Selling Soulfully with Jennifer Allan

I was reminded yesterday that it's been two weeks since I've posted here on Active Rain. Wow - that must be a record for me! Anyway, here I am... and I've been working on a Q&A for a Colorado online real estate school to include in their weekly newsletter, so thought I'd give one of the Q's a test drive here...

So, without further adoooooooo.... 

Question:
"How can I convince a buyer that now is a good time to buy?"

JA Answer:
I don't believe in "convincing" anyone to make a huge decision like whether or not to purchase a home! Our buyers are adults and should be allowed to reach their own conclusions, based on their personal circumstances, beliefs and tolerance for risk. That said, you CAN help them reach the right decision for themselves by being knowledgeable, supportive and non-pushy.

• Knowledgeable: Stay on top of market trends and data. Read those articles and reports that come across your desk or email regarding the local real estate market and economy (both the positive and the doom & gloomer ones). Be prepared with facts & figures in case your buyer asks for them (see below).

• Supportive: Did you ever notice that when someone argues with you, you tend to dig in your heels and hold even more firmly to your opinion? I know I do, you probably do, too. So, if your buyer declares that the timing isn't right for him to buy a house, acknowledge and respect his position. Don't argue with it! Have you heard the saying "Those convinced against their will are of the same opinion still?"

• Non-pushy: Our buyers know that we're paid on commission. Therefore, if you appear to be pushing them to do something they've decided they don't want to do; you'll likely lose their trust, and subsequently their future business. Buyers expect their agent to be looking out for their best interests, so any indication to the contrary (i.e. the agent seems more concerned with a paycheck than with the buyer's needs) may seriously damage the relationship.

The Punch Line: Here's the cool part. IF you are knowledgeable about your local market, supportive of your buyer's opinions and you DON'T PUSH him, one of two things will probably happen.

First, once the buyer realizes you are on his team, he may actually ask you for your opinion on the matter, at which time you are free to give it (this is where having the above-mentioned market knowledge comes in handy). Once he asks for your advice, he'll be much more willing to listen to it than if you'd pushed it on him, uninvited.

Or, second, he may decide not to buy a home right now, but will be back on your doorstep at a future date when he feels better about the market, the economy or his financial circumstances. And there's nothing wrong with a full pipeline!

Happy Friday, my friends!

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Last night I participated in a lively discussion here on the Rain about whether or not to require buyer pre-approval and/or a buyer agency agreement prior to showing a home. The author of the blog and most of the commenters agreed that it's a waste of time to work with a buyer who does not have a pre-approval stamped to his forehead and/or hesitates to sign a buyer agency agreement upfront.

Such discussions always rile me up and I couldn't help myself from approaching rudeness on someone else's blog (sorry). But I have to ask myself... are real estate agents in today's market So Darn Busy with qualified buyers and motivated sellers that they need to actively turn away those who show up at their doors looking for help? Wow! As I always say in these situations - I LOVE a full pipeline! Send ‘em my way! I'll take great care of them and probably sell them a house eventually... as well as to all their friends through the years. And I'll be happy to pay you a referral fee.

I have used the services of many real estate agents in my lifetime and I promise you that if any of them had shown more interest upfront in my financial qualifications than in my housing needs, I'd have found someone else ... who showed me the respect I think I deserve. And I certainly would not be interested in obligating myself to anyone I barely know. Oooooh, I get bristly just thinking about it.

I submit that many agents are chasing away perfectly good buyers who are 100% sincere in their desire to purchase a house -- and are likely perfectly well qualified to do so. But with these disrespectful efforts to tie them down, all they're accomplishing is sending them elsewhere... fulfilling the prophecy that buyers are liars and confirming the belief that stronger "rules" are needed in the future.

I disagree. I believe that this approach simply irritates buyers, so they look elsewhere for more respectful assistance. I have to wonder if spending time with a buyer without a hint of obligation or pressure might be a much better use of  time than fussing so much over whether or not they're worthy of a little time?

Relationships take time. There's no way you can know upfront if a buyer will buy, regardless of the pieces of paper they bring with them or are willing to sign. If an agent can't afford the $20 in gas or the two hours of time it might take to create some trust and rapport, then by all means, he'll probably do better referring his potential clients out. And please don't forget - we get serious paychecks when someone buys. Our paychecks more than offset the risk of a little gas money and time.

My friends, most buyers are not liars... Most buyers have better things to do than waste our precious time. Their time is precious, too. They simply want to be treated kindly, and with RESPECT.

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I'm so sick of hearing how real estate agents can't afford to work with buyers anymore - UNLESS that buyer has signed a buyer agency agreement AND has an iron-clad loan commitment in hand - because of the high cost of gas. What a crock.

Okay, let's do a little analysis.

Over the last several years, gas has hovered around the $3.00/gallon mark. Sometimes higher, sometimes lower, but I think that $3/gallon is a reasonable place to start.

In some parts of the country, gas is now around $4.00/gallon. That's $1.00 per gallon difference.

If your car gets 20 mpg, you're spending ONE EXTRA DOLLAR for every 20 miles you drive.

If you take a buyer out and drive sixty miles with him or her, that's three extra dollars you spent on him (over and above what you would have spent on him last year and the year before).

Are you really saying that you can't afford to spend an additional $3.00 in exchange for a shot at a $7,500 commission ($250,000 x 3%)?

Tell ya' what. I'll be happy to take your Denver buyers for a ride, whether they've signed a Buyer Agency agreement or not. Whether they're pre-qualified or not. Because I know that being out in my market with a warm body in my car (and that warm body probably has lots of friends he can refer to me in the future) is a MUCH better use of my time than sitting back at the office congratulating myself on saving $3.00 in gas.

I'll even pay you a referral fee. So, on top of the THREE BUCKS you saved, you'll also get $1,875 just for giving me a call!

Buyers can be hard to nail down and you'll hear agents talk about the "Buyers Are Liars" phenomenon. It's a phrase usually used in frustration either when an agent loses a buyer or when he's at his wit's end showing homes that the buyer says work for her, but don't inspire her to make an offer. It simply means that buyers don't really know what they want, and often it's true.

Remember, buyers don't shop for houses every day and they probably don't know what they'll respond to until they see it. So you'll need to have a little patience with them.

Find out your buyer's preferred neighborhood. If he is unfamiliar with your city, find out what kind of neighborhood he thinks he'd like - urban, suburban, rural, mountains, coastal? Any particular commuting distance? Does he like charming older homes near the city center or new contemporary homes near the shopping malls? Price range?

Moving on... number of bedrooms, baths, garage? Any special needs? Don't get too specific though. Pushing buyers for too many details is counterproductive, believe it or not. If you keep pushing, he may start making things up to please you. Doesn't everyone want a garage and more than one bath? But he might not really care that much and, if you limit your search to his non-critical parameters, you'll miss a lot of great homes.

The other danger in asking for too many details is that your buyer will start telling you things like, "I really want a window over the kitchen sink" or "I want an open floor plan with lots of light." Depending on your inventory, you may end up with nothing to show her if you rely strictly on her wish list. And if you show her homes that don't meet her "requirements," she may think you weren't listening. You (and she) need to gauge her reactions to different styles of homes in person. Remember, buyers don't shop for homes every day and don't really know what they will respond to until they've seen it.

When I was shopping for a second home in Alabama, I told my agent that my "must-have's" were four bedrooms, a two-car garage and high-speed Internet access. What did I buy? A three-bedroom home with no garage and dial-up access only. But my agent was sharp enough to switch gears in the middle of our search when she saw that I was emotionally responding to homes in the country, even if they didn't have everything I claimed I had to have.

No, buyers aren't liars. They're just human beings who need our help... and our patience. And we are well-paid to provide both. In my opinion...

copyright 2007 Jennifer Allan

www.sellwithsoul.com