Real Estate Offers - Learn From the Legends
I realize my more than two decades of real estate experience may hurt me this week and I may get some of the new generation of agents thinking this content is completely ridiculous but I honestly believe the art of real estate offers has been lost and that we need to seriously be reminded of some old school fundamentals.
What happened to the days of face to face presentations of real estate offers?
Doesn’t the amount of money we receive for our services warrant the listing and buyer agents getting together and bringing the clients together in the office for an offer presentation?
I remember the day when the listing and selling agents would actually call each other and talk prior to the offer.
Without breaching agency and without breaking our fiduciary duty to our clients whatever happened to both agents prior to preparing and presenting an offer share with one another what the seller is doing if they sell? Why the buyer has chosen to write on this listing and what is their second choice?
Is the seller thinking that their Price, Timing or Terms are most important?
All three?
Why not ask the listing agent to send over their comparables they used for establishing price for their seller and you send the listing agent the comparables you used to establish your buyers price and each of you may find one or two that you might have missed and be able to present to your clients?
Another idea I have is sharing about the average days on market and the average list to sell ratio percentage and try to bring both agents and their clients education levels up prior to entering into the offer and presentation.
After covering the pre offer strategies let’s take a look at some of the presentation strategies that would help get more of our offers accepted.
The most important thing both agents want to create is a spirit of cooperation vs. a spirit of competition.
So many times I have had to say to the other agent “Hey, I am not the enemy here I am just the messenger. The last time I checked you and I get paid if we can get our clients together so let’s try to keep that focus and not work on another offer that doesn’t come together.”
Once we have established that spirit of cooperation then we establish the location and grounds for presentation and there is no better place than to meet at the office. The office is neutral ground and the seller is emotionally disconnected from their home and when the agents and both clients are all meeting at the office we send a message to all parties that something is going to happen and this is business.
Face to Face Real Estate Offers
The presentation begins and the worst thing the selling agent can do is open with a presentation of their own market evaluation. This will send two messages to the other agent and their sellers.
The first is that the listing agent doesn’t know how to do their job and you have taken the liberty to do it for them and the second message is the seller is uneducated and not well informed and you are here to bring them up to speed.
I just cringe when the agent does this because when they leave the presentation usually my sellers are absolutely insulted and don’t care if they ever sell their home to that agent and their buyer.
Someone needs to take control of the offer presentation and that person is you!
I always take control of the presentation by taking everyone out on what Floyd Wickman called the "safe island".
The safe island is a technique that lets all the parties know what is about to happen prior to it happening.
“I want to thank the selling agent for coming this evening and choosing our home to write their offer on. We know they had other choices. What we will do first is get the selling agent to tell us why they chose to write on our listing first and let us know if they have a second choice.
Then tell us a little about your buyers, who they are, where they are from and what they do for a living.
Then we will get the selling agent to start with their offering price because the price is most important to you Mr. and Mrs. Seller and then share with us the dates and terms of the offer to follow.
We will then have a chance to ask the selling agent any questions and clarify any details of the offer. We will ask the selling agent to excuse themselves and have a chance to discuss the offer with Mr. and Mrs. Seller in private.
Why don’t you begin by telling us about your buyer?”
A few other tips I like to add is pay the clients a compliment on their choice of agent and only if you truly respect that agent.
I also like to remind the seller they have three decisions to make today...
1) Accept the offer and you can stop showing, cleaning and get onto your next goal.
2) Counter and risk losing the buyer and continue showing and cleaning and maybe losing the property they are wanting next.
3) Reject the offer and not respond, again losing the property you want to buy next. I always like to remind the buyer and seller that market value is “what a willing seller and a willing buyer are going to agree upon at that day and time.”
I also like to remind the other agent to remain “Charged Neutral” which is to stay non emotional in all of this and try not to be the “White Knight” and remember this is not our property, not our money and definitely not our decision today, it is our clients.
We are all busy and I know we have all this amazing technology that allows us to never see anyone during the process but I believe if we can merge some of the old school with some of the new school we may just win a few more offers and create a boost in our real estate income and business.
BONUS REAL ESTATE OFFER TIPS:
Multiples Offers
- Always ask the listing agent if the competing offer is their own.
- Always wait to present the multiple if possible face to face.
- Bring your buyer to the offer presentation. Shows you are very serious and can act quickly.
- Leave the acceptance time for your offer for only say 30 minutes. Doesn’t leave the listing agent enough time to play your offer.
- Try to bring a letter from the lender stating your buyers financing position.
- Try to present last if possible. Ask if the other offer included any commission concessions?
- Take time to educate your buyer to put their best foot forward. They may only get one chance to offer.
Back Up Offers
- Confirm the collapse date of the first accepted offer prior to writing your back up offer.
- Make sure you put “Subject to the seller not being obligated to the previously accepted offer on or before (Date). For the sole benefit of the seller.
- Add the term “Seller and sellers agent agree not to grant any extensions to the first accepted offer.”
- Add the term “Seller and sellers agent agree not to notify the first party of the existence of the back-up offer.”
- Add the term “Seller and sellers agent agree not to disclose any details including price, terms and time of the back-up offer to the first party.”
**DISCLAIMER: Consult with your broker owner and/or legal counsel regarding adopting and/or implementing the above information.**
I trust some of this content is helpful and that you can take it and implement it today in your business!
Strength and Courage!
Wade
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