Crazy business, isn’t it? You study, get your license, pay all those fees, find a broker and get to work. If you’re lucky, your broker will have some sort of training program for new agents. Most, however, will teach you how to fill out the contracts and a few other rudimentary tasks and send you on your way.
What is lacking is training on how to work with clients – especially buyers, with whom most new agents typically work. Have no fear, rookie, here are three things you absolutely must share with your buying clients.
1. Closing costs
Have you ever wondered why there is so much focus on educating buyers about the down payment while details about closing costs are rarely mentioned? I have, and I have a theory about it.
Buying a home is expensive. That’s a given. Telling clients who are on a budget that they’ll need thousands of dollars in cash to put down on a home almost feels like we’re scaring them off. Once past the down payment hurtle, who wants to say “Oh, yeah, by the way, you’ll need about that much more in cash for closing costs?” It’s much easier to let the lender take the hit for that one, right?
But you owe your clients much more than this.
There is nothing worse than meeting with the lender and learning you’ll need twice as much cash as your agent told you that you’d need.
So, vague references to closing costs don’t cut it. Be the agent who helps change the perception of the industry by being upfront and honest about all aspects of the transaction – especially financial aspects.
2. Give them more information about the loan process
First-time buyers have a tendency to think that loan preapproval is an iron-clad guarantee that they’ll get the loan. It’s the lender’s job to tell them otherwise but how many do so?
Since you, as the agent, have a vested interest in the buyer’s successful closing, don’t assume the buyer’s lender is going to do this.
What is especially important for your buyers to understand is that their loan can fall apart right up until the moment the loan is funded. Caution your client to not quit his job, move money around to different accounts, buy anything on credit and to not apply for new credit.
3. Treat the final walk-through seriously
Before I got into real estate, a relative bought a house and used a well-known local agent. It was her first home so she relied heavily on the agent’s experience.
During the final walk-through, my relative allowed her agent to take the lead and, it’s a good thing, because all of the appliances which were to remain with the home were gone. Refrigerator, washer, dryer – all missing.
Since the walk-through was scheduled the day before closing (who DOES this?), the closing had to be postponed while the seller replaced the appliances.
After my relative moved in she found that the garbage disposer was also missing, plants were removed from the landscaping and several other fixtures were gone. At that point, it was too late to remedy the situation and she was forced to replace everything out of her own pocket.
That agent failed on her duty to her client.
You won’t make the same mistake, right? Talk to your client about the importance of the walk-through and suggest that she set aside enough time to make a thorough inspection. Then, create a walk-through checklist of every aspect of a home and use it during the final walk-through. Be your client’s second set of eyes and take your time.
There’s so much to learn in your first year in the real estate business — things you didn’t learn in real estate school and things your broker won’t likely think to share with you. Ask a more experienced agent if you can tag along during his or her buyer consultation, take notes and put together your own. Then, make sure the above three items are conversations you have with each of your buying clients.