Just when you think home sellers have it super easy with the current market... let me share a personal story that's becoming more and more common in our industry.
We listed a home for sale after working diligently with the seller to get positioned to capitalize on the current market environment. Pre-listing home inspection, agent video tour, property website, mega open house, etc. Everything was going as planned and we received multiple offers over list price as you expect.
There was one particular offer that stood out.
It stood out because of the price. The price was $35,000 greater that the next closest offer. Definitely got our attention and we started our due diligence on this particular buyer.
✔️ Discuss buyer's situation with buyer's agent.
✔️ Review buyer's financing with lender in detail. (Verification of employment, income, credit, DTI, application, etc)
✔️ How long have they been shopping
✔️ Type of loan
✔️ How much are they putting for a down payment
✔️ Do they have proof of funds to cover an appraisal shortfall (since we knew this was very likely)
Everything checked out so far and our seller accepted their offer with a few minor adjustments.
Things get interesting.
The buyer does their inspection and quickly submits an amendment requesting $12,000 in concessions! This includes items that were fully disclosed in the listing along with a laundry list of nitpicky items.
I picked up the phone and called buyer's agent.
Me: Why are you asking for a credit for the AC to be replaced? Your inspector and the seller's inspector both marked it's performing and no deficiency.
Buyer's Agent: It's older and will need to be replaced soon... so they will need some money to do that.
Me: We disclosed the age and condition of the unit in the listing documents. Why wasn't this requested as part of your offer?
Buyer's Agent: Well... you know... it's so hard to get a contract right now they wanted make a good offer to get a house.
OMG! Yes, the other agent was openly telling me this was their agenda to shake down the seller AFTER getting under contract during the option period.
SELLER BEWARE. This practice happens more often than most agents care to admit and can be high stress and anxiety. Some buyers will use this as a strategy from the start and it can keep you up at night if you're not careful.
Good news! We shut down this nonsense and closed without the buyer ripping our head off. There is a strategy to handle this flavor of crazy and keep your lucrative contract when this happens to you.
Step 1. Stay calm. This is a puzzle that can be solved.
Step 2. Execute a back up contract. You should do this regardless. Don't just hold on to a good offer with the intention of pursuing later it if this deal fails... go through the process and execute it.
Step 3. Do the math. While this is emotional and the buyer is not operating with the highest of ethics... do the math and see if the numbers make sense even though the buyer is being a jerk. Keep those numbers (net for both contracts) in your back pocket as they will become important.
Step 4. Add time and emotion to the equation. I know, I know... you want to tell the buyer how awful they are and many more colorful descriptive actions. Stay calm. Let them know a) We are very, very disappointed with this request (not them personally... the request) b) We need some time to review this.
We want this buyer to clearly know we are upset by this request since they are inappropriate and by adding time to the equation it will start to make them think this is not a quick cut and dry shake down.
Step 5. Present a verbal counter. Let a day or two go by with no communication. Balance this with your remaining option period. We then call the buyer's agent (not email or text) and let them know a few things:
- Seller is very, very upset by this request and was really tempted to ask you to terminate
- Seller has reviewed everything in detail and is willing to give the buyer $1,100 in a credit for A,B, and C items which is legitimate.
- Seller has executed a backup offer that is close to the current offer. (They don't need to know how close)
- This is the BEST the seller can offer you; please let us know if the buyer wants to continue and send over a revised request.
This strategy works well against the shakedown buyer. It lets them know you're a person not just a contract. You have seriously reviewed and considered their request. You are making a legitimate counter offer as for reasonable items. And you have made plans with another buyer if they can't behave professionally.
Getting offers is the easy part. Keeping them together while keeping your sanity can be tricky.
Sam Thomas, Providence Group Realty
Serving Plano, Texas and surrounding areas