Friday, August 8, 2008
Real Estate Listing Agents and What Not To Do
I recently was working as a buyers agent showing property in Franklin Massachusetts. I have been working with this particular buyer for a while as I sold their condo at Indianbrook in Hopkinton back in the winter. They have been renting since then, waiting for a good home that fits their needs to come on the market.
Well I found these buyers a home and wanted to explain the listing agents mistake in negotiations.
The buyers looked at a number of homes and found one that matched their criteria and decided to make an offer. As Murphy's law goes, when I called the listing agent to let him know that I would be submitting an offer he informed me that there was already another offer on the table that he had been negotiating for the past two days. He told me they were close to putting it together so I needed to act right away.
I explained the situation to my buyers and told them that if they really wanted to get this home they would probably need to start a little higher than they had planned to. This particular home had value range pricing of $489,900-$539,900. Value range pricing is a range in which the seller will consider offers. I am not a big fan of this marketing concept but won't get into those details here.
We submitted an offer for $500,000. The listing agent told me he would speak with the seller about the offer and get back to me. The agent called me back later in the day and asked me if my clients were 1st time buyers. I explained to the agent that they had sold their condo in Hopkinton and had been renting. He wanted to make sure that the buyers were not going to "nickel and dime" the sellers after the home inspection. He futher went on to say the "offers were very close" and the seller was weighing everything carefully.
This was the agents 1st mistake. As a listing agent, you never ever reveal any information about a competing offer on a property. The fact I knew the offers were close would completely change our negotiating strategy. Fortunately for the buyer and myself the agent made mistake #2 which was even bigger.
He called back and said the seller accepted our offer! What? Did I hear that correctly? No counter offer?
Here is the big mistake - We were in a multiple offer situation. The correct course of action on the listing brokers part would have been to tell me he was giving both buyers the opportunity to come back with their best offer. This did not happen and by doing so the listing agent cost his seller client about $10,000.
My buyers fully expected to come up at least 5-10k from their initial offer of $500,000. It is hard to imagine what the listing broker was telling the seller behind the scenes but it could not have been good advice. My buyers really wanted this home and in the end got it for less than they expected to because of the agents careless actions.
A good seller's agent will always be looking out for the best interest of their clients. Of course a large part of that is getting them the most money possible!
Although I will work with some buyers, most of my work is with sellers. I enjoy the marketing aspect of being a listing broker. This is done in large part through the internet and creating an "online presence for my seller clients.