After Preapproval: Starting the Home Search
A week ago, we discussed the importance of the preapproval when starting the home search from the buyer's perspective. But once you are preapproved through a high quality customer oriented lender, what is your next step?
This is where I would say each buyer has a home search personality type. As a Realtor I have seen multiple styles of property search psychology.
1. "I saw this property on a property search website, It's the only one I've seen, it's perfect and I absolutely want to see it now." This home search type is probably the most dangerous psychological state to be in as the buyer. The buyer has no alternative properties picked out, they probably haven’t gotten preapproved, and they are relying on the listing agent's marketing to determine that it's their "dream property." They are farther along in their decision making for the buyer's agent to have a decent chance at slowing down the decision making and due diligence and to concentrate on the pros and cons. What usually happens here is that a hungry buyer's agent agrees to show the client the property on short notice, and the property ends up being very different from the listing agent's marketing. If it is not different from the listing agent's marketing and the buyer does happen to have the financial qualifications already sorted out, they are in a precarious position in a hot market because they could be outbid and lose their only chosen property. Either way, the client ends up being disappointed, they have wasted a lot of their own time and the realtor may not ever hear from them again.
2. The second property search personality type is the do it yourself type. They like to be the ones to pick out the properties and tend to dislike properties sent to them from their buyer agents. There is nothing wrong with this strategy, so long as good communication is happening between client and agent. It is good for the agent and the client to have a conversation about how the clients prefer to find their properties. Most clients of this type prefer using Zillow, but if there is an agent provided alternative it can be good to use that as a replacement. The agent has better access to how interested the client is in the property and can do some due diligence work on the client's behalf ahead of time, keeping ahead of the property search game! The other downside is that Zillow is trying to actively separate you from your existing broker so they can sell other leads to you. This means that if you work to much in Zillow's platform you will most likely get a lot of cold calls you did not mean to trigger. The client should make sure they are actively forwarding any "liked" properties to their chosen agent with any detailed follow up questions the client may have.
3. The third property search personality type are those clients that prefer the buyer agent to assist in the property search by actively hunting for properties on the client's behalf. This is a very efficient strategy so long as communication is solid and the clients continue to give the agent constructive feedback on each listing that is provided. Alternatively, the buyer's agent most likely should not overload the client with too many options. It is the buyer's agent's role to narrow down the amount of active listings by honing in on those that best fit the client's property profile. This method also narrows down the amount of due diligence needed by the buyer agent and the clients as well because the agent can hone in on the properties that are best suited for what the client is looking for.
In closing, the important lessons here for the client trying to optimize their property purchasing strategy are:
The agent and the client should be open about what is driving the property search. This allows everyone to be on the same page as to what properties are suitable.
The client should understand this isn't a one shot get lucky process like we discussed in scenario 1. This is a team effort that will take time and work.
Scenario two or three is fine for home shopping, but which one the client prefers will effect how much communication needs to happen, and how much work. In scenario 2, the client needs to be diligent about communicating with the agent. In Scenario 3. the agent needs to be diligent about communicating with the client.
For everyone's sanity, for efficiency, and to reduce the amount of cold calls, utilizing the agent's search tools is probably optimal.
Next Week: Now that you have a short list: What is a BATNA and why should I have one?