Hi folks. I’ve read a couple of posts this week that have left me scratching my head. Both were about listing agents and their “unethical” practice of not handling multiple offers according to the Buyer agent’s expectations.
In the comments on these posts the listing agents were called lazy, unethical, unprofessional, bad, rude, unfair and greedy. The consensus was that “The listing agent was not looking out for the Seller‘s best interest.”
Well my question is:“How do you know what’s in my Seller’s best interest”. The answer of course is “you don’t“. You have no clue what my Seller and I have discussed.
As a listing Broker it is my job to counsel my sellers. My Sellers need to know that they do not have to…….
…..disclose multiple offers. …..counter offer. …..ask for “highest and best”. …..even acknowledge your Buyer’s offer.
There are many reason why NOT disclosing multiple offers or asking for “Highest and Best” may be the best way forward.
The Buyer may NOT submit an offer if they know there are multiple offers.
A Buyer may also NOT want to get caught up in a bidding war.
By disclosing multiple offers I could very well keep my Seller from getting a better offer.
I can’t even count how many times a Buyer’s agent has called me to say they were sending over an offer. Frankly it goes in one ear and out the other. I NEVER believe them. I am not going to contact my Seller and get them all excited only to have to let them down when the offer does not materialize.
Send me the offer and I’ll present it to the Seller. And send me a COMPLETE offer. Telling me you will provide a pre-approval and/or proof of funds tomorrow does my Seller or your Buyer no good. Without these items the offer will not be presented. It’s a non offer.
As an example: I received an offer on one of my short sale listings on Friday. It was cash and very low. It was also sent over with out proof of funds (POF). I emailed the agent and asked them for the POF.
I didn’t receive POF until Monday and then......I couldn’t read it. I had to ask the agent to resend it. It took the agent took another 24 hours. Finally, 5 days later, I was able to discuss the offer with my Seller.
My Seller countered. Shortly after that we received a far better offer that my Seller will probably accept. After discussing it we decided to ask the cash offer for “Highest and Best” just to see if they would come up.
I received an email from the agent moaning that she thought her Buyers would get an answer today and that they were not happy with “Highest and best” and were in fact upset that there were now multiple offers because we “didn’t disclose this to them”.
Now if this agent were a Blogger she would probably write a post about how lazy, unethical, unprofessional, bad, rude, unfair and greedy I am. And how “I’m not looking out for my Seller’s best interest.”
But that’s OK. My Seller just accepted the other offer that was $15,000 better than the cash offer. I really don’t give a crap what the Buyer’s agent and the Buyer think. I work for the Seller. They are the one’s paying me.
While I certainly agree with having “professional courtesy” it does not extend to giving you insider information to help you negotiate a real estate transaction. Always remember who you are working for.
If your expectations are different....then you are setting yourself and your Buyers up for failure. That’s all I have to say about that. What say you?
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Professional courtesy is one thing... but folks need to remember we are on opposite sides of the negotiating table and as you say, always remember who you're working for.
HI Bryant, I and my buyers have been in multiple offers many times, and so far we have always been advised by the listing agent, we have multiple offers and you may resubmit a highest and best offer before 5PM tomorrow night. Or words to that effect. When this happens my buyers and I decide what is their highest offer, or best offer, (because sometimes, an all cash offer with a 2 week closing is the best offer), I have had one buyer walk away because they feared a "bidding war" and it was their choice, after all, we do not know if we are ALREADY the highest and best offer. I advise my buyer to do what their mind says, then they will never regret it. I can see where the Listing agent should never disclose what any other offer is.... this is still a negotiating point for the sellers.
The last time I was in a "bidding war" my buyer decided to walk away - they just didn't want to play. Fine by me. I notified the seller's agent that we were dropping out of the "4 way race". Funny how his calling for best knocked the best off - we were already the best and we left. We didn't go back either we had already executed a contract on a different house - asking for more just might get you less. I totally agree that sellers do not have to look at anything they don't want to and listing agents do not have to tell selling agents the rhyme or reason.
Bryant - Sounds simple enough to me. Sounds like this experience came out better than expected. And I believe you're right, in that we always have to remember who we are working for.
Ahhh, BB, finally you write about something that I have experienced many times....coming from CA we spent about 7 years perfecting the art of mulitple offers. Sometimes we got up to 60 offers on one property. Remember those good old days:) I think the problem is, from my perspective, is that many buyers agents today have no experience in muliple offers so they love to blame the listing agent for their lack of experience. In the end, I still say selling real estate is an art. And if that is true, they you are the Picasso of listing agents:)
On yesterdays post (about a buyer in a bidding war that came on rather suddenly :-) I stated that I was going to play devils advocate...perhaps the seller didn't want to participate in a bidding war and simply wanted to accept one offer without the risk of losing a good buyer? It happens. Often. Sellers really have enough stress without playing poker with offers.
I always counsel my buyers to submit an offer that is their best and last. One that they can sleep well after submitting it, without staying awake wondering "What if I...?"
Edited to add: Real scenario: 2 months ago a VA buyer client of mine submitted an offer on a home. Listing agent told me that the home was having a 3rd showing by an agent the next day, but we got the offer over and the seller accepted it. No counter offer. The seller didn't want to wait to see if the "3rd showing" made an offer and risk losing my well qualified and motivated buyer. We closed on the home last month and both seller and buyer were thrilled.
In Maryland, and I suspect everywhere else, buyers agents are not privy to most of what is in the listing agreement. That's what dictates my actions on behalf of my sellers.
BB, oh, yes indeed. I have been close to being run over for not disclosing, not going into a bidding war. My clients looked at every offer separately, got exactly what they wanted, that was that. My clients were elderly and had health issues, didn't want to screw around. Right from the start I asked for their best, but didn't say that there were other offers. The house was priced to sell, my clients wanted out asap, so there was quite a bit of interest. Each offer was looked at by itself, all but one were rejected with no negotiating, they didn't want ONE SINGLE counter back. Was very odd. But, I did what they wanted. The accepted what was best for them, sold the house fast, and moved on. No fuss, no muss.
Oh yeah, except for a few phone calls to me. I was threatened, called all sorts of names, and NOT ONE of those agents was aware of the fact that I was under NO obligation to disclose the multiple offers unless the client told me to. NOT ONE AGENT... let me just scream that out in case you missed it. And, I might add, these are some of the "top producers" in my area. OK, they were ... not any more. Struggling to sell like the rest of us, and might add pretty sleazy deals too. :D
After the offer was accepted (and noted as under deposit on the MLS) we got more offers in, my clients instructed me NOT to present them the offers, to tell the agents to watch the MLS and see if it came back on again. They felt that their signature on the offer to purchase was binding as far as they were concerned. I got that part in writing,LOL.
As a sage said recently "Now this is a post I can get my head around!!"
"In the comments on these posts the listing agents were called lazy, unethical, unprofessional, bad, rude, unfair and greedy. The consensus was that "The listing agent was not looking out for the Seller‘s best interest."
I agree! But, this is nothing compared to the buyer's agent not presenting his offer directly to the seller and their agent, before the sun sets! I understand some times you have to acquiesce to a sinful system, but if you do you can't then take the high ground! It's the pot calling the kettle black!
"As a listing Broker it is my job to counsel my sellers. My Sellers need to know that they do not have to.......
.....disclose multiple offers. .....counter offer. .....ask for "highest and best". .....even acknowledge your Buyer's offer."
Is fair advice! Although if the listing agent collected multiple offers while delaying mine or didn't get a counter, I'd rarely show their listings. If they didn't acknowledge my offer by turning it down or countering it the agent had better be able to prove he presented it, I've faced their both as a REALTOR® and a consumer, one of the agents did eventually get their license back.
With that said, I've had the luxury of working with far more investors buying logically than would be home owners buying with the hart. It's a lot easer to hold the high ground when your client is willing to walk.
It's seems this is the same debate we've been having the last week or so.
BB, as I see it, these negotiations can take several forms, depending on the agents involved, and the sellers preferences; and of course the firearms involved as well. Judging by the pattern, was that a small-bore with bird-shot? I always like the old single-shot 12 gauge that split open -- much fun! John
I recently was in this situation. My buyers submitted an offer, the sellers agent didn't even respond to me until a day after the response deadline. He said he recieved another offer AFTER my offers deadline of acceptance. He then told us to send our highest and best, so we did, and we lost the home. Why? Because my buyers didn't want to get involved with the "war" of pricing. They figured, the other guys can have it, there is too much on the market to get into a bidding war. I agreed. :)
BB - BRAVO! I couldn't agree with you more. While I hate to hear about all the ridiculous bidding wars that my little first time buyers have had to get in to get their offers accepted, it is simply the only way to get a property these days. Most of my clients Realtors are advising my clients to go in with their "best" of "highest" if they even want their offers to be considered.
It's unfortunate that in some cases, my clients offers have been "highest" but because the seller felt that some lower cash offer was "best" for them, my clients lost out. How do I know this TLW? The LA told my clients BA that a lower, all cash offer was accepted. As you said BB, only the sellers and their LA knows what's best for them.
I still think it's a shame that higher financed offers are getting overlooked for lower cash offers.
BB - just wanted to add that I absolutely love the redneck counteroffer video. No matter how many times I watch that video, it always leaves me ROTFLMAO. You and TLW are such a hoot!
BB, I'm so glad that you posted this. We've gotten involved with "corporate" sellers, and while the majority of buyers agents without a winning bid are terrific, a few are HORRIBLE to deal with. It didn't occur to me to just flat out offer: 'It's none of your business", but regrettably, it's going to have to be the new response.
BB, Loved the Redneck video. I have had buyers think that the listing agent is trying to pull a fast one,so they don't really offer their hight and best. Then when they don't get the house, they believe the agent just wanted more money. I've told buyers that I don't think an agent would want to loose their license over stuff like that.
Bryant, this is a great and timely post. The listing agent must obey the wishes of his client as to whether they will disclose or not. There are times it needs to be done, there are times it shouldn't. Check the NAR archives, they have an excellent guide for handling multiple offers.
Bryant - When I represent buyers - the shoe is on the other side - I do a market analysis of the house they are interested and see what offer may be accepted - it is always their highest and best use given the condition and circumstances. My submitted offer always have at least pre-qual letter and/or POF and copy of earnest money deposit with offer. There are times my buyers offer will not be accepted because we were outbid - we then move on to the next one.
All this is well and good, but remember, if you tell Buyer agent A that you have multiple offers, you have to tell Buyer agent B and so on so all buyers are on the same playing field. Otherwise you could be opening another whole can of worms you don't want to open. A buyer may think they were discriminated against. Or don't tell any of them. I don't think it's rude for the buyer's agent to ask. As stated above, some sellers want it disclosed, some don't, so don't blame the buyer's agent for asking, they don't know until they ask. Everyone's just trying to do their job for their client. As far as the video LOL LOL LOL May I download it to use as a counter offer on my listings when needed!!!! You need to send it to Jeff Foxworthy!! LOL LOL
I Love your "Red neck" approach to Real Estate. I am going to invite The "Goomba" over next time we have a multiple offer and give our second offer the "ba-da-bing!!!" Yup...up here in the big apple.
I'm with you BB. I would imagine that most agents in your market know this by now when working with you and would counsel their client to pony up their highest and best from the git go.
Although I understand your point, saying an offer with no approval letter is not an offer is not technically correct. A seller may be willing to wait a few days to see if the approval follows before accepting a lower offer. Therefore, I may send it over anyways. Never say never.
BB - I agree with your reasons for not disclosing MOs. I also do not like to disclose until my sellers get to a point where they are almost comfortable with how individual offers have been negotiated,like what's on the table and the buyers have totally immersed themselves in the game.
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Reserved Parking For "The Lovely Wife"...TLW...ROAR!
Hun...
I've decided that we should start charging a transaction fee on all non-offers :)
P.S. Ground breaking video. We're soooo cutting edge :)
TLW...ROAR!