G R I Marketing Buyer Services Day 2

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GRI Marketing – Buyer servicesGRI Marketing – Buyer services1. Prospecting for buyers2. Phone opportunity 3. Creating buyer expectations4. Buyer representation5. Showing and selling property6. Handling stalls and objections7. Relocation buyers8. Property inspections

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Learning objectivesLearning objectives Identify potential sources of buyers Effectively function as a buyer’s representative

by creating realistic expectations with buyers and guiding them through the process

Successfully conduct an open house and use it as a prospecting tool

Professionally show property Determine the needs of relocation buyers and

provide guidance in the process Correctly explain the inspection process

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Section 1: Prospecting for buyersSection 1: Prospecting for buyers

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ProspectingProspecting•REALTORS must always look for business opportunities•Prospects work on their timeframe – not yours•You should have contacts or prospects at all stages of the buying cycle•Some prospects may take longer to mature or develop

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ProspectingProspecting•Let people know that you’re in the real estate business•Let them know that you’re a Texas REALTOR•You come in contact with a lot of people; more than 75 percent of people use an agent to purchase a home •You must be able to discern when your prospect’s needs escalate so that you can adjust your services•Ask for referrals from friends, family, and those with whom you’ve worked

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Buyer sourcesBuyer sourcesWhere can you find prospects?

Write an introduction for the different types of prospects listed in your book.

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E-commerce and prospectingE-commerce and prospecting

Integrate it with traditional prospecting and marketing

Consumers use the Internet for research but not as a replacement for an agent

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Why consumers use the InternetWhy consumers use the Internet

Anonymity Convenience Efficiency Empowerment Control Knowledge

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Internet consumers and the buying cycleInternet consumers and the buying cycleConsumers on the Internet enter the buying cycle at different points, but they still want their needs met quicklyInternet consumers can be just as valuable Outreach to the consumer strips away his anonymityTraditional selling skills work well with and enhance conversion of Internet customers Respond quickly and build rapportDon’t assume consumers know what they’re doingFollow-up

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E-mail prospectingE-mail prospecting E-mails with ads must be identified in the

subject line unless a prior relationship exists Ask consumers for their e-mail address Maintain an opt-out feature The burden of proof lies with the sender E-mail lists aren’t as effective as your own e-

mail prospects Create distribution lists for contacts Use a signature

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Agent and company Web sitesAgent and company Web sites Can help generate new business Check for inquiries daily and respond

promptly The consumer who contacted you on

day one is normally lost to a competitor by day three

Provide a means of contact on these sites

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Electronic newslettersElectronic newsletters Are a cost-effective

prospecting tool Should include an opt-out

mechanism Informational newsletters

would not fall under the CAN-SPAM purview

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Lead generating servicesLead generating services

Monthly fee provides a specific number of leads

Quality of these leads is no better than any cold call lead

Prospects may not have consented to be passed out as a lead

Consider service cost and flexibility

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Search enginesSearch engines Search engines analyze Web sites for keywords Position toward the top of a search list is prized

and may be costly Consider costs of a search engine

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Networking linksNetworking links Provide an effective partnership tool for

related service vendors Exchange links with other vendors so

prospects from those sites can connect to your Web site easily

More link exchanges may give you more exposure to a wider array of consumers

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Section 2: Phone opportunitySection 2: Phone opportunity

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Phone opportunityPhone opportunity A valuable source of business Preparation and attitude greatly influence

conversion In general, the caller will stay on the line after

receiving her initial requested information if she perceives the agent can continue to provide value

Remember why you’re there: to help consumers who may become clients

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Preparing for phone opportunityPreparing for phone opportunity Review ads that will be running on the day of

your phone opportunity Be familiar with advertised properties Run MLS searches with criteria similar to

advertised property so you have alternatives Have a positive attitude focused on

establishing rapport

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Preparing for phone opportunityPreparing for phone opportunity Have online access to help with other

properties Become familiar with all company inventory Create a prearranged list of questions; use the

checklist

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Anatomy of the callAnatomy of the call Start with a positive attitude – smile! Introduce yourself and ask the caller’s name Ask the caller how you can help Ask some general questions about his search Does the caller have other properties in mind

that you could look up on MLS

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Anatomy of the callAnatomy of the call Find out if the caller has arranged for mortgage

financing; explain that this is the first step Try to set an appointment to see properties Invite the caller into your office to do a search

through the complete MLS data Ask the caller for contact info

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TAR marketing materialsTAR marketing materials The TAR Web site has “How I Work on Your

Behalf,” a marketing piece that you can customize

Another marketing flier available on the TAR Web site is “Seven Tips for Home Buyers”

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Section 3: Creating Section 3: Creating buyer expectationsbuyer expectations

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Creating buyer expectationsCreating buyer expectations Some people who want to buy a home are not

viable for various financial reasons Some are not viable because of their personal

situation Others are viable candidates and still do not buy

through us Our goal is to prepare the buyer, in any case, to

work with us

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Why buyers don’t use REALTORSWhy buyers don’t use REALTORS®®

Not committed to agent Unaware of all of the services agents provide Do not understand how the agent can help Feel they will save money by not using an

agent Do not understand the multiple listing of

property Have a negative impression or have received

poor service in the past

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Why buyers don’t use REALTORSWhy buyers don’t use REALTORS®®

Feel buyer’s remorse Can’t reach their agent Lack of follow-up by the agent Doubt agent’s expertise, knowledge and

competence Cannot find the right property Redirected to another agent as a referral

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Creating expectationsCreating expectations Make buyers knowledgeable about the home

buying process and maximize their experience When a buyer knows what to expect as they go

along, their angst is reduced Create expectations by proactively dealing with

difficult subjects, such as FSBOs and buying from a builder

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Creating expectationsCreating expectationsWe have two choices:

Let the buyers loose in the marketplace with no guidance

Proactively address what they should do and how we can help

Creating expectations starts at the very beginning.

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Section 4: Buyer representationSection 4: Buyer representation

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TAR 2501TAR 2501The form TAR 2501, Information About Brokerage Services, explains to consumers that if they use an agent as a buyer representative in a transaction that the agreement should be in writing and spell out the responsibilities and duties of each party and compensation arrangements.

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Code of Ethics: Article 1 Code of Ethics: Article 1 Five articles of the Code of Ethics specifically relate to buyer representation.

Article 1 – REALTORS protect and promote their clients’ interests while treating all parties honestly.

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Code of Ethics: Articles 3 & 7Code of Ethics: Articles 3 & 7Article 3 – REALTORS cooperate with other real estate professionals to advance their clients’ best interests.

Article 7 – REALTORS receive compensation from only one party, except where they make full disclosure and receive informed consent from their client.

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Code of Ethics: Articles 12 & 16Code of Ethics: Articles 12 & 16Article 12 – REALTORS paint a true picture in their advertising and in other public representations.

Article 16 – Respect the exclusive representation or exclusive brokerage relationship agreements that other REALTORS have with their clients.

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Statutory requirementsStatutory requirements With the first conversation, we are required to

inform the buyer about agency choices As an agent working with the buyer, you can either

be a subagent or a buyer’s representative If you are a subagent of the seller, you owe these

responsibilities to the seller, and if you are a buyer representative, you owe them to the buyer

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OLD CAROLD CAR Obedience undivided Loyalty full Disclosure Confidentiality Accounting Reasonable

care and diligence

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Comparison of buyer servicesComparison of buyer services Today, buyer representation is the preferred

agency relationship when working with a buyer, because it clearly defines your loyalty

Why are sellers and listing agents increasingly refusing to allow other agents to work as subagents?

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Exercise: buyer’s agent & subagentExercise: buyer’s agent & subagentWhat should the buyer’s agent and subagent do in

the following situations listed in your book?

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Buyer’s Agent SubagentFull attention to seller needs

Confidential info shared w/ seller

Keeps focus on seller’s property

Find the best buyer for the seller

Limit properties

No duty to keep looking

Show only properties that match range

Give the facts with no advice

Protect the seller’s interests

Only give facts, don’t focus on negatives

Strengthen the seller’s negotiation positionComps only, CMA if it supports seller’s price

No buyer protection if it hurts the seller

No financing that could hurt the seller

Negotiate to get the best for the seller

Share all info about the buyer

Solve problems for the seller

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Buyer representation agreementBuyer representation agreement

The buyer rep agreement clearly spells out:•The scope of the agent’s responsibilities•Compensation•The expectation of loyalty

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Signing the buyer’s rep agreementSigning the buyer’s rep agreement Why are

agreements not signed and what can agents do to make buyers more comfortable in signing them?

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A good buyer’s agent knowsA good buyer’s agent knows It is OK to not work with a buyer who will not

commit Buyer agency allows you to do your best for the

buyer Without a signed agreement there is greater liability Full dedication to a buyer’s needs should not be

given if that buyer will not make a full commitment Disloyal buyer customers can waste time and

resources

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The buyer counseling sessionThe buyer counseling sessionYour goals should be to: Build rapport Assess other relationships the buyer may have Present Information About Brokerage Services Discover the buyer’s wants and needs Discuss the agreement before discussing

anything confidential

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The buyer counseling session Discuss price range Probe steps buyer has taken to arrange financing Discuss buyer representation and the different types of representation Ask for a commitment

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Agent standards and practicesAgent standards and practices Each agent must set standards for her own

practice You can always walk away from a buyer who

will not commit You can amend the agreement to limit your risk Limit the scope of the agreement to properties

that you have shown the buyer

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Agent standards and practicesAgent standards and practices Subsequent showings would warrant that the

agreement be modified Limit time period of the buyer rep agreement Schedule a buyer counseling session to

address buyer concerns or discuss additional strategies

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1501 – Buyer/Tenant agreement1501 – Buyer/Tenant agreementTAR 1501 is the Residential Buyer/Tenant Representation Agreement.

This form can be downloaded from the TAR Web site, www.TexasRealtors.com

Your local board may also have a buyer/tenant agreement suitable for use in your market

http://www.texasrealtors.com/

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1501 – Buyer/Tenant agreement, 1-3 1501 – Buyer/Tenant agreement, 1-3 Paragraph 1

details the parties and their contact information

Paragraph 2 appoints the agent as the exclusive agent for

the buyer

Paragraph 3 defines certain terms: acquire, closing, market

area, and property

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defines time limit of the agreement time frame is normally based on how long

you think it will take to find the buyer and close the transaction

Paragraph 5 spells out the obligations to the buyer related

to this agreement and the broker’s commitment to use all of her best efforts to find the right property

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outlines buyer’s duties to the seller and specifically requires the buyer to use the agent as his exclusive agent

Paragraph 7 deals with representations most importantly, the representation agreement

ensures he is not currently obligated under any other buyer representation agreement

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1501 – Buyer/Tenant agreement, 8 1501 – Buyer/Tenant agreement, 8 Paragraph 8

addresses whether the buyer will allow the agent to work with her in the event that the buyer wishes to see and purchase a property that is listed with the agent or his company

spells out the obligations of the broker if acting as an intermediary

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1501 – Buyer/Tenant agreement, 9-101501 – Buyer/Tenant agreement, 9-10Paragraph 9

gives agent permission to work with other buyers interested in the same property

while the license law does not prohibit working with two buyers on the same property, it is wise to ask another agent to work with one of the buyers

Paragraph 10 spells out inherent confidentiality duty

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1501 – Buyer/Tenant agreement, 111501 – Buyer/Tenant agreement, 11Paragraph 11

addresses compensation for broker directs broker to seek compensation first from

seller, landlord or their agents, then the buyer If agent removes compensation from buyer as

a last result, it may leave the agent vulnerable if the buyer goes directly to FSBO or builder

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1501 – Buyer/Tenant, 12-131501 – Buyer/Tenant, 12-13Paragraph 12

sends parties to mediation if they cannot resolve disputes through informal negotiation

Paragraph 13 notifies parties that broker can seek the

compensation in Paragraph 11 as relief if buyer defaults

buyer may seek any available remedy if broker defaults

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prevailing party in any dispute may seek attorney’s fee from non-prevailing party

Paragraph 15 limits liability of broker in working on behalf of

buyer broker is not liable for personal injuries or

losses to buyer’s property that are not broker’s fault

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details any documents part of the agreement includes Information about Brokerage Services

Paragraph 17 include only factual details here do not practice law

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1501 – Buyer/Tenant agreement, 181501 – Buyer/Tenant agreement, 18Paragraph 18

many of the notices in Paragraph 18 are also included in the promulgated contract form

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Intermediary relationship noticeIntermediary relationship noticeTAR 1409 is used to notify parties in the transaction that the broker is acting as an intermediary and is appointing an agent to work with the buyer and an agent to work with the seller.

Normally, the agent appointed to work with the seller is a listing agent and the agent appointed to work with the buyer is a selling agent.

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Procuring causeProcuring causeProcuring cause and buyer representation are very distinct; we will discuss the differences.

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Procuring cause definitionProcuring cause definitionNAR uses the definition of procuring cause from Black’s Law Dictionary, Fifth Edition:

The proximate cause; the cause originating a series of events which, without break in their continuity, result in the accomplishment of the prime object. The inducing cause; the direct or proximate cause. Substantially synonymous with “efficient cause.”

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Procuring causeProcuring causeA broker will be regarded as the “procuring cause” of a sale, so as to be entitled to commission, if his/her efforts are the foundation on which the negotiations resulting in a sale are begun.

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Procuring cause/Code of EthicsProcuring cause/Code of Ethics Agents under the Code of Ethics should

always ask if a buyer is under buyer representation with another agent

To proceed with a buyer when we know he is under a buyer representation agreement violates the agency of another and is forbidden by the Code

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Procuring cause/Code of EthicsProcuring cause/Code of Ethics The Code does not extend to the actions of

buyers: sometimes buyers do not disclose the existence of another buyer representation arrangement with another agent

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Procuring cause conflictProcuring cause conflict Circumstances arise when the buyer or the

agent lose commitment to the agreement, which opens the door to the possibility of someone else becoming procuring cause

If the buyer’s agent does not follow through on the commitment to the buyer, the agent is vulnerable to another agent becoming the procuring cause

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Loss of compensation hedgesLoss of compensation hedges Make sure the buyer can easily reach you Have a back-up agent in place if you will be

unavailable Document the property you have shown and

the work you have done on behalf of the buyer Be able to demonstrate continuity in the series

of events that led to the sale

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Open housesOpen houses Can be a source of buyers for agents willing to

use it as a prospecting tool An opportunity for agents to look for buyers at

different stages in the process

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Tipping exposure in your favorTipping exposure in your favor Sunday afternoon works best Ask your sellers to leave Send open house invitations to prospective

buyers Place an open house ad in the newspaper Plan for open house signs and directionals Take plenty of highlight brochures, seller

disclosures and business cards

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Tipping exposure in your favorTipping exposure in your favor Ask a lender to prepare a financial sheet to

give to buyers Prepare an open house guest register and ask

guests to sign it Invite other agents to hold listings open at the

same time Run an MLS search to learn about comparable

properties

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Open house conductOpen house conduct Greet guests and ask them to sign your guest

register; explain contact consent Accompany guests through the house Answer any questions or ask qualifying questions Ask if they would be interested in more info about

the property or about other comparable houses If you have a laptop with wireless access, perform

an MLS search for an interested party

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Open house conductOpen house conduct Be mindful of the form Information About

Brokerage Services Build rapport and gather contact information Give visitors your business cards Send thank you notes to all buyers who came

through Call all attendees within 24 hours Follow up, follow up, follow up

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Professional designations – ABR Professional designations – ABR Accredited Buyer Representative is a

designation awarded by the National Association of REALTORS®

Qualifies you for membership in REBAC, the Real Estate Buyer’s Agent Council, Inc.

Gives notice to your buyers that you are a professional who specializes in serving buyers and meeting their needs

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Council of Residential SpecialistsCouncil of Residential SpecialistsProvides REALTORS ® with additional knowledge about:

Business planning Listing presentations Making transactions smooth Working in your clients’ interests Building referrals

Designations serve to enhance your professionalism and build your knowledge base

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Section 5: Showing Section 5: Showing and selling propertyand selling property

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Showing etiquetteShowing etiquette Leave your business card Leave the property as you found it Turn off all lights and lock all doors Always accompany the buyer through the

house If damage occurs or you set off the alarm,

immediately call the listing agent and/or police and leave a note

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Showing etiquetteShowing etiquette If you notice any irregularities, call the listing

agent If another agent is showing the property, wait

or ask permission to show at the same time If you cannot keep an appointment, call to

cancel Do not take the last disclosure or highlight

sheet

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Showing etiquetteShowing etiquette Make sure any pets are secure when you leave Never meet a stranger at a vacant house Capture contact information of anyone you are

meeting Always let someone know who you are showing

property to and where you will meet them

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Showing etiquetteShowing etiquette Prepare in advance and know where you are

going Your car should have gas, be clean, and in

good repair Be on time; if you are delayed, call to see if you

can show at a later time Prequalify your buyers

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Showing etiquetteShowing etiquette Don’t criticize the property Take periodic breaks Wear sensible yet professional clothing Keep a first aid kit and other supplies in your

car Carry adequate car insurance

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Showing etiquetteShowing etiquette Use a hands free listening device if you use a

cell phone while driving Make sure that all riders are buckled up Respond to any listing agent request for

feedback If you are the listing agent, request feedback

via e-mail with a link to the property info

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Preparing for showingsPreparing for showings The more knowledgeable you are about the

property, neighborhood, and market, the more likely the buyer is to choose you

Always arrive on time for your appointment Know the route that you will take Come prepared with the proper forms in case

the buyer decides to write a contract

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Knowing the marketKnowing the market Your company’s inventory is a “must see” You have a responsibility to every seller to do

your best Many brokers have property tours or caravans

for agents to view company listings If you can’t make a caravan, you still have the

responsibility to see your company's listings

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In-house listing fileIn-house listing fileThis includes descriptive material about the property:

multiple photos floor plan/layout survey list of amenities highlight sheet property disclosure specific directions to the property

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Knowing the marketKnowing the market When you show any property to a buyer, you

learn about the market Over time, you will learn general characteristics

of properties in an area Do not overlook the listing agent as a source of

information about the property Listing agents are the best source for the

strong points and condition of their listings

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Previewing propertyPreviewing propertyYou should preview before you show a property, but it is not always possible or practical for many reasons.

Use the Seven tips for homebuyers marketing piece when you meet with a buyer to show property.

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Showings: be preparedShowings: be prepared Show properties in a logical order Take the buyer in the car with you to build

rapport and listen to feedback Try to pull information on additional properties

for the buyer

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Showings: get preparedShowings: get prepared Bring additional information besides what you

know the buyer already has for the property Place the properties on a tour form with space

for the buyer to make comments Establish a rating system with your buyer and

note key differentiators Eliminate properties if possible as you go along

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Practice active listening Practice active listening Listen attentively, make notes, and focus Keep your mind from wandering Focus on what the buyer is saying Rephrase what the buyer has told you Keep eye contact and nod to affirm

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Practice active listeningPractice active listening Voice opinions as to other things the buyer

might consider Ask mental questions to keep you alert Do not use sarcasm or jokes about Do not judge what the buyer tells you Ask clarifying questions on points you don’t

understand

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Practice active listeningPractice active listening Be aware of body language Make sure the buyer sees you take notes Ask open-ended questions that require

explanation by the buyer Rephrase buyer statements as questions Use tie-downs to reinforce meaning Always listen!

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Closing techniques: overviewClosing techniques: overview Many buyers need some help when it comes

to actually making the decision to buy Good selling skills build on a series of small

“yeses” to reach the final decision Therefore, the final agreement is based on

many small agreements that make the final decision the next logical step

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Types of closing techniquesTypes of closing techniques Timing centered Alternate choice Assumption Ben Franklin Feature and benefit Back-at-you Reduction to the ridiculous Ask for the order

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Section 6: Handling stalls Section 6: Handling stalls and objectionsand objections

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Handling stalls and objectionsHandling stalls and objectionsPotential reasons why a buyer is not willing to write a contract include:

Not serious about buying Hasn’t found the right property Afraid that they haven’t seen enough Frightened about the whole buying process Has had a bad case of buyer’s remorse Is wary of you or the process

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Handling stalls and objectionsHandling stalls and objections Has a legitimate reason that precludes

commitment Has not been forthright about financial

qualifications Is obligated to present housing situation Must sell before they can buy Is not qualified Too big of a step for the buyer

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Stalls, true conditions, objectionsStalls, true conditions, objectionsThe reasons buyers offer for not committing are:

A stall – hides the real reason they are not committing

A true condition – the real reason that the buyer cannot make a decision

An objection – the reason that the buyer believes that they cannot make the decision

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Commitment reluctance exerciseCommitment reluctance exerciseIn your workbook, review each of the reasons for not making an offer. Determine if each is a:

stall (S)true condition (TC)objection (O)

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How to handle a stallHow to handle a stall Agree

Probe

Listen

Repeat

Solve

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How to handle an objectionHow to handle an objectionNot all objections need to be handled. Concentrate on those that are major and the rest will cease to be issues.

Agree Probe Prioritize Isolate Overcome

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Role play for buyer objectionsRole play for buyer objectionsWrite out a role play script for handling the buyer objections in your workbook.

Be sure that you go through the five steps: agree, probe, prioritize, isolate, and overcome

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Section 7: Relocation buyersSection 7: Relocation buyers

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Relocation buyers Relocation buyers Relocation business can mean any business where a buyer moves from one city to another.

A relocation is normally thought of as a move necessitated by a job transfer.

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Employee relocation councilEmployee relocation councilThe ERC is a professional membership association of organizations concerned with domestic and international employee transfer.

ERC cites average relocation costs around $60,000

ERC offers the Certified Relocation Professional (CRP) designation

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Corporate costs of relocationCorporate costs of relocation Loss-on-sale Shipping of household items Federal tax liability Purchasing closing costs Mortgage buy down Bonus/incentive

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Corporate costs of relocationCorporate costs of relocation Miscellaneous expense allowance Temporary living expenses Duplicate housing allowance Home finding trips Spouse employment assistance Travel and lodging

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Why companies relocateWhy companies relocateQ: Why would a company spend so much on a transfer, rather than just use a local employee?

The answer: To increase productivity and maximize profitability by having the right employee in the job at the right time.

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Negatives for transfereesNegatives for transferees Lack of control Time pressure Surprise Family upheaval Emotional toil

Corporations offer counseling, home sale, and home finding assistance to help the transferee through the relocation process.

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Relocation buyer sourcesRelocation buyer sources Broker-to-broker referral networks Broker-to-broker referral networks through

franchises Third-party corporations Membership in NAR Societies, Institutes and

Councils

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Relocation buyer sourcesRelocation buyer sources Corporate marketing Your company’s relocation department Internet Internet lead generators Personal referrals

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Relocation referralsRelocation referralsYour decision to accept a referral that carries a fee will be influenced by:

Your workload Your ability to generate your own non-referral

fee business Your aptitude for servicing the relocation buyer Your business philosophy Value you place on seed business The buyer’s housing requirements and demands

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Special needs of relocationsSpecial needs of relocations Information about the city School information Housing near the job Spousal employment Churches or places of worship Medical doctors and hospitals

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Special needs of relocationsSpecial needs of relocations Amenities, programs, or hobbies that match

current lifestyle The ability to potentially look at many

properties during a short time period of time Information about local customs Awareness of state or municipality differences Additional housing expenses Sale of home in the origination city

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Relocation buyer phone callRelocation buyer phone call •First call to the transferee sets the tone for future interaction•Have a very clear idea of what you need to accomplish during the call so that you gain the information you need to help the buyer •Tell them about you to earn trust and build confidence that you will be able to help

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During your first callDuring your first call Introduce yourself State the purpose of your call Build rapport Ask how the buyer feels about the relocation Has the buyer ever been through this? What family members will be transferring? How old are any children?

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During your first callDuring your first call Do they have educational requirements? Find out where they will stay and how you can

reach them Do they need to be picked up at the airport? What do they want to accomplish on this visit;

how much time can they devote? Who will be coming along?

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During your first callDuring your first call What are they looking for? When do they need

to purchase? How much do they want to spend? Do they need a lender? Do they have

financing? Are they receiving relocation assistance from

their employer?

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During your first callDuring your first call Determine if there is any information that they

would like you to send before they arrive. Do they need to sell their home before they can

purchase in the destination city? Do they have corporate buyout assistance for

their home?

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During your first callDuring your first call How soon do they want to relocate? Ask if you can visit with the spouse Set up the next contact and get buyer’s contact

information Make sure that the transferee has your contact

information

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Role play exerciseRole play exerciseAgent role: Frankie LaPoma, sales associate with Northside REALTORS®.

You must call Bobby and start the process of helping him and his family relocate to your city. Have a clear idea about what you want to accomplish on that first call.

Transferee role: Bobby McGinness Add details about your situation as you answer

Frankie’s questions and start to work with him

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Relocation agent best practicesRelocation agent best practices Develop rapport Uncover negatives Maintain close contact Touch base weekly or as needed Call before they arrive Clear your calendar Have mortgage financing arranged

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Relocation best practicesRelocation best practices Attend to details that will reduce stress Keep them well informed of progress Show you care and are here to help Never give advice on employee’s relocation

benefits Report progress regularly to the referral source Thank the referral source and ask for more

business

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Section 8: Property inspectionsSection 8: Property inspections

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PricingPricing The offer price you present to the seller should

include comparable sold, CMA data, and the seller’s disclosure

Prepare a CMA for the buyer before you write the contract

Factoring in the condition of the property in the offer price is a negotiation best practice

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Property inspectionsProperty inspections Occur during the option period after the

contract has been executed – or during the inspection period for HUD

homes It is important to schedule them as soon as

possible after the contract is executed in case additional inspections are necessary

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Agent’s role in inspectionAgent’s role in inspection Buyer should be present at inspection Agent may or may not choose to stay for the

whole inspection, but it is helpful Allow the inspector and buyer to communicate

directly with each other If the buyer is confused by something in the

report after the inspector delivers it, encourage the buyer to speak to the inspector for clarification

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Negotiating itemsNegotiating items Instruct your buyer to create a list of priorities

limited to major items of concern

Large items should be bid; this helps both the buyer and the seller understand what is at stake

Bids are also important if the buyer will ask for a monetary concession in lieu of repairs

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Inspection and the option periodInspection and the option period Make sure that any change to the option period

is done in writing on the promulgated amendment before the first option period expires

Include additional option money. As with the original option fee, no extension can begin until the option fee is in the hands of the seller’s agent

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Inspection and repairsInspection and repairs Agent and buyer should perform a property

inspection and walk-through You can use the TAR 1925 Buyer’s Walk-Through

and Acceptance form Scheduling a walk-through where the buyer signs

off reduces risk If the property condition is not acceptable, then

renegotiation or mediation is needed at closing. – Ask listing agent to have seller bring to closing

any repair invoices and warranties associated with performed work