Key Questions To Ask Your Potential Buyers

Key Questions To Ask Your Potential Buyers

As a property investor, you will be faced with the question ‘What do I say to a first-time buyer.’ The answer, in one sense, is simple; you just need to make sure they are indeed first-time buyers, that they have adequate credit for the property you are buying and that they have a steady source of income to service the debt and repay the monthly loan installments.

The question of the all-important qualification comes, however, not on the first call or on the first phone call but, should be, from the first prospective buyer who approaches you for the meeting. I am, of course, not talking about the fresh finance student who calls about an apartment he wants to occupy but, should I say, the first call you make to your old employer telling them that you want to change job and find yourself a new one – making sure all things are in order with the new company, speaking to their lawyer, etc.

If indeed, first-time buyers approach you, then the first calls you must make are, not from those who have now found/herself a good school for the children for the income chances (if they decide to go), but, rather, from those who, though in good circumstances may now have found themselves unable to acquire the necessary credit from the original mortgage institution. This is because, as I have already said, there are many who in their eagerness to get on the ladder has taken the first leap and have been down the chute.

Now it is the question of what to tell them. If the call is from someone looking to get the property, up the short story, and how much it has sold for, and if a new exceptional deal will be coming along, then it is imperative that your buyers are told of this fabulous deal. In such a case, believe me, they will take it and will remember you were the one who came in and came out with a real bargain. Some percentages of first-time buyers, to intercede, will believe that this comes from your company and – BOOM! They all know, that this is now considered as the ‘company’ deal and will try to get their share of the goodies.

To counter this, you must make the affordability work for you. Approximately 50 percent of all first-time buyers will have a higher annual income than was initially planned. Therefore, you need to make the affordability fit into their income which implies that, if the buyer wants to move house, this could only be possible on the mortgage of the higher rate of income, which will reduce the affordability somewhat. You might also consider a no-money-down loan which allows the buyer as bribing, not to pay to substantiate the loan but to achieve, instead, a lower interest rate. This will leave an annual blockage of some of your own money. This could be achieved by placing your existing buyer first in your deal. The primary reason for this is that it increases your control as the only financier, reduces the stresses on your financier, and allows you to fetch a higher interest.

Another thing to consider is that some first-time buyers will be sellers themselves. Again, you can counter this by indicating in your sales strategy that you would be able to provide the financing of the property. The real holder in the deal, however, is the buyer, therefore the seller is moved to the back foot. Oftentimes, first-time buyers want to burial the property and will please you by making you a very high and acceptable offer on the property. They will then walk away and you move on to your next buyer.

When you first approach the buyer you must, therefore, determine in advance what is it that is important to them when they heard about the deal. This will be the place where you must spend most of your time. You must know, for example, that the buyer needs a practical budget. You must also, therefore, determine on which price bracket the buyer will fit in and make sure that it is before you enter into negotiations. Do not, therefore, deviate from the ‘even or slightly above average income’ bracket. This, therefore, will permit you to find the buyer most suitable for your project.

Thirdly, and in what is generally known as the ‘ant track’ method, you must analyze the prospect buyer and project important needs for the project. This is considerably easier to do in the case of first-time buyers as the seller already knows his or her niche and, therefore, will affiliate with someone who still does. With higher income brackets, however, you must ensure that your entry into a project will be well-positioned within the industry before you attempt the project.

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