HOW do you know when you have a genuine buyer or you're dealing a tyre kicker?
I get asked this question quite a bit and sometimes the answer is not what you think.
Back in the late nineties when we were doing less open houses and more private inspections, you got to pick up the scent a little easier.
But as the market has moved toward open houses and we as consumers seem to prefer less initial engagement with salespeople it is getting harder to know who the real buyers are.
One of the real surprises is that the number of times a buyer inspects a property is an indicator, but not always for the reasons you would expect.
Experience has taught me that if a buyer inspects a property two or even three times then they are interested. But any more than three, its usually a bad sign.
When an agent says to me, they love it they've inspected five times I start to worry.
They are usually either trying to convince themselves to buy it or they are looking for a reason not to buy it.
After the Global Financial Crisis I would turn up to auctions, ready for battle and the agent would brief me on the number of prospective bidders.
"We've got about four bidders Haes," they would say. I would then commence proceedings and lo and behold no one would bid. How did they get the name 'bidder' I would think?!?
So what we did was review all the activities that the buyers who did bid, do prior to the auction.
This is what we found. There are about six things that a serious buyer does prior to bidding at an auction. If your buyer is doing these then there's a good chance that they're going to bid.
A nice early indicator is the buyer calling your agent independently. When a buyer calls the agent, it's a gentle buying sign at the start of the relationship.
If they want to buy it, they're going to need to step forward.
So you may have a nibble. But its what comes next that can tell how serious they really are.
At the top of the list was that they made an offer. A buyer who commits to signing a full offer on a contract is a serious buyer.
Next, they have invested in some due diligence. Not just walking around the house talking notes, they had a valuation, got a building inspection or conducted a body corporate search.
If the property was an auction, they tried to vary the standard terms. It surprises many buyers, and unfortunately a few agents, to know that you can vary the terms of an auction. If an owner is agreeable, you can have a lower deposit or a longer settlement. When a buyer needs different terms it means they have thought about how they are going to pay for the property and when they are going to move in.
Next, if an agent can tell me how a buyer is paying their deposit eg bank cheque or EFT, then I know they have had a personal conversation about something as private as the buyer's money.
If your agent knows how the buyer is paying their deposit, this is usually a good sign too.
Finally, if the buyer pre-registers for the auction, that is a great sign.
When a buyer registers for an auction, it doesn't mean that they are duty bound to attend, but they would have needed to provide a copy of their drivers license and signed a legal document.
Most people won't waste their time if they don't plan on at least turning up.
At the end of the day I've had buyers turn up who I've never seen before and people vanish who I would have bet the house on. There are no guarantees.
But if you have a few buyers doing the activities above, your campaign is heading in the right direction.
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