Happy Hump Day. I hope you are getting through it with flying colours. With this weather, what’s not to like? For us at Bosley Real Estate, Wednesdays are Mastermind Days. We believe in the power of inter-office discussions so much that we actually hold two per week, one Uptown and one Downtown. Great discussions every week, so if you missed today, you missed some great conversations follow-up discussions about Bully offers. So let’s get started.
If you are a buyer these days, chances are you are feeling the fatigue of the chase. It is getting tough out there and I have talked about some interesting ways buyers are trying to get any added advantage. This post will touch on one. One such advantage, potential as it may be, is to have your agent try to submit an offer ahead of the offer date. This is known as a Bully Offer. You have to know your stuff to either make a Bully Offer or to present one to your clients. The discussion at Mastermind today centred around whether or not you disclose the contents of the offer before presenting. Lets say an agent wishes to submit a Bully Offer. The listing agent asks what the terms are but the buying agent doesn’t want to say. We have been taught not to talk price before the presentation but Bullys are a little different. Our group agreed that they would communicate the details of the offer to the client before presentation. Here’s the thinking on that. If I have a listing and you call me with a Bully Offer, I want to know that it is worth my client’s time. If the house is $499k and your Bully is for $640K I will go to the end of the Earth to get this information to my clients. For a Bully of $520K I will still try to find them but I probably won’t recommend that they take the time to look at it. We also talked about agents who say they can’t get in touch with their clients. Do you actually expect me to believe that your clients cannot be reached? Today? Seriously? No phone? Seriously? That just doesn’t fly (unless they are actually flying, but most likely they will touch down in the next few hours). So when they say they can’t be reached, what the agent is really saying is “I don’t really want to work tonight to get the best price for my client”.
The take away on this is pretty simple and goes back to something that I focus much of my energy on. Give your clients all the possible scenarios when you list their home. Let them know that the house might not sell on offer day, it might sell in multiple offers, or they might get a Bully offer. Outline the disadvantages and advantages of each situation and let them decide what to do. If the clients categorically do not want to look at offers BEFORE the date set for offers, have them put it on paper. Scan it and send it to your phone so that you can forward it to potential Bully Offer agents. Simple. Yes, it is a lot more work, but you need to be prepared for any eventuality.
Happy Tuesday. I’m not sure how I feel about being back to work after a long weekend. It seems like there is a lot more to do when I come back from an extended weekend. Today was no exception as this afternoon I headed to the Bosley Real Estate HQ for our last Bosley U class (our in-house new agent training program).
Today, as part of our discussion on offers, we spent some time on the registration process. The question came up about when to register an offer. One school of thought is to register at the last-minute, come in to table with a strong offer and a short irrevocable time. This is very much a bully tactic that has worked over and over again, however if not played right, can offend more often than be successful.
The other theory is to register early. Registering early has a number of benefits. First off it has the potential of scaring off any potential buyers who are afraid of multiple offers, but more importantly, a registered offer keeps you in the know because a listing agent must contact you if he receives a bully offer or any other change to the listing. Here’s an interesting story that may illustrate how not registering can cost you big time. Agent Smith has a client who is desperate to buy a house on Major Street. After many months of looking, a perfect house comes on the market through another listing company. Agent Smith is unavailable to show the house so he tells his client to pop into the open house on the weekend. The client falls in love with the house and informs Agent Smith to prepare an offer for presentation on offer night which is in three days. A couple of days before offer night Agent Smith is checking the computer and realizes that the house on Major is listed as sold. He calls the listing agent who tells him that they received a bully offer yesterday. The listing agent tells Smith that he changed the listing to remove the offer date and called everyone who showed the property as a courtesy and managed to drum up one additional offer. Smith now has the dubious honour of telling his client that his dream house was sold from underneath him.
What went wrong? Agent Smith should have done a few things. First, even though he wasn’t at the showing, he could have called the listing agent and made him aware that his clients were coming. Next he should have called the listing agent as soon as he knew his client was interested and asked to be kept in the loop. At the very least Smith probably should have checked the listing a couple of times a day OR could have booked a showing for the morning of offer day because he would be in the listing agency’s computer. Better yet, he should have prepared an offer, even basic in nature, and had his client sign it so he could officially register.
What about you? Do you register early or swoop in last minute with a good offer and short irrevocable? Or does each case call for a different tactic?