Lynn Olson is a Chicago-based writer and editor.
Keeping the Deal Real
When buyers' expectations are as high as the sky, it's up to you to bring them back to Earth. Here are some suggestions.
May 13, 2015
Edward Orasi has a flair for the dramatic. When he brings buyers to the office for consultations, he sets up large screens in the conference room to display thousands of real-time MLS listings. He asks buyers to tick off all their must-haves—price range, square footage, amenities, even types of flooring and countertops—and he’ll filter out all the properties that aren’t a match. Sometimes, once buyers have gone through their list, there’s nothing left on the screen.
"They realize that, OK, they can't get everything they want," says Orasi, mrp, a sales associate with Keller Williams Marketplace One in Las Vegas. "So then we move on to what they actually need. They can always put in granite countertops later."
Putting great effort into satisfying buyers' wildest desires at a bargain price will surely lead to disappointment and could put your future business dealings with them at risk. "If they get frustrated, they’re going to end up going to another real estate agent," Orasi says.
It might be a shock at first, but setting buyers’ expectations from the beginning saves you and your clients time and frustration. And it’s about not only leveling with them on their property preferences but also getting real about the homebuying process and the condition of the market as a whole.
Many buyers, particularly first-timers, might not be realistic about the time it takes to get approved for a mortgage, find a home, submit an offer, and get to the closing table. That’s why Brandon Bridgmon, an agent with RealtySouth in Birmingham, Ala., presents his buyers with a flowchart explaining the major points and time frames in the buying process, from the decision to move to getting the keys to a new home. He calls himself a real estate "personal trainer" for his clients, explaining what is required of them to get past each milestone within their desired time frame.
He then outlines certain expectations in a buyer agreement, stating that he will not show them homes that are priced more than $10,000 above their budget. "I find that it’s much better to educate buyers on the front end than to find time to educate them when the transaction is moving along," Bridgmon says.
The initial consultation is also the time to discuss issues that could potentially scuttle a deal. Mark Lesses, a broker with Coldwell Banker Residential Brokerage in Lexington, Mass., makes a point of discussing with buyers their responsibilities in the inspection process. "In Massachusetts, you have the option of waiving an inspection," says Lesses. Though doing so can strengthen the offer, it can also be an unwise move, because you have no protection if unforeseen defects arise later.
Make sure to prepare buyers about the inventory status in the market, especially where supply is tight and buyer demand is high. Buyers should understand if they're likely to face bidding wars and a longer wait for more options to hit the market. Sometimes, Lesses says, you have to let your buyers see it for themselves. "I can say that the market is strong, but some buyers won’t truly believe it in their bones until they go to an open house and there are 40 people there—and all of them want the house," he says.
If you find few homes that fulfill a buyer's desires, look for alternative properties that are as close to what they're looking for as possible. For example, a buyer who says he or she wants a half-acre property can get the same benefit from a quarter-acre home on a cul-de-sac, says Holly Weatherwax, ABR, GRI, an associate broker with Momentum Realty in Potomac Falls, Va.
Sometimes the timing just isn't right, and you have to be prepared to tell them that they should wait for more homes to come onto the market. In the fall, Weatherwax might advise her clients to put off their search until spring in the hopes that more attractive options will appear.
Even with preparation and education, some buyers have to learn the hard way. "They may have to lose the first house that they think they want," Weatherwax say, "because they’re not willing to think creatively or offer full price in a competitive situation."