I recently saw two very good examples of how not to write and submit an offer for a buyer. I found agents who felt they were representing their buyers, yet failed them both in obtaining what they wanted — a contract on their first home.
The first example was an offer I received that had in the special stipulations section a list of 10 items, specifying everything including resurfacing the driveway, replacing the gutters, adding new carpet in the color and choice of the buyer, repainting all interior rooms a color selection made by the buyer, fixing leaks in two specific ceilings and — the part I found most amusing — the HVAC was put on a personal property bill of sales as staying with the property at no cost to the buyer. Plus, in the personal property bill of sale, the agent added light fixtures and even the hot water heater. Well, I know I don’t have to say this, but light fixtures, hot water heaters and the furnace are not personal property to begin with. Of course, they remain with the property.
My comment to the other agent was, “Having done nothing more than show the property once, how can you confirm there is a leak in the two rooms referenced?” The remark I got back was “There was a stain on the ceiling.” The stipulations seemed to be assumptions, for the most part. I also asked, “What leads you to believe the gutters would have to be replaced?” No real answer was tendered.
The agent felt he was representing his client. I think he was a bit overzealous. Many of these items could have been defined by a home inspector or bank appraiser, who would have then told us what was required regarding repairs prior to being able to close. Also, any repair issues would have been defined in the correct part of the process during due diligence when both buyer and seller would be at least “engaged” at that time. Not a great way to win friends and influence people at the forefront of negotiations!
My last broker always told her agents, “You are a real estate agent, not a home inspector or a contractor.” Let the experts you hire determine what repairs need to be done … or, like this offer, it will be dead on arrival. My seller had no interest in negotiating with this buyer.
There is a difference between representation and trying to be something we are not. Representation requires tact as well as the proper timing to allow the experts to come in and make those inspections and recommendations of what needs to be done regarding lender required repairs.
Part of an agent’s job is to give good advice to buyer clients about what’s realistic to ask in a seller’s market — especially when a buyer’s offers are being rejected, one after another, because the buyer thinks the seller should provide a new home. Please don’t miss this point. To represent our clients fully, we must not forget how to negotiate.
A day later, we got another offer with about the same net to my seller. The only special stipulation was a request for a $45 termite clearance letter before closing. That agent mentioned in her email containing the offer that “the seller might not be aware, but the back gutter needs to be fixed. Seemed to be some recent damage.” That is a far more welcome and tactful way to put a possible repair need than to write up a list of stipulations that call for replacing “all gutters on the house” in an offer. Win friends and influence people; don’t alienate the seller and listing agent before you can even bang out terms on a sales price.
The second situation revolved around multiple offers on another listing. The first two offers had no initial lender prequalification. The second — and you will love this — sent me an email from the buyer’s lender where the lender said in a thread, “I sure hope (the buyer) gets the house. He is a nice guy.” There was no mention of whether he could afford it. Just that he was “nice.” I asked both agents to bring us their highest and best offer within 24 hours.
The first brought us a complete offer in the stipulated time frame. The second spent much of the next 24 hours telling me that the lender would email the prequal. It took until the final hour or so to get it. It took equally as long to to get any offer in writing and signed by their buyer, and that is only because I told him we had to have it. An offer itself comprises more than just sales price and seller concessions. There are other key terms that need to be confirmed and defined as well.
Regarding that second offer: It was a good offer, but my seller had to make a decision with both no lender prequalification and an email thread regarding sales price and seller concessions — so the seller could not get comfortable with accepting this offer. In the end, a third buyer popped in, and that buyer’s agent gave me a clean offer with proof of funds.
The seller decided to go with them. They had the best offer on the table, and it was great to see an agent who submitted a complete offer without me having to beg for it. How refreshing!
Hank Bailey is an associate broker with Re/Max Legends and a Realtor for more than a decade who provides buyer’s agent representation and seller listing services related to residential real estate.