will do wonders for future business and referrals.
(2) THE INEXPERIENCED FIRST-TIME HOMEBUYER:
On a short-term basis, they need to be handled with kid gloves. They will require a lot of hand-holding, will ask lots of questions, and they will take up time in terms of explaining the housing market and understanding loan programs.
However, on a long-term basis, they do trust your experience and expertise, are very very appreciative of helping them with their dreams, and also provide or will provide a very good future potential of referrals.
(3) THE EXPERIENCED "SHOPPER" :
These clients are experience with the real estate process and the loan process. However, they tend to try to second-guess the realtor fees and lender fees. They try to leverage their many contacts of other realtors and loan officers that they know who may offer lower fees. These clients take up quite a bit of time because you have to convince them that service ultimately is what is most important. They need to be constantly reminded that they will get what they pay for. However, long-term, they are also a good source of referrals as you do prove that service takes precedence over price.
(4) THE INEXPERIENCED, WISHY WASHY HOMEBUYER:
These clients are nice people, but seem to be very apprehensive about the whole process. They tell you they are interested but have a tendency to not act until they find the "perfect house" and "perfect situation" in order to act. They also seem to be the type of client that, once they do decide to pull the trigger, are very slow to respond to changes during the process(i.e. signing addendums, providing documentation to lenders needed for the completion of the loan process).
They can be ultimately good to work with and provide a source of referrals, but you have to be careful about the time invested with them. It may come down to being blunt with them and becoming more heavy-handed in terms of: making decisions and responding to paperwork requests.
(5) THE EXPERIENCED, ENTITLED HOMEBUYERS:
These clients generally have bought and sold homes, done many real estate transactions but again they question realtor fees and lender fees. They second-guess your assessment of value on their home you are listing, feel that you are not justifed in the fees you charge, and don't understand why, when they have a 800 FICO score, why I still need to ask for bank statements and tax returns.
They feel "entitled" to a smooth loan process without asking for their paperwork, "entitled" to the top listing price in their neighborhood because their house is the nicest one, and don't think our fees are justified.
Bottom line is that these customers will take up your time and suck the life out of you.
The moral of the story is that, although transactions are hard to come buy, spending too much time with category (4) and especially category (5) borrowers will prevent you from finding category (1) through (3) borrowers.
I don't think any of us "like" prospecting, but it is essential for us to survive. Focusing on asking for referrals from the first three categories of clients will help ensure we not only survive but stay successful.
Thank you again for your business.
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