There are a number of misconceptions that buyers have when using the services of a real estate agent and confusion as to why they should use the services of an agent. What advantages do they gain? What are the benefits of exclusivity to one agent?
A Champion Agent is aware of these misconceptions. They have also developed the knowledge to deal with them appropriately. Every buyer has belief in one or more of these misconceptions; a Champion is prepared to respond.
Misconception #1: I don't need an agent.
Too many buyers are faced with the advent of available information on the Internet. They can acquire all the information they need, and they think that they can do at least as good of a job searching and selecting a property on their own as an agent could.
The consumer is correct; they do have access to the same information as an agent in today's world. Any person who has an Internet connection can search listed properties in the MLS. For years, that access to properties was our advantage to mandate consumer use of our services.
I believe the access to information is one of the least valuable services that we, as real estate agents, provide. We must move to the interpretation, analyzing, counsel, and protection of our clients as the most valuable services we offer. We have the market knowledge to help them evaluate the opportunities of the marketplace and to select the best value in the short run and the greatest value in terms of long-term appreciation and quality of the home and neighborhood; that is interpreting the information of the marketplace and available properties.
We must analyze the marketplace as well as the client's needs. What provides the most complete home, based on their requirements of the features they want against the budgetary constraints of monthly payments and down payment to secure the home? How competitive is the marketplace for good properties, and what's the probability that my client can secure one given the competition for homes, the level of buyer they are, and their expectations? All of these are factors and services a Champion Agent would provide.
In counseling the client, we are exposing to them the odds of the marketplace. We help them establish a realistic expectation for securing a property and the type of property it will be, based on their financial capacity. We should counsel them through what they can expect at each stage of the home buying process. The ultimate goal is no surprises for the client. Surprises are for birthdays, not real estate transactions.
Lastly, we protect the client. Through a properly executed contract, we can establish security and safety for our client. With the addition of disclosure, inspections, specific timelines, and performance deadlines, a Champion Agent knows how to explain to a prospect the need for their services strictly from a security to the client standpoint. They will always be safer with a skilled agent representing their interests each step of the way.
When you receive a response from a prospect like, "I really don't need an agent" or "I don't need any agent; I can find all the on the Internet myself", the correct response is a response of isolation. Your goal is to try to find out why. We need to know clearly why they feel the misconception of "I don't need an agent" is true for them.
I always approach defending my value through the easy pathway first. Then, I move on to more complex and sophisticated benefits and reasons if it doesn't work. Always start re-education with what I call the "Why Not" technique. The "Why Not" technique clearly asks them why they should not use an agent.
You could further explain if you still encounter resistance that the seller is paying the fee for their service. Whether they have an agent or not, they have already committed to a fixed fee. When else can they receive professional representation without the cost of it coming out of their pocket... why not?
Misconception #2: I don't need to work exclusively with an agent.
Too many prospects want to keep all of their options open. The only way you will ever really know if you are working with that type of person is to ask them for exclusivity, to ask them to sign a Buyer Agency Agreement or Exclusive Right to Represent Agreement.
A Champion Agent has a no exception rule to Buyer Agency Contracts. They would rather lose a prospect now than someone they thought was a client later on. With a prospect, you have invested a small amount of time; with a client, you usually have substantially more invested.
We must educate them that the best agents work exclusively. If they are working with a few agents, then those agents must be marginal. You could even appeal to their consideration of fair play. How would they feel if they invested time in helping someone, only to find out later on that all of their effort was a waste, and they didn't get paid for doing their job? Would that be fair?
Misconception #3: I don't need to be financially pre-qualified.
It is the people who say, "Trust me, I have the money" or "Trust me, I have the means to secure the financing" are usually the ones who can't. A Champion Agent doesn't leave a prospect's ability to perform to chance.
The skill is in convincing the prospect that it's in their best interest to meet with a lender. Completing their paperwork with a lender and achieving pre-approval puts them in the negotiating position of strength. The truth is just as the buyer is trying to select the best house, the seller is trying to select the best buyer. One of the factors is certainly sales probability when selecting a buyer. Equally important is the ability of that buyer to perform. The more we can convince the buyer to minimize that risk by pre-approval, the stronger our position and the stronger the buyer's position is in negotiating.
We have to sell this as a benefit to the buyers. There are two key benefits to your service that are enhanced with pre-qualification.
The first is writing the purchase agreement to correctly and clearly express their intentions and represent their interests. It would be almost impossible to counsel them on their many options and suggest what the best ones might be based on your experience, without a clear picture of their finances. You would be engaging in professional suicide. Any agent would be providing a lower quality service than they would expect because of the lack of financial disclosure.
The second is submitting the client's purchase agreement in a manner that will represent their interests in the most favorable position. Being able to demonstrate to the sellers and the listing agent that they have the best buyer in terms of financial capacity and closing ability of the loan. The listing agent wants to know if the buyer can perform. Can they do what they are proposing to the seller?
A good listing agent will protect their seller from the most significant risk of the transaction... falling out. The transaction that fails to close days before closing is the worst-case scenario for the seller. It is worse than if their home never had an offer because; the marketing has stalled for the home, other buyers who were interested have bought other homes, the listing is much older and the market could have shifted or more inventory could have entered the marketplace, they have emotionally moved to their next house because most likely they have bought something with the expectation of moving and now that transaction is now in jeopardy, and finally, they have made commitments and preparations for moving like being packed, moving van scheduled, utilities set to transfer, mail set to transfer. The list of all the work the seller has done with the expectation of closing is endless. So absolutely, this is the worst case, which does happen to sellers all the time.
We have to be able to convince the buyer that financial pre-approval or pre-qualifying is one of the most important factors in positioning themselves well. If they don't, and they want to try to get a high demand home in a superior location or because it has an extensively competitive price, they will probably lose out to another buyer who is better prepared and carries less risk.
Misconception #4: If I look long enough, I'll find the perfect home.
This misconception has two parts. The first is that "the perfect home" really exists. In reality, there is no such thing as the perfect home. The other is the length of time. If I hold out longer, a better property will come on the market. Most buyers think they fall into the exception, rather than the rule. They believe they will be the lucky one to get the perfect home at a discount.
We must educate them that there is no perfect home; that if they can get 80% of what they want in a home, they have done well. No one ever acquires 100% of their wants when purchasing a home. There will always be things people change to make the house they bought a home. They often also think that, by using more real estate agents, it increases their selection and the odds of them getting what they want.
A Champion Salesperson works to establish what is a want and what is a need. What must they really have without question? Why do they want that particular feature in a home, and how important is that feature?
We need to be skilled at lowering the bar or standard for the client on the home they select into reality. We certainly want the client to acquire a home that they will enjoy. We also want them to be realistic about what they can expect and afford, based on today's market conditions.
Deal with these misconceptions up front in the early stages of qualifying or the presentation. Don't wait until you are writing an offer before you deal with them. At that point, the counsel is coming too late. You will be doing it at a time when they could feel you only care about yourself and your commission check, rather than their needs, wants, and desires. They may question whether you really have their best interest in mind.
Look for Part II as we look at the next 3 misconceptions.
Published: March 8, 2013
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