This post was originally published on the Trulia Pro Blog by Geoff Bray for Trulia.com. Follow Trulia Pro on Twitter: @TruliaPro.
In an industry where Murphy’s Law seems to reign supreme, anything that can go wrong most certainly will. Unfortunately, some of the shows on television paint a picture for home purchasers that they will look at three homes, pick the one they want and — “Lights, camera, action!” — they are happily moved into their new home and get it for the price they want. Ah, the magic of Hollywood.
A buyer getting the home they want rarely happens that way, and it’s our job to set their expectations at the first meeting. One of the biggest reasons a consumer never takes the first step towards buying anything — let alone a house — is their fear of the unknown. By setting a buyer’s expectations of what is supposed to happen next, how that event is supposed to happen, as well as what could go wrong, we take care of a lot of the insecurities associated with the purchase. Not to mention we won’t have to deal with the phrase, “But you never said this could happen!”
Here are three major areas to set expectations during the offer process:
1. Competition with other buyers
We’ve all heard the saying, “While you’re sleeping on it, someone else will be sleeping in it.” At no other time during the last eight years of residential real estate could this be more accurate. Nice homes that are priced right and marketed correctly are flying off the shelves. Multiple offers and final sales prices over the listing price are happening more and more.
This might be a surprise for buyers, considering they’ve been told by their parents or colleagues to start their offer at 20 percent below the listing price. This is a crucial item to go over at the buyer consultation meeting. Have the discussion that when they find a home they love, there is a good chance someone else loves it, too. Not only will this set them up to get the home they truly want, but it will make your life easier when it comes time to write a strong offer. A buyer doesn’t just hire us to negotiate; they hire us to get them the house they want.
2. The “deal”
As mentioned before, buyers’ parents or co-workers who bought a home 10-plus years ago are notorious for giving them better advice than you (of course it’s better, they’ve bought a house, which makes them a real estate expert!). “Start off at least 20 percent lower than what they’re asking … and, of course, everyone is getting their closing costs paid for by the sellers these days.”
Our clients deserve to know that many of the “deals” in this market could be good deals at their list price. We are, of course, going to help them determine a fair market value if it’s outside of dual agency, but the notion they can count on getting a huge discount is not always the case. Inventory is low and demand is high. A good deal might be NOT having to pay more than what the house is listed for. They will appreciate you told them this when you first spoke about the offer process so they don’t have to write six offers before they get “the one.”
3. The inspection
Oh boy. Here we go. Many real estate transactions have met their demise during the oh-so-scary home inspection. This is probably one of the most difficult steps to navigate in the sales process for the buyers, sellers and real estate agents. A real estate agent can’t give much advice on items needing repair; a seller never thinks the repair is a big deal; and the buyer just got kicked in the gut.Prior to the inspection, the buyer thinks this is the most perfect and beautiful place to call home. The inspector, however, is able to wreck their world in a matter of hours by informing them of all the imperfections and “could go wrongs” lurking behind the walls of the home.
Let the buyer know when the offer is accepted and they choose to do a home inspection that it’s going to be scary and a little disheartening. This is normal and we will roll with the punches and get through it together.
Letting them know all of these things upfront will keep them — and yourself — prepared during the transaction to glide through any obstacles that come your way. If the buyers know you have their back, they’ll BE back when it’s time to sell.