Protect Your Time From Some Buyers and Some Listings
Over the course of a career we have all done this, a buyer walks into your office and tells you how much you came recommended, and how ready they are to buy. They say they are pre-approved, maybe even show you a letter stating their qualifications to buy. You like them and enjoy helping people, and because they seem so nice, you know that after you sell them their starter home, they will be your client for life and give you all kinds of referrals!
Then problems arise, they seem picky, they want to see lots of homes, they aren't following your advice, and before you know it you find out that they don't qualify for a loan, but they would love for you to find them a lease purchase home. You've already spent so much time working with them and you don't want to lose all of that referral business, so you keep trying!
You put them under contract on one property, and that falls through, then the second property you preview the property, and they write an offer on it because it looks so great from the pictures and they don't want to lose it! However, after walking through it, even after you have convinced the seller to owner finance, they don't like the floor plan! It's only a $41,000 town home, and it's owner financed, but they don't like the floor plan! After all a buyer is the one who has to live in the home for the next several years, and they have a right to be happy right?
For the $1,200 you get before you pay your expenses and give a portion to your broker, is it really worth helping buyers who can't make up their minds, aren't really well qualified and are picky? Even though people deserve good service, and I love to help people, I realize that my first obligation is to my family. This means that I'm glad to refer these types of buyers out! The opportunity cost of spending time working with these buyers is more expensive than working to earn the commission. If it's a close friend, that's one thing, but usually making the $400 for refering the client out is your best play here!
Fortunately, I was the listing agent on the $41,000 property, and the buyer's agent will continue to have to deal with these headaches. I was exhausted after the 5-6 phone calls I dealt with regarding this property with the buyers agent, and I can't imagine how they are going to feel when the buyer finally gets something, or maybe decides to WAIT UNTIL THEY CAN GET APPROVED for what they really want! There are simply some buyers and sellers that it is better to refer out, and you must protect your time and decide what makes sense for you!