Have you ever spent countless hours showing houses to a buyer only to find out they changed their mind?
It’s the worst feeling ever and makes most agents pull their hair out! Good news is this is how you can do a better job of avoiding that altogether! You should always have a buyer’s consultation before you ever show property.
I cannot stress the importance of a buyer’s consultation. The most important thing that will come out of a buyer’s consultation is that you build rapport and confirm their purchasing ability. If you do it the right way you’ll also gain their trust and earn their respect, which will keep your clients loyal to you.
In a buyer’s consultation, you are interviewing a new buyer client as much as they are interviewing you.
I had a client that was referred to me from an old friend. He was a young single guy buying his first condo. When I called him, I built rapport right away and offered to meet him for drinks so he can give me a clear understanding of exactly what he was looking for.
When I met with him he immediately thanked me for taking the time out of the day to sit down and discuss exactly what he was looking for. I found out that he had been looking to buy for over 2 years! He went through 2 different agents and was very frustrated with them. They were showing him properties he didn’t want to see. All he wanted was someone to listen to him. Because I took the time to do so, I gained his respect and trust instantly.
It took me over 8 months to find him a condo at the price he wanted (hang in there I know what you are thinking). Instead of taking him out every weekend hoping that he would bite on one of the properties we saw, I really understood what he was looking for and waited patiently for the right one to come up. I let him know upfront that I would not waste his time and that what he wanted does not pop up everyday.
I only showed him 20 properties (still a lot) in the 8 months were we working together. I could have started showing him all kinds of properties, but it would have just frustrated the both of us. My patience paid off with a closing and a very happy client that is a large referral source to this day. I would have never closed this deal if I didn’t do a buyers consultation with him.
6 Things To Cover On A Buyers Consultation
1. You are referral based!
Get the elephant out of the room! Let’s face it, you are in sales and people hate being sold. I don’t care how noble your cause is because most people see us as blood sucking vampires. Let them know you are 100% referral based and that when you do a good job with them they share your name with their friends, family, and co-workers ( you are also referral programming here). Therefore it’s in your best interest to make them happy! This always brings down people’s guards.
2. Your Services Are Free
Many people think that working with a buyer’s agent will cost them money. Let them know that you are paid by the seller of the property they purchase. Therefore they get all of your hard work and expertise for FREE!
3. The Home Buying Process
Go over the home buying process with them. Don’t take what you know for granted. Many people don’t know what goes into to buying a house. If you want to establish yourself as an authority to your potential client, you need to advise and educate. You should be an expert in the real estate market in addition to the buying process.
4. Establish Purchasing Power
This is the most important part to cover. People get pre-approved all the time, but that doesn’t mean that’s what they would be comfortable spending. Find out how much they want their TOTAL monthly housing expense to be. I like to establish a purchase price based on what somebody wants to spend a month. Once you have that figure you should be able to reverse engineer a comfortable purchase price for them.
5. Tax Advantages To Home Ownership
Explaining the tax advantages to owning property is very important. This is especially true with first time homebuyers. Even if they say they already know this, just make sure you at least attempt to go over it with them. It shows that you care. Every homeowner should know that their interest and property taxes are 100% tax deductible.
6. Buyer’s Triangle
Get an idea of what they are looking for! Finding someone a house is nothing more than a process of elimination. It is our job to help identify what someone DOES NOT want. Most people don’t know what they want until they see it. It’s important that you let them know upfront that they WILL NOT get everything they wish. There’s always a sacrifice! The buyer’s triangle focuses on 3 points: Price, Location, and Amenities. It’s your job to help them determine which of the 3 will be sacrificed a bit.
- Price will always be a search criteria. If you work a total monthly payment you will be able to more effectively establish a price. Things like property taxes and HOA dues can vary from property to property. This changes their purchasing power and dollar amount. Properties with lower taxes or HOA dues allow for a buyer to go up in their search price and vice versa.
- Location will be very important in their search. It’s much easier to find out where they DO NOT want to live and use the process of elimination. It’s our job to show them what they get for the money. Does it need to be in certain school district? How about highway access? Public transportation? You can really narrow down location if you use the process of elimination in determining a location.
- Amenities describe the actual property features. Do they need a view? Do they want something move in ready completely upgraded? How about closet space, pool, or number of bedrooms? If you do a good job listening to their wish list, they should be satisfied with your initial search results. If you send them properties they have no desire of even looking at, you could lose some credibility upfront. People want to be heard, so listen. This is another reason of much consumer frustration. You don’t have to sell anybody anything. Just give them what they want and they will think the world of you!
7. Closing Costs
Make sure you review your local closing costs with them. The last thing you want to do is get reamed at the closing table by your client for a city tax they had no idea would be charged. It’s our job to educate the buyer on everything included with buying a property.
Once you have finished the buyer’s presentation, make sure that you offer to give them your lenders information if they don’t already have one. You want them to get pre-approved before you show them anything.
This should also be used as a measure to see their true motivation. If someone does not want to get pre-approved by a lender, how motivated do you think they are? You can always phrase it as, “good deals go quick and it’s essential that you are prepared when it pops up. I’m not moving in with you so I don’t care what you buy, but I do care about the investment aspect of it. I want to sell this house for you someday and help you find another one. If you do well you will be very happy with me”. Never fails.
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