The expanded use of verbal negotiation is one surprising side-effect of this real estate market.

I have noticed it among counteroffers. You spend two hours meeting with a client including travel time only to have the other agent call you back 5 minutes later with another counteroffer. It comes down to best use of time and keeping the negotiations moving. You would be in your car all day getting useless documents signed, not the best use of my time. Now if it is going to be your best and final offer, I would absolutely send that in writing.

Richard:

Sometimes verbal is the only way many local agents communicate in the San Diego community-via voice mail, etc. Too often, time is of the essence and if verbal communication is not used a deal could go south in a hurry.

Verbal negotiations make me very nervous, since I don't want MY client to ever be left holding the bag of what they thought was a deal, only to discover that another offer came in or another listing came on the market -  & since we did not yet have a legally binding, written contract, the other party is free to go on their merry way.  Not to say verbal counteroffer negotiating never happens, or that most people would lightly go back on their word - but just sayin'.  I would sure want my client to be fully, totally aware of the risk they run until everything is in writing...

Richard - I have used verbal counters for many years without issues arising from this.  Today, I was very pleasantly surprised to get a house under contract for some buyers of mine.  There were 2 other competing offers, and one of them was full price (like ours).  The other agent told us we had a deal, then heard from one of the agents about them raising their price as well.  He honored our agreement, and told his client that they had a "moral obligation" to do so. 

I was impressed. 

I would name him publicly (because he's on AR, too), but I don't have his permission to do that.  Thankfully, their offer price was the same as ours, not higher.  Needless to say, however, the other agent was not happy with the turn of events, but that is to be expected when there are multiple offers.

Hi Richard -- Exceptionally well said!  The thing that still drives me crazy in this day in age with instant communication and technology is how many times a sheet of paper hops around the fax machine, both shrinking it and degrading the quality, to the point of not being able to be readable by the time it's all said and done.  It still boggles my mind on how many agents cannot use a scanner and know about things like black and white, grayscale, resolution, etc.

We have one agent that will not accept any kind of verbal offer. He/she makes them him/herself all the time, but will not accept them. But, especially if the offer is unlikely to be ever accepted, rather than do all of the documentation, I prefer to see if the main items are acceptable to the seller. If not there is no reason to go further. Often here in Florida the owners are back up north and to fax back and forth is cumbersome to say the least. And frequently we are dealing with customers who are not tech savy.

I do, however, stress to the buyer/seller that in Florida unless it is in writing, the Statute of Frauds makes a verbal real estate contract about as valuable as a dead frog in the road. I tell them that until both parties have signed or initialled all parts of the contract, either side can decide to kill the deal or accept a better offer is one should appear. (Funny how some agents do not know that).

But, verbal negotiations can be an efficient way to see if it is worthwhile to proceed with a full written offer. Especially in this less than hot market.

I may be a old skooler but if it's not in writing it doesn't get done.

We may have passed the era where a handshake was good enough for a contract, but why not act that way anyway, and then produce the paper to back it up.

Richard - After I get an email verifiying that the original contract was received w/ a copy of the earnest money and letter of credit, I use verbal negociations as an effective way to finalize my contracts. Once done the cleanned -up contract is signed by both parties and we are on to the next level. But verbal offers without paper are worthless. I understand your point of this post and use this method for most of my transactions. Perhaps I have been exposed to many ethical Agents that work well with others

so true what Joe says above,  it needs to be in writing!

It's worth nothing if you don't have a signature.

Patricia/Seacoast NH

I hadn't thought about it before but you're right... there is a lot of verbal negotiation going on.

I have used this on more than one occasion.  When we had a deal that worked for everyone, we put it in writing and the closings when off without a hitch.

Richard,

I take exception to some of the comments above. I had one case where I had a lowball offer. I negotiated over the phone with my client and the other Realtor and came up with a workable price, THEN got the counter in writing. 96% of list. Wasn't laziness; just saving a lot of time.

It is a waste of time, paper, electricity etc etc and overall bad for business as well as mother earth to not counter and negotiate verbally. I have some agents in my area that refuse to do so. Every time a counter is made they print the contract, mark it up, get initials and send it over. Most of the time, not even close to where my folks want to be.

Once you get a written offer, verify escrow and approval letter why not bounce it back and forth verbally? Sure its not legal til it's in writing. Sure the other party can go back on their word. 98% won't though because they want they deal they have reached!! If they walk..you never had a deal anyway and you are probably better off. Is this a screening of sorts? 

I'll also add, I think that by not negotiating verbally you loose some deals. Some people might take it as the final word and walk away from the deal and find another house. If it's your listing, did you do your clients justice?

Good morning Richard,

Great topic you have brought up! Lane has made some valid points and after all if it is your listing are you doing justice to your clients by not keeping the dialoggoing? I expect to see an offer in writing accompanied with a pre-approval letter. If we are a good distance apart we may want to verbally give it a go and then get all agreements on paper and initialed immediately.

Richard, verbal communication does cut corners; however, I've found that sometimes talk is cheap. It pays to get everything in writing.

yes....we have been negotiating more by phone and email instead of to shipping the voluminous paperwork back and forth each time.

Richard, I have negotiated verbally for the majority of my career.  I have found that especially when making low ball offers it is less offensive!

I did it once on a repair request on a deal in which the agent was the owner of the property and she ended up going back on her word! I learned my lesson and will NEVER, EVER do it again. I'm with Lenn, I'll track you down to the ends of the earth to get your John Hancock on the dotted line.