BY DIRK ZELLER
I have talked with a handful of clients who have dealt with the same issues, and I want to address those issues with all of you. You may not be experiencing these issues right now, but you will at some point in your career. I want to cover are the market changing to a buyer-controlled or buyer-driven market, multiple offers on properties and bidding up of the price. My advice to all of you who are in this situation is from Nike: “Just do it” – right the first time. In other words, don’t re-earn your commission, sell them the house the first time.
I think we owe it to our clients to educate them as to the realities of the marketplace. They will need to understand that if they want a house now they need to step to the plate. I was always amazed in my career when I represented the seller, and we were getting multiple offers and the offers were low. This truly made no sense to me. These buyer’s agents had invested large amounts of time, while their client invested energy and emotion into that home. Then they would write an offer that really had no chance of acceptance against the other offers. They weren’t playing the odds in their client’s favor.
Your first step is to educate your client to understand what is going on in your market. Here is an action plan for all of you: research your market. Understand what the homes are selling for compared to the asking price in all price ranges. You need to know the actual percentage of sale price versus asking price. If homes are selling at 97 percent, 95 percent or 105 percent of the asking price, then it is crucial for you to know that percentage. Move yourself into the trusted advisor role as opposed to the salesperson role. Counsel them on what they need to do to get the house they want. They will start to lose confidence in your ability to get the job done if you are writing multiple offers. You will lose the deal eventually for yourself and your mortgage partner if you struggle to get an offer accepted.
You should also look at the situation from your business standpoint. You have spent all this time to show property, write the contract and try to negotiate for them. All that time will be unpaid if you don’t get the home for them. Make sure that you get paid for your time invested in a client. You will also put your mortgage partner through the wringer with you. They will appreciate your conversion of this buyer quickly and efficiently. The quicker you are able to convert the buyer, the less time, if any time at all, you and your mortgage partner will have to ride the interest rate roller coaster. If this begins to happen, as it usually does in the spring and summer months, you will both get motion sickness, and so will your clients.
Remember, the longer you have to administrate a buyer or seller, the less profit you make in net dollars. People cost you time and money in the client status. They are a wealth center when they pass on to the past client status. Get them there fast! The longer they stay in client status, the more that can go wrong. You need to move them through the process to escrow as quickly as possible. Clients are not a potential profit center until they get into escrow. Now I want to be very clear. I am not saying slam them indiscriminately into a home for your benefit. I am also not saying put aside your fiduciary responsibility to the client. If the bidding process gets ridiculous, you owe it to your client to pass on the home.
What I am saying is know the market and convey the data to the client, so they know what it takes. Some clients may decide that they want out of the game for now. It is better to know at the buyer interview that they don’t have what it takes to own a home at this time. You will save yourself many unpaid hours of work. Understand the profit ramification for your business and your mortgage partners, as well. And just do it right the first time.
Dirk Zeller is an agent, an investor and the president and CEO of Real Estate Champions. His company trains more than 350,000 agents worldwide each year through live events, online training, self-study programs and newsletters. He’s the widely published author of “Your First Year in Real Estate,” “Success as a Real Estate Agent for Dummies,” “The Champion Real Estate Agent,” “Telephone Sales for Dummies‚” and over 300 articles in print. Visit RealEstateChampions.com for more information.