Setting Expectation When Working with Buyers
If I am able to listen properly and you are able to articulate what your needs are, we should be able to find the home you’ll buy within the first five homes we look at. If I find that within the first five homes we’re not doing that, then we have a problem. At that point, I’ll ask you more questions so I can reevaluate your needs. Fair enough?
Buyer – Setting Expectations of Trust
I’m going to tell you everything about the homes we will be viewing together, both good and bad. My job is to provide you with enough information so that you can make an intelligent and informed decision. Fair enough?
To a Buyer that Wants to See 20-plus Homes Before Deciding
I would be incompetent if I showed you that many homes. You are interested in finding the home you’re going to buy quickly, aren’t you?
Buyer Wants to Think About It
You’re looking at this house today and you want to go home tonight and think about it, and what if there was another couple who saw this home yesterday and they thought about it last night? What if you lose this home? How will you feel if I call you tomorrow and tell you that it’s already sold to someone else?
Let me explain how I work … The first day we’ll be looking at 3-4 homes in 3-4 different areas. You’ll need to tell me exactly what you like and dislike about each of them. Based upon that information, I’ll be able to get a clear picture in my mind of what will ultimately meet or exceed your expectations. The next day we’ll look at another 3-4 homes, any one of which you’ll be able to buy. We’ll decide on which
home is the best, write and negotiate the contract, and by noon – at the latest 3:00 – you’ll be under contract. Now, that’s the way that it works, do you have any questions before we start the process?
Relocation Buyer – Control Your Time
Mr./Mrs. Buyer, I understand you are anxious to find a home. Tell me, has your company stipulated that you must look on the weekends only? I ask this because most people prefer to show their homes and negotiate during the week. Since you have a short time scheduled, I would suggest a weekday rather than a weekend, so we have more homes to view. Would seeing more of the homes available be of
benefit to you?
Out of all the scripts that I have heard, this one is perfect for Qualifying a Buyer. Rather than asking – are you working with a Realtor – we suggest the following.
I assume that because you contacted me directly that you’re not currently obligated to another Agent, is that correct?
For online leads you can say: I assume that because you registered on my site, that you are currently not working with another Agent, is that correct?
Financially Qualifying the Buyer
(To begin the financial qualifying of a buyer, we suggest using this strategy.)
Are you paying cash or do you require financing? (This is a smooth lead in to all of the financial questions you’ll be asking.)
When financially approving a buyer, there are two numbers that are important here.
One is the amount of money that you feel you can spend on a house, the other is what the bank feels you can spend.
As long as those two are in agreement, we’ll have no problem. However, if those two numbers are a little out of sync, you may run into a problem. So, when is the best time for my lender to give you a call to make sure that those two numbers are in alignment – weekdays, weekends, or in the next 15 minutes?
I’d like for my motivation to match your motivation – and what I mean by that is, if you want to buy a home yesterday then you would love it
if I called you every day with new listings for you to look at. Wouldn’t you agree? And if you don’t want to buy a home for 6 months to a year, I would drive you crazy if I called you every day, right?
So I know how to follow up with you best, tell me, on a scale from 1-10, with 10 meaning you have an immediate need to buy a home and 1 means you’re just curious, how would you rate yourself? (Anything less than a 10) –
What would have to happen to bring your motivation to a 10?
The Buyer sees the market shift and believes that he has all the time in the world to look and buy.
There is really no rush; there are a lot of houses on the market.
Agent: [Insert Buyer’s Name], there certainly are many homes on the market. Let me ask you, has there
ever been a time when you were out shopping and you saw something on sale that caught your eye, and
yet you didn’t have the time right then to stop and buy it and you thought “there are so many I can
come back later and buy it” only to find when you went back the best ones weren’t available anymore?
Agent: Well this time is like that time, may I explain?
Agent: Even through there are many homes on the market the good ones always sell. Everyone is
looking for the best home for the best value. So regardless of the number of homes the best ones still
sell quickly. You do want the best home with the best value don’t you?
Agent: Then let’s buy today and make this a great home for your family. OK?
The Buyer has a “fear of the future” and is concerned that property values will continue to go down.
We are really worried that the property’s value will go down and we’ll lose money.
Agent: [Insert Buyer’s name], I understand. Other than property values possibly going down, is there any
other reason you wouldn’t buy today?
Buyer: No, that’s what I’m afraid of.
Agent: Let me ask you, how many years do you plan on living in this home?
Buyer: [Buyer will answer].
Agent: Terrific! And when do you feel you would lose money? Isn’t it when you sold the home?
Agent: Let’s go back and look at the recession cycles. Other than the Great Depression no recession has
ever lasted more than 16 months and, historically, nationwide average home prices have always gone
up. So let me ask you, are you willing to have someone else living in this house tomorrow knowing you
could own it today?
Buyer: Well, we do like the house.
Agent: Great, let’s buy it.
Buyer: We’re still concerned about losing money.
Agent: Just out of curiosity do you enjoy paying rent and helping someone else earn equity?
Agent: Well whether you buy this home or not, you will still have to pay money to live somewhere,
Agent: As long as you’re paying to live somewhere, don’t you think you deserve to have the tax
advantages and build equity for yourself by owning your own home today?
Agent: Let’s get started today on building your equity. Go ahead and sign the contract and let’s buy this
Agent: [Insert Buyer’s name], I’m curious, what makes you feel prices are coming down?
Buyer: That’s what I’ve heard and I’ve seen price reduction signs on homes everywhere.
Agent: I agree. Now let me ask you what has been happening to interest rates over the past few months,
have they gone up or down?
Buyer: They have been going up.
Agent: Right. Well looking at this mortgage calculation graph you’ll see that a $200,000 loan at today’s
interest rate of 6.5% would be $1264.14 a month, and when interest rates take another jump to 7% it
would be $1,330.60 a month which means that you would pay $66.46 more per month. So the price of
the home would acutally have to come down $10,500 to have the same payment as today. Do you think
that we should hold off on buying in hopes that prices will drop before the mortgage rates go up? Or
should we make an offer based on the reality of today?
Buyer: Let’s go with reality and make the offer.
Situation: The Buyers sees the market shift and believes that he has all the time in the world to look and
Buyer’s Objection: There really is no rush; there are a lot of houses on the market.
Agent: [Insert Buyer’s name], you’re correct; there are many homes on the market. Let me ask you how
many homes are in great shape and would be a home your family would love and enjoy?
Buyer: I don’t know. I would assume many of them
Agent: You know, as a buyer specialist I look at homes every day and there are many homes that look
great on the outside and need a lot of work on the inside. Are you willing to pay thousands of dollars to
fix up a home?
Buyer: No, not really.
Agent: Then we only want to look at the great homes that you’ll enjoy, correct?
Agent: Buyers are looking at homes every day and when you look, you shop by comparisons correct?
Agent: Well when a buyer finds a home that fits their needs and it is in great shape, they usually react
quickly and buy the home taking it off the market and leaving what’s left. Do you want someone else’s
leftovers or do you want to choose the home that you and your family will enjoy?
Buyer: I don’t want someone’s leftovers.
Agent: Great. Then we need to look now and buy a great home. Don’t you agree?
The Buyer sees the market shift but does not understand that it is a good time to buy.
We don’t know if it’s really a good time to buy. Who knows what’s going to happen?
AGENT: [Insert Buyer’s name], you’re right. No one knows what will happen in a minute, an hour, a day,
or years from now. All we know is what is happening right now, this minute. And right now home prices
are the best they have been in a long time and interest rates have been steadily increasing. Let me ask
you, are you interested in finding a great home for your family and saving money?
AGENT: Then we need to buy now. May I explain?
AGENT: Today we know the price and we know the interest rate. If the economy picks up what
generally happens to interest rates?
BUYER: I think they go up.
AGENT: Right. And what do you think happens to prices?
BUYER: They will also go up.
AGENT: That’s correct. So doesn’t it make sense to save money and care for your family by buying
BUYER: I guess so.
AGENT: [Insert Buyer’s name], what specifically makes you think this is not a good time to buy?
BUYER: Prices could go lower.
AGENT: Yes they could and while you’re waiting for prices to go lower the interest rates could go higher.
What do you think would have to happen for you to save money?
BUYER: I’m not certain.
AGENT: [Insert Buyer’s name], a home at $300,000 at 6% interest has a principle and interest payment
of $1,798. If interest rates go up to 7% — just a 1% increase — then the house would have to drop in price
to $270,479 to have the same payment. Do you think a seller is going to drop his price by almost
$30,000, which is 10% of his asking price, and then buy a home where he’ll be paying a higher interest
rate and making larger payments, or do you think he’s going to raise the sale price of his home to help
him when he buys?
BUYER: I guess he would just raise his price.
AGENT: You’re right. Let’s buy now so we can save money and take advantage of the interest rate and
lower prices right now. OK?
The Buyer has a “fear of the future” and is worried that they will pay too high an interest rate.
What if we buy now and the interest rates go down again?
AGENT: That’s an interesting point. Sounds like you want to save as much money as possible, right?
AGENT: Great. Let’s look at the last year and the trend of interest rates. If you’ve had an opportunity to
watch the business news in the last year you already know that interest rates have been going up every
time the Fed meets, and they are looking at them to continually rise. So since you are concerned about
saving money we should make an offer today while the interest rates are at a low [Insert current rate].
Don’t you agree?
BUYER: OK, that makes sense.
AGENT: [Insert Buyer’s name], if the interest rates dropped would that mean you would not want to
own your own home?
BUYER: No, not exactly, but we would like the lower interest rate.
AGENT: Interestingly enough, most buyers want the lowest rate they can get. The question is, is the
absolute best home that you chose to raise your family in more important or is the absolute best
interest rate more important?
BUYER: The home we raise our family in is more important.
AGENT: [Insert Buyer’s name], then doesn’t it make sense to go ahead and just buy the home you really
want now and refinance it later if the rates drop significantly?
BUYER: That makes sense.
AGENT: Then let’s do the right thing and buy today.
Seller Commission Objections #1
SELLER: Will you lower your commission?
AGENT: No. Any other questions?
SELLER: Well, so&so says they will list it for (amount lower than yours).
AGENT: Mr. Seller, first and foremost so&so knows better than I what he/she is worth. Let me ask you this, if I’m not willing to fight for the commission that I know I am worth, how will I ever fight for you in intense negotiations in getting you the most money possible?
SELLER: Well, so&so said they will list it for (amount lower than yours).
AGENT: Wow, why are you paying so much?
AGENT: I mean, if you’re just looking for the cheapest way to go, there are agents that will do it for a lot less. Let me ask you this, what’s more important: What you pay or what you walk away with after all the smoke clears?
SELLER: What we walk away with.
AGENT: Right! So is it fair if we focus on that number vs. what my commission