Isn't That Why I Hired You?
I commented on a very good blog from Jennifer Allan yesterday called How Do I Talk My Buyer Out of Low-balling? The blog generated some discussion, but one of the points that Jennifer brought up was...write the offer up, if the buyer wants your opinion, they will ask for it. Now I am a HUGE fan of Jennifer Allan and her Sell with Soul philosophy but...
I disagree just a tad with this premise. Not the premise about writing the offer 
up, because I will, but the idea that if the buyer wants my opinion, they will ask for it and that I need to wait until they do or they might think I'm not on their side. I believe that is why the buyer hired me in the first place...my educated and experienced opinion on buying a home in the area that they want and for the price range that they are pre-approved for.
Buyers today have choices in who they hire as a Realtor® and when I become their Guadalupe County buyer's agent, I become their advocate and advice giver about all aspects of the home buying process and that includes the entire process from beginning to the closing table (and sometimes even after). I am not, nor do I want to be just a door opener and contract writer, although I do both of those things very well if I do say so myself :). When (not if) we find home for the buyer, I advise them that I will prepare a comparative market analysis for them to give them an opinion about the value of the home and how we can come together to best get them the home that they want.
Once I present to them the comparables, and given what they want to spend and if they want any seller contributions, we will then discuss a strategy how to best get them into the home they want. Now, so that everyone understands where I am coming from, ultimately the decision will come from the buyer. If they choose to low ball because it's a buyers market and there are deals to be had, I don't have any issue with that. I will let them know, however, the possible consequences. Is it true that the seller may just accept the offer as written...sure. We never truly know what a seller will accept or not accept until we ask.. and this is a truism...however, a lot of the time a low ball offer will get at the minumum countered. I feel it my duty to at least let the buyer know "my opinion" on what or how the seller may react to the offer so that there are minimal surprises if and when the offer comes back countered to full price (which happens all of the time) or gets rejected in favor of another offer (which happens all of the time).
Again, I must note...I will not try to "talk the buyer out of the offer or make them go up". All I can do is present the information and allow the buyer to make their own decision based on that information.
If I don't counsel (provide my opinion to) them, and they lose the home because of the low ball offer, then the buyer is sure to wonder why I did not give them any input.
What happened...?
well..you didn't ask for my opinion...if you had I would have provided you these comparables and let you know your options.
Well isn't that why I hired you?
Don't beat me up Jennifer :).
Brenda Mullen – San Antonio Texas Real Estate Professional
Selling a San Antonio Texas area home involves many steps and having an experienced San Antonio Texas Real Estate Agent by your side will make the transaction run a lot smoother. I would love to be your San Antonio Texas Area Real Estate Professional! I assist both buyers and sellers in the San Antonio Texas area with either the purchase and or sale of residential real estate.
As an Accredited Buyer’s Agent, I have received special training to guide and educate you through the entire home buying process. From start to finish, I listen to your needs and desires in what you would like and take the information you give me to find you home.
As your San Antonio Texas listing agent I am well versed on the local San Antonio Texas area Real Estate Market. You can expect personalized service that includes a detailed consultation on how to best position your home to be competitive in today’s market with an in depth comparative market analysis, and advice on staging. I use the latest and most up-to-date marketing methods to get your home in front of as many buyers as possible. Being your San Antonio Texas area Realtor® not only involves just finding the home or selling the home, but being your guide, negotiator, advisor and advocate and making sure that your needs and goals are met. Being your San Antonio Texas area Realtor® is one of my truest passions, and “Helping You Find Home” is my number one priority.
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99 Comments on Isn't That Why I Hired You?
I point out the good, the bad and the ugly when I'm showing the properties and give them the data on a value range for the neighborhood. I offer my advice and opinions so they can make informed decisions on how they want to structure their offer. It's up to them if they want to use my advice.
I work with the buyer to come up with a negotiation strategy to get the price and terms that are most important to them. For some buyers that is buying the house of their dreams at the right price and for others it is building equity and cash flow in real estate. I'm happy to work with both types of buyers.
I think we have an obligation to share with our clients, but at the end of the day I write it as the direct me. I view it as a learning experience, the next time they write for more.
Excellent post Brenda and congrats on generating a ton of comments too! I agree with your approach to handling your buyers and offers - it's my approach too - and seems most of the commentors do too! ;-)
All good points. Very important to remember who is moving in and that it's their decision ultimately. Great post!
There is a reason they are referred to us or they hire us. We are proficient at what we do. It's okay if they do not listen to us ONCE.....
We'll let them try, be embarrassed, rejected or whatever needs to be done to show them that our numbers were accurate and do not lie. After that I'm with Lenn - they'll be looking for a new agent that has time to waste. Joy
Whether or not to low ball is going to depend on market conditions. Sellers had a long stretch of sitting in the drivier's seat, but that is not the case now through much of the USA... In fact, many would consider America to be experiancing a prolonged firesale, and as a buyer myself, I certainly have no problem trying my low ball offers until something sticks. The sellers would have had no problem taking me to the cleaners in years gone by, and I have no sympathy for them now... Business is business, and homes are pretty much worthless now, so yeah, I will make my market value offers, and people can free to call them low balls.
On the same note, I will work with a buyer who is looking for a deal. I know it will not be easy, and we may have to write several offers, but I am sure at least most of you have seen what a commission cheque looks like... (my point being that it is worth it to put in the effort, rather than to look only for low hanging fruit)
Thank you again for all of your comments. It seems that many of us are on the same sheet of music :)
Brian-Sellers may have had a long strectch of sitting in the driver's seat..I wasn't a Realtor in that market, so I can't really comment. What I can say is that the same people selling today, are most likely not the same people who sold years ago and perhaps took advantage of you (or took you to the cleaners) although I am not sure. Not every seller out there is some greedy person looking to take you for all you've got. But...here's the good news, even if some are, here in Texas a home must appraise for the value you are trying to get a loan for (unless you are paying cash), so a buyer will end up paying for the market value of the home.
When I talk about low ball offers...I am talking about true low ball not market value offers. I would never advise my client to offer anything over the comparables just because it's the list price. We look at everything, comparbles, market conditions, condition of the home, any seller contributions and come together for a strategy, (oh and not to forget, is THIS home for the buyer?).
Low ball to me means home is priced reasonably and the buyer wants to offer wayyy lower than that because "all sellers are desperate" or "this is a buyers market so the sellers should be happy to even get an offer". This is erroneous information for buyers for the most part and often times they lose out on the home that they want with this type of thinking.
Thank you for all of your comments :)!
Not too long ago, I broke up with a client who wanted me to write an offer that I knew was really low ball and didn't stand a chance of getting accepted. We had submitted several offers before. at the prices he wanted, with the same outcome: not accepted. So I expressed my concern, and gave him parameters where his offer will at least merit consideration.
The ex-client said it's his money and that I get paid for writing an offer. Wrong. I don't get paid if the offer isn't accepted and we don't close escrow.
That's when I told him it was time to part company.
We should always give our opinion and back it up with information -- that's the value we bring to the table.
This is a very well thought-out and written post, Brenda. I do agree with everything you said, except that there is a point where I will not write the offer and will make it clear if they want to continue they should go elswhere. Because there is a point where the offer is just too ridiculous to present. But other than that, if a buyer has been given the facts, the comps, etc. and still want to put themselves out of the running without being totally off the wall, then I will certainly present that offer. After all, we can always tell them "I told you so".
Hi Pacita-Sometimes you gotta let the relationship go, LOL :)! It just isn't worth it after a while.
Hi Jane-Thank you very much. I have to say that I do agree with you there. I haven't had a situation yet where somebody wanted to offer than ridiculously low that I would walk...but I do believe that if it happened..and they didn't say they were just kidding or wouldn't listen to reason I would.
Thanks for dropping in :)!
And that's why you're such a great buyer's agent, Brenda. I know the numbers. It's part of my job to know the numbers and I share those with buyers. If things are selling for 96% of asking and the home is priced right, I'll ask the buyer why he's offering only 77% of list price. I will write it up for him but I will also warn him of the consequences. I've actually had buyers pay full-price because they didn't heed my advice and really wanted the house.
I give them the pros and cons of the offer they want to make.I will write what they want me to write with the stipulation of what might happen if they do this or they do that.
Dear Brenda,
So long as my clients make an informed decision, I'll back them up. However, we always sit down to consider the cost-benefit of writing on one house versus another and look at numbers to see, what makes sense. In the end, most clients come up with a pretty good strategy to get their new home.
I do agree Brenda, we should advise our clients on the purchase of a home because to some of them this is the biggest investment/purchase they have made or will ever make in their lifetime. Giving them the advice they need to make an informed decision is essential to why they chose me and not the other thousands of Realtors® out there. I also agree with Jennifer, sometimes you just have to keep quiet and be like the penguins of Madagascar "smile and wave nod boys" because you are dealing with someone (BFB) who is going to lowball regardless of your input.
George #73, The "Let's talk about the 'magic price'" thing, I like that.
Explaining the consequences of a offer low or reasonable is always good
I totally agree with you Brenda. I always sit down with clients at the beginning of our relationship and explain to them how the buying or selling process works. I have comprehensive presentations for both and I cover a variety of scenarios using stories of my past experiences. At the end of my stories I always tell my clients that I want to make sure they make informed decisions, not look back in retrospect and say "why didn't Jennifer tell me that or warn me about that" and that the worst thing they will ever be able to say about me is "you know she told me but I didn't listen". While sometimes clients still want to "try" their way first (and I do let them try and it usually becomes another story to tell). It usually does not take long for them to come around to my way of thinking.
Clients hire us for our knowledge and expertise. If they think they know more than us and just need us to open a door or stick a sign in the yard, then those client relationships usually fall to the wayside and do not produce a win-win.
HI Tammie-Thank you so much. I haven't had a buyer complain yet :)!
@unknown-As long as we are giving the pros and cons and the buyer makes the decision, we can feel good that we at least tried to inform them.
Hi Dorte-Most people do see the benefits of strategy in getting what they want. There are those who only want the deal and then for them, a lot of us move on :)!
Hi Keith-Sometimes we need to do the smile and wave and nod thing, but only after we have tried, not before :)!
Hi Michael-I agree.
Hi Jennifer-Exactly.
I want to thank everyone for their continued comments.
Agreed Brenda. I always provide a buyer all the information I can prior to an offer. Then I almost always get asked my opinion. If they don't ask, I start asking them pricing questions. I try to provide a small bracketed price range where I think the property will sell based on the data and the showing. My buyers usually respond by making the strongest offer they feel comfortable with. If they continually lowball, I'll have a discussion with them after a couple of offers. If they don't heed my advice, then I start charging by the hour or refer them out. However, bottom feeders usually don't want to pay by the hour or be referred! They're just looking for an order taker, not a representative of their fiduciary interests.
Reviewed your's and everyone's comments. Nice resource!
I agree with presenting the market analysis and using lower amounts as a starting point. If happens too many times I would have to rethink keeping them as a client.
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