April 22nd - 2014

Guiding first-time home buyers

Buying a home can be a highly emotional experience, and REALTORS® who work with first-time buyers often find themselves tempering their clients’ dreams with a dose of reality.

Couple look over paperwork

Couple look over paperwork

Buying a home can be a highly emotional experience, and REALTORS® who work with first-time buyers often find themselves tempering their clients’ dreams with a dose of reality.

“First-time buyers are eager to go out and look at houses, but sometimes you need to slow them down and find out what they can actually afford,” says Brian Wilhelm, a Stratford broker in the real estate business since 1984.

About 20 per cent of Wilhelm’s current business is first-time buyers, but “some people haven’t been in the real estate market for so long, it’s almost like they’re first-time buyers,” he said. “You may want to treat them like they’re new, because they’re looking to you for advice.”

Wilhelm does most of his selling in Tavistock, a small town south of Stratford, and after 30 years, he knows many properties in the area so he does not usually view them in advance. He generally meets clients at the property unless they are from out of town and don’t know the area. Many of his clients are repeat business or relatives of previous clients, he says, a by-product of being in the business for so many years.

Working with first-time buyers isn’t just about selling, Wilhelm notes. A great deal of educating must be done because members of the public often don’t know much about listings on a real estate board’s MLS® or understand the concepts of agency or broker of record.

“We tend to forget that people view us as someone who finds them houses, but our role is really more geared towards helping them work through their options and navigate the flow of paperwork.”

He likes to know as much as possible about a buyer’s finances, he adds, noting that if something changes between the time financing is approved and a deal closes, the approval may be void.

“I had a client who bought a car between the property purchase and closing,” he says. “We still managed to keep the house deal together, but the buyer ended up needing a co-signer. People may feel they can still afford the property, but the bank doesn’t necessarily agree.”

Tania Kohl, an Ottawa salesperson, was initially surprised at how much time she spent “re-educating first-time buyers from all of the misinformation out there.” Kohl is relatively new to the realty business after making a career change four years ago. She enjoys working with these clients, who bring in about 75 per cent of her business. She says her colleagues are often less interested in working with first-time buyers because more time is needed with these clients.

“You must be clear about the amount of money they’ll actually need,” she says, noting that first-time buyers don’t always realize how mortgage rates or lawyer’s fees will affect total transaction price.

“I’ve also realized that my role is to teach buyers when to take certain steps,” she adds. “My clients have lost bidding wars because they weren’t making decisions. You have to engage with them on many levels.”

Kohl says she has learned a lot about working with new buyers over the past few years, experience that can only be gained while out in the field. “I used to worry about scaring them off by asking them to sign a buyer’s representation agreement,” she said. “I didn’t do that at the beginning, and Two business women signing contracts I remember taking a lot of time with one family, spending hours figuring out where to take them. One day, I arrived early to our rendezvous and saw them getting out of another REALTOR®’s car. I was devastated.”

Kohl says that she has often driven buyers to see properties, but more often today, she meets them at the homes. “As a single female, I have to think about safety. I won’t drive a solo man I don’t know.”

Rita Alexander, a Toronto salesperson, also prefers to meet her clients at the showings, although she doesn’t cite safety as the main reason. “I feel they need time on their own to discuss the place they’ve seen,” says Alexander, who works mostly in central Toronto. “Then, they have the freedom to talk to each other. I don’t want to control their time and their actions.”

As a newer REALTOR®, Alexander says she likes working with first-time buyers because, “being young, I have something in common with them and I understand their frustrations,” she says. “I know where they’re coming from and it’s easier for me to make a connection and make them feel comfortable.”

She also enjoys the attitude of those new to the market. “I like the excitement that first-time buyers bring to this huge step in their lives,” she says. “It’s almost like being a first-time buyer myself.”

Although she is relatively new to the business, Alexander grew up around the real estate business. Her father bought, renovated and sold homes for a living. She loves being part of the real estate industry. “It is always growing, and it’s so exciting,” she observes.

Buyers offer different challenges from sellers, she notes. “It’s easier to guide buyers and there’s more inventory to work with,” she says. “You can take them to different areas, and they can pick the one that suits them best. With sellers, there’s less legwork, but more responsibility. You only have a few seconds to make an impression on buyers, so you must be thorough and professional from the start.”

Like her colleagues, she agrees that working with first-timers requires educating them. “It’s important to sit down with them and explain all clauses and details in the documents thoroughly, because this is a big purchase. It’s a long process, but it doesn’t have to be a difficult one. There are many papers to sign, and people may initially worry that they’re signing their lives away. You must take extra care to explain everything.”

All three REALTORS® agree that working with first-time buyers can pose challenges, but the process is enjoyable overall. “It’s a lot like being a psychologist,” says Alexander. “You can’t use the same approach with every person. Adjust your approach based on their needs and personalities.”

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