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Even If It's Painful, Agents Should Always Tell Buyers the Truth

I know a lot of agents who are afraid to lose the sale. It's tough out there right now for many real estate agents. Some are struggling, doing lower-priced deals, getting paid half as much and some aren't doing any transactions at all. For these agents, I suspect it's even harder to tell a potential home buyer that perhaps buying a home is not the best direction for them to move.

Yesterday, a buyer was ready to go into contract. He had a viable counter offer in front of him at a price that was agreeable. The counter offer contained two points, however, that he fixated on. One was the seller wanted him to split a selling fee. It wasn't the amount of the fee that he objected to, I came to discover, it was the fact that the seller had asked for it. The other stickler was the seller stated in the counter offer that the appliances carried no guarantees.

"All homes in Sacramento are sold 'as is,'" I explained. "It's already in the contract." He wanted to see where it was written in the contract, and I showed it to him: Seller makes no warranties regarding the above items.

The buyer decided the seller might be hiding a defect. He argued that the words "guarantee" and "warranties" were not synonymous, although they are. We discussed his home warranty plan -- we talked about the home inspection and his right to cancel -- we pondered places to buy a used appliance. We even discussed the possibility that if an appliance was defective, how the seller might be willing to repair it.

During our 90-minute discussion, it became apparent that the buyer had a laundry list of objections to the contract, which he had already signed. It was clear that those concerns had been discussed among his family members. He wanted to see the seller's confidential documents that do not pertain to the buyer. He asked for standard verbiage in the contract to be altered which, for a variety of reasons, was not feasible.

The buyer proposed that the seller was being unreasonable by requesting that the buyer split a small fee. He said it made him uncomfortable. Even if I offered to pay that fee for him, he was unhappy. Furthermore, he was certain the stove, which most likely had a value of $200, was broken. I seized that opportunity to point out in the most sincere manner I could muster that if the seller could see him right now, the seller most likely would feel that HE was being unreasonable.

I pride myself on my communication skills, and integrity is my cornerstone in this business. I tried to explain technicalities in several different ways, using layman terms, but I was beginning to feel like I had somehow failed in my mission. Then the light bulb went off. I laid it on the line: "I'm hearing from you that you do not trust real estate agents; you don't feel that I am being honest with you. You do not trust the verbiage in the contract that protects your rights. We can't maintain a business relationship if you question my ethics, integrity and honesty. You might want to consider either working with another real estate agent or hiring a lawyer to represent you." Then I went a few steps further and suggested that perhaps this buyer was simply not ready to buy a home. He appeared to be uneasy with the entire process. Maybe he should withdraw his offer and forget about buying this home.

It's not my job to strong arm a buyer to make a decision he could later regret. My job is to represent the buyer to the best of my abilities, maintain our fiduciary relationship and protect his interests. Always, my belief is the best thing to do is to tell the buyer the truth.

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Elizabeth Weintraub is an author, home buying columnist for The New York Times-owned About.com, a Land Park resident, and a Land Park real estate agent who specializes in older, classic homes in Land Park, Curtis Park, Midtown and East Sacramento. Weintraub is also a Sacramento Short Sale agent who lists and successfully sells short sales throughout Sacramento. Call Elizabeth Weintraub at 916.233.6759. Put 35 years of real estate experience to work for you. DRE License # 00697006.

The Short Sale Savior, by Elizabeth Weintraub, available through bookstores everywhere and at Amazon.com.

Photo: Unless otherwise noted in this blog, the photo is copyrighted by Big Stock Photo and used with permission.

Posted by Elizabeth Weintraub, Sacramento Short Sale Agent, 916.233.6759, Lyon RE on 08/17/2008 10:14 AM

Comments (29)

counter offer, sacramento, buying a home, buyer remorse, cold feet

Originally posted at: Elizabeth Weintraub • Sacramento Short Sale Agent • Land Park: Even If It's Painful, Agents Should Always Tell Buyers the Truth

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29 Comments on Even If It's Painful, Agents Should Always Tell Buyers the Truth

AUG

2008

I agree. Be honest!

Tell them the truth.

It works out better in the long run.

All the best.

Bill

Absolutely correct. Almost all agents I know do tell the truth. There are a few that are more into limiting buyer information and I consider that to be sneaky.

Just don't kill the messenger. Buyers seem to know that it's not the Realtor, It's the facts that kill dreams sometimes...

Hello Bill and Steven: Would you have sat with that buyer for another four hours hashing over points in the contract or would you have addressed the white elephant in the room?

Elizabeth

The truth is key. If one cannot be honest with themselves then they cannot be honest with others. I believe it was Winston Churchill who said "The truth is incontrovertible. Malice may attack it, ignorance may blind it, but in the end there it is."

How is your book coming along there my friend?

Sincerely

Tom Braatz

Hi Paul: Sometimes, though, the buyer is not really a buyer. He might dream that he is a buyer, but when push comes to shove, he may freeze. Generally I'm pretty comfortable walking a buyer through cold-feet syndrome. A client once told me she preparing to cancel a contract within her inspection period, so I told her fine, assign the contract to me, and I'll buy it. And I was serious, too. When she saw that I'd take it, she decided to close. Which, in some ways, was a little disappointing because I was excited about picking up the home for my own portfolio. :)

Split the fee, replace the stove and get down the road. I don't see how honesty has a lot to do with this. Unreasonable, certainly. People don't generally know how to transact real estate, that's exactly what you are there for. Protect your party, and facilitate the transaction.

The seller here wanted to sell and the buyer wants to buy. The price was fine and the deal side tracks on piddly items. In negotiation training I've taken, I've learned that the "end goal" was the primary focus and that to win every battle was actually a bad thing. Win Win.

Bravo! As I was reading your post and got to your line, "I pride my self on my communication skills", I'm thinking to my self yea but where are your sales skills, Then I get to the Bravado! Great job with the "Take away" Close. This is not a bully tactic, but a way to weed out the looky loos, and fine tune the true client. I'm sure there is a lot of inventory for him to see, so losing a deal of semantics is silly in today's market for both the seller and the buyer. I really really like the way you articulated the languaging, for your belief in your self. And really regardless of how long it has been since we have received a pay check we really should only work with those that respect us, that's where our referrals come from, and yes there is still referral business out there, more so now than in the "height of the market"

Hi Tom: The book is coming along like gangbusters. I'm up to 6,000 words, pushing out 1,000 words a day. Today is day 7. I can commit only about an hour a day to it, though. I wish I had more time for the manuscript, but I don't.

Love your response. I had this happen to me a day before the closing. I told the buyer walk. You will lose your 1k deposit but if you think the deal is no good then so be it. They bought in the end

Elizabeth: I think you did the right thing. From the sounds of it, he really didn't want to buy. You had answered all of his objections, and he still wasn't comfortable. I had a similar buyer once. She had me looking for a home without a tree in the yard because she was allergic. In Virginia, that is impossible. All townhomes come with some sort of tree or shrub. But I had answered all her objections and this was one that I couldn't. The obvious, "You can remove trees, with the HOAs permission, from any home you purchase." That didn't work so I laid the same truth on her. "Sounds like you may not be ready to buy." She came back to me one year later...unreasonable requests gone.

Hello Randall: Honesty has everything to do with this. It wasn't just the stove and fee. The buyer did not believe the verbiage in the contract and he did not believe what I was explaining to him. It was very clear to me there was a trust issue going on. Furthermore, I'm still not certain he truly wants to buy.

Hi Sheila: It is a tactic to weed out those who are not serious. I'd rather find out now than two weeks down the road after the buyer has spent money on a home inspection, paid for an appraisal, and others have expended effort.

Hi Charlie: I always let buyers know they do not "have" to buy a home. Nobody will ever force them to. Sometimes, just realizing that fact, takes the pressure off them. It's stressful to buy a home.

Hi Chris: I agree with you, when the buyer is ready, they don't make unreasonable or goofy requests that can't materialize.

Well done! You are an excellent realtor, and we can all learn from the way you handled this. It's about a business based on a year to year production, and not a deal to deal reaction. Truth always wins!

So what happened?? Did it end??? Did he go through with it??

One of my unpleasant experiences with a buyer dealt with the fact that she wanted to write her own offer. She'd been on the internet and copied something down that was recommended and insisted that she would do her own. Now knowing that a buyer is making a total fool of themselves and not protecting themselves either, it was a farce. She didn't trust me. I didn't want her to get screwed. She didn't buy the house and ended up disliking me. I know that because she went to another agent and said we didn't get along. BUT, that agent didn't seller her anything either.

Elizabeth - I think you handled it very well. Good for you to be able to see through his objections to the main problem. Let us know how this story ends, okay? :)

I am going through that with a seller right now. A few weeks ago I blogged that I was about to FIRE this seller. Time after time he ignores my advice, questions family members then tells me why I am wrong and what he wants me to do instead. Despite rejecting 2 good offers, 2 viable offers in this environment, I held on to him. We got a 3rd good one and he held out for full price. He got it. Now we're in inspection stage and we're going through the I DON'T TRUST YOU deal again. Buyer's inspection found termite evidence. He told me in no uncertain terms there were no termites there. He called hte original inspector out again to re-inspect, and the man explained patiently why he should remediate. He told the seller the exact same thing I did, twice. I advised to treat because the buyer would have a bank problem if we didn't. He argued that he wouldn't treat if he didn't want to. Anyway, after mr inspector talked to him, he sent me a long email explaining that he WOULD treat, but let me know that if I had told him this beforehand it could have saved us all this time and worry. UM, I DID TELL HIM THAT FROM DAY 1. It's like he's throwing it in my face. I am so ready for this deal to close. If it does, I've earned every penny of this commission based on headaches and angry feelings. If it doesn't, I am going to un-list the property.

Hi Li: Not only does truth win, but who wants to work with a buyer who doesn't trust them? OK, some agents don't mind, but I'm not one of those. Some buyers don't trust any agent for any reason, and that's a shame.

Hi Debi: When things don't make sense, there's generally a reason why things don't make sense.

Hi Barbara: Sometimes buyers sabotage themselves. Just because they're waving a checkbook and stroking the granite counters doesn't mean they are a buyer.

A loyal client referred this buyer to me. He refers a lot of doctors to me, and I did NOT want him to feel offended if I discontinued my association with his friend. He was OK with it. So, when the buyer called to hem and haw again, I referred him to another agent in my office.

Hi Erica: Life is too short for headaches. I would not have gotten as far as you in this transaction. I would have cut the strings much sooner. However, not to defend your seller, but he did get his price. It's always up to the client to decide what they want to do; we can't dictate it to them. But if you're not seeing eye-to-eye, that's the time to move on before it gets worse. It rarely gets any better.

I can honestly say that I don't love every buyer and seller but I do adore all my clients, because I select them. LOL. I wouldn't go through hell in an escrow for all the tea in China.

Elizabeth---Bravo! Excellent post! It should be featured!

Many a times I have lost a sale for my honesty--but I believe it's better to lose an offer than to cancel an escrow, better to lose a buyer than to lose a law suit!

"I pride myself on my communication skills, and integrity is my cornerstone in this business" I agree with you! and I am jealous--I wish I had some of your communications skills---I am working on that, but I too pride myself on my integrity!

Thank you for sharing.

The buyer may have just have a case of "cold feet or buyer's remorse!" That is when they start to look for the exit door.

Hi Aida: My communication skills are based in part on the following: I try to explain complex situations in the most simple terms I can muster. If I sense the client is still confused or I'm not getting the response I expect, then I explain it a different way. I keep coming up different ways to say the same thing hoping one of them will make sense, and eventually it does. Then I repeat it several times. :)

Hi Jim: I sense this particular buyer won't buy a home until he finds a seller who says, "Yes, I would love to sell to you, and I accept your offer in its entirety without negotiation." This buyer doesn't like conflict. It makes him uncomfortable. He's methodical and analytical, but he doesn't want the seller to respond in that manner. He wants to be in control. And he's not in control because he doesn't have any money.

He was near contract with another agent on another home that was in probate, but he didn't like the "attitude" of the sellers so he walked away. He also complained about that agent, but I couldn't find anything that agent did that was wrong.

Elizabeth, I thought you took the right approach with the firmness toward the buyer. Look, make a decision and get off the fence. The buyer sounds very picky and immature to me.

I would think a buyer would appreciate the truth, and know that you are not out to just make a commission at their expense.

AUG

2008

Elizabeth, yes the seller did get his price, and still it's not enough to make him pleased.

Hi Gary: I don't think he understands the logistics. I predict he will end up in a lousy neighborhood and purchase from a desperate seller now because time is running out for him. At least I won't have the honor of owning that listing when he decides to sell in six months, if you know what I mean.

Hi Sherry: Sometimes people don't want to hear the truth. And that's just too bad.

Hi Erica: Couldn't you pay somebody in your office to take over this file for you to relieve you of the conflict?

Once again Elizabeth, great post. Good for you for giving the buyer the option to walk. You know if he's going to be this difficult at the beginning of the deal, he'll be difficult right up until closing, if it does in fact close.

I had a seller recently who wanted to change verbiage in the standard NCAR Offer to Purchase because their brother the lawyer recommended it. (I represented the buyer). That was kind of the last nitpicking straw i was going to take from this seller and just told the sellers agent we were going to use the standard contract that the Real Estate lawyers wrote for everyone in NC, and if they wanted to change it, my buyers would have their lawyer review it also. Did they want to get into a spitting match with lawyers? Guess what, they took the contract as it was written.

Have a great week!

Elizabeth, I like the way you handled it. I have gone through this a few times in the past myself. Buyers that want to renegotiate the purchase after they have signed the contract and agreed to disclosures and terms. You went above and beyond in dealing with this situation - Is the buyer going to close?

Hi Linda: I can tell you've been around for a while because you're right. It never gets any better and, in fact, it gets worse. So why even bother going there?

Hi Steve: No, the buyer flaked and I referred him to another agent who doesn't mind the drama.

AUG

2008

I never did understand why so many people are willing to hide their true feelings, at the detriment of their own sanity. I admire your handling of the client, and I certainly don't consider you to have "strongarmed" him. Our job requires honesty - if he didn't trust you after those words, he never would. We have the right to choose our clients, and we should choose to work with people who want to trust us - we will sell more, in less time.

Hi Scott: Well, he's not my client anymore. But I do have to tell the truth -- not solely because I am required to, either, but as you say, for my own sanity.

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