- Real Estate Rescue Realty Working with today's Buyers can be tricky and it is critical to be aware of all the areas that can slip you up. This is a detailed article to help you create more success and satisfaction working with buyers and creating long term referrals.
- Make a list of all the steps involved to complete the transaction process. This is important for you to stay organized and on top of the process. The list should start at the introduction and go thru closing and beyond.
Laminate your copy for future meetings and have paper copy for them.
Introduction to parties. Set up a comfortable atmosphere to have the 1st meeting. It can be at your office, a local restaurant, or their home. Make sure the environment is conducive for talking and minimize any distractions (Kids/Animals/TVs/Loud crowds). This is the most important meeting you will have with them. Be present and listen. Have a tablet and take notes, it shows respect and genuine care.
- Before you go into the process of buying a home- Make sure to ask if they have any questions about you, your company, and/or your experience in the business. Be present- Listen and ask questions- Be compassionate and understanding with them. Let them know you are competent/knowledgeable and have the experience to guide them thru the process successfully. Emphasize “Trust” is the most important ingredient in your working relationship!! Have a “Personal information form” for them to fill out for your records, moving forward.
- Previous Experiences- As you begin your conversation, find out if they’ve had any past experiences with agents/loan officers in a real estate transaction. Start out asking what they disliked most- really listen to their experience, emotions, and words, as well as how it impacted their overall experience and future expectations. Ask what you can do to ensure that won’t happen again? Write this down. Then ask what they liked the best? After they share, support the positive experience, and let them know you will also make sure to do those things (or let them know you can’t…) Make notes in the file. PAY ATTENTION TO THE THINGS THEY SHARE WITH YOU- AS YOUR SKILL AND ABILITY WILL BE MEASURED EVERY DAY AS THEY ARE WATCHING FOR THOSE SAME SITUATIONS S TO ARISE and watching how you respond. After you clearly understand their experiences and the impact they had on them, you can start going thru the process with them.
- Hand them a copy of the list of events they will be experiencing and maybe give them a pen and paper to write on…Start with the Loan Approval process…Emphasize the importance of a knowledgeable/ experienced loan officer and a good company – to meet closing deadlines and resolve issues that may arise during the approval/ pending time frames. If they don’t already have a good loan officer- have one for them (ready to go- whom you have spoken with regarding these buyers) this is the 1st step and most critical part of the process. Without the money, the transaction won’t work. Explain there may be times when the loan officer/processor asks for more documents??? Emphasize that is normal and doesn’t mean the deal is failing!! Really Emphasize the importance of the pre-approval regarding making an offer and how sellers want to see an approval up front to accompany an offer. This also dramatically effects what price range to search for a new home. Depending on the current market conditions- you may be able to search a little higher, make sure to cover the consequences of searching out of their price range in a sellers’ market. Disappointment!
- Expenses they can expect during this process-NO Surprises! (Remember- Surprises are not good during the transaction- shows you don’t know what you are doing.) There are 3 separate events which they will be required to spend money. Earnest Money, Home Inspection and Appraisal. Keep in Mind- they are trusting you to help them thru a very stressful situation. Any time a surprise arises…it delivers a message “you don’t know what you are doing” …or even worse. The folks you have referred don’t know what they are doing. This can erode the trust and the relationship can deteriorate quickly. Be very intentional with your communication and direction. Start with the 1st item they will part with their money- Earnest money deposit- When it is needed, dangers of losing it, circumstances for that to occur-timing for deposit to title and why. Talk about the amount, what it goes towards and if they can get it back? Or lose it? Explain the reason behind it. (Good Faith Money). 2nd item - Home Inspection – explain this is a type of insurance policy/inspection for them, not anyone else. Not the bank or sellers. It is not required, highly suggested. Let them know the cost range $400-$500-depending on size of home. The inspectors almost always find things that need attention. This is another negotiation point, and they may find items that need to be fixed or are at the end of the functional life expectancy or need to be replaced. Also let them know there are several items that show up on most inspections and not to get too worried. Assure them you will be going over it with them and will make sure the items most important to them are addressed. Let them know they will not be depositing the earnest money (if possible) until they are happy with the inspection results. Make sure you explain the time frame (# of Business days) you put in the offer to allow for the inspection to be completed prior to the earnest money deposit. Your job is to watch out for them, not the sellers. Also explain that the fee for the inspection is not refundable if they terminate the transaction for the results the inspector found. The 3rd Item is the Appraisal – these can be $600-$700+ ordered and charged by the lender, this is NOT a fee YOU have control over. Ask if they have any questions about the appraisal, condition of the home, any items that may get called out by the appraiser. Explain the things the appraiser is looking for, as well as comparable sales in the area. Estimate the time and expectations for the appraiser to complete the report.
- After explaining the three times money will be spent prior to closing, Emphasize the importance of NOT spending money on any new home décor items, appliances, automobiles, or opening any new accounts, as it can/will affect their credit scores and the loan approval process. This is Critical- it can cause the termination of the transaction.
- Next- Ask if they have any questions so far? Then go thru the Time Frames for each event…. Offer & Acceptance Process…Home inspection…Earnest money deposit/ Escrow/Title/Appraisal. And the lending processes. Talk about Closing/Signing, possession, and keys.
- Revisit their Reason for Buying, Expectations of you and the process, understand what they are trying to accomplish thru a new home. This is a good time to have them write down the descriptions of the home they would like to find. If you have a couple, give them each a pad to write on and then compare when they are finished. You will be surprised. It will be a good experience for all parties and lets them know you care.
- Explain your role and have a commitment from them to work with you. Get a signed Agency Agreement, ahead of time, prior to searching for homes. There are several ways to explain the agency forms.
- Discuss your roll/ your available work times-hours/boundaries (maybe for ease of communication they “TEXT” you to see if you are available) and the roll of other professionals involved in the process- title, lender, home inspector, appraisers.
- Home Searching/ Viewing- This is a confusing process, as they are usually looking online and many of the homes are misleading on details and sales information. Talk with them about the search parameters and how to best share information with you. Let them know you will have to make an appointment to see each home, even if it is vacant – at least verify it is available with the listing agent (as sometimes homes go “Pending” the night before and are not reflected on MLS). Talk about the importance of the photos and the descriptions in the listings. Talk about the information you see vs them, as they don’t see “agent remarks” or usually the financing terms Talk about what the listings show- flooring, appliances, layout, bathrooms, carpet, kitchen cabinets, updated or not. Also, talk about the search pricing ranges, as they will usually shop higher. Talk about the pluses and minuses of that approach. Not all sellers will go down in price or give concessions as closing costs. Some listings are “as is”. Talk about what that means and ramifications.
- Discuss in detail the home searching process, online searches, Zillow, and such- challenges - delayed information, pending, sold, photos impact, surroundings, areas. Make sure you have a way to get information to them as well as they can send you information.
- The Showing- when you can get there early, turn on all lights and make the home easy to view. If not, do your best to go thru and turn on all lights. Let them look thru the home, you will hear their comments and get a sense if they like it or not. Pay attention the condition of the home, the year built, are there any upgrades/updates. Check furnace system for dates of service and installation. Check windows for fogging, broken seals, moisture/water intrusion/Roofing outdated, pealing or worn-out shingles. Pay attention to details in the home, is the intake air vent filter clean? Or full of debris? Are the carpets maintained, or worn? Has the home been “Loved” or Neglected? This will matter later, as several items will show up in the home inspection and possibly cause unneeded stress for the buyers and sellers. Mention you can ask for a Home Warranty to cover the operating systems for a year. If they have any questions about the home, make notes and ask the listing agent for the correct information, DO NOT GUESS…it will come back to bite you.
- Writing an offer- Go over the financing details with them in detail- the earnest money deposit date/when it will be due/ the home inspection time frames/ approach to the actual pricing of the offer and what may happen via counteroffer and how that process works. Make sure you spell their names correctly with middle initials if needed. Be careful, as details in offers do matter. If you are doing the offer electronically- make sure to add all personal information correctly, as it will reflect in the documents. Make sure to ck all boxes and dates. Let them know when you are putting in the offer deadline, as they will ask.
- Counter-Offering- Go over the difference between the original offer and the counteroffer. This is a negotiation opportunity with the seller. What is the seller’s perspective? Or is it important to get handled? Is it repairs or price? Let them know this is normal and work with them to find the solution. Watch the emotions of your clients, this can be a sensitive situation for them. They are watching you and how you treat them….
- Offer signed and agreement details are met. Order home inspection asap, coordinate with the listing agent to get access for inspector. Talk with buyer about the process, if they are wanting to be there, let them know to show up at the end (you should also be there, in case they want to go inside and see items from inspection) Get the report quickly and take time to review it, if you have any questions- reach out to the inspection company and get answers. Go thru the report in detail, don’t skim thru it….it will show up later- The buyers are looking to you as the EXPERT. Prepare the list of repair items with them. Talk about time frames to get contractors in for repairs, as it may affect closing times. Make sure to monitor inspection deadlines per sale agreement. DocuSign the addendum and follow up with listing agent to make sure they received it.
- Monitor Deadlines- Keep close eye on the upcoming deadlines for inspections and earnest money. Make sure the buyers are aware of them and follow up with them constantly.
- After inspection is negotiated successfully- make sure to order the appraisal asap, and earnest money is deposited on time.
- Talk with the buyers about the next steps of the You are waiting for the “Clear to close” from the lender and title company.
- The title company will give the buyers the final figures for closing, any money to bring to closing.
- Make sure to go back over the possession conversation and make sure you get the time frames correct. If you mess this one up, they may be parked in front of their new home with a moving truck and calling YOU>>>
- Arrange with the lender/title staff to call you when the transaction is funded and recorded, so you can call your clients and say “Congratulations!!!”
- Make sure to follow up with them to make sure they have gotten moved in and are adjusting to the surroundings. Add them to your calendar and make sure to send them a note occasionally.
They are now past clients- don’t forget about them…. they can be a great future value to your business. Make sure you Have Birthdays, Favorite hobbies, anything special about them for future conversations.
Thanks Michael, you are so very right. I believe setting expectations can make or break the transaction experience. I will work to make the information current, appropriate and usable.