Give your buyer clients an early education in problems that might be encountered, how they are usually resolved, and your role in the process. Negative surprises in the emotionally charged and time-sensitive home purchase process can be avoided in many cases by going through a checklist of instructions to buyers.
1. Making a Good Deal
Everybody wants to make a good deal, and working a motivated seller into a bargain purchase price is the goal of most buyers. Be sure to talk to your buyers about how this will influence the process in almost every aspect through to closing. Let them know that getting a seller to their rock-bottom price line will generally ensure that they will not agree to further concessions for repairs or money to correct inspection problems. As long as you’ve educated your buyers to this fact, you will hopefully avoid the deal falling through due to seller remorse or inspection correction negotiations.
2. A Really Low First Offer Can Backfire on You
A slowing market with rising inventory sometimes encourages buyers to make low-ball offers to test the sellers’ motivation. In some markets, it’s not that unusual, and sellers simply come back with a high counter offer to draw the buyer up to a reasonable price. However, sometimes a very low offer can offend them.
3. Offer a Comparative Market Analysis
When you get the question, “What price should I offer for this home?”, you should advise your client using a comprehensive market analysis of similar recently sold properties in that area. This should yield a range and your buyer can then choose an offering price based on accurate market statistics.
4. Help Your Buyers Locate Resources
You actually enhance your value to the client by helping them to locate the appropriate, competent professional to answer their questions. This can include inspectors, lawyers, appraisers, engineers, etc.
5. Buyer Representation Agreement
You want to help them find the home of their dreams, and to devote the time necessary to turn over every rock to locate it. You should execute a buyer representation agreement with them. Explaining and getting this agreement in writing will help to assure you a commission if they do buy.
6. Don’t Buy That New Furniture Until After Closing
With many of today’s buyers purchasing homes at the top end of what they can afford, there isn’t any room left in their loan qualification score. Deals have been lost days before closing because the lender did a final credit check and found several thousand dollars of new furniture had just been purchased on a credit card.
Advise your buyers to make no significant credit changes or purchases in this critical pre-closing phase.
7. Stuff Happens – Don’t End Up Temporarily Homeless
There are so many variables involved in a closing that it’s not that unusual for there to be last-minute delays that move a closing a few days farther out. Many times this is due to loan documents, as the lender wants to see all appraisal, survey, title and other documents first. If any of these are delayed, then the closing might be later than expected. Be sure that your client has a contingency plan should a delay occur.