Hi folks. Let's talk a little bit about negotiating. Negotiating is one of the things I enjoy most about my job. I would be perfectly happy to never do anything but sit at my desk and negotiate deals over the phone.
Negotiating is an acquired skill that anyone can learn. It's one of those things that the more you do it the better you get. I also think everyone has their own way of doing it so I'm just going to try to explain what works for me and then you can tweak it or add to your current way of doing things so that it works for you and your market. And hopefully, you will be able to add some suggestions or techniques, in the comments, that will help me to improve. So here goes:
One of the first things I've learned about negotiations is that unless the offer is acceptable I always suggest to my Sellers that they counter offer. We rarely out right reject an offer. I've had offers that started out extremely low where the Buyers eventually came up. There are some Buyers who just have to get the low ball offer out of their system. It could be a cultural thing. It could be they have watched too much late night TV. Whatever the reason.....it's just an offer. Don't let the Sellers take it too personal and get upset over it. Counter it.
When I receive an offer onone of my listings, the first thing I do is call the agent and go over the offer with them. I do this for two reasons. One, I want to make sure I have the entire offer and I'm not missing an addendum that may have additional terms on it and secondly, I want to open up communications and get friendly with them. Why? Well, it's simple, they may tell me something that my Sellers and I can use while negotiating. You would be surprised at the things I've learned during the course of a conversation.
Next I call the loan officer or mortgage broker. Same strategy, ask questions and listen. You can find out quite a bit of information. But most importantly, I want to make sure the Buyers truly are qualified. You can usually tell if the LO is being truthful with you or not.
Now folks, I'm not working for the Buyer. I work for the Seller and my goal is to get as much money as I can for my Seller's property. There is nothing wrong with me asking questions. If the Buyer's side chooses to answer something they shouldn't, well that's their problem not mine.
Once I have taken these two steps, and I'm satisfied with the answers, I prepare a Net sheet and transaction outline for my Sellers. Now I'm ready to get with my Sellers and go over the offer. Initially I prefer to present the offer via Email or by phone. At this point in the negotiations I've just found it easier on the Sellers if I'm not burying them in paperwork right up front. I present the offer by using the Net sheet and transaction outline that I have prepared. I want the Sellers to concentrate on the things that are important to them not 10 pages of useless disclosures and addendums. We can go over that stuff later.
I suggest to my Sellers that they make a strong counter offer. We want the Buyer to be tempted to accept our counter. I also suggest they agree to as many minor things as they can i.e warranties, closing costs contributions, closing dates and the such. If the costs/terms are within reason, accept them. Give the Buyer the small stuff. It's easier to get a counter accepted if you are not changing or denying every little thing the Buyer is asking for. If the Buyer wants closing costs and warranties, these items are just reflecting in the counter offer price anyway......so why not leave them in?
Once the Seller has decided on a counter offer we make the changes on the contract and mark where the Buyer needs to initial. Now this step, may be a little controversial and some may not agree but here goes, my Sellers do NOT sign or initial the counter offer. I Email it to the Buyer's agent with no signatures or initials. "But Broker Bryant, why do you do that?" Well, let me tell you, I want the Buyer to commit before my Seller signs off on it. My Seller ALWAYS signs last.
We keep the property on the market and take showings and offers until the Buyer has agreed and signed and initialed everything AND put up his escrow deposit. I want my Sellers to be in a position to negotiate and accept another offer if one should come in that's better. I don't want the Buyer to sit on my Seller's counter for two days while they decide whether or not to accept it or counter it.
Also, NEVER give an ultimatum in negotiations. Don't say, "This is my Seller/Buyers final offer, take it or leave it." It slams the door shut on any further negotiations and it's not true. I can assure you, if my Seller comes back within $500, your Buyer will probably accept it. So just don't give ultimatums. Negotiate until the deal is accepted or dead and buried.
Bryant. You're statement:
may be a little controversial and some may not agree but here goes, my Sellers do NOT sign or initial the counter offer. I Email it to the Buyer's agent with no signatures or initials. "But Broker Bryant, why do you do that?" Well, let me tell you, I want the Buyer to commit before my Seller signs off on it. My Seller ALWAYS signs last.
Is right on. I train listings agents in the same technique. Until the buyer has agreed to all price, terms and conditions, the seller doesn't sign. That way you don't wind up with a ratified contract and counters with only one signature.
BTW, the system is not working fully. I don't have my tool bar at the top. I can't edit for paragraphs or anything.
Hi BB - Very well put, and I have nothing to add. Sounds like the way I operate too. I don't always withhold signature on the counter though, as I have had buyers think their time to respond is therefore open-ended, and if my sellers are anxious for a quick close, they want a response NOW.
I also got a kick out of your mentioning 10 pages of disclosures. I wish ours were only 10 pages - ours are at least 4-5 times that!
Oh, this is why I love this place. Only here can one learn the stuff that you can't learn in real estate school, or even in your own office (being a teacher, I can never be at the office training sessions, so I'm stuck, unfortunately). Definitely bookmarking this, printing it, and posting it a wall and keeping a folded copy in my wallet. Thank you Bryant!
"I also suggest they agree to as many minor things as they can i.e warranties, closing costs contributions, closing dates and the such. If the costs/terms are within reason, accept them. Give the Buyer the small stuff."
We suggest this also, how many times does it come to bite you back when the seller doesn't want to give in anything or changes even the minimal things, and then inspection rolls around... ~Rita
Great post Broker Bryant. I must be a little old school, but I consider any unsigned counter offer as basically a counter 'suggestion'. I don't see an upper-hand scenario by breaking the process of the negotiation by requiring the buyer to commit to the seller's counter BEFORE the seller commits to it. It could also be a California thing (in case you all haven't noticed, we are a tad different out here.)
As a side note, I always thought it would be fun to have a portal on ActiveRain that allows different States to post their contracts so we can all see the differences.
Thanks
Bryant, isn't it amazing how most buyers agents love to talk your ear off! A simple question or two can go a long way. I've also used the un-signed counteroffer on the Buyer's side. Thanks for your video and other suggestions. - John
PS - where does TLW's Counter Offer come in? (or should I say, blast in?)
Broker Bryant, Thank You! I am bookmarking this one too. Great post, but especially loved the accompanying video! Negotiating 101. Just Brutal! Have a happy weekend! :)
Hell BB,
I was just about to call you to list my property, and realized that after watching the video of you telling us that you would buy our house for 50 cents on the dollar and noticed the number of times your secretary broke in to the conversation then reallized that if you could not control your secretary how in the world could you control the sale of my property... and of course if you don't take phonecalls you can't sell homes and I would not want one of your employes to sell it, as you may only have the same control over them as you have over your secretary.
TM of Camelot.
I recommend everyone verify the laws in the State in which they are licensed and selling real estate. This may be not work in all states …. That’s all I’m saying. I do think shooting a hole in the paperwork would be more fun than tearing it up … either way … to protect privacy … a shredder works too. Save a copy for your file!
Wow BB. This may be the most useful blog I've read yet. THANK YOU THANK YOU THANK YOU. I'm a pretty good negotiater but I learned some great tips here. I especially like not getting seller's signatures until after buyers have agreed. I can't wait to share this with my agents. May I?
Thank you very much for the very informative post Broker Bryant! Since your lovely wife got me started here on Active Rain this week(I am "The Teacher" although TLW should have called me the "PRE-K"- as in kindergartner when it comes to real estate.) I have been reading countless posts and I have enjoyed responding to many. I especially love "The Guru's" blogs on economic data.
Thank you so much, as well as all the other members of Active Rain who so freely share their knowledge. I am learning the system slowly, but surely.
All the best to you and "The Lovely Wife", and may you have a great Labor Day Weekend!
Now these anonymous comments are cracking me up. Let's start with:
Virginia Beach Real Estate...
Your assumption is that is he tore up a contract. Are you sure is wasn't just a few papers? And are you sure you want to speak to our Board? They love it when I shoot holes in contracts much less tear them up :)
Camelot...
Glad you recognize humor when you see it. I'm the secretary you speak of. And just so you know our videos are meant to be funny. Good call on your part :)
Bruce...
Boy am I pleased to see you jumping in and getting around in the Rain. I can't bring myself to refer to you as Pre-K. To me you'll always be "The Teacher" and I mean that with deep respect :)
Lourdes...
Don't concern yourself with remarks that are made to steer this post away from the real topic. That includes me mouthing off in here :)
I realized how emotional buyers and sellers get when negotiating. And never volunteer information. It's something that buyers and sellers so naturally do.
BB - Another great post. I do believe talking to the other agent after getting the offer is good. You just might find out some good information. I also like to see what is really important to the buyer . Is it the closing cost assistance, Home warranty, repairs, or the price of the home.
I wouldn't do the unsigned counter. I would just let them know that if another offer comes in that we can withdraw our offer by sending you a withdrawl of offer notification.
I'd be annoyed by a seller refusing to sign their own counter offer until my buyer signed it. It kind of sends the message that they can't be trusted or they're trying to do some kind of trick.
I do agree with showing the property and taking counter offers.
What I dont understand is why some agents no longer take offers after they get their first offer accepted? Doesnt make sense to me. I think it holds the first buyers feet to the fire. Also if the deal falls apart you dont have to start all over.
Now I will always make sure my clients dont sign an unsigned contract.... Learn something everyday by listening. Im representing someone now who when they bought the home the listing agent and the seller didnt disclose foundation problems that were known to the seller. I wonder how you would handle a listing when the seller knows of issues like this. Do you disclose or do you not say anything like this selling agent did?
Don't you just love those lowball offers from Realtors that have never even shown your property? I find it amazing.
Anyway, I agree. Keep it simple. Give a strong counter-offer the first time around. That way the buyer still will hopefully stay in the negotiating game.
I've had listing agents refuse to present my offers, in each and every case I simultaneously complained to the State DRE and their Board evey offer got presented! Several closed. On fool FLI member refused at a table where we had a quorum of Board members, we offered her a chance to remain a member, she presented the offer it was turned down of course! 6 months later the seller called me, could we please buy their property? We did an even included the original brokers commission!
I replayed you tape and it seems you didn't consult your seller!
As to the no signatures on the counter offer, that's not a counter! It's playing "wouldyatake" in reverse no one should play "wouldyatake! let alone "wouldyapay"
I've read and reread and found no negotiations only possessing and arrogance! Personally I like arrogance and if you're not going to negotiate your talking with the other agent and the LO is excellent. (I can't tell you how many emergency applications I had because the original pre-qual is worthless, pre-approvals are even worse!)
I guess that transactional brokers represent no one. Better check your state law and Board rules this could get you gelded in many places! Parrie ousters anyone?
Hi Bryant ~ Great post. Most of it makes total sense to me, although I've never tried the unsigned counter and don't think it would go over very well here. Don't really see the point anyway, since either the buyer or the seller can withdraw their offer at any time anyway as long as it hasn't been signed by both.
BB... Great information.. I like the part about the seller signing last.. This does allow them to be in a position for a better offer. If they signed the counter and another offer comes in and the seller has already signed, then you have to go withdraw the counter. During this time, the buyer could still sign, date and time just before your notice to withdraw. I agree that many may not like this way of presenting a counter offer. How ever it is great for a seller. I may have to try this as well. ( if my selllers are ok with this )
BB: You do business the same way that I was taught. Gather all of the information for your client, put the net sheet together and present it to them in a calm manner. After all it's just papers. If the offer is low, don't get upset, maybe the buyer is bottom fishing and just testing the waters, counter the offer. We had a deal, several years ago where the offer came in $100,000 short of the asking prie. The seller hit the ceiling. We calmed them down, put on our negotiating hats and at the end of a long evening ~ we were signed sealed and delivered.
I am like you, I love to negotiate. Besides showing houses ~ it is the thrill of the deal for me.
Some very good points--strong counter, give them something to like (paraphrased), but if I didn't have my Seller sign the counter, I'm sure I'd get a call from the buyer's agent saying they'd consider it if the Seller would sign first. We have one agent in town (small town) that delivers the offer in person, then leaves. No talk, nothing. Makes everybody work for their money, and nobody is discussing their clients' business out of school.
Thanks for sharing your information. Like you, I love to negotiate. I love to win. For me, the prize IS the WIN, not the commission. The money is the added bonus.
I have been doing what you mentioned, mostly. Now, because you shared your wisdom, I will implement ALL of those techniques.
Thank you, Linda Alexander
BB- The object of any negotiation is to achieve your goal.
In order to do that- encouraging some concessions is a means to that end.
Think of it as engineering a bridge which will cross the divide.
It's perfectly okay to have a property listed and continue to market it while negotiaions are on-going, but if a seller won't reply to an offer with a written counter-offer then I walk away. There are just too many properties for sale right now for a buyer to be in a position where he doesn't have a counter-offer to consider and where he's just making a second offer.
These are good practices I think. When I am working for the buyer I always call the listing agent prior to actually sending the offer to open the doors of communication first, and get a feel of what the seller is thinking. This has always worked well for me.
Sending an unsigned counter accomplishes nothing...your client can always withdraw the counter (in my state simply by calling the other agent). Sending something over unsigned will offend in a significant percentage of cases --either offendng the other client or their agent (at least in my market). Sending over an unsigned idea will NEVER have the negotiating impact of putting something truly meaningful in the other party's hand that they must confront and decide upon...and something that they know gets them a deal if they act positively.
Having a "chat" with the other agent will often net compromising info ---compromising to the other agent's client - and ultimately compromising to the agent themselves. In a significant percentage of cases the other agent will resent any attempt on your part to compromise either they or their client. Making a habit of this tactic will get agents watching everything you say and do like a hawk (...every one of them just a phone call away from a Board or regulatory office) and very likely talking about you among their colleagues. Agents who are watched like a hawk, eventually get their wings clipped.
This is really an excellent post. I consider myself a pretty good negotiator, but unfortunately, most of my negotiations now are with banks so it's pretty hard to play poker.
Also, by the seller signing last, you have full control over the binding agreement date, and you can get those closcks ticking!
Wow!! Great comments. I guess sending over an unsigned counter is all about the presentation. In 100s of transactions I have never had an issue with it. As for contract law....well it's not a contract it's an offer. Contract law doesn't apply.
And Bill....of pourse I consult with my sellers. It's their offer not mine. The video is just a staged video illustraing what I would like to do sometinmes. It's NOT reality.
Here's the point with an unsigned counter. If the seller signs and sends a counter over then as soon as the buyer signs the counter and sends it sends back we have a binding contract. What if we received a better deal in the meantime? If the seller hadn't signed we still have only an offer and are free to entertain the other offer with having to withdraw the first one. Someone ALWAYS has to sign last. I prefer it to be my seller. It's actually no different than they way lenders handle their REOs.
Now if I were on the buyer side I may have an issue with this. But...for the purpose of this article I'm on the seller side. In 15 years NEVER has a buyer's agent complained to me. That either says my presentation is awesome OR the agents are not on the ball. Either way my seller wins.
But remember, I'm not telling you how to negotiate. I'm telling you what I do in my market. These articles are designed to stimulate thought. I hope it has.
This is what many banks have been doing for some time with their foreclosure properties. They send back their "counter" with no signatures or initials. Then, after the buyer signs the bank's counter, the bank then finalizes with their signatures. It is a power play, but I have to say that I haven't had a buyer reject this method of negotiating yet.
Here we do mark-up contracts. We mark up everything we don't agree to, change the price and INITIAL and date.
That way there is a trail of changes with dates. It is not a bottom lined contract until all changes are initialed and changed. Once that is done we have a line on the last page where both parties sign.
If the contract gets messy with lots of back and forths then we re-write the first page to give to the lenders and title companies to read clearly.
The house is never put in the MLS as contingent until ALL the negotiating is done. And even then some agents don't, which drives my batty.
Must have missed something....Please Broker Bryant, tell us how you "REALLY" feel about a contract that comes in about 25% under list.......hehehe. Had never done the send it back without a signature, will begin that in all of my future transactions.
Here in North Carolina, we have an official form that works very well and avoids the problem of counter-offers and contracts with so many changes they are not legible. The form is called Seller's Response to Buyer and it specifically states that "This is not a counter-offer" but Mr. Buyer, if you will make these changes and present a new offer, we will consider your offer favorably." Although the form allows for the sellers to sign, I never allow them to do so because I've had selling agents insist that it is a counteroffer. I sign it for the sellers as their agent.
The beauty of the form is that it allows a seller to make a list of changes that are acceptable in writing without having marked up counteroffers floating around. It also allows for negotiation of multiple offers in a written format for clarity without committing the seller until the seller is ready. Then, ideally, a clean contract with agreed upon terms is signed by the buyer for signature by the seller.
BB - this is why I always read your posts. I always learn something! I love the idea of sending the counter over unsigned. Question - Do you VERBALLY counter offer at all? Seems like we do that more here than actual paper counter offers.
Excellent recommendation to have your client sign last, that one will be in my quiver this point forward. Never close the door on an offer...keep it going until you've exhausted every possible option. It will win you more deals than you otherwise would be sacrificing.
Here in Charlotte, my BIC has instructed us to never let the sellers sign until it's final. Otherwise, if the buyers sign, you have an accepted contract.
But some offers are not even worth TLW's bullet holes! We negotiate verbally back & forth and then the buyer signs off first and brings it to the seller. Seller signs last in my area. You're right about the useless threats of 'this is our final offer, take it or leave it'. Two days later, they're back!
Hey, BB, we're cut from the same cloth. I'd love to do nothing else but sit at my desk and negotiate all day long, too. It's my favorite part of the business, because every transaction is different.
In fact, just put one together that had fallen apart last week. The seller issued counter offer #3 but the buyer refused to sign. Then, a week later, the buyer resurrected herself from the dead and submitted counter #4. But it was for a lower price than #3. The buyer's agent begged to keep it alive. It seemed senseless to issue #5 when the buyer already had #3. The buyer knew the seller's bottom line. Fortunately, the seller received 2 more offers at about the same time, which shifted the power.
We made the buyer sign #3 and issue an addendum extending time for acceptance, which the seller signed. My sellers sign last, too.
"Wow!! Great comments. I guess sending over an unsigned counter is all about the presentation. In 100s of transactions I have never had an issue with it. As for contract law....well it's not a contract it's an offer. Contract law doesn't apply."
depending how your pa is set up, it could be in violation of contract law. stay with me here, if anything is written above a signature in a contract or as you put it an offer, it voids the offer. at least here in michigan, and the way our pa's are set up, on the sixth page there are three sets of signatures, so if the buyer signed the second one and then the seller had to sign the first and third one, this would void the contract/offer.
now on the other hand, i deal with many banks and it is common practice that the seller (bank) will not sign anything without all buyers signatures, however, they dont use our sixth page, they use their own addendums that basically rewrite the whole pa anyways.
I do all counter offers verbally. Once terms are reached, buyer's agent rewrites the offer, buyers sign it and send the dough. Then seller signs it. Definitely keep showing the house, try to get multiple offers! Love your video, BB.
Another great piece of information here. Actually it makes perfect sense not to have your seller sign it. Here in dealing with all the bank owned and short sales, the bank NEVER signs the addendums until after your buyers does. For some reason, I really didn't think about it until you brought it to the table, Thanks!!!
One thing I love about listings is that the seller never makes the first offer. My first ex-father-in-law was a master negotiator who taught me that whoever makes the first offer is in a weaker position. As a seller the buyer is declaring upfront what they are all about and the key is to get them to the table. it is a shame if we squander that advantage by letting the buyer dictate us.
Fairly good story with details. In contract negotiation the professionals meaning the Agents must have already coached the buyers and sellers before you go to court, so to speak.
But I know that people can be very fickle and so on. Everyone should follow the rules but communication is the best answer, people want to know you are representing them and that you are trustworthy.
I loved your post. I rarely call the buyers lender but think it's an excellent idea and will be doing this consistently from now on. I also like how you don't bombard your seller with paper when presenting an offer and would love to know what your transaction sheet looks like..
I like the outline idea along with the net sheet. I can see the client just glazing over the details while theykeep the bottom line (the money) at the forefront. That's why I give a purchase contract to my clients when I take a listing. In AZ we have a nine page contract that we draft - not an attorney. I review the highlights during my listing appointment. That way when we do get an offer, it is not the first time clients have seen the contract and we can focus on the negotiation.
I like the outline idea along with the net sheet. I can see the client just glazing over the details while theykeep the bottom line (the money) at the forefront. That's why I give a purchase contract to my clients when I take a listing. In AZ we have a nine page contract that we draft - not an attorney. I review the highlights during my listing appointment. That way when we do get an offer, it is not the first time clients have seen the contract and we can focus on the negotiation.
"Once the Seller has decided on a counter offer we make the changes on the contract and mark where the Buyer needs to initial. Now this step, may be a little controversial and some may not agree but here goes, my Sellers do NOT sign or initial the counter offer. I Email it to the Buyer's agent with no signatures or initials. "But Broker Bryant, why do you do that?" Well, let me tell you, I want the Buyer to commit before my Seller signs off on it. My Seller ALWAYS signs last."
If other agents know this is your practice with everyone, they won't get offended. I always ask the buyer agent to make the changes and resend the updated offer and then my client signs last. The only difference is that I ask the buyer's agent to make the changes. The upside with this is that it preserves the buyer agent's dignity, but the downside is that when the offer comes back, sometimes there are other changes that we haven't agreed to. I may try your approach as there is less chance that they will make changes we haven't agreed to. Good tip! Thank you.
Exactly what we do! Almost to the letter. We tell our Sellers to never throw the baby out with the bath water and not to be mad at low offers but rather be mad at those who didn't make an offer. Great stuff, as always.
For all of you that think not signing a counter offer gives you some kind of 'advantage' in bargaining--This is one buyer that did see it for what it isn't....it isn't a serious offer. Buyers aren't ALWAYS stupid. We offered on a house last year (cash buyers no financing), seller countered by a small increase (unsigned) but the negotiations got snagged on another small item. The fact the seller had not made a LEGITIMATE, BINDING counter offer to us spoke loudly. Why should we waste our time negotiating anything when the seller had never seroiusly considered us as buyers? We let our offer expire. During the remaining time of the offer, both seller's agent and buyer's agent spent a good deal of time trying to convince us that we had to "honor" the seller's counter offer or we would lose our earnest money. Both agents became extremely agitated when I pointed out there was NO counter offer and we would happily honor our SIGNED offer. (As the prospective buyer who loved the house, I thought I was supposed to be the emotional one?) Our earnest money came back when I mentioned that there seemed to be an ethics problem in two agents trying to represent an unsigned counter offer as a binding real estate contract. Needless to say we ditched our seller's agent and have spoken LOUDLY to anybody that we see that needs an agent to avoid both realty companies.
I often times represent buyers. I do the same thing before writing a contract- I call the listing agent to see let them know we are thinking about putting in an offer and that opens lines of communication. Sometimes they will tell me things that are very helpful.
I didn't understand why not have the seller sign the counter, until I realized that's exactly what the banks do, with REO properties, so they can possibly get better offers. So ... good idea!
Once again some really good info. On the surface it appears to be very basic - stuff that everyone should be doing as a matter or routine.
What I picked up that I will try is 1) not having seller sign counter until the buyer accepts and most importantly 2) keeping it in the MLS until the deposit is received.
I hate a trust account, so I typically have the buyer make the deposit directly into Escrow - now I will let them know that it will remain ACTIVE on the MLS until I receive a receipt from Escrow - that will keep people moving quicker.
Great blog BB! Love reading your blogs. I have been sitting here 30 minutes reading this blog. love all the feedback.. This is a tremendous learning experience for me. Never sent a counter back, unsigned by the seller. I can see your point. I learn soo very much here on AR! Love the video... makes it so much nicer to have pictures and video. got a good chuckle from the video.. thanks for sharing!
BB, I think we went to different schools together! I like your style...it's the same as mine. The thing that resonates for me is your advice to CALL THE AGENT! And that goes both ways. I run into way too many newer agents who email an offer or drop it at my office and never let me know about it. Call me up and let me know it is coming and we can agree on the best place for me to get it. I promise I am not sitting in my office waiting for something to show up unannounced.
If an offer is particularly low or complicated I've been known to ask a buyers agent to help me understand where their client is coming from so I can help the seller see what they might do to help them along. The best advice I give new agents is not to forget that there is another real person on the other side of the contract. Understanding their motivation goes a very long way to sealing a deal!
@ Ginger in # 75: I am sorry... but if I received a counter offer that was unsigned... or un-initialled, I would call the other agent and have them have their buyers or sellers sign and/or initial it. Some of the things suggested in this post do not make sense to most Realtors... so I would suggest you ask others before you adopt what you see here as a "how-to-do-things" road map. Just my two cents.
I agree about always countering. Sometimes sellers take it too personal. I tell them that countering is part of the process. It's a meeting of the minds.
On the seller side we never give a 'take it or leave it' counter. If the seller decides the offer is close or unreasonable they can counter at a $1 lower price, but always the offer works or the buyer stops negotiations. I have found the 'take it or leave it, final offer' can work well for buyers if used judiciously. Not surprisingly, it works very well with REO officers if the offer is cash with only inspection contingencies.
Hi BB,
I agree with your belief that many agents have "loose lips", but respectfully disagree with some of your post.
To receive an un-signed counter-offer is akin to receiving a piece of paper! In terms of negotiating, who says sellers are in the drivers seat?
I thought contract law was similar in Canada as in the US. If a new, better offer comes along, a seller can revoke an earlier counter-offer if it hasn't been accepted.
Very nice to see the side where the seller does not sign anything until the buyer agrees with everything... I am not sure about the emailing over. If the offer is really, does that not risk getting seller emotionally involved and quickly get into a defense mode? Just wondering about that part.
Aaahhh countering. I always put it in writing and whichever client is making the counter signs first. I've had buyers and sellers throw up their hands and say well, I guess that's it. I encourage them to try one more time, if they want the property or the sale. I've had sales where 5 counters have been written and they have closed. All parties happy to have the deal done. I've had some verbal "counters" work and some that haven't. It seems that putting it in writing, with a signature makes both parties feel it's "real".
Karen Anne, Why not try that on an REO property and see where it will get you? The answer is no where. Lenders almost always sign last. My sellers can do the same. I do however agree that agents need to find what works for them in their market. This post is to get people to think out of the box and is in no way a definitive way to do things.
Novelty G, It certainly sounds like you got hooked up with the wrong batch of agents. Sorry to hear of that experience.
Ok I'm heading out to the pool.......but will be back later. Place nice now!!!
Jim Hale, My reputation amongst my peers is impecable. But truly I don't work for them. I work for my sellers. Everything I do is above board, ethical, legal and above reproach. I wouldn't have it any other way. But lets get real...most of the agents I'm doing deals with today won't be in the business tomorrow. I'm not going to concern myself too much with what they think. There are no techniques in this article that are against our CoE and certainly nothing that is illegal (if there are please point them out and reference the Code or law so I can change the way I do business). My techniques may be aggressive but that's OK. Folks hire me to look out for them not coddle to agents.
Bryant - great tips, Kevin is the same way, he loves to negotiate offers and uses many of the same techniques. It's amazing what you learn by just listening to the other side.
Great ideas, Bryant-- I guess I would not send an unsigned counter to the Buyer--I would want a done-deal coming back to me for my Seller, so I would want the Seller's full agreement to the counter in full view of the Buyer--
I think your last paragraph-- no ultimatums-- is extremely important-- negotiating is best done in a calm, rational manner-- an ultimatum, even if it is based on truth, throws too much emotion into the mix. Thanks for the great post.
So many great comments you don't need mine, but I'll send it in anyway... this is clearly full of great tips and I practice most of what you advised. I devote a good deal of time to coaching my clients not to ever say "final offer" for those reasons.
However, not signing the counteroffer leaves a bad taste in my mouth. When I first became an agent I followed the old school practices some of my senior realtors modeled including something like this which might be aimed at keeping the upper hand... after all, I work for my client and my job is to get it done, as long as it's legal my obligation is to be as aggressive as it takes, right?
However I have also kept an open mind and been busily evaluating how well the various approaches have worked in all the many situations I've been in and it is my considered opinion that doing the right thing and being friendly (while always knowing my goal and commitment is to represent the buyer...never give anything of value away) and even bending over backwards for my "opponent" agent's comfort (never giving anything of value away) works best in more cases. If I got back an unsigned counteroffer it would ring bells in my warning system that this agent had a bag of "tricks" and it would be an uncomfortable process at best... that might not always be true but it's probable. I find that creating an atmosphere of mutual respect and professionalism is the best way to get my client the best results... am I misjudging you?
As someone said, you can always withdraw an offer or counteroffer at any moment until it gets accepted. I do see that if the original offer is expired and you send back an unsigned counter "suggestion" it does leave you free to negotiate at the same time on a new offer... isn't this skating on thin ice? Or just doing one's best for one's client? What do you think, folks? If you lead the first offer's agent to believe that the negotiation is proceeding and they impart that to their client, but then you accept another offer, it really makes them look bad to their client when the client loses the property, doing them a huge disservice for the crime of believing you?
Bryant - Your style is well-thought out and it works for you! I normally also do not counter in writing, but by email with my seller's "OK". One reason is for expedience and saving faxes of faxes, though. I also don't like the seller's counter "sitting on the buyer's countertop"! Exception: IF the buyer's agent thinks the chance of buyer accepting counter will be greater if they get the contract back from my seller with an initialed change, that is what we'll do... Every situation is different.
I was shocked that you tore up the offer. In Texas we are required to make the seller aware of all offers, and it is his decision, not the agent/broker's to reject the offer. More than once I have had a seller give me a written statement not to present offers uner $XXX, yet when I call him with an offer lower than that, to ask if he is still rejecting lower offers, he decides to counter or accept. Without a proper power of attorney, the broker/agent in Texas CANNOT answer for his seller.
I was shocked that you tore up the offer. In Texas we are required to make the seller aware of all offers, and it is his decision, not the agent/broker's to reject the offer. More than once I have had a seller give me a written statement not to present offers uner $XXX, yet when I call him with an offer lower than that, to ask if he is still rejecting lower offers, he decides to counter or accept. Without a proper power of attorney, the broker/agent in Texas CANNOT answer for his seller.
I think that having your Seller avoid signing the Counter is genius. It provides the Buyer with your terms without having to commit to them. They can still accept a Different offer. Nice
All very helpful as usual. I like to talk to the other agent first thing as well. I like to set the tone and make sure they know that there is no need to be adversarial while negotiating. Some agents believe you have to be a hard @ss to get things done and it's just not true.
Jo, The video is humor. Isn't that obvious? Of course it's ALWAYS the sellers decision how to move forward with an offer. Read the post.
Edy, "I find that creating an atmosphere of mutual respect and professionalism is the best way to get my client the best results... am I misjudging you?" If it helps I COMPLETELY agree with this statement. Respect and professionalism is certainly the way to go. However I don't see that as having anything to do with sending over a counter that has not been signed and/or initialed. Two different issues. Negotiations are between the seller and the buyer.
I think a lot of this depends on your market. I can do things that work in my market that may not work in yours. It's our jobs to know what works and what doesn't. It's also important to remember that nothing is set in stone. All deals are different. We have to be willing to be flexible when flexibility is required.
BB - I love to negotiate and the situation is different when representing buyers.
For my buyers, I want the counter in writing back. I get calls back from listing agents telling me what the counter is over the phone and I get this a lot lately. Are selling agents lazy to put a counter in writing - is it too much to ask for?
I think what I like about AR better than the posts are the comments. You can learn alot of things from both and sometimes you learn "what not to do". Case in point.
All offers are to be presented to the seller. Seller owns the property, at no time does the agent own the property. Seller may consider a low ball offer, it is their call. You do your best representing the seller by presenting the offer, as it is.
Use your negotiating "skills" to work back and forth, but the video made it look like that is how you do business. Tearing up an offer like you are very unpleased with it, doesn't work. Intelligent communication does.
Bite me back if you like, but there is a long conga line to work through. I like what Brian from Idaho said.
Edy, "I find that creating an atmosphere of mutual respect and professionalism is the best way to get my client the best results... am I misjudging you?" If it helps I COMPLETELY agree with this statement. Respect and professionalism is certainly the way to go. However I don't see that as having anything to do with sending over a counter that has not been signed and/or initialed. Two different issues. Negotiations are between the seller and the buyer.
Hi BB,
Thanks for the response. Well, you don't address what I mentioned and is my even more pressing concern than the above, which is if the buyer's agent believes you are in the middle of a negotiation process and you are entertaining another offer without them knowing it, it will reflect badly on the agent. You may say they should be savvy enough to know better. But again, that means savvy enough to know you may be intending to deceive them. I think it's a bad basis to do business on.
My solution would be, if you say... my seller has not signed this and we are still accepting any other offers that may come in until we hammer this out, then I think that would take care of my concerns. Then everyone is clear what is going on. Otherwise, it would be a lot better to just connect verbally with your requests for a new offer with new terms, which is clearly not a contract. Sending over what we usually know to be a contract but unsigned with the intention of it being merely a "suggestion" had better be clarified or I personally think it's getting shady.
Edy, I guess I'm just missing your question. If I'm understanding properly you are suggesting that if I were entertaining other offers my seller should disclose this? Disclosing multiple offers may or may not be the best way to go. That certainly depends on the offers on the table and what else we are expecting to get. I am not in the business of deceiving people. But I also play my cards close in most cases. The reality is that none of these issues ever come up. I send over unsigned counters and the buyers agents never say a thing about it. Maybe they are not looking out for their buyers best interest. I truly don't know as it never comes up.
To all: To clarify a little more this is how I would send over a counter. Usually by email:
Thank you for the offer received on this property. I have discussed it with the seller and they have decided to counter the offer as follows...........
I have attached the offer with the changes made as per my seller's request. If your Buyer is agreeable then please have them initial and date the changes and send the contract back to me so I can forward it off to the seller for signatures. Thank you and I'm looking forward to doing business with you.
Now does that sound deceitful? Or confrontational? Or unprofessional? Or unethical? Or illegal? Or any of the other stuff mentioned in this comment thread? This stuff is really not as complicated as you are making it.
One more comment about how it works here in North Carolina. NC licensing law requires that agents disclose the presence of other offers. This transparency eliminates a lot of the recriminations about shady dealings and helps everyone understand that until the contract is signed, sealed and delivered, other offers can and will be considered. It keeps everyone on their toes.
Our market still has agents, however, who just email or fax an offer in without notifying the listing agent that an offer is in the works and sometimes not even following up to make sure the listing agent got the offer. These are the agents who are doing their buyers a disservice. Of course, the buyers have no idea.
Hi Carol, NC really has a law stating that sellers have to disclose multiple offers? Why would that be under licensing laws? Are you able to provide a link to that? I find that very interesting. It sounds like something designed to protect agents not the consumer.
Bryant :) It is in R COE 1-15 (regarding disclosing existence of other offers)
REALTORS®, in response to inquiries from buyers or cooperating brokers shall, with the sellers’ approval, disclose the existence of offers on the property. Where disclosure is authorized, REALTORS® shall also disclose, if asked, whether offers were obtained by the listing licensee, another licensee in the listing firm, or by a cooperating broker. (Adopted 1/03, Amended 1/09)
Okay now I had time to read these posts. I agree with BB. I too will counter verbally and ask the buyer's agent to have the buyers sign and re-present the offer. But once again, I am mainly a SELLER's agent and that is what I know best. I present all offers, but come on people--taking BB to task for ripping up papers on video? Get real.
Candice, Don't overlook the most important part of that article "with the sellers’ approval".
Any broker/agent disclosing multiple offers without their sellers permission is breaking their fiduciary. If they are REALTORS(R) they are in violation of the CoE as well.
Erica, The crowd is getting restless today!! I should have used the shotgun counter instead. We actually have a ideo of our German Shepard Brutas Tutas, may he rest in peace, taking a dump on an offer too. I think I'll dig that one out :)
It sounds like you read my book, Create A Great Deal, the Art of Real Estate Negotiating, that I sent you. Negotiating is the skill where our clients expect that Realtors should excell, and it is the talent that the NAR statistics show that the clients are the most disappointed. Thanks for the post.
The ultimatum comment was superb. Huge mistake by agents. Just had fun with one this week with the agent stating that she was a certified negotiator. Well she might as well have said, let fight it out. That is certification I would keep very very quiet.
Very intereting, indeed!! It's a clear representation of the fact that the transaction is based on "people" making "personal" decisions. To think that there is only one right way to do prepare a counter offer (therefore, the other way must be wrong) is like assuming all people are exactly the same. Agents who are offended by another agent's style of doing business are doing their own clients a disservice... it's not about us, it's about what our client's best interest dictates. Sometimes that means putting your hackles down and playing nice, even though it's not your first choice in how things should be handled. There is nothing wrong with working with an agent that you'd rather not work with (and as someone pointed out, being very careful each step of the way... good call), if your client is served well in the end and has a home that they love, for a price that they found acceptable. I'm sure the new homeowner won't be worried about your pride when they tuck their children in to bed in their new family abode. No one agent can successfully negotiate with all agents, or clients for that matter. You do the best you can with what you've got and don't get caught up on the rest... Great topic. I like the enthusiasm!!
Great post, great comments! This is why Real Estate is so much fun! Negotiation is for sure the name of the game and as like many here, I would love to do just that all day long! You shared some great, obviously controversial points that help represent the sellers with their best interest. I too agree in calling the loan officer to have a conversation about the buyers pre approval. Many people just LOVE to talk and may give away the farm.
Each state does have different laws, so each transaction will be negotiated within your own states legalities.
Once again, I find this brilliant. Our investor client will love this. Especially here in our market b/c we are starting to receive multiple offers on properties. I do always call the lender and I find this to be extremely helpful, but I do not call the agent and I will put that on my list- great idea! My first year of Real Estate, I worked for a builder , who was also an attorney and had previously worked for VAR, who always insisted he sign the contract last. He would have me do the same, write the counter, present and he would review and sign last always. I don't know why I didn't carry this procedure with me when I decided to try resale last year but I love it!! On disclosing other offers, I check with my Broker who is also a licensed Broker in NC and she said she is unaware of anything requiring disclosure of other offers. In our listing agreements it does ask the seller if we have permission to disclose other offers but does not require us to, it all depends on if it would benefit the seller, which is who I normally represent. As far as being concerned about other agents thinking I am deceiptful or watching me like a hawk, wanting to clip my wings.. geesh.. I would like to get along with them all, but not at the expense of doing a poor job for my client. I would take the stance that if the seller found out I disclosed other offers and they did not want me to, all in the name of making friends, that could be unethical as well. P.S. not everyone is Virginia Beach has no sense of humor.. I found the video to be very funny.
Jennifer Keltner, Long and Foster Oceanfront, Virginia Beach
Tim Burrell, I am still reading your book and find it very much in line with my way of doing business. I really appreciate you giving ma a copy. This post was written in May of 2007 though.
Tim Moncrief. Now that's funny. I wonder if she learned in negotiator school to brag to your adversary about being an expert negotiator? Must be the intimidation factor. Like that'll work.
If you're going to insult him, at least get it right. He's not a moron, he's a prick. If you'd said that to begin with he wouldn't have deleted your comment because it would have been spot on :)
Sorry Hun...
If they're going to say things like that, they should at least say something a bit more applicable :)
Hmmm... Every state has its own rules, and I let my license go a few years ago, so I'm not up to speed on Idaho real estate law any more, but I don't think what you suggest would be allowed in Idaho.
For one thing, we weren't supposed to make changes on the contract. We had counter-offer forms where we had to clearly outline each and every change - and if it wasn't signed, it wasn't a valid counter offer.
However, there was a box to check that said the property would stay on the market and the seller had the right to accept other offers at any time up until the buyer's acceptance of the counter offer was delivered to the seller's agent.
We did have one buyer who got very angry because he got bumped out, but since the form required him to sign acknowledging that he had received the counter-offer, he couldn't do more than yell, scream, and bad-mouth our agency to everyone who would listen.
I used to do REO's and it made me very nervous that they would not sign their counter offers - we never knew if they'd back out after coming to agreement. We DID have that happen - Washington Mutual made a counter offer, the buyers accepted, and then they changed their minds.
As for your other points - calling the agent and the lender - I agree.
Good morning Bryant,
I wanted to make a quick response to your question about NC licensing law so I haven't included a link. The NC Real Estate Commission has labeled the existence of other offers a material fact that has to be disclosed. Therefore, we have to disclose regardless of seller permission (unlike the COE). Obviously we can't disclose terms, just the existence of offers.
I like this process. Everything is transparent and it helps us negotiate better terms for our sellers.
I suppose it's all in the way you look at things. As a seller of property, I will rarely respond to a lowball offer at all. For instance, I received an offer on an apartment building for 3.5mil last month. We didn't counter at all, just rejected. The buyer raised the offer by 2 mil and sent it back again. That sort of thing happens all the time.
Carol, I have searched and searched and can find NO law in NC requiring the seller to disclose multiple offers. I did find the disclosure law Statute G.S 47 E that addresses property disclosures and I have read through the disclosure form that sellers are required to provide NO WHERE is having multiple offers discussed. What am I missing?
Ok Carol. I'm back. This supposed law has really been bugging me. For one thing Licensing law is for agents NOT buyers and sellers. To pass a law requiring a seller or their agents to disclose multiple offers makes absolutely no sense at all. Any way, after researching for a couple of hours I found this inNC Licensing Law:
So.......who ever told you this was wrong. Statements regarding laws and ethics need to be backed up. This is how we all learn.
I'm new to the Real Estate business and have to say I've learned a ton from reading your blog. Being so new, all of my business thus far has been working with buyers. That being said, I'm trying to reconcile everything said here, and in some of your comments in previous posts, to put together negotiating techniques that I can use to better represent my buyers.
In a much earlier post, you described how you would have your buyers write a personal note, describing how much they loved the sellers property, when submitting an offer to purchase. I liked the idea at the time, but now question whether that may give the sellers the impression that they "have a live one" on the hook and decrease the sellers motivation to negotiate (obviously, I'm not talking about REO properties or other distressed properties here).
Ultimatums look and sound like threats! They don't accomplish anything and break the line of communication. Like the idea of the Seller not signing the counter but usually I call the other agent and try verbally tell them about the changes...then of course follow with proper paperwork if agreed upon.
Coming in late, but this is a great post! Bryant, what do you think about disclosing other offers?
Our listing contract has the same language that says agents can disclose the existance of multiple offers w/sellers approval. In most cases the seller will do whatever the agent advises- disclose, no disclose. Disclosing a multiple offer situation can work for the Seller or against--depending.
What are your thoughts on asking for highest and best in a muliple offer situation?
The announcement of mulitple offers could lead to No offers, Or..
- A serious buyer will put out his best offer knowing there are other offers on the table
- A buyer (maybe serious, may be not serious) will walk away because they don't believe there are other offers and get ticked, or because they say, "they don't want to get into a bidding war"
You probably already have a post somewhere laying out your negotiation practice with multiple offers...If so could you point to it, or lay it out here. Thanks again.
Dan, I believe the post you are referring to was written to answer a specific question from an agent. They asked; "What can we do to help increase the chance of our Buyer's offer being accepted?" or something close to that. My post was giving them ideas. I think that post is also a couple of years old. The market has changed in my area as I only deal with distressed properties. So you aren't missing any thing. All of my posts are to get you thinking. It sounds like I was successful :)
Bryant: You mentioned about REO properties, and that my approach would not work on REO's. I am sure that is correct. I did not realize that your ideas were pretty much aimed at REO stuff. In my market here in Fort Worth... I rarely deal with REO properties. I do more listings than sales at this time in my career... so yes, you and I are, in many ways, talking about apples and oranges. Each is usually approached differently.
Karen Anne, My point was that there are no definitives in negotiating. Each deal is different. My post clearly states that this is the way I handle my business and that others need to figure out what works for them.
I believe your point was that I was "nuts" and that "Agents who are watched like a hawk, eventually get their wings clipped" as stated by Jim Hale but applauded by you. And of course your advice that "Some of the things suggested in this post do not make sense to most Realtors..." Which of course is a statement that has no backing at all. In fact out of 130+ comments only a very small handful thought it "didn't make sense".
So while my post and subsequent comments are designed to help my peers in their business, by getting them to think, yours were mainly to discredit the author.
Your constuctive opinions are certainly welcomed your destructive attitude is not. Does that make sense?
We've had these discussions with you before. As I've told you in the past, if don't like what you're reading, it's best for you to scroll on.
You've made it clear, both now and in the past, you do not care for the way we handle our business. You've made it especially clear that our sense of humor is beyond your reach.
Do us all a favor and take a nice long walk. The exercise might help with that attitude problem that you have when it comes to BB and I.
We mean you no harm, we simply do not appreciate every attempt you've made to discredit us. I'll once again ask you to just stay away from our Blogs until you get over it. Whatever 'it' might be :)
Hi Bryant! I've been following this post for a couple of days and am just now realizing that I didn't comment yet! I think that you and I had the same real estate negotiating professor! The ONLY thing that I do differently is respond to the buyer's agent with an email, stating the agreed upon changes that need to be made by the buyers, initialed and sent back to me so that we have only one document that has been faxed/scanned and is super clear for the attorney and lender use when we're ratified. I DO phone the agent and I DO phone the lender--where does it say in the COE that we are NOT to represent our sellers to the best of our ability and that, to me, is doing my seller a service that many listing agents overlook. I want to get to know the agent across the table from me before we sit at Closing and I want to see what their client's motivations, limitations, etc. are. For my sellers, they love it--perhaps the buyers have two small children that are the same ages as my sellers' children and that just gives everyone warm fuzzies. Nothing but GOOD comes from those two phone calls and I can tell you that there is not ONE agent in Charlotte NC who would not gladly work with me again. I do my best to make the deal work for my sellers but, I am respectful to the 'other agent' and I make their lives easier when doing a cross sale with them. I don't think any of them resent my initial calls or view them as breaking any sort of COE rule. Furthermore, my (as yours) style has salvaged many a deal because I handle negotiations this way and I think know my sellers appreciate being able to move on!
One other item of note, because I provide the email with the verbally agreed-upon changes to the Offer, that is a legal, binding form of written documentation. Therefore, future Offers that arrive before the Contract is ratified, are given to the Sellers but, are not entertained unless something should happen with the buyer--when the email has been sent to notify the other agent, my seller is committed to the terms of the Contract and will sign when the buyer sends back the clean, changed copy of the original, agreed-upon Offer.
Great post and frankly, I'm shocked at some of the members' negative, derrogatory comments--I guess as TLW has said before, in reference to the vid--you just can't teach FUNNY!
You made me laugh and gave me a great tactic. I like the unsigned counter technique. I'm going to check with my managing broker to see if that is legal in Colorado.
I like to place the horse's severed head in the sheets of the other agent right about the same time that our counteroffer is hitting his/her inbox. It gives me no discernible advantage. Just find it amusing.
Paul "The Headless Negotiating Horseman" Slaybaugh
Mike on #136 brings up a good point for all information on these blogs. Check with your broker before you do anything that other agents suggest you do. I hope my agents check with me.
I'm sorry but I disagree with much of what this "infomercial" says. I have been a full time negotiator and facilitator for the last couple of years, all day, every day.
Maybe from the perspective of a real estate agent, some of this information is accurate but from an investor.broker/facilitator point of view it is simply fluff. Most real estate agents I know are out getting contracts and sales not spending 10-14 hours a day onthe phones trying to make headway with banks and lenders that are:
1-trying to get the most money out of your seller's pocket as well as the buyer's pocket to cover their loss.
2- Have no real concept of "market value" as you do and ___________(insert statement above).
3- Will actually lie about BPO and appraisal values.
4- Have no bones about cutting your commission down to $10 if they could.
My realtor partners bring their negotiations to me because they know I know how to manuever this mine field and traps of the lenders and I know how hard to push and I know the TRUE value of the real estate the lender is trying to offload for a premium.
Why is that important? Because the lower a value is, the better chance you have of selling it quicky and having it appraise out. If your sellers owe the lender $200K, and the current MV of that home is $80K but the lender wants $135K to settle, how much chance do you have of selling that home and having it appraise out God Forbid you need financing??? My experience has taught me how to convince the lender that it is really worth $75K or $80K. Thats the difference between a 15% National short sale Close ratio and my 85%+/- closing success rate.
Also, one last thing before I get to work.....the "highest and best " offer for a shot sale isnt always the highest "purchase price. Its the pric that thelender will accept AND not pursue a collection or deficiency against the homeowner. My job is to make sure the lender's terms are conducive with the sellers' tax situation and the fact that he doesnt have to spend the rest of his life with a collection agent calling his home at 8Am and 9PM every other day!!!
The mora of this story, Realtors market /sell real estate. If you have NOTHING going on in this arena then maybe you have nothing to lose but time becoming a "negotiator" with lenders. And there is a learning curve. Not all lenders are equal. Some, you do not want to deal with.
Find your self a good 3rd party negotiator, with a track record of more than 4-6 months and let him handle your "short sale" work while you do what you do best: selling and getting contracts.
Video was great! Love your humor! Great advice. I laughed when you said you have another video of your puppy kid pooping on another offer.. tooo funny!
Bryant:
Your post #127 does little more than validate what Carol wrote in #123. She clearly wrote the EXISTENCE of offers is considered material and must get disclosed but she specified that no specific details are to get shared without seller's permission. So was your goal at #127 to prove Carol right because by my reading that is all you did. You found a section in support of her post #123 and as I am sure you read, your quote does not preclude the disclosure of the existence of other offers as reportedly required by NC law just the preclusion of the specific details therein without seller's approval. In other words, you proved her point about NC law. Maybe re-read what you posted again and review her post and then it should come to you.
Hi Maria, If you read the CoE and NC law you'll see that you cannot disclose the existence of multiple offers without the sellers permission. I was just trying to get clarity. Carol is stating that you MUST disclose the existence of multiple offers regardless of whether or not the seller has given you permission to do so. Now maybe the law that states "Disclosure of offers prohibited" is ambiguous. However, in my opinion it's pretty clear.
No where in NC law does it state that multiple offers have to be disclosed. Unless of course I missed it. If that's the case I would love to be pointed to it so we can be sure.
Now if the law did not mention anything about dislcosing multiple offers then we have to go by our CoE which states we have to have the seller's permission.
REALTORS®, in response to inquiries from buyers or cooperating brokers shall, with the sellers’ approval,disclose the existence of offers on the property. Where disclosure is authorized, REALTORS® shall also disclose, if asked, whether offers were obtained by the listing licensee, another licensee in the listing firm, or by a cooperating broker. (Adopted 1/03, Amended 1/09)
But hey I'm not in NC and I'm certainly not an attorney. I would just hate for someone to tell their seller they have to disclose multiple offers if it's not true. Wouldn't you?
I think what you do with the sellers not signing the counter is a really good idea. Many sellers do get emotional and want to reject an offer outright but working with it by presenting a counter offer to the buyer is always best. This is really good advice for agents.
Well, the law is clearly very different in various jurisdictions. An unsigned counter-offer is not worth the paper it is printed on in Ontario, and in fact, this practice if reported would be punishable.
The offer process IS part of contract law - the law does not only apply to the interpretation of an executed contract but to the process of arriving at a contract as well.
In Ontario, offers for REAL ESTATE must be in writing or they have no meaning.
There are many ways to keep the "upper hand" if so strongly desired upon making a counter offer as the Seller:
- sign at a price you're happy with so other offers are irrelevant
- give a very short irrevocable timeframe so you are not bound for long
But in any case, a solid blend of win-win consensus building with negotiating savvy is almost always going to get you further than half-handed techniques like not signing things that are supposed to be a serious step in the process.
You'd last about 10 minutes in our market with this tom-foolery.
The points regarding agreeing to the small stuff, probing for useful information from the other party - good stuff.
OH yah - on disclosure of multiple offers. In Ontario it is the LAW (not just ethical conduct) that multiple offers must be disclosed to all parties who have made an offer. Don't confuse that with disclosing the TERMS of those offers. In Ontario, the NUMBER of offers, and the identity of the BROKERAGE making each offer must be disclosed to each party. The number of offers could well impact each buyer's strategy, and the id of each Brokerage essentially makes it clear whether any of the offers is from the listing brokerage.
Now Bruce you just have to know I'm going to ask to see the law about revealing multiple offers. I find a law like that very anti consumer and it surprises me that there would be one. As a buyer or a seller I would probably choose to ignore it.
We have the Statutes of Frauds which basically says a contract related to real estate has to be in writing to be enforceable. This is course is talking about contracts NOT offers. A a contract can be verbal and still be valid it's just you won't have a leg to stand on if you have to defend it in a court of law.
There is always a point in every contract negotiation where we are dealing with unsigned offers. Some one ALWAYS has to sign last. My sellers just prefer it to be them. No biggie.
I'm serious about coming back and posting the law. I find the differences very interesting.
Hi Bryant - I guess i should have known to quote the law the first time around :) Thanks for your detailed response - you've cetainly generated an interesting oncversation and you're right, the legal differences are fascinating.
From Ontario Regulation 580/05 made under the Real Estate and Business Broker's Act, 2002;
Competing offers
26. (1) If a brokerage that has a seller as a client receives a competing written offer, the brokerage shall disclose the number of competing written offers to every person who is making one of the competing offers, but shall not disclose the substance of the competing offers.
Black and white, no?
Thanks Bruce. Why would they pass a law like this? Do you see this as something that would protect or harm the public? I guess I struggle with any law that tells someone how they must negotiate. Disclosing multiple offers can cause a good buyer to walk.
It also sounds like, from reading this, that it only applies to brokerages and not to say a seller selling without an agent. Is this true? And if so then this law is clearly to protect agents and not the consumer.
In Ontario, what used to be the code of ethics was written (modified and written) into a regulation drafted in 2002 and passed into law recently (I think it was April 2007 - can't recall the exact date it was enacted.)
It is law. There is no doubt at all of that.
The entire purpose of the Act (The Real Estate and Business Broker's Act) is to protect the consumer. In the case of disclosure of multiple offers you could argue for and against. A buyer who does not know there are other offers will often offer less than they would be willing to pay, and could easily lose the property. From the Seller's perspective, it also works both ways - buyers may offer more - or as you say, they may walk. It must be in the interest of allowing consumers to make choices based on knowledge. Much of the protective capacity of the Act is geared toward protecting the consumer against unethical behaviour of Agents obviously - so I would have expected something that ensures PROOF of other offers to avoid a Listing agent falsifying a multiple offer scenario. But interestingly, that isn't there. Mind you - if you're caught doing this you're toast - but there is no provision for proof. I think that this disclosure requirement is intended to be the proof - since we all do what is required of us by law.
And to answer your other question - yes, the Act regulates licensed sales representatives, brokers, and brokerages - it does not apply to private transactions. But that is not because they are trying to protect us from consumers - but the other way around. Consumer protection from each other is up to Contract Law.
Fascinating discussion. I find myself wrapped up in the "no signed counter" right now in NM. My clients signed an unsigned counter offer from an REO service. A practice, shockingly I know, that I was not even aware of. An unsigned "in writing" offer?? Who ever heard of such a thing! Well, I guess that woudl be me now..
You know where this post is going of course. After we sent our SIGNED counter, the REO got another offer. So, here we go. That's why I'm on AR now, looking for answers.
I'm getting from half of the group that this seems like a fair, if not ethical, tactic. I don't know how you can counter an offer, in writing, not sign it, and then not expect to be held to it. The Buyer's could have lost out on another home, because they were "offering" on this one. What if the Buyer's signed the unsigned counter from the REO, made another offer on a second property, and then both seller's signed. What is the obligation of the Buyer?
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Reserved Parking For "The Lovely Wife"...TLW...ROAR!
Baby...
We really should have tacked that offer to the nearest tree...Put a nice big bullet hole in and mailed it :)
The ripping is FUN but I think the bullet hole produces a special kind of shock value :)
TLW...ROAR!