For decades, agents presented offers face-to-face. Due to the invention of the fax machine and digital presentation platforms, today that practice is a rarity. When the buyer’s agent texts, emails, or faxes their offer to the listing agent to present, are these agents unwittingly falling into a trap?
When REOs reigned supreme during the early 1990s and the Great Recession, lenders required buyers to submit their REO offers via fax or email. Agents immediately took to the practice—why drive across town to do battle with the sellers when you can click, send, and let the listing agent present the offer? Sellers quickly learned to love this approach as well—no more confrontations with pushy agents or having to waste their time with ridiculously low offers.
For the few agents who wanted to present their offers face-to-face, listing agents often told them, “No—you’re not meeting with the seller. Send the offer to me and I’ll present it to the sellers.”
Being face-to-face improves your listing presentation conversion rate
Suze Cummings, Canadian Director of the Real Estate Negotiation Institute, reports that her clients who do face-to-face offer negotiations have seen a 400 percent increase in the number of offers that they have accepted. This has been especially true for multiple offer situations where the seller is communicating with an actual person rather than looking at a digital offer.
Given these facts, is it time to step up your game and start presenting your buyer offers face-to-face?
Representing the buyer exclusively means exactly that
Allowing the listing agent to present the buyer’s offer to their sellers is a widespread practice, but are you living up to your agency obligations to your buyers if you allow the listing agent to present the offer?
When you signed the agency agreement that says that you represent the buyer exclusively, you are bound to do exactly that. Given that scenario, does the listing agent even have standing to demand that he or she “must” present your offer to their sellers?
Granted, in the case where the seller specifically instructs the listing agent that they want to have all offers flow through their agent, then the listing agent’s fiduciary duty obligates them to carry out the seller’s request.
By the same token, when buyers are in a multiple offer situation, many will agree to almost anything to get the house. Who presents the offer is often the least of their worries, but again, note that Cummings’ clients had their rate of accepted offers jump up 400 percent when they presented face-to-face.
Nevertheless, the question still remains; is the routine practice of allowing the listing agent to present your offer when you have agreed to represent them exclusively in your buyer’s best interest and does this practice meet muster with the agency laws governing these relationships?
Guidance from the California Association of Realtors (CAR)
June Barlow, the General Counsel for CAR, advises that the question agents must always ask is,
What is in the best interest of my client (the buyer in this situation) to get them the best results in a given the situation? Have you discussed the situation with your client and are the two of you on the same page?
Barlow goes on to explain:
I do NOT think that one presentation of an offer creates an agency relationship. Agents often have to cross over and pick up the slack when there is a sloppy agent on the other side not providing all the necessary forms, etc.
CAR has actually created two forms to handle this situation: The Buyer’s Non-Agency Agreement (BNA) and the Seller’s Non-Agency Agreement. (Colloquially, we refer to them as the, “I’m not your agent” forms). These forms explain that some tasks will be undertaken by the agent representing the other side and that they are doing it for the benefit of their own client, (not for the benefit of the person whose own agent should have done it) and that they are explicitly NOT consenting to be their agent.
Additional best practices to minimize your risk on offer presentations
If your buyer asks you to present their offer to the seller directly, follow the process below. (Please note, if you’re in a multiple offer situation, you’re probably stuck with whatever the listing agent decides to do.)
1. When you first contact the listing agent, explain that your buyers have asked you to personally present their offer to the seller, either face-to-face or on Skype, rather than relying on the listing agent to do s
2. If the listing agent tells you “No,” be persistent—after all, this is what your buyers have requested that you do and there are multiple benefits to doing so. If the listing agent objects, here’s how to overcome the objection:
My buyers will want to know why I’m not being allowed to present their offer directly to the sellers, when they have requested that I do so. Would you please put your reasons in writing for my buyers?
If the listing agent still refuses or if the seller has instructed their agent that they do not want to speak with the buyer’s agent, then draft a detailed letter that outlines what you would have said to the seller if you had presented the offer to the seller. Attach the letter as a cover sheet for the offer.
Best practices for seller’s agents to minimize their risk on offer presentations
1. Once the sellers have signed the listing agreement, ask how they would like to handle both single and multiple offers. Armed with this information, you will be able to inform any buyer’s agents what your sellers’ wishes are.
2. When you do run into someone who wants to present their offer in person or via Skype, let the sellers make their own decision.
3. If the seller insists that you bring them the offer rather than having the buyer’s agent present it, encourage the buyer’s agent to write a letter outlining their position and sharing as much about their buyer as possible.
4. When you present the offer to the seller, present the buyer’s agent letter and the offer. Let your clients review the documents and ask how they would like to proceed. Be sure to take detailed notes on any questions your sellers may have and convey them to the buyer’s agent.
To avoid creating problems for your business, familiarize yourself with the agency laws in your state and, whenever possible, get in the habit of presenting your offers face-to-face.
Bernice Ross, President and CEO of BrokerageUP and RealEstateCoach.com, is a national speaker, author and trainer with over 1,000 published articles. Learn about her broker/manager training programs designed for women, by women, at BrokerageUp.com and her new agent sales training at RealEstateCoach.com/newagent.