Going Under Contract: The Negotiations
One of the most important things in negotiations is having control over the outcome. Remember that you are not negotiating with the listing agent but with the seller. Because of the different traditions and guidelines in various parts of North America and the ease of contract via email, the tradition of presenting an offer directly to the seller has been nearly forgotten.
Through the years, my offers were chosen above the competition time and again, mostly because I was presenting directly to the seller. The advantages of presenting directly to the seller are as follows:
The seller perceives the seriousness of the offer.
- The selling agent or buyer’s representative will be able to determine the seller’s “hot buttons,” which can make or break the contract.
- The listing agent will not be able to offer incorrect assumptions/suggestions that you, as the buyer’s representative, cannot counter.
- You will be able to put the seller’s needs in order of importance.
- You may be able to receive a faster response to your offer.
- The listing agent will find it harder to play favorites with buyers or other cooperative agents.
- You, as the buyer’s representative, will be able to “sell” the positive aspects of the offer more convincingly.
- You, as the buyer’s representative, will be able to paint an emotionally charged picture for the buyer’s benefit.
- The seller may like you more than the listing agent will.
- Since you as the buyer’s agent have control over time regarding the eventual signature of an acceptance or counter-offer, you can make the buyers available for a fast confirmation.
This is certainly not an exhaustive list of the benefits of representing your buyer’s needs directly to the seller. This will eventually solve many of the problems that arise when a listing agent improperly presents your offer with biases or takes too much time, which can result in increases of existing offers from other buyer’s agents or additional offers coming in from new interests.
As good as this sounds in theory, many of my coaching clients and students still find it difficult to present an offer directly to the seller when the listing agent requests that it be emailed, faxed, or dropped off for his/her own presentation alone with the seller.
As the buyer’s representative, you should explain the benefits of making a face-to-face seller presentation when you are consulting your buyer. Explain to the buyer that you will do a better job in presenting his/her wishes, needs, hopes, wants, and dreams to the seller than the listing agent; also explain that you will be eliminating some of the selfish biases that a listing agent may have. Get the buyer on your side.
After your presentation to the buyer, create a document that reads something like this: “We, (insert buyer’s names), have requested that Walter S. Sanford present our offer directly to the seller for their acceptance. We believe the only person who understands our situation is Mr. Sanford. Please allow our offer to be presented directly to the seller by Walter S. Sanford.” Have this request signed by the buyer(s).
When you explain to the listing agent that you have an offer to present and an argument arises over the presentation, you could utilize the above request from the buyer. I have gone so far as to call the listing agent’s broker to nicely explain my buyer’s wishes. I am not saying that I always won a direct presentation to the seller, but more times than not, I did.
Sometimes, a direct presentation was not possible because the seller was out of town, so I would solve this problem with a phone conference with all parties. I was not successful all the time, but when I was, I was able to keep the buyer who was represented by the listing agent at bay. I was then able to find out what the seller’s hot buttons were to suggest a better counter-offer that could then be signed by my waiting buyers in the car.
If you do not implement this system, you will find that your success ratio is lower. There is too much opportunity for a listing agent to sway a seller to their buyer client’s way of thinking for a double-ended transaction. Also, a cooperative agent in a listing agent’s office could receive preferential treatment. Furthermore, some listing agents believe it is their job to negotiate for the sake of negotiating and to try to squeeze the last dollar out of the transaction when the seller simply wants a closed transaction.
Please be firmer in representing your buyer’s interests directly to the seller. You will find that your success ratio will increase and it is less likely that you will have to go back the next day to find a new home for your disappointed buyer. Remember, showing properties may be one of the highest overhead activities in real estate.
Visit us at www.waltersanford.com or call us at 800.792.5837 for more details on coaching, speaking, or training materials