Regardless of the market cycle, first time buyers always make up a significant portion in any market. That’s just as true today with millennials entering the first time buyers’ market at an ever-increasing pace. Just like any client base, these people come with needs and requirements that are unique to each buyer. Even in this age of information, most first time buyers will become easily lost in the buying process at some point.
As a realtor, your responsibility and competitive edge comes from anticipating this and providing awareness and answers before your client even knows a problem or hurdle exists. Typically, first time buyers are familiar with agreeing to and signing an apartment lease, which is much different than buying their own home. The types of questions these people think to ask are something like – “can I have a pet?” or “what utilities will be paid for me?’ or “will I have an assigned parking space?” Obviously, these are way off base from the questions they really need to have answered.
Starting the First Time Buyers’ Process
As a skilled professional, you need to anticipate your buyer’s confusion when you start tossing out terms such as “the neighborhood has an organized HOA”. First of all, they don’t know that HOA stands for Homeowners Association. Second, they don’t know that a substantial monthly fee almost always comes with an HOA. Certainly they are unaware there will be a litany of governing covenants making it easy for the HOA to place a lien against the house for doing something as simple as erecting an unapproved flag pole on their own property or for parking a travel trailer in the drive way.
But it begins well before that. Start by offering your new client a free information sharing presentation. You want a sit down meeting in a casual environment (your office or their home is fine) and you want to use friendly language. However, you want to present a professional and accurate explanation of the home buying process for your specific location. Encourage and make it easy for first time buyers to ask questions at any point in the discussion.
Have a Prepared Presentation
You can’t go into the minutia about every contingency that might come up but you can provide an overview of options and what buyers should expect. To you, it’s second nature but to them it’s a completely new world of things like:
- Prequalifying for a loan.
- Loan options that are available.
- The home viewing process – open houses, private tours, giving you some notice of a home they want to see so that you can learn the more intimate details about the house including what might be motivating the seller, etc.
- Earnest money (with contingency clauses).
- The typical negotiation process.
- The importance of reading HOA covenants.
- Home inspections.
- Buying and selling agency fees and who pays what.
- The closing process and the fees they will be expected to pay.
- The process of taking possession of the home.
Of course, that is an abbreviated list but it will get you thinking about what first time buyers don’t know. Better yet, everyone appreciates free and insider information. It’s a great way to solidify yourself as their buyer’s agent. You’re going to be the one they call whenever they have a question. And of course, there is always the benefit of word-of-mouth referrals they will make for you to their friends and family.
Please leave a comment if this article was helpful or if you have a question.
Author bio: Brian Kline has been investing in real estate for more than 35 years and writing about real estate investing for 10 years. He also draws upon 30 plus years of business experience including 12 years as a manager at Boeing Aircraft Company. Brian currently lives at Lake Cushman, Washington. A vacation destination, a few short miles from a national forest. With the Pacific Ocean a couple of miles in the opposite direction.