Oh hurray...the buyers are out...the buyers are out....summer vacation is over and in this part of the country, it always seems that the "seasonal buying" period begins a couple weeks after school starts. It never fails...you can hear it in the halls of every broker in town....the buyer the agent thought was "hers or his" just went to...an open house...made an appointment from a sign....knew the neighbor next door to the house they just saw...." and the stories continue. How could they ? They were going to....sign a buyer agency contract...maybe they did...they really, really liked you...you thought...They were bright people...you have worked with them for months, known them for years....and now...Poof ! The other agent has procuring cause...and there you are...or are not....
Real Estate 101 Have a friendly, open and honest discussion with buyers at the initial meeting with them to determine their goals for home purchase. There are agents who require a buyer agency....we have learned of some recently who CHARGE a fee for buyer agency (wow...that really makes them loyal !) Then there are the agents who explain that if after getting to know you...they want to work with you and have you represent them in the sale, a buyer agency contract is a service offered at no charge that enables you to represent them.
AGENTS - Have this informative discussion with buyers at your first meeting. Never ever "assume" loyalty or understanding...it has nothing to do with how bright the buyers are or are not...how experienced they are or how loyal they have professed to be....they need an explanation or you won't be the one at the closing table.
BUYERS - If you are working with an agent you trust...that is not just "nice" but also is knowledgable, has a great sales track record...can furnish you with recommendations...reward and honor that relationship with loyalty. Do not call about a property...not even the "magic numbers" on the sign...your call is likely captured and some hungry agent will claim you as their own buyer. Do not go to an open house and then tell your agent after the fact. Your loyalty to an agent will be reciprocated with award winning service..the kind you deserve.
Sally K. & David L. Hanson, ABR, CDPE, CSS, e-Pro,ILHM, REDS
Thanks for the post. Buyers should read this, but most likely, not. Too bad.
Sally/David....great information...I agree! I love the photo of course too...gorgeous doggie!!
It's just a first conversation, after all. Or, is it??
It's the best opportunity to bond.
It's the best opportunity for a buyer to feel confidence that you'll be able to help them meet their goals.
There is nothing more important than the first conversation with a prospective home buyer.
Nothing.
Dogs are often more loyal than people.....and the "just" Lenn is Just Right...if you ever expect to WRITE it...you better get it RIGHT and not jump in the car without that first thorough conversation....
Everytime I skip the Buyer's Consultation Session it shows up later in the transaction when my Buyer doesn't understand something !
Skipping shold probably be left to the playground and not part of a transaction :)....I think we all assume things we should not....and it can be based on very logical thought patterns...they are bright, you have sold to them before, etc....but it doesn't mean they "get it ".
The retainer fee is starting to be charged here too. Our herd is thin and the active agents here are on the grind working some long hours.
I work with whom I want. If someone is insisting I work with them (and I don't want to because I don't feel they are being serious,) they can pay me a retainer. They usually go away after that.
Now that is sound advice!
Oh and that photo is a little scary :)
your friend in Charlottesville Virginia!
Hadn't thought of the reverse psych approach Renee...we had a buyer recently who began the conversation after having paid his former agent $600 for 6 months of no accepted offers...how much we charged...yuck !
Aw come on Charles..it's FIERCE loyalty ! :)
Sally & David - Never assume loyalty is right - educate. Congratulations on the featured post:)
Much grass Wendy....didn't even know it was till now...way to start the weekend !
When working with buyers explaining "Agency - Who's Working With Who" is not only just common sense but a great opportunity to build trust, explain how the process works and how you conduct your business. It also helps to understand their expectations in working with you to determine if you could work together. Kinda like each party interviewing the other for compatibility.
In NC this is required at a first "substantial encounter" and if omitted could get the licensee and their Broker In Charge in trouble.
Sue of Robin and Sue
As a new agent, I appreciate this advice. Thanks.
One of my realtor partners says that if the buyer is looking at a home to give him the number and he will do the work so they don't have to.
Back to the scout motto...Be Prepared...and if you don't Prepare the Buyer...be prepared to forget your commission.
I won't charge an upfront fee, but I do have a counseling session, have them sign a buyers agreement, and get them to a mortgage company if I don't know them or they were not referred to me.
Sally and David - it is such an improtant part of the initial discussion so buyers understand how you work adn how you can best help them. It's really not in their best interest to float around with several agents, but many don't consider the cons of doing do. Ultlimately it's their choice, and if they do not want to be loyal it's pretty hard for me to say I want to as well.
Jeff
I have "that talk" with all my buyers. I explain what to do an open house, why they shouldn't call the listing agent from a sign and how important it is to not step foot in a new subdivision without me at their side. Because buyers don't know this stuff and why should they? They are home buyers not real estate agents. They may not even understand how a buyer's agent is paid.
I think that many folks (buyers) do not understand that they should trust the agent to do the dirty work; so, it really needs to be explained.
Loyalty....ah yes....Procuring Cause...that's a whole different subject...and then there is the ...If I work with the listing agent...I get a better price thing...but that is whole different blog...
Getting to know a new client and setting expectations for the working relationship are very important. Putting them in writing and getting a signed agreement makes good business sense.
Loyalty is something that is earned. We have to explain to them why they should be loyal, and build trust along the way.
Buyers have no loyalty. Anything you don't have to pay for is seen as no having no value. Yeah, I'm bitter. Buyers are hot to trot, then disappear. Buyers wander off to open houses and don't tell you they went. Maybe a small retainer fee is not a bad idea.
hey Ladies...see we have some of both here...some from the "Buyers are Liars" school and the cordial..."Getting to Know You...Getting ot Know all About You...Getting to Like You...Getting to Hope You like me...." curriculum.
What's the old idiom about separating the wheat from the chaff? Buyers are like that. I love the ones that call the floor agent from in front of the house and expect you to drop everything and drive over so they can look around!
Sally & David, this is right on the mark! If I had just one thing to share with a new agent it would be "do the initial consultation" and never assume they aren't talking to others! If we want loyalty we have to earn it and ask for it and then DELIVER!
BTW, LOVE your agent version of the boy scout motto!
Great advice for someone that is just getting going, Thanks!
Getting a call from a potential buyer is always great, but converting them into a client is key...explaining to the exactly what buyer agency means, the do's and don'ts for them, is crucial. I haven't had a buyer yet to lose me as their agent, because I explain all of it to them from the start. And I have not yet had any unpleasantness with other agents over my buyers going to open houses or calling about properties, because I spell it out for them at the beginning of our relationship that doing that is "my job" -that's what they're hiring me to do. Makes my life so much less stressful.
I train my agents to give a buyer presentation. A buyer rep agreement is to a buyer what a listing agreement is to a seller. It is an agency agreement between parties. I tell them you spend hours preparing and presenting to sellers, why not for buyers??? They are ignorant to the process and if we do not inform them, well we have no one to blame but ourselves for not taking the opportunity! Great post and right on the money! Have a great weekend!
Good thoughts Jeani and Richie....less worry...more education...better use of our productive time !
Congratulations on a worthy feature. I learned quickly that educating buyers about how the system works was the best way to build a relationship, gain credibility, and secure at least some loyalty. Equally importantly, that first meeting is a good chance to find out whether they are working with other agents.
Right you are Erik...assuming the buyers aren't telling the next agent they meet with later that afternoon the same story :)
Great advice Sally & David:) I use that same logic when closing a construction deal. How ever estimates in my business are free, but consulting you have to have a fee. Many hours go into planning a project or giving ideas and advice. But time is money and money well spent. Really liked your blog and look forward to reading more of them. Check out some of my blogs and hopefully my information you find useful.
Sincerely,
David W. Brown--President
Thor Design Building & Development, Inc.
Don't you love making new friends in the rain...? We have guided folks thru the building process as well...that is of course a stronger and longer process....but good point...hope to see you again soon !
'
I think too many agents are too anxious to jump in a car and go show houses when they should in fact slow down and take the time to explain the home buying process.
GREAT POST! I too train our agents to take the time and interview the buyers similar to what you would do with a seller by making sure that you find out what their main purpose for purchasing is so that you can meet that goal. During the first meeting we explain the home buying process as well as making sure to get them pre-approved if they are not already. In our market where there is a ton of inventory and more importantly, constant change in the mortgage guidelines... You want to be sure to spend your time wisely.
Wise words Damon...jump is right.....desperate jumps can be suicidal for wasting time...and Charlotte...great training...lucky agents to have you as a mentor !
That pretty much sums up the difference between a sales person and an agent!
Interesting thought Jay....I think the sales people are becoming an extinct class...all the better for the best of us !
Have learned a lot from the line of comments...thank you all!
Good Antoinette...keep turning your umbrella upside down and your education will grow by leaps and bounds
Hi Sally and David -- Sound advice, and I have gotten burned several times even after going through all this. It's a hard business sometimes.
When I first meet with buyers I usually talk to them about agency and explain why they need representation. The idea of calling a buyer agency contract a free service that enables me to represent them is novel, I will remember that. I also try to take them and register them at any building sites that I think they might be interested in, so they don't wander in without me later.
I also like the marketing spin that "buyer agency" is an added value service that I can provide for to them for free ...it's true, allows me to truly focus on their wants and needs, and it builds trust in the buyer / agent relationship!
Right you are Ladies...Buyer Agency can be the best thing the buyers Never Paid for !
When I have the first contact with a buyer, I go over and have them sign the Consumer Notice. This way I have explained "agency" to them and that leads me into the discussion of the Buyer Relationship. As others have said, I generally find out if they have been with other agents and what went on.
I am always amazed at how few agents in my area ever show anyone the Consumer Notice. This is then my way of letting them know how I operate and what I would expect of them. Having other agents not do what is required puts me many steps above them in a buyers eyes. Buyers begin to wonder what else that agent is not telling them.
7 times out of 10, I am able to have them sign the Buyers Relationship agreement. I too have found that explaining that it is a no fee arrangement softens "the having to some a document" mentality.
My rule of thumb has been that by the second meeting they have sign the Buyers Relationship Agreement and if they have not begun the mortgage process, I can then give recommendations and get the ball rolling. I also give them several of my business cards so that if they do go to an Open House without me, they can give my card to the agent to let them know who they are working with.
Great post.
This is a great Blog! I have been having a hard time with this and I trust people too much! But the past burns have thickened my skin and this Blog has given me great ideas on how to talk to these buyers the right way and right away!
Hi Jayne ....not sure what a consumer notice is....I am guessing the kind of Agent/customer bill of rights...good work....And Ambers so glad we could be your "Wizard of Oz" and give you some courage/encouragement to meet buyers head on....and profit from it !
Honesty is the best way to live your life and it's good for business too.
I don't think it is always a question of honesty...some buyers have not had the "rules" explained and think it's fine to go to open houses...have showings and then go back to "their agent" and have them write the offer....
Sally & David
In PA a Consumer Notice is a document that explains the role an agent has when they are a Sellers Agent, Buyers Agent, Dual Agent, Transaction Agent and Designated Agent. It also explains that in Pa we have what is called a Real Estate Recovery Fund. Say an agent in a transaction does financial harm to the buyer/seller. They can sue the agent and if they cannot recoup the financial damages that were awarded by the court, they can apply to the fund for them. We as agents in Pa contribute to the fund each year.
We are required by Law to go over this document with a consumer when there is going to be substative discussions. They sign it as well as I and they keep a copy. As I said, this is usually done at the first meeting.
It also specifically states that it is not a contract.
Interesting...no funds like that here...sure is an interesting concept...thank you for the explanation !
Oh ye of little faith. The ActiveRain gods have put their magic fingers to that golden star and it now shines high over your blog for all to see....
And the loyal bumpkin from the west coast has stopped by -- out of loyalty -- to see how you've been doing and to say Congratulations! on the beautiful golden star.
Thank you...it shall be placed high on my Tiara and worn proudly....!