Seller Tip: Don’t Try This at Home

Or What a Seller Did to Infuriate Me and cut off his own nose to spite his face.  My investor buyers, who already had a renter lined up, wanted to see a cute house set atop a hill near their home.  The house was newer, had a 2 car garage, large yard, larger bedrooms and walk-in closet in the master and looked like a great potential investment.  We submitted a complete package, made a cash offer to close in 10 days, and hoped for the best. 

We were overjoyed when the listing agent called with a counter offer that was reasonable and my clients accepted.  Before the paperwork could exchange hands, the listing agent called back to say there were now multiple offers on the table and that my clients should come back with their highest and best, after our verbal offer had been accepted!  Well imagine my surprise when the listing agent argued there was no contract to honor!  She had not gotten the counter offer signed by her seller before presenting it, and in fact, it was true – there was no contract to honor. 

The North Carolina Real Estate Commission states a broker can only give Notice of Acceptance; the broker can’t bind a client to a contract that the client hasn’t signed.  A Broker will create a binding contract by notifying the party making the offer/counter-offer, or that party’s Broker, that the Broker has in their possession the offer signed & accepted by their client as written;  A call to the Legal Department that day revealed that although what the agent did was not illegal, it was, however, unethical.  

Much of real estate is transacted in good faith, and it’s common practice and legally binding to communicate acceptance by phone, email, fax, and mail.  In this case, the agent communicated acceptance of the counter offer without having the seller signed docs in hand.  The greedy seller then violated his word, and lured by the smell of money, accepted another offer described by the listing agent as ‘WAY WAY over the list price’ instead of signing what he’d agreed to.  The agent said the offer was so ridiculous that it probably wouldn’t work out, and that she’d call me if and when it went back on the market.  

My clients and I were angry and frustrated.    They went on the get another great property under contract.

Then, you guessed it.  The email arrived.  The buyers, who had their contract accepted on the basis of a cash purchase, couldn’t get a loan.  Poor buyer.  Poor seller.  My offer had gone in with a proof of funds letter; apparently, theirs did not.

My buyers are very happy with their new purchase, and we close Friday. 

There’s no way they’d have gone back to negotiate with the previous seller after what they’d experienced.  There was just too much risk with all the behind the scenes chain of events that must come together smoothly to close that the seller and listing agent couldn’t be trusted to perform. 

And the seller’s property is still on the market… and that smell of cold hard cash has long wafted away.

For an agent who does things the right way, and protects your best interests from contact to close, contact me by phone or text at 704.562.1030 For a property search to get you on your way to building your investor portfolio, visit TheSafariGroup.com and SEARCH Properties.

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Room for Negotiations

One of the most important rooms in your listing is room for negotiation.  It is critical in every market to set your list price accurately.  In any market, if your listing isn’t priced right, you price yourself out of showings.  Pricing with room for negotiations can be a dangerous practice and may sabotage your chances to make the sale.

Here’s where a trained and experienced broker is instrumental in getting the property priced right, not only to achieve vigorous showings, but also to elicit that all important high offer.  A skilled broker is trained by appraisers who are actively working in your market and who partner with lending institutions in providing their professional services to set market value once the property is under contract. 

Once your broker has researched your neighborhood’s recent sales of properties most similar to yours, several line-item adjustments will equalize the subject (your property) and the comparables (homes sold in the last 6 – 12 months in or near your neighborhood) for a suggested list price range.  Then the competition will be evaluated.  If new construction is in the area, the product, incentives, and desirability will also be considered.  Any home, in addition to yours, that would be included in a buyer’s tour must be carefully considered.

Once a range of value is determined using several calculations, it’s time to discuss price.  If your home is found to be a unique value, then its suggested list price would be on the upper range of calculated value.  This unique value may include condition, location, or the fact that there’s nothing like it available in your price range.  Here’s where sellers sometimes are tempted to become greedy. 

It’s just not worth the potential sabotage to your sale to price your property greater than ten percent above the suggested list price of your broker.  Buyers are out touring the listed homes and generally getting a better hands-on look at competing inventory than most sellers, and will see the inequity.  Most won’t make the offer even if they like the house.  What seller wants lots of showings, but no offer? What buyer wants to make an offer, only to hear “No?”

Take your broker’s advice in pricing your listing.  The result will be a quicker sale at a higher percentage of the list price.  Who wants the deal to fall apart when the appraisal is returned?

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I love what I do, I’m good at it, & I’d love to work with you! My personal best is 8th with foreclosure bid; we not only won (it was NOT more $), but listing agent complimented me on my complete package, & asked permission to use my secret weapon! 

My listing was on Google, first page, number three position, ‘above the fold’ within minutes of my blog post featuring it!

Chrystal is a REALTOR® and principal of The Safari Group, a local, homegrown real estate firm, specializing in all phases of the residential and small business real estate market, including New Construction, Finance, Marketing, Objection Handling, Relocation, Technology, Foreclosures, Short Sales, and Luxury Homes and GREEN Features.  Contact her at 704.562.1030 TXT/PH or Chrystal@TheSafariGroup.com