As a real estate agent, ensuring your clients are not making huge mistakes along the path to homeownership is one way to ensure happy clients and increase your potential for referrals.
In today’s market, Millennials and GEN-Yers make up the biggest share of homebuyers, according to the National Association of Realtors.
Adam Contos, co-CEO of real estate company RE/MAX, recently discussed with CNBC some of the key mistakes clients can make when buying their first home.
The first mistake, not surprisingly, is not using a professional real estate agent.
Amid low inventory and rising prices, the competition for a house can be intense. Bidding wars can ensue and quick decisions may be needed. The buyer who has a skilled agent on their side will have the upper hand. These are all key points to remember when trying to land a new client.
Second, many buyers fall into the trap of buying a home that is too expensive. Contos said this is a trap that clients must avoid.
“The key is understanding the monthly costs of owning, and making sure, before you move forward, that your income covers it all with enough left over to fund the life you want. Stretching a little is fine, but only if careful analysis, insight and consideration are also part of the decision.”
Lastly, underestimating the final bill can be a huge mistake. Contos points out that owning a home is a big commitment and can be costly.
“You learn a whole new vocabulary. You meet new people. You develop different perceptions and values. You discover new ways to spend Saturday afternoon.”
As agents, we are charged with explaining each step of the process to clients, earnest money to inspections and beyond to appraisals and closing fees. Make sure your clients understand each step.
You also should have a list of references and credentials ready for prospective clients. Too many first-time homebuyers don’t do enough research and may select an agent who doesn’t fit their needs. Be one step ahead.