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A Real Estate Phenomenon

By Gena Riede

Real Estate Broker/Owner with Riede Real Estate, Lic. 01310792

July 18, 2008 06:46 PM

Real Estate Question Real Estate amazement!

Rather Shocking!

Thought this question should be asked to the group since I assumed everyone provided this to their Seller before listing a house.

Boy, was I wrong. It seems that there are listing agents out there that don't provide this for their seller and I am truly baffled as to why? I should correct this statement and say that I found at least one that doesn't. I hope there aren't any more.

Can you think of the most important thing as a listing agent that you do for each of your sellers prior to listing their home for sale?

Be honest and tell me in the comment section if you came up with the proverbial Seller Net Sheet. Can you imagine not doing a Seller Net Sheet?

Well, recently one of my Sacramento home buyers wanted to write an offer on a house for sale by a regular seller. It was not a Short Sale and not Bank Owned or REO. Just a regular sale. When studying the tax records, I thought that the seller might be very close to possibly having to come to the table with a little cash out of pocket depending on the type of loans she had.

I was shocked at the fact that the agent did not return phone calls and after calling the Broker and finding that he was a "Broker in name only," the downward spiral continued on. When the listing agent finally got around to calling the day after the contract response date, the agent indicated that the "seller was not very motivated."

Hmmm not motivated with $5,100 over asking with 3% coming back to the buyer when homes in the area are going down in price and are mostly Short Sale and REO's ? Hmmmm. I asked the listing agent if her seller was upside down and the answer I got was numbing. "I don't know" she said.

Have you EVER listed a house without offering your seller a net sheet (sample of seller net sheet)?

The other crowning blow was when the listing agent told me that she had emailed the offer to her seller who lived within driving distance and that her seller didn't understand the offer. No joke, Sherlock! Sorry, I couldn't resist...naturally I didn't say that but I did think it.

The final blow was an email that our offer had been rejected and that the listing agent would be relisting with different terms. I assumed that she would be listing the house as a Short Sale.

WRONG!

She changed the price to reflect $5,000 over our offer. Are you wondering why she didn't counter us?

ME TOO!

Luckily, while she was busy missing contract dates and seemingly taking her sweet time, the buyers and I continued looking for another house and wrote a different offer.

Several morals to this story...

Find out how much your seller owes on their loans and the terms of their loans prior to listing their house
Provide your seller with a Net Sheet
Return phone calls (you never know if your seller might get an offer)
Let the Selling Agent know that you have received the offer
If you can't reply by the time-line in the contract, call the Selling Agent and explain AND tell them when you will be presenting the offer to the seller
Present all offers in person (unless the seller is not within driving distance)
Provide the seller with a Net Sheet for each and every offer

These are just rudimentary elements that I believe every listing agent should do. How about you?

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Anonymous

Tina Yakel, Realtor

This does not suprise me. I am a realtor in Florida. I just made an offer on a home and the realtor knew I was making the offer that night and when I called him and told him that I just emailed it to him. (the sellers live out of town) I never heard back from him. The seller ended up calling me the next day because her son saw that I had been at the home that night. I told her I wrote an offer and had emailed it to her realtor. She said he has not called me. We went for 2 days before we got a response. In addition to this, I get to pay a refferral fee, he spoke with my buyers once on the phone and the sellers happen to be at the home one day cutting the grass and my buyers drove past it and they talked and the sellers let them in the home. So now guess what, I get to pay a referral fee. Nothing suprises me.

Jul 20, 2008 12:29 AM

#67

Karen Rice Keller Williams Real Est

Keller Williams Real Estate - Hawley, PA

Northeast PA & Lake Wallenpaupack Home Sales

Did they sign an agreement with him? I doubt it. Talk to your broker. I would not pay the fee and I would protest it. He would have to prove he had procuring cause. The SELLERS let them in the home, NOT HIM.

Do talk to your broker about this!

Jul 20, 2008 01:43 AM

Gena Riede

Riede Real Estate, Lic. 01310792 - Sacramento, CA

Real Estate Broker - Sacramento CA Real Estate (916) 417-2699

Katie, yes sellers care about their net and buyers care about their expenditures. We owe them that much!

Ashville's Green Land, yes I agree it should be in everyone's tool box in order to help their clients realize what they are to net at the end of the day and what their expenditures are.

Greg, good for you. And that's the way it should be no matter what your profession is...people want to have a break-down of costs and see where their $'s are going.

Jul 20, 2008 02:34 AM

Gena Riede

Riede Real Estate, Lic. 01310792 - Sacramento, CA

Real Estate Broker - Sacramento CA Real Estate (916) 417-2699

Grace, glad to hear you also do net sheets. Surprises...no one needs when it comes to money especially when it's so easy to make sure that one aspect is covered. You are absolutely right, now more than ever with so many homeowners upside down it is imperative that net sheets be done.

Roseane, yes it is disturbing and it hurts every single one of us in this profession. We all know that negative spreads so much faster than positive so this gives us just more to have to hurdle when there are agents out there running amok. I sincerely hope that every Broker takes a stronger stand and requires net sheets as part of each agent's transaction prior to being paid. Maybe then, we will see a more uniformity in our profession. Of course, it's not just net sheets but all aspects of a good transaction that should be addressed.

Robert,I don't agree simply because of the fact that there are those clients that have no idea how this is determined and so many who simply think that they will receive a net minus all commission charges. When you as a client have that type of mindset, then why would you consider asking for something that you don't know exists? I really believe that the burden lies on the Realtor not the client.

Jul 20, 2008 02:44 AM

Team Honeycutt

Allen Tate - Concord, NC

I hate to say it but nothing much surpirses me these days.....thanks for the post.

Jul 20, 2008 02:49 AM

Gena Riede

Riede Real Estate, Lic. 01310792 - Sacramento, CA

Real Estate Broker - Sacramento CA Real Estate (916) 417-2699

Lynda,I had no doubt that you use a net sheet with your sellers. And isn't it sad that you aren't surprised? It unfortunately paints a very picture for r.e. when this type of thing occurs. My title co. provides a net sheet program that I can download to my own computer so when taking a listing it is very easy to simply run the numbers for the worst case scenario to present at the listing...same is true for each offer received.

This is just another indcation of how referrals are given. We want to make sure that our clients are well taken care of by the agent that we refer our clients to so it's good to know who uses net sheets and who doesn't. Referral or no referral that is the question...

Jul 20, 2008 02:50 AM

Gena Riede

Riede Real Estate, Lic. 01310792 - Sacramento, CA

Real Estate Broker - Sacramento CA Real Estate (916) 417-2699

Bill, yes I'm sure you are right and what a shame. Brokers were SUPPOSE to provide training for the agents in the brokerage and that was SUPPOSE to curb this type of sub-standard performance but unfortunately we have a lot of "brokers in name only" and brokers who may not even know themselves. What a mess!

Michael, I agree totally. But, one thing we need to stop is this on-line licensing and require field experience with a lot more than just multiple choice. As a profession we each need to demand this be changed and respect our own profession by requiring more of others instead of just simply "not being surprised" at the lack of duties an agent exhibits.

Bethany, glad to hear that you are another one of the responsible, good acting Realtors out there conducting your business on behalf of your client's best interests by providing net sheets. You are so right...surprised in this business are usually BAD ones and anything we can do to curtail some of those should be in our arsenal and used.

Jul 20, 2008 03:03 AM

Gena Riede

Riede Real Estate, Lic. 01310792 - Sacramento, CA

Real Estate Broker - Sacramento CA Real Estate (916) 417-2699

Melina, excellent and I'm sure you also provide them to your seller for each offer so that they can actually determine which offer to accept.

Brian, believe it or not this agent is a full time agent who has been in business for 1 year. I asked the broker who is a "name only" broker and was amazed.

Latonia, right-on. We owe that to our clients and they have a right to know what those expenses could be and are. You are absolutely right...why not provide something that is so easy to do and can eleviate so much pain, misunderstandings and bad surprises?

Jul 20, 2008 03:08 AM

Gena Riede

Riede Real Estate, Lic. 01310792 - Sacramento, CA

Real Estate Broker - Sacramento CA Real Estate (916) 417-2699

Joan, I am curious what type of form the listing agent was requiring to her liking...can't put my arms around that one just yet.

We all need to work in the best interest of our clients and not ourselves.

Shrader in Florida, how amazing that most agents in Florida don't know what a net sheet is and that you in the mortgage industry provide this for the FHA transaction. Are you also there to provide this for the listing agent at the time they take the listing? Something tells me you are not which then tells me that the listing agent is NOT providing this for their seller. WOW!

Diane, not surprise but you say you are shocked...well, me too!

Jul 20, 2008 03:14 AM

Gena Riede

Riede Real Estate, Lic. 01310792 - Sacramento, CA

Real Estate Broker - Sacramento CA Real Estate (916) 417-2699

John, I hear ya. Absolutely, the word APPROXIMATE is bold and underlined right down at the bottom of the net sheet where the net total is and the signature line is below that. Anyone not requiring a net sheet prior to reducing the price is really not acting in the best interest of their client. With CA being such a litigious State it is essential and other States should heed that requirement, as well.

Virginia, excellent. And if it's "not our job" who the hecks job is it? I certainly wouldn't want to be represented by a pass the buck agent and it sounds like you wouldn't either.

Rick, I love the NFL you shared. Although all of those added credentials are sometimes meaningful, other times they mean nothing but just someone rushing through to pay for letters after their names. They should always mean more education, experience and follow-thru. I have experienced agents who have every letter imaginable after their name and they are clueless while others who have none do a great job. It's all in what you put in and give out that counts.

Jul 20, 2008 03:25 AM

Gail MacMillan

Titusville, FL

Hi Gena - pretty amazing that such non-professionals can remain in this business with work ethics/habits such as you described. Too bad, but it hurts all of us in the end. It takes only a couple of minutes to prepare a net sheet. I usually give the sellers 2 or 3 to show them what they take away from the closing for various offers they can expect. Did you find your buyers a better home than the one you made an offer on?

Jul 20, 2008 03:30 AM

Gena Riede

Riede Real Estate, Lic. 01310792 - Sacramento, CA

Real Estate Broker - Sacramento CA Real Estate (916) 417-2699

Pam, absolutely we have an obligation to provide each of our clients with all the information available. Maybe a few agents who don't follow-thru and waste their time and money only to find that their clients are upside down and end up loosing their house will have the best teacher of all...experience the hard way.

Unknown, I don't know that they are scared but you are right...they are pathetic.

Karen, glad to hear that you do this and your MLS requires it or at least your office requires it. If it were a state law, I would be behind it one hundred percent. It is a client's protection that should be widely used.

Jul 20, 2008 03:32 AM

Gena Riede

Riede Real Estate, Lic. 01310792 - Sacramento, CA

Real Estate Broker - Sacramento CA Real Estate (916) 417-2699

Tina, if the sellers let the buyer in the house and the listing agent was not present, then I don't see how you would owe a referral fee. Check with your Broker on this one.

Karen, my agreement as well.

Allen, although it may not seem surprising we all need to stand up and require more of our profession. Taking on a apathetic role will not bring about change and there needs to be a change.

Gail,glad to hear that you are another Realtor that I would be proud to send a referral to...sounds like you have your client's best interest at heart and follow-thru with the necessary procedures that make that happen.

Yes, we found a better house before I even heard back from the "so called" agent that the seller had rejected our offer. So it worked out for the best. Thank heavens! Thanks for asking.

Jul 20, 2008 03:44 AM

Thomas Hargreaves

TriStar Financial Services - Eugene, OR

Gena, I am a mortgage broker and work with several Real Estate Agents. I learn so much on AR that I intern pass on to the agents I work with. I am even trying to get them to subscribe to AR. I saw your net sheet sample. I just need some info. It states it is for the seller, wouldn't it be more beneficial to the buyer? Why should the seller need to know all of those fees, as the buyer will be paying for them? thanks..

Jul 20, 2008 06:42 AM

Fred Jaeger

High Lakes Realty and Property Management - La Pine, OR

Real Estate Connection - Central Oregon

Your summary at the end was especially helpful. I'm particularly annoyed with other agents that are literally across the street who insist on emailing or faxing offers.

Enjoyed the post. Congrats on the feature.

Jul 21, 2008 07:50 AM

William Collins

ERA Queen City Realty - Scotch Plains, NJ

Property and Asset Management

Gena,

Thanks for the post. Personally, I can't see how you can prosper in this business, if you don't apply the rudimentary litmus test for buyer's or seller's ability to perform.

Jul 21, 2008 03:15 PM

Andrew Kyle

Royal LePage Foothills - Calgary, AB

Calgary Condo Realtor

Was this an MLS listing? If so I can think of about 5 different rules that were violated had the listing been with my local Board.

Here in Canada there is a bit of a fight going on with discount brokerages wanting to be part of the MLS system. But the Canadian Real Estate Association (CREA) which is simply the Canadian equivalent of the NAR, is fighting them on the grounds that Realtors(TM) means a certain high level of service that discount brokerages don't provide. Stories like this make for great evidence in support of CREA's position. I would be ashamed to call myself a Realtor if the title were diluted to be service like that in this story.

Jul 21, 2008 03:39 PM

Gary Bolen

McCall Realty - South Lake Tahoe, CA

CRS - Lake Tahoe Real Estate Information

Was way cool to meet you, finally. Much enjoyed the show today.

cheers

Jul 23, 2008 12:53 PM

Rob & Jeannie Steward - Realtors®

RE/MAX Advantage - Nashville, TN

We Work TWICE As Hard For You! - Ashton Group

We always prepare a sellers net sheet with the worse case scenario. We let them know that this is a realistic scenario yet not written in stone. Basically it shows a lowball buyer asking the world. Full closing help with perhaps down payment assistance, decorator allowance (if needed), etc. In turn we always like to provide a likely case scenario. But never do we promise the best case scenario as that one will always come back to bite you in the ass. They usually have that one worked up in their head already anyway. Oh boy!

Jul 25, 2008 12:20 AM

Kirsten Mellinger

SkyView Real Estate - Simi Valley, CA

Ventura County Real Estate

Winforms through CAR (California Assn of Realtors) has a fillable form that makes it super easy to fill in what you can and then go over with your clients. I have had liens show up on title in escrow that the seller said: "oops...I forgot all about that." Some title companies also have a program with fillable forms. As far as agents not returning calls, that's simply common courtesy and it's not just business...it's a way of life!

Jul 25, 2008 11:11 AM

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