No question that frustration levels are high these days. The market is still very hot and competition on offer night is as strong as it has ever been. They used to say that you had to make fifty significant real estate related conversations to get one deal. Today that adage has been tweaked to say that you need to make one hundred connections for the CHANCE to get a deal.
Part of my job as manager is to help agents figure out strategies on winning BEFORE they present. I decided to use this topic as a focus for my Tuesday meeting. Having lots of brains in the room allowed us to work together to come up with ideas on how to improve your chances. Frankly some of them seem very obvious but you would be surprised how often even the simplest idea can lead to victory.
There are the basic winning strategies. Have a well prepared and clean offer, include a large deposit in form of a bank draft, and have your client nearby. These three items should be enough to get you across the finish line. But there are some that may be less obvious. The truth is that it is not always the person with the biggest bag of money who gets the house. On the contrary. A solid offer, with better terms and conditions can beat a higher price more often than you think.
Like a good detective, its important to find out as much as you possibly can about who the seller is, how experienced is their agent, who are you competing with. The answers to this questions may help you in determining your strategy and potential offering price. Also it is important to present well. That means not just looking good, but making sure names are correctly spelled on the offer and that you have multiple copies for each seller even if the eventual offer will be signed digitally. It seems like a silly thing to do but before you head to the offer table ask the listing agent who you will be presenting to. If it is a family of five making decisions for an estate, bring enough copies for everyone in the room.
Ultimately the perfect presentation should include building rapport not just with the listing agent but with the seller. Being understanding yet firm with a sharp mind on the market and comparable sold properties in the neighbourhood will endure you as a professional.
Another helpful hint. After the offer is typed, find yourself a quiet room with no distractions and go over the entire offer line by line. There is nothing worse that wrong clauses, inclusions or names. Many years ago I received an offer on a property from an agent who was obviously in a rush. In an effort to save time, this agent cut and pasted clauses from another offer. When it arrived to me it had the wrong address and seller’s name on one of the schedules, the written deposit amount didn’t match the numeric amount nor did it match the amount on the cheque. Sloppy mistakes like that can cost you a deal very easily and there is nothing worse that having to go back to your buyer and explain why their higher offer was not accepted.
As I said earlier, these tips won’t guarantee you will win but they will increase your odds dramatically. Have any other tips that have worked for you? I would love to hear them. Drop me note.
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
At a recent mastermind session our group talked about the frustrations we often feel when we are at the offer table. There are many opportunities for the evening to go wrong because the process is secretive and often skewed to favour the listing agent and there is always a chance that we, acting as a buying agent, will have to go back to the buyer and let them know that they didn’t get the house. Sure, it could be as simple as price, but as you know, there are many chances for error, incompetence or fraud.
So in our meeting, we wondered if there were a way to sell a home with complete transparency. Could we make the process so fair that everyone who offered and lost could walk away knowing they were given every opportunity to buy the house? We worked through several possibilities, talked through potential land mines, and played devil’s advocate on a number of different scenarios.
One of our solutions could be best demonstrated by this example. You’ve listed a property for $699k and have received 5 offers. You’ve told all the participating agents that you will be running the process as follows…after everyone presents you are going to meet with the agents collectively and disclose only the price of the highest bid. At that point you will give the agents 1/2 hour to speak to their clients and return, if they so wish, to participate in the second round. Four agents return for the second round and present their offers again and once more you meet with them and announce the winning bid. This process continues until there is only one agent standing. In many ways it mirrors an auction process but requires the skill of a buyer agent in negotiating fairly with the seller and the seller agent. All agents are present and counted for so there is no chance that there are phantom offers. At no time is it made clear which agent has the leading bid, nor does that agent know how close the other offers are. The winning offer is successful based on its merit (and or price) and there is no opportunity for shenanigans. In the event of an offer from the listing agent, the manager or someone else from the office manages the process and the listing agent is unaware of the other offers.
From the surface the idea seems to have merit until you dive into REBBA 2002, which is the Act that we must follow (in essence, our play book). In it, there is expressed direction that an agent does not have the right to disclose any terms of an offer even if directed to by the client seller. So if you liked the idea of a completely transparent offer night, don’t hold your breath.
It occurred to me that rules and regulations are brought about to govern the way business is conducted TODAY. When the way business is conducted changes, the rules (or laws) get updated. We see that happening today with the Condominium Act which was first enacted in 1998. Certainly a lot has happened in that world over the past 16 years and even with tweets and updates, one wonders if an act that old holds the answers to an ever-growing segment of the real estate market. Like the Condominium Act, I wonder if, when first established, REBBA 2002 could have ever imagined a market as strong and unrelenting, or something as strange (back then) as bully offers.
At the end of the day, the only answer is hard work. As the listing agent, our job is to run offer night in the most professional way which, among other things, means refusing to represent your own buyer. We need to keep the lines of communication open with every agent bringing an offer, explain the process that will steer the presentations and stick to them religiously, and above all be fair and honest to everyone involved in the transaction. For buyer agents, come prepared with your best offer, have a good deposit, and make sure your buyers are nearby. Keeping simple rules will make the transaction go smoothly, eliminate confusion, and keep everyone out of court.
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.
Last week I attended the National Association of Realtors (NAR) Mid Year Legislative Assembly in Washington as a representative of the Toronto Real Estate Board. Unlike the NAR Fall event, this one is a little more policy heavy with more emphasis on politics, lobbying and government relations. Still, it was a worthwhile event and I attended some very good break out sessions. One in particular was about risk. I believe real estate agents of all levels and skill and experience encounter daily challenges about their fiduciary roles to their clients.This session used real world examples to illustrate some of the reasons why we get sued or taken to RECO.
Here is an interesting question that was posed at the meeting; Who’s making more mistakes, the guy doing 1 or 2 deals a year or the guy doing 1 or 2 a week? That’s a tough one. On one hand you could argue that the guy who does one deal a year takes lots of time to make it right while the guy doing lots of deals is more susceptible to sloppiness. Then again, the once-a-year guy may have a lesser understanding of the process and make fundamental (read..bigger) mistakes while the prolific deal maker is so good at his job that nothing gets forgotten. What do you think?
Well, the idea of risk got me thinking, so my first morning meeting back in Toronto I made my topic all about risk. I asked the group to list areas where risk is more likely. In less than 30 minutes we came up with 48 possible ways you can open yourself to liability and avoid risk. I’m sure we could find another hundred if time permitted. Have a look at the list. Is there anything you would add?
At the core of this discussion is the philosophy that the real estate industry must centre on the needs of the client rather than the broker or the agent. When the needs of the client are put first, the risk diminishes. When agents function at the top-level of service and offer a standard level of service EVERYTIME, fewer mistakes happen.
With new agents getting into the business daily we should be concerned about competency levels. While education is good it does not prepare new agents for real life experiences. As I like to say, OREA teaches you the moves but it doesn’t teach you to dance. Only a handful of brokerages offer additional training. Are you at all worried? Recently I spoke to an experienced agent who prepares standard offers on her own properties, complete with all the right clauses, to give to agents who are preparing offers. At first it seemed a little crazy, after all, why is she preparing offers for other agents? Simply put, she believes that there are lots of qualified buyers out there who may lose a great house because their agent isn’t as experienced. By preparing an offer herself she is reducing the risk which ultimately is better business.
Interesting fact; regardless of a deal happening, if you provide exceptional service, and put the needs of the client first, both you and your client will feel great. I believe competent agents do more deals. Their listings sell, their buyers buy, their deals hold together, therefore creating less risk and less liability. Food for thought…