How to Eliminate Buyer Analysis Paralysis
How to Eliminate Buyer Analysis Paralysis
Do your buyers ever feel overwhelmed after seeing one too many properties? It’s called analysis paralysis and it’s a real world challenge for real estate agents looking to close buyers efficiently and effectively.
Recently a 2013 survey by the National Association of Home Builders (NAHB) says that the median number of homes a buyer looks at is six before purchasing a new home and 10 before buying an existing home. In a buyer’s market, that number can skyrocket to four or five times that amount. In a seller’s market buyers must be able to make decisions fast in order to close on the house that meets their needs.
Sean Healey’s buyers aren’t facing any of these problems. In fact, they typically see three or four homes only once before making a purchase decision. The team lead at The Healey Group in the Denver North (Colo.) market center has created a process that streamlines working with buyers, eliminates “analysis paralysis” from seeing too many homes too many times, and keeps buyers focused on the goal: finding the best home for their needs and their price range. The eight-person team includes a lead buyer specialist, two buyer assistants, two field agents, an executive assistant, a transaction coordinator and a listings specialist. He also has two virtual assistants.
“Most agents don’t have a system for showing homes,” Healey says. “They’ll go through a basic buyer presentation and try to guess what the buyer wants. Then, they’ll take the buyer out and show him or her homes without a specific plan or process in place. They could end up showing five, 10 or 15 at a time because they have nothing better to do.” With a buyer-directed system of elimination, the path from sorting through piles of MLS listings to the sale is cut dramatically and with greater client satisfaction.
Step 1: Make the Grade
The Healey Group’s process starts with a meeting to determine if the client is an A, B or C buyer. B or C buyers are ready and willing, but just not ready to buy at that moment because of finances, credit, or other factors. He and his team members deliver a 20-point PowerPoint presentation that manages expectations, familiarizes prospective buyers with current market conditions and educates them about the buying process.
The presentation also gives them a taste of what kind of homes they can expect to see within their price range. While the B and C buyers are good long-term lead generation material, Healey is looking for grade-A buyers who are ready to start the process in earnest.
If the buyer is a B or C, the team adds them to their email list, keeping in contact with them through a drip email campaign and giving them access to the team’s Website so they can conduct their own property searches. The team tries to support these aspiring buyers as they move closer to the path of becoming homeowners.
Step 2: Narrow the Focus
Once the buyer is qualified, Healey’s “funnel approach” to finding homes begins. He and his team members have no desire to be the gatekeepers. They program buyers’ parameters into the Multiple Listing Service (MLS) basing the search on number of bedrooms, square footage and price, in an attempt to match the search results to the market as broadly as possible. “Some people will say, ‘I have to have air conditioning.’ We ask, ‘Well, if the house was perfect in every way, could you add that later?’ We wouldn’t want to eliminate something that’s perfect for them in every other way,” he says. The goal is to get to a hard-copy list of between 15 and 30 homes – more if possible, but that’s tough in Denver’s current seller’s market.
The team educates buyers on how to read the list and gives them a day to narrow it down to approximately 10 to 15 homes, depending on the original length of the list. Buyers sort the printouts into “yes,” “maybe” and “no” piles. Once the selection is reduced to the best options, the buyers have more homework. “They’re not just buying a house; they’re buying a neighborhood, so we ask them to go look around the neighborhoods on their own, driving by each of those houses. We ask them to make sure the home doesn’t back up to anything they’re not comfortable with and to make sure the other houses look good. We want them to determine whether the neighborhood is one they could see themselves living in,” he says. Then, he tells them to choose the best three to four houses, at which point the team schedules private showings.
Step 3: Tear Up the “No’s” and Move Toward the Close
The team schedules showings at the three or four properties that the buyer selects. They never give their opinion, but once the first showing is done, the buyer is asked to rate the home on a scale of one to seven, with seven being perfect. “The buyer isn’t going to pick a one, two or three because they’ve already vetted the properties as better than any in the original printouts. If they say a seven, then the house is perfect and it can’t get better,” he says. With no other homes to compare, the buyer usually ranks the first house a five, he explains.
After the second showing, Healey or the buyer agent asks the buyer if the second home ranks better or worse than the first. If it’s better, the first MLS listing printout is torn up and the house is out of the running. If it’s worse, the second MLS listing printout is discarded. This process continues until only one house is left. When the three or four are finished, the homeowner has the best possible home after seeing each only one time. How often do they choose “none of these?” Never, Healey says, because they have already prequalified the homes from which they’re choosing.
This process contributed to the firm’s $31.6 million in sales revenue last year. It has also earned Healey, a 25-year real estate industry veteran, a spot in Gary Keller’s expansion Mastermind Group, which is attempting to duplicate successful systems and expand them to other markets.