You’ve done it! You’ve finally got those buyers in the car, and you are out and about looking at properties. Perhaps, you are even mentally calculating when you’ll be collecting that next commission check. Hold on! Didn’t your mother ever tell you not to count the chickens before they hatch?
3 Greatest Buyer Roadblocks
The transactional hurdles that can hamper a smooth and successful closing are all too common. Here are 3 buyer roadblocks you need to spot and how to avoid them:
- Full Mortgage Qualification. If your buyer is obtaining a mortgage, then you’ll want to be sure that he or she is fully qualified prior to writing any purchase offers.Some lenders will conduct a cursory call with prospective buyers and provide a pre-qualification letter without ever reviewing the buyer’s financial documentation. If that happens, then problems arise when an offer is accepted and the paperwork is reviewed. Make sure to understand the buyer’s loan program, since there are certain types of properties that can only be purchased with a specific type of loan. How to Avoid Roadblock #1: Don’t write offers on behalf of individuals who don’t have documentation to support full qualification.
- Property Values Variance. Picture it: You are tooting around town writing loads of offers for the same buyer, those offers are constantly getting declined. After a while, almost anyone would notice a pattern: your buyer always makes offers significantly lower than market value. It’s no wonder they are getting declined. Perhaps your buyer doesn’t understand that homes in your community are selling like hotcakes. Are you going to continue to write lowball offers for the same buyer over and over again? How to Avoid Roadblock #2: Educate the buyer on the market of the moment. Prepare and present a report that shows market time of listings at your buyer’s price point as well as average list-to-close ratio. If you need a helpful resource, check out RPR where you can get an up-to-date snapshot of price activity for any address.
- The “Dream” Home Hurdle. You’ve shown your buyer lots of properties near their price point. According to your buyer, every home has something wrong with it: the carpet is older, the kitchen’s outdated, the rooms are small, and the pool hasn’t been updated since the home was built. The reality is that your buyers can’t afford to purchase a new or like-new home in the community that they desire. How to Avoid Roadblock #3: Don’t just continue to show them homes in hopes that they see the light.Have a sit-down meeting with your buyers and spend some time reviewing the MLS side-by-side. Show them the homes available at their price point. If they absolutely do not want to change their wish list in order to stay in the community of their dreams, provide information on other areas where they could—perhaps—find homes at their price point that meet their specifications.
Set Expectations Accordingly
When it comes to working with buyers, it is vital to start the relationship on the right foot. This means setting realistic expectations about what buyers can expect throughout the home buying process. When you discuss your role, information about the market, the properties at their price point, and the mortgage qualification process, you set your clients up to win. If you have a good talk up front, chances are you won’t find any roadblocks along the way to your next successful closing.