Choosing the house you’re going to buy, make a home, and maybe raise a family is a big decision. There’re a lot of financial and emotional factors involved, often competing with each other.
Your job as a real estate agent is to guide buyers through that process, answer questions, and make things easier. You want to give them enough information to make an informed decision but not so much that they’re overwhelmed. There are five basic steps in finding and choose the house that’s right for them.
1. Financial Assessment
Where are the buyers financially? What kind and how much debt do they have? Discuss all the expenses of homeownership. Talk to them about their 5 and 10 year plans. Determine whether they’re financially ready to buy a house.
After buyers are confident they’re ready to buy, then they need to determine what they can afford. House payments should not be more than 28% of their gross monthly income. Multiply the gross monthly income by 0.28 to find the maximum monthly payment they can take on.
Suggest they get pre-approved for a loan to identify a price range. It will also indicate to sellers that they are able to complete the home purchase.
2. What and Where
Now that you have a range, ask where they want to live and what type of house they’re interested in. Their price range will narrow these two down somewhat. With the location, there are various factors to consider such as schools, type of neighborhood, distance to jobs and city centers, and local amenities. Their family situation and lifestyle will determine much of this.
Then they have to determine how many bedrooms and bathrooms they need, square footage, house age and type, and lot size. Have blank buyer’s wishlists to allow your buyer to write down and rank their needs and wants. Remind them that they probably can’t get everything in terms of location, price, and size. Usually, it’s only 2 out of 3. It’s about compromise and tradeoffs.
3. Online Search
Most buyers have already done this before they contact an agent because it’s fun to window shop. It’s helpful for them to browse the listings to get an idea of what is available in their price range. It’ll also help them adjust their expectations.
After they’ve picked a batch of houses they really like, print out the listing sheets with a photo, address, price, and specs. Tell the buyers to take notes on the back of the sheets as they’re touring properties, jotting down first impressions, questions, and issues.
4. House Hunting
This is the fun part. Having an agent along while touring houses is helpful to buyers who likely have lots of questions. Their agent can provide context and background about a house or neighborhood, fill them in on the current local market, educate them on the possible negotiations and contingencies, and offer suggestions about upgrades and repairs.
After they’ve attended several open houses and toured many properties, it’s time to narrow down the house list. Have them read through their notes on the listing sheets and choose their top 3 favorite houses. Discuss what they like about them. Perhaps arrange to go look at these three houses again to help make a final decision.
5. Choose the House
This is an analytical process where they list and weigh the pros and cons of each house, but it’s also emotional. Sometimes you just have a feeling about a location. Sometimes buyers connect with one house in a way they don’t with the others.
How will the buyers know which house they should submit an offer on? Some people say you just know, you feel it in your gut. But this is a big, expensive decision, and some people are indecisive.
Do they enjoy imagining themselves living in the house? Do they fantasize about the changes they’d make and the renovations they’d do? Do they arrange their furniture in the house in their minds? If your buyers answer “yes” to these questions about one of the top 3 houses, then that’s probably the one.
Buying a house is an emotional journey. Your clients are choosing where they’ll make their home for the next 5, 10, 20 years. It is smart to be pragmatic and analytical about it, but it’s also important to include the emotional aspect too. How the buyers feel about a house can be a powerful force.
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