When buyers first walk through the door, they bring in a lot of false truths. Here are 10 commonly held beliefs that agents may have to debunk.
1. My family member has a real estate license — they will help me
Perhaps you can gracefully convey to your clients that the odds of their success vary in inverse proportion to how involved any family members are in the deal, let alone as the agent.
It’s worth noting that buyers are capable of “letting” local agents show them properties, then suddenly remembering their agent family member just as they get ready to write an offer. You should already have a signed agency relationship form (C.A.R. Form AD), but also be prepared to explain that the real work begins once the offer is submitted, and your knowledge, connections and expertise will be worth the commission.
2. We’ll get a better deal if we use the listing agent for the property we buy
When you’re the listing agent that’s one thing. And while all REALTORS® must adhere to a standard of practice requiring fair and honest dealing with all parties to a transaction, agents should try to alert their buyer clients to the fact that listing agents, by definition, represent the seller, and do not have their best interests at heart. (Inman offers 27-plus ways to respond to this common objection).
3. We can find the perfect house if we look long enough
It doesn’t matter how long buyers look, there is no such thing as a “perfect” house. The one your buyers want is the same one 100 other people are waiting for. While they are all jockeying to land that one “perfect” house, people with more brains and better credit are buying the other homes that meet all your buyer’s criteria except … something.
4. The home values posted online are probably more accurate than what my local agent thinks
You’re thinking, “please fill us in on what the ‘Zestimate’ on any property is, because we just look at the MLS six times a day for the entertainment value.” [This is why, as stated previously in CVAR Connect, it’s always a good idea to knowwhat the Zestimate says.]
5. It’s smart to offer way under the asking price for a house we really want
Not in this climate. One buyer (let’s call him Bob) submitted an egregiously low offer two days after one of a well-priced properties hit the market. The seller refused to consider the offer, instructed us to inform the buyer’s agent of that fact, and directed that agent not to submit any further offers from that “buyer.”
The property went into contract with a different buyer a few days later and closed slightly over asking. Fun fact: Bob thought a heartfelt letter describing how much he wanted the property would get the seller on his side. It didn’t.
6. Sellers have to fix anything that’s wrong with a property (or compensate the buyers for repairs)
Seriously, buyers still believe this. Agents take note: They better not still believe this when it comes time to write an offer. (See next week’s CVAR Connect article: “6 Tips to Winning Bidding Wars.” Hint: “As Is” is extremely popular.)
7. If we have to bid full price to get the house, we can always negotiate the price down when the inspection reports come in
See No. 6 above. Sellers hate buyers with this attitude so much. (More on this next week!)
8. We can worry about getting a loan once we’ve found the perfect property
OMG. As their agent, you should have corrected this piece of misinformation before you got seriously involved with their house hunt. There’s a pandemic going on. How do people imagine they will even get in the door without producing a loan approval document and proof of funds these days?
9. All lenders are basically the same
They aren’t. But get your pre-screened lenders to explain that to clients who believe this stuff.
10. Rates are terrific right now, so we’re going to buy a car before the house closes
Buyers don’t understand financing. Or delayed gratification. Again, pass this ball to a trusted lender. There’s only so much education you can do before clients start seeing you as the “bad cop.”
And, as long as you’re filling up the lender’s dance card, ask that your buyer clients be provided a home loan calculator, a forecast of how low mortgage rates will go and information about using funds from their 401(k) accounts to buy a house.
You may be thinking, “My buyers are smarter than this.” No. They. Aren’t. Not when they first walk through the door. So, be a good scout, and be prepared. Listing agents everywhere will thank you!