If you have spent hours driving around buyers who aren’t really ready to buy, you know the importance of making sure buyers are pre-qualified before they get in your car. And I don’t just mean pre-qualified with a lender. I mean agents need to take the time to ask some tough questions of the buyer to really get in touch with their wants, needs, and their reality. Buyers can be a real estate agent’s dream or worst nightmare. You may learn that your time has been fruitlessly spent driving around with them looking at homes they cannot buy.
Many agents focus their pre-qualification questions on what type of home the buyer would like and how much they have to spend. In fact, smart agents know that the best way to pre-qualify a buyer is to ask them detailed questions to encourage them to really think about where their boundaries are. If you focus only on money and the type of home, you are missing out on finding out how the buyers feel about different scenarios that could happen to them. Having this talk up front really helps you to get to know your buyer.
What if your buyer tells you that even if they found the perfect home and it was only $1,000 above their budget that they absolutely could not afford it? Wouldn’t this help you to better plan what homes you would show these buyers? Of course it would! And if you are in a market with low inventory and your buyers want to buy a home that has low supply with multiple offers the norm, it is essential that you set your buyers up for success by having the tough discussion on the front end. When it is time to write an offer, there can be a lot more emotion involved. Having the game plan in place at the beginning will help an overwhelmed buyer facing a multiple offer situation.
For example, imagine your buyers have found and fallen in love with a home listed at $250,000. However, the top end of their budget was $250,000 and due to inventory challenges, they are faced with a multiple offer situation in which they cannot compete. It is essential that you present this scenario to your buyer before you ever show them properties they may not be able to compete to buy. Having an open discussion up front could prevent severe disappointment later.
Some great “what if” questions to ask buyers when pre-qualifying them might include the following:
- “What if you find the perfect house and it is $5,000 above budget?”
- “What if we can’t find the type of home in the neighborhood you want? Would you consider a different neighborhood or would you consider a different type of home in the neighborhood you like?”
- “What if we can’t find a home as close to the school that you wanted?”
- “What if we have to compete with other buyers in a multiple offer situation? Can you go above your budget to secure the home?”
- “What if the home you want is above the price point you have said you want to stay within, can you go up in price? And if not, what can you give up?”
Until you practice asking these hard-hitting questions a few times, you may feel like you are being intrusive and it may not be a comfortable feeling. However, once you get a few buyers talking about their true needs and expectations, you will see what a gift this can be for both your buyers … and for yourself!