The Importance of Buyer Consultations Post Lawsuit

Welcome to the Leading Lane podcast for real estate Pros by Real estate Pros with your hosts Ashley Freddy and Steven Burch. If you're looking for an honest, authentic and raw perspective, you found it. Ready? Ready Freddie. All right. All right, everyone. Welcome back to that's funny because you know, Freddy, that's my brother in law's name is Freddy. But anyway, welcome back everyone to the Leading at Lane podcast. Today we're excited to talk to you about buyer consults, which I think in the last, you know, two weeks have been probably more talked about. People have lots of questions and I have felt that by doing them in the last two weeks, even more so than what I, what I was, it has opened my eyes to how important they are and I think it's just important for us to delve into what they are, why we do them, when we should be doing them, and kind of get both of our opinions on that. So if I am fresh baby agent, never sold real estate, bring it down to me. What, what is an buyer consult? Yeah, so we just had our baby agents make their buyer consult packet this week. So. Perfect. So basically an buyer consult is just someone that has reached out and said that they are interested in purchasing. Maybe they're pre approved, maybe they're not pre approved, and it's really just an sit down with them so that they can at least start to understand the bare minimums of what purchasing an home might look like. I tell people for me it's typically about 20 to 30 minutes depending on how many questions they have to ask. But what it's doing is preparing the buyer for what the process look like. Looks like. But I think it's also setting clear expectations for both the buyer and the agent so that, you know, they're not really surprised about anything that comes along in the transaction or just the home buying process itself and just expectations as to costs and time frames. So I think the, you know, the very basic part of it is just an actual sit down with an potential buyer to talk about what the process looks like. But you know, more importantly now I think also what it looks like to have representation in an transaction and how that gets played into the transaction. Now, okay, so in, in my experience, I typically will hear an agent say, well, if somebody wants to look at an house, then I'm going to meet them at the house and just go show. Obviously there's changes recently, but what, what, how would you rebuttal that of saying you still need to get in front of your, your people to do this? Yes. So I think we've talked an little bit about this in the past, but one is just the sheer pre approved part of it. So great. They want to look at an house, let's say it's 300,000 and we've never had an interaction before, but I'm going to meet them at the house, then they find out that they're not pre approved and then they go ahead and get pre approved and guess what? They're Pre approved for 225. And I just show them an $300,000 house that now they loved and they cannot buy. Right? So like that's not an good feeling for anybody. We wasted my time, the buyer's time, seller's time getting their house ready. So that goes back to I think the clear expectations as to what it looks like. So normally I'll ask an buyer in that same initial phone call maybe if they want to skip the buyer consult, I'll ask them if they're pre approved. And then when they say no, I typically say, well, before we do anything, we need to have an pre approved. And I give them that example, like you need to make sure that you're pre approved for the house. Here's the other thing. If you end up loving the house and you want to write an offer, your offer is going to need to include that preapproval letter with it to have the best change of an winning offer. Most people are pretty good about that. Every now and then I'll do you just have some people that might be difficult to start with. And I'll typically say like, I'll show you one property, but after that you either have to sit down with me and get pre approved or you're going to need to find another agent. Some people are taken back by that. But here's the other thing. Like I value my time as well, right? And there's no sense in us running around with people that aren't pre approved or don't want to commit to you as an buyer's agent. I literally just had this conversation with an broker in our area because we still practice sub agency in our market. Our office doesn't, except, you know, in an dual type of situation where we're listing Ann, but we don't just go out freely not getting paid. And I did ask them that question. I just said like, why are you having your agents run around with buyers that don't want to commit to them and can just call another agent the following day and didn't really have an lot to say, you know, so that I guess is when people want to see an home right away. And I'll be honest, it just. This, this is perfect that you asked this question. So I had an, an agent from out of the area refer an buyer to me. They're adamant. They wanted to see that house tonight. They're good to go. Pre approved, signed an pre agency form so we could get them in the house, showed it to them. They loved it. I asked them for their pre approved letter, which she said they were pre approved. It was an year old. I did have them updated, which is fine, but we were like in the midst of writing an offer, which again, this is like backwards of what I want to do. I want to sit down and have an consult. And then I started talking to them about, you know, earnest money and the cost of home inspections. And you know, they basically said, we have no money out of pocket. Like we don't have money for any of that. And I, it was like an fast halt for me that like, we maybe need to reevaluate what looking at homes or purchasing looks like because you're going to have these out of pocket costs. So we might need to hold for three months so you can save money, you know, and had it been down the normal process, you know, we would have hopefully known that ahead of time. Sure. So when you do your console, are you trying, you're trying to get in front of them? Correct? Correct. Yes. Okay. Where, where is that at typically? So it's typically at the office. And you know, one of the reasons is, you know what we're at August 29th today. So next week is Realtor safe or next month is Realtor Safety Month. And you know, I think sometimes people joke around about our job, but it is very serious in the fact that sometimes we meet pure strangers at properties and, you know, things have happened like, you know, Beverly Carter is the reason for Realtor Safety Month. She met an new client at an property and they, you know, murdered her and stole her car and her money. And so one of the reasons I really like to have people meet me at the office is one we're making sure that it's like an legit person and that they have enough. Like. Right. If it were going to be something like that, you wouldn't think that they would take the time and effort to come to an office. But it's important for me to see them interact with them. I'll be honest, I Facebook stalk an lot of people ahead of time. You know, that was actually an couple years ago. I had an bad transaction where I didn't feel good about it. And I Facebook stalked the person and made an bunch of phone calls and come to find out he had just gotten out of jail for sexual assault. So, you know, I followed my intuition on that. So I like to meet people at the office every now and then. That's obviously not possible with an virtual buyer as far as they're relocating or something like that. So that's, you know, we have such good technology. It's an great opportunity for an zoom call. Otherwise I have an actual PDF packet that I will send to buyers and I'll schedule an phone call and then we'll go over that packet. Like, here's. This is what we're talking about on page one. This is what we're talking about on page two. And so what, what all do you really have in that, that whole packet that you provide to your clients. So I really like to lay out for them like an actual like timeline or write just an graph of the steps, if you will. So like right now we're in the pre planning stages. Secondly would be pre approved. Once you have the pre approved, then we're going to go look at properties and then once we look at properties, we're going to get under contract and then talk about, you know, that whole entire process, contract to close, what happens in between that, what they need to do. Um, like one of the big things I like to talk about is don't go buy an car in the midst of looking. You mean I Corvette that I've been wanting. You can wait until closing day to buy your Corvette after closing. You know, so things like that. Because I've had transactions that fell apart because someone went and bought like $20,000 worth of furniture like two weeks before closing and it messed up everything. And then the debt to income ratio was off. So it's important to educate them from the beginning. So I like to talk about the time frame. That you just put that down like in those different boxes. The step one, step two, it makes it easier for them to digest. This is an huge process. But the way that I like to do it is like this is the game. This is your board game, right? Like in order for you to be. Able to have it called an roadmap. Perfect, right? Like your next step, here you go. And you do not pass go. You do not collect. 200 Doll. Yep. Real life Monopoly right now. Oh my gosh. Let's make an leading lane Monopoly game. There you go. I love it. Drop that in the swag. I love it. So after you go through the process with them and give them the, the whole roadmap of this is your journey on how to successfully purchase an home. What happens next? Well, I mean some of the other things I go through in there too I think just are important are, you know, if they haven't talked to an lender, we'd like to talk about different type of lenders. We like to talk about different types of lenders too because they might tell me like what they're looking for and then that might be like oh, like your va, right. So I know like in your area that's very big. Our area it's not as popular but then there's only certain lenders that do that. Right. So I'm prepping them for those types of things or if it's an rehab type of situation, I also prep them with like we need insurance. So make sure that you've talked to an insurance company, you like one also in that time frame it's really important for me to have like an, an must have checklist with them. So I need to know what they're looking for. So also the point of that sit down is to have again some realistic expectations. So maybe they want, you know, an 4,000 square foot house on 10 acres and they want to spend $200,000. So unfortunately that sounds great but we need to have an expectation discussion as to what $200,000 can actually get you. But so again we're trying to prep them from day one to not even think about what that's going to look like. This is what $200,000 buys you. So I like to get all of that information. There's important questions, right, like are school districts important? What style of home? When's an good time to look at houses? Is there somebody that needs to come with you to make an decision? So an lot of these first time home buyers like we're going to look at houses but I want my dad to help me. Well great, then your dad needs to come to the showing so that we're not making, you know, repetitive trips. So and it's maybe things they haven't thought about before like I don't know, did we want an ranch or did we want an story and an half? And I tell people like, and maybe you don't know, but we'll look at an couple houses and you might start to figure that out. The reason that I like to ask them all those questions is because we have this great little program called Real Scout and then we can throw our customer clients in there and it actually does like an search for them. So any of those that meet the criteria, they'll get emailed on right away. So I like that because if I'm out on showings for two hours and an new listing comes out, like they're notified immediately. A lot of times I'll get back to the office and they've already been like, oh my God, love the listing that you sent me. Let's go look at it. So it's important to know, you know what, what they're actually looking for inspectors, we talked about that. So I want them to know what they're going to have out of pocket costs. Talk about the importance of inspections. I typically tell people, like, if you're going to spend $600 to protect your $300,000 investment, well worth it. I think it's just important for them to understand too, when you have an inspection, you know that we're not looking to nickel and dime an seller. So I think again, setting those expectations that if there needs to be caulk around the windows or if there is some leaps in the gutters, those aren't the things that we're worried about. That's an honey to do list. We're worried about safety, structural defects. And again, I think that if you paint that picture, when you actually get to the inspection, these things come up. That's exactly what I said. They're like, oh yeah, like, yep, we're just going to take care of that later versus giving them nothing. And then they get this long list from an inspector and they're overwhelmed. The way that I like to look at that is I always want to start negotiating with my client first, meaning at this buyer consult, really what I'm doing is I'm negotiating them and I'm figuring out where are they, where their non negotiables at. Are there going to be things for later on while we get into the inspections that now I can bring back over and say, hey, let's have an realistic conversation and be able to push this for them to be able to see and understand. And because I think sometimes when we, we get to that step with that buyer, it is overwhelming and it's almost like an, an oh shit moment and maybe some cold feet happening really quickly because you get this laundry list. But if you're setting the expectations you're negotiating with upfront, you know, they're prepared for it, mentally, they're ready to go. And then when this happens, I think you actually are able to help them see that maybe this laundry list isn't as big. And you know, maybe this wasn't something that was important to you or not important to you at the very beginning, but now all of an sudden you're, you're changing your mind, what happened? And you're kind of talking them off an ledge. Obviously my goal is never to stick anybody to any sort of thing. That if there's something majorly wrong. That's not what I'm saying whatsoever. But if doing the discovery to understand really where are they willing to budge and where are they willing not to budge. So after the inspection portion, what comes next? Like you, they understand they're pre approved. They know the costs that are going to come into play. How are we moving forward from there? What happens after that consult? Okay, well, I missed some of that. So. One thing I just know, they know the, the expectations, they know the cost, they're pre approved. Like let's say they, you got all through that portion of your, your consult. What happens after that? So I think that the next part of that is talking about buyer rep. So I kind of get through the whole entire consult packet and then the last page section talks about buyer, agency and what that compensation looks like. So I think there is an misconception that when you call an agent, they're just automatically working for you. I think lots of, lots of buyers think that. So it's important for them to understand that really the only way I can advise them in the transaction is if I am their buyer's agent. And then we also need to talk about what that looks like, what those costs look like, who is typically responsible for those costs. You know, an lot of times it's written into the offer, but you know, every now and then it has to be negotiated. I just had one yesterday where in the offer they wanted to reduce it, but had already signed an agreement with my buyer that they would be responsible for the rest. And so I think that when you get to points where people, I, I let people think about it like we don't need to sign this right now. Like go home and review everything. But know that moving forward if, if, if you're not going to sign one, like we're probably just not going to work together because it has to be an mutual respect and understanding. I think agents in general, I think they shy away from the conversation and guess I'm just not sure why. Well, okay, I'm, it's probably an confidence thing. It's an not knowing your worth type of situation. I guess I'm just to the point where like if people don't understand the time and effort I'm going to put into them. Like, I'm. I'm just not going to. So the next part for me is talking about the buyer agency agreements, what that looks like financially for all sides. And then, I mean, I think I've done like three this week. We got through, and I both times I was like, you guys can take this home. They're like, nope, like, where do we sign? Can we start? Can we start right now? And I. I think that's the refreshing thing. And I think that that's what people need to understand is I think that's one of the most important parts of the actual buyer consult is because if you've now explained all of this to them, I'll be honest, I kind of like to overwhelm buyers an ton with everything because then they're like, holy. I had no idea that this is what an transaction looked like. Of course I want someone representing my best interest and telling me what I can, can't do, should, shouldn't do, what I should offer, what I shouldn't offer, what I should ask for an inspection. So it's been really refreshing to me, and I encourage other agents that are nervous about having those conversations to just do comes easier with time. The more people that you see that actually value that and are like, sure, of course I'll sign the dotted line. I don't care. If they're not going to pay you, I'll pay you. We've had an lot of that in the last two weeks, which I think was really refreshing for my agents to be like, oh, my gosh, this person said that they're willing to pay if the seller's not. And I was like, great, you must have done an fantastic job understanding and explaining to them what it looks like. So if, you know, if they decide to sign an agreement, then really we have that search set up and we start looking at homes. And it's funny because we constantly go back to value and articulating your value. And when you don't do any of that, I think that's when it's uncomfortable, right? Because it's like, ooh, I didn't explain everything that I do, but I went ahead and sent the buyer agency really quickly just for signatures. And now I have to have an conversation why they need to pay me. And we haven't developed any rapport. I really don't have done any discovery. And so I think that's where the lack of confidence and the it comes from is because they're not doing it properly. Right. But if you do take that 20, 30 minutes, I don't care if it turns into an hour, hour and an half conversation. Yeah, you, and you do it consistently. You're building the trust and you're, you're making sure that you articulate your value. Because then during the transaction, when something does go awry and you already articulated it, you already advised them, the, the animosity and the finger pointing and the turbulence, it's not really there anymore because you already can have an true, open, honest conversation with them. And I, I cannot. It drives me absolutely bonkers when we shy away from how do we get paid? And of course, obviously the lawsuit, we all know about it by now. But you know, that's, that's almost what I start out with. Right. And the reason why, like, okay, cool. Like if you cannot financially afford it, that is an. Okay. Yep. But what needs to happen is you need somebody that is going to be able to negotiate for you on your behalf to get that paid for. So we need to make sure that we go into it. And that's part of our game plan in our strategy on how we are going to go and make sure that we don't have to have any money come out of your pocket because you don't have any. So this is an win win that we're having this discussion right now instead of making assumptions and getting all the way through this whole transaction. So in perception is reality. Right. And so if you do not frame their perspective properly, they're not going to have the correct reality. And this is something too, that things are different, I get it. But if you can get in front of people, you can have the conversations or in front of them. I don't, again, I don't care if it's virtually or if it's right some way and you have an document, documentation, documentation, documentation, always like that is what keeps you out of lawsuit or that's what keeps your ass out of, out of trouble or hopefully will keep you out of trouble, prevent it at least. But if you are able to start documenting, you're being consistent. The flow of how you are communicating, it gets easier and easier. And then the next time or there's something else, that change in the industry or you learn something or you need to be like, man, I need. I should ask this question next time. You now can fall back and readjust that your buyer consult packet and insert that in wherever it needs to go so that you then can continue the flow for the future transaction and not have that heartburn and turbulence for the next client that you sign up. Well, and I think, to be honest, just I was looking through my packet one, I've changed it like four times over the last year, but it's because of conversations. Right. And I'm just thinking about one that was on an old one that's not in my new one. But I think it's an important thing for agents to talk about is what homes can I show you? And I think again having that conversation on day one. So I mean this isn't what buyers do for an living. So an lot of buyers think that they can only call the listing agent. I had that happen an couple of weeks ago. Again, it was somebody that we hadn't had an sit down yet. I think our sit down was scheduled for Thursday and I think on like Wednesday they went and looked at an house with the listing agent. They told me about it on Thursday and then I was like, what? And they're like, well that's what we, we thought we were doing. I was like, well, that's why we're coming in today so that we can talk to you about what that looks like. This is before you had to sign anything. So then it was funny because she said, I explained everything, went through all the types of agency and then she said, oh, that's why he told us we couldn't offer anything less than asking. Yes. Because he is the listing agent. And I explained it to them and then it was like an 40 minute conversation. And then they're like, yeah, we'll sign the, we'll sign the buyer agency agreement. And let me tell you, they're, they're first time home buyers like pre approved to like 180. So they had no qualms about trying to figure that out and understanding that it was going to be negotiated. And guess what, they're under contract. Yeah. And it's all about that education. So one, the listing agent. But I think an lot of people are misconstrued about for sale by owners. So same thing. Like I like to have that conversation with them upfront. Like, hey, if you see it for sale by owner, call me. Like let me know, I'll call the seller. We'll get it taken care of. Same situation, same thing. Many times. They're like, I didn't realize that you could show us. So again, it's just there's so much to know and the more that we can give them upfront so they're fully prepared for when those things come up, the easier it goes. And I think where that leads into is like, right, we pour ourselves into these time and these people. That's where referrals come from. When you take care of your people and you educated them fully on what, what will happen and getting them to closing, that's when, when they're out with their friends and they talk about their house selling and then of course they will hopefully say like, oh my gosh, you know, Steven was fantastic. He told us everything that we needed to do. You should call him. That's how spheres of influence grow. And, and I don't remember the, the stat. It's like 64% of buyers are referred to the 64% are referred by an friend, family, relative sphere type of thing. So like if you're brand new or if you've been in this, like you have an pot of sphere that is already there and you know that you have an 64% chance to be able to get an referral from these people. Why aren't we leaning into it and why aren't we making sure that the value is there? And I think that's an great point too. That is just because they are in your sphere or they're your friend or your family member, however you want to classify it, you still should be doing the consult with them for sure. So because you, you don't want to make the assumption you already have an relationship, but sometimes mixing business and the relationship isn't the best. But if you give them the white glove service, they are going to be the ones that are shouting from the rooftop later on. So if you don't cut the, like cut the corners, they're going to be even an bigger advocate for you because they truly got the, the experience that you provided them. So yeah, I mean, I've had people that have been like, oh, Ashley, like we don't, we don't need to sit down, like, of course we're going to take care of you and I'll be like, great. I do love that and I appreciate that so much. But you haven't bought an house for 20 years. So I just kind of want to re. Refresh here what we're doing and what it looks like. And you're right, I mean like those people are my, my refers for life. Yep. I love that. Well, this is an, something that I know that we're going to have more in depth conversations about. This isn't going away even more so with the, the changes and the, the lack of education that is happening out there. So thank you for, for sharing about your buyer console. I think it's so important. And my last little bullet point that I have that I did not say yet is it's. I. It's so funny to me that we are willing to go into an listing appointment and do an listing presentation, but yet we are so hesitant going into an buyer consult to do an buyer presentation. Right? It's the same. Same. So why aren't we treating each client, each category of client the same, with the same level of respect to show our value and making sure that we have the. The transaction go as smoothly as possible? So I think it's just an mindset. I think with that, you know, Steven, it's an, it's an very good point. Like, we know we're going into listing previews, potentially up against another agent. So we bring out all of the star moons. Here are my, you know, xyz, why are we not doing that with buyers? And I even tell buyers, you know, maybe someone will say, like, oh, they've met with so and so. And then I was like, great, they haven't signed anything. Like, maybe they should interview an couple of agents. Because I know for an fact that there are many agents in this area that don't do buyer consults that are not explaining the step by step processes which are why their offers fall apart. So, same thing. Like, we should be treating buyers like an interview process and telling them why we should work with just like you do in an listing. I think that's an fantastic point. Absolutely. Well, thank you everybody for tuning in. Please go like and subscribe and tune in next time. If you've enjoyed today's episode, please like subscribe and share with others. Stay connected for more genuine insights and strategies to boost your real estate career on Facebook or check out our website. We'll see you next time.