edited photo courtesy of esterase
On Trulia Voices, Chris Freeman asks:
I have a buyer looking for homes about an hour away.
They are prequalified for $95,000, but they keep sending me listings to look at that are $130,000. Many of these listings are already price reductions, are not bank owned, and are close to the prevailing price in the area. I keep telling them that they need to send me things closer to what they are approved for, (or at a minimum) bank owned because a longshot lowball might at least fly in that instance.
Their reply is You never know if they will accept it. On the contrary, I know they won’t! These clients are very nice people, but they just are not listening. I have tried many things with them, but I can’t break through to them. I want to help them, but I am wasting a lot of time and gas taking them to places that they can never buy (I subtlely expressed this to them as well).
What are your thoughts, readers? What do you do when your buyers are unrealistic? Do you patiently drive to the farthest stretches of the earth on their whim, do you tell them after viewing several homes that perhaps you are not the match for them as together, the communication isn’t on target if they’re still hunting? Do you hold their hand while they dream of unrealistic homes or do you cut them loose?
Jim Duncan
March 19, 2008 at 11:42 am
Don’t waste your time, gas and efforts on folks who clearly do not have reasonable expectations. Give them another chance to re-evaluate their (and your) expectations, and if they still continue to aim higher than they have achieve, respectfully cut them loose, wish them well and work with your other buyer clients who have said reasonable expectations.
Matthew Rathbun
March 19, 2008 at 12:12 pm
Referral, referral, referral…. Find someone closer to the area who doesn’t mind driving Ms. Daisey.
It’s hard for everyone to give up clients, but don’t just factor in your gas, but how much is your time worth? You need to know your market area. In our local market, it is reasonable to see folks come down $50,000 from asking, but it’s only been recently in our depressed market that this is possible.
Steve Belt
March 19, 2008 at 12:13 pm
I think this is actually an ethics question as much as a financial one. You can tell your client that ethically you are not allowed to show them property they are not qualified to buy. As an alternative, you could draw up a buyer-broker’s agreement with a retainer. If they want to look at homes they don’t qualify for, ask for $1500 as a retainer, and you’ll be glad to play taxicab driver for a month. Otherwise, you need them to be realistic and stop wasting your time.
Personally, I’m highly selective in working with a buyer. They need to be highly motivated and they need to be realistic, or I’m going to attempt to refer them to someone else.
Daniel Rothamel
March 19, 2008 at 12:20 pm
“You never know” is only true is you never try. If you have taken your clients to all of these listings, and not written any offers to find out if they will fly, then you truly will never know. You will, however, waste a lot of time. I have had clients that were unrealistic until the reality of a rejected offer smacked them in the forehead.
If they are taking you to listings out of their price range, AND not making offers on them, then you are REALLY wasting time.
From the question, it is hard to tell if the agent has suggested any properties or not. It is true that our clients direct the journey, but sometimes they need a little guidance. Sending them listings that are attractive AND within their price range might help. Plus, if they honestly believe that an owner will take an offer for $40K less than the listing price, the $100K listings should look really sweet.
Vicki Moore
March 19, 2008 at 12:21 pm
You have to have your own criteria, your own max tolerance level. I tolerate it to a point. But if they aren’t realistic about their purchasing power, I will tell them that I’m not the right agent for them.
Here’s a tool I use: (If I remembered where I got it, I would give them credit.) The point is you have to have boundaries in all areas of your life, including your professional life.
Client must score 5 points total. This form must be posted in the buyer’s file.
1. Do I like the client?
(_) Yes (+2)
(_) Sort of. They’re OK. (+0)
(_) No (-2)
2. Does the client trust me? Do I have great rapport?
(_) Yes, a lot (+2)
(_) Yes (1)
(_) Somewhat. So-so. (+0)
(_) Not much. Doubtful. Skeptical. (-1)
3. Does the client have realistic expectations?
(_) Yes, definitely (+2)
(_) Yes, I think so (+1)
(_) Wishy washy. Dreamer. (-1)
(_) Unrealistic (-3)
4. Is the client level-headed, even-tempered and “normal”?
(_) Yes (+1)
(_) I think so. Not sure. Seems like it. (+0)
(_) No (-2)
5. Can the client get a loan?
(_) Yes. Pre-approved (+2)
(_) Yes. No problem. Going in for pre-approval. (+2)
(_) So-so. I think we can get him a loan. (0)
(_) I hope we can get him a loan. There is a chance. (-1)
Total Score_______
9 = Outstanding 7 = Very Good 5 = Fair/Marginal
8 = Excellent 6 = Good 1-4 = No! Stay Away
Charles Woodall
March 19, 2008 at 12:43 pm
I agree with Jim. It is so easy to get caught up in chasing the commission, rationalizing that “I’ve spent so much time with them that I can’t stop now”. You gotta stop the insanity at some point.
Missy Caulk
March 19, 2008 at 1:02 pm
Here is what we tell them, home prices in MI have already come down. Yes you can make an offer but you won’t steal a house, we have been in a recession since 2001, the sellers are realistic in their pricing.
We say pick your top 5 houses for one day, and top 5 for another, then pick you will chose your top 3 from that and you can decide.
No I won’t or let me team drive people around all over the county and 2 counties over if they are not serious. I know this sounds harsh but Realtors need to get control of their buyers from the get go.
People I have found are really looking for guidance and if you are confident in what you tell them you will not be taken advantage of. Occasionally we will get a stubbern buyer who wants to offer 180K below on a 690 house that was just reduced from 790K but not often.
Larry Yatkowsky
March 19, 2008 at 3:41 pm
“I know they won’t! –
they just are not listening –
I have tried many things –
I can’t break through
I want to help but………..”
Read my lips : >()
Time to move on!
Jay Thompson
March 19, 2008 at 6:17 pm
Not much to add to these great comments.
Here is one key though, quoted right from the question:
“I subtlely expressed this to them as well”
Don’t be subtle. Be firm and direct. You certainly don’t need to be nasty by any stretch of the imagination. Be direct, with supporting data. Most people will respect that. Those that don’t, well, you can’t please everyone. Let ’em go.
Benjamin Bach
March 19, 2008 at 8:11 pm
My acid test: Would my family think this is a productive use of my (our) time ?
If I have to tell Sarah that I showed *another* property to an investor who isn’t under Buyer Representation… it would be bad news bears for me.
BenjaminBach.com
Ines
March 19, 2008 at 9:35 pm
Great discussion here – LOVE Vicki’s questionnaire – I personally don’t have the patience and I am also highly selective of our buyer clients (Rick is a lot more patient than I am). I’ve gotten good at being able to tell who is wasting my time and who isn’t and I am straight forward with them, never rude but direct (as Jay stated above).
This is also a very personal thing – you, as an agent, are the only one who can tell if you are willing to waste your time or not. Sometimes I have so much fun with certain buyers that I don’t really care how long it takes them to buy and we become great friends.
Greg Cremia
March 20, 2008 at 7:00 am
These unrealistic expectations are not the buyers fault. Buyers these days try to be educated about the process and they are being told by other authoritative sources (media) that this is how the market is and they should make low offers to find a deal.
If they are serious buyers then write up a couple of low offers. After they get rejected a couple of times they will come to the realization that the media is not actually the authoritative source they thought it was.
OR, write up a couple of low ball offers and one of them might just work. My wife was ready to cut one guy loose after 3 offers when the 4th one hit pay dirt. The buyer got the house for $150,000 less than the last comp which sold for $675,000. The sellers would have been better off to let the bank take it but there are some people out there who would rather take the hit in their pocket than on their credit report.
Bob
March 20, 2008 at 11:06 am
>On the contrary, I know they won’t!
No you don’t. Every seller situation is different and things frequently change. The first rule of negotiation is to never make the decision for the other party.
I have written offers that didn’t have a snowball’s chance, only to see them accepted as written. I have had sellers tell me they won’t accept a dime less than X only to have them take an offer 15% less 24 hours later.
Larry Yatkowsky
March 20, 2008 at 3:21 pm
I suppose you could start with a close something like – “Sir,- if you really love your wife you would take this offer and help relieve her pain”. .>0
Seaside Florida Vacation Rentals
March 21, 2008 at 5:23 am
Just expalin to them that is why they have hired you to be there agent and would they expect when they sell a house for realtors to waste there time with people who don’t qualify. You should tell them you will only show homes and give them the range that is within reason that a seller may lower to and only look at those houses. You can also suggest they wait and save the difference since they seem to be interested in a higher value house. Good Luck! I got it tell them to meet you there and they will also tire of using there gas to go to these places.
Florida Waterfront Real Estate
March 22, 2008 at 6:28 am
This can be frustrating and more than once should not be allowed to happen unless they are trying to decide to go for a better house and wait and save for the difference. Good luck we have all had this happen at one time or another and nip it in the bud if it’s just a wild goose chase.
Blue Ridge Cabin Rentals
March 23, 2008 at 6:04 am
I think it’s kinda funny for years realtor got the bad rap for showing house not in the range buyer is looking for and here it is the other way around.
I remind clients that there lender has set the limit and her obligation is to show homes to qualified buyers not lookers. So I am not able to show a house not in there buying range. Problem solved.
lake mary florida remax
March 24, 2008 at 5:19 am
You are there to show them homes they qualify for and that is what sellers want not just anyone walking thru their home. A buyer should understand when they go to sell there house someday they would feel the same way to.