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Reasons to Ignore Price Points When Choosing Real Estate Clients
Criteria for choosing real estate clients should be based on the agent’s ability to perform.
An agent friend called to ask about a recent blog that she thought might apply to choosing real estate clients. I had discussed prioritizing and spending time on functions that lead to closing. She somehow misread or maybe I wasn’t clear enough. My point was to talk to people whose conversation could lead to acquiring or closing a transaction, and not to spend time talking with sales people, telemarketers, schmoozing mortgage brokers, pretty much ignoring anything that is not directly real estate related.
The question put to me was when is it OK to not work with a client whose price point is very low and requires a lot of work, without signs of immediate reward. Is it all right to tell buyers, for example, that an agent who spends time working with them is giving up valuable time that could be spent working with buyers whose offers won’t get rejected due to competing cash offers and whose price points are more plausible? That the agent prefers instead to target a more financially rewarding buyer?
I thought about the question and how I felt about it. It’s a foreign concept to me. Here’s what I believe. This is about ethics and integrity. If a real estate agent when choosing real estate clients uses ease of transaction and sales price as determining factors, where does one draw the line? And won’t that line change as time goes on? If you start with the assumption that, for example, you won’t work with buyers who are looking for a home under $100,000, how long does it take before you decide you won’t work with buyers looking for a home under $200,000? Under $300,000?
What kind of person does that make the real estate agent? Not a very nice person, I concluded. In fact, it makes the agent kind of an asshole, forgive my descriptive French, but it’s an accurate description. I think an attitude like that would fester and mushroom into a monster. One would be like Donald Trump. You can’t say some people are worth your services and some are not because they don’t have enough money to interest you. Well, you can, but you’d be an asshole.
That has never been my practice when choosing real estate clients. I never look at the sales price or the amount of work involved. I’m a Sacramento Realtor. I don’t discriminate. Selling Sacramento real estate is my job. Some transactions are more lucrative than others, and some are easier, but it doesn’t mean money or a slam dunk is my focus. My focus is to work with anybody who needs help. I never look at the bottom line sales price. Ever.
I put transactions into escrow. As long as I have transactions in escrow, I know I won’t starve to death, and my cats will enjoy heat over the winter. Some years I make more money than others, some years less, but I am always ranked in some form in the top 10 agents in Sacramento. Part of that way I accomplish that is by not choosing real estate clients based on how much money I will make. I’ve learned a long time ago to ignore that part of the business, odd as that might sound to some of you.
Yolo County Easement Disaster and a New Kitten
Yolo County seizes property for an easement and makes owner suffer more when it’s not needed.
You can’t make up stories about a Yolo County easement. If you think dealing with the Sacramento County offices for certain things is time consuming, it seems Yolo County is no relief, either. True tale. About 40 years ago, Yolo County seized part of a property in West Sacramento, probably under eminent domain, which means the government has the right to waltz in and claim your property, whether you like it or not. Then, when they abandon the plan for the property, they can make you pay absorbitent amounts to get the easement released.
Is there a word for when they screw you coming and going? It’s probably not printable. One of my clients who bought property in West Sacramento purchased said property subject to an easement for a road. When he questioned the use of the easement, he was informed the county no longer needed the easement because the land behind it had been divided, and the plans for the property no longer required a road.
OK, fine, says, he, can you abandon the easement then so the property is buildable? Well, only if the owner pays for a surveyor to survey the easement. Oh, and pay another $800 because they need to see profit on that $10 recording fee. Surveyors are expensive. Like a few grand. The easement is already spelled out in the title insurance policy by a metes and bounds description that is very easy to draw and understand.
This is a Yolo County easement process for you. Ridiculous.
Horatio might become our new kitty.
On the other hand, my husband and I are in the process of trying to adopt a cat. Just a regular cat, my husband says, an ordinary cat, this time. No purebreds. OK, I can live with that. I’d rather not fly to LA to get a kitten. But when you’ve had cats for as many years I have, you want a cat that doesn’t look like a cat you once had. A different cat. And that’s really hard because I’ve probably had dozens and dozens of cats in my life.
I searched and searched and found just the right age and sex for our family. We need a male kitten so Tessa won’t have a hissy and so Jackson will accept him. Our cats are 3 and 6, so it’s best to introduce a kitten or at least a cat under a year. Tessa is so dominant, she might hate another female.
Here is a photo of the kitten we are going to meet on Sunday. His name is Horatio, and he’s a lavender siamese and a mutt mix. His mom was rescued while pregnant so Horatio has led a pretty cushy life so far, but he’s still a rescue kitten. Just not one that was abused, tortured, abandoned, disfigured . . . You would think you could say, OK, I’ll adopt him, but no. That’s not how it works. This is not 1950. First, we had to fill out an application that asked all sorts of personal questions. After that, a phone interview. Passed those hurdles.
Why don’t they do this when they allow people to vote? No, I don’t really mean that. That would result in discrimination, and we don’t need to discriminate.
Next, we meet the cat in person. If we all get along, then the rescue organization will come to our house to inspect it and to meet our cats, just to make sure we’re not crazed animal killers or drug addicts who squat in a home without sanitation. But I don’t mind jumping through a few hoops, even if I feel the rules don’t really apply to us. Their group, their rules.
It’s better than trying to battle a Yolo County easement process. I suggested my former client contact a council member who represents his district. He might get further with that route than trying to reason with a government worker behind the counter at Yolo County.
How to Determine if the Offer is a Solid Purchase Offer
All viable offers look like a solid purchase offer to a Sacramento Realtor.
First off, a Sacramento Realtor cannot predict a solid purchase offer. No way, no how. Yet that does not stop eager buyer’s agents from calling about pending sales to ask: how firm is that purchase offer? It’s not a question I can really answer. Do I know the buyer personally? No, I do not. Do I represent the buyer? No, I do not. Much of the time, I don’t know the buyer’s agent, either. We have 5,000 agents in our Board. Turnover is high. Many agents aren’t in the business long enough to renew their licenses, which is at the four-year mark.
On top of this, the buyer’s agent might not know the buyer, either. The buyer could be some dude who plucked an agent out of the blue because the agent advertised on a website that contains property listings, like Zillow, for example. Strangers working with strangers working with strangers . . ..
Basically, we have two types of purchase offers. The kind that close and the kind that do not. Both of these look exactly identical to each other. They each contain a strong preapproval letter, and the buyers have coughed up an earnest money deposit by wiring or writing a check to escrow. They have scratched a signature on an offer and are contractually bound.
Which is a solid purchase offer?
You won’t know until closing.
In our hot 2017 real estate market in Sacramento, most of the obviously flakey buyers do not make it into escrow. Given a choice between a badly written purchase offer, submitted without a preapproval letter and an offer that adheres to standards, sellers will take the offer that meets requirements and ignore the screwed up messes.
We received 9 offers the other day for a property and only 7 were viable. Of the 7, most likely one of those might not close. Is it our present escrow or is it one of the offers we did not accept? There is no way to discern. After 40+ years in the real estate business, I can spot a crummy offer a mile away, but I cannot determine which viable offer is a solid purchase offer. It is impossible.
I don’t care if the buyer’s agent promises us the moon. They can say their buyer strolled by this home every day as a child and fell in love, dreaming about the day it would be available for sale; implying they would give up their first born to buy this home, and they can cling to the mailbox, refusing to budge until closing, proclaiming their love by screaming into a forhorn for all the neighbors to hear, and I don’t care.
It doesn’t mean they will close escrow.
If your buyer wants to write a backup offer, just do it. But please don’t call me to ask if we have a solid purchase offer.
Can a Sacramento Seller Pull Back a Counter Offer After Signing?
Any time prior to delivery of acceptance, a seller can pull back a counter offer.
After I answered the phone last night, I could sense the tense irritation in the caller’s tone. Uh, oh, these were the buyers who just lost a home because they did not sign the counter offer fast enough. They certainly did not want to hear that I am not their agent and cannot engage in a conversation with them; no sirree, these were folks who felt they understood exactly what had happened and they were royally screwed with a Capital R and no orgasm to boot. Except that is not what occurred. What occurred is they did not believe a seller should pull back a counter offer.
These buyers had an interest in my listing which, after a couple weeks, became a temporary off-market property. They called me directly and wanted information shortly after I listed the home. I explained that I would not work with them because I don’t do dual representation. I will not work with a buyer while representing a seller. If they needed an agent, I offered to refer them to a team member, but they suddenly had their own agent. Well, as long as they had their own agent, then problem solved. They can call their agent and ask her to call me.
Their agent called to ask about the property in temporary off market status and inquire when it would go back on the market. Not until next month. But if the buyers wanted to submit an offer subject to inspection, that might be the way to go, I suggested. I try to suggest that solution to every buyer’s agent who calls on a TOM status listing. I’ve had several agents call about this particular listing. This is a tight market with limited inventory. If buyers can’t find a home to buy, asking their buyer’s agent to scour the TOM listings and call listing agents is a good strategy.
My sellers had personal reasons for wanting to take their home off the market for a little while. Early yesterday morning, I received an offer from an agent who represented the now irate buyers. Their offer contained an element or two the sellers wished to counter, so they accepted the purchase offer subject to their own counter offer. I received the seller signed counter offer from DocuSign, sent it to the buyer’s agent and received a confirmation of receipt late morning. Tick, tick, tick. Can you hear the Sacramento real estate clock? Timing is everything. You know what happens next, right?
Late afternoon I suddenly received another offer from another buyer. What are the odds of that happening with a TOM listing? I guess in this market, those odds are pretty high. There were things about that offer that were very attractive and enticing to the sellers. As their agent, I am required to deliver that second purchase offer immediately and to point out that the sellers have a counter offer out to the first set of buyers. If that counter offer were to be signed and delivered to me, they would be in contract. Done deal. But they also had a small window of time to consider withdrawing the counter offer, if they chose to accept offer #2. Their call. Tick, tick, tick.
Of course, you know by now they did exactly what you would do. They authorized a Withdrawal of Offer, signed the WOO and I delivered it pronto to the buyer’s agent; but I also called her to explain what had happened. These things happen. Sometimes sellers pull back a counter offer. I felt empathy for the agent. I suggested her buyers could go into backup. The first set of buyers are very angry now that I did not try to persuade the sellers to stick with their offer. They felt I owed them an ethical obligation to try to keep them in contract. I’m afraid they don’t understand real estate 101. The only ethical and legal obligation I owed at that point was to my sellers.
The first set of buyers had many hours in which to return the counter offer and they didn’t sign it within that time frame. Don’t ever sit on paperwork thinking the transaction is complete. It’s not completed until all documents are delivered. Before that time, sellers are free to pull back a counter offer if they choose.
The moral of the story is if you receive a counter offer from your agent, sign it right away. Make sure it is delivered immediately. Don’t make the mistake of believing you have the luxury of time on your side. The Sacramento real estate market in its present frenzied state waits for no one.
When Agents End Up Working With Crazy Buyers
Working with crazy buyers is part of Sacramento real estate.
I have to be careful when I am facetious. My humor leans toward dry. Because my general nature tends to present itself as a nice person, sometimes people don’t realize when I am insulting them. I suppose that could be interpreted as a good thing. I could say I feel sorry for an agent, and another would think I truly felt empathy — when what I meant was I’m sorry the agent is such an idiot. In that event, the other side of the street is a better place for that agent to walk upon than to chance an encounter with me.
Some agents are forced to work with crazy buyers; I get it. The market is tough on many agents. The limited inventory in the Sacramento real estate market makes some agents desperate for business. But if an agent chooses to work with a crazy client, that agent owes it to the rest of us to rein in that person. You don’t give a loopy dude 10 shots of bourbon and turn him loose with a six shooter unless you’re a sucker for punishment.
When an agent knows her client is a loose cannon, she doesn’t send her client unauthorized correspondence just to stir the water further. Because that end result is no transaction for her. Like the Soup Nazi. No soup for you. The seller doesn’t want to be in escrow with a nut job. Neither does the listing agent. There is also that problem of guilt by association.
Over the years of being a Sacramento Realtor and dealing with Sacramento real estate, I have come to be highly selective. I select the sellers I work with. I work only with people I like. If I can’t find something to like about a person, I don’t work with them. Further, I am especially critical of purchase offers. I scrutinize. My job is to make sure the seller closes escrow. That means going into escrow with a person who is likely to close.
One thing I do is ask buyers to do before looking at homes is to sign an agency disclosure. It’s required by California Civil Code prior to showing any real estate. Yet many agents never present an agency disclosure until weeks of showings have passed. If buyers struggle with signing that document, which is just a disclosure, that could be a red flag. It needs to be addressed.
Not every buyer is a serious buyer. Not every buyer today is committed to closing. We have crazy buyers in the market. For a million different reasons, buyers sign offers and never move forward. Agents should be able to pick out these types of clients and correct that behavior before they ever get to the offer stage.
The agents who can’t, well, they lose credibility. Not to mention, sales. Because they spend way too much time working with clients who are not really clients.
