Frustration reigns today as an abundance of buyers chase too few homes for sale. It has become commonplace for buyers to make full price (or higher!) offers over and over again only to remain "home-less". There are some strategies buyers and their agents should consider in this pressurized market.

It all starts with a buyer-agent consultation. Call it a "wants-needs analysis and market review." Obviously, you want to qualify your buyers financially as well as determining their motivation, needs, and time frame. This is an ideal time to discus the home buying process-from home search to closing day.

On your agenda should be: Your role as agent and why loyalty is important, the fact that homes sell for market value, the offer, counter offer and multiple offers process and procedures. Why wait until you’re in the midst of chaos to explain the situation to the buyers? Future pace your buyers by explaining the process before it begins. You’ll build trust and confidence with your clients. Plus, they’ll know what to expect.

Strategies For Success

When your buyers have found their dream home, our role as agents is to get an acceptance, or at least minimize the need for a long-detailed counter offer. Start by filling out the purchase agreement properly with an attention to detail. Be precise, accurate and don’t overlook lines, spaces and clauses. They are there for a reason.

To really help, why not call the listing agent while you and your clients are drawing the offer? We all have cell phones today. Without breaching your agency relationships, you could discuss items such as closing and possession date, title and escrow company, home warranty company, time to present the offer and find out if there are any other offers in. This call will help minimize the need for a counter offer on the above items. Plus, right in front of your clients, you’ll find out if other buyers have put in offers. Your buyers may want to better their original offer on the spot. By hearing your conversation firsthand, your credibility level increases in the eyes of your buyers.

Contract Tips

Get a substantial deposit. It shows good faith and the seriousness of your buyer’s offer. Tighten the time frames. Sellers want to know when the events will happen and they want the peace of mind knowing that their home really is sold. For everyone’s peace of mind, use a local mortgage lender who works in your area, and has preapproved the buyers. If the sale is contingent upon the buyers obtaining a mortgage, fill in the mortgage clause with a realistic interest rate ceiling as rates change daily and often hourly. You don’t want to lose your sale in a rising market by putting today’s interest rate in the contract. Ask your buyers at what interest rate would they not want to proceed with the purchase. In other words, what is their threshold?

Most agents have their favorite title and escrow companies and endure needless counter offers and stress in negotiating which one to use. The title companies which serve our market all do a good job. Why not resolve the issue up front? I often wonder…do the clients really care or do they even know the difference in which title and escrow company will handle their sale? What will your clients think if they lose the sale because the agents couldn’t resolve which title company to use, and another offer comes in and gets accepted while you’re fighting over this issue?

The clauses dealing with liquidated damages and arbitration need to be addressed as either included or not included. If one party wants it and the other doesn’t, it needs to be resolved in a counter offer. Make sure both buyer and sellers are aware of the outcome when it is resolved.

The confirmation of agency clause needs to be filled out completely by the buyer’s agent-before the buyer signs the contract. As agent, you know who the other agency is and how they represent their client. So, don’t leave it blank-fill it in.

MLS rules permit the buyer’s agent to be present at the presentation of the offer to the listing agent and the sellers-unless the sellers, in writing, do not want the buyer’s agent there. It makes good business sense to employ this practice. The role of the buyer’s agent is to explain the buyer’s offer, their motivations, their financial qualification and to answer any questions the sellers and listing agent may have about the buyers and the offer. The buyer’s agent is not there to intimidate, coerce or get confidential information.

In an ideal situation the buyer’s agent would present the offer then go outside, so the sellers and listing agent could discuss and consider the merits of the offer. The sellers could then give an acceptance or tender a counter offer. The buyer’s agent could then take it immediately to their buyer’s for a response. Imagine wrapping up a sale in a few hours!

The way it’s done today boggles the imagination. We draw an offer, fax or deliver it; the listing agent picks it up, meets with the sellers. The listing agent makes representations to his/her client based upon information he or she has gotten from the other agent, not really knowing if it is true or not. They all discuss the offer then a counter is delivered or faxed to the buyer’s agent who has to go to the office to pick it up, schedule a meeting with the buyers for a response. If it’s not an acceptance, the whole dance starts over again.

What is wrong with this picture? No wonder it often takes days and days to get a sale together! How many hours and days are spent driving, delivering, faxing, re-faxing, re-delivering, and re-driving and re-re-faxing things all over? Both agents truly representing their clients’ best interests by working together, could do it all in one day. Makes sense to me.

All indications are that, fortunately, we will be in this heated market for a while. To lessen the stress levels of all involved, and make your transactions smoother and more business- like, I would recommend you consider some of these strategies in your business. I hope these tips will help you survive and thrive not only today, but also for the rest of your career. Your clients and customers will appreciate the difference.

Glenn M. Race, CRB, CRS, GRI is a veteran of over 31 years in the real estate business. Originally from Syracuse, New York he is currently Director of Career Development at Prudential California Realty. You may contact him at 209-526-4040 or at www.glennmrace.com.

Published: July 19, 2004

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