Category Archives: First Time Home Buyers

Changing Seats at the Real Estate Negotiation Table

I have worked with many home buyers over the years and done my fair share of real estate contract negotiations. Many eventually call me when it is time for them to list their home for sale. These repeat customers are the highest form of compliment an agent can receive. When a past buyer contacts an agent to sell their home, it conveys their confidence in my expertise and I successfully earned their trust and built a positive relationship with them. The buyer then becomes the seller.

There are many types of home buyers and sellers. Each specific category brings its own unique perspective when looking to purchase a new home. First time home buyers can sometime require a greater degree of hand holding as they navigate the home buying process for the first time.

They are often unfamiliar with the process and need to feel reassurance as the transaction moves from offer to closing. More seasoned buyers may not need as much information as a first timer, however still need an agent that has a proven track record of negotiating, a keen sense of the market and valuation, and strong communication skills.

For buyers, agents are tasked with ensuring that the buyer’s sales price is as close to market value possible and to facilitate the successful completion of the transaction. For sellers, agents are relied upon to come up with an accurate valuation of market value and to get the home in front of as many potential buyers as they can.

In a real estate transaction, the perception of the buyer is often that they are in a subordinate position. The seller has the final say about what offer they will accept. When a buyer turns into the seller they can often get drunk with power.

I noticed an interesting trend developing when past buyers become sellers. The mindset, perspective, and attitude is definitely influenced by which side of the transaction they are on. How a particular client is as a buyer does not always indicate the kind of seller they will be.

real etsate negotiationsI chuckle when a seller is unwilling to repair something that their buyer has requested and believes that the buyer is being petty or inflexible. Negotiations can go off the rails when ego take over. I often have to remind them of their requests when they were purchasing the home.

When they put the selling hat on they can be offended when a buyer asks for closing costs, even though they received closing assistance when they purchased the home. In fact many of them could not have purchased the home in the first place without the seller concessions.

When a buyer is making an offer they ask for the moon and hope to get a star or two. Buyers feel that sellers should help cover closing costs and accept an offer that may be below market value. Sellers feel that it is not their job to give up any of their profit for the sake of a buyer. Understandably, sellers want to walk away with the most money possible. Round and round it goes. This is the challenge that agents face regardless of which side of the transaction they may be working.

Tips for better real estate contract negotiations.

When the buyer becomes a seller, it is my job to remind them that moderation and compromise are a part of a successful outcome for both parties. Walking a mile in the seller’s shoes may take years for a past buyer to experience. Watching a loyal and satisfied customer experience both sides of a transaction can be frustrating and even amusing at times. The opportunity to see things come full circle is a reminder that walking a mile in someone else’s shoes is one of the most effective and powerful teaching moments in life.

 

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Firing A Buyer in Real Estate

Firing a buyer is never pleasant and is one of the most difficult decisions a real estate agent can make. The concept of caveat emptor is as old as dirt and I bet there are few out there who are not familiar with its meaning. Real estate professionals are well aware of this phrase. Buyer beware. It is a simple concept that speaks to the need for due diligence prior to any purchases.

The burden of information gathering and sound decision making rests on the shoulders of all who find themselves in the position to buy something. But what happens when the real estate agent is the one who should beware?

In real estate, the nature of the contracts we use afford buyers numerous opportunities to make certain they understand every detail of a property. Home inspections are a key example of this. Buyers who choose to forgo a home inspection are the poster children for the buyer beware club. Most buyers are very diligent in their efforts when they are purchasing a home. It is my job as their Realtor to impress upon them the importance of home inspections.

This week I “fired” my first buyer. The experience got me thinking about the concept of Caveat Realtor. Realtor beware. When a buyer contacts a real estate professional they have an expectation that we will offer our services, time and expertise to help them navigate the often stressful and unpredictable road to home ownership.

First time home buyers are my favorite buyers to work with. They rely upon me to explain the process and help them achieve their dream of owning a home for the first time. They are often terrified but full of enthusiasm. There is no greater feeling than watching first time homeowners receive the keys to their first home. This is the feel good part of selling homes.

Other buyers can be a challenge. The ability to work well with different personalities is a critical skill and is not mentioned very often in the real estate textbooks. There are many kinds of buyers. Some are more active in their home searches, others take a passive approach. I have worked with them all over the years. I never thought that I would have to decline working with a buyer. I am very good at adapting to demanding and difficult personalities. Last week that changed.

The buyer was adamant about what she estimated the value of homes to be. My comps did not matter. For three weeks I did my best to educate and present information to support why her low ball offers were not being accepted. She required that I respond immediately to her texts, emails and phone calls. I complied. We looked at many homes and submitted a few offers, all of which were rejected. I was blamed for the rejected offers. The price range of the homes she was interested in made it worth my time to suck it up and deal with the demands. The entire time I was professional, realistic and accommodating.

She let me know that she was also conducting her own search and that if she found something that I did not show her that I would not be the selling agent.  I had hoped to convince her of the benefits of committing to one agent for her search, she was not convinced. She would contact listing agents directly on the properties that I had shown if I did not respond to her immediately.

It was a bit of a nightmare. A day after the last rejected offer, she called to let me know that she had found a for-sale by owner that she would be putting a contract on. I cautioned her about the risks and she thanked me. I was not surprised by this. I was disappointed, but not surprised. Mea culpa.

Three weeks after later she contacted me again to let me know that the FSBO fell through and that she wanted me to resubmit an offer on a HUD home. I told her that I would be asking her to sign a buyer agreement before we went forward. I explained that I had numerous buyers and sellers in my pipeline and I was unable to continue working with her if she was going to continue the search on her own at the same time. She refused.

Simply, spending the amount of time and energy that she required would not be the best use of my time if she found something on her own again. I got burned once before and it made sense to cut her loose. I gave it the old college try. I never like to end a relationship with a potential buyer. There was no other option with this particular buyer.

As real estate professionals we must be able to work smarter and harder, but not be willing to run in circles without a commitment from a buyer. There are exceptions to every rule and the vast majority of buyers we deal with are not like this one. However, understanding that there are times when the situation dictates letting a buyer go is the perfect illustration of Caveat Realtor in practice.

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Renters are Future Customers

Spring is in the air and I have been inundated with renters. I currently market through Realtor.com and have been getting an inordinate amount of rental requests. I have, on occasion, been privy to the fact that some Realtors complain about rental customers and many even will not put any effort into helping them find housing because there is no payday at the end of the deal. Many think that is not worth their time for a couple of hundred dollars in a lease or referral fee. I take a different approach.

I get it. Renters can be difficult to work with. Usually this is because they are unaware of the fine art of securing a rental. They often do not understand that renting a home is not like negotiating the price of a home that is for sale. I just had one that I was working with decide to negotiate a rental rate. In the area that I live in this is not something that landlords appreciate or ever do.

The rental market is very competitive and she did not get the home. I explained that this was not recommended but she did it anyway. The fact that she did not heed my warning will not prevent me from continuing to work with her when she call me with the next home she found listed on Zillow or Trulia that she is interested in. Water under the bridge.

Of course these can be frustrating situations to deal with. However, renters are potential buyers in the future. Building a relationship with those who may not be financially ready, willing or able to purchase a home yet is important, even if it may not pay off on the front end. You have the opportunity to educate them about the home buying process right out of the gate. You can become their resource while they begin taking the first steps towards homeownership in the future.

When a renter contacts me, I always ask the reasons why they are choosing to rent. Many think that this is their only option. This conversation opens a dialogue and allows for the opportunity to begin explaining the home buying process.

One of the biggest challenges that I deal with as a real estate agent is when a first time home buyer comes to me and has no idea about what they need to do first when they are ready to buy a home. They want to look at homes and have no idea about if or how much they qualify for. Many do not know their credit scores or anything about lending.  I have the opportunity to plant the seeds that may grow into a future sale.

I wish that more agents would realize the diamonds in the rough that renters are. Many rent because their finances are shaky or their income is not yet where they would like. Many do not know that buying is within their reach. Explaining what lenders require before you can qualify for a loan is one way that can help them begin to take the necessary steps for future home ownership. I let them know that looking for homes is the last step in the home buying process. They usually have a very confused look on their faces.

I will always do my best to show homes to renters. Not only is it a great way to meet new people and expand my network but it also goes a long way to showing someone that you are helpful. This is why I do what I do. I remember the days of renting. It can be difficult to find housing and often landlords are all business.

For younger clients this is their first go around on their own and helping them to ease their concerns about where they will live is just kindness. No, I do not plan on making the millionaires circle by working with these renters. I do walk away with the satisfaction that I have done a small part to help meet the needs of a future potential buyer.

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LONG STRANGE TRIP

As a Realtor, I am fortunate enough to meet many diverse people on a daily basis. Between networking with potential customers and keeping up with past clients there is never a shortage of interesting people. I have been working with out of town customers for almost two years now as they search for the perfect Florida home for their family. Working with this family has become somewhat of an adventure. We have had the good fortune to find some amazing properties together, however none have panned out up to this point. There have been many opportunities but for some reason not all of the stars have aligned for them to this point.
The Monastery
They are not cookie cutter kind of people. From our first phone conversation I knew that these buyers were not representative of the typical kind of buyer that we all work with on most days. From the start, I knew that they were looking for something unique, and in Florida, aka the land of subdivisions and HOA’s, that this was going to be a challenge. They wanted acreage, a workshop, a pool and something that they could put their own stamp on. Together we have toured a vacant monastery, complete with bell tower and a chapel that was missing portions of the roof. Initially they considered opening, renovating and operating a bed and breakfast property that could also double as a residence for their family.

Given that these clients are from up north, they have had to make special trips down when they have had time to get away. We have built a relationship over the past two years and at this point I pretty much know what they want and do not want. Last summer, we put a contract on their perfect home, however there were issues with the financing given that it was a VA loan. We named this one the EPCOT house as it was a custom home built in the 1980’s and literally looked like something from Future World. This broke both of our hearts for many reasons. Even now, this home is still the measuring stick for what their new home should feel like. Throughout this search I have always reminded them that when the time and place were right that things would fall in place and become a reality.

EPCOT

To date this has not happened. Each go around we have made more progress toward the goal of homeownership for them in Florida. As a Realtor, I often hear complaints from other agents about working long and hard and not having a commission check to show for it. I have also been told that some agents have dropped clients because on paper they were losing money in the end because the time spent with them had not yielded a pay day. I suppose I could be one of these agents. I am not. I am honored and rewarded by the fact that these clients have chosen to stick with me this whole time. My business model has always had loyalty and hard work as its top priority. Sure, it has taken some time to find them something that feels like home and fits their needs, but all good things take time.

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On their last trip down a couple of weeks ago they wanted to tour a home about 90 miles from my main area. A home that was dome shaped and a peachy flesh color. We agreed to refer to it as “The Boob” home. It seriously looked like a boob. We all got a middle school chuckle from this property for sure. Did I mention that these clients are perhaps one of my favorites of all time? They felt awful about my having to drive so far to show them this home. They even gave me the opportunity to refer them to a new agent given that their latest round of unique properties were out of the immediate area. They let me know that they wanted to continue working with me, but understood if it would be too far for that to happen. Their consideration is something that I truly appreciated. Of course, I let them know that I would be happy to work with them. When you invest time in high quality and kind buyers, you have no problem going the extra mile, literally, to show them homes.

At this point I am just as invested in seeing this happen for them as they are. I love a challenge. Weeding through properties trying to find that one unique home out there that was meant for them is high on my list of things to do. The lesson that I have learned with these particular buyers is that selling homes for a living is much more than paperwork and commission checks. Realtors work with humans, with wish lists, and questions about schools and inspections. We console disappointed buyers when contracts are not accepted or banks change things and financing hits a wall.

Our need for patience with the deals that may take years to complete is something that cannot be stressed enough. Our job depends on our ability to remain as loyal to our long term clients as are with us. I have had more fun with these buyers over the course of the past two years than any other to date. It hardly seems like work given the relationship we have built while we waded through muddy fields, laughed at odd floor plans and discovered really awful record collections in dilapidated workshops with no electrical wiring. Working with this particular family has been a long strange trip indeed and I am certain when their buying journey is over that my compensation will include not only a commission check but things that money cannot measure.

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Long Strange Trip

As a Realtor, I am fortunate enough to meet many diverse people on a daily basis. Between networking with potential customers and keeping up with past clients there is never a shortage of interesting people. I have been working with out of town customers for almost two years now as they search for the perfect Florida home for their family. Working with this family has become somewhat of an adventure. We have had the good fortune to find some amazing properties together, however none have panned out up to this point. There have been many opportunities but for some reason not all of the stars have aligned for them to this point.

They are not cookie cutter kind of people. From our first phone conversation I knew that these buyers were not representative of the typical kind of buyer that we all work with on most days.  From the start, I knew that they were looking for something unique, and in Florida, aka the land of subdivisions and HOA’s, that this was going to be a challenge. They wanted acreage, a workshop, a pool and something that they could put their own stamp on. Together we have toured a vacant monastery, complete with bell tower and a chapel that was missing portions of the roof. Initially they considered opening, renovating and operating a bed and breakfast property that could also double as a residence for their family.

Given that these clients are from up north, they have had to make special trips down when they have had time to get away. We have built a relationship over the past two years and at this point I pretty much know what they want and do not want. Last summer, we put a contract on their perfect home, however there were issues with the financing given that it was a VA loan. We named this one the EPCOT house as it was a custom home built in the 1980’s and literally looked like something from Future World. This broke both of our hearts for many reasons. Even now, this home is still the measuring stick for what their new home should feel like. Throughout this search I have always reminded them that when the time and place were right that things would fall in place and become a reality.

To date this has not happened. Each go around we have made more progress toward the goal of homeownership for them in Florida. As a Realtor, I often hear complaints from other agents about working long and hard and not having a commission check to show for it. I have also been told that some agents have dropped clients because on paper they were losing money in the end because the time spent with them had not yielded a pay day. I suppose I could be one of these agents. I am not. I am honored and rewarded by the fact that these clients have chosen to stick with me this whole time. My business model has always had loyalty and hard work as its top priority. Sure, it has taken some time to find them something that feels like home and fits their needs, but all good things take time.

On their last trip down a couple of weeks ago they wanted to tour a home about 90 miles from my main area. A home that was dome shaped and a peachy flesh color. We agreed to refer to it as “The Boob” home. It seriously looked like a boob. We all got a middle school chuckle from this property for sure. Did I mention that these clients are perhaps one of my favorites of all time? They felt awful about my having to drive so far to show them this home. They even gave me the opportunity to refer them to a new agent given that their latest round of unique properties were out of the immediate area. They let me know that they wanted to continue working with me, but understood if it would be too far for that to happen. Their consideration is something that I truly appreciated. Of course, I let them know that I would be happy to work with them. When you invest time in high quality and kind buyers, you have no problem going the extra mile, literally, to show them homes.

At this point I am just as invested in seeing this happen for them as they are. I love a challenge. Weeding through properties trying to find that one unique home out there that was meant for them is high on my list of things to do. The lesson that I have learned with these particular buyers is that selling homes for a living is much more than paperwork and commission checks. Realtors work with humans, with wish lists, and questions about schools and inspections. We console disappointed buyers when contracts are not accepted or banks change things and financing hits a wall.

Our need for patience with the deals that may take years to complete is something that cannot be stressed enough. Our job depends on our ability to remain as loyal to our long term clients as are with us. I have had more fun with these buyers over the course of the past two years than any other to date. It hardly seems like work given the relationship we have built while we waded through muddy fields, laughed at weird floor plans and discovered really awful record collections in dilapidated workshops with mold. Working with this particular family has been a long strange trip indeed and I am certain when their buying journey is over that my compensation will include not only a commission check but things that money cannot measure.

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Feels like the first time.

I love first time home buyers. Many Realtors that I have spoken to pick this group as their least favorite to work with on a transaction. There is nothing more gratifying and enjoyable to me than experiencing the buying process with someone who has never gone through it before. Sure, there may be more explaining to do about every little detail and step of the sometimes long process, but the joy that you see as the keys are finally handed over makes the journey well worth the commission.

The time spent with each buyer is like a constant reminder of how important it is to communicate clearly and effectively. They may be green around the gills, but there is no more willing and interested student than a first timer. As I spend time explaining the process, my skills are being honed as not only as a real estate agent, but also as a teacher. Every buyer is different and may need a different approach. There are those who are decisive and set in what they want and there are others who really just know that they want to buy a home. Helping them navigate the process includes not only great communication, but also a very good understanding of multiple aspects of the journey to homeownership. Dealing with lenders, title companies and the sellers can be very overwhelming at times. Even as a Realtor I have had many days where it seemed like everytime I checked my phone or email there was a newly discovered issue. In fact, this is the case for most transactions and the frequency and urgency of each little fire that needs to be put out is inversely proportionate the the amount of days until the sale is scheduled to close.

As Realtors, it is so critical to remember that we were all once first time home buyers. Keeping a positive and patient approach to those new buyers is always the key to a really happy conclusion. Working with the first time buyer can be a great opportunity to grow professionally and personally. If you have not worked with one in some time I encourage you to seek some out and enjoy being a part of their special once in a lifetime event.

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