Real Estate Consultant · Madison, NJ · Member since 2016 · 6k+ posts · 7k+ votes
I stopped working with on-market buyers last year because they were driving me insane. Is everyone feeling this all over the country? Buyers are watching too much Fixer Upper and think every house should be perfect, but also priced right for them. When it comes time for inspection, they think they should be entitled to "repairs" like unmatching doors and ugly handles.
The one other thing that I think these shows have done to debilitate buyer's agents is that now buyers think they know everything and that we are just interchangeable bobbleheads who are opening the door for them. I have seen a huge increase in buyers who just go to Open Houses and don't think they need an agent until they need to make an offer and then don't understand why they have to rush.
But, in their defense, the real estate industry as a whole has a very low bar so there are a lot of bad agents that they come into contact with that help enhance the stereotypes they come to the table with after watching another episode of Property Brothers.
@Russell Brazil I think the new agents are seeing it more and more. If you can be choosy, you can weed these types out, but when you are new you get all hopped up over a good buyer who nowadays thinks they know more than you. Experience always helps, but like you, I have to drop or pass on clients who I know would drive me insane.
@Jonathan Greene - These kinds of clients are what burned me out last year.
I've adopted a similar mindset as @Russell Brazil. I screen them like I screen my tenants. I show them what they can expect from a house in the price range they're buying in. I make sure they understand that a house for $120k will probably have older windows, or lath and plaster walls. If they aren't ok with this, then I refer them out and move on.
I'm fortunate to be in a position where I don't have to suffer through bad clients for the sake of money.
@Michael Ablan same with me. I left the retail side for a year because the constancy of this behavior just drove me mad. I've eliminated market buyers altogether. For us, who can choose, it's easier, but I think it's really hard for brand new agents that these new buyers think they know everything and also think anyone can open a door. Although, as I said, with the low bar there is evidence to support some of what they fell about us as a whole.
I dont find that's the case at all. As in all relationships, it is setting the expectation and guidelines from the beginning before you start putting real time into fostering that relationship. With that being said, I only work with investors' who's goals are to achieve financial freedom/househack so for my experience it's always been about the numbers. Do the numbers work and the condition of the home suitable for something my client is looking for? That removes the emotional side of things and makes it much more fruitful and realistic to set those goals.
@Lien Vuong that is all I work with now as well for the buy-side and I agree. Those relationships are based on different factors and they also have more knowledge of what they want. It's the new agents that are suffering with the new market buyers in my opinion, especially when it comes to expectation on inspection. They watch shows and think houses will be near perfect. Investors are looking for the worst ones to make the most money. I will be interested to hear from newer agents who still work regular retail buyers to see if it's still going on as it was before I left that segment of the market.
@Jonathan Greene - I would argue that it's good for new agents to deal with clients like this. They'll definitely get more experience seeing ALOT more houses (haha). But they'll also learn how to communicate expectations and how to properly assume the role of a "Professional" guiding a client.
It takes a lot of patience to work with clients like these. Doing it well will have a lot of spillover into other aspects of their business and personal lives.
@Michael Ablan that's a good point. I do think it will help them if they learn to manage the ebb and flow of these relationships. So many new agents are a foot in and a foot out and can get discouraged quickly and when their first deal fails in inspection because the buyers thought they should get credits for a garage because it was older than the house, it can be frustrating. Totally agree though. If they can deal with new buyers, it will spill over.
@Jonathan Greene This may be market or property type dependent. Are you working with buyers purchasing expensive single family “dream homes”? If so, I could see them having their heads in the clouds a little bit.
@Michael Noto no. I stopped working with buyers altogether, but when they were at their peak it was mostly first-time homebuyers moving out from NYC to NJ. The $500-$750k range was ripe with this behavior in my market. Part was surely just being overly cautious with a first buy, but the other part was a real expectation of perfection even from homes built in the 1920s.
Do you do a consultation with buyers before working with them? For the last 18 years I've been doing this with every single buyer (even people who were strongly referred and already are sure they're going to work with me), I find it super helpful in terms of making sure they understand the information they need to know in order to make good decisions as a buyer (regardless of whether they end up working with me or not), and in the course of doing the consultation they understand a lot more about the expertise I'm bringing to the table.
So by the end of it I know they have the knowledge to be realistic about pricing, what to look for and not look for in a home, what to expect of me, how to evaluate financing options and handle inspection results, the procedure we'll use to determine the best offer price, etc., and also they are far more likely to respect my opinion as a result of the info I've shared with them. And if during that time we've figured out we're not the best match to work together, then it's a ton of time saved.
I'm not saying this is the only answer for every agent, but for me it's crucial and if I didn't do one I would struggle to get enthused about working with buyers. I totally understand the frustration of being under-valued by people who think that buying a house is as simple as shopping for a plane ticket or a car, but I think consultations eliminate this (or else eliminate the prospect), and even newer agents can have good success by taking the time to do a consultation with every buyer. In my experience the effort pays off enormously and it's win-win for everyone.
Funny story...years ago I was probably one of those "other 6 people". My wife and I had just purchased a new home for ourselves before learning that the area it was in was experiencing a bit of a decline. I began to browse real estate listings and found the perfect house in an area we loved!!! I called the listing agent to arrange a showing. The agent, who was a seasoned agent, began to "qualify" us, and after learning that we had just purchased a home a few months prior, basically said thanks but no thanks...didn't think we could qualify for another loan. Well we ended up calling another agent (a new agent) who showed us the property and we ended up buying it! Sad thing was, the seasoned listing agent had to do twice the work to keep the transaction together to make up for the lack of experience the new agent had.
@Irene Nash I don't work on-market with buyers anymore, but saw the dynamic before I left. I did as many buyer consultations as possible back then as well and they did help lay the groundwork. Coupled with the expectations of the modern buyer is the view that anyone can show them the properties so I think it applies more to newer agents who don't have the systems and experience to counteract the new "knowledge" of the HGTV buyer.
Many listing agent’s open house intentions is for the buyers only without buyer’s agent, so the listing agent can earn double commission on both buyer and seller side. Haha...
With Buyer’s agent, don’t really need an open house because the buyer agent can use lockbox to open the door for the buyer to look at it. Haha...
I've noticed this from time to time in my market. Typically the buyers were unrealistic and/or unmotivated to begin with. As time has gone by and as I've gained more experience, I found that focusing on the qualification stage helped weed these folks out from the beginning.
That being said, I can recall 2 folks that decided to "move on" because they didn't like the list of properties they received/were shown. Both of them seemed to have received some kind of satisfaction from firing their agent. My suspicion has always been that people like this watch too much HGTV or the Apprentice.
@Tab Teehee lol, knowing more then your expert is a strong feeling I bet. Good for the new agent and I love the story. Did you go state,local or national bank for that second loan?
I am seeing this from buyer leads I get from BiggerPockets. I can't tell you how many tire kickers I get who PM me saying they want to buy a BRRR with no money down...as if these deals are just sitting out there for anyone to buy. Had another person tell me they wanted to buy a house for 25% of what they were qualified for but it needed upside to be converted to a multi family...oh and near a train station lol.
I agree with some responses. You have to screen these people because they can completely waste your time due to believing the fantasy that BiggerPockets has been pushing in the last year. Serious buyers who live on planet earth? More than happy to help them and I do.
@Peter Tverdov and @Ronan Donnelly yup. The transcendence of TV and online guru preaching has made people think that buying a perfect home is expected and investing in real estate is easy, even with no money or idea what you are doing. Many real estate agents don't hold their clients accountable and police their crazy desires and too many REI "coaches" and "mentors" are preaching that it's easy to find seller financing and BRRR deals for 50k anywhere, no biggie.
@Peter Tverdov and @Ronan Donnelly yup. The transcendence of TV and online guru preaching has made people think that buying a perfect home is expected and investing in real estate is easy, even with no money or idea what you are doing. Many real estate agents don't hold their clients accountable and police their crazy desires and too many REI "coaches" and "mentors" are preaching that it's easy to find seller financing and BRRR deals for 50k anywhere, no biggie.
The coaches are the biggest scam artists on the planet.
It’s also the age of delivery for everything, disposable furniture and super easy user interfaces. I wonder if you have noticed if people have less imagination? Seems like fixer uppers are going out of style. People don’t have the knowledge or the patience.
We have bought a couple of wonderfully solid houses where it just needed new paint and taking off the wallpaper.
@Peter Tverdov and @Ronan Donnelly yup. The transcendence of TV and online guru preaching has made people think that buying a perfect home is expected and investing in real estate is easy, even with no money or idea what you are doing. Many real estate agents don't hold their clients accountable and police their crazy desires and too many REI "coaches" and "mentors" are preaching that it's easy to find seller financing and BRRR deals for 50k anywhere, no biggie.
I think Russell's recommendation to heavily screen clients is the way to go. I'd hate to have an investor in one my deals who wasn't prepared for the ride and didn't understand real estate.
This is exactly my why I phased out of residential and into commercial. Most commercial investors are very professional and expect the same. I just hit the pause button and started taking CCIM courses and seeking mentors. M-F 9-5. No one in the commercial real estate investment world expects weekend or holiday work. Fits my desired lifestyle a lot better.