“Buyers are liars.”
That’s a phrase I’ve heard time and again from fellow Realtors since I first obtained my real estate salesperson’s license last fall. And I’m starting to believe it, after some recent encounters that I, and some of my fellow rookie Realtors, have experienced in the past several weeks.
To clarify, that quaint little catchphrase isn’t meant to suggest that all buyers are lying cheats. Quite the contrary: Most are generally honest and sincere folks who simply want to purchase a home at the lowest possible cost. Good for them.
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The problem, as any Realtor will tell you, is that many want-to-be home buyers aren’t up-front and completely honest with the agent they choose to represent them. The typical end result is that the buyer doesn’t get the house, the Realtor doesn’t get a sales commission, and both parties wind up wasting a lot of time they’d rather have spent doing something else.
I’ve worked with nearly two-dozen buyers over the past few months and still haven’t closed a sale. Here are some of the mistakes those buyers made and what I’ve learned from them:
Working with more than one Realtor. After I spent three straight weekends touring properties with a young couple, the wife complained I wasn’t showing them anything “new.” When I asked her what she meant, she said I was taking them to many of the same homes that their “other Realtor” had shown them, too.
Well, duh! Buyers need to realize that every Realtor has access to the same list of for-sale properties, so using two agents only guarantees they’ll double the amount of time they spend looking for a home.
I obviously didn’t know they were working with a second agent. If I’d known, I wouldn’t have wasted my time with them in the first place.
Hiding credit problems. A fellow rookie agent was elated when the client, who had already been pre-approved for a sizeable loan, made an offer that was accepted by the seller. But shortly before the deal was scheduled to close, the bank withdrew its loan approval because a bankruptcy the buyer had filed a few months earlier, but didn’t tell the agent about, finally showed up on his credit report.
The deal collapsed because the buyer couldn’t find another lender willing to finance the purchase. Apparently, many buyers don’t realize some lenders run a second credit report shortly before a purchase is ready to close just to check that the buyer’s financial situation hasn’t taken a sudden turn for the worse.
Having unrealistic expectations. Like in many parts of the country, the number of homes for sale in my particular area is at an all-time low. Properties routinely sell for more than their list price, multiple offers are commonplace, and the bidding is getting even more intense now that the recent drop in interest rates is bringing even more people into the market.
With so many buyers and so few sellers, most sellers won’t even bother making a counteroffer unless a buyer’s first offer is at or near the list price. Yet most prospective buyers still insist on making an initial offer that’s 5 percent or even 10 percent below the list price. Though some buyers believe they can always renegotiate upward later, making such a low initial offer in a hot market like ours simply guarantees the seller won’t take them seriously. If one buyer doesn’t want to pay the seller’s asking price, there are plenty of other buyers who will.
I recently started to provide each of my buyers with a comparative market analysis that shows the listed price of homes in the area and the even higher price they eventually fetched.
It has helped to encourage some, but not all, of my clients to make a stronger initial offer, but I still haven’t closed my first deal.
Any suggestions other Realtors might have would be appreciated. Send your comments to Rookie@inman.com.
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