To say it has been a competitive market over the last two years would be an understatement. More like a feeding frenzy as depicted in that Redfin commercial where multiple people are trying to snag a home off a shelf, akin to what they were doing with paper towels and toilet paper when the pandemic first hit.
As agents, we thrive on competition. We compete for everything, every day from listings, writing offers, solving problems, overcoming objections and obstacles to getting our clients’ attention to listen to us and follow our advice. Not so easy is it?
No wonder we are in a perpetual state of “high alert,” which has especially been the case since the pandemic real estate boom. With low inventory, we had to live for new listing alerts and come up with all kinds of creative ways to be the first showing or do some “recon” if all the showings got booked up in the first hour that a home was on the market.
This frenetic pace and intense competition can lead to some unintentional mistakes. When you are up against 20 offers and offers are due within a couple of hours of showing the property or you are one of five listing agents being interviewed for a home that will sell the minute it hits the market, you may find yourself saying or doing some things you wish you hadn’t later.
While the market is softening a bit, here are eight mistakes agents often make in the heat of the battle, no matter the market.
Not reading or paying attention to details in MLS
I can’t tell you how many times I have received questions that could easily have been answered if the agent contacting me had taken the time to read the information I posted. There is a reason it was posted — to make it easy to reference 24/7 and assist with writing an offer.
Asking if you have a survey or the seller’s disclosure when both have been posted under the documents tab in MLS, etc. When you update private agent remarks to notate multiple offers or update when offers are due and an agent wants to show the property at a day/time well past the deadline.
When you are up against a mountain of offers and you are racing to get yours submitted, it can be easy to leave things blank, not be clear on what you are requesting as part of an offer or the offer simply leaves more questions than answers because not all is spelled out. Personal property or appliances that convey or do not convey may not be clearly identified, thus causing room for even more confusion.
Generic closing time frames such as “X days after closing” are written without the agent reviewing a calendar only for the closing date to fall on a Saturday, Sunday or holiday. Granted it rolls to the next business day, but do you really want to function from reactive chaos?
Incomplete offers that lack proof of funds or lender letters that may have a name on them that doesn’t match the names on the offer without any explanation of that person’s connection to the buyer or reference to gift funds only leave the listing agent and seller with pieces of a puzzle they can’t put together.
My advice? Slow down. Take some time to carefully complete each section and please make sure the financial portion of the offer and all supporting documentation adds up. You need to gather that ahead of time as well vs. at the last minute.
You need to have account statements vs. screenshots texted to you showing a clear idea of proof of funds (with account numbers blocked) and a thorough approval letter from a lender so a listing agent and seller can determine whether the buyer is preapproved. vs. prequalified or, even better, direct underwritten approved. Make sure your lender letters are reflective of the current market and show what the buyer is approved for based on the higher interest rates, not what they were three months ago.
Double-check personal property and appliances that are included or excluded. If you aren’t clear, please ask the listing agent before writing an offer. If information states the seller can’t close before a certain date, please don’t write in that date as your closing date.
Misleading and overpromising
There is nothing worse than a buyer’s agent trying to “sell” the listing agent on their offer by teeing up how easy the buyers will be to work with, that they aren’t going to ask for any repairs, along with any other surface-level “promises.”
When the seller goes under contract with this buyer, it is a completely different story. The buyer (and sometimes their agent) turns into Dr. Jekyll and Mr. Hyde. Meanwhile, the listing agent and seller had no way of knowing and are forced into jumping through all kinds of unnecessary hoops and circles to appease them and nothing done during the transaction is ever good enough.
Then, the attempt at a huge price reduction that’s not warranted often follows in this transaction, taking advantage of the fact the house has been off the market for a few weeks and thinking the seller has no choice but to cave.
Offers that won’t stick
Speaking of attempting to renegotiate, another agent mistake is crafting offers that the buyer had no intention of sticking to in the first place. The “as is” offer turns out to be a litany of repair requests.
In those markets that use escalatory addendums, putting on an escalatory addendum with the buyer’s offer that has some crazy dollar amount well over asking price, or even leaving that amount blank, does no one any good. If the number isn’t going to be backed by an appraisal guarantee of some sort, along with proof of funds as validation that the buyer has the money to support the price, this is a waste of everyone’s time.
The seller may get a false sense of excitement and demand about their home only to find out that should the escalatory addendum come into play due to multiple offers, the buyers with the “winning offer” are sticker shocked at how high the price has been driven up and don’t want to commit to the sale at the price the escalation addendum has created. This recently happened to me on one of my listings that received nine offers.
This happens on both the buying and selling sides. Agents may haphazardly offer to reduce their commission in the heat of the competition to be the winning offer, only to have agent remorse later when the transaction requires a tremendous amount of work (and don’t they all) and they are out of “give” to help solve other issues because the buyer and seller won’t budge.
This also happens in competitive listing situations where it becomes a feeding frenzy with agents pitted agents against each other, asking “how low can you go?” The seller believes that you as the listing agent aren’t going to really do anything, but the home will still sell fast. Of course, the market is shifting and that is starting to change, as well.
Don’t get caught up in the hype. Stand up for yourself and become strong and confident in your role in the transaction and what you bring to the table and why. While we can determine the commission at our discretion generally speaking, what we do impacts what others in our marketplace do going forward. Instead of complaining about reduced commissions, we need to be the change we want to see in others in our industry.
Failure to manage and communicate expectations
There is nothing worse than a buyer or seller client who has not been properly advised about the buying or selling process, what’s involved, potential issues that may arise with the kind of property they are buying, the costs, what is realistic (or not) as far as how a seller might handle repairs (or not) or a lower appraisal. Thus, those transactions tend to be the most difficult and frustrating.
The agent is so focused on making the deal happen that they have failed to read their client’s signals as to what kind of guidance they may need. Just because a buyer or seller doesn’t talk much doesn’t mean they understand or are ok with everything transpiring. In fact, the silence may indicate significant concerns looming beneath the surface.
Glossing over details
In a real estate transaction, details matter. Agents can get so focused on just trying to get the listing or the sale locked up that they fail to think through important pieces of information that are critical to ensuring a smooth transaction.
With a listing for example, it is important to know what items may stay or go or are negotiable with the seller. You need to know if the seller needs a certain closing timeframe and how to best manage that – such as with a post-closing occupancy agreement or leaseback, depending on how much time is needed.
If a seller is pointing out what components in a home don’t work and will convey “as is” or something is in the process of being repaired, it is important to pay attention and take notes.
There are agents who proudly say “they don’t do paperwork” and leave preparing listing agreements and offers to an assistant or a transaction coordinator. While that may be ok, if things are missed, then the agents have to spend quite a bit of time sorting out and documenting details that should have been communicated in the first place between the buyer and seller.
Not verifying lending details
When a hot property hits the market and you are working with a buyer, or if your listing just went live, this is going to result in a crazy sense of urgency. The buyer can’t get in the house fast enough and, as a listing agent, your phone blows up with so many calls and showing notifications, you can barely keep up.
As such, in the rush to submit an offer or review offers, lending details in the contract need to be reviewed and clarified. Agents may be submitting dated pre-approval letters that aren’t reflective of the current interest rates or have old down payment amounts. Proof of funds that the buyer shared may not add up to the down payment and escrow deposit as prices of properties that buyers offer on vary.
In a rush to submit an offer, agents often don’t review or verify this information. In some cases, the buyer goes under contract only to learn that the down payment requirements have changed with the loan program they were going to go with, hence they no longer qualify or have to scramble to pull funds from other sources. If a buyer is receiving gift funds, that documentation is often not included with the offer.
There is a multitude of things that agents can do to be better prepared in a competitive, frenzied situation. Knowing your forms, how to access them and how to properly complete them is the first step. Having a checklist to guide you so you don’t miss anything also helps you keep all on track.
Additionally, don’t promise what you can’t deliver. While you want to pitch your offer as the best, it can be easy to get caught up in presenting this as “nothing is an issue and the buyers are totally flexible.” That may or may not be the case.
Another one of my favorites is “this will sell fast, no problem.” In a changing market, that is an unknown. Think carefully about possible ramifications and pitfalls to the terms of the offer you are crafting or the listing you are taking. What and how you communicate may create an expectation that can’t be met and potentially kill the deal, as well as your reputation.
Competition in our business is like preparing for a final exam every day. The clock is ticking, time is of the essence, but accuracy also is. You must be able to think on your feet and be on your game 24/7.
As such, it can be easy to overpromise, gloss over details, skip over concerns with surface-level answers and worry about details later. By taking some time to be prepared, hone in on the details, follow offer instructions, listen and address concerns and manage expectations, even in the heat of the moment, you’ll be well prepared, no matter the battle, each and every time.
Cara Ameer is a broker associate and global luxury agent with Coldwell Banker Vanguard Realty in Ponte Vedra Beach, Florida. You can follow her on Facebook or Twitter.