Category Archives: Working with Buyers

Three Simple Pre-Qualification Questions

So your property is now up for sale and the buyers are calling and want to see your house.  You scheduled four showings tomorrow, but you don’t know if any of the buyers are good candidates to purchase your home, so here is what you do; ask these simple questions before ……

  1. “John, are you working with a Realtor?” If “yes” then you want to make sure the Realtor is going to accompany the buyer.  That is why you offer a buyer’s agent commission so let the Realtor work it.  If “no” go to question #2 and #3.
  2. “Do you have a home to sell before you can buy one?” If “yes” they are what we call a contingent seller, and if they say “no” they are a very desirable buyer.
  3. “Have you been to the bank?” This tells you if they are pre-qualified.  If they tell you that they have not been to the bank, you need to tell them to call Karen at Premium Mortgage 585-746-0987 (She is great)  and to call you back after meeting with Karen for an appointment, so that you are not wasting your time.

Don’t waste your time with tire kickers, make sure buyers are serious about purchasing a home upfront, then you know you are talking to the right person!  Good Selling!

*Thanks to Rebecca Burcher our New Hampshire List2Move.com affiliate for the inspiration.

Disadvantage to Manual Combo Lockboxes

Lockbox Caper – Combo Boxes Lead to Home Invasion in Detroit ~
Click here to watch the video

WXYZ, Channel 7 in Detroit, reported on 10/17/2008 that two women allegedly broke into listed properties using lockbox codes.  One of the women worked for an appointment setting service, and used her access to the codes to get into the lockboxes.  The two women allegedly stole thousands of dollars worth of merchandise from several homes before getting caught.

 

In tough economic times, desperate people will increasingly exploit security vulnerabilities.  While we are proud to provide the most secure lockbox system available to you and your clients – one that is not susceptible to the vulnerabilities created by one-day codes and contractor codes – we also recognize the reality that boxes utilizing combinations are still occasionally used.  For those agents who do utilize combo boxes, we encourage you to change the codes frequently, for your safety and the safety of your clients.

 

The other option is an Electronic Lockbox where only Realtors can access your property and when they do the lock box electronically logs them in and out by name and date and times.  This is a big advantage.

Advertising Open Houses

If you are advertising in the Democrat and Chronicle or any other form of print media for Open Houses, do it efficiently.

Tips,

  • Include your Address (helps buyers pre-qualify themselves as to location)
  • Include your Phone Number (encourages them to call with questions)
  • Include your Price (helps buyers pre-qualify themselves –  you don’t want to talk with people who can’t afford your property)
  • Include your Realtor MLS number (discourages agents from soliciting you)

Photo ads (Best Buys) are expensive and ineffective, so we don’t recommend paying the extra dollars.  Instead,  include a URL (web site address like www.list2move.com in your ad.

One of our previous customers said…

“Hold open houses, but don’t spend too much on ads in the paper. We kept an Open House sign in sheet, asking for names, address, phone number and where they heard about us. Over 75% said they were just driving by and hadn’t even known there was an ad. We put open house signs on the corners of most intersections within a mile of our home. In our experience, signs bring more people in than ads.“Other open house tips . . . Relax and let people tour your home without you trying to sell it too hard. Be confident that it will sell, and don’t ever appear desperate, even if you are. Do point out advantages and things you love about your home. This is where no agent can do a better job than you. “We love this enclosed porch, and eat out here almost every night in the summer. . . This fenced yard has been a wonderful safe place for our children to play. . . .I’m going to miss my kitchen because it has this large pantry and my herb garden window.” A few well placed comments like this may get even casual lookers more interested. Also mention the convenient location of the neighborhood, how you like the school district, and the friendly neighbors, if applicable. As mentioned before, ask people to sign in. The next day, call everyone on the sheet to follow up and ask if they have any questions. Be brief. You will find that some give you disconnected phone numbers but it may bring someone back for a second look and subsequent offer. “

Just a quick note on sign in sheets -  If you don’t have one down load one here Sign In Sheet and use it; according to Nation Association of Realtors, 98% of all agents fail to follow up on all open house leads. 

If you have any more suggestions or would like to submit a better designed sign in sheet please share it with us so we can share it with the group.  Sign in sheets can be emailed to us at admin@list2move.com

Buyer wants you to pay closing costs?

We see this a lot.  The buyer doesn’t have the cash to make it happen, so they come to you and want you to help them, financially. 

In cases like this, the buyer is often qualified to purchase the house, but they are short on cash, so the banker who pre-qualifies them tells them how to structure the deal.

Your concern naturally is what are you going to net out of the property after all expenses, including the concessions.  The trick, that has worked for many sellers, is simply adding the amount of the concession to the purchase price in a counter offer.  

Pre Qualifying Buyers is Easy

No joke, it really is easy. 

First of all, I would never show a home to an unqualified buyer in any market because I personally don’t like waisting my time, so you shouldn’t either.  You have a life to live, so go ahead and live it by being smart. 

Here is all you need to do, we’ll role play it.

(Phone) Ring Ring Ring…

You – Hello

Buyer- Yes I would like to make an appointment to see the home at 123 your address.

You- Great, who am I speaking to? 

Buyer- My name is John.

You - John,  have you been to the bank yet? 

Relocation Buyer Response - No, I haven’t but we just sold our property in Arizona and we are relocating to Rochester, NY (You know at this point, there is a good chance he is “bankable” so take the chance and make the appointment.)

First time home buyer response- No, we are just getting started looking. 

You- Oh that’s great, well John in order to set up an appointment we would need you to have a pre-qualification letter that says you are a qualified buyer.  If you call David White at Canandaigua National Bank, here is his cell phone number, (585) 330-4360 he could probably have you pre-qualified in an hour.  Tell you what, give me your number and I will personally have David call you directly, that way we can get you through the house.  (By taking John’s number, you are now in control of John’s pre qualification process and you could be helping John buy your house.  David will love you for bringing him business and he will call you back to tell you if the buyer has been qualified) 

Should I try to Pre-Qualify people in an open house?  I wouldn’t out of my way, but if a buyer showed interest I would definitely ask them if they had been to the bank. 

Offer/Counter-Offer Strategy (Rule of Thirds…)

Check out this video. Works for us…. Probabilities are interesting and believable. 

httpv://youtube.com/watch?v=kbDIqmg_fe8

Example: List Price $200, 000 with offer of $185,000 (the difference is $15,000)

  • 80% Probability the buyer will come up $5000.
  • 50% Probability the buyer will come up $7500
  • 20% Probability the buyer will come up 2/3 $10,000

Recommendation: In order to end up in the middle third, come down about  30-33% or $4,500-$4,950 on the first counter offer.  That would put your price on the counter offer at around $195,500-$195,050. 

Lee says that chances are that the buyer will then come up about 1/3 at about 80% probability which puts them at about $189,950. (now your negotiating difference is about $5000 –  which has narrowed) 

Can the Bank Mandate an Engineers Inspection?

One of our sellers called yesterday and asked this question… “The buyer called me tonight and said that he cannot get a commitment letter until the home inspection is done by the bank.  Is this true?”

In this case the buyer had wavied the engineer’s inspection and had applied for a conventional mortgage. The bank most likely wants to get the appraisal done, not an engineers inspection. I don’t know any conventional bank that has ever required a home inspection.

Property Condition Disclosure

We would like to acknowledge and thank John Blyth, Esq. for his expertise on this subject.

Many real estate agents will tell you that the Property Condition Disclosure is “required” and you have to fill it out. This is not true. You have options…Please read John’s remarks below… Download here…. Property Condition Disclosure

The New York Property Condition Disclosure Act (the “PCDA”) affecting the sale and puchase of residential property in New York is found in Real Property Law, Sections 460 through 467. It became effective on March 1, 2002.

The PCDA requires the seller to deliver to the residential buyer a 48 question Property Condition Disclosure Statement (PCDS) and provides for actual damages for willful failure to provide truthful answers based on actual knowledge OR a credit of $500.00 at Closing for failure to deliver the PCDS. The provision regarding the $500.00 credit is found in Section 465 of the Act.

Upstate, where the broker usually fills in the blanks in a bar association contract, a PCDS is routinely being delivered. Downstate, where attorneys prepare the contracts and transactions often involve larger prices, the seller often opts to give the $500.00 credit instead of delivering the PCDS.

There is a body of case law developing in New York where sellers have been found liable for willful failure to provide truthful answers based on actual knowledge. Rather than face this potential liability, some sellers have preferred to give the $500.00 credit. The buyer should be encouraged to make its own due diligence investigation by responsible professionals (engineers, etc.) responsible to the buyer.

See Karl B. Holtschue, Responses of the Legislature and the Bar Associations to Court Decisions on Sales of Residences, NYSBA N. Y. Real Property Law Journal, Spring 2005, Vol. 33, No. 2.

John E. Blyth, Esq.
141 Sully’s Trail,
Suite 12
Pittsford, NY 14534
Tel: 585-586-0590
Fax: 585-586-2297

Marketing to different Types of Buyers

There are really four types of buyers of which you should pay attention to the first two:

  1. Buyers in a Hurry (those that just sold their house, or are relocating)
  2. Buyers not in a hurry ( 1st time home-buyers, and people who are upgrading)
  3. Investors ( these people are looking for a steal or a great deal)
  4. Tire Kickers ( these people are not serious buyers, they are more interested in striking up a conversation, or checking out your curtains etc…)

Obviously the first two types are where the money is, so how do you weed out the investors and the tire kickers? We do this by pre-qualifying the buyer… this is a piece of cake, and you can do it… we will explore in a different post.