You passed your real estate exam, have your real estate license and signed up with a principal broker. Now it’s time to go to work! Most new real estate licensees will begin their real estate career by working with home buyers. ProSchools has some tips for getting started with home buyers:
Home Buyer Objectives:
Determine your buyer’s objectives and find their motivation for buying a home. Once you know what motivates your buyers to purchase a home you can use those key factors to encourage them to move forward and buy.
Make a list of questions to ask your buyers:
- Why do they want to buy a home?
- Do they need more room or need to downsize?
- What is their time frame in moving?
- Do they need to sell a home before buying?
- Do they know what their credit score is?
- Have they been pre-approved for a loan?
- What is the maximum they are approved for?
- What location are they interested in?
- Do they have children that attend school?
- What style of home do they prefer?
- How many bedrooms / bathrooms do they need?
- Do they need a fenced yard?
- Do they prefer master on the main?
- Do they want fixer or a newer home?
- What other preferences in a home do they have?
Pre-Approval for a Mortgage Loan
It is best not to show properties until a buyer is pre-approved to buy a home. Being
pre-approved is different than being
pre-qualified. A pre-approved buyer has submitted an application and is approved for a specific home loan amount.
Pre-qualified is a “guesstimate’ of what a buyer might qualify for before they actually submit an application. You don’t want to look at houses without knowing what the buyer can afford and have them fall in love with more expensive homes and turn down everything in their price range.
Maintain Credit Ratings
Once your buyer is pre-approved make sure to advise them NOT to purchase anything on credit or take out new loans until after they close on their new house. Their credit will be pulled again right before closing and they could be rejected if their credit score changes.
Finding a House
Searching for a perfect home can be frustrating and time consuming. Put your buyers into an automated system that will email listings as soon as they come on the market. You will work with your buyer to create the criteria they are looking for. MLS pictures can be deceiving and you don’t get a true picture of the neighborhood. Make sure your buyer likes the “curb appeal” and neighborhood before viewing the inside. Have your buyer drive by to preview the outside of the homes and neighborhoods of interest before driving them around and showing them homes. If they like what they see on the outside then make an appointment to show the inside of the home. You will save a lot of time by having buyers do their own preview.
Communication with Buyers
Communicate weekly with your buyers making sure they know you are there to help them every step of the way from previewing homes to attending closing. Ask if they found any homes of interest or if you should make any changes to their search criteria. Look for home yourself and send them homes you think are of interest.
Writing and Submitting an Offer:
When you find a home that your buyer would like to write an offer on, call the listing agent to inform them that you will be submitting an offer and discuss what motivates the seller. You will need to find out if there are any other offers on the table. If there are other offers you will need to advocate for your buyers to the listing agent demonstrating why your buyers should be considered. You might ask to present the offer in person to the sellers, however, most listing agents will not allow this and will want you to fax the offer over. In today’s fast-paced working environment most offers are e-faxed or emailed.
You will want to make the best offer your buyers are willing to make if competing with other offers. Talk to the listing agent and find what motivates the seller and try to accommodate those motivating factors in the offer so they will select your offer.
- Does the seller want a fast close?
- Does the seller want to not make any repairs and is willing to take less for the home to compensate for repairs?
- Does the seller have any other issues that could be negotiated?
By doing your homework upfront, you will be able to write a better offer and know what factors are tools for negotiations.
Follow-up after submitting an offer. Call the listing agent and let them know you sent the offer and ask them to confirm they received it. Ask them to call you if they have any questions or concerns. By opening communication up front, you will build trust and save a lot of time and frustration dealing with written addendums in an attempt to make changes to the offer.
Home Inspections
Once you submit an offer you will need to attend the home inspection with your buyers. The home inspectors job is to tell you everything he finds, and he will find things wrong with the house. All homes have issues. It is your job to soften the “shock” of the home inspection report. Discuss what is really important to your buyer to be fixed. If they want to buy the home, both parties will need to negotiate on repairs. If your buyers are prepared, you have a better chance of negotiating your way through to closing.
Communications with Lender and Escrow:
Both you and your buyers will need to have open communication with their lender during escrow. Make sure they turn in any items requested promptly. Your office should assist you in getting all documents to the lender and escrow. By establishing good communications with lenders and escrow officers, you will establish a strong team support for closing.
After Closing
You will want to buy a closing gift for your buyers and ask for referrals. Keep every buyer in your client database and stay in contact. You want them to think of you if they know of someone wanting to buy or sell property and to call you when they are ready to move again.