Frank J Festa, Real Estate Pro in Watchung, NJ

What is my jobs as a buyers agent? If my clients offer is lower then the asking price must I apologize or must the sellers agent negotiate?

Asked by Frank J Festa, Watchung, NJ Sat Jan 30, 2010

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Come on Frank - so what's the story?

Were you asking this question as a tutoral for the consumer to learn what a buyers agent is supposed to do with an offer?

I know you have a sense of humor, and enjoy a good laugh, so there must be an explanation behind this!
1 vote Thank Flag Link Sat Jan 30, 2010
Frank,

I did not attack you, and if you perceived my comment to be an attack, I apologize. I just thought it weird that a seasoned agent would ask such a basic question on a public forum, and apparently so did other agents.

To answer your question, in this market, I have had numerous buyers come in with low (sometimes very low) offers, no matter what the comps showed, or tell me they were going to offer 30-40K less than the comp value so there was room to negotiate. I have never apologized for my buyers, it's their money and they have the final say in what they perceive as a homes worth. I have to say that in some instances though, after weeks of looking for a home, when the offers were so low that the sellers never even counter, I sometimes I feel I am due the apology from my clients when they spend my (and their) time, only to lose the house, have to start looking all over again, and end up having the house in question end up selling close to what the comps showed.

Regardless of my feelings, it's my job to guide them the best I can with comps and my knowledge of the local market, write the offer that they want, and present it to the sellers with no personal comments and no apologies.
2 votes Thank Flag Link Sat Jan 30, 2010
Thanks John and Gina for backing me up on that one...

I agree Gina, if I were a buyer seeing the post, I wouldn't call that agent either.. and wanted to let potential buyers know that this may be a spam posting.
2 votes Thank Flag Link Sat Jan 30, 2010
I agree with both Mary and Gina.. something weird here...

Although, Frank's profile does say he is a commercial guy.. commercial agents are in a totally different world then residential agents. Totally. In brief, no rules like we have in residential.

So maybe Frank is moving into the residential market and he is unsure of the situation.

If that is the case, then no apologuy necessary. We cannot control the offers of the buyers we represent.
Present it and get the negotiation started.
2 votes Thank Flag Link Sat Jan 30, 2010
I may have to agree with Mary on this one. If a buyer's agent is unsure of how they should be handling offers and needs some assistance, I wouldn't recommend posting that on a public forum (agent to agent, perhaps) because if I was a buyer and I read this post, I certainly wouldn't be calling Frank to buy a home.

Back to the question at hand, you must present their offer with no apologies. You are working for your buyer not for the seller. You should be providing your buyers with a cma showing them what market value is so that they can make an educated offer. We all know that even after we show buyers the numbers sometimes they still will put in a lower offer, but your job is still working for the buyer and you must present their offer looking out for the buyers best interest. The seller's agent is working for the seller. Your job is to get the best house at the lowest price for your price and the seller's agent is to get the seller the top price for their home. Somewhere during negotiations, a happy median is reached.

Gina Chirico, Sales Associate
Prudential NJ Properties
973-715-1158 cell
973-992-6363 ext 116 office
Gina.Chirico@PrudentialNewJersey.com
2 votes Thank Flag Link Sat Jan 30, 2010
Good answers below, however why do I get a feeing that the question was bogus, especially posted on an open forum by an seasoned agent who is also a Trulia Pro??
2 votes Thank Flag Link Sat Jan 30, 2010
i wrote an article last month called "The Art and Science of the Lowball Offer." Check the web reference for the full story, but here's a highlight...

"I see this all the time – 58.4% of all listed property never sells at all in Intown Atlanta. No wonder, right?

So in many cases, adding earnest money of at least 5% will help the “earnestness.”

Also, closing within 45 days will help the seller’s motivation.

I asked the listing agent, to receive my client’s offer as a serious offer. I also suggested to her that when she presents the offer, would she please ask the seller a question that I ask my seller clients who are similar to this seller, in this situation:

“If you knew that the market would be down another 10% in 6 months, how would this affect your behavior today?”

Sometimes that question helps sellers to be less resistant to any offer."

I believe that your job is to sell the offer. Tell the other agent that your offer is better than the other offer that they have in hand.

They'll say "what other offer?"

You'll say - "that's exactly what i thought you would say..."
1 vote Thank Flag Link Fri Feb 5, 2010
Yup it's a valid question. I never said it (or any question) are not valid. All I was saying was that the way it was worded conveys the (apparently unintentional) idea that the agent asking it doesn't know the answer (and buyers and sellers assume we know our jobs) and could be counter-productive.

All my comments were meant to do (and Gina's, and Johns's and Debbies), was to verify it was a legit question, posted by the questioner.

My posts said :
<Good answers below, however why do I get a feeing that the question was bogus, especially posted on an open forum by an seasoned agent who is also a Trulia Pro??>
<I agree Gina, if I were a buyer seeing the post, I wouldn't call that agent either.. and wanted to let potential buyers know that this may be a spam posting.>

Perhaps I didn't explain myself clearly enough, but my comments were meant to protect. Again, I am a firm believer in asking questions, but the internet is full of phoney postings (I just has one of my for sale listings posted by a spammer on Craigs's list as a rental, and got 5 calls asking when they could rent it out) and I was trying to be nice.
1 vote Thank Flag Link Sun Jan 31, 2010
I think this is a vaild question. The answers provide Trulia buyers and sellers an insight into the agents here!

Laura Giannotta
1 vote Thank Flag Link Sun Jan 31, 2010
Frank,

My last weigh in on this question.
I was not attacking you for asking the (a) question, nor do I think anyone else did. As a matter of fact if you read my posts, I questioned it's authenticity because it was not on the AGENT to AGENT forum, it was on an open public forum. I wondered how a seasoned agent would ask the question knowning potential clients could read it, and make a judgement as to whether or not to use you as an agent (read one of my earlier posts and Gina's).Believe it or not, my first reaction was meant as a protective one, not a criticism. I saw others answer the question outright, and not one person here criticized you personally

I am all for asking questions and getting answers, life is a continual learning process. In both my first career as a pharmacist for 23 years, and now in the past 8 years as a Realtor, there were, and are, always things I don't know, and winging it or assuming you know the answer when you don't can be costly (and not only in dollars). The best answer you can give, is "I don't know, but I will find out."

if your intent was just to feel out Realtors on their perception of what their responsibilities to buyers are, then perhaps your question should have read " With the changes in Real estate, what is your current perceptions of a Realtors duties to their buyers..........?", and perhaps it should have been on the agent to agent forum instead.
1 vote Thank Flag Link Sun Jan 31, 2010
If you dont know your duties as a buyer's agent, suggest you refer the client to another agent and go back to school. You could also get a mentor or have your broker assist you. Dont take this as an attack but rather advice to help you keep your license.
1 vote Thank Flag Link Sat Jan 30, 2010
Frank:
I'm glad you asked your question. I am a Realtor and an Attorney, licensed only in the state of Ohio. Buyer Agency came into effect in the mid-90s in Ohio. A short while ago, I had a 30 yr Realtor ask me a question. She said she had only been a Seller's Agent - never a Buyer's Agent. She asked me, "What are the responsibilities of a Buyer's Agent?" I was pleased that she asked the question, because she didn't know and did the right thing by asking someone who could give her an answer. This is intended to be an agent-to-agent forum. We are on this forum to help our fellow agents.
Best regards,
Pat
1 vote Thank Flag Link Sat Jan 30, 2010
Thank you all for your reply to my inquiry. The rules of real estate marketing are changing and the changes are fast and furious. I believe that most REALTORS are sitting on their hands. I hate to say it and I hope someone can prove me wrong. In replying to the question most attacked me and not the question, interesting. Regards,
1 vote Thank Flag Link Sat Jan 30, 2010
Odd question. One I wouldn't even expect from a first-time homebuyer, much less an agent. The answers below are fine.

No. Not only is an apology not required, it's not in your client's best interest. Besides, in most markets, especially today's market, I'd guess that 85%-90% of offers ARE lower than the asking price. There are some negotiating tactics that can, in essence, involve an apology. It's a combination of the "Higher Authority" gambit and the "Good Guy/Bad Guy" gambit. See http://www.rdawson.com/articles.html Real estate investors do it frequently: "Well, I'd really like to offer you more [good guy], but my partner [bad guy] is awfully tight with the money, and I'd need his approval [higher authority] to go any higher." But you don't have that luxury, or that positioning, as a buyer's agent.

Must the seller's agent negotiate? Of course not. First (and this is why the question sounds as if it were written by someone who'd never bought anything before, no offense to you), of course, the seller's agent is only the representative of the seller. The seller (with the advice, input, etc., of the agent and perhaps others) decides whether to negotiate--or whether to simply reject or accept the offer. It's not up to the seller's agent to make that decision. So, no, the seller isn't required to negotiate. However, the seller's agent IS required to act in accordance with his/her client's wishes.

Hope that helps.
1 vote Thank Flag Link Sat Jan 30, 2010
Don Tepper, Real Estate Pro in Fairfax, VA
MVP'08
Contact
"Tell the other agent that your offer is better than the other offer that they have in hand.

They'll say "what other offer?"

You'll say - "that's exactly what i thought you would say..."

I LOVE IT!!
0 votes Thank Flag Link Fri Feb 5, 2010
Thanks for your reply to my post Johnny. It's a way of life around here. Regards,
0 votes Thank Flag Link Fri Feb 5, 2010
I can not even imagine sellers agent who wouldn't negotiate
0 votes Thank Flag Link Fri Feb 5, 2010
Very good suggestions Lee to get the attention of the seller when negotiating an offer.

Jeanne Feenick
Unwavering Commitment to Service
Search the MLS at http://www.feenick.com
Web Reference: http://www.feenick.com
0 votes Thank Flag Link Fri Feb 5, 2010
A spirited debate on a valid topic - just met with a seller yesterday. We discussed this very point. In their last listing period, they received several offers, and did not respond to either one of them because they, and their agent, felt that the offers were too low.

My advise to sellers is this - take a deep breath and remember that receiving an offer is in itself a compliment. I always recommend that we respond in an effort to engage with the buyer. It is not where the negotiation begins, but where it ends that is important. I remind my sellers - and my buyers - that either party can "get off the train" at anytime.

While it is not always the case, sellers often evaluate an opening bid by whether they could live with the mid point. If they can't then they may not respond, hoping that the buyers will come back with a better starting point.

Best,
Jeanne Feenick
Unwavering Commitment to Service
Search teh MLS at http://www.feenick.com
Web Reference: http://www.feenick.com
0 votes Thank Flag Link Fri Feb 5, 2010
Pat: thanks for your reply. I'm always interested in what REALTORS have to say about REALTORS and anyone that would ask a simple question. REALTORS attack each other and put each other down. As an Attorney you must have seen this on a number of occasions.

As Debbie Rose said, "Come on Frank - so what's the story? Were you asking this question as a tutoral for the consumer to learn what a buyers agent is supposed to do with an offer? I know you have a sense of humor, and enjoy a good laugh, so there must be an explanation behind this!"

REALTORS, judge yourself and not someone that would ask a question, any question. Regards,
0 votes Thank Flag Link Sun Jan 31, 2010
Hi Frank.
As a buyers agent your job is to help your client get the best possible deal they can. No apoligy necessary to the listing agent. If the offer is not acceptable they should either counter or ask you to resubmitt. Always act like the professional you are and keep moving forward
0 votes Thank Flag Link Sat Jan 30, 2010
Answer 1: Work for your buyer and present the offer. No Need to apologize? How low is the offer? 90% 80% 70% low? Seller's agent need to negotiate! If Its my listing< I ll laught at the offer, but will present to the seller!
0 votes Thank Flag Link Sat Jan 30, 2010
To address your last point--that things are changing rapidly and most Realtors don't seem to be adapting--I agree completely.

But that's human nature. People have a comfort zone, and change tends to force them outside that comfort zone. And people continue to do what's worked for them in the past, and they'll cling to a lot of excuses (maybe it was just a bad mailing list, maybe it's because there's a foreclosure down the street that's cheaper, maybe, maybe maybe) to help explain why what used to work is no longer working.

On top of that, there's been some criticism of NAR for always putting the best spin on what's sometimes been a pretty rotten picture. In my experience (35+ years with various trade association and groups), NAR is no worse, and certainly better, than some.

True story: Back in the 1970s I worked for an association representing trucking companies. It was apparent that things were about to change. Trucking companies had antitrust immunity to set rates (using what were called "rate bureaus.") The Interstate Commerce Commission tightly regulated new entrants to the trucking industry. The regulations on what a particular trucking company--with a particular "certificate of convenience and necessity" could haul was at times humorous. You could transport fresh mushrooms but not canned mushrooms. You could transport bagels but not donuts. Stuff like that.

But there was a lot of pressure for that to change. And it was apparent that there was going to be regulatory reform (or "deregulation," though it wasn't, really). It was absolutely obvious to everyone. However, the association representing trucking companies (the American Trucking Associations) and some of its sub-groups were fighting hard in Congress to slow down or weaken deregulation. So, politically, they couldn't concede that things were going to change. As a result, ATA told its members that everything was fine. Things would continue as they always had. Its members had nothing to fear. Now, the big companies--with their own lobbyists in Washington--knew that wasn't true. And they were very smart about preparing for the changes. Problem was: The smaller companies believed the ATA line. They really did. And when the Motor Carrier Act of 1980 was passed, those smaller companies were doomed. Most failed in 2-4 years.

Same thing is going on in real estate. For political reasons, the industry spokesman has to take certain positions and advocate certain policies. And they are doing it for the benefit of the industry and the long-term good. The risk is that some of its members may take those statements and promises too literally. And when things change--and things always change--they may be left out in the cold.

Hope that addresses your point.
0 votes Thank Flag Link Sat Jan 30, 2010
Don Tepper, Real Estate Pro in Fairfax, VA
MVP'08
Contact
Sounds like there is more to your question than it appears. Fiduciary responsibility is to your client and to your clients best interests. Unless you are disclosed dual agent, that is the only one to worry about.
Paul
0 votes Thank Flag Link Sat Jan 30, 2010
Frank,
Are you asking this as a rhetorical/ to prove a point question? In NYS ( and probably everywhere) you must present all offers to the listing/selling agent and they must present the offer to the seller asap! It's always a good idea to have it in writing and ask for a reply in writing, to ensure that the listing agent does indeed present the offer in a timely manner..Does that answer your question?
0 votes Thank Flag Link Sat Jan 30, 2010
As a buyers agent you are representing and working for that buyer. It is not your job to apologize to the seller, however there are times when a buyers offer is so crazy, it may warrant an explanation of why they submitte dthe offer they did. Your first job when taking the buyers offer is to educate them what the property is worth and find out the background of the seller and if they can accept such a low offer. Then back your offer up with comps or estimates to fix anything that may be bringing the price down. Your explanations go to teh listing broker who then take sthem to his/her seller. If you provide substantial information it will makie the job of going to the seller easier to submit the offer and have a hope the buyer will accept. I hope this helps.
Web Reference: http://www.ScottSellsNH.com
0 votes Thank Flag Link Sat Jan 30, 2010
As a buyer's agent, you present that offer as if it's the best offer the seller will ever get! Back it up with comps if you can or general market information such as absorption rates, present in person and make a connection with the seller. Good Luck!
0 votes Thank Flag Link Sat Jan 30, 2010
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