Mona's Real Estate Matters and a Myriad of Other Conversations: Disrespectful Offers Never Work - Gimme Shelter, Monday Melodies

Disrespectful Offers Never Work - Gimme Shelter, Monday Melodies

Our jobs as real estate agents is to try and keep the situation under control and emotions out of the negotiations so that the parties can work towards a harmonious conclusion.  Usually that is a sound strategy and works great. Well, it works great as long as both buyer and seller are interested in a "fair market" value outcome for both sides.

The strategy doesn't work so well however if one side or the other is either a "winner takes all" personality or if the buyer's agent has allowed the buyers to look at properties priced above their approved range in the misguided belief that sellers are still willing to consider offers 30-40% below list price.  Those buyers and their agents are in for a long and disappointing ride.

At least that's the case here in Western North Carolina.  Unless a property is brutally blemished, it has been a few years since we've seen evidence of properties going for sale at such bargain basement prices.  More and more often, properties are getting full price or close to that if the sellers' agent guided them right in the beginning.  It has also been quite some time since the norm in pricing was unrealistically high. (although a few of those do make it onto the market)

It is all about setting reasonable expectations in the beginning with both buyers and sellers.  We as agents have this law that we must work under stating that we must present all offers.  Okay, we can do that.  If your buyer insists on offering 30-40% below the list price and adding to that a laundry list of concessions on the sellers' part, I sure hope you've prepared them for what could be my sellers' response.  My seller wants to sell this house and I want that for them.  Believe it or not, I'm even going to work really hard to keep the seller from ending the negotiations right then and there since we all know that often that first volley from the buyer is testing the water.

It's all about the tone of that first response from the seller.  If they respond with full price and no concessions, yep...you've made them mad...move on.  If they respond with a rejection and a suggestion that you try again, you have a chance to still negotiate a reasonable deal.  If you are lucky enough that the seller responds with a slight price reduction and an acceptance of a portion of the requested concessions...this could be the start of getting into a new home.  The buyer's next counter-offer will really set the stage for the possibility of reaching a mutually acceptable compromise.  If the buyer insists on staying in the farthest regions of imagination, this isn't going to be the house for them most likely.

Usually when this scenario happens, it turns out to be the buyers aren't financially qualified for a house in that particular price range.  The sad thing is that if their buyer's agent has encouraged looking in the out of reach price range, nothing in the buyers' own price range will be appealing to them.  Not only is this a sad, sad story all the way around but a tremendous waste of time for everyone concerned.

This behavior typically harms the buyer more than the seller.  More often than not, the buyer HAS to find a home...the seller already has a home. Looking for and buying a home is a lot of work...hard work.  I'll never understand why some buyers want to make it harder on themselves.

From the agent's point of view though, all I can say is "What are you thinking?".  Until there is a closing, all agents can expect is to spend money and time on a transaction.  Encouraging your buyer to look way above their means is a rookie mistake and we've all done it.  I haven't done it though since my first year in real estate when I realized everyone loses!

But hey, that was then and this is now.  I'm throwing off the frustration from last week, my seller is already over it and we're both ready to tackle the world with renewed vigor.  This is the song to get us moving, "Gimme Shelter" by the Rolling Stones.  Bless their hearts, even when they were young they already looked like seasoned firewood. LOL.

Have a great week!

 

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Comment balloon 9 commentsMona Gersky • August 17 2015 05:31AM

Comments

THIS IS THE BLOG OF THE MONTH!! in my book at least... great content! well put..great inssight  and  F A I R !!! fair is the word here!

Posted by Mike Rock, Granite Bay Luxury New Construction...For Less (Complete Design) over 2 years ago

btw... sellers can instruct the agent to not inform them of any offer below xxx$ ... dont bring me anything below 300k.  actually thats a very strong message to the buyer. buyers agent: Sorry mr. Cheapskate, the sellers agent is under instructions not to present this..imagine the look on the buyers face when buyers agent relays this lol. also... i feel sorry (for a min) when the buyers agent has a handful for a client like this one.

Posted by Mike Rock, Granite Bay Luxury New Construction...For Less (Complete Design) over 2 years ago

Good Monday morning Mona Gersky -

It looks like Mike has covered this one well. 

Posted by John McCormack, AlbuquerqueHomes.com, Albuquerque Homes Realty (Albuquerque Homes Realty * www.AlbuquerqueHomes.com) over 2 years ago

Hello Mona,  What a great way to start my Mondays with the Rolling Stones.  Yes!

Posted by Will Hamm, "Where There's a Will, There's a Way!" (Hamm Homes) over 2 years ago

Mona,

 

When offers are too low to counter I have had excellent success with the following strategy.

With the sellers permission I email the buyer’s agent that the seller appreciates the offer but the seller is looking for a buyer who understands the value of their property and truly wants to live there.

We don’t counter the price.

 

When, in effect, we tell the buyer that they can’t have the property it is amazing how often they come back with an offer that is higher than if we had countered.

Posted by David Gibson CNE, 719-304-4684 ~ Colorado Springs Relocation, Relo, Commercial, Luxury & Lifestyle, Residential (Colorado Real Estate Advisers LLC ) over 2 years ago

Mona agents that don't counsel their buyers to shop within their means (and have lender approval in hand) are doing nobody a favor. Such a waste of time. On occassion we've received low ball offers but most sellers will simply reject them and give the buyers (and their agent) an opportunity to re-write the offer at a fair price. That has worked but only if the buyer really wanted the home and figured out that low balling offers simply wouldn't fly.

Posted by Anna Banana Kruchten CRS,CRB, Arizona's Top Banana of Real Estate! (Phoenix Property Shoppe) over 2 years ago

I'm left to wonder "why" on many elements and steps within the process, Mona Gersky.  "Rookie" mistakes are made by professionals that don't conduct enough business to know, understand, react, and navigate the quickly changing elements within the modern transaction and mortgage process.  Clients need to do more homework prior to choosing their professionals ... and then listen to those professionals and follow their guidance.  That would help so many clients and their transactions immensely ... 

Gene

Posted by Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi, 708.921.6331 - 40+ yrs experience (NMLS #216987, IL Lic. 031.0006220, WI Licensed. APMC NMLS #175656) over 2 years ago

Hi Mona - If there is any possibility of a deal there, your approach is exactly how best to handle these offers. And Gimme Shelter has always been one of my favorites.

Keith Richards

Posted by Dick Greenberg, Northern Colorado Residential Real Estate (New Paradigm Partners LLC) over 2 years ago

Mona-Excellent post and it is too bad when this happens and being disrespectful in any situation is never a good thing.

Posted by Sharon Lee, Retired and loving life (Sharon Lee's Virtual Assistance) over 2 years ago

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