As a buyer agent, your job starts well before the negotiations—or even the first showing. You need to make sure that your real estate clients are looking at properties that best fit their size and style goals, while reasonably falling within their ability to pay. The following guidelines are a starting point to show clients your knowledge, skills, and experience in the realm of buyer agency. By beginning with these five steps, you will save yourself and your home buyer clients time and frustration in the long run.
To get the full version of these Buyer Agency Guidelines, take our sister site’s highly-rated online course, A Day in the Life of a Buyer Agent
Step one: Listen
Before you can display your buyer agency skills, you need to start by listening. What type of property does the buyer want? When do they want to close? What special considerations do they have? Many buyers don’t have a solid idea of what they want—and that is okay, too. It is most important to match the buyers’ desires with the properties that best match what they want and can afford. Of course, one major determining factor is the price range, which leads to the next step…
Step two: Review preapproval process and help determine price range
Does your buyer need financing? Most do. There is a definite difference between a buyer being prequalified and preapproved for a mortgage. Prequalification is simply evaluating the debt to income ratio and establishing a rough estimate of the buyer’s ability to obtain financing. Preapproval involves the buyer selecting a lender, submitting a loan application, and having it approved by an underwriter. Buyers needing financing are generally better served if they are at least prequalified, but ideally preapproved prior to their property search.
Step three: Give an overview of current market conditions
Buyers frequently make poor decisions because they hear misleading information about market conditions. As a real estate licensee, you have the best tools to assist your buyer clients:
- Show them examples of recent sales that are comparable to their ideal property.
- Calculate the ratio of sale price to list price of recent sales in their target market. Is it 90%, 95%, 102%?
- When looking at these facts, also note the days on market, original list price, and any special circumstances of the recent sales (e.g., short sales or foreclosures).
Arm your buyer client with facts so they know what the current market conditions are, and what they can expect in their search for the best property. Once you show the facts and give your advice, the ultimate decision is up to your buyers.
Step four: Explain the process of buying a property
Next, prepare your client for the process of buying and some common issues that occur. Explaining the process of buying property is considered part of the minimum level of service. Discuss the following questions with your buyers:
- What is a reasonable timeline from purchase offer to closing?
- How should they handle the negotiating process?
- What actions should the buyers be taking, and when?
- What if there are issues uncovered in the home inspection?
- Are there any expenses they should be prepared to pay outside of closing costs?
It is also a good idea to show the buyers a copy of the Binder or Purchase and Sale Agreement used by your brokerage, to make them aware upfront of the terms and conditions, timelines, contingencies, etc.
Step five: Determine communication method and schedule
Communication goes hand in hand with the home buying strategy. How does the buyer want to hear from you (e.g., email, text, phone, personal contact)? When do the buyers want to hear from you (e.g., anytime, after 6:00 PM, weekends only)? Will you be unavailable at any time? Regular communication and setting expectations can help to ease concerns, make buyers feel more comfortable, and help the real estate transaction move more smoothly.
Finally, you are ready to begin locating suitable properties and showing them to your buyers!
The key to a good purchase strategy is to really listen to your buyers and discover their top priorities. However, knowing what buyers want is only part of the process of getting them ready to purchase a property. After listening to their wants, you should then do the talking and inform them about the process and possible issues. By listening, informing, and preparing your buyers for the home buying process upfront, you can put your best foot forward and increase your chances of success in the realm of buyer agency.
For an extended and far more detailed version of the buyer agency guidelines outlined above, check out our sister site’s highly-rated course, A Day in the Life of a Buyer Agent.