6 Tactics To Temper Your Home Buyers Expectations In A Sellers Market
It’s currently a seller’s market, but that also means that the inventory of available homes isn’t enough to satisfy all buyers. More than one person might be interested in a single listing. Unfortunately, buyers sometimes see a specific home, fall in love with it and can’t be dissuaded from purchasing it, even if someone else outbids them or the home isn’t the best match for them.
In big cities, such as Chicago, inventory is particularly low, which drives prices higher and may price some first-time home buyers or those looking to downsize their expenses out of the market. It’s important to prepare your clients for reality versus expectations as they begin their hunt for the home of their dreams — or as close to their dreams as possible.
Create a Vision Board
Take the time to suggest a vision board for your clients, whether physical or on a site like Pinterest, on which they list their must-haves.
Examples might include photos of a dream kitchen, notes about a large yard or other features. As they look at different listings, they can compare their vision with what is on the board.
Perhaps the house that just went on the market doesn’t have their dream kitchen, but the price is low enough that they can easily work on the home and get that kitchen. The board also keeps what they want in the Realtor’s mind, allowing you to schedule a viewing for a new listing the minute it comes on the market.
Stress the Value of Improvements
While a turnkey home is attractive to homebuyers because they can move in and not worry about doing a single thing, it isn’t always realistic for buyers on a budget.
If their budget doesn’t align with their wants and needs, stress the value of buying lower and making some improvements on their own. Buyers can expect a 70 percent return on investment from improvements to the exterior of the home, such as new siding. This not only gives them something to take pride in, but can also help them financially down the road.
Be Upfront About All Expenses
In the world of real estate, referrals and repeat business drive your success over time.
Make an effort to present a clear picture of all the expenses a home buyer has after purchasing a home. Go over how much property taxes and mortgage insurance are and how they’re added into the overall payment.
Explain the average utilities on that home and the cost of maintenance. Having this information presented clearly allows buyers to choose a house they can truly afford, even when all the little extras are added in.
Teach Buyers Seller Secrets
Take the time to teach your buyers the tricks that sellers and real estate people use to make a property seem more attractive.
Yes, you’ll be giving away some of your own secrets, but you’ll also educate your buyers so that they don’t make a mistake they have to live with for years to come. Instead, they’ll understand that “quaint” means the place needs some work.
Take the time to work with your buyers, particularly first-timers, to get them pre-approved for a mortgage.
Make sure they understand closing costs and how much of a down payment they’ll need for the price range they’re shopping in.
About 40 percent of the younger generation says they aren’t saving any money for a down payment on a home. Make sure the buyer understands how much they’ll need to move forward. Doing so avoids a scenario where the clients fall in love with a house they can’t afford and everyone walks away heartbroken.
Prepare for Contingencies
In nearly every home purchase, the home inspection will turn up something or several things that buyers want fixed.
Prepare your buyers so that they know the inspection is there to cover them. If the things that turn up are expensive fixes and the seller balks, the buyer needs to be prepared to simply walk away from the deal.
It’s hard to walk away once you’ve invested that level of time and resources, but if they don’t, they could wind up with a money pit where they continuously have to fix things. Another option is to ask the home seller to provide a home warranty for the first year or two to cover any major repair expenses, such as a furnace going out.
Emotion Versus Good Business
It’s hard to leave emotions out of the home-buying process. After all, your clients purchase a place where they’ll live out their days, raise families and have gatherings of friends and those they love. It’s an emotional decision in many ways.
However, if your buyers approach purchasing a home from the emotional side of things, they won’t be as likely to make smart business decisions. Do your best to guide them toward smart choices that will protect them financially, but at the end of the day, remember that you also have to deliver a house they’ll love. When you balance those two competing needs, you’ll win both as a real estate agent and as a person.
millennial experiences in renting and homeownership.
You can read her latest tips on her blog, The Estate Update,
and follow her on Twitter @HollyAWelles.