RE/MAX Hallmark Blog

Bully Offers - the process is wrong

"Offer date set for tuesday at noon." We have all seen many MLS listings with different variations of this note. Clearly it is meant as a direction, a fact - no offer will be viewed or entertained until the set date.

In a market we have been experiencing when there are two few listings on the market for the number of buyers, holding off on offers until a certain date makes sense. The hold off allows all interested parties to view the property, establish the value (to themselves) and contemplate making an offer on the set date. Makes perfect sense - a win win for all involved. The seller gets great exposure and perhaps people competing to buy his or her property, and the buyer gets to get all his or her ducks in order. 

Except for the pre-emptive offer or the "bully offer." The bully offer enters the picture and creates an unlevel playing field. Everything changes with the registration of the bully offer. Usually the buyer rep wants to jump the queue when his client is willing to put forward an amazing offer, and certainly doesn't want to risk the chance of losing the house by competing with others.  The price is extraordinary with a very short irrevocalbe date to the seller. All very tempting to the seller and selling agent. What to do?

Often the process goes like this:

Buyer agent (BA): I want to register an offer on the property.

Selling agent (SA): Offer date is set for tomorrow evening.

BA: My offer is good for today only and will expire in a few hours

SA: How good is your offer?

BA: Extremely good, unconditional and $50,000 over list price.

SA: Send it over, I will connect with my seller and get back to you.

RECO has rules for what the selling agent must now do. He or she must inform his seller of the registration of the offer, and notwithstanding the direction concerning the offer date in the MLS listing the offer can be viewed and dealt with. All offers registered on the property must be notified and dealt with of course.

But what about all the buyers, and buyer reps who have been waiting patiently for offer day? Technically they are out of luck unless they have registered an offer.

So, does this process work well for all concerned? Absolutely not. The seller is put under pressure with an extremely good offer - the selling agent doesn't want to advise the seller to hold off for offer date just in case no other offer materializes.

More often than not, the selling agent and client make the decision to deal with the offer. Better realtors will now take the time to inform all that have shown an interest in the property and notify them of the change of offer date time. The listing will be rerun with the reference to offer date set time removed. (company policy at RE/MAX Hallmark) If the selling agent is fortunate, other offers will materialize and now the original bully offer is in competition.

But what about selling reps who simply follow RECO rules and only deal with registered offers? According to RECO, nothing is wrong and life goes on for all. But is it good for all, is it good for our industry?

The simple solution would be have selling realtors get an acknowledgement from their sellers at the listing table concerning offer dates. An acknowledgement from the seller concerning the date set (if any) for offer presentations, which cannot be moved forward. This text could be embedded in the listing agreement and initialed by the seller. 

Or else we could continue on wasting the time and angering many prespective buyers, while draining our industry of credibility in the eyes of the public.

Or, just wait for the problem to disappear when the selling market softens. 

I prefer we do something now.

 

 

 

Enjoy the journey of what you do

I was visiting with a realtor colleague yesterday. We were going over various aspects of our business. How it has changed over the years, how people are and certainly how the market is.

I thought of myself when I started in this business. What I remember being clear about is I knew absolutely nothing about the market. Was it strong, soft, on an upswing or downswing? Maybe I was naive or just maybe I didn't need to over think what I had no absolute control over. What I did know was that I was committed to make my living and mark in this industry, and that I would figure it all out somehow. I didn't pay too much attention to current conditions, other than to learn as much as I could about how things were. Of course I needed to learn as much as I could in a fairly quick time in order to help me grow in my business by being of service to the public.

I went to work each and every day. I didn't complicate things. I figured if I didn't work, that is  - connect with people - I wouldn't eat. And I love to eat.

Realtors today over think. Mostly we get in the way of ourselves, of what needs to be done. Another friend of mine, who is a great realtor told me, "Just be good to people and good things will happen to you." Seems pretty simple and idealistic, but it always works out if you approach each and every day this way.

So my advise to many of the wonderful people I come in contact with each and every day. Do something, connect with people, add value, make a difference and always put them first. 

Enjoy the journey of what you do.

From a buyers point of view

Can you imagine if we all went about our business as realtors without the slightest hint of a client  qualifying process? Suprisingly it may happen more often than you think.

I received an email from a buyer client of one of my realtors the other evening which went into great detail concerning his experience of trying to buy a home in today's market. He explained in two incidences he lost out on multiple offer situations with no regrets concerning the process. But his third experience was one which really set him off - understandably.

I wanted to share his frustration through his words:

"After two unsuccessful attempts of getting a house (first one sold for 101,000 over asking in bidding war of 9 people), and the other (sold for 105,000 over asking with 11 people in bidding war) - we found the 'dream home'.  ugly as sin with lots of reno needed, but steps to a desirable area. 

It was listed in November for 699,000 and sat there for 60 days (over priced).  Apparently they received three offers under asking and turned down all three. 

It was unlisted beginning of February and then put right back on again a few days later and now listed for $599,000.  That's when it got on my radar.

 

After checking it out and walking through it with my husband and 2 contractors we decided to put an offer on it.  Of course like the other properties we bid on, they were holding back offers.  So on Tuesday, we offered 625,000 (26k over new asking price), and there was only one other offer so we felt our chances were good.  The listing agent said the other offer was higher and we had a chance to lift our offer.  So we did.  We jumped it to our maximum budget amount of 650,000. 

Now it should be noted that beautiful houses in that area that are detached (this is semi) with 4 parking spaces (this has zero) and with larger lots have sold for 700k, so this was clearly not at that level at all. 

Instead of countering either of us - they flat out said no to our best offer and the other one.  After sitting on it over night, we contacted family and were able to get a personal loan from them to beef up our price!  

We now offered 680,000 PLUS as before, ZERO conditions AND CLOSING in 2 weeks which is what they wanted!!!!  This was offered to them yesterday and we gave them until 3pm today to decide.

 

The listing agent said there was another 2 offers today (I frankly think she was lying as she CLEARLY wanted more money as she told our agent to ask us to bump it up!  We were completely maxed out so that was not happening).  At 3pm today we had to call them and guess what?????  The daughter (co-signer with dad) said she doesn't want to sell it anymore and wants to keep it!!  We're then told they will go home for a 'pow-wow' and decide what to do. 

As if that's not enough, NOW the news changes.  We find out that they have taken the house OFF the market, and are RE-LISTING it TOMORROW for $704,000!!!!!!!!!!!!

I am so outraged, I can't even believe it.  These people are crazy and in my opinion their listing agent is too for not guiding them better or informing them on what their house is really worth.  How can she let them do this?  It is clearly way over-priced and the owners clearly have no clue what their house is actually worth."

I feel sorry for clients in the marketplace when they are faced with dealing with buyers or sellers who haven't been qualified by their realtors. It is a big waste of time for so many people and as unprofessional as it gets. 

Realtors need to step up their professionalism.

How we are is reflected in what we are

If there is one way of being in 2013 which I wish upon each and every realtor it would be to focus on the actions rather than the results. I certainly don't advocate not having dreams or goals, but sometimes we forget about the day in and day out work required to get us to where we desire to be.

A way of being will drive us to what we really want. How we are is reflected in what we are.

How do we go about achieving what we want? What are the strategies involved?

Acknowledge where you are today and visualize where and what you want to achieve. Understanding the connection between these two elements are the important factors in growing. Between who and what we are and who and what we want to be sits the important stuff. Thousands and thousands of block building exercises put together to get us to where we want to be.

What we want and who we want to become begins with daily block building exercises. Focus on the actions, clearly and results will flow.

I have found we are in a hurry to be in a hurry.

What matters most is the pause between stimulus and response. Taking time for wise insight before pushing forward is crucial.

Take a deep breath, ask yourself if what you are contemplating is wise and good for your client (substitute self, family, friends..)

It's very often a short pause which makes all the difference to an unnecessary reaction.