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Posts from the ‘Mastermind’ Category

20
Dec

Agent Wants to Know If You Had Any Offers On Your Listing?

whisperingHow much are you willing to say about a previously turned down offer on one of your listings? This was the topic of last week’s Mastermind meeting at our office and it created considerable debate. Here is the scenario…. You have a listing that has been around for nearly two months. In that time you have entertained two offers. The first one came on offer night but it was much lower than the Seller’s expectations. Just after the third week, you terminated the listing and relisted it at a higher price. (This tactic has limited success but, depending on the time of year and a bunch of other factors, can help sell the property). Within days you received your second offer which was lower that the first offer. Now you are cruising in on month two. You are still getting lots of showings and agents are asking questions…why hasn’t it sold? have you been getting interest? AND… have you received any offers so far?

We had a rather entertaining debate at the office and on the local real estate Facebook group. One thread suggested that the listing agent has a duty, according to REBBA 2002, to say absolutely nothing. I find the logic incorrect on this. While our duty is to inform agents about the number of competing offers we are bound to keep the contents of competing offers confidential, but once an offer is rejected and expired, is it still our responsibility to keep the contents private? If you agree with that logic than you would have to agree that an expired offer is still, technically, an offer. I don’t believe that is the case. Plus I find it hard to imagine an agent responding to my question about other offers by saying “I can’t tell you”. In my mind that is a loaded response that immediately puts any possibility of a new offer off the table.

Another thread suggested that it was okay to divulge certain information about expired offers, such as price and terms (like conditions or closing dates) provided the Seller has given his permission. Generally this is not a bad answer but I don’t think it ticks all the boxes either. Essentially it suggests that the Seller is directing the listing agent to say something like “the Seller is hoping to get $1M and the last offer was only for $850k”. Clearly the agent is acting on the direction of the Seller but is he advancing his listing in any way?

While I recognize that we work under a strict code of ethics and the law, I believe there are a number of responses that work without implicating your Seller in a position of greed or being unrealistic. “We had two offers. One came really quickly and wasn’t what we were looking for, and the other had some conditions that the Seller was uneasy with” or how about “we were back and forth but in the end the parties just couldn’t come to an agreement”. and end the conversation with “we are still getting plenty of showings and traffic is high at open houses”. No lies, no disparaging comments. Simple truths. What you don’t want to say are things like “The offers didn’t meet my clients expectations” or “both offers were below market value” or “my clients expectations are too high” or ” my client is looking for $X (even if directed by your client to say so)”.

I am reminded about the saying that a good agent will say more by not saying. That’s a valuable lesson to be learned. I believe it is alright to say that you had two offers, but, if pressed about the contents it is okay to be vague. Don’t fall into the trap of saying too much especially if you are asked about price. Simply direct the potential agent to do their own research on comparable solds in the area and let them determine value. 20 years ago our market was much different. Properties stayed on the market for months so naturally agents would ask about previous offers and yes, we would speak the truth. There was true kitchen table negotiating with candid discussions while not giving away too many details. My advise, strike a balance between saying something and not saying anything. That may sound strange but the reality is that human nature should be your guide. People want what others have or want. If you say that there has been interest and offers then potential buyers want in on that action.

Mark McLean is the Broker/Manager at the Bosley Real Estate Queen St W office, the Immediate Past President the Toronto Real Estate Board and a director at the Ontario Real estate Association . The opinions expressed here do not reflect the opinions of TREB, OREA or Bosley RE

30
Nov

Commission Discussion 101

commissionGenerally I have done my best to stay away from the great commission debate. In a lot of ways its kind of a moot point. If you are a seller you can pretty much pay whatever you want. You can even pay nothing and sell your home yourself. But a few weeks ago I was lucky enough to have one of our top agents at my Mastermind session and he made a point that has really stuck with me. He said that in his experience 25% of the people he meets never talk about commission. They completely understand the value he brings to the table and are willing to pay for his insights, experience and market understanding. Then there is another 25% who see little value in his offering. These people firmly believe that mls is the only thing they need to get a home sold and will list with the person who will do it for the lowest commission. Usually they are disappointed in the outcome and statistics have proven that on average, if they do sell the home themselves, they receive 13% less than they could have by using a Realtor. Then there’s the other 50%. That middle group that is essentially your battleground. These are the people who you need to prove your value to.
So, what is your value proposition? We hear about it a lot but if you were put on the spot, could you adequately explain why you deserve the commission you want? I’ve been at it long enough to know what my value is. I have practised it over and over and over again. I know how to deliver it in a way that doesn’t warrant a response. There is no discussion, no debate, no counter proposal. It’s on the table. Lets move on and sign up this listing. Of course you can get easily pulled back into the debate but you have to be resolute in the discussion. Of course you won’t win them all especially when a potential seller says that another agent will list their house for less and supply the same level of service. When that happens my response goes something like this;
“I appreciate the choices that exist for you, and across every good or service that exists there are several price points. You can buy a $20k car or a $50k car. Both will get you from A to B. But the cheaper model may take more time. It may choose a route that is bumpy or unpaved, the radio only gets one AM channel and the seats are uncomfortable. Yes, you arrive at your destination but the experience in getting there was unpleasant. Like the better car, the experience you get with me will be unparalleled. I know where I am going and I know how to get there based on my many years of experience. My understanding of the conditions in the road play an important role in determining strategy for arriving at our destination quickly and successfully. In addition, my service has no chance of a breakdown. My team is highly tuned and able to anticipate and solve every problem and the car that you drive will look its very best throughout the journey”.
The debate is often easier when the difference in commission rates is larger but stories and comparisons always work the best and I believe it is fair to say that every person who opted for the cheaper item or service, whether it be a car or computer, lawn care or renovator was disappointed in their decision.
Mark McLean is the Broker/Manager at the Bosley Real Estate Queen St W office, the Immediate Past President the Toronto Real Estate Board and a director at the Ontario Real estate Association . The opinions expressed here do not reflect the opinions of TREB, OREA or Bosley RE

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.

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