Here’s a quick guide to managing buyers’ expectations.
I hear other agents complain all the time that, given how tough the inventory situation is, their buyers aren’t being realistic. Then I see agents on my team helping buyers get their properties under contract quickly and smoothly. What’s the difference between our buyers and other buyers?
The answer is the advisory communication we give to our buyers. No matter where your buyers are looking to buy, you have to educate them on the marketplace so they can make knowledgeable decisions. If they assume today’s market is the same as it was four years ago, they’ll have a different attitude toward what’s available today. The house they could’ve bought for $400,000 once upon a time may be worth $500,000 or $525,000 now. If you don’t educate them about this fact from the very start, they’ll get frustrated with the market and, ultimately, you. They’ll then end up firing you, and you’ll have done a lot of work and spent a lot of gas money for nothing.
How do you avoid this lose-lose situation? When you meet with your clients the first or second time, do a market check reality. What I like to do in this case is an area market survey on MLS PIN. Under the “tools” tab, go to “area market survey” and do a survey of the last six months of the areas your buyer is looking in. See how many properties are active and under agreement so you can calculate the months of inventory and tell them how quickly the market’s moving.
Then look at the sold properties and check the sale-to-list price ratio—not just for the areas they’re looking in, but in their price point as well. If all the homes are selling for, say, 102% of their list price, tell your buyer that. This way they’ll know that the list price is really a starting price, and they won’t be able to negotiate it down.
After that, it’s time to get hyper-specific with your buyers. If they give you a budget of $500,000 to $600,000 and say they want to buy in Danvers, for example, go to the MLS and pull up what’s under agreement and sold between $500,000 and $600,000. There doesn’t have to be any criteria; you just want to see what’s sold. Show them these properties and see whether they like what’s selling at that price point. If they don’t, perhaps they need to increase their budget or get more realistic with what their current budget can buy them.
Next, remove the price from your MLS search and insert your buyer’s criteria for their future home. Show them the properties that come up and take a look at the price points. This will educate your buyer as to what’s really happening in the market and you’ll both be on the same page. Once you’re ready to start seeing homes in person, they’ll understand the market and be prepare to win.
If you have questions about managing buyers’ expectations or there’s anything else I can help you with, don’t hesitate to reach out to me. I’d be happy to help.
