What to Expect When They Don’t Know What You are Expecting
Written by Patrick Kelly, Industry Expert and Assistant Manager of Berkshire Hathaway HomeServices PenFed Realty
Do we always know what our clients want or need? Do our clients understand everything we do as Realtors to get a transaction to the closing table? The purpose of this little chat is to talk about expectations when you are representing someone buying or selling their most valuable investment; their home.
Let’s talk about expectations, and by that, I mean managing expectations. Growing up, I thought the word expectation was spelled with four letters, as in, it was not a word I loved. The longer I am in this business, I see how incredibly important it is to manage the expectations of clients. As a coach and a trainer, I am continually asking questions to new agents to the point that I feel like I am turning into my parents. Or maybe my wife, but I digress. Questions I ask new agents include: “What are your client’s expectations?” “Did you actually talk with your buyers about what to expect from a home inspection?” “Does your seller know that ugly wallpaper is not vintage chic?”
I’m going to highlight three different types of expectations that need to be talked about with your clients. Expectations about the buying process, expectations of the selling process, and what can your clients expect from you as their agent.
Purchase Power Expectation
▪ The most common phrase when purchasing a home is “champagne on a beer budget.” Borrowing money is cheap right now, your buyers need to talk to a lender to see what they can afford. There is no value showing a home to a buyer who can’t afford it.
Market Pricing Expectation
▪ This is specifically for properties priced under $200,000. There are no deals to be had. If your client is considering a house priced at $175,000 that is move-in ready, and they want to sleep on it, I would say, “If you want to sleep in this house then you can’t sleep on that offer.”
▪ As much as I love Chip and Joanna, they are not going to remodel and decorate your client’s homes. Your buyers need to understand a little sweat equity can help make a house a home.
Highest Price Expectation
▪ Sellers have done some research on their own and know our current market has low inventory, so it’s a “seller’s market.” While this is true, it doesn’t mean they are going to sell their house for 20% over market value.
How Soon Expectation
▪ How fast a property sells is directly affected by price and the market segment. Under $250,000, sellable homes are selling in days and not weeks. Higher priced homes may take a few months. Overpricing a house, even by as little as 5% over market value, can lengthen the Days on Market considerably.
Home Needs No Repairs Expectation
▪ No house is perfect. No. House. It doesn’t matter if it is a brand-new construction, or a 100 years old house, there is something that needs to be fixed. Seller’s should not take it personal.
▪ This one is near and dear to my Realtor heart. Set the expectations of when and what method you are going to communicate with your clients. Telling your clients “I work 24 hours a day” is not only misleading, but also very unhealthy. If you ever get a phone call at 2:00 in the morning because your client was up and wanted to know where the best place to get moving boxes from (and they haven’t bought a house yet), you will understand.
▪ Another saying I’ve picked up over the years (Thanks, Zan Monroe), “Your clients are in charge of the decisions, but you are in charge of the process.” That means they decide what price to offer, price to list, repairs, etc. You, as their agent, are responsible for the entire process from showings or listing, negotiations, and getting the deal to the closing table. Make sure your clients are comfortable and understand all of the decisions they make.
Ultimately, it comes down to having conversations with your clients. There are situations that you need to be brutally honest. Realtors always need to listen to what our clients want and need. Remember, a real estate transaction is like an onion that you need to peel, one layer at a time. Setting expectations is like taking a knife the onion and chopping it in half. It takes less time and fewer tears.
Patrick Kelly is an Industry Expert and Assistant Manager of Berkshire Hathaway Homeservices PenFed Realty