Qualifying buyers effectively can play an important role in matching buyers to appropriate properties by reducing transaction times and fall throughs and helping to manage sellers’ expectations. But it’s often overlooked either due to a lack of time, a lack of understanding about how to qualify a buyer, or because of an overt focus on just getting a property to SSTC.
Here’s some top tips from mio on ensuring your buyers are qualified.
- Are you serious? – lockdown has left many people feeling dissatisfied with their homes and yearning for a change but moving house is a big deal, especially if you’re planning to move tens or hundreds of miles from your current home. As a busy Estate Agent, you don’t want to waste your time dealing with someone who isn’t actually going to move. Ask buyers how long they’ve been looking for, how many properties they’ve viewed, whether they’ve already made offers on properties and why those offers weren’t accepted.
- Help buyers, help you – ensure buyers understand how the process works, ideally before they make an offer on a property. This will ensure they can respond quickly as the sale progresses and can take weeks off transaction times.
- Virtual viewings – nobody wants to waste their time on physical viewings unnecessarily. Ask anyone who wants to book a physical viewing to take a virtual tour first. This might result in fewer physical viewings but at least you know that you’re investing time in someone who is really attracted to the property.
- Availability for viewings – can they drop everything to view a property or do they need a couple of weeks’ notice as they have to, for example travel hundreds of miles? With a shortage of new stock coming to the market, it’s easy to see the appeal of a buyer who can swing by a house after work.
- Cash in the bank? Has the purchaser got a Mortgage Decision in Principal (MDIP) and how much can they borrow? Buyers with an MDIP are generally more organised than those without and can often progress their purchase faster. Having an MDIP in place can also reduce transactions times. If the MDIP is more than a couple of months old, ask the buyer to get it refreshed. Lending appetites change and so do buyers’ financial positions. If someone states that they are a cash buyer, ask for evidence e.g. a recent bank statement.
Kate from Norfolk recently sold her property. Having accepted an offer from a ‘cash-buyer’ in July 2020, it took Kate’s Agents several weeks to discover that the buyer wasn’t actually buying in cash. The sale did complete but it took two months longer than it should have done.
- Have you really sold it? Is the buyer’s property on the market or at SSTC? How complicated is their chain and what’s the status of the other transactions in the chain?
- Have they got their ‘team’ lined up – does the purchaser know which Conveyancer they are going to use and if they’re buying an older property, which Surveyor they will appoint? This will allow you to sort the organised buyers from the less organised. This also presents a great opportunity to refer buyers to your preferred suppliers which can generate valuable extra revenue.
- Speed isn’t for everyone – Not all buyers and sellers want to move in eight weeks. Anything from pre-booked family holidays to school term times, to the status of the seller’s onward purchase can affect timelines. Try and take account of both buyers and sellers timelines to avoid mismatched expectations.
Emily from Wiltshire recently made an offer on a property. She was an organised, motivated buyer and her property was already at SSTC. She gave the Estate Agent a clear deadline for Exchange when making her offer. Her offer was accepted but fell through four weeks later when the sellers said that they did not want to move so quickly as they’d hadn’t yet found their onward purchase. The sellers had not been told about Emily’s deadline for Exchange when they accepted her offer.
- Act on the information you have – If you want a quick sale and your client wants a quick sale, make sure you highlight which buyers you think are in a position to move quickest when you present offers to your client. An offer that is 10% above asking price might look appealing on paper, but does it really trump an asking price offer from a chain free, cash buyer?
This might sound like a lot of extra work but investing twenty minutes in fully qualifying a buyer can reduce transaction times by weeks and that makes a big difference to your revenue, your commission and to your ability to evidence great service to existing and potential customers.