Brokerage

Winning a multiple offer: Some clients believe deception is their only hope

3 sticky scenarios agents should be prepared to handle

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Have you ever had a seller who asked you to not to disclose a property issue to a buyer? Or how about the buyer in a multiple-offer situation who has you write an “all cash” offer when you know she cannot close without obtaining a loan? The question is, do you let them manipulate you, or do you walk away and/or disclose the truth?

No one likes to be manipulated, regardless of whether it’s a Realtor or a client. Consequently, one of the best steps that you can take for your business is to shift from focusing on your agenda to focusing on what’s best for your clients. You can do this by asking “how” and “what” questions and always keeping in mind that “it’s their house, it’s their mortgage, and it’s their decision.”

But what about the case where a client tries to manipulate you into doing something that is clearly wrong or that would just require you not to say anything? When someone attempts to influence you in order to accomplish some goal or plan that personally benefits them, they are not only using you, but they are putting you and your livelihood at risk as well.

When this occurs, take deliberate steps to derail their efforts, especially if what they are doing is illegal or harmful to someone else. Here are three scenarios as well as the strategies for handling them:

1. The screaming client

Some people believe if they scream at you, they can intimidate you into doing what they want. In order to derail this person, the first step is to do what neurolinguistic programming experts call a pattern interrupt. Instead of saying, “Stop yelling at me” or escalating the situation by yelling back at them, respond by saying, “Will you please speak softly to me so I can hear what you are saying?”

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If the person persists with the yelling, repeat the request. If the second request doesn’t work, then say, “If you can’t speak softly to me, I’m leaving (or hanging up the phone). We can continue this conversation later.”

... If (your buyers) cannot close the transaction and they misrepresent their financial situation to the seller, they could be on the hook for their earnest money deposit plus additional damages. It's important that you make this clear to your clients and ask them to be truthful in whatever they offer.

If the yelling persists, leave. If you must walk away from someone like this, seriously consider both the cost and benefit of having this person or client in your life. The best course of action may be to walk away permanently.

2. “You can’t disclose that — if we lose this deal, we lose everything”

When someone asks you not to disclose an issue because “we will lose our house,” they’re relying on your guilt in order to manipulate you. Here’s a great example of why it’s always smart to do what is right:

My client was a local community bank that had made a $1 million construction loan in the Hollywood Hills. I had both sides of the transaction and my buyer was an attorney. The geological report came back saying that the hillside in back of the house was unstable and that it could slide into the new home. The bank president asked what types of options might be agreeable to the buyer. If they didn’t close this deal, the bank would be shut down and my clients would be out millions of dollars.

My response was that this was up to the buyer. The options I gave her were to (1) have another inspection since the city inspectors said the hillside was secure, (2) negotiate some sort of concession from the lender, or (3) to cancel the transaction. She elected to cancel the transaction.

The bank ended up being taken over by the feds. I felt horribly guilty, but three months later when there was a heavy rain, the hillside collapsed causing major damage to the home. Needless to say, I was very happy that my attorney buyer was not living in the property.

3. We’ll write the offer for all cash if that’s what it takes to win the multiple offer

If you have had your buyers preapproved for a loan, you know ahead of time how much they can afford as well as how much of a down payment they are most likely to have. If they tell you that they’re willing to write an all-cash offer and you know they don’t have that much cash, you’re now in a very sticky situation.

The first strategy in dealing with this situation is to tell the buyers that sellers in all-cash deals normally require a “proof funds” letter. If the buyer cannot supply the letter, the sellers will not accept the buyer’s offer.

The buyers could waive the loan contingency; however, if they cannot close the transaction and they misrepresent their financial situation to the seller, they could be on the hook for their earnest money deposit plus additional damages. It’s important that you make this clear to your clients and ask them to be truthful in whatever they offer. If not, walk away.

Confronting manipulative clients is never easy. After handling one of these difficult situations, do something special for yourself. A little self-care can help you recover and keep you in forward motion. If you are still feeling emotional, write down everything that is contributing to how you feel. When you have worked through the emotion, burn the paper in the fireplace or run it through a shredder.

Remember, you are an independent contractor and you can choose the clients with whom you work. When someone tries to manipulate you in a way that could harm you or someone else, it’s time to close the drawbridge and to seriously consider whether you will ever open it again.

Bernice Ross, CEO of RealEstateCoach.com, is a national speaker, trainer and author of the National Association of Realtors’ No. 1 best-seller, “Real Estate Dough: Your Recipe for Real Estate Success.” Hear Bernice’s five-minute daily real estate show, just named “new and notable” by iTunes, at www.RealEstateCoachRadio.com.