What is a qualified buyer and how can it impact the sale of your property? ✔️
Have you ever heard of a buyer being 'qualified'? Estate agents use this term, and it is very important that you know about it when trying to sell your home. Read this article to learn more.
If you're trying to sell your home, you may have heard estate agents refer to potential buyers as 'qualified'. But what does this mean? You don't need to have any particular qualifications to buy a property. But the real question is, why should you care? What is significant about having a qualified buyer?
In this context, the term 'qualified' refers to the status of the potential buyer. An estate agent will register buyers on their database, ready to market new properties to them, hoping to book viewings and make offers. The agent's aim here is to understand the requirements of a buyer and show them properties that match those requirements, leading to offers for the seller of that particular property. It's like online dating but for houses. There is no point showing a buyer a 4-bed detached if they are looking for a 1-bed apartment, so the agents will spend time learning about the buyers' needs. This is good for homeowners, too, because it reduces the number of viewings that won't go anywhere.
Of course, there is no guarantee that the agent will know the buyer's desires so well that they can show them one property, and they will fall in love with it. However, showing buyers properties they are likely interested in reduces the potential for unsuccessful viewings.
Qualifying a buyer goes further still. Much more in-depth than understanding how many bedrooms a buyer is looking for, qualification refers to the buyer's financial position. This is a key piece of information for any seller—you don't want to waste your time getting your home ready for a viewing or get your hopes up when they make an offer if they have no chance of raising the funds to pay the price that they've offered.
So, what exactly does the agent mean when they say that a buyer is 'qualified'?
- They have confirmed their position to make a purchase. This could mean there is a property to sell or a notice period to serve to a landlord, and they have informed the estate agent so that you know the likely timescale that they would be able to complete a purchase.
- They have confirmed how they intend to pay for the property. Whether they have cash in the bank, need a mortgage or will be using the funds from the sale of a property, they have confirmed their financial position with either a mortgage agreement in principle and evidence of the deposit funds or the total amount, if the purchase is to be in cash.
- They have confirmed the status of their own property sale. If a property is to be sold, they have informed the agent that it is either to go on the market, is already available for sale, or is indeed under offer. If the property is under offer, the status of their own buyer and any subsequent buyer below them in the chain will be established, too.
This sounds like a lot of questioning and information to gather about someone who has yet to make an offer, and you would be right. But there is a reason.
Imagine you have an offer from a buyer and are over the moon with the figure. You rush off to view properties to buy, and you find the home of your dreams. You start negotiations, and the excitement is overwhelming. You might just have your offer accepted for this amazing new property. Things are moving quickly.
But then, just as you start making plans, you discover that your buyer has a property to sell to pay you for yours. And that property is not on the market. In fact, they might not have even had a valuation. This means they might be unable to sell their own property for a price that would give them enough of a budget to buy yours for the price you agreed to. In no time at all, your emotions will have gone from cloud 9 to rock bottom.
And so, fully qualifying a buyer will give you peace of mind and confidence that, if the buyer likes your property and you agree to an offer from them, you will know how they will pay for the property and what timescale that purchase is likely to take. From here, you will be able to assess if their offer is good, based not just on the literal figure but on the circumstances of that offer, allowing you to make decisions that work for you and your own move.
Your agent will use the information gathered from each potential buyer to establish the urgency of each buyer. If you are not in a rush, they will know that a cash buyer looking to move in 4 weeks would not suit you. Of course, they wouldn't be turned away, but to save everyone time and energy, you can all be aware of the circumstances before the viewing. You could decide to move faster than you had initially planned, or the buyer could move into rented to allow for your timescale.
The key is knowledge. You can plan accordingly if you know about the situation from the outset.
