Brokers share their tricks to spot a serious buyer
It’s a seller-friendly market, as you may have heard, especially if your condo or co-op is in decent shape and is realistically priced. If you're lucky, you may even nab multiple offers. But not all bids are created equal, and not all are likely to lead to a sale. Some buyers put out "feelers" even if they don’t intend to follow through; others lowball to test the waters.
While it's nearly impossible to pick out a serious buyer just by looking at them, you may be able to separate the real ones from the sightseers by keeping your eyes peeled for these signs:
How's their open house etiquette?
“People who are serious about a place know to be on their absolute best behavior,” says Jay Glazer, an agent with Compass. “They know they are being watched. As a broker, I’m always observing people at my showings and open houses."
Brokers should be able to report back to sellers about how certain prospective buyers behave: whether they appeared to have fallen in love with the place, the building or the neighborhood, and whether they seemed particularly nitpicky, enamored or negative.
How long have they been looking?
Some buyers will tell you if they’re at the beginning of their apartment hunt, letting you know upfront that they may not be ready to move forward just yet. They may volunteer this information or it may come out during a conversation, so you (or your broker) should be sure to engage them to find out more about their search history. Ask how many properties they’ve seen, and if they have submitted offers on any places. This will tell you where they are in their process and how serious they are.
“If somebody has seen a ton of places, they're probably better equipped to appreciate your apartment and the asking price,” says Roy Silber of Citi-Habitats. If they've offered and lost out on a few apartments, that is an issue worth pursuing, he says, though never at an open house. "If they come back, showing interest, that's something I as a broker would follow up on.”
Do they ask the right questions?
Brokers like to hear buyers ask certain questions, which can be signs of a more serious buyer. For example, it's good if they're interested in the layout of an apartment and what a renovation, if called for, would undertake. It shows they are trying to see themselves in the space. It’s even better when they ask about the building’s financials. “That tells me they are educated about real estate and are two steps ahead,” Silber says.
Are finances in order?
Perhaps the biggest indicator of a serious buyer is whether they have their finances sorted and ready to go. Glazer says they don’t necessarily have to have mortgage pre-qualifications or pre-approvals in hand at showings the way one would with an employer's letter of bank statement for a competitive rental, but “any serious buyer will likely have documents prepared in PDF form ready to submit with any offer around the time they identify a property in which they are interested.”
Are they already working with a lawyer?
While many prospective buyers may wait for a broker to recommend a lawyer, those who already have a NYC-based attorney in place by the time they submit an offer are probably pretty serious about locking down a deal. (Note: The lawyer should be somewhat local, with experience handling similar properties, like co-ops or multi-family townhouses).
“I don’t care if they have just hired an attorney the morning of the day they submit an offer as long as they have somebody to accept a transaction sheet. Otherwise, I’m moving on to the next people on the list, “ says Silber.
While a lawyer isn't technically necessary until after the offer is accepted (when they'll have to look over the deal sheet), having an attorney at the ready (and in time for best and final bids) puts a big "check mark" next to that offer, according to Glazer.
Do they have a broker?
While not all buyers work with agents, a buyer with a broker at the ready has already put in some legwork and if they're investing time in the process, they're fairly ready to get down to business.
“I’d never say buyers who don’t work with brokers are not serious,” says Nina Horowitz Rothman, an agent with Halstead. “But a lot of times, their inexperience leads to missteps that ultimately cost them an apartment. Those people may end up losing out on a few apartments before they understand how to navigate the market.”
Is their offer legitimate?
Earnest candidates know they need to submit their best offer right off the bat, Horowitz Rothman says, rather than putting in a low bid to test the waters.
If a bid is too low that can be a sign of someone who's not quite serious about your property. That said, it's always a good idea to give a counteroffer, even if the bid seems low. You never know if they'll come back with a more reasonable number. Of course, if the buyer continues to make unrealistic offers, feel free to stop engaging with them.
(Note that if you're getting more than a few offers that are way under asking price, your apartment might be overpriced. Read here for more on pricing your apartment.)
Did they go the extra mile?
While good financials are the most important factor in accepting a bid, a buyer who writes a so-called "love letter," accompanying their offer and explaining why they’re qualified and excited to purchase your apartment, can show they’re dedicated to doing a deal.
Related:
Why you shouldn't always pick the highest bidder
What sellers need to know this spring
Bidding war? Pick the best buyer
Confessions of a first-time seller
Pulling off a bidding war: Your 8 step guide
Top negotiating mistakes EVERYBODY makes (sellers, buyers and their brokers)
