The “Bailing” Buyer

There is a local group of agents who are networking on facebook.  The question came up as to whether the recent negative Case-Shiller Index Report had any impact on their clients?   A couple of agents felt their buyers withdrew from sales because they were worried housing prices were still going down.  This made me begin to wonder if these buyers really got that spooked by the report, if they were shaky from the beginning or if they became leerier as the transaction neared closing.

Is one of your current buyers someone who will get cold feet and bail just before closing?  How well do you really know what your buyer is thinking? You educated your buyer on the process, asked their wants and needs, took them out and showed them countless properties; they found the home of their dreams.  Everything is hunky dory..Right?   

99% of time the answer is yes, the deal may have its bumps and challenges but they eventually do close. But what about the other 1% that has a buyer that withdraws.  What are signs to pay attention to? Maybe there is a profile of a buyer we should be more alert to than others, ones that may be prone to “bailing.”

 The investor type is the person who is more focused on the money than the ascetics of the home. They will negotiate over a penny and usually want the last word.  They ask lots of questions as to what your opinion is on future gain. If they switch out the carpet for hardwood, how much will that add to their value?  What is a kitchen remodel worth for future resale.  How long do they need to stay put before they see some return on their investment? Questions that are money related to a future sale are often a clue.

Another buyer that could be prone to bailing is the ‘scared to make a decision’ person. They waffle back and forth over every decision throughout the contract.  They need constant reinforcement that they are doing the right thing.  They often have never bought a home before.  Does your buyer make comments that tell you they are constantly watching the news regarding the market conditions?  Do these newstories worry them?  Do they quote friends or colleagues at work who make comments about this being a bad time to buy?  Do these comments worry them? If you aren’t paying attention to your buyer’s emotional state, you could miss the warning signs that you have a sale with the type of buyer who is subject to getting cold feet?  Did they show hesitancies or have a hard time making the initial decision? 

The last buyer profile is someone who made a past, bad buying decision and paid dearly to get out of it.  Now it’s time to buy again and they are afraid of making the same mistake twice. This client will tell you the whole story and will be looking to you for guidance this time around. They will also be on the look-out for any signs that they are repeating their past mistake.

Of course “Cold Feet” can happen to any buyer in a changing market.  Acknowledge their fear of buying property as it is such a big purchase for them. And also recognize that some people are afraid of change..It’s uncomfortable for them even when its necessary.   You need to make sure you are staying in tune to their feelings and understand where they are coming from.  

So what can you do to help avoid this?  I am sure there are many responses but here are a few I have put together.

1. When the decision has been made to offer on a house, have the buyer write down in their own handwriting 10 things that they love about the house.  If they start wobbling later on you can have them review their own words
2. Have the buyer write down in their own handwriting how they imagine living in the home and why.  Same reason as #1
3. Be sure they have reviewed all the disclosures prior to writing an offer if possible. I have heard buyers say, if I had known ‘that’ I would have began my offer lower.  If that “niggly” happens after price has been agreed upon and signed, this feeling can escalate until they could decide to bail over a minor incident later on.
4. You must understand why they want this move and consistently remind them using a positive tone.
5. Make sure that you are asking the deep question technique when finding out what the buyer is wanting.   Example:  You said you wanted a large fenced yard.  Tell me why your getting a large fenced yard is so important to you? 
6. During the consultation, ask then what their fears and uncertainties are… That way you can help guide them through those fears from beginning to end. Pay attention at all times to their concerns and comments. They may be clues.  Address them as they come up.
7. After agreeing on a price and if they think they ended up paying a little too much, you can reinforce they are going to live in the house for several years.  “In ten years, after living in this home, do you really feel will it matter as much to you if you paid a sliver more than you thought you should have?  This is also the time to remind them of their 10 things they love about the house.
8. Take them back to the amount of time spent shopping and the number of homes they rejected before they selected this house. Remind them of the great loan they are getting and the terms they negotiated, like possessions, warranty, move in date, etc. There are other reasons besides just price to justify a good deal.. and of course remind them that they would have to start the process over again and possibly also lose loan lock and great interest rate and if it’s the case, maybe not have such an agreeable seller next time.
9. Timing the market is not wise. By the time you realize the bottom has been reached, it’s already moving up. The market will eventually shift back to a seller’s market In fact in some neighborhoods and price ranges it’s already began to be harder to find properties that fit your criteria.  It’s like day traders, you don’t hear too much about them anymore do you?
10. Stay in constant communication with your buyers! When they have to seek you out for answers rather then you always being there that might be the start of the downward spiral. 

We work so hard to get our clients on paper; we should work just as hard to keep them there!  Saving an  additional 1% of the deals can make the difference between a good year and a poor year!

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