First-Time Buyer to Lifelong Client
By building a trustworthy relationship early on, you set the stage for repeat business.
June 1, 2006
To impress first-time buyers in today’s dynamic real estate marketplace, you have to work harder than ever before. They’re self-educated about market trends, use the Web to narrow their search before they call you, and have received no shortage of homebuying advice from family and friends.
As savvy as they are, this new breed still benefits greatly from your expertise — if you can deliver it in the right way. By tuning into their needs and making the homebuying process as stress-free as possible, you’ll be the one they contact when they’re ready for their next move, and the move after that, and the move after that.
Who They Are, What They Want
To provide stand-out service, you first must know who first-time buyers are. On average, they’re 32 years old, have a household income of $57,200, and buy a home that costs $150,000, according to the 2005 NATIONAL ASSOCIATION OF REALTORS® Profile of Home Buyers and Sellers.
They’re also are more culturally diverse than repeat buyers; 26 percent are a race or ethnicity other than white, compared with just 14 percent of repeat buyers. In addition, 8 percent speak a language other than English, the research shows.
When asked what they want most from their real estate practitioner, first-time buyers say they need help finding the right home, negotiating price, handling paperwork, determining what comparable homes are selling for, and arranging financing. A hefty 79 percent use the Web as part of their home search.
Confident, But Still Learning
Because they rely so heavily on the Internet to research the market, today’s first-time home buyers tend to be very informed on housing styles, prices, loan programs, and neighborhoods. They use this data to narrow their search, sort of like window shopping.
But with so much data, they often come to you with a list of price, square footage, location, and other must-haves for their first home. They may exude confidence, but this is when they really need your help. Start building trust by listening closely to their preferences and answering questions as they arise. Remember, they’ve never done this before.
During your initial meeting your new client, you also should being educating them about the process, beginning by establishing your role as the buyer’s agent. This includes telling them about your abilities to represent, network, and negotiate on their behalf. By articulating your commitment to this role as well as your experience and knowledge in the field, the buyer will enter the buying process with greater confidence in the buyer-agent relationship and in you.
Personalize the Experience, Set a Timeline
Some first-time buyers may be brand new to a neighborhood, town or state. As an “ambassador” of the area, you can add value by providing information on the area’s amenities (parks, restaurants, shops, etc.), as well as informative — if not trivial — anecdotes. Historical areas are fun to emphasize in this manner. Some practitioners even provide new buyers with a booklet of recommended services, including maps, coupons and frequently-used phone numbers.
At this point in the process, before you start looking for homes, you must set a realistic timeline. New buyers are eager to get into their first home and may not be aware of how long it takes to find the right home. In 2005, first-time buyers spent an average of eight weeks actively searching, according to NAR research. That doesn’t include the time it takes to get financing, negotiate the price, inspect the property, and close.
By creating a simple outline of key dates, you will put the buyer at ease and help them prepare for each step of the process. It’s important to explain that the outline is just an estimate, and that every transaction has its unique set of timelines and potential delays.
Prove Your Power of Negotiation
For buyers who are inexperienced at real estate pricing and negotiation, the offer to purchase is the first time they realize their impending financial commitment. By discussing price in the initial client meeting, as well as throughout the house search, you and buyer will have greater comfort when the real price negotiations begin.
It is at the offer and negotiation stage that the perceived strength of the buyer is critical. First-time buyers may not have the financial credit history of repeat buyers and, on paper, may not appear as strong to the sellers and financing companies. Here, your role is to position the buyer in a positive light. This can be done by describing the buyer’s career growth, earning potential, and credit history on large purchases. If you have confidence in the buyer, you’ll exude that same confidence to the seller’s agent and others in decision-making positions.
Is Your Buyer a Client for Life?
The process described above is useful when working with first-time buyers, but also can be helpful when with repeat buyers. Buyers at all stages need excellent customer service, attention, and dedication if they’re to use your services again.
Once a deal is closed, keep in touch with your clients and let them know you look forward to working with them again. By establishing an ongoing rapport to anticipate your their’ current and long-term needs, you’ll increase your odds of turning first-time buyers into life-long clients.