It goes something like this: You get a call from an Buyer's Agent: "Hi, this is Anne Oyance of Bobble Head Realty..I have an offer on...blah, blah,blah..."
"That's great, Anne..." you say, and then make plans to present the offer to your Sellers. So you call Mr and Mrs Donhavetuhsell to tell them the good news, and they say (one of the following):
1. Terrific (fill in your name, here)...what a fan-flippin-tastic Realtor you are! Why, it's only been twenty three minutes since you left our home with the signed listing documents, and you've already sold it! You know (fill in your name here), we trust you implicitly...whatever the offer is...tell them we'll take it. And...we can close tonight..if they prefer.
2. Well, that's just grand (fill in your name here). Naturally, we'd like to see the offer, evaluate all of the various terms and conditions so that we can make an informed decision, with your expert advice and professional guidance. Let's arrange a mutually convenient time for Anne to meet with us, in your office.
3. OK..how much is it? We're not about to waste our valuable time on a low offer.....Ya, know (fill in your name here), it's only been on the market for three (weeks/months/years)..she better have a GOOD offer..because...we don't have to sell
Well, if you've been in the real estate industry for even a short while, you know that #3 is a fairly commmon response..and rightly so. After all, how well are we preparing our seller clients for an offer? What steps are we, the Professional Full Time Home Marketing Experts taking to assure that our clients understand the many nuances of the Sale Transaction (especially the contract negotiations)?
Unfortunately, we're not doing enough.If we were, we'd hear response #2 every time.
So? What DO we do?
You've heard the expression: No one is ever sold anything. They make an informed decision to buy. In other words: if you sell..rather than inform (teach)..you'll get no where. Look at the most successful Realtors in your market...they learn everything about the people, neighborhoods and trends of their area. They also learn what their clients want and need BEFORE they propose a particular service to fill the need.
If our client reacts to an offer as in the above example, it's (often) because we haven't given them another option..we haven't informed them about the importance of the initial offer, the response/counter offer, "gimmes", incentives and sweeteners, and of course..the Win-Win.
Home sellers must be prepared for their first offer right from the start. From the first day of the listing agreement. Tell your clients that most buyers will make LOW OFFERS..tell them that many people who look, act and talk like buyers..aren't really buyers at all, they're more like fishermen. You know fishermen, sitting on a lawn chair, sometimes on a bridge..sometimes on a stream bank...drop the line in the water..if a fish bites, good. If not, also good. See... with fishermen, it's not the catch-of-the-fish as much as the act of fishing. Same thing with some "buyers"..they look at eighteen homes a week..with nine different Realtors. They'll make an offer on every fourth home they see...not necessarily a reasonable offer..but still an offer.
Our clients need our professional guidance, experience and...this is important..our reasoned, emotion-neutral reaction to anything "the other side" proposes..including very low offers. That's the only way to approach a contract negotiation.
Another important consideration is this: in a real estate market that has become very challenging (especially for home sellers), all parties must understand the concept of Good Faith Negotiations. What's that, you say?
I said... Good Faith Negotiations.
In good faith negotiations...
a. All parties agree to deal honestly with each other (including the Realtors)
b. The Seller will disclose all necessary information to the buyer.
c. The Buyer will provide all necessary information to the Seller.
d. Seller and Buyer will abide by all decisions involving inspections, appraisals and financing.
This point is very often misunderstood by the parties (and, some real estate agents)
e. The contract price is negotiated prior to a fully executed contract. The home inspection is not a means of reducing the contract price further, other than for issues which materially effect the value of the home.
When inspection issues and the negotiations of such get bogged down, or dragged out for days and weeks, one or both of the parties may experience "Deal Fatigue"..the consequence of which is often "BOM" (Back on Market)..or "OTM" (Off The Market). Make sure that any issue which may arise is dealt with..immediately and effectively (you owe your client no less). Make sure your client understands the importance of careful consideration regarding inspection issues, and their quick resolution. for everyone's benefit.
Buyers--legitimate, well-qualified and motivated buyers--are not easy to find these days. When we do find one, we have to do everything we can to keep them in the transaction, for their benefit, and that of our client. If a buyer walks away from a deal because of a minor issue which could have been handled better, you (and your Sellers) may not get another comparable offer--or any other offer.
Frank Nicolato,CRS,e-PRO,QSC Realtor-Associate
Prudential New Jersey Properties