1. Wanna-be wheeling and dealing.Some people love a bargain. I mean, they love the idea of getting more than they’re paying for almost more than the gratification of the purchase itself! And the internet era has encouraged this. There’s a whole consumer segment of folks, myself included, who never make a purchase online without first running a Google search to find a promo or coupon code, or to check to see if the item is available elsewhere for less.
The problem is that this mentality simply does not apply to a real-time auction atmosphere marketplace like real estate. In other words, real estate is not retail. Homes are not commodities as interchangeable as shirts or shoes, and there’s no such thing as a guaranteed “Buy It Now” price.
In fact, the list price is often more like the starting price in a multiple offer situation, like those that are so common right now. Plus, home sale transactions are much more complex, and involve many interrelated terms that impact the price to which a seller might agree; cash offers can often close faster and at a discount compared to lender- or seller-financed offers.
Wanna-be wheelers and dealers are those buyers who try to apply their promo code mentality to their home buying endeavor, aiming for a standard 5%, 10% or even 15% discount rule of thumb in their offer prices. They crave a deal, no matter whether the other circumstances of the transaction render a discounted price sensible. These people don’t care if the list price was already below market, or if there are a dozen other offers, they want their discount. Well, at least the do the first few times they make an offer.
Over time, especially in markets where prices are ascending, savvy agents can show these buyers how their insistence on getting a discount is actually costing them money as home values rise and the number of buyers active in the market heats up. In cases of first-time home buyers stuck in wanna-be wheeler dealer mode, showing them the tax advantages they are foregoing while they spend months trying to save a few thousand bucks can also be instructive. Finally, the pain of losing one too many “just-right” homes turns out to be the experience that educates many of these buyers that this is one transaction in which an across-the-board discount code just doesn’t exist.
2. Holding onto conflicting wish list items.I once had a couple of clients – lovely human beings – who simply could not move from conflict to compromise in terms of their “must-have” list of home features. In particular, one of them wanted a home with panoramic views of the Bay (doable, on their budget) and the other wanted a home within very short walking distance from one of several local shopping districts (also doable on their budget). The problem was that there are very few homes that even exist that are geographically elevated enough to get great Bay Views while still being less than a mile from these strolly, village-ey shopping centers; the few such homes that did exist were the toast of the town and so outside their budget.
This happens all the time. One buyer wants vintage charm, while the other insists on a contemporary aesthetic. Or one wants a rambling, kid-and-dog-friendly lawn while the other insists on a low-maintenance hardscape. But most people are able to work it out and hug it out, or come across one home they both love so much that the compromise is made, de facto, by what features and amenities the property has (or lacks).
3. Finger-pointing.“My mortgage broker is an idiot.” “My agent doesn’t listen to me.” “The Fed is crooked. “My Mom was bad with money.” “Sellers are so greedy!” “It all goes back to Reagan/Clinton/Bush/Obama, if you ask me.”
Home buying is not simple. Nor is it easy, or cheap, in most areas. And, as we in the industry are wont to say, it’s most people’s largest purchase, largest asset and largest investment. Ever. So, many buyers do not come to the table being comfortable having the conversations, making the decisions, or engaging in the negotiations smart home buying requires. Add in the changes in the market and the inevitable emotional roller coaster of loving a home enough to make an offer on it and then not getting it, and you have a recipe for frustration. Anger, even.
It’s not uncommon for frustrated buyers to engage in finger-pointing, citing everyone from their mother to the last 30 years of presidential administrations for their stuck house hunt or inability to afford the home of their dreams. It’s okay to vent, but in order to finally secure a home that works for their lifestyles, their families and their budgets, these folks have to turn the finger around, pointing it squarely at themselves.
And agent coaching can help. This is not about trying to argue with the buyer about how wrong they are in placing blame – that’s a battle you’ll never win. And it’s not about buying into it or playing the blame game with them, because assigning blame is counterproductive (unless you happen to have a direct line to the White House). Rather, it’s about taking two positions on a consistent basis: problem-solving and empowerment.
When you hear your client start to spiral into blame, acknowledge her upset, then shift the conversation into problem spotting and solving mode. Work with them to identify where the house hunt is misguided (e.g., hunting in too high a price range) or offer strategy is not working (e.g., consistently coming in at the bottom of a long list of offers). Then, constantly surface wise suggestions for things your client can proactively do to change her own house hunting fortunes.
Here’s a script: “I know you disagree with some of the national policies on housing, but that’s really beyond our control. And I know lots of buyers in your position who are managing to be successful in this market. I want to give you some strategic recommendations for taking control of your house hunt so you can buy before prices go up any more – here are some things I think you can do.”
Those are the top 3 buyer mistakes I’ve noticed recently. What else have you seen with your buyer clients?
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