Your home is on the market. It’s 9 a.m. The phone rings with a warning that prospective buyers are coming between 10 and 12. You rush the kids through their cereal and send them to perform their assigned chores. Mary makes all the beds; Jerry loads the dishwasher, takes out the trash, and wipes down the kitchen; you quickly check all the bathrooms to make sure no one left yesterday’s clothes on the floor and grab the Windex to polish the faucets and sinks.
Your spouse closes the closet doors, pulls open the drapes and blinds, turns on all the lights, turns off the TV, and changes the radio station from talk radio to soft rock. There is barely enough time for everyone to grab their sweaters and get out the door by 10. Oh, don't forget to confine the pets. Whew! You can only hope this buyer is the one who will make an offer so you won't have to go through this drill any more.
Determining whether prospective homebuyers are “real” or “fraud” is up to the agents. You assume they wouldn’t waste their time or yours. That’s one of the reasons you listed your home with a real estate agent and agreed to pay those “big bucks”. You KNOW that a FSBO (For Sale By Owner) has to let every caller in to see the house – including the people looking for decorating ideas, the people who can’t afford your home, and even criminals who are “casing the joint”. So how do agents separate legitimate buyers from the pretenders?
1. Come into the office –
If a prospective buyer is not willing to come into the agent’s office, chances are they’re not serious buyers. I generally begin by asking buyers for photo identification and leaving it in my office before I get into a car with them. I figure that an axe-murderer, rapist or robber probably won’t be inclined to provide this identifying information. As far as I’m concerned, these folks will have to settle for open houses and FSBO properties – they’re not getting into a car with me! (P.S. – That’s one of the reasons I do not hold Open House.) Of course, I have a standard questionaire for all prospective buyers - Fair Housing Laws require that I treat each buyer the same, and this "standard procedure" is the best way for me to document that I do.
2. Loan pre-approval –
If a prospective buyer has a loan pre-approval from one of the lenders I recommend, the loan officer who I know and trust has verified to the extent possible that this individual is who they say they are by verifying employment, assets, and cash on hand. If someone walks into the office with a loan pre-approval in hand, as far as I’m concerned, they might as well not even have one. This prospective buyer may or may not be pre-approved (anyone can "fake" a loan pre-approval), and may or may not be who they say they are. They could be frauds! And, assuming they are who they say they are, the agent should show them only homes for which they qualify financially.
3. Match properties to buyers –
Having completed the first two steps – verifying the buyer’s identity and financial qualifications – the next step is to match the buyer's wants and needs to properties. Does this home purchase require something to happen before they can buy such as selling their current home, getting a new job, receiving an inheritance that is in probate? Is this move necessary, such as relocation for a new job, or optional, such as a move-up to a larger home? Do they want/need to settle in 30 days, a year, or somewhere in between? Does your home have the features they are looking for in a home? You rely upon agents to know these answers before they bring strangers into your home… don’t you agree?
While I can’t promise that all real estate agents take these same precautions before showing your home, many do. Frankly, these three steps are essential for any buyer’s agent for two reasons: 1) The safety of you, your family AND the agent; and 2) so you and the agent don’t waste time with prospective buyers who won’t or can’t buy your home.
Determining that homebuyers are real and not frauds BEFORE agents show your home is a reasonable expectation for you as a home seller when you list your home. You shouldn't have to ask yourself "Are these homebuyers for real?" Agents, if you’re reading this, take note.
More information:
Are these homebuyers for real?
Copyright 2007. Al rights reserved. Margaret Woda
14 comments:
Margaret - I agree with you completely.
Unfortunately, while many agents do value their time and make sure it is worth while to spend it with a potential buyer, some other agents are happy to be pop-tarts.
This is why I make all my own appointments.
I wrote a post about this and with your permission would like to share it.
"1. Come into the office - " - That's the key for my team members - and many a Buyer has fallen at that first fence!
My wife also sells real estate and I am always tellling her sort of the same things. I don't know if you guys heard or read about it, but in Mckinney Texas, we had a new home sales lady murdered in a model home a few months back. There is no need to take chances if you feel something is not right.....
Great post. I always have a buyer's consultation before I take a client out.I believe every buyer should be qualified. It is as important for you to decide whether or not you want to work with them as it is for your client.
Great post- This is a "must" list for every agent working with a buyer. Not a bad idea to meet the "seller" at the office as well- for safety reasons : )
Great Rules to weed out all the tire kickers.....I have had my fair share of those lately! (El Paso County, Colorado)
Margaret,
Your words should be required reading for every seller who demands an open house at his under-improved and over-priced home. Heck, for ALL the sellers out there who "just want some traffic"...
The world is a dangerous place, and a large part of what we should be doing for sellers & buyers is to be aware of those dangers, and work to minimize them for our clients. Buyers who can not be bothered to spend a few minutes at the office ought to have a very good reason - maybe the office is far away - but even then, a corner Starbucks is always close. Stay safe, stay smart!
Maricopa Co., Arizona
I always wondered how agents qualify buyers. This was very informative. Thanks!
Louise - Crofton, MD
From a perspective of one who sold her house 1 1/2 years ago, you would HOPE that the realtor has weeded out the 'chafe' from the 'grain'....my children are grown and the only thing that my husband and I needed to worry about when showing the home was getting 3 dogs out of the way. They are little and they are yappy - definitely a distractiion to anyone coming into the house. However, I also sold a house when the kids were little and that was even more difficult! Kids can make a mess and it's so hard to make the house look presentable when there are toys and stuffed animals everywhere! I feel for the sellers!
It is just plain negligence to take a prospective home buyer in a home for which you do not know that they are qualified to buy. Mindless home tours are unprofessional. If a buyer isn't willing to provide financial information about what they qualifications to buy, they shouldn't be entering sellers' homes. If they want to tour Open Houses, that's different. We can't require that only qualified buyers tour OPENs.
It is the responsibility of any agent to know the buyers' financial ability to buy before taking them in a home for sale.
Agent Responsibility, WHAT A CONCEPT!
Great post - I would love to get a copy of the buyer questionnaire you use.
I agree that these should be performed by each agent that is going to work with buyers. I noticed you said that you don't hold open houses. I will admit that some places that I've held open make me very nervous, especially the BIG homes in the expensive neighborhoods. It's almost impossible to keep up with two groups of people coming through at the same time. Thanks for the post - you made some great points!
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