Chapter 19
The Problem Buyer
In This Chapter
• Yes, maybe, I don’t know—The uncommitted buyer
• The buyer who won’t tell all
• Dealing with the buyer who wants it all
• When to say enough is enough
Selling your home means you’re going to run into all sorts of people. Some will be so mellow you’ll wonder if they’re even awake, while others will display an intensity that could saw steel in half. Hopefully, when you hook up with a buyer willing to buy your home, you’ll be lucky enough to land somewhere in the middle—someone who’s intent and committed but reasonable enough to respect the needs of others and the overall importance of seeing the sale through to a successful conclusion.
Notice we used the word lucky, because sometimes things don’t work out that way. You will likely discover that not every buyer is ideal in every way—often, to be frank, rather flawed and hard to deal with.
Our sympathies. If you’re reading this chapter, it’s likely you’ve just hooked up with the “problem buyer”—one who, for whatever reason, comes across as intent on making things as needlessly difficult and unpleasant as possible—regardless of whether they intend to or whether they’re even aware of their behavior.
But we’ve got you covered. In this chapter, we discuss the various types of problem buyers, the ways they can wreak mischief on the sales process, and effective ways for you to cope with their behavior.
What Next? The Prospective Buyer Who Won’t Commit
Next time you have to hang around a car dealership for a while—say, your car is in for repairs—pay attention to shoppers in the showroom or out on the lot. If you look long enough, you’re likely to spot a buyer who just cannot seem to make up his mind. There are all sorts of classic signs—he may circle the car repeatedly like a bird unsure of where to land. Perhaps he’ll kick the tires several times or peer under the hood in a vain attempt to suggest he has the slightest notion of what he’s doing. Whatever you see, you’ll notice that he’s going to great pains not to talk to the salesperson or, even worse, make a decision at all.
Unfortunately, there are buyers like this in the world of home selling as well—those who seem interested but, for whatever reason, just can’t seem to make the call on whether or not they really want to buy your home. Like the car shopper, they can display some classic signs—maybe they come back repeatedly to look at the house, or maybe they ask for the same details and information over and over.
To a certain degree, that’s both natural and expected. After all, buying a home is a huge financial commitment, one that should never be entered into lightly. With that in mind, you should be prepared to accept and deal with a certain degree of hesitancy and, on occasion, downright fear.
Sales Snafu
One strategy to nudge a hesitant buyer toward a commitment is to ask what other type of information they may need to help them reach a decision. Sometimes, the information they need may be completely new, such as proximity to a particular shopping area or place of worship that hasn’t been covered. On the other hand, you may find yourself repeating old news that you know the buyer knows as well. Go with the flow—sometimes, a buyer has to hear certain things more than once before it really sinks in.
Hesitancy is only a problem when it crosses a certain line—when, in effect, a buyer’s hesitancy becomes an impediment to selling your home as efficiently as possible. Warnings signs can include:
• You’re spending too much time with this one buyer to the detriment of time with others who may be much more willing to commit.
• The buyer asks you not to accept any offers until he makes up his mind. He may go so far as to offer a small deposit to “hold” the house for him.
• The buyer keeps insisting an offer is on its way—except nothing ever actually arrives.
Countless other examples exist, but you get the picture. Maybe the buyer can’t make up his mind, or perhaps he’s overreaching—expressing unrealistic interest in homes he can’t possibly afford.
The problem, too, is that a hesitant buyer today may be a committed buyer tomorrow. You certainly don’t want to run the risk of somehow discouraging or alienating someone who may be a few moments away from deciding on an offer.
Selling Smarts
Loan preapproval can be an invaluable tool in helping you determine just how serious a hesitant buyer really is. With preapproval, at least you know the buyer is financially positioned to afford your home. This tells you the cold feet are coming from somewhere else. Check out a sample pre-approval form at www.yourloanhelper.com.
It’s important you have an effective strategy for dealing with hesitant buyers so you don’t run the risk of getting tied down by someone who, in reality, isn’t likely to buy your home. Here are a few tips:
• Never accept any money to take the house off the market unless it’s a bona fide offer.
• Be upfront with a buyer who seems unwilling to move toward a commitment and is becoming a pest. Provide the information they need, but make it clear you’ll accept any other competitive offers that may come in. In other words, let her knowing the house may be gone by the time she’s ready to act.
• If in doubt, find out whether a buyer has been preapproved for a loan sufficient to buy your house. If he hasn’t been, that’s a red flag telling you he may be unable to afford your house and your time may be better spent elsewhere.
• If you know a buyer is financially capable of buying your home, follow the suggestion we made earlier in the chapter. Try to help the buyer identify what is holding him back from a decision. Sometimes, a little more information or just some reassurance may be all he needs.
• Finally, never downplay the problem a hesitant buyer poses. They waste your valuable time, get your hopes up, and divert your physical and emotional energy. Be polite and helpful, but never lose sight of your own interests.
It can be exceedingly helpful to break down a buyer’s objections into smaller, more manageable issues. As we suggested in Chapter 11, a buyer who feels your home is $10,000 more than he can afford—even though his loan approval says otherwise—may be swayed if he hears that $10,000 boils down to a mere $59 a month on a 30-year mortgage at 6 percent interest. That’s not even a night out in most cities.
I’m Shy—The Buyer Who Won’t Disclose
We’ve stressed throughout this book the importance of knowing whether, in fact, a buyer can afford to buy your home. All other things being equal, nothing is really more essential. And that means financial disclosure—either through loan preapproval or by thoroughly documenting their capacity to buy the property.
That naturally leads us to the next type of problem buyer—the buyer who is shy about disclosing necessary financial details.
The problem here is that, to a certain extent, it’s a very understandable reaction. For one thing, many people are exceedingly private about their financial lives—particularly when it comes to a complete stranger, which you likely are. Maybe they’re nervous they won’t be financially positioned to buy your home, even though they may, in fact, be perfectly qualified. Perhaps they are worried some financial problem from the past will prove both embarrassing and destructive to their hope of buying your home.
Whatever the reason, you may hear any number of things other than the financial specifics you’re going to need. Maybe they say everything is okay, don’t worry. By the same token, they may tell you they’re very much at the beginning of their house hunt and haven’t reached the financial stage yet.
Should you take that as a warning sign? Maybe, maybe not. As we said, some people just aren’t keen on being that forthcoming. But there is always the chance their finances are not up to par in some way or another. Or by the same token, they may be hoping to get them back in shape before the time comes to show a financial commitment.
First rule of thumb: Bear in mind that, sooner or later, the buyer is going to have to tell you about how he intends to buy your home, provided they’re serious. No way around it.
With that in mind, it’s a reasonable course not to pay too much attention to a buyer who doesn’t want to pass along financial details right away. Put your energy into other prospective buyers who are more upfront. If you want, only deal seriously with buyers who are preapproved for a sufficient size loan. That way, you don’t have to guess whether they have the necessary funds.
Selling Smarts
Think a buyer who says he’s preapproved—even as he waves an official-looking letter around—is really preapproved? One source contacted for this book offers an adamant “no.” She urges all FSBOs to double check the legitimacy of preapproval. Look up the lender in the phone book or online. Call them or visit a real live office to confirm whether your buyer is, in fact, preapproved.
Why all the suspicion? Our source tells us she has known of many instances where a buyer faked preapproval—even going so far as to draft phony letters or have a friend at the other end of the phone line pose as a loan officer. The reasons can vary. Some people may simply get a kick out of feeling like they pulled one over on someone else. Others—a bit more legitimate—may be hoping to pull their real finances together while posing like qualified buyers so you stay interested.
It may seem a bit overblown, but it certainly never hurts to double check whether your buyer has genuine financial documents—just to make certain you’re not wasting your valuable time and energy.
But if a buyer seems genuinely interested, you can always try to help him overcome his reticence to share financials. Here are some ideas:
• Ask if he’s working with a bank or other lending institution. Ask his permission to contact them for financial details. If he’s interested in your home—and that interest is genuine—he shouldn’t object.
• Ask if your lawyer can contact his attorney, if he has one. Sometimes, people are more comfortable sharing financial details if their lawyer is involved.
• Make a particular effort to point out the financial summary you’ve prepared about your home. An overview of cost, property taxes, and other details may offer a subtle hint that, sometime soon, the buyer is going to need to prove to you that he can handle those sorts of numbers.
• Don’t give him free reign. Like the buyer who’s unwilling or incapable of making up his mind, be polite and thorough in your dealing with him, but at some point, let him know things simply are not going to move any further until he can prove his financial standing.
The Nitpicky Buyer—What You Should and Should Not Have to Do
There are some buyers who seem as though they wouldn’t be able to decide whether or not to get out of the way of a speeding truck. And as we’ve seen, there’s another buyer—shy as a newborn when it comes to sharing details that are central to moving ahead and completing the sale.
Then there’s a third type of buyer, one who is every bit as frustrating and hard to deal with—the nitpicky buyer. This is the buyer who wants everything, just the way he wants it, and he wants it yesterday—until tomorrow, of course, when he’ll change his mind and demand something else.
Granted, this kind of behavior can show up to a greater or lesser degree depending on the buyer. And to a certain extent, it’s to be expected. After all, we’re talking about a transaction of significant financial impact. Every one of us, within reason, has the right to expect certain things from a deal of that magnitude.
The key phrase there is “within reason.” This is a characteristic that’s in short supply with the nitpicky buyer. They have no sense of compromise or give and take. They want the house on their terms and no one else’s. They demand things happen at the precise moment they demand they happen. Moreover, because things rarely hit on all cylinders at once during each phase of the sales process, they complain every step of the way and point fingers at everyone but themselves.
The problems with the nitpicky buyer are varied but no less destructive. First of all, they’re only concerned about themselves, not about getting the deal done in a fair and equitable manner. Moreover, they can be grossly unrealistic in their expectations—every minor problem or issue that needs to be addressed is blown out of proportion. Not only can that threaten the entire deal, if nothing else, it makes an already challenging process unnecessarily stressful.
One classic sign of a nitpicky or unreasonable buyer is a habit of asking to talk with you or see your home at odd hours—say, early in the morning or late at night. Of course, these requests are rarely accompanied by any sort of apology for putting you out.
On the surface, not getting involved with a buyer whose manner and expectations are unreasonable seems the most commonsense choice. The problem is, many such buyers are often the ones with the best financial muscle. If you think about it, it stands to reason—for instance, if a buyer has the cash to buy a home outright, he has the leverage to demand more than he would if his position weren’t so strong.
Selling Smarts
Keep in mind the risks of bad faith bargaining when dealing with nitpicky buyers. We mentioned this in Chapter 11—negotiating without a genuine intention of closing the deal. If you turn down legitimate offers from someone just because you think they’re too demanding, it could lead to charges of bad faith bargaining—that you never had any intention of selling your house. Check with your attorney to be safe.
The simple truth is that nitpicky buyers who seem to demand everything are a fact of life when trying to sell your home. Rather than avoiding them altogether—and possibly passing up an opportunity to sell your home for a price you want—it’s more effective to know how to deal with them. Here are a few ideas that may help:
• When you start out on selling your home, be sure to set limitations on what you’re willing to do and where you draw the line. That makes it easier to work with all types of buyers, nitpicky and otherwise.
• Don’t be afraid to shove back a bit if needed. It’s not always the case, but many nitpicky and unduly demanding buyers are trying to bully their way into what they think is a better deal. And, like all bullies, they tend to back down when someone stands up to them. It doesn’t have to be any sort of dramatic scene—just tell them you’re not willing to agree to something or you find some of their requests unreasonable. You may be pleasantly surprised how quickly they back off.
FSBO Facts
Remember our earlier anecdote about the buyer who got all bent out of shape when three coat hangers were left in the closet (pun intended)? She even had the audacity to ask one of the authors—the person selling the home—to come over and take them out of the closet! The answer: a very blunt “no.” Amazingly, the topic of coat hangers was never raised again.
• If a buyer seems genuinely interested in your home but is being maddeningly nitpicky in the process, hand her off to your attorney. Not only are they trained to handle all sorts of people, but your attorney will be able to work with the buyer without any emotion.
• Give on some things, but have them agree to give in as well. Another strategy is to accommodate some of your buyer’s more reasonable demands. In return, have them agree in writing that they’re satisfied and no further demands will be made.
• As we mentioned earlier, haggling over what stays and what goes from a house can prove a veritable feeding frenzy for the nitpicky buyer. If you fear the stay/go debate may prove a bottomless pit, remember our earlier suggestion about scheduling a walkthrough specific to that topic. On top of that, pick your battles carefully. If you truly value something, keep it out of sight. If you don’t mind giving something up, leave it out—it may prove sufficient bait and give you negotiating leverage in the long run.
Here’s another tip for pushing a problem buyer toward items in your home that you don’t care about giving up. During the initial showing or walkthrough, mention how those items are particularly dear to your heart. If a buyer has his heart set on grinding you out of all you’re worth, he may well ask you to throw them into the deal. If not, you can offer them as a “gesture of good will.” Either way, you come off as generous and, in the process, soothe a buyer who, without that bone, could prove even more troublesome.
Other Headaches, Courtesy of the Buyer
Think we’re done with our rundown of problem buyers? Not by a long shot! Sit down, take a deep breath, and check out some other types you may come across (and some ideas on how to best handle them):
• Buyer incommunicado. Someone tours your home, says she loves it, makes an offer, you counter, and then you don’t hear anything. Another variation: a buyer with whom you commit to an offer is slow in getting back to you with information on how elements of the sale are progressing (indeed, if they even bother to get back with you at all.) It’s a classic case of the buyer who doesn’t maintain an adequate flow of communication. Possible solutions: inform them in no uncertain terms that they need to keep in better touch to ensure all goes ahead as planned. If that doesn’t fly, have your attorney contact them—hearing from a lawyer that there’s a problem needing correction often carries more weight.
• The hyper buyer. A buyer makes an offer on your home and wants the deal done as quickly as possible—often in an unreasonable timeframe. This can work, but be careful about allotting yourself adequate time to do everything that needs to be addressed. Also, if you can, find out just why the buyer is in such a rush.
• The house hunting divorcee to be. This isn’t a problem so much with the buyer himself as it is with the circumstances connected to the house purchase. A soon-to-be divorced person makes an offer on your home. The offer is a fair one—at least so far as the price goes. Trouble is, the funds for purchasing your home are coming from the divorce settlement. Not surprisingly, this sets up a host of problems. First and foremost, divorce settlements are notorious for taking their own sweet time to come together—on top of that, the terms and specifics of the settlement can change at any time. And while many divorces are little more than a happy parole, for others, they are wrenching. This may put you in a position where you’re dealing with a buyer who may not be in the best shape, emotionally speaking.
Here, you have to judge things according to the specifics of the situation. Find out when the divorce is slated to be completed. In some cases, things will come together in plenty of time to complete your deal. Others that are more shaky and less predictable are probably well avoided. Checking on details such as preapproval can help address these issues, too.
Cut Bait! When to Terminate Relations with a Buyer
Ideally, most headaches that a problem buyer presents can be handled in some manner. Just be more patient, more thorough, or do something a bit better or differently to keep the deal moving forward.
Unfortunately, that isn’t always the case. As we’ve just seen, there are as many foreseeable problems with buyers as there are buyers themselves, and even more unforeseeable ones. And, sad to say, not every problem has a solution.
That means the time may come that, no matter how promising the deal may have appeared at first, it becomes apparent it’s time to sever relations with a buyer.
The preceding discussion should have given you examples of the types of behavior and instances that could warrant calling it quits with a buyer. Some others include:
• Failure to keep appointments. This can be as maddening an issue as any you’ll encounter. Nothing like taking off valuable time to meet with the buyer, only to deal with a no-show.
• Failure to adhere to deadlines. Somewhat similar to appointments, but these can have clear legal ramifications as well. For instance, failure to obtain suitable financing within a specified timeframe is one common reason why a buyer is dropped from the picture. Failing to complete necessary paperwork is another common one.
Selling Smarts
As we’ve mentioned numerous times throughout this book, various steps in the sales process can carry certain legal obligations—including when and how you can call it quits with a particular buyer. Be on the safe side and always check with your attorney to make certain you’re on safe legal ground to discontinue your relationship with a particular buyer.
• Intruding on your time. Of course, you should make yourself reasonably available to work with the buyer in any way possible. But some take advantage of that openness—they may call you repeatedly at all hours or, even worse, simply appear at your door with questions. Don’t be nervous about setting parameters as to when you’re open for business and when it’s time off for other things.
• Having you do things they should be looking after themselves. It may seem strange, buy buyers have been known to ask the sellers to schedule a home inspection or see to some other detail that buyers almost always handle. Don’t play nursemaid to any buyer.
• Believe it or not, some buyers ask the sellers to complete the necessary paperwork—such as disclosure statements—claiming they simply don’t know how to do it or are unable to afford an attorney to do it for them. No further discussion needed here.
• A general inability to hold up their end. As a rule, look into dropping a buyer who consistently fails to do what they’re called upon to do. If they’re really committed and motivated to buy your home, they should certainly prove capable of seeing to whatever obligations the process involves. If, time and again, they don’t, check with your attorney about cutting them loose as quickly as possible.
As is the case with most anything related to selling your home, never just tell a buyer that things have come to an end. Put it in writing. Don’t forget to return whatever deposits or other funds the buyer may have put up in the process.
Online Problem Buyer Resources
Much of your success in dealing effectively with the problem buyer boils down to being assertive—not aggressive but standing up for yourself in a positive, productive fashion. Some websites that offer information on how to be assertive in any number of situations are found at:
The Least You Need to Know
• Problem buyers are a part of selling your home. Prepare to deal with them.
• If a buyer just seems incapable of making up his mind, ask if there’s any additional information you can provide that may help.
• Be careful with buyers who hold back on financial disclosure. That can hint at all sorts of significant problems.
• Dealing with a nitpicky or bullying buyer can be done several ways. Ask them to back off or hand them off to your attorney.
• You may want to terminate relations with a buyer for a number of reasons. But be careful and check with your attorney to make sure you’re in a legal position to do so.
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