Spending time with potential clients who have yet to get a pre-approval letter gives you an opportunity to build a relationship, get referrals and update your knowledge of the current inventory.
Recently, in a Facebook Mastermind Group, this question was posed: A buyer wants to see houses for several hours on a Saturday but has not yet been pre-approved — what do you do?
I was shocked by how many agents said, “No! No approval, no showings.”
Personally, my answer would be yes. I would spend a Saturday showing homes to a buyer who had not yet been qualified because I see it as a valuable use of my time. In my experience, that face-to-face time is more critical to forming a relationship than making sure they have a piece of paper from a lender.
Buyers are fickle. Many will talk to whatever agent’s picture appears first, so if I can get a leg up by personally meeting them, I feel it’s a good use of time regardless of approval status.
Here are 7 reasons you may want to rethink saying no to showings without a pre-approval.
1. Not all buyers are educated in homebuying
One of the top reasons for not owning a home is a lack of homeownership education. Taking a prospect out for a few hours on a Saturday allows you to explain the significance of pre-qualification, the differences in types of agency and the importance of choosing one Realtor.
2. Potential buyers are a referral source
People appreciate being treated with respect regardless of their buying power. The more respectful we are as agents, the more respect we earn from potential clients.
In my experience, many buyers who hit a snag in the approval process went on to be good referral sources. Even though they couldn’t buy right now, they referred me to family and friends who were ready to purchase or list a home.
3. It gives you a chance to be more familiar with current inventory
New homes come on the market every day, and keeping up with current inventory is hard. Showing homes on a Saturday is a great way to familiarize yourself with homes you may not have seen. Knowing what’s available can come in handy when assisting another client.
4. Hand them off to a new agent for a referral fee
New agents are hungry for business and more likely to jump at the chance for a prospect. If you cannot show the homes yourself, consider asking a new agent to spend the day with them for a referral fee.
This can be a win-win for new agents. Even if the customer doesn’t buy, the agent receives valuable experience and has a prospect they can nurture.
5. Future clients
Being a real estate agent is a marathon, not a sprint. Just because someone may not qualify now doesn’t mean they won’t be eligible in the future. After spending a day with them, make it a requirement they receive a pre-qualification before spending another day with them. If they are not quite ready to buy now, they will be in the future. Work with them and nurture them until that day is here.
6. Not all qualified buyers buy
Just because a buyer has a pre-qualification doesn’t mean they are a slam dunk! In fact, over the years, I’ve had many qualified buyers disappear or not buy at all.
7. Some buyers fear pre-qualification will hurt their credit
Some people are afraid that a pre-qualification will lower their credit score. Mortgage shopping will not hurt credit scores. You can mortgage shop for 45 days and all inquiries count as a single inquiry.
Be smart. Think safety first.
If the non-qualified buyer is someone that called you out of the blue and you don’t know much about them, don’t meet them at a property without someone else accompanying you. If at all possible, meet them at your office first. Let them be seen and make sure others know where you’re going before heading out.
The bottom line is to keep an open mind. Just because someone doesn’t come to you with a pre-qualification letter does not mean they are not qualified. Spending a few hours on a Saturday to establish a relationship is never a bad idea. Especially since you don’t know where that relationship might lead.
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