Home Selling in 87122>Question Details

Yukio, Both Buyer and Seller in Albuquerque, NM

Question is about realtors showing their buyers' hand. While in the process of selling a house my realtor

Asked by Yukio, Albuquerque, NM Fri Feb 20, 2009

told me the buyer was making a low ball offer. She further said don't worry, the seller's agent said he is just testing the waters and will come up. So here you have a buyer trying to get a good deal and his realtor already revealing he's willing to pay more to avoid the buyer not even countering, but at the same time, showing the buyer's cards when the buyer is trying to have a poker face. I've been on the other side too, as a buyer, where I made an offer, got a counter, and my agent advised that the seller's agent said let's counter again, the seller's agent told me there would be further negotiations indicating the seller would lower the price further. I have bought and sold 8 times as an investor, and can ALWAYS get my agent to find out what the other side is thinking. How can a buyer or seller hope to negotiate on their own terms when realtors always want to show the other side their clients hand? How do you know what your agent is saying and how can you control this?

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Answers

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Legally and ethically, a sellers agent has a fiduciary responsibility to protect the interests of the seller, while a buyers agent has the same duties towards his clients (buyers). Unfortunately, many real estate professionals blur the line, and do not follow their ethical responsibility.
The best thing a person can do is interview the agent in advance, and ask pressing questions about how they would handle such situations, and what you would expect. Remember that realtors are simply human beings - - - there are good ones and bad ones!
2 votes Thank Flag Link Fri Feb 20, 2009
I agree with Barbara and the others, but what your question highlights is the need to find a real estate professional who is a strong negotiator - one who recognizes that this is one of the best ways they can be of value. I would ask what experience and education they have and what their specific strategies are to save your money when they represent you. I highly recommend working with a pro who is actively buying and selling themselves, as they/we are typically the strongest negotiators. Personally, I find the challenge of negotiating ito be one of the more exciting aspects of my job - and I love to win! The easy days of real estate brought too many unskilled people into the business who are now looking to make a transaction easier by betraying their client's interests. It is too common, but absolutely not right!
1 vote Thank Flag Link Fri Feb 20, 2009
Good question.

Let's put the story aside. The real question is: How do you know if your agent is truly representing you? The answer is, you don't - but that's not a reason to panic.

Negotiation is an art form, not a science. If you attempt to apply game theory to most real estate negotiations, you'll quickly find that the noise from trying to quantify the assumptions will drive you crazy.

We know that there are really only a few possible answers to an offer or counter-offer:

1. We accept.
2. We change.
3. We reject or ignore.

Part of the negotiating process is to know what your goal is and to have some strategy of how to get there. I may be asking 300 for my property, and my goal is to sell it for at least 275, but if you offer 220 I may not come back at 275, right? The strategy is to keep you in the negotiation with the objective of pulling you up.

Then, again, I might come back at 275, but with the warning that I'm not moving from there. Take it or leave it.

My telling you that I'm still willing to talk isn't "showing my hand" as much as it is telling you that, simply, I'm willing to talk, but your number is still too low.

Now, if I have an agent communicating this on my behalf, they are totally doing their job, even though it may look to you as if they're selling me out.

And that's the thing that isn't always apparent - whether the agent is, in fact, speaking for themselves, or for the clients.

That's my take.
0 votes Thank Flag Link Fri Mar 12, 2010
The real answer is simple. Never trust your realtor. Tell them you may be pre approved for this much, but the amount you offered is all you will spend. Leave them in the dark about what you might do. No telling no retelling. Allow your realtor to explain how you were barely able to make that offer, That you would like the place but not for any more and you are willing to walk.

problem solved. keep your cards close to your chest.
0 votes Thank Flag Link Fri Mar 12, 2010
In the absence of a "Buyers Agency Agreement" the realtor is obligated to work for the best interests of the only party that has a Fiduciary responsibility. That would be the Seller.

A "Buyers Agency Agreement" is legal and binding on the Realtor to represent the best interests of the Buyer.

Buyers and Sellers agents are legally bound not to provide information that may harm their Fiduciary. You should have a Buyers agency agreement and tell you agent that you expect them to abide by it. In my opinion.
0 votes Thank Flag Link Fri Mar 12, 2010
This is a great question and a common problem. As a REALTOR we all want inside information from other agents about their clients. Psychology and mind games play a large role in real estate negotiations. How an offer is structured and how it is presented can be just as important as what the offer is. Emotion is one of the worst parts of negotiating as an agent, but it can also be one of the most useful tools. Ideally you have a REALTOR representing you that you know and trust, but If you find yourself in a situation where you are using a REALTOR that you are not 100% comfortable with I would suggest having the agent contact the other agent to present an offer in your presence. As an agent I would have no problem doing this for a client as their trust is one of my top goals.
0 votes Thank Flag Link Fri Mar 12, 2010
All offers need to be presented whether (as the real estate agent) I like the offer or not. As much as we prepare a seller to be priced according to market value, we need to do the same with buyers and eduate them about what things are selling for in a given area. If homes are selling for $250 is it likely someone will take $225, probably not but you never know anyone's movtivation. Even with short sales and foreclosures, banks are not there to ensure you get a "deal" they are there to get as much money as they can for the asset. Education of buyers and sellers if vital. I always to my homework with buyers and sellers. In fact, I just had a sale where the buyers wrote a "low ball" offer on a home and the seller refused to counter regardless of my counsel. Within 10 minutes, I had a higher offer - the risk is you can anger sellers with ridulous offers. Did you know that if the seller allows you to disclose the price and terms of other offers to other buyers, you can - provided the buyer didn't send over a confidentiality agreement? Make sure to put terms and conditions in writing because if they aren't, it should not be done. Based on what you wrote above, I'd say that Broker Duties (NM) were most likely violated.

I hate seeing these comments and would never use them without a sellers consent, "Bring all offers, Seller motivated" or "Divorce, bring all offers" isn't any seller with a sign in front of their home motivated? All phrases like this do is encourage low ball offers.

Mum is the word unless you have something in writing that authorizes it!
0 votes Thank Flag Link Fri Feb 20, 2009
The only way to 'control' this is to work with a realtor you trust. If as you state you are an investor and purchase homes on an ongoing basis, you should have someone who has been tried and tested. My experience is that most realtors are honest and ethical. As in many professions, it is the few bad apples who give us all a bad reputation.

You should always interview a realtor and find someone with experience and a good success rate. More than likely, a successful agent got there by doing the right thing and making the client happy.
0 votes Thank Flag Link Fri Feb 20, 2009
Richard is on target regards to his comments made.

However we do have clients as a buyers agent who want to low ball offers by at least 50% of list price NOT ON A FORECLOSURE, a seller properties NOT A SHORT SALE, it at times can tarnish a realtor repetition in the trade not be taken serious at anytime submitting an offer.

With these clients "low ballers" we just decline service of representing them . I am not only a realtor but a real estate investor there is what considered reasonable offers submit.
Web Reference: http://www.lynn911.com
0 votes Thank Flag Link Fri Feb 20, 2009
Interview your agent and ask specific questions pertaining to the information you do and don't want shared. Your agent should never divulge anything that would weaken your negotiating position. I would be happy to chat & show you on how I always represent my client's best interests.
Web Reference: http://www.MyABQHomes.com
0 votes Thank Flag Link Fri Feb 20, 2009
I agree with Richard's response. It is the client's responsibility to be diligent in the interviewing process of agents. Along with interviewing agents, talk to your friends, family & co-workers. I'm sure plenty of them will have great referrals and others not-so-great. Tell the agents what you expect from them. With 8 transactions under your belt you should have a pretty good idea what you're looking for and good Realtors respect that. Good luck!
0 votes Thank Flag Link Fri Feb 20, 2009
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