Most highly successful Agents are Listing Agents who represent home sellers. But the majority of all Agents – and nearly all newer Agents – earn most of their commissions by serving as Buyer's Agents in the real estate transaction. As you build your business in the early years, use the following ten tips to increase your effectiveness and efficiency working with buyers.
Qualify Your Prospects
Prospects either are motivated and able to buy, or they're not. Agents who work with low-quality buyer leads hoping they can raise their interest levels and convince them to take action, most often are wasting precious time.
An Agent can offer counsel on favorable interest rates, low inventory levels, and the benefits of taking immediate action, but even the most skilled salesperson can not prompt an unmotivated prospect to adopt a sense of urgency.
Quality prospects must be motivated to buy, must want or need to take action within a short time frame, and must be committed to working exclusively with you as their Agent. If your prospect lacks these attributes, you're better off saying, "Next" and turning your time and talent toward another prospect.
Work Only With Committed Clients
Many Agents think they cover this issue when they ask buyer prospects if they are working with another Agent, but that's really the wrong question. The right question is, "Are you committed to another Agent?" This gets to the heart of the philosophy you want your clients to adopt. You want their commitment.
Agents receive compensation from committed clients. Clients who "work" with you make no promises regarding the outcome, and the odds that they can switch to another Agent at any time can leave you empty-handed in the end.
If you've advertised a listing and you receive an ad call or sign call, do not simply offer to meet and show the home. Make it your objective to meet the buyer prospects in your office. If you feel that you need to show them one home to open the door toward commitment, do so, but do not show additional properties without testing their motivation to buy, confirming their commitment to buy, and gaining their loyalty to you as an Agent .
Do not Assume That the Buyer is Committed to Work With You Exclusively
If you indulge yourself in the belief that a prospective buyer who comes through your open house, responds to your ad, calls after seeing your sign, or hits your Web site is dealing with you and only you, you're practicing wishful thinking, and faulty thinking as well.
Make it your objective to be the first Agent to set an appointment for a face-to-face meeting that ends with the launch of your exclusive working relationship. Until you gain the buyer's agreement to work exclusively with you, you're in competition with all the other Agents in your marketplace.
Ask for and Win an Appointment
Whether you're working with buyers or sellers, the route to success starts with a face-to-face appointment – in your office – during which you can demonstrate your value to the prospect.
The appointment is the gateway to a new client and, after that, a closed deal and a commission check. In every conversation with a qualified prospect, ask for an appointment.
Be Ready to Counter Typical Buyer Misconceptions
Buyers, especially first-time buyers who comprise the bulk of a newer Agent's clientele, often come to the transaction with limited knowledge and a lineup of misunderstandings about how Real Estate Agents and real estate deals work. Be ready to confront and overcome the following frequent problem areas:
o Many buyers do not see why they need to work exclusively with a particular Agent to find and buy a home. Many think that once they find the home of their dreams the seller's Agent can handle the deal. As they see it, the seller is already paying the commission and so the buyer can just piggyback and take advantage of the Agent's time and expertise. It's your job to help the buyer understand that by working exclusively with a Buyer's Agent – you – they will get the same kind of preferential treatment and fiduciary counsel that, for example, attorneys promise when they agree to represent only one client in a legal case .
o Buyers do not understand the importance of beginning their home search already financially pre-qualified or, better yet, pre-approved for a loan. Explain to them that just as they want to find the best home, the sellers want to find the best buyer. If sellers are presented with two offers, one from a buyer who is clearly in a financial position to close the deal and the other with a bunch of financial question marks, guess which one they'll choose.
o Too many buyers have a preconceived idea of their perfect home and they think that if they look long enough – and if they get enough Agents searching on their behalf – they'll find the needle in the haystack. The reality is this: Buyers do not buy perfect homes; they turn the houses they buy into perfect homes. If you're representing a buyer in search of ready-made perfection, you either need to help your client explode the perfection myth or you need to select another buyer to work with.
The list of buyer misconceptions goes on and on. Most buyers think they should never offer full price. They think they should always start with a low offer and come up later. And maybe, worst of all, they think there's time to dally because the owners of the property they want to buy will wait for them to act. When you encounter buyers with these beliefs, tell them this truth: The most disappointed buyers are those who lose the home they want by not taking early action or by not being competitive enough in their offers when they do.
Explain the Services You Provide
You can not assume buyers understand what you do. They do not. Nor the know how to distinguish you from all the other Agents in your marketplace. Detail what you do and how you do it better than other Agents by following this advice:
o Provide a complete explanation of the home buying process.
o Provide a complete overview of current and emerging real estate conditions in your market area.
o Let your clients know that you're ready and able to assist them in selecting the best home in their price range.
o Write your purchase agreement to correctly and clearly express your intentions and how you will represent the buyers' interests. The purchase agreement is the contract between the buyer and seller.
o Submit your purchase agreement in a manner that will present you in the most favorable position.
The important thing to remember is that you must distinguish yourself from the competition. You must prove your excellence and convince your prospects that you offer important personal services that they can only receive by choosing you to exclusively represent their interests in the purchase of their new home.
Develop a Partnership With a Lender
One of the best ways to win a commitment from buyer prospects is to bring a Mortgage Originator into the relationship early on. This partnership delivers two major advantages:
o The Lender can determine the prospect's financial qualifications and spare you from hours spent with prospects that are in no position to buy or unable to buy at the level they desire.
o By steering your prospect toward a trusted Lender you put the financial portion of the transaction into the hands of skilled professional. Just as the number of Real Estate Agents can increase or decrease depending on the marketplace, so are the ranks of the mortgage industry. If you leave the choice of a Lender to chance, odds are better than good that the deal will go to a Lender you do not know or recommend, leaving you working harder to pick up the pieces at the end of the transaction.
Ask Buyer Prospects Plenty of Questions
Contrary to popular belief, prospects do not want to listen to your sales spiel. They want to talk about their wants, needs, and desires. Arm yourself with a good list of questions and you'll be well on your way to not only gathering the information you need to do your job well, but also to establishing the rapport and confidence necessary to gain the prospect's commitment.
To gather the information you need, learn everything you can about what the buyers are looking for in a new home. What area or areas do they prefer? What type of home do they have in mind? What home styles do they like best? What is their ideal move date? How many bedrooms, bathrooms, and other types of rooms do they want? How long have they been looking? Have they seen anything they liked? What are their financing arrangements and how far along are they in securing the financing? How do they want to be communicated with? What is their expectation of you as an Agent?
When you work with seller prospects, either you get a listing contract or you do not. Right then and there, you know whether you have a committed client, and you know exactly what the sellers expect to get out of the deal, since the sales price is right on the agreement.
Buyer prospects are harder to pin down. They may be inclined to work with a number of Agents. They may change their minds about what they really want. They may have lofty and unrealistic home expectations. For these reasons and more, as a Buyers' Agent you need to take control and manage the Agent-buyer relationship.
The first step is to convince the buyers of the value of working exclusively with one Agent. The next step is to learn the buyers' purchase and service expectations by asking the kinds of questions detailed in the preceding section. The third, and most important, step is to take control and guide the buyers through the home viewing, property evaluation, home selection, and purchase phases.
In the process, be ready to serve as a reality therapist. More often than not, you'll have to lower your buyers' expectations regarding what their dollars can buy, gently adjusting their champagne taste buds to align with what looks more like a beer budget.
It's OK to say No
If the client wants you to do something you feel you can not, say no. If you can not meet them on Saturday, say no, you can not. If they're asking you to write a ridiculous offer that will only make you look bad to the other Agent and seller, say no. If they want you to participate in a shady transaction where the money trail is covered, say no.
I was asked many times throughout my career, especially in the early days, to engage in transactions with "creative financing." Less-than-honest buyers know to seek out new, hungry, inexperienced Agents to work with on their "innovative" deals. Be aware that too often "creative financing" schemes also fit under another term … called fraud!