Managing Buyer Expectations – If You Don’t, They Will

Posted by: Carl Medford on September 28th, 2009

It’s a typical scenario: you get an email from a couple wanting to see a home. Adrenaline surges as a closing check flits across your mind. You eagerly set up an appointment, drive across town, show the property at the appointed hour then set up another appointment to show them more homes on the weekend.

frustrated-realtor-drivingFriday comes and you get an email with 17 MLS numbers they’d like to see. A small gnawing feeling starts working at corner of your stomach as you realize you need to do some educating. You dive into the list and quickly discover that 14 of them are short sales that can be shown by appointment only. That uncomfortable feeling in your tummy is expanding into a minor digestive disorder as you get ready to start making the calls to set up the appointments.

I could go on with scenarios all too common for too many REALTORS® … ending with the unreturned calls, failure to respond to emails and finally the devastating realization that the clients you’ve been carting around for the past three months have just purchased a home from another agent at an open house.

You’ve just been managed.

From the first moment you come in contact with a prospective client, they have expectations. In many cases, these expectations are not based on reality: they’ve been garnered from conversations with their friends, reading posts on sites like HomeGain, Zillow and Trulia and by watching HGTV. Often, their expectations are way out of alignment with reality. It’s up to you to manage their expectations and direct them forward in a positive manner. You’d think it would be easy, yet statistics state that by the time a buyer gets to you, they’ve already been in contact with numerous other Realtors. How do you get this food chain to stop with you?

Bottom line: if you don’t mange your buyers, they will manage you. Right out of business.

In reality, I’ve discovered that most buyers want to be “managed.” Used in the right context, the word “manage” is a good thing. Every successful business and sports team has a manager critical to establishing and maintaining winning ways. Managers are critical. Buyers want to know that they are working with someone who knows the ropes and cancoach-team-effort facilitate a smooth process beginning with them seeing a home online to being handed the keys to their new digs. Don’t like the word “manager?” Think “coach.”

Problem is this: if you don’t have an established process in place for managing buyers, they’ll provide a process of their own. And like it or not, it will seldom end up in your favor.

After much trial and error, we’ve established the following process for managing buyers, especially those coming through sites such as HomeGain.com.

1. We meet with buyers BEFORE we show them any homes.

We want them to meet and get to get to know us, so we set up an appointment in a neutral environment where we can check each other out. Starbucks is a great place to have this meeting – we meet them at the location most convenient for them. In this meeting we do the following:

a. Find out who they are and what their expectations might be.
You need to get to know them and find out if they’re a fit for you. They’re going to use this time to do the exact same thing with you! Start with relationship. If the relationship isn’t clicking, nothing else will work either.

b. Spend as much time as necessary explaining the current market realities.
I bring my laptop so that I can access market data, trends and the MLS. I want them to immediately discover that I’m very knowledgeable about the market – in fact, I want them to understand that I know MORE than anyone they’ve encountered so far. And, ironically, I want them to see that I know more about the market than THEY do. Many buyers know more about the market than the Realtor they’ve been working with. That’s simply unacceptable.

c. Carefully explain the differences between REOs, short sales, FSBO’S, normal sales, etc.
Explain how each works and gauge their comfort level for each. As an example, this is where many buyers figure out that they don’t want to see short sales. It’s critical to do this UPFRONT, or you’ll end up wasting a lot of valuable time down the road.

d. Talk about the pre-approval process.
Explain how they won’t get into your car until you have a PreApp on file. If they plan on looking at REOs, you will also need their FICO scores and Verification of Funds. I don’t show a single property until I have all of these in hand. I also explain the deposit check and how that needs to be handled.

e. Discuss your strategy for getting them into a home.
Explain setting parameters, auto-feeds, how they can let you know what properties they want to see and so on. This is where you discuss the mechanics of the home-buying process.

2. Ask them to commit to you.

I explain that I require a signed commitment form from all of the buyers I work with. It is not a contract (e.g. a buyer/broker agreement) and that they can get out of the agreement anytime they choose. The first two pages of the agreement detail what they can expect from me (I put it in writing so there are no surprises), and the third page explains four things I expect from them. As an example, it states they are not to ask for any of my commission.

3. Clearly explain the process and what they can expect to happen next.

They need information, and it’s your job to provide a constant stream of data concerning all aspects of a transaction. We have all of the steps laid out in convenient forms so they clearly understand the next steps. Here is what they receive from us:

a. An Information Form
This 2-page form gives me all of their contact information as well as lender info, property preferences and expectations they have of me as their Realtor. It also details past experiences so I don’t get blindsided. I show them a copy of the form as we are meeting and explain its purpose. If I get the feeling they’re ready to commit, I email the form to them from the Starbucks as we are meeting. They fill out the fields, save it and email it back to me.

b. A Commitment Form
It’s entitled “Our Commitment To You” and it details what they can expect from us. I explain that I need to set them up for DocuSign and that I use this commitment form to do so. As soon as I get the Info Form back, I send the Commitment Form to them by DocuSign.

c. A Getting Started Form

As soon as I get the Commitment Form back from DocuSign, I send out the next form entitled “Getting Started …” This form details everything that needs to happen next. It’s divided into three categories:

•    Action Items To Get Started
•    Action Items For Your Loan
•    Action Items For Submitting An Offer

I hate surprises, and so I make sure every single item is covered BEFORE we go out looking.

d. A Comprehensive Buyer’s Guide
This guide includes EVERYTHING I want buyers to know and understand about the buying process. It covers EVERYTHING, including how to deal with Open Houses, FISBOs, New Home Builders, a complete set of contract docs, a comprehensive overview of the buying process  … and so on. I wrote it after answering the same questions over and over again … it’s proven to be worth its weight in gold. I give this to them the first time we go out looking. We end up back at a Starbucks, discuss what they’ve seen, then I quickly go through the guide and point out the things I want them to understand (such as “How To Handle Open House Agents!”)

4. Get Started!

The above process may seem a bit arduous, however, it works. There are obviously no guarantees, and you’ll have to prove to them that you are a great person to be with and know what you are doing. However, if you cover all the bases, you’ll discover a few wonderful surprises:

a. Clients “stick”
After all, they’ve signed a commitment form! It’s a very powerful tool that works. You will also have trained them to be loyal to you in no matter what circumstance they find themselves.

b. Clients appreciate your attention to detail
If you’re this detailed up front, they’ll have confidence that you’ll be able to handle all the details to follow.

c. Clients are set up to respond instantly.
If you’ve done your homework and have everything you need in hand, you can generate an offer immediately after viewing a property (from the closest Starbucks). It should take no more than 30 minutes to write it, have it signed by DocuSign and emailed to the listing agent (read my other post, Where Your Office NEEDS To Be … 6 Things You Need To Do To Relocate It NOW).

bullseye-realtorsYou’ll have a comprehensive offer package and, as I’ve discovered, get preferential treatment from listing agents who appreciate your thoroughness. That translates into accepted offers and …

Managed clients. HAPPY clients. Clients who will refer their friends and family and who would never dream of doing business with anyone…

But you.

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Comments

14 Comments on “Managing Buyer Expectations – If You Don’t, They Will”

Portland Real Estate

Proper prior organization is a huge deal. If you have pre prepared market reports and information to hand out to the client right away, you look professional and organized. I like to keep my laptop around too, its my little buddy that keeps track of everything that my iPhone cant.

-Tyler

John

We have all had an experience with the client who thinks he knows all there is to know about real estate and what he does not know, his friends will gladly tell him. He thinks he knows more than you and he holds his friend’s opinions about real estate in higher esteem than he holds yours. It is important to find our early one whether you can work together. Can you position yourself as the real estate expert or assume the position of taxi driver. Or…do you have the guts to walk away from a situation that is unpromising? Whatever the case, the early meeting is essential.

sherry ryan

a link to an example of YOUR “Our Commitment to You” form would be nice

JeanE

pls share a copy of the Our Commitment to You form?

Marc Rasmussen

Great article. Love it. A buyer of mine went under contract this week on a property. She originally emailed me 47 properties to see in a 3 day visit. Fortunately, I was able to “manage” her and narrow down the list.

Mark Brace

If you could provide a copy of sample forms for the information form, commitmnet form, and getting started form, that would be awesome. I’m trying to get more organized and this sound great and I would really appreciate a sample to work off of. thanks

Josephine Semente

I agree with all the comments on having copies of all the documents that would help us getting started.

Carl Medford

I’ll talk to HomeGain about a venue to post the forms – in the meantime, if you want copies, just email me at carl@carlmedford.com.

Susan Thomason

GREAT Article. Boy…I can sure relate! HA. I would love to see all of the written forms you share with your buyers. Would you share?
Thansk so much
Susan

las vegas homes

I’m glad to hear someone else mention that gnawing feeling in your stomach…lol! Is it just me or: the lower the price range, the more listings buyers want to look at? :)

brett

If I were to wager a guess at why, I’d say that users don’t “browse” forms. The interaction style users engage in with forms is different, and requires its own study and design best practices.

work form home

Carl Medford

@Susan: did you send me an email to get the forms?

@las vega homes: you are correct – the cheaper it is, the more they want to see!

@brett: not sure what you are saying – can you clarify please?

Josephine Semente

Thank you Carl. I would appreciate any forms you will be willing to share. I am a SRES, ABR, SFR & would love to have some forms to help me manage my clients in a better fashion.

Carl Medford

Josephine:

Send me your email address – email me at carl@carlmedford.com and I will send you the forms.

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