Four Steps to Weeding Out Tire Kickers
“In this market, [sales associates] have to monitor the quality of buyers and can work only with motivated ones, which they haven’t had to do for years,” says Walter Sanford, owner of Sanford Systems and Strategies, a coaching and training company in Kankakee, Ill.
You’re probably thinking that you need to make money, so you’ll work with anybody. Sanford, however, says it’s silly to work with unmotivated buyers. “All you have is your ability to work with high-percentage-close clients because that gives you a larger chance of earning a commission, and you’ll give them better service because you won’t resent the time spent with them.”
Sanford has developed a four-step plan associates can use to find out if buyers who call about properties are motivated. “The plan asks buyers to cooperate with systems put in place for their own good,” he says, “and it proves to you their motivation.” Here’s Sanford’s plan:
1. Gauge the buyer’s motivation during the first telephone call.
I’d be happy to show you the property, and the more I know about you, the better chance I have of showing you other properties that meet your needs.
I don’t want to answer a lot of questions. I just want to see the property.
I can also show you properties other sales associates will never show you—houses that are for sale by the owner, expired listings, items from my past client database of people who own real estate that may meet your needs. In my office, we discuss brand new listings every week, many of which haven’t been put on the market yet, and I’ll show you those too. I’ll also send out 500 postcards to people who live in the area that interests you, announcing that I have a buyer looking for a property in this area in this price range, and I’m looking for people who want to sell but haven’t listed yet. I’ll be showing you inventory nobody else will ever show you.
What part of “show me the house” don’t you understand?
Sanford says the buyer’s responses “identify him as a low-motivation buyer.” This should be your response: “From our conversation, it sounds like you want to see only this one house. I’m happy to help you see this one house, so why don’t I put you in touch with the specialist for this house?” Then, according to Sanford, pass the lead along to a new agent in your office who’s looking for business for an agreed-on referral fee.
2. Prequalify the buyer for a mortgage.
“If the buyer answered all my questions, I like him more,” says Sanford. “But I still won’t work with him until I e-mail my lender, and I tell the buyer the lender will be calling. The lender call does two things: It provides the opportunity for the lender to give me a third-party endorsement, and it prequalifies the buyer.”
Thank you for this information. I’ll start processing it. In the meantime, I’ll have one of the lenders I work with call you to see if you qualify for the best terms and service.
3. Require the buyer to come to your office.
If the buyer qualifies for a loan, Sanford recommends that you require that buyer to come to your office, which shows additional motivation and ensures your safety. “If the buyer doesn’t show up, everybody makes mistakes, and I make a second appointment,” says Sanford. “If the buyer doesn’t show a second time, I refer the lead to a new agent in the office.”
4. Ask the buyer to sign a buyer’s agent agreement.
“I won’t work with buyers until they sign a loyalty agreement, which is my name for a buyer’s agent agreement,” says Sanford.
Sanford says this process weeds about 70 percent of low-motivation buyers out of the process. “The remaining 30 percent have about a 94 percent closing ratio, based on my 30 years of experience,” he says. “If you have highly motivated buyers, you’re more motivated working with them, and you have to handle fewer objections because low-motivation buyers have more objections.”