When working with new buyers, what do you insist on (if anything) before you start showing houses?

Do you drive them around or make them follow you?

Thanks

At some point in the conversation I try to find out if they have been pre-approved (not pre-qualified) for a loan. I may show them one home without one, but no more until I get a pre-approval letter. I usually meet them at the home or homes if they know the area, and as a last resort, I drive them.

I will show a potential buyer a single property before requiring them to do my buyer interview. I usually get this done before I show property at all.

During the interview I explain agency and present them with my EBA to sign. I also give them my home need, want and wish form and ask them to take 10 minutes to fill it out.


I determine if they have been pre-approved. If not I get my mortgage broker on the phone and introduce them and get the ball rolling. I excuse myself for 10 minutes while they fill out my form and are pre-approved by my MD. When I return they have a pre-approval amount and the form finished. We then go on to the area needs and wants form where I determine what areas of town they are looking to live and school preferences and then I do a search and pull 2-3 properties in addition to the one they called about.
Then I show properties.

1. Pre Approval or talk to one of my lenders
2. Buyer Consultation (45 min. interview)
3. EBBA
4. I preview properties to save client time

Robert -

Those are interesting and potentially time consuming steps.

Considering scheduling conflicts and lender pre-approval turn around times, do you ever lose a buyer because you aren't willing to show them a property until all of these tasks are completed?

I think there is too much fear about losing buyers in this business.

If a client doesn't have a pre-approval letter, or at least have a discussion with one of the lenders that I have a relationship with, how do I know what price range to look for?

In addition, this protects my time, which if you have solid lead generation techniques, is critical.

If a buyer doesn't want to commit to me and is likely to be disloyal, disappear, not be serious about purchasing a property. I save a lot of time by weeding them out early in the process.

I had a $2.5M sale last year from a buyer that refused to sign a BBA or to be pre-approved by a lender. He paid cash.

Sometimes you have to go with your gut.

(P.S. - The funny thing is he originally wanted to do a 2-year lease.)

I give them the choice.

Robert,
I agree 100%!
Until you have someone pre-approved and a signed EBA(Yes Jason there are exceptions to the rule but those are usually few) that person is a prospect and not a client. If they are not yet willing to get pre-approved they are not ready to buy.

Jason,
Your example is the exception. So what was the reason the buyer did not want to sign an EBA?

A lot of buyer's do not want to do this, or feel uncomfortable doing so. It's more important to explain the whole process up front, how you will be working for them, etc and gain their true loyalty (as much as is possible) instead of just asking them to sign a form saying they will.

-J

I think it comes down to how we as agents explain it to them if we say"signing this agreement means you have to pay me commission" then yes not many will sign it.

If you explian that this agreement allows you to protect there interests and spells out i represent you soley in negotiating the best deal and terms for you then they usually are glad to sign it.

Ya Think!

Josh,
The only way to get the buyer to sign is to explain to them the process. Many agents fail in doing this because they are fearful of using EBA or go into the discussion thinking the buyer will not sign. If you do this you are done before you open your mouth. If you explain the benefits and believe in the benefits you will find it easier getting that signature. I had one guy that said no way. I asked him if he were an agent and someone came to him and said I want you to sell my house but I do not want to sign a listing agreement would you do it? He said no way. I said that is what you are asking me to do! He thought about it for a few minutes and signed. Are closing on his house next week.

How you approch your potential clients is key to your success in using an EBA. If you cnnot overcome objections you need to practice more.

I get all the buyers I can to sign EBA's, but I'm not going to not work for a client because s/he doesn't sign one... there are many old fashioned people that just don't want to sign contracts period, it's hard enough to get them to sign when they actually find a house they love just because they do not like signing stuff... applying a blanket statement that you must get all yoru buyers to sign one is limiting yourself (much like Jason is trying to get by you guys as well.)

-J

If I have a $2m buyer I might consider working without the EBA if they otherwise demonstrate they are serious buyers.

At $200-$300K no thanks... plenty of clients to work with.

Paul said: "...that person is a prospect and not a client". I think that is a very good way to look at it. That might even be a good way to word it to the buyer. After all, it just makes sense that we can't do as much for a prospect as we can for a client. Once we have the EBA, we can stop worrying about their loyalty and start concentrating on their future home.

I'm wondering if moving the buyer consultation to the top of the list, above loan pre-approval, would make sense in some instances. If an agent spends 45 minutes investing in the buyer's potential as a client before sending them to be pre-approved, wouldn't the chances of getting the buyers back IF THEY ARE PRE-APPROVED be considerably higher? This may be more of a good idea for agents who are not swamped with work than for those who have a full calendar most of the time.

No matter what routine we have down pat or what schedule we insist on, we probably do need to be a little flexible.

Darlene