Your new buyers bring in a list of 25 questions they expect you to answer before they will work with you. Do you really want to be bothered?
Recently my husband did several negotiation workshops for a major real estate company in the Southeast. One of the agents asked him about working with a set of buyers who came in with a list of 25 questions that they wanted answered before they would decide to work with her. Here is a sampling of what they asked:
- Why should we work with you rather than other agents?
- We have a list of 25 houses we would like to see. How soon can we see them?
- Are you willing to give us a commission rebate?
- Can we get a discount on our mortgage fees?
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How would you have handled this situation? Would you have sat down and worked through these questions or would you have passed on working with this particular set of buyers?
If you believe buyers are more demanding than ever, you’re right. In fact, the scenario described above is actually pretty common. Assuming that you would like to work with these buyers, what’s the best course of action?
When a client objects, it normally means that the client is uncomfortable with the agent, the situation, or both. Trust does not yet exist.
Second, many buyers today have thoroughly researched the purchase process, including whether commission rebates are possible. Because of their research, they often feel they know everything they need to know about purchasing the property.
Third, and this is probably the most important, these questions indicate the buyers expect you to show them the value that you bring to the transaction.
Like most situations in real estate, this is a negotiation between the agent and the buyer about the nature and the cost of the services between the parties. There are two steps to follow if you want to take control of the situation.
First, you must be prepared with specific resources when the buyer raises these questions. For example, be sure to include a Buyer’s Guarantee of Services. This is a list of the services you provide as well as your personal signature that marks your commitment to deliver on what you promise. Other suggestions include how to comparison shop for the best mortgage deals, a package of sample transaction documents, plus a list of inspectors, repair people, etc.
The second step is to ask a question. Questions put you in charge of the situation. Remember, the moment you need to justify your position, you lose. Using the four questions above, here’s how to use this approach.
1. Why should we work with you rather than other agents?
Agent: "Here is a copy of our Buyer’s Guarantee of Services for you to review. The guarantee outlines the specific services we provide to our buyers. Please feel free to interview other agents and then choose the agent who is best suited to your needs. Is that a strategy that works for you?"
This response puts you back in control by asking the client to read your guarantee. Also, it invites a comparison to other agents, which is exactly what these buyers want. The less attachment (i.e., the less of a hard sell you are), the more attractive you will be to them.
2. We have a list of 25 houses we would like to see. How soon can we see them?
Agent: "Before looking at any houses, have you been preapproved with a lender? If so, may I see your preapproval letter? If not, it’s important to obtain a preapproval letter before you start looking. That way you’ll know exactly how much you can pay for a property. More importantly, it many cases a preapproval letter can help you get a better price as well. Is getting a better price important to you?"
This response can save you tremendous amounts of time by avoiding clients who are not truly qualified to purchase. Rather than chauffeuring them around and showing houses that may not be right for them, this helps both parties limit their search to houses they can actually afford.
3. Are you willing to give us a commission rebate?
(In some states it is illegal to pay a rebate or referral fee to anyone unless that person holds a valid real estate license. Be sure to investigate the exact requirements in your state.)
Agent: "If my company gives you a commission rebate, the rebate must be disclosed to your lender, to the seller and to the seller’s agent. The net effect is that the seller wants the commission reduction since they are paying the commission. If you’re counting on the rebate as part of your downpayment, this can also cause problems in terms of qualifying with your lender. Which is more important: getting the right house at the right price or possibly being unable to close due to a potential conflict with the seller, the other agent and the lender?"
This approach places the decision back on the buyers rather than having to defend why you won’t do a rebate. If they still want a rebate and your company prohibits this practice, politely thank them for their time and refer them elsewhere.
4. Can we obtain a discount on our mortgage services?
Agent: "Comparison shopping for your mortgage is a smart idea. You have three options. You can locate your own mortgage broker; you can use one of the online mortgage companies that provides a comparison of a number of different lenders such as LendingTree or Zillow; or I would be happy to give you a recommendation to three of the lenders I normally use. Which of these strategies works best for you?"
Like the other four responses, this approach avoids having you defend your position.
To ask more powerful questions, a great formula to follow is to outline the sellers’ options and then ask which solution works best. This simple approach is an excellent way to strengthen your negotiation skills.
Do you need more help with controlling the negotiation situation with sellers? Then don’t miss Part 3 of this series.
Bernice Ross, CEO of RealEstateCoach.com, is a national speaker, trainer and author of "Real Estate Dough: Your Recipe for Real Estate Success" and other books. You can reach her at Bernice@RealEstateCoach.com and find her on Twitter: @bross.
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