Who Cares? This Is Not My Money...

By
Real Estate Broker/Owner with Daytona Condo Realty, 386-405-4408

My client, a couple from New York, is buying a condo. They liked the unit priced below any other one bdr. unit in the building. On a $230K unit we submit a $200K offer. They counter at $225K. We are trying to figure the trajectory, where we can get it. My guys would be happy to get for $210K, and ready to pay $215K. This is our goal, our magic number.

I am sure the agent representing the Sellers, does the same calculation, and I hope we have the same number in mind.

Ask my clients whether they want to counter at $210K, or they still would like to test the waters again and offer $205K. That's what they want. There is the understanding that $205 is unrealistic, and they understand it and are fine with it.

Submitting the offer for $205,000. Waiting and are ready to go with a higher number. The fax comes, the offer is signed at ....$205,000. I am looking at it in disbelief. I do not understand why the associate broker with tons of experience, who is representing the Seller, worked for my clients? She knew we were ready for higher number. Why didn't she advise her clients to counter? She just gave it to them and left them to decide whether they sign or reject.

By not advising to her Sellers, she allowed the price to be knocked $10,000 down. What good is it  to set the right (realistic) price to win the Listing, if you do not fight for that price? There are so many situations that you have to agree so that the deal goes through, but that was not the case here, and she knew it...

There is one test that in my opinion she miserably failed. If she were the Seller, she would get her $215,000. She has the knowledge, has the skills, but after 25 years she is taking an easier route. They signed, screw them, that's their money.

Not that I am trying to pat myself on the back, but I would do crazy things fighting for the clients penny, actually I would do better for my clients than for myself. When I am hired, and my client want to pay 50c on a dollar, I go and offer, and do all the calculations, and the letter to the Seller in order to win. I would not feel comfortable doing it for myself.

But it is bothering that there are so many indifferent agents.

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Jon Zolsky, your Daytona Beach connection
www.beautifulFlorida.com

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Rainmaker
273,464
Wayne B. Pruner
Oregon First - Tigard, OR
Tigard Oregon Homes for Sale, Realtor, GRI

Why would the Sellers' agent know your buyers magic number? Maybe they were happy to get $195,000. I'm sure you work hard for your clients, but if the Sellers are happy, then the agent did her job.

May 18, 2008 04:26 PM #1
Rainer
135,548
Bill Exeter
Exeter 1031 Exchange Services, LLC - San Diego, CA
1031 Tax-Deferred Exchange Expert

Hi Jon,

It does amaze me that so many people will put commissions ahead of their client's best interest.  The downside is that over time the real estate market will become more and more regulated as abuses such as this are discovered.

May 18, 2008 04:32 PM #2
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Jon Zolsky, Daytona Beach, FL
Daytona Condo Realty, 386-405-4408 - Daytona Beach, FL
Buy Daytona condos for heavenly good prices

Wayne - For one, this is the least epensive unit in the building. I do not buy this "happy to get $195,000" because they have listed it for $230,000. There is an average percentage of discount at any given time in any given property, and there is one more thing, called the 6th sense.

Sellers may be happy for different reason. Not knowing that they were screwd is one of them. Is that really the job of the agent?

You know what, I would still after all this say it in a simple way,. She could get more for her clients, but she chose not to try. You still think this is a good job?

May 18, 2008 05:19 PM #3
Rainmaker
655,832
Bob & Carolin Benjamin
Benjamin Realty LLC - Gold Canyon, AZ
East Phoenix Arizona Homes

It could be that the sellers were very happy with the number they got. Sellers motivations and goals often change during the life of a listing. And often times they are just happy to get an offer and get on with things and not keep countering.

May 18, 2008 05:20 PM #4
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Jon Zolsky, Daytona Beach, FL
Daytona Condo Realty, 386-405-4408 - Daytona Beach, FL
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Bill - I have to agree with you. It is actually doing things the easy way instead of the right way

May 18, 2008 05:29 PM #5
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Jon Zolsky, Daytona Beach, FL
Daytona Condo Realty, 386-405-4408 - Daytona Beach, FL
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Bob & Carolin - I am not talking about the Sellers. I am talking about the agent, who chose not to advise the Sellers to counter, even though she knew perfectly that they could make $5K- $10K easily.

Unless, of course, you persuade me that the goal of the Sellers has changed and maximum amount of money was no longer important

May 18, 2008 05:33 PM #6
Rainer
45,581
Joe Virnig
RE/MAX Gold Coast REALTORS, Ventura County, California - Ventura, CA
No Ordinary Joe

Jon, Your post amazes me.  Our clients are the ones who need to make the final decision.  What if the listing agent badgered the seller into making a counter and it blew up in her face.  Early in my career an agent came back from presenting an offer that he thought was too low.  He told the seller to counter.  The seller asked him if he'd make his mortgage payments for him until another offer came along and then he accepted the offer.

May 18, 2008 05:56 PM #7
Rainmaker
592,907
William J. Archambault, Jr.
The Real Estate Investment Institute - Houston, TX

Jon,

It's late and I'm tired, so I might go into detail tomorrow.

My first though is: "Let's hope that some agent who has his client's best interest in mind instead of his pennies, doesn't sell the property first!"

Are you familiar with the saying "Penny wise and pound foolish?"

You're looking at the least expensive listing in the building, and may lose it for less than 5%! That's bad enough, but if your client truly has a $215,000.00 limit and you're thinking of countering at $205,000.00, that's less than 2.5%!

Unless you know something you haven't shared with us you have a foolish client.

Have you checked the seller's public records? "Knowledge is power."

Good luck.

Bill

May 18, 2008 06:20 PM #8
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Jesse & Kathy Clifton
Jesse Clifton & Associates, REALTORS® - Fairbanks, AK
Retired

I don't know Jon... You never know what folks are thinking.  Your first offer prompted a counter but when you countered back at $205,000 they would be left to assume that's pretty much where you buyer was at, price wise.  Perhaps their motivation kicked in, perhaps something happened, perhaps,  perhaps, perhaps.  There's no real way to know what they were thinking.  Don't get me wrong, I've seen my share of lazy agents, but I don't know that I would be so quick to chalk this one up to lazy... there could be other factors at work here.

May 18, 2008 11:42 PM #9
Rainer
29,759
Stephen D White, E-Pro, ABR Cape Cod Real Estate
SDW Realty of Cape Cod - Falmouth, MA

Sounds like the sellers agent just wanted the deal done. She didnt represent her client in their best interests and didnt get them their highest price for their property. But you Jon got your clients a very good deal with a price they should be very happy with! you or the listing agent saved them $10,000! Congrats

 

 

Cape Cod Realtor sdw1

May 19, 2008 02:33 AM #10
Rainer
340,863
Kris Wales
Keller Williams Realty - Lakeside Market Center - Macomb, MI
Real Estate Blog & Homes for Sale search site, Macomb County MI

Were you there for the counter offer?  (I'm wondering how you knew of the conversation between listing agent and sellers...)

If you weren't, I don't see how you can state she didn't work hard for her sellers.  The sellers quite possibly saw other areas of the offer (strength of financing, etc) that they found favorable enough to not risk losing the buyer over.

May 19, 2008 04:43 AM #11
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Jon Zolsky, Daytona Beach, FL
Daytona Condo Realty, 386-405-4408 - Daytona Beach, FL
Buy Daytona condos for heavenly good prices

Joe - I am a bit surprised by the comments. Obviously, I did something wrong, if commenters do not see what I see.

But anyway, there are so many ways to do these things. I would call the agent and say: "hey, what if I talk my guys into agreeing to the ..... amount. Talk to your guys and see if they would listen. Let me know". This way if the Sellers are firm, I saved the Buyer's face as that was from me, and nothing now prevents me from saying: "Fine, I spoke to the Buyers, and they are OK. There are a lot of other things and the way you do that. Like I often write e-mails to my clients and cc to the agent, so that they see that it is not going easy with my client, etc. I just do not want to get into the details here as they are irrelevant.

The point that I am making is that the agent decided not to do anything. The Seller signs, fine. She OK the amount for the Seller. I understand that you were not there, and there is something that is missing from the whole communication, but this is my take on it. Yes, she knew she could make the Seller a bit more money, but it involved some risk, and she did not want to take it, and she did not want to go extra mile unless she would absolutely had to.

Of course, situations may be different, There was no mortgage here, the Sellers were wealthy and just did not want this unit any more. On the other hand I would still ploay it even with the mortgage, as long as I will leave the way out for the Seller. I did it so many times...

May 19, 2008 09:13 AM #12
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Jon Zolsky, Daytona Beach, FL
Daytona Condo Realty, 386-405-4408 - Daytona Beach, FL
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Bill -  This is not the market to be afraid of offering low. Even the lowest priced unit take time to sell. I was the one who was suggesting our buyers offer $100 - $1,000 more than the asking price when the market was hot.

My clients in St. Croix offered $1,150,000 on the asking price of $1,120,000, plus no financing contingency and with half of usual due diligence time to win. The agent later told me that there were 5 offers on the table, three of those were in some way better than our, but none could beat price, cash and quick sale in one package.

That was not the point. THe point is that dealing with professionals you both know the game, and one suddenly stops playing just because she could, you know that she took an easier route.

May 19, 2008 09:27 AM #13
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Gary Woltal
Keller Williams Realty - Flower Mound, TX
Assoc. Broker Realtor SFR Dallas Ft. Worth

Jon, maybe the seller thought your lower offer was best and final and not a motivated buyer.

May 19, 2008 09:29 AM #14
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Jon Zolsky, Daytona Beach, FL
Daytona Condo Realty, 386-405-4408 - Daytona Beach, FL
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Jesse - You have a perfect line of those 'perhaps'... Absolutely perfect. And they were to decide themselves.

My point is that the agent withdrew herself. You do not have all the nuances. They knew tha the Buyer loved that building, and that area, that he was pretty determined... There were plenty of signs, even more than I would love to, as I hate when Buyers come and say that they absolutely havge to have it.

I watched the agent's sales, and this is pretty obvious that she is on the Buyer's side when it comes to closings.

You would be surprised, that even in the hottest market,these agents allow discounting the price. At the peak of the market there were only two agents that could say that they were selling for what they have listed. THere was no magic there. You just say "no" to a lower price. In order to fight the Buyer's temptations, we were getting them to authorize us to reject any not full price offer. So, when the offer comes, we say "no". At that time properties did not stay long on the market, so another day or two and we get the full price.

May 19, 2008 09:37 AM #15
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Jon Zolsky, Daytona Beach, FL
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Kris - It is really very simple. How do I know? Because I know that my client was ready to pay $215K, and nobody tried to get it. As for the logic that there are other strengths, etc, then why not just let it go to $200K.

Listen, when I am saying that she started playing that game, I mean it. We both knew perfectly what my guy would accept. The only reason I even submitted $205K was to please the Buyer. We were calculating, and so did she.

She just decided not to advise them to counter. There most probably was no conversation at all, she faxed them the counter, period. If there were any conversation, they would have gotten more money. Yes, I did not watch her, but I saw the result.

What strength of the offer are we talking about when this was the lowest priced unit? There was none. Why is this that you, guys, try to find any other explanation. For me it is really simple. When we are looking for our buyers, very often I check who the listing agent is and I can right away say whether we can get a good price or there will be hardly anything.

May 19, 2008 01:22 PM #16
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Jon Zolsky, Daytona Beach, FL
Daytona Condo Realty, 386-405-4408 - Daytona Beach, FL
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Gary - Of course they thought this way. I thought there was an agent to advise them, and that did not happen.

May 19, 2008 01:29 PM #17
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Jon Zolsky, Daytona Beach, FL
Daytona Condo Realty, 386-405-4408 - Daytona Beach, FL
Buy Daytona condos for heavenly good prices

Stephen -to the best of my knowledge that's exactly what happened

May 19, 2008 01:31 PM #18
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