Are you finding the success you want when it comes to working with buyers? Or are you so frustrated with buyers that you’re seriously considering working exclusively with sellers? If you choose not to work with buyers, you are walking away from 50% of the opportunities that exist in the market! If you love the business you have and don’t need one more penny of income, then by all means focus on sellers and forget about buyers.

I personally believe that having a strong buyer business can be an extremely lucrative and fulfilling experience! But you need a strategic plan to be really successful working with buyers. Over the course of the next three Zebra Reports I’m going to give you everything you need to wow buyers.

Let’s start by talking about the most important piece of the buyer puzzle - engagement. It’s the cultivation of relationships that ultimately leads to an increase in business, and a more profitable bottom line.

Many of you are having challenges with buyers because you are not engaging effectively with buyers.  Are you showing buyers home after home after home … but they never buy?  Or do they make offers that are never accepted?  Perhaps they write offers that are accepted … but they bail out of the transaction before closing for reasons that don’t appear valid?

While it’s easy to label these as buyer problems, they are also agent problems! In order to have an effective buyer business you need to seriously sharpen your buyer-client skills.

Let’s look at three critical pieces of the buyer experience: communication, the pace of the home search, and negotiation.

Communication: Often an agent will tell me about a problem they’re having with a buyer … and it immediately becomes clear that the problem is communication. What do I mean? It’s not just whether you talk to buyer clients on a regular basis. It’s also how you talk to them, what you’re saying, and whether the method you are using to communicate mirrors their preferences. Here’s an example: Let’s say you have a buyer named Mike who communicates with you primarily via email and text. You, on the other hand, prefer to pick up the phone and chat, or meet face-to-face. Because you’re obviously not communicating in the manner that Mike needs, he’s going to get frustrated with you. When his frustration gets to the point where he just can’t stand it, he’ll likely find another agent who does understand his preferences.  Or maybe your favorite way to communicate is via email and text, but your new buyer Claire rarely responds to your email messages. Is she not interested in buying? No! She is giving you a clue that perhaps email is not high on her list of communication methods. If you want to create great buyer relationships, ask your client how they prefer to communicate. And remember - listen for the clues, then honor and respect those wishes.

The pace of the home search:  Let’s say you’ve found, after many years of experience, that most buyers can’t remember the details of more than three homes in any one showing. Based on that assumption, you always limit showings to no more than three homes in one buyer appointment. However, you’ve just shown Jim and Diane three homes. You’re heading back to your office with them, and you realize that they’re ready to look at many more houses. Obviously, Jim and Diane don’t fit your preconceptions about buyers! Now they want to keep looking, but you haven’t made arrangements to do that. So they’re disappointed … and they’re probably feeling you aren’t showing them “enough” homes. Making assumptions about how buyers like to search for homes is a common mistake, but it’s one that is easy to correct. All you have to do is open the lines of communication! Ask buyers whether they like to look at lots of homes at once, or if they prefer to view just a few on each outing. Then, listen and watch for more clues.

A great way to handle the home search is to start by taking buyers on a “driving tour“, which helps you learn a lot about your buyers fairly quickly. Based on their parameters, create a tour to show them neighborhoods or communities that they prefer. While on the driving tour, ask your buyers to identify the homes that they would like to take a closer look at. These tours allow you to cover a lot of ground up-front, and ultimately shorten the buying cycle. Just remember to match the clues they give you with the pace they are going. If you drive buyers past 20 homes and they seem overwhelmed, that’s a clue. If you take them by eight and they seem bored, that’s another clue. Pay attention to all the clues!

One last thought on the home search process. If you’re sending buyers bundles of listing information via email and they’re not responding to you, it could be that you’re simply overwhelming them and they don’t know where to start. It’s also a clue that perhaps you should slow down the process and talk to them face-to-face again. If, on the other hand, your buyers are contacting you regularly to ask about listings you have not sent information on, or called them about, you need to pick up the pace and become much more proactive. Again … watch for the clues.

Negotiations:  Every buyer has a negotiation style that is most comfortable for them. You need to determine what that style is, and how to effectively manage it. Some buyers are always going to want to write a low offer on reasonably-priced homes because they want room to negotiate. Other buyers will offer exactly what they can pay, and not a penny more. Some will offer full price - because they and their agent have done their homework and they know the home is priced correctly. Regardless of your buyer’s style, it’s critical that you spend time talking to your buyer clients about “win-win” negotiating. Show buyers exactly what that looks like. Explain to them why it’s important to bring a fair offer to the table. Before you get to the offer-writing stage, have an honest discussion with your buyers about their negotiating style and how you can work together to make it work within a win-win scenario.

Remember - the key to building an amazing buyer business is engagement. It’s listening and watching for clues and adapting your style to mirror your buyer’s style. Engagement is making sure that your communication, home search, and negotiation styles match the preferences of your buyers. If you take care of these three critical areas, you’ll build strong, long-lasting relationships with your buyers … and ultimately build a profitable, sustainable business.

Rich Levin

It’s one of the most interesting parts of my job.  When an Agent that I coach is in the middle of a tough negotiation I ask them to call me.  Debbie did.

The asking price was $769,000.  The offer came in at $625,000.

Debbie is smart and talented.  As the owner’s anger and frustration arose, Debbie calmly explained that, “All offers are good offers,” that in this market Buyers feel that owners may be desperate.  The key is that she kept the owner objective.

She did not disparage the offer, the other Agent or the Buyer.  She didn’t compliment them either.  Instead she kept it objective.

The owner countered at $725,000.  The Buyer came back at $640,000.  Again, as you might expect the owner was angry and frustrated.  Again, Debbie kept her cool and told him.  “I want to be as upset at you are but my job is to keep my eye on the goal of getting you the price you need to get the job done.  So, let’s decide do we want to tell them we won’t respond until they raise their offer?  Do we want to make a small concession and keep inching closer?  Or do we want to go to or close to your bottom line and send the message that we want to get this done with less “Mickey Mouse” back and forth.”

She explained the risks of not responding and allowed the owners to lead the decision making with her guidance.

So many Agents who are far less skilled negotiators than Debbie empathize with their Client in ways that paint the other Agent or the other party as wrong, greedy, etc.  Debbie demonstrated three key negotiation skills of a talented negotiator.

1. She kept the negotiation and her Client objective.
2. She kept the conversation and the negotiation focused on the goal.
3. She kept herself objective and focused on the goal.

Mike and Stacey Spickes

It is important to realize that the appraisal is the most critical piece of information that the lender will consider in determining that the market value of the home is indeed less than what is owed on the property. The Rep will use the appraised value to calculate the net amount that the lender will accept in the Short Sale. The net amount that the lender will have to receive in the Short Sale will be a discounted percentage of the appraised value as determined by that lender’s Short Sale guidelines, the type of loan that the homeowner has, and the condition of the property. It is important for you to know that the discount percentage used by lenders in accepting or rejecting a Short Sale changes according to federal guidelines, market conditions and individual bank policy. Currently,

• FHA loans are insured at 84-88% of the appraised value and, therefore, the lender can discount the pay-off amount down to 84-88% of the appraised value, depending on how long the homeowner has been approved into the HUD Pre-Foreclosure Sale Program.

• VA loans are guaranteed at 88% of the appraised value and, therefore, the bank can discount the pay-off amount down to 88% of the appraised value.

• Conventional loans currently tend to be discounted to 85% of the appraised value. Understand that, for Conventional loans, this % moves with market conditions and is typically based on the lender’s volume of foreclosure activity and inventory in a particular region.

Once you have submitted your Short Sale package and have been assigned to a Loss Mitigation Rep, the Rep will order an independent appraisal to be done on the property. It is important that you make yourself the main point of contact for both the lender and the Appraiser. Sometime after your first contact from the Loss Mitigation Rep, you should get a call from the Appraiser wanting to schedule the appraisal. We try to establish a good rapport with the Appraiser. We usually provide him/her with the comps for the area, a list of all the repairs that are needed to bring the property up-to-par, as well as pictures of any problem areas that should affect the value of the property, such as roof damage, wood rot, termite damage, mold, etc. Of course, you must keep in mind that this Appraiser has been hired by the lender and is working on the lender’s behalf, not yours. Also, understand that the information we give him/her is for informational purposes only. We are not trying to inappropriately persuade his/her professional opinion. What we do know is that the value he/she comes up with is somewhat subjective and there is a range within which the Appraiser can appraise the property. If the information we provide might help the Appraiser better understand the situation and come in with a lower appraised value, the lower we will be able to list the house, the faster it will sell and, therefore, the better chance we have of saving this homeowner from foreclosure.

If you have already placed a lockbox on the house, the Appraiser should be able to access the home with his/her key. If not, you will need to schedule a time to meet him/her at the property. If your clients are still living in the home, be sure to let them know the time and day of the appraisal. We usually recommend that our clients leave the property while the Appraiser is there, but if they choose to be present, that is their prerogative. Many homeowners ask if they should clean up or make any repairs to the property prior to the appraisal. We recommend that they leave the condition of property as-is. After the Appraiser does his/her appraisal, reviews the information you have given him/her to consider, he/she will come up with an appraised value for the home, formalize a report, and submit it to the bank. The appraisal is the final piece of information needed by the lender to approve or disapprove the homeowner for the Short Sale.

Note: On Conventional and VA Short Sales, lenders sometimes order a BPO, rather than a formal appraisal. A BPO is a Broker’s Price Opinion and entails the lender simply having one of their approved Brokers do a valuation of the property and provide a Comparative Market Analysis. The upside to this is that this Broker is using the same CMA data that you are in determining value and, if the Broker’s valuation comes in too high, in your opinion, the lender will many times allow you to contest the BPO value. The downside to a BPO, instead of a formal appraisal, is that the Broker does not need to contact you for access to the property; therefore you are unable to explain the situation to the Broker in hopes that they will value the property at the lower end of their valuation range.