Finding the Buyers, Listening to Them, and
Satisfying Their Needs
If hitting a home run is the magic moment in baseball, then selling a house is the glamour event in residential real estate. Just find qualified buyers, match them with the home they want, and touch all the bases on your way to the bank. It's little wonder that new agents are chomping at the bit to go out there and sell houses.
Of course, selling real estate isn't that easy, but it does have special appeal. First, it can be extremely profitable. For what is often a comparatively short investment of your time, there is the potential for a very substantial commission. Second, working with motivated, qualified buyers can be a pure joy-for them, when they move into the home of their choice; for the sellers, when they collect their check at closing; and for you, when you get paid in satisfaction and money.
"Motivated" and "qualified" are the critical words when applied to buyers. If an agent can continually come face-to-face with people who are ready to buy and who have the means (called "belly-button-to-belly-button contact" in less genteel circles), it would be hard not to succeed. Although you will have plenty of competition in your quest for these prizes, you can win more than your fair share if you approach your task systematically and creatively.
As you consider this material, keep in mind our discussion of agency in Chapter 5. In keeping with what seems to be the trend, we will assume that in working with buyers you are representing them as their agent and that you owe them a fiduciary duty. We will also assume, however, that you do not have an exclusive contract with them and that they remain free to work with whomever they wish. Although there is a strong movement among buyer's agent groups to reach the point where buyers sign exclusive contracts with buyer's agents, we're not there yet. Even if you had such an agreement, most permit termination without much difficulty.
ARE BUYERS LIARS?
So, under our scenario, your potential buyers likely have no legal obligation to any agent. They can work with whomever they choose, whenever they choose. Some salespeople are devastated when they learn that buyers with whom they were in contact bought through someone else. If you are doing things correctly that will not happen often, but it will happen. When it does, you should analyze what you did wrong, or someone else did better, but there is nothing to gain by feeling betrayed. Buyers are concerned with their best interests, not yours, and that is perfectly understandable. You will thoroughly enjoy working with almost all of them, and most will display a remarkable loyalty to you-but there will be losses. Most buyers are not liars, although they may sometimes tell you what they think you want to hear to avoid hurting your feelings or to take the pressure off themselves. Reverse the roles and we would likely do the same.
CATEGORIES OF HOME BUYERS
Home buyers fall into rather broad, identifiable groups, each with somewhat different motivations and capabilities. What follows are the major segments of the buying public as they are most often classified. Some agents become so adept at working with certain types of buyers that they spend most of their time doing just that.
- First-Time Buyers. Whether they're single or married with a small family or DINKS (double income, no kids), first-time buyers generally have less money for a down payment and a smaller monthly income. By necessity, they are more likely to accept small homes and attached homes. Those who are handy look for older, cheaper homes to buy and repair, but financing on such projects can be tricky. Be prepared to work with parents and older friends who are often called in to inspect potential purchases. Relatives often chip in for a portion of the down payments.
- Move-Up Buyers. Most buyers in this category are married with children. They can come up with a hefty down payment because they have typically sold a home and are looking for something larger in which to raise the family. They tend to see detached housing as essential, and are often drawn to homes in the suburbs with large yards or small acreage.
- Empty Nesters. Generally, empty nesters have a substantial amount to put down, because they have sold a house that became too large for them once their children left. They are experienced buyers. Listen carefully when they describe what they want, because they know. Depending on individual circumstances and preference, they will accept attached or detached housing.
- Retirees. Like empty nesters, retirees probably have a sizable down payment, but monthly cost will be important if they are on a fixed income. They most often prefer a single-level house, because climbing stairs can pose a problem. Having lived through the golden years of the American dream of home ownership, they look upon owning a home as a solid financial investment as well as a fulfilling emotional experience. Most seniors with whom I worked responded best to unhurried, uncomplicated house hunting and viewed with suspicion gimmicky financing. In some cases, you will work with children who want to look at the parents' choice before a final commitment is made. I'll expand somewhat on this topic in Chapter 17.
The following suggestions are intended to help you keep your "prospects" file full of one of the most coveted of all assets-ready, willing, and able buyers. You can never have too many of them.