As a Professional REALTOR you will often have to step into the role of a coach to keep your clients focused and out of the ditch. Today’s topic is about keeping your clients motivated and on track to reach their buying and/or selling goals.
One of the good (and bad) things about our current market here in the Triangle Area of NC Is we have a lack of inventory…especially in the $200-400,000 range. The stats show a huge increase in sales in this particular range with a marked decline once you hit the $500,000 mark. Sellers in this range are seeing multiple offers in days, and sometime even hours, of listing their property.
KEEP EXPECTATIONS REASONABLE: If you know a buyer can only afford a $225,000 mortgage, and they only have $15,000 in cash for down payment and closing costs, don’t show them properties valued above $240,000…(key-word is “valued” and not priced) This is where you can earn your commission! An over-priced property may be a hidden jewel just waiting to be sold if the agent is willing to gather the INTEL to determine actual value verses list price… and then educate the seller with a reasonable offer supported with comparable sales..
Showing your buyer clients a “loaded” home above their pay grade is a sure-fire recipe for a big pot of disappointment stew! Keep their expectations realistic and have them be willing to walk away from a transaction that doesn’t work for them.
LOW APPRAISALS: One transactional breakdown we are experiencing is a seller receives multiple offers and the buyers run the price up “competing” for the home... only to see it not appraise for the contract price. This is something the agents needs to prepare the buyer and seller for in advance.
This is an important consideration when accepting an offer…a Seller should compare offers by LTV…a buyer with a 96.5% LTV and asking for $3000 in closing costs will most likely not have the available cash to bring to closing if the property does not appraise…which would disappointingly force the seller to reduce the contract price to the appraised value…or cancel the contract.
Same goes for the buyer in this situation…they need a plan B if the home doesn’t appraise… TIP: If you feel there may be an appraisal issue, inform the lender to order the appraisal right away.
“LOSING” the Home: Nothing is more discouraging for a buyer than to find the perfect home and then have the seller accept another offer. Here are a few ideas to prepare them for and/or prevent a letdown.
1. Don’t waste time! Show them the property as soon as possible and if it is “the” one write and deliver the offer immediately….call the listing associate as soon as you know the buyer is interested. If your buyer is out of town, make sure to have open lines of communication 24 hours a day…. sometimes minutes and hours can make the difference between winning and losing with your offer.
2. Write reasonable offers. In a sizzling market like we are experiencing, making lowball offers and asking for personal property is no longer acceptable…especially when you know up front you are competing with another buyer for the property. Educate your buyer on comparable values and have them be prepared to present their highest and best offer first. Higher Due Diligence, Less Concessions… Lower LTV and Higher Earnest Money Deposits, and mortgage qualification letters all make for superior offers.
3. BE NICE! Sounds simple doesn’t it? But for some agents, representing their client seems to go hand in hand with being mean, nasty, rude, and a general all around pain in the rear. The buyer agents attitude can reflect in the listing agents offer presentation to their client. If the competing offers are close… and the seller asks their listing agents opinion… it may come down to which co-broke agent would they rather work with? Ever hear the old saying …It doesn’t cost any more to be nice? Well in this case, being a jerk could cost your clients their dream home… and you a commission! I have seen cases where it came down to one of the buyers had written a hand written letter to the seller saying how much they wanted to purchase their home to raise their current child and the one which was due in 4 months. This “heart-string” pull was the deciding factor in which offer the seller accepted.
Above all else… always portray a positive attitude to your client…when they see you give up…they will give up on you as well.
Eddie Brown ©2013