One of the most common mistakes REALTORS® make is not scheduling time to discuss the fundamentals with their clients. We tend to forget that we do this stuff every day, but our clients do not!
Then, when the client goes off track (in one of a multitude of ways), we blame them. Damn clients! They should have asked me!
News flash: It’s not their fault. It’s your fault for not educating them ahead of time.
When it comes to new buyer clients, I recommend scheduling a meeting with them as soon as possible in the process. If this isn’t practical, figure out a different way. For example, it could be in your car in-between showings.
I know it’s old-school to drive your clients around in your car, but old-school doesn’t automatically mean it’s wrong. On the contrary, I find that “car chatting” time is invaluable for developing rapport and loyalty with new clients, even if I only do it the first one or two times.
If it’s not a scheduled meeting (best) or in your car (second best), figure out another way; maybe it’s just a simple phone call. Just don’t forget to do it, or you’ll be sorry!
You don’t believe me? You must be new…
Every experienced agent can tell multiple stories about losing buyer clients (and tens of thousands in lost commissions) because we didn’t take a few minutes to educate them on the fundamentals.
#1 Establish Wants and Needs
This is the first topic you need to discuss, and it forms the basis of setting up an auto-notification on your MLS software.
Listen carefully, give feedback, and make suggestions to expand or refine their search criteria. It’s your job as a professional to provide guidance.
I could easily write an entire RAM on this topic alone, but suffice to say, the worst thing you can do is set up an auto-notification for your clients and then fail to communicate with them regularly.
I’ll write more about this topic sometime soon. Probably maybe.
#2 Align Your Motivation Levels
Just say something like this, “If you’re a ONE, I’m a ONE too, and you won’t be hearing much from me. But If you’re a TEN, I’m going to drop everything right now, and let’s go find you a house!”
This will relieve pressure and make them feel more in control of the process. If they truly are a ONE, the last thing they want is you chasing after them daily. On the other hand, you’re clearly communicating that you’re ready, willing, and able to respond quickly to their needs, whenever they are ready.
By the way, if your client says they’re a ONE, this does not mean you should ignore them. They can go from a ONE to a TEN in a hot second. You need a system to communicate effectively without being annoying (another topic!).
#3 Getting Pre-Approved
It’s obvious (to you) why getting pre-approved is so important, but you need to explain it from their perspective.
Being truly pre-approved is quite different from a verbal, “yeah you should be good.” Explain why it is so important to follow through and submit all the necessary paperwork to their mortgage professional ahead of time. It can take the bank several days to process an application, so the more work they do up-front the less chance there will be of a delay and possibly missing out on the perfect property in a competitive market situation. Paint a picture! Speak from experience! Convey the urgency!
Also, if interest rates are rising, explain to them why it’s essential to have a rate hold in place, and to be aware of when that rate hold expires. They need to maintain ongoing communication with their bank or broker.
I’m not the REALTOR® who refuses to work with anyone who isn’t truly pre-approved. Sometimes I make a judgement call. But I do make absolutely sure that my buyers understand the importance of it, and I follow up with them regularly to ensure they’re getting it done.
#4 Review All Required Paperwork
The Buyer Meeting is the ideal time to discuss Agency, the Buyer’s Brokerage Agreement, and the Purchase Contract.
Everyone has a different opinion about the Buyer’s Brokerage Agreement. Mine is, it’s incredibly confusing and stupid, and I wish it didn’t exist.
It’s the part about ‘forced agency’ that I disagree with, by the way. If I have a buyer client, and I’m doing a lousy job, that client should not be forced to continue the relationship. That said, there are other legitimate reasons to have this form signed, including transparency about how I get paid, etc. I just wish they took out the ‘forced agency’ part.
Since I don’t make the rules, I always give my clients a copy and ask them to review it and sign it whenever they feel confident to do so. Yes, I tell them I think it’s stupid (I’m always dead honest), and I explain why.
In my jurisdiction (Alberta), we have the Consumer Relationship Guide, which explains the agency relationship. I do review this form and ask my buyer clients to sign it at the initial meeting. After all, it’s not a binding contract in any way. It’s just a simple acknowledgment of my role, but the act of them signing does have a psychological effect, I think, that further cements our relationship.
In addition to the above, I think it’s wise to review the appropriate Purchase Contract ahead of time and all other paperwork required in your jurisdiction.
#5 Preplan Negotiations
Reviewing the purchase contract is a great way to initiate a discussion about potential scenarios when writing an offer. For example, what is a reasonable deposit amount? What conditions will they include? What are all the various factors which may affect the price? Etc.
I guess that’s another topic! Hey, I know I’m not going into much detail here. If you’re reading this and you want to have a chat, feel free to call me any old time 403-973-9730. Yes I answer my own phone, unless I’m in an appointment.
There are numerous other topics to discuss during the Buyer Meeting, including FSBOs and New Construction (make sure your buyers always contact you first), what to do about potential hidden cameras and microphones, how to keep a tally of the best listings (and forget about the rest), how you will help them work through conditions, and much more.
Come to think of it; I could write an entire RAM on each of these topics. Of course, I do go into much more detail within the ‘Working with Buyers’ module in the Agent Skills Master’s Program. But the main point of this short post is, one way or another, to make sure you thoroughly discuss all these topics as soon as possible and preferably before you even get started looking at properties.
This will not only alleviate future mishaps, but perhaps even more importantly, it helps to establish your role as a trusted advisor, and further cements your relationship.