Owning a home is still the American dream, but how many buyers are willing to make (and/or capable of) the actual hard sacrifices to get one.
Determining which buyers “are real” vs. which are “just (fantasy) shopping” is the key to your (our) success.
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Many agents (privately) complain they’ve “had their chain pulled” (by friends/ family members) repeatedly by buyers who get the “itch” “just start looking”.
If you have a relative or a member of your social group that fits this profile, this puts you in a “no-win” situation. If you don’t “humor” these types, you run the risk of them bad mouthing to others in your family /social groups.
If you try to facilitate them, time, gas and marketing budgets are wasted and they cost you commissions which would’ve been earned by working with other buyers.
The best judge if a buyer is serious, is how they BEHAVE..NOT what they TELL YOU; so begin to notice their habits so you can prioritize which buyers are most important.
Many behaviors seem like small and nondescript until the costs are projected over 1, 2 or even 3 years that’s required to save for an adequate down payment.
Signs of Serious Buyers
a) Borrowers are making the right financial strides. They have already started saving toward a down payment.They are receiving a gift from relatives or other significant cash influx (inheritance-tax return-bonus)
b) Borrowers have a firm budget and want to know what they can afford.
Editor’s Note: It’s important for your loan officer or their tax preparer to be able to calculate the state & federal tax savings, as it lessens the payment shock. This will expand the buyer’s ability to buy a home they wouldn’t otherwise think they can afford.
c) Borrowers are realizing what they want. The more buyers are focused on specifics such as tracts, school districts or commutes indicates the degree of commitment!
d) Borrowers focus on “house specific” features. As buyers get closer to committing they prioritize what they need, not what they want.
e) Three bedrooms, two bathrooms and an attached garage – those are needs. A want would be high-end fixtures, granite counter tops or a wine cellar.
f) And last, borrowers are toning down expectations! The final sign borrowers are ready to take the big step is when they realize “there is no such thing as a perfect house”, but instead realize “this is the place where I want/ need to live”.
Signs of “Unsuccessful Buyers”
1) Spend more than they earn every month.
2) Are too busy to budget, track income and expenses.
3) Always have large wads of cash in their wallet.
4) Are impulsive shoppers.
5) Hate the idea of paying bills online.
6) Plays the lottery habitually.
7) Use credit card convenience checks.
8) Never reads the fine print before “signing on the dotted line”.
9) Eats out frequently.
10) Has a budget — but never follows it.
11) Doesn’t use coupons, or Internet promotional codes.
12) Financially disorganized
13) Uses credit cards (vs. debit cards).
14) Counts on a big inheritance or family gift for the down payment.
15) Prefers making the min. credit card payments each month.
16) Buys new cars — every few years.
17) Smokes, uses hard drugs or gambles.
18) Never checks credit report for errors (or at least until they already have written an offer for a home).
19) Hates comparison shopping.
20) Think credit cards are for emergency funds.
21) Stuffs unopened bills in a drawer.
22) Tries to keep up with the Joneses.
23) Doesn’t run a household like a business.
24) “Chronic” legal issues (i.e. DUIs / Child Custody Battles)
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Before Your Buyers Begin Looking for a Home!
Daniel Dobbs (.org)
Managing Broker
Mutual Home Mortgage
500 S. Kraemer #165
Brea, Ca. 92821
Cell: 949 250-3981
Dandobbs6@gmail.com
BRE # 00986886 …..NMLS# 307631
Copywrite © August, 2018 Daniel Dobbs MHM Mortgage /// All rights reserved. No part of this publication may be reproduced, distributed, or transmitted in any form or by any means, including photocopying, recording, or other electronic or mechanical methods, without the prior written permission of the publisher, except in the case of brief quotations embodied in critical reviews and certain other noncommercial uses permitted by copyright law. For permission requests, write to the publisher, addressed “Attention: Daniel Dobbs, Author- VP-Broker Mutual Home Mortgage 265 S. Randolph #120 Brea, Ca. 92821 Cell: 949 250-3981 Dandobbs6@gmail.com NMLS #307631 BRE #00986886