Overcoming the Intrinsic Value Component when working with Buyers
Buyer Representation Agreements have been in the real estate industry for over 20 years. According to the most recent NAR Home Buyers and Sellers Generational trends report, 41% of buyers who purchased in 2022 signed a buyer rep agreement when they purchased their home. Why wasn't this number at least 90%? When presented with the agreement many buyers have often preferred to wait until later in the process so that they could see how an agent works before deciding whether to sign a buyer rep agreement. In today's blog we'll review how to present information in your initial buyer's meeting so that you are able to answer the hardest questions of all--the unspoken expectations of the buyer.
The importance of obtaining a signed buyer representation agreement prior to showing a home to a buyer will be a required part of the process beginning in mid-July. While many agents and brokers already have incorporated buyer consultations into their practice, not everyone is comfortable with the use of the Buyer Representation agreement and getting that document signed prior to showing homes. A well thought out presentation to the buyer is extremely important and will pave the way for successful relationships. But will it ease all of the questions a buyer has about the agent?
If you follow the NAR Home Buyers and Sellers Generational Trends report, you know that buyers in the market expect real estate agents to provide more than a way to get into a home. They absolutely want you to help them find the right home at the best price. Besides those expectations, buyers also have ideas about what you should be bringing to the table as a real estate expert in your market but may not tell you about these silent expectations. These unstated expectations may not be met if you don't take time to uncover what the buyer also wants from the transaction.
As you can see in the attached exhibits from the 2024 NAR Home Buyers and Sellers Generational Trends report, depending on the generational group, there are specific skills, qualities and factors a real estate agent must demonstrate in order to meet a buyer's expectations. Looking at both exhibits here, the most important qualities are honesty, integrity and trustworthiness. Demonstrating an understanding of the buyer's home buying goals, as well as the ability to listen and to follow up with any information critical to the buyer remain a key qualities that buyers want in the agent they choose.
Buyers also want to be sure that you understand the market, can help them navigate the purchase process successfully and negotiate well on their behalf.
Some of these qualities are easier to demonstrate than others; those intrinsic qualities such as responsiveness, listening skills and overall trustworthiness can be more difficult to showcase. Meeting a buyer's most important wants and needs comes down to setting aside time for a strong buyer's consultation that clarifies their expectations, introduces them to your style and approach and allows you as the real estate professional to outline your expectations as well.
How to Uncover a Buyer's Complete List of Expectations and Set Your Style in Place
The best initial buyer consultations are those that uncover:
Buyer's long term goals for the property
Buyer's expectations for the home buying process and for you as their real estate professional
Buyer's ability to purchase
Buyer's preferred timeline for the purchase
Buyer's potential reasons for delaying or accelerating the purchase
Buyer's excitement around purchasing
Nowhere on the list above will you find preferred location, bedroom count, bathroom count, price range, pool, basement, etc. Those items are basic parameters that you'll find on any home search website.
When a buyer calls they are looking for your assistance over and above those basic parameters. In order to earn the buyer's respect and their agreement to a formal meeting, we have to focus on building the relationship, from the moment we first receive a call from the buyer. It is possible they have found a home and just need to get in to see it. Even if that is the case, taking time to uncover more about what the buyer wants while demonstrating the expertise, skill and knowledge you bring to the transaction will begin to build that relationship or clarify whether or not this buyer is someone you want to work with.
Preparing and Hosting a Buyer's Consultation
Develop an excellent buyer's questionnaire that goes a little deeper past the basic questions. In your initial phone call with the buyer, find out more about what is prompting this home search. Invite them to sit with you for a meeting live or over zoom. In the meeting you can cover any of the questions that went unasked when you first spoke with them and confirm that the information you received is still accurate.
Prepare a digital presentation as well as a hard copy presentation for your initial meeting that includes relevant information on the market as well as what you will do throughout the home buying process. Although it seems rudimentary to us, many buyers don't know what it is we do. Take time to explain in writing how the home search process is handled, what you do during negotiations and how the time period between contract and close is handled.
Set aside a room for the meeting or select a quiet area in a convenient location with good WIFI. If you are using Zoom or Teams, be sure you have everything you need cued up and ready to go.
Pull up the MLS and input their parameters while you are in front of them. Show them the results and ask them why each property meets or doesn't meet their goals. Listen carefully to their answers and ask more questions if necessary. You don't have to go through each property; just enough to uncover any unstated goals or expectations. You'll also be able to cover points of the contract while reviewing the properties.
Explain how you will find properties that are not in the MLS. Review how you'll handle For Sale by Owners, new construction, networking with agents in your market and how you will handle uncovering those sellers who are thinking about moving and whose home could be a great fit for the buyers.
Assemble and review important paperwork. This can be digital or hard copy. Review the disclosures, major points of the contract or contracts and the buyer agency agreement.
At the end of this presentation, a buyer will have made a decision about working with you and will understand the knowledge, skill and expertise you bring to the buying process. This clarity brings a level of confidence in the transaction that will alleviate concerns, build confidence in their ability to overcome hurdles and increase the level of trust they have in the information they are receiving from you. The buyers will have a much better idea of how you work and any expectations you have from them.
So often, a successful relationship comes down to your ability to look deeper at the questions they have, build their trust in your ability to find the answer for them and understanding their most important goals. While the tangible items of finding the right home are still important, meeting their intangible goals will ensure that you have a customer for life.
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