Can I Give You the Shirt Off My Back...PLEASE?

By
Real Estate Agent with Keller Williams Realty

ThiefI had to finally sit down and address one of my pet peeves in the real estate industry, but a little background first.  I spent 5+ years in a mid-sized law firm litigating cases and negotiating various settlements in lawsuits.  I quickly learned that negotiation is an art form and not a science, but also that many different styles of negotiation can be effective.  That said, I am constantly amazed when I read the listings of some real estate agents.  They are stealing their client's money, and they don't even seem to realize it.

Some agents believe that their job is to sell their clients' home, but that is only half true.  Their job is to sell their clients' home, protect them from mistakes in the sale AND GET THEM THE MOST MONEY FOR THEIR HOME THAT THEY CAN.  So why do so many agents use phrases like the following in a listing that has been sitting too long:

"Bring All Offers", "Motivated Seller", "All Offers Considered", and my personal favorite "All Reasonable Offers Will Be Considered."

To me these lines all say the same thing, and they could have just written in the listing, "My seller is distressed, please ignore the list price and bring me a low offer!"  Think about it, why even use a list price if you are going to undercut your seller's bargaining position in such a manner.  As for the "All Reasonable Offers" statement, is that not the most redundant phrase ever invented.  Of course only reasonable offers will be considered, but by putting that in the listing you have just told me that your seller is getting distressed (or you are).

Case in point, I got a call from a couple asking me for help selling their home because their current agent was not working hard for them.  I talked to them briefly, explaining that I would review their listing and provide a few pieces of legal advice until their current listing expired or was cancelled.  The first thing I told them when I saw a copy of their agent's marketing and listing materials was that the only offer they would get would be a low-ball offer because of their agent's use of one of the above phrases, and I explained why this would occur.

Two days later they called back and told me that they got an offer, and it was remarkably close to what I told them I would offer if I had clients looking to buy the house.  And my offer was low, very low.  They were quite shocked to hear that such phrases were used by a lot of agents when marketing a home.

In my opinion, when you have a distressed seller or a home that is not moving there is only one proper way to communicate to potential buyers...BY REDUCING THE PRICE.  Pricing itself is a form of negotiation, but does not give away vital information that can be used once an offer is made.  If you have a seller that needs to move a poperty fast, then structure an arranged price reduction of a certain percentage every week or two.  Eventually you will find the price point where the property will sell quickly, and it will almost always be a higher figure than if you tell agents to submit a low offer using one of the phrases above.  At the very least you will have more control of the negotiation and will not have given away your most important negotiating points.  Thus instead of undercutting your own list price and in effect telling buyers to ignore it, you use the list price to communicate that a sale will be advantageous to a buyer because the price has been reduced compared to the typical market value of the home.

Here is an example of price communication in negotiations.  I currently have a listing for 18 acres of land priced at $990,000.  When I received an offer of $700,000 on the land I talked to the owner and determined that if we countered at $850,000 we would likely arrive at a figure of $800,000 for the contract price.  Sure enough, when we countered at $850,000 we received a second counter at the $800,000 figure.  My client asked hoNot a Pretty Picturew I knew that we would end up at $800,000.  I admitted that not all negotiations are that predictable, but explained how pricing and price negotiations are a form of communication and that experienced agents or attorneys learn to pick up a feel for where a negotiation will end up.

Hopefully many of the agents that use these types of phrases in a listing are simply inexperienced or poorly trained.  Just keep in mind that unless your client is a charity, giving away money will be severely frowned upon.  Further, some people just should not give a buyer the shirt off the seller's back.  It just isn't pretty.

Comments (9)

Jason Sardi
Auto & Home & Life Insurance throughout North Carolina - Charlotte, NC
Your Agent for Life

Steven,

   It's nice to have a little bird's eye view into the realtor end of the market.  With most of your points, I agree.  I should point out, from my perception, the over-used phrases you mentioned may have been legit to the seller's need to sell the home, no matter what.  Or, they could of been a faster way to receive a pay check by the agent involved.  BTW, nice pic at the end....the fridge looks empty and the stomach looks full....Hmmmmm!??!

Mar 31, 2007 08:03 AM
Diane Bell, Hilton Head Real Estate, Bluffton
Charter 1 Real Estate, Hilton Head, Bluffton, SC - Hilton Head Island, SC
Typically, I wouldn't use that type of advertising unless my seller authorized it and many times they do.  Good post.....food for thought.
Mar 31, 2007 08:30 AM
Joan Snodgrass
Midamerica Referral Network - Kimberling City, MO
Did you say you were a lawyer or a psychologist?  Guess good negotiating requires both skills.
Mar 31, 2007 08:54 AM
Wayne B. Pruner
Oregon First - Tigard, OR
Tigard Oregon Homes for Sale, Realtor, GRI
Those phrases are one of my pet peeves and the sign of an amateur. My buyers always take advantage of those phrases. Just lower the price and use the saved words to describe the property in its best light.
Mar 31, 2007 09:22 AM
Bryant Tutas
Tutas Towne Realty, Inc and Garden Views Realty, LLC - Winter Garden, FL
Selling Florida one home at a time

Steve, I am in total agreement with you. My pet peeve is negatives in the ads or MLS i.e chandelier doesn't convey, fountain doesn't stay, stove will be switched etc etc.....please just remove these items before you place the home on the market. Reading things like this is a HUGE turn off. We haven't even started negotiating yet and the seller is taking stuff away. Not good. IMO negotiations start at time of presentation. Present the listing properly and you may reap the rewards. Present it wrong and your seller WILL pay. 

You are also correct that negotiations are a form of communication. It's not rocket science but it does require skill AND listening. If you listen well enough the offer will tell you what the offerers hot points are and it's not always price. Pay attention.

Mar 31, 2007 09:39 AM
"The Lovely Wife" (Broker Bryantnulls Wife) The One And Only TLW.
President-Tutas Towne Realty, Inc. - Kissimmee, FL

Steve...

Excellent post. Really excellent :)

Since Blog Boy (Broker Bryant) has already spoken my mind...Can I ask you for legal advice? :)

Sorry. It's April Fools. Almost. I'm having a terrible time trying to be serious. Hey. At least I tried :)

I thought you would rather have a comment than a lurker. Right? Thought so :)

TLW...ROAR!

Mar 31, 2007 10:04 AM
Steven Holcomb
Keller Williams Realty - Plano, TX
Esq. - BBA, JD, GRI
Thanks for the nice comment...and I would be happy to provide legal advice for the low, low price of $250 per hour or my lifetime purchase agreement of only $500,000 (which includes free monthly updates of your legal risk on cute handwritten note cards and a once a year Drew Rosenhaus - Terrell Owens agent - type rant where I lie on national TV about how great you are and that every problem in your life was caused by others).
Mar 31, 2007 10:29 AM
"The Lovely Wife" (Broker Bryantnulls Wife) The One And Only TLW.
President-Tutas Towne Realty, Inc. - Kissimmee, FL

Thank you for that laugh on line.

RotFlat (rolling on the floor laughing at that) 

What happens if I already know how great I am? LOL. You don't have to answer that. You're expensive :)

TLW...ROAR!

Mar 31, 2007 10:39 AM
Darren Kittleson
Keller Williams Realty - Madison, WI
CRB, SRS, RENE-Madison WI

Great post!  I agree that price is the ultimate negotiating tool.  Quite often I believe a weak agent using the phrases you mention instead of just being open, honest and direct with their client.  Oh, yeah that also requires that the agent must know the market as well.  That's one of my pet peeves.  Just because one has a license doesn't make one an expert in the local market.  That's OK but you better do you homework before you have a pricing dialogue with a Seller.  I'm amazed at how many agents never preview property when they should be learning a neighborhood. 

Thanks for the wisdom on a fool's day!

Apr 01, 2007 08:40 AM