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"The Top 10 Strategies for Dealing With First-Time Buyer Syndrome"

by Bernice Ross, Ph.D., MCC and Byron Van Arsdale, MCC

Depending on your marketplace, up to 75% of the buyers are first-time home purchasers. If you're looking for some strategies to reduce "first-timer jitters," try the following.

1. Recognize that "first time jitters" are almost always due to fear. When clients are fearful, ask them if there's any additional information you can provide or if there's anything else you can do to make them more comfortable with the selling/buying process.

2. Make sure you explain the benefits of being pre-qualified (i.e. sellers are more likely to give them a better price and their offer will be more competitive in a multiple offer situation.) If the buyers refuse to be pre-qualified, don't work with them.

3. Give buyers "sample" purchase documents as early as possible. This can include such things as the purchase contract, loan documents, or escrow instructions. If appropriate, ask the buyers to have their attorney review these documents ahead of time so the buyers can feel comfortable making an offer as soon as they find the right house.

4. Explain the offer process ahead of time. In many cases, the buyer's agent presents the offer directly to the seller. In other cases, the listing agent does the presentation. Let the buyers know that once their offer is accepted, they have obligated themselves to buy the property.

5. Explain what a multiple offer is and how multiple offers are handled in your market area. Ask them ahead of time, how they will want you to handle the situation where there is another offer on the property they want (i.e. do they want to offer close to asking, over asking, make a normal offer, or withdraw from the negotiation.) This avoids creating undue pressure on them when this situation occurs.

6. Carefully explain before writing an offer, what happens to the buyers' earnest money deposit. In some states, the deposit is held by the escrow/title company. In others, it is held by an attorney. In other states, the buyer's earnest money check is given immediately to the seller and the seller can cash the check. Be sure your buyers are comfortable with the procedures for getting their earnest money back if there is a problem. (In some states, the earnest money is NOT returned. Make sure out-of-state buyers know your state's procedures.)

7. Give the clients a calendar upon acceptance. The calendar will list all the important steps in the transaction as well as the dates upon which the contingencies expire.

8. Most first-time buyers don't realize that "closing costs" are in addition to their 20% down payment. Avoid giving buyers a detailed "estimated closing costs" as well as informing them that their HUD statement may also be incorrect. Instead, let them know closing costs are an additional 2.5-3% of the purchase price. (Less than 20% down may be as high as 4%—check with the lender to know for sure).

9. Upon Acceptance, let the clients know 95% of all transactions have challenges severe enough that the principles think the transaction is not going to close. Even when the transactions have problems, however, 90% still close.

10. Tell the buyers to plan on moving into their new home 2-3 days after the transaction closes. (Set your closing dates accordingly). This way, if the seller doesn't get out in time, there is some extra room. Also, suggest that your buyers have a cleaning crew scheduled to come in the day after closing to clean up what the seller may not have had time to clean. Let the buyer know a house that "looks clean" may not be so clean once the movers take down the pictures and haul off the furniture.