4. Buyer Service

1. 4. Buyer Service • Services buyers and sellers want • Client and customer service • Needs assessment • Finding properties • FSBO • Negotiations as a buyer service • Effective follow through • Lending • Fair housing law 65

2. Buyers Want Help 1. Finding the right home (50%) 2. Negotiating price and terms (13%) 3. Determining sales prices of comparable homes (10%) 66

3. Sellers Want Help 1. Selling the house within a specified time frame (25%) 2. Finding a buyer (22%) 3. Marketing the home to buyers (16%) 66

4. Stages in a Real Estate Transaction • Needs assessment • Property selection • Viewing properties • Negotiating • Follow through 68

5. Needs Assessment Buyer - client • Buyer’s needs • Buyer can talk freely • Advise buyer on alternative solutions Buyer - customer • Seller’s needs • Full disclosure to seller • Focus on the seller’s property 68

6. Property Selection Buyer - client • Find best property • Leave no stone unturned • Give first look at new listings • All properties are available Buyer - customer • Get best offer • Show listed properties only • Lower level of responsibility • Limit properties to buyer’s affordability range 70

7. Skill Builder Tip • Recommend inspections • Get a C.L.U.E. Report 71

8. Viewing Properties Buyer - client • Okay to give advice • Educate the buyer Buyer - customer • Material facts only • Protect the lesser (client) 72

9. Skill Builder Tips for Safety • Ask prospects to stop by your office • Introduce clients to colleagues • Let others know where you are going • Call the office once an hour • Establish a voice distress code • Preview the property • Carry only non-valuable business items • Park at the curb • Leave the front door open wide • Let the prospect walk ahead of you 72

10. Negotiating Buyer - client • Educate the buyer • Negotiate for the buyer • Provide price counseling • Contract • Financing • Continue services • Strengthen position • Share all info about seller Buyer - customer • Material facts only • Negotiate for the seller • Price (CMA to support the seller) • Contract • Financing • Continue services • Strengthen position • Share all info about buyer 74

11. Follow-Through Buyer - customer • Follow through on behalf of the seller Buyer - client • Follow through onbehalf of the buyer 76

12. Providing Lists for Services • Provide only a list and allow the client to select the other professional, e.g. home inspector, title company, appraiser, and others • Do not overstep boundaries to provide legal advice 80

13. MLS Fax broadcast * Personal solicitation * Internet FSBO publications FSBO file FHA / VA foreclosures Auctions New construction Others Finding Properties * Remember do not call, fax, and e-mail laws 81

14. Prepare your buyer-client in advance Contact the owner and disclose that you are a buyer’s representative If the buyer is compensating you do not make your compensation an issue with the FSBO Secure all public information about the property and prepare a CMA for your client Do not provide advice or guidance to the owner Keep the negotiation on price as simple and straightforward as possible FSBOs 83

15. Forced sale of real estate to repay a debt auction sheriff’s sale short sale judgment lien REO Not for every buyer Foreclosures 85

16. New Home Construction • Generally not listed on MLS • Learn about the product and the construction process • Factors • Registration • Financing • Active involvement of buyer • Contract and closing • Sales representative • Pricing and negotiations • How can the buyer’s representative help a buyer-client 87

17. Risk Management • Manage expectations • Do not promise what you will or cannot do • Keep your presentation realistic and balanced • Keep buyer-clients informed • Do not “fuzz” the truth 89

18. Skill Builder Tip • Document the transaction with copies of agreements, memos, e-mails, and notes about conversations with clients, customers, other agents, and service providers • Use the same file names and structure for both hard copy and digital files 89

19. Lending – Subprime, Predatory, Fraudulent, High Risk • Subprime – higher costs for higher risks • Predatory - abusive practices that prey on the uninformed, financially-inexperienced, cash-poor • Fraudulent – deliberate criminal activity • High risk – right for specific circumstances 91

20. Skill Builder Tip: Red Flags • Request to calculate a commission on amount different from purchase price • Request to raise the property price in the MLS after contract • Arrangement to route money from the seller to the buyer through a third party • Fabricated income and employment verification or forged signatures 92

21. Choosing the Right Loan Why? Payment flexibility, maximize cash flow, minimize impact of rental vacancy, leverage. • Interest-only • Buy Down Mortgage • GPM • Convertible ARM • Fixed period ARM • Two Step • Option ARM 92

22. Federal Protected Classes • Race • Color • Religion • Sex • Handicap • Familial status • National origin Everyone is protected by Fair Housing Laws. State, county, and municipal laws may add classes 96

23. How Will Your Respond If the buyer asks… • What is the racial composition of this neighborhood? What kind of people live here? • How are the schools in this area? Are they good? Are the schools integrated? • Why don’t you just pick out some nice properties in a safe area for us? Would you live here? 96

24. Fair Housing Self-Assessment • Meeting the prospect for the first time • Qualifying the prospect • Choosing properties • Showing properties • Performing follow-up activities 98

25. Building Blocks • What could you say to explain the advantage of services provided by a buyer’s representative in: • Needs Assessment • Property Selection • Viewing Properties • Negotiating • Follow-through 100