If you have been in the real estate business for any length of time, you have probably heard the phrase, "Buyers are liars." Is this statement really true or is the real issue something quite different?
It’s pretty common for buyers to tell the agent that they want one thing and then purchase something entirely different. As one of my former caravan buddies put it: "They will tell you they want a single-story contemporary with a red brick wall, and they will buy a two-story traditional with a white picket fence."
Are you asking the right questions?
There are certainly buyers who will use one agent to locate the property and then turn the deal over to their sister-in-law who will "kick back" part of the commission. In most cases, however, the real issue is that the buyers aren’t really liars — the agent just didn’t ask the right questions.
In fact, what questions do you ask when you first start working with a buyer? If you’re like most agents, you will probably ask the following:
- What’s your price range?
- Where would you like to live?
- How many bedrooms and baths do you want?
- Are there any other features that you want?
- How many people are in your household?
Armed with this information, agents begin a generalized search on the multiple listing service. Because the agent didn’t obtain more details, the result is the agent often spends hours showing the buyers property.
Adding insult to injury, the agent often receives a message from the buyers that says, "We’re really sorry for wasting your time. We bought a house yesterday at an open house. I know we told you that we wanted a one-story contemporary, but we walked into this open house that was the cutest two-story traditional with a white picket fence. We just fell in love with it."
To avoid having this happen to you, here are some important points to consider:
1. Don’t take buyers out until they have been prequalified or preapproved
Because financing continues to be challenging, don’t waste your time or gasoline showing buyers property unless you know they can purchase.
In the past, obtaining a prequalification letter from a lender was usually enough to begin the search process. Today, it’s smart to have your buyers preapproved. The difference is that with a preapproval, the lender has checked the buyer’s credit. All you have to do is to find the right property, make sure that it appraises, do the inspections, and complete the title work.
2. Do a lifestyle buyer interview
Before taking your buyers out to look at property, it’s smart to spend 20-30 minutes interviewing them about their lifestyle. Ask about what they like to do when they are at home, which rooms they spend the most time in, as well as what they enjoy doing when they have time off from work.
For many younger buyers, the actual house or condo they live in is not as important as the area where the property is located. They may settle for a 650-square-foot loft if it’s close to the nightlife scene they enjoy frequenting. If you ask questions only about the property rather than the buyers’ lifestyle, you will never discover this important fact.
3. The miscommunication disconnect
Most agents have never been trained to dig deeper into what really matters to the buyers. The challenge is that when you ask a buyer the questions above, he or she will give you an answer based upon the forebrain — the thinking center in the brain that makes logical decisions.
In contrast, the actual buying decision will normally be in the brain stem areas that regulate emotion. The triggers in this area are always nonverbal — it can be a scent, a sound, or a feeling tied to a feature. In most cases, these buying triggers are related to a pleasant time in the person’s life, usually in their childhood.
I learned this lesson early on my very first real estate sale. I was showing a young couple four houses. The first house met every one of their criteria and was in excellent condition. The other two houses were strong alternatives. The last house was a dog.
Of course, they bought the dog. When I asked what made them select that house that was so different from the criteria they gave me, this is what they said: "This house reminds me so much of my grandmother’s house. It has that great old stove — I don’t know. It just made me feel good when we walked in. It felt like home."
Clotaire Rapaille, a marketing consultant to Fortune 100 companies, attributes this phenomenon to what he calls the "reptilian brain." This is the brain stem and the other lower brain structures that control our emotions, plus eating, drinking, body temperature, etc.
The only way you can access these buying triggers is to ask the buyer some very different types of questions. One way that normally works is to ask the buyers to describe their favorite house from when they were children.
Ask them what made that house their favorite, including what their favorite memories were. This is the type of house they will be more likely to buy rather than what they tell you they want.
Taking the time to dig into the buyer’s lifestyle, as well as searching for early childhood memories about their favorite house, can go a long way in making sure your buyers aren’t liars with you.