Meg White is the former managing editor of REALTOR® Magazine.
Have you ever dealt with unreasonable buyers who seemed totally clueless about their responsibilities in the transaction? Ever gotten to the offer table only to have them say, “What do you mean, ‘earnest money?’”
Ever thought it might be your fault?
According to Adorna Occhialini Carroll, broker-owner and vice president of Realty3 Carroll & Agostini in Connecticut, real estate professionals may share some of the blame in many of these cases. Whenever her agents call with a transaction problem on the buyer side, she asks them one question: “How long was your counseling session?”
Carroll relayed this to a group of students at a recent Accredited Buyer’s Representative (ABR) class held at the Chicago headquarters of the National Association of REALTORS®. She and co-instructor Lynn Madison, a real estate instructor and speaker, traced almost all elements of successful buyer’s representation back to a straightforward, informative, and honest buyer consultation period.
Here are some of the key points to cover over the hour or two you should spend getting buyers ready for the transaction process:
One of the main reasons for the consultation is to explain the whole homebuying process and how a buyer’s rep fits into it. It’s something real estate professionals routinely do on the selling side, Carroll points out.
“We do this in our listing presentations, don’t we?” she pointed out. “Start putting your value proposition in front of the buyers in the same way that you put your value proposition in front of the sellers.”
Many buyers use online search to find the homes they want, which is why the consultation is a great time to show exactly why they still need you.
“We have value in this transaction beyond the information,” Madison said. “Buyers have information; they don’t always have knowledge.”
Maura Neill, a real estate professional in Georgia, said she sets aside some 20 minutes just to discuss Zillow with potential clients. She turns her computer over to potential clients as asks them to put the term “Zillow + Atlanta + margin of error” into the Google search engine. The company admits to having a median error rate of 8.8 percent in Atlanta, and when that shows up at the top of the search results, it hits home with buyers.
“I say, ‘Read that top line to me.’ And then they get it,” she told fellow classmates. She said that while she encourages clients to use Zillow as a comparison tool, she also tells them that “what I’m going to give you is much more effort.”
Madison reminded attendees that in order to function as a trusted filter for all the information available online, they need to be up on the latest data. She urged them to use the Realtors Property Resource® (RPR) whether their MLS is hooked into the system or not. She added that brokers should encourage their agents to tap into this source of copious nationwide property data.
Madison says she uses personality types — broken out into amiable, driver, expressive, and analytical — to figure out how to build rapport with potential clients.
“You either need to build a lot of rapport or almost none,” she said. “The analytical needs to know that you know your stuff. The amiable needs to know that you care about them ... The driver is going to think you’re a lightweight flake if you spend too much time building rapport.”
Both instructors stressed the need to go through the consultation process even with potential buyers you already know well.
“You still need to do a buyer’s counseling session with them, even if it’s your brother,” Madison said. “They will throw you under the bus, even if they are your brother.” Carroll added that buyer’s reps should not be tempted to dress down with people they know; business attire makes it easier for family and friends to separate out an agent’s professional persona.
The consultation period is also a good time to get to know what the buyer is looking for on a deeper level. Carroll reminded attendees that housing preferences go well beyond number of bedrooms. She’ll ask questions like how clients feel about haunted houses or other stigmatized property types.
“We’ve got dead people everywhere ... I just need to know: Do you care?” she'll ask potential clients. It may sound uncomfortable, but most buyers appreciate the question. “Not every agent is bringing this up, so this is another thing that differentiates you.”
When it comes to getting a buyer’s representation agreement signed, language and culture can be important. Thai Hung Nguyen, a real estate practitioner in the Washington, D.C., metro area, said his Vietnamese clients sometimes equate signing documents with being in legal trouble. He simplifies the wording and explains that he is committing to them as well, by way of the agreement.
“When I present the buyer’s agreement, I tweak the language,” he told classmates. “It’s more like a buyer’s protection in a way.”
Carroll and Madison agreed that some of the industry’s terms can be problematic. They suggested using the words “compensation” or “professional service fee” instead of “commission.” Also, they said “written authorization” is an alternative to the word “contract,” which can have an oppressive tone.
Carroll recommended allowing clients take the wheel when preparing to sign the paperwork.
“Ask them to fill out the agreement,” she said, recommending agents allow house hunters to specify where they want to look and for how long. “Deliver it in a way in which the client feels comfortable ...They’re taking control of their own document.”
Of course, even if you follow their advice note for note, Carroll and Madison told ABR students they would have to be ready to field some common objections.
“If you don’t have a response to those objections, you’re dead in the water,” said Madison.
ABR class attendee and 2013 NAR President-Elect Steve Brown of Dayton, Ohio, stressed honesty and professionalism in response to a potential client’s unwillingness to sign an exclusive agreement.
“If you want my loyalty and my 100 percent commitment, I want that from you,” he offered during a breakout session on handling objections. “Normally that addresses it.”
Neill took on the problem of buyers who want a discount for offering to both sell their current home and buy their next one from the same buyer’s rep.
“If you give me a chance to offer that to you, then I’ll do it. [But] I don’t want to be hired because I’m giving you a discount,” she said. “A lot of it is inexperience ... their parents tell them to ask for a discount, HGTV tells them to ask for a discount, About.com tells them to ask for a discount.”
Brown also noted that sharing the Code of Ethics can help handle objections. The preamble’s emphasis on signed agreements can be a powerful ally in the argument for exclusive buyer’s agreements — especially in states where buyer’s agreements are not required by law to establish exclusive buyer representation, such as Brown’s home state of Ohio.
“Because I don’t have the benefit of the law ... I’d love to just say, ‘and here it is,’" Brown told classmates. “That’s what I live by.”