Special offer

When is an offer REALLY an offer?

By
Real Estate Broker/Owner with Pareto Realty TN #251071

Have you ever had a Buyer client tell you that the house you showed them is just PERFECT. Excitement is high. You scramble to pull up the comps and pull together the sundry forms you will need to complete the written offer, and you call the Listing agent to let him/her know that your client has interest and to let you know if anything else comes in before you write yours.

Here you are . . . Poised and ready to write . . .

A few days pass . . . You call the Client to touch base . . . He is "too busy at work to meet this week - Perhaps next week?"

The Listing agent calls darn near every day wondering where that offer is???? Is the Buyer "still alive or not?" You report what you know, but don't feel great about it because you really DON'T know why the delay.

The next week passes - still no action . . . Listing agent and Seller are now figuring someone is not telling the truth . . . Maybe it's YOU playing some twisted game . . . Maybe the Seller thinks the Listing agent concocted the whole thing just to say something is going on . . . Maybe the Buyer just isn't serious and/or has other issues (finances etc).

We all play the "imagination game" and create scenarios in our heads as to what is REALLY going on.

One day when you least expect it, your Buyer calls you and says: "Let's offer $100,000 (25%) below list price to close in 3 weeks and let's not waste time by putting this in writing - Just run it past the listing agent and see where we can get with it."

THIS is a call you dread, but you make the call . . . How does it feel?

Flip the coin . . .

Now, you're the listing agent receiving that call. Can you throttle your reaction and RESPOND in a calm manner with: "Thank you for the offer. I will present this to my Seller to see if he is willing to consider a verbal offer."

You call the Seller who (understandably) blows a gasket. "This is an INSULT! What kind of A__hole IS this Buyer? What's this game he is playing? I'd rather pull the house off the market then to even respond."

These are not objections you disagree with, but again you maintain your ability to RESPOND without stirring the pot any more. You validate your client's frustrations and make the point that even though it IS verbal and the price is WAY low, it is already $300,000 more than anyone else has been willing to offer since the house was listed . . . It merits a response even if that response is: "Full price in WRITING!"

Here's my real beef with this whole scenario . . . I think it IS an insult (and just plain lazy) for a Buyer to act this way - Especially if the Buyer really DOES like and intend to purchase the property. It is arrogant and presumptive and a level of emotional mind games that is simply unnecessary and likely to instill enough bad will into the deal that if it does consumate, it will be contentious throughout.

I have NO issue with low offers . . . nor do I have an issue with indecision. After all, this IS a market in which Buyers can sometimes "have their way" with the Seller. The insult to me is the time and emotional factors. The arrogance factor is that the Buyer is communicating that "Putting this writing is not worthy of MY time, but I want everyone else in the transaction to invest time and energy on my behalf."

From the Buyer's agent perspective, I know that we cannot always compel our Buyers to behave . . . even when we know that we will get them a better deal in the end if they DO behave. The uncomfortable truth to me is that such a scenario leads to distrust among ALL parties involved. Our integrity is on the line.

It's a delicate balance.

I'm interested in hearing other's thoughts . . . I have seen these scenarios play out several times recently and have observed that they typically result in ill feelings all around . . . and am wondering if that is necessary?

Best,

b

Barry Owen

Principal Broker & Productivity Coach

Keller Williams Realty - Nashville, TN - Green hills

www.theowengroup.net

www.creatingspace.blogspot.com

Simply & BOLDLY Living the FourFold Way in Open Space!

 

Posted by

Barry Owen

Founder
Principal Broker
Pareto Realty
Nashville, TN

615.502.2080
www.paretorealty.co  
Call me: 615-568-2123
email me: barryo@comcast.net

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Gary McAdams
GMAC Schwartz Property Sales - Key West, FL

If I am the buyer's agent I would call the seller's agent right away.  If I were the seller's agent I would advise the seller to insist it is in writing before I will even entertain it.

May 21, 2008 11:44 PM
Fernando Herboso - Associate Broker MD, & VA
Maxus Realty Group of Samson Properties - Clarksburg, MD
301-246-0001 Serving Maryland, DC and Northern VA

"PUT IT IN WRITING, MY CLIENT WILL NOT NEGOTIATE VERBAL OFFERS"

I have several listing and  this is more and more common from investors looking for bargains. .

I make them go to the procedure. . if they feel that is taking too much of their time. . .

that is very fine with me!

 

May 22, 2008 12:04 AM
Steve Loynd
Alpine Lakes Real Estate Inc., - Lincoln, NH
800-926-5653, White Mountains NH

I have said this many times we get excited when we start calling people "buyers" they are customers until a signature and check are in your hand, so don't call them buyers and your disappointment will lessen.  Good Luck Steve

May 22, 2008 12:32 AM
Karen Gentry>>Charlottesville, Virginia Real Estate Professional
RE/MAX Excellence-Charlottesville VA - Charlottesville, VA

How many times has someone told me something that is not true?  Sadly, more than I can count.  People used to value their word.  Times sure have changed. So if it's not in writing, then it's a waste of time.

May 22, 2008 12:36 AM
Jim Dvorovy
Cutler Real Estate - Canton, OH
REALTOR - Canton Ohio Real Estate

Hi Barry - I too am experiencing more and more of the exact scenario you have painted. When buyers will not make a committment to a property by putting it in writing, lowball offers become a moot point as the seller has little to nothing to work with.

May 22, 2008 12:54 AM
Larry Brewer - Benchmark Realty llc
Benchmark Realty LLc - Nashville, TN

Barry - I don't make verbal offers, ever. If my buyers don't have the time to sign a few forms, what seller can take them seriously. Most buyers agree. The ones that don't like it can work with someone else.

This is a serious business, and we need to treat it that way.

May 22, 2008 01:25 AM
Ron Tarvin
Residential, Investment properties, rehab projects, property management, luxury homes, new construction! - Katy, TX
Broker, Katy, Houston, Cypress 77450,77494,77095

You know what?  A verbal offer isn't binding BUT it is the start of a dialogue.  Unless my seller says "DO NOT BOTHER ME WITH ANYTHING VERBAL" I am going to let them know.  Why?  Because it is not my job to speak FOR the seller but rather WITH the seller.  It's my job to let the seller know the ins and outs of a verbal offer and that it means NOTHING until we have it on paper, but that it also does not prevent him from entertaining a written offer if that should happen as well.  It's like fishing.  Sometimes the fish bites and sets the hook...other times, it's more technique involved in getting the hook set so you can reel in the fish.  TECHNIQUE.  And remember, the agents in a co-op deal are both paid to achieve the SAME goal--get to the closing table.

May 23, 2008 01:32 AM
Jim Dvorovy
Cutler Real Estate - Canton, OH
REALTOR - Canton Ohio Real Estate

I totally agree with Ron Tarvin's post. Plus, my broker insists that we follow Ohio real estate law and present all offers. No one says we have to go to the mat for unrealistic offers, especially verbal ones, but why in the world would an agent refuse to present them, unless directed not to do so by the seller, (should be in writing)?

One of the most important services we give our clients is our negotiation skills, regardless of the twists and turns they may take or where and how those negotiations may start.

May 23, 2008 01:51 AM
Roland Woodworth
Blue Cord Realty - Clarksville, TN
Blue Cord Realty

Barry: I have had a few buyers like this.. Actually have one right now... Already wrote an offer and now can't real him in for the counter.

May 31, 2008 03:34 PM