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Real Estate News and Advice |
July 10, 2009 |
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 The Want-to-buy Buyer VS The Have-to-buy Buyer
by Blanche Evans
Because of their sheer mobility and number of resources, buyers are particularly hard to acquire as loyal clients. Unlike sellers, who contract with only one agent and brokerage to market their homes, buyers can search for homes on the Internet, visit many neighborhoods, talk to FSBOs and work with multiple agents to find a home. While that's not what the industry prefers to believe, the reality is that many buyers feel they have little reason to be loyal to an agent unless they are sold on the benefits of having a dedicated agent. But the main reason they aren't loyal has nothing to do with the agent - it's that buyers don't usually have to buy; they want to buy. As with sellers, the level of urgency can be an important factor with buyers in helping you determine how much effort you should put into buyers and where your efforts are best spent. Here are some suggestions on how to work with buyers: The Want-to-buy Buyer As with want-to-buy sellers, the want-to-buy buyer can be nonchalant about making a home transaction, which is frustrating, time-consuming and expensive for the agent(s) who are involved. A good beginning is to try to explain the difference between a buyer's market and a seller's market, and where your market currently lies. Sometimes a buyer can be encouraged to get preapproved and to be ready to make an offer when the right home comes along. This is a good strategy in any market as it tells you the level of the buyer's interest and commitment, particularly in a seller's market. Some buyers want to see everything on the market whether it suits their needs or not. With this type of buyer, it's best to try to narrow types of housing into easily digested categories, such as one story VS two-story, or the most cost, size or feature-appropriate single-family, townhome, or condo in the area. Some buyers have their minds on beating the seller, not on buying a home. They want to barter, but this only works with a have-to-sell seller who is willing to play this game. If you have a buyer who simply isn't catching on that they are under-offering or contingency-laden, you can point out the "cost of procrastination." For example, a recent Realty Times article pointed out that in one particularly hot market, Silicon Valley, the cost of waiting even one month to buy was $58,000. In a buyer's market, buyer behaviors can border on arrogant, just as sellers do in a seller's market. In a slowing market, buyers won't leave work to see a showing like they do in a hot market. They also tend to let small issues upset the deal, like minor findings on inspection reports. While in a hot market, buyers will let repairs and cosmetic problems slide, but they want everything to be perfect in a buyer's market. In a buyer's market, older housing is more punished by buyers, particularly if it hasn't had updates, putting sellers in the unfortunate position of performing updates they aren't going to be around to enjoy in order to sell the home. A good strategy with the want-to-buy buyer is to step up their level of urgency by showing them only homes in top condition. To do that, you'll have to preview homes before showing them to your buyer. You'll have to pay closer attention to your buyer's hot buttons as those could be the dealmakers or breakers later. The Have-to-buy Buyer Seldom do buyers get into a position where they have to buy, but there are times when urgency is relevant. The buyer may be nearing the end of a lease and wants to buy a home before having to move out and sign another lease which could put off a home purchase for another six or 12 months. Depending on their level of urgency, these buyers may prefer an empty home so that they can close quickly, or a seller who is amenable to a quick sale. A lot of urgency for the buyer is related to interest rates. As little as a quarter point difference can mean as much as $50 or more to the monthly payment. While most lenders can supply as much as a 60-day or 90-day lock at no additional charge, buyers can't really apply for the loan until they have a home under contract. Buyers aren't used to being asked to go under contract, but a contract is the best way to show a buyer that this isn't a sport for you and it is serious business for them. If the buyer won't go under contract, another strategy is to refer the buyer to agents in other neighborhoods you aren't as interested in working because of distance, price or whatever your reason. If the agent can be trusted, he or she will feel the same way, and you can both make out with the same buyer as one will close the transaction and the other will collect a referral fee as long as the buyer stays with you and your 'partner.' This satisfies the buyer's need to be free and unfettered while you know you will capture something from the deal. Published: April 12, 2004 Use of this article without permission is a violation of federal copyright laws. 
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Blanche is a renowned author of five real estate books. Her newest, Bubbles, Booms and Busts: Make Money In Any Real Estate Market, McGraw-Hill, was rave-reviewed by The New York Times. She was also selected from hundreds of real estate experts to contribute to Donald Trump's book, Trump: The Best Real Estate Advice I Ever Received: 100 Top Experts Share Their Strategies, Rutledge Hill Press, and is featured on page 68.
