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Posts tagged ‘multiple offers’

5
May

WTH!?! Your Client Walked Away Over That?!?!

broken microvaveI’m trying to be polite here. The “WTH” stands for ‘What the heck”. A few weeks ago at our Mastermind session we talked about how an agent lost a deal over a relatively small item. In this case it was a $500 Ikea cabinet. As soon as that story came out others piped in about some of their lost deals too. It was surprising to see what buyers and sellers would walk away from. I put it out to my Facebook friends and got some wild responses.

One person lost a deal over a pool table when the seller was moving out of province anyhow. Another lost over a broken snow blower. Apparently the seller promised it to a nephew and buyer walked without it. Other inconsequential items included a fridge, a $100 microwave, a bookshelf, drapes and a flowering shrub in the garden. Of course it isn’t always about possessions. Sometimes it’s a technicality. I heard from one friend who had a deal fall apart because the age of the home was reported as 14 years old when it was actually 18 years old, while another deal died over a 6 month discrepancy in the age of the furnace. Another fell apart when the seller signed back an offer to close on the same date that was the anniversary of a death of a family member and was taken as a sign that this “wasn’t meant to be”.

Often the argument is just an ego thing where the buyer and seller just don’t like each other and dig their heels in but other times it is the telltale sign of something larger. Our job is diffuse the anger and turn it into a positive. Here is my example; Once I went on a listing presentation on a condo. The exact same unit on the floor directly below sold for $365k. I suggested to the seller that if we listed at $369k we might do a little better (being one floor up). The owner was insistent on listing at $379k so I thought, sure why not. It’s not wildly off base. After a few weeks we got an offer for $375k so being already $10k ahead I pressed my seller to accept. She wouldn’t. Insisted on the full $379k. We couldn’t make the deal work and the seller walked. So clearly my seller lost on a great opportunity….or did she? About a month later the seller listed with someone else at $379k and the condo sold way over in multiple offers. In effect, it turns out the original buyer lost. There is a lesson in here somewhere.

Clearly buying or selling a home is an emotional experience. Both sellers and buyers think they hold all the cards. Getting them together is the real trick. If you hit this critical impasse the first thing to do is isolate it. Is this a buyer getting cold feet or a seller who’s just not ready to let go? Knowing the true motivation will help resolve the issues. Sometimes however, people are just stubborn jerks. Other times you step up and buy them a new microwave. In the end, the buyer and the seller just want to know that someone cares. Finally, I heard from one friend who tells it like it is. His client was his wife. Many years ago she dug her heels in when there was only a $200 difference between her and the seller. The agent husband managed to get the deal together and it has been their matrimonial house for 20 years. He loves to tell the story about how she almost let the deal die over $200. Hilarious.

mark mclean is the Broker/Manager at the Bosley Real Estate Queen St W office and President-Elect for the Toronto Real Estate Board. The opinions expressed here do not reflect the opinions of TREB or Bosley RE.

26
Jan

List High To Double End? That’s An Interesting Strategy.

stubborn
Let me first say right off the bat, that I have no way of knowing if this was the intended strategy, but in Mastermind last week we heard from an agent who showed a house that, by his own estimation, was a bit over-priced. His clients really liked it but they were $50k apart. The listing agent was quite adamant about the price and said that the owner had no interest in negotiating. Our agent said his clients were prepared to play the waiting game. Give it a month, the home was sure to get reduced. But than it sold…the listing agent double ended it….at a price closer to where my agent’s clients were thinking.

The story highlighted our discussion on pricing to get listings. It planted a seed in our minds that maybe, just maybe, an agent would give a price that was on the higher side of the CMA scale in order to get the listing. Well certainly that is well within the realm of possibilities. I mean if you bring in three agents to price your house, and one gives you a price $50K more than the other two, wouldn’t you at least consider going with the higher number? It’s called buying the listing. And while it’s probably not the best marketing strategy, it does put your face on a sign. Of course the other side of the story is that the owner has unrealistic expectations but an agent takes the listing anyway. There are enough stories out there about walking away from overpriced homes but that is probably a discussion for another day.

Then the penny dropped. What if the intent was to eliminate all other buyer agents and then just wait for the call? You know…the one from the person who saw it on Realtor.ca and who’s plan is to only work with the listing agent to score a better deal? Again, I’m thinking to myself, “no, it can’t be. It’s way to risky”. But here’s the thing. There are lots of people out there who believe that working with the listing agent is the best way to win a listing in multiple offers AND get the home at the best price. So I suppose it is conceivable. Sometimes agents agree to drop commissions if they double end (bring in their own buyer) but it is a dangerous tactic for ANY realtor. So many things can go wrong. At the end of the day, representing two people (a buyer and a seller) is actually double the work. Everyone should know that going in.

I still believe that pricing is, in many ways, an art. It’s not just looking at what the neighbour’s house sold for (although that factors into it). There are hundreds of minute details that determine price. It’s something that can’t be learned in a day. My advice…stay on top of the market, wow Seller’s with your knowledge, marketing genius, and sales prowess.

mark mclean is the Broker/Manager at the Bosley Real Estate Queen St W office and President-Elect for the Toronto Real Estate Board. The opinions expressed here do not reflect the opinions of TREB or Bosley RE.

5
Jan

The RealtyLab Top Five Posts of 2014

top 5 RL 2014Happy New Year everyone. I hope that you are as excited as I am to start 2015 off with a bang. I find myself in such a great place these days. In 2014 I ran 1300 kilometres including two half-marathons, and was elected to President Elect of Toronto Real Estate Board. In addition I took on the position of Creative Director of Bosley Real Estate and grew my office significantly. All and all, I would put 2014 in the “win” category. We will just have to wait to see how 2015 unfolds, but I have already laid out my goals, although they are more like hopes, dreams and aspirations.
With all the other “stuff” that I was doing, my blog took a bit of a beating. While I actually collected a few more followers last year, I recorded fewer views because I was writing less. Finding time is increasingly becoming a challenge. Still and all, I had a couple of successes, so without further ado, I present the top five posts of 2014.

5. In this post I posed a simple question. Would our lives as realtors be easier if the Seller paid the listing agent and the buyer paid the buyer’s agent. Kind of an interesting theory once you work out how to roll the buyer agent’s commission into the purchase price. it is certainly one revolving topic around our office.

4. Nearly a year ago we had an office meeting where we discussed the pain of losing a listing presentation. What emerged was a discussion on removing all the variables from the equation. Being prepared seemed to be the most important point of the exercise, but the office got a lot out of this shared experience.

3. No other post received as much discussion. It revolved around the multiple offer scenarios. In this case we played out a fake multiple offer where the listing agent held back the highest offer but then made counter offers to each of the lowest offers. Confusing? Only a lot. At the end of the day, this type of negotiating required nerves of steel. The ultimate response was just to set the ground rules early and negotiate in good faith.

2. Back in November 2013 I was lucky enough to attend the National Association of Realtor’s Convention in San Francisco. Although the conference has a distinctly U.S. feel, every Realtor should endeavour to attend one NAR in their lifetime. I made a ton of notes but it took me a few months to actually blog about predictive marketing. In a nut shell, predictive marketing was done by a company that could analyze a series of seller events to predict the likelihood of them selling their home. It’s not as crazy as it seems.

1. And, the number one post of 2014 was a story I wrote about the return of the real estate brand. In this early entry I theorized that commission was no longer a competitive advantage for Realtors entering the business. Today’s Realtors need to perform above and beyond the general real estate population if they were to survive and given the enormity of that task, a newer agent might want to consider working with a brand that did a lot of the heavy lifting.

So there you have it. RealtyLab’s top 5 blog posts of 2014. I’m looking forward to breaking new ground in 2015 and hope that you will check in to see what I will write about in 2015.

mark mclean is the Broker/Manager at the Bosley Real Estate Queen St W office and President-Elect for the Toronto Real Estate Board. The opinions expressed here do not reflect the opinions of TREB or Bosley RE.

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