One of the very first pieces of “advice” I received regarding working with home buyers, which you've also most likely have been told too is:
“No mortgage pre-approval letter, no showings.”
That's how a lot of realtors operate their business or at least try to. We've all heard of this practice and we all feel a little guilty when we commit the treason that is taking a buyer to see homes without a Pre-Approval letter in hand.
Early in my career, I would chat with other agents or maybe see a comment in a Facebook group from a proud realtor telling their story of how he stood his ground on requiring a pre-approval before showing a buyer.
This particular agent let the buyer walk because he refused to get a Pre-Approval letter before even meeting with the agent. And he was proud of that fact…
You see how I find it interesting that an agent losing a huge potential commission would be proud of it?
Now don't get me wrong, I'm all about holding your business and your time to a higher standard but you must be strategic and think using both sides of your brain.
The reality is I've closed countless transactions with clients who I didn't immediately twist their arm for a pre-approval letter and we ended up having a buttery smooth transaction.
Some of these people have become some of my loyal clients who continually refer me business.
A common thread I hear from these people is that they frankly didn't like or appreciate the condescending nature and tone that they felt from other agents they spoke to who would not even give them the time of day without a preapproval.
Put yourself in the mind of a consumer who maybe has never either bought a house before or doesn't remember having to fill out a credit application just to go see some houses.
In fact, I'd bet that the people with the higher credit scores will always be more reluctant to have their credit pulled when they're just starting to look at houses.
Sales is all about making people feel comfortable with you and how can you expect someone to feel comfortable with you when you're instantly the bearer of bad news.
Which by the way, saying “Before we can go see this house you called on, we'll need to confirm that you can afford this house” is most definitely not good news.
It's just the worst way, in my opinion, to handle a new and interested buyer.
I'm not saying that you shouldn't be using your experience and spidey-senses to pre-qualify leads but if you there aren't too many red flags, go open some doors and make a connection with another human.
Now let's break down how most agents treat buyer leads and how you should be treating buyer leads.
How Most Agents Do It
For this scenario, I'll use a man and a woman, Gina & Martin.
Gina's walking down the street looking good and here comes Martin.
Gina: “Hi. How are you?”
Martin: “I'd love to have dinner with you and see if this can become a great relationship.”
Then Martin goes in for the kiss.
Stunned, Gina says “Look we just met and I have no idea who you are and you want me to let you into my personal space like that?”
And then Gina leaves…
See this is what Realtors who require Pre-Approvals are doing.
They're asking for the kiss before dinner!
We all know that you would never ever ask for the kiss before dinner unless you're the Biebs.
The Dating Game
Working with buyers is in fact, a lot like dating someone. You have to get their attention, woo them a little and then continue seducing them for as long as you want to be with them.
1st Showing (1st Date) – Your first time meeting them in person is the first date. This is where they see if the online pictures and persona match the real thing. Remember, you only get one chance for a first impression.
Pre-Approval (1st Kiss) – Congratulations. If your buyer leads went through with getting pre-qualified with your lender, you made it to first base.
The Home Search (Dating) – While you're working the buyers and searching for homes, is your dating time. The deal is not sealed yet and you still need to show that you're the right person that they should be working with.
Contract Acceptance (The Engagement) – Now, they're really committed! Congratulations, you did so well that they liked you enough to go under contract with you, BUT don't forget that you can still get left at the altar.
The Closing (Honeymoon) – Now is the time to celebrate with your buyers, you made it to the closing table aka the honeymoon.
Here's What To Do Instead
Treat the first showing as the dinner date.
We take every buyer lead out showing at least once even if we don't have a pre-approval (usually show 2-3 homes).
That's actually our goal and has been for awhile because we found that, especially with internet leads, if we can meet them in person and spend an hour or two seeing a couple of homes our conversion rate shot through the roof.
Actually, not only did conversions go way up but pretty much every Key Performance Indicator that we were tracking increased dramatically as well.
This helped us identify another major key to success for realtors as well.
And that is that when Realtors show houses to buyers, they write offers, and when they write offers, they get offers accepted, and when they get offers accepted… you get the idea.
What going out and meeting them face-to-face accomplishes is just that, a face-to-face meeting which surprisingly these days is undervalued.
Assuming that you're practicing all the safety precautions that are unfortunately necessary these days, you can get exponential results by just adjusting this strategy.
- Answer The Call — Closers answer quickly with a smile on and a tone that exudes friendliness and confidence. This is the second first impression but even more important.
- Ask The Right Questions — One person is always leading a conversation and one person always thinks they are. You know which one to be.
- Feel Them Out — Sales are as much a science as they are an art. Mirror their tone and energy. Probe a little further and engage them in conversation.
- Schedule A Showing — Get face to face and seduce them with your expertise and knowledge.