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Get out of the box.........your next commission may be out there!

I’ve read a couple of posts lately on verbal offers. Instead of rejecting them why not try this? Ok, a Realtor calls me up with a verbal offer from his Buyer on one of my listings. It goes something like this:

“Hi Broker Bryant I have an offer for your listing. My Buyer is only in town for a few hours so is making a verbal offer so we don’t waste our time.”

“Oh, I’m sorry my Seller will not negotiate verbally. It’s in my listing agreement, all offers to purchase must be in writing and presented with a prequalification letter prior to negotiating. So why don’t you swing by your office write up the offer and send it over to me. If your Buyer is serious, then maybe we can get a deal negotiated because my Sellers do want to sell.”

“My Buyer is serious but we really don’t have time to go through all that.”

This is where I jump out of my box.

Ok, now my goal, is to get offers on my listings, so my Sellers can have the opportunity to negotiate and hopefully be able to sell their house. After all, it is their house and it is not my place to blow a Buyer out of the water just because his Realtor is incompetent. So, telling this Realtor to forget it, is not an option. If the Buyer is truly interested, I could be harming my Sellers, by not at least hearing what the offer is. So this is what you can do. Pull out a blank purchase offer. Then ask the Realtor the following questions.

Ok, what's the Buyers name?
How much does he want to offer?
How much deposit is he offering?
How much is he putting down?
When can he close?

Now that’s 5 simple questions (in a couple of minutes) and while I’m asking them I have written the answers in the appropriate blanks on the purchase contract. Next I say:

“Listen, I have already completed a purchase offer for your buyer and I am faxing it over to your office. Now if your Buyer is truly serious then swing by, have him sign the offer and fax it back over to me, with the pre-qualification letter and I will present it to my Seller. Is that easy enough for you?”

I know, I know, Broker Bryant why are you doing this Realtor’s job? Why are you wasting your time with this nonsense?

To answer the first question, my Sellers have hired me to sell their property and they are paying me handsomely for doing this. So this may not be my responsibility but it is definitely my job.

To answer the second question, why not? I never discount any offers with at least trying to negotiate. You just never know. I have had many “low ball” offers turn into pending contracts. My job is to present the offer to my Sellers and let them decide how to proceed. Also, I repeat my earlier statement, “I will not hold a Buyer responsible for his Realtor’s incompetence.” The Realtor is not the one buying the house. I am sure Realtors lose many deals by not understanding this.

So next time before you blow off the other Realtor and possibly lose a good Buyer, pull out that contract and fill in the blanks. Who knows?….Get out of the box…….your next commission may be out there!

Posted by Bryant Tutas Broker/REALTOR(R) Tutas Towne Realty, Inc on 09/20/2006 07:00 PM

Comments (29)

negotiating, educational

29 Comments on Get out of the box.........your next commission may be out there!

SEP

2006

It's a shame some agents are sooo lazy. It's obvious they are not taking their jobs seriously. I pity their buyers. Where's the representation. And doesn't he recall -- real estate contracts must be in writing?

BB,

Another great post. I would love for you and TLW to come to Birmingham. You can give motivational speeches. TLW can shop with Maureen & I. :)

However, TLW can give a "good lesson" too!

That's a pretty good approach to it. In my opinion any offer, high, low, or verbal means the buyer found something they liked about the house. An interested party is a negotiable party. I can't believe it when I hear agents tell me they receive a low ball offer or a verbal offer and they'll just ignore the offer as if it didn't happen, or just respond back with a "No thanks".

I always counter (even if it's the same price) and if I'm representing the buyer, then I expect counters. (no matter how crazy my investor may be!)

I work for buyer/seller and sometimes it doesn't matter how much "education" we give them they'll still want to do what they want to do.

As for verbal offers though, how much faith does the buyer have that their offer is going to be accepted if they don't want to put it in writing? I go into each offer expecting an acceptance, even the low balls.

Robert, I blame verbal offers on the Realtor not the Buyer. The Buyer will put in writing most times if told to.

And you are 100% correct, if a buyer is interested , at all, I am going to present the offer. You just don't know what may happen. It's not our decision to make. I've had sellers who were addamant they would not go below a certain price and the next day they accept a "low ball" offer with no counter. Go figure.

I actually had a Realtor try to give me a verbal offer, and he said "if we can't put this deal together, I don't want to waste my time writing it up." Kid you not.

I usually have an entire contract written with the seller's info and the listing price filled in. This is done at the time of the listing. This can be handed to a "work challenged" agent and they just need to fill in the agency info and the buyer info. This takes them no time. And if I have buyer without an agent, the work is already done for me.

Do you ever use a "letter of intent"?

www.HomeRome.com

Margaret, I don't use a letter of intent, but I will put my sellers counter in a letter. I always have my sellers sign the deal last. Just in case:)

I like "work challenged". You're so nice.

Verbal offers are our normal procedure here. I always require and send a follow up in writing. Even when it is in writing it's still considered verbal and neither buyer or seller have any legal obligation until a fully executed contract is signed.

Most of the time, I will present an offer to the seller in person. It's sometimes difficult to say NO to someone when face-to-face, much easier to do over the phone! The concept of a buyer who is ready willing and able to make an offer will most certainly find the time to drop by and sign the offer!

That is awesome!

Do what it takes!

You have a great attitude.

SEP

2006

Thanks for the Post. I understand completely about making certain that I have a fiduciary duty to my seller to "color outside of the lines" once in awhile to me a more beautiful masterpiece.

Amen Broker Bryant - that is excellent advice!!

Bryant, great post! It's all about making it happen and you never know! Also, you learn how flexible your seller is and if there is room for negotiation.

5 questions, 5 minutes to ask and write down. You have a phone number to get back to them if it looks good for the seller and tell them to get a move on. Takes 5 minutes or less to toss the idea to our seller and let them think about it. What is the problem people have with that? Wasting your time, I see alot of time managment issues already as far as time goes. Since this might happen maybe at best once a day it seems fairly simple to me, write the info down , put it in the folder, contact the seller and then the agent with a response of some kind and that it will need urgency on their part to take place. Written offers will be taken first , and presented and if an offer comes in before they can get their offer in then it will be reviewed and considered, that is plan and simple.

“I will not hold a Buyer responsible for his Realtor’s incompetence.” I love it!

www.SearchHomesKansasCity.com

Verbal offers?? I have known these to be used by agents in the past just "feeling" out the seller's interest in negotiating. However, there are so many components to a contract these days, inspections, disclosures, approvals, etc., it's risky simply dealing with price in any offer, verbal or written.

What I have done and will do in the future is present a one page "Letter of Intent", to a listing agent. This letter will include price, settlement date, mortgage approval status, etc. It's a synopsis of a written offer and clearly states that a full contract offer will be forthcoming in 24 hours if the seller is in agreement with the 3-5 points in the Letter of Intent.

This approach has be instrumental in getting out foot in the door with several sellers who otherwise were holding out for their price.

This has worked for commercial real estate sales forever and can be helpful with residential too.

Lenn Harley, Broker/Owner, Homefinders.com, http://www.homefinders.com

In many states, the law requires all offers be presented. That overrides many listing agreements in which the listing agent and the seller say they will only present written offers. While that might be thier preference, you might want to check the state law before you do not relate any verbal offers to the seller.

I don't do verbal offers, but I have done the "feeling out." I always call the other agent to let them know when I'm about to write a contract. I do this because I've had the experience of calling the owner of a property listed as active, having the owner OK the showing, have my buyer love the property, get ready to write to offer, finally get a call back from the listing agent who informs me that the property is already in escrow and is scheduled to close in three days. Oops! They claim to have forgotten to change the status in the MLS.

I'm also going to ask if the client is motivated. That's my traditional phrase. You'd be surprised how much information a listing agent will give up. I once asked an agent how motivated her clients were and she immediatley told me their bottom line, which was 15K below list price and definatley below market value. Sounded good to me. On the other hand, if my clients have interest in a property that they want to lowball for whatever reason, if the other agent says that his or her clients are not going to budge, I let my clients decide if they're willing to put pen to paper and make the offer. I work for my clients, and they make the decision, not me. So if you're listing a property my clients are interested in, expect the call.

Great post. I agree, rather than just cutting them off abruptly, test their mettle. Are they just shopping or serious? Like some of the other folks in above posts, on occasion, I have used a letter of intent to get the ball rolling. Once price and terms were agreed to, then put it in a contract.

You are successful because you dont lag on your clients. Great work Mr. Tutas

One of the many reasons you are a success

"You'd be surprised how much information the listing agent will give up." - too true, Michelle. On more than one occasion I've gotten off the phone shaking my head over a listing agent who's throwing information at me I'm not sure the seller would want to have shared. But it happens.

I like the idea, Bryant, and may try it sometime once I work out the kinks for Arizona based on our state's contract. (Like the need for a Loan Status Report, which details the buyers' loan, etc.). Maybe Jay or Michelle or one of the other local regulars can help me see if I'm looking in the shadows for boogeymen who aren't there.

Almost forgot - to one of the first comments. In Arizona, verbal offers are legit and need to be presented. Verbal contracts also are legal, though they're almost impossible to enforce when things go wrong.

I remember doing this very same thing in the early 1990's when our market had turned to a Buyer's market. We'd actually make an offer to the buyer from the seller with price filled in. It helps with buyers who loved the house, but for some reason were on the fence or too afraid to make an offer. IT WORKS!

Yet, in this market, where we don't do verbal offers, when an agent calls me and says that they "have a verbal offer" it's a signal that the buyers are LOWBALLING the property.

So, got a verbal several weeks ago...$20k below listed price. I told the agent to put it in writing. Of course, she didn't.

But, I then emailed my seller and told him what her buyers "said." Then, I asked my seller if he'd like to reconsider the offer that he had refused 6 weeks earlier. He said Yes.

And, we got that contract together. Seller got a decent price. Buyer happy. Selling agent is a nice guy unlike the "verbal" agent.

Whoa! It's your job (as a listing agent) to sell a house, correct? Ifthis is the way the market is headed, why should Broker Bryant turn do a perfectly good offer just because a buyer's agent is in the car?

Hooray Broker Bryant! Take 'em any way you can get 'em.

I have a blog idea for this.

SEP

2006

In my opinion it is exactly this kind of attitude that sets the true professionals apart from the agents that stick around for 18 months and disappear.

The fact of the matter is that we still work in an 80/20 (some would argue 95/5, but that is another discussion). 80% do 20% of the work, etc. Given that, we as professionals are going to come face to face with very incompetent peers on a regular basis. The bottom line is that we have to figure out ways to work within that reality.

What you suggest above is right in line with that. In fact, you can even take it a step further. I use WinForms to generate my contracts whenever I can. In this case, ask all the same questions and type them into WinForms as you go. Then, ask the agent for their email address, save the contract as a PDF and mail it off. Finish the conversation with "The contract is in your email inbox"

So much of our business is about adapting, improvising and overcoming obstacles. I think the public would be surprised to learn that more often than not, the obstacles are not buyers or sellers but other agents!

"My Brilliant Husband"

Let me know when it is time to put you...Back in your Box!

by "The Lovely Wife"...Kum La Ka Lakka...ROAR.

If only more agents would take these same approaches & stop being 'deal killers'. What a much more productive bunch we'd all be.

OCT

2006

Bryant,

Another great Post. (I have to admit -I've been reading a bunch of your blogs today and I enjoyed all of them!) I have to agree with Susan - not just would we "...all be a much more productive bunch", but it would help remind us daily that we are there to make the transaction happen, not sulk on something relatively minor (minor - as in: we CAN do something about it.)

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