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Managing Buyer Repair Requests to Buy a Home in Elk Grove
Managing buyer repair requests is an art form. I can always spot that experienced buyer’s agent who invests the time to educate her buyers. It’s as plain as day. Some buyer’s agents simply take orders from their buyers. Don’t know why. Who is the professional and who is the client? I suspect some agents don’t know the answer to that question, so they allow their insecurities to bubble, to thrive and to rule. Agents don’t want to tell a buyer to back off or calm down or listen to reason, not in those words, of course. They want to be a buddy. And that’s the problem.
If an agent can’t find a way to explain to a client why the buyer’s chosen plan of action is harmful and a really bad idea, then how is a buyer’s agent representing that client? What kind of service is that? I tell you what it is. It’s called lip service, for some of you younger guys. Lip service is a disservice. Just like agreeing for the sake of harmony when the agent knows it is wrong. The best way to engage in managing buyer repair requests is to have a conversation with the buyer prior to inspections. To review other types of inspections and to prepare the buyer for the inevitable: The fact their dream home has things wrong with it and damages the seller might not fix.
This is never time “wasted” on behalf of the buyer’s agent. Yet so few set aside time to discuss aspects of the transaction with their clients.
I’ll give you a case in point. Yesterday, I closed a listing in Elk Grove. A sale which I sold twice and got paid once. Nobody likes to do that, albeit it is less work for me than the poor buyer’s agent who now has to hit the street to show more property or, worse, lost a client over it. In this scenario, a buyer’s agent begged me to show compassion toward his buyers. The agent made a plethora of promises he ultimately could not keep. When I hear from that agent in the future, I shall no longer hold a high opinion of that agent. The opposite. He lied. Repeatedly.
— Which is unacceptable in my book. Other agents say, hey, we all huff and puff and fluff, get over it. But, no. We all don’t huff and puff and fluff. —
After promising his buyer would purchase AS IS, he sent the sellers a 14-item request for repairs. It included things like replace all the fixtures and faucets in the house, replace the siding, install new windows. Crazy-ass stuff. The one thing he should have focused on was replacing the leaking water heater and he might have closed. Focusing on one major item is a sign of a smart agent. But no, they tend to get caught up in drama.
I tell sellers not to do repairs after they get a home inspection. But they take it personally. They actually want to fix broken things. It’s hard to get them to back off and wait for a request. Because what they think a buyer will want fixed and what a buyer really wants are two completely different viewpoints. No sense fixing stuff the buyer doesn’t care about. No two buyers are ever the same. After the existing buyers canceled, we found another buyer right away. Of course, this new buyer did not care at all about the home inspection. Just like I said. Those buyers had an agent who was adept at managing buyer repair requests.
Also, in this particular transaction, when our winning offer arrived, we already had a counter offer out to another buyer. That buyer was slow to respond. His agent did not appear overly motivated, either. While that counter offer was out and awaiting buyer approval, we received the offer we really wanted. Bay area buyer. Cash. $5K over. So we sent the second buyer a withdrawal of offer, withdrew that counter offer, and accepted the offer we preferred.
The sellers had already decided at that point to replace the water heater. It was expensive. Cost $1,400 to replace a 40-gallon water heater. Yikes. For that price, one may as well go tankless, but I digress. Last water heater I helped a seller replace was $750. Only a few years ago. However, these particular buyers had paid for a pest report. The first set of buyers did not. See? They don’t always get a pest. The pest showed $7,500 of Section 1 work, plus more for Section 2.
We had bumped up the sales price by $5,000, so we reduced it by $5,000, which made the sellers even. Even Steven. No pest work, and we closed with a cash offer. 9089 Paseo Grande Way, Elk Grove, CA 95758 closed escrow on September 12, 2018 at $339,999.
How About a Thanksgiving Lowball to Go With Your Butterball?
A Butterball turkey from 11 years ago at my house in Land Park.
Not making this up, I actually received a Thanksgiving lowball offer for one of my listings yesterday morning. No introduction to the buyer, no notice the offer was about to arrive. I woke early morning to an email: here is an offer with the accompanying documents. When a Sacramento Realtor receives a Thanksgiving lowball without the usual notification, there is only one thing to do. Call all of the people responsible at oh-dark-thirty. Especially the person who sent the email with instructions not to call.
Further, no calls, we prefer emails. Oh, yeah? Grabbed my cellphone. One ringy dingy.
I’m not sure the buyer’s agent was happy with me waking him up. He sounded pretty sleepy. His assistant returned my call while I was on the phone with the buyer’s agent and rattled a long message that I didn’t listen to. What I hoped to determine was whether it was worth it to send the counter offer, along with the entire offer signed. Or, should we save my sellers the hassle and just send a counter offer? If it seems the counter will be met with dead silence, I don’t bother my sellers with a request to obtain signatures on the offer.
Don’t get me wrong, I will work on Thanksgiving. Obviously. But my 43 years of experience says dealing with lowballs generally means an unrealistic buyer on the other end. Over the years, a few lowballs have worked out but most do not. Probably because not much to argue over. The entire focus is the sales price. You can’t negotiate nor compromise when list price, an attainable and reasonable goal, falls off the table.
Work with us, the agent urged. As though somehow a listing agent’s job is to tell her sellers to accept less than they deserve. Maybe that’s how others do business. Not this Sacramento listing agent. People call me a bull dog. My goal, my commitment to the seller, focuses on delivering list price or better. I say to the agent, make a full price offer. Ensure the seriousness of your buyer about buying a home. The sellers would like nothing better than to sell this home to a willing and eager buyer.
You have a dated listing, the agent attempted to argue. Like it’s old, worn out, a home nobody wants. How is this when the days on market barely exceed 2 weeks? Already received over-list price offers, mostly contingent on selling homes not yet for sale. No reason whatsoever the seller won’t get list price. With that thought in mind, I prepared a counter offer at list price, obtained a signature and delivered the document to the buyer’s agent.
Hey, even a Thanksgiving lowball gets a response.
A Good Purchase Offer Does Not Make the Seller Issue a Counter Offer
Small mistakes in a purchase offer can require a counter offer.
With almost every new Sacramento listing these days comes a flurry of purchase offers from an assortment of buyer’s agents. Every strong listing agent in Sacramento is witnessing this sort of stuff right now. Some of us, I should add, are fairly detail oriented, and we expect purchase contracts to arrive with all the I’s dotted and the T’s crossed. It should not be surprising, then, when we find mistakes in the purchase contract that it means we will undoubtedly be required to suggest a counter offer to the seller.
A well written contract is a purchase offer the seller can immediately accept. If an agent is submitting an offer in a multiple-offer situation, for example, and that offer is less than list price, a buyer’s agent should not force the seller to issue a counter by making a mistake in the offer. Because a seller will start looking at other things in the offer to object to, perhaps and quite rightly so, starting with the sales price.
Sometimes agents will toss other factors into an offer such as requesting a certain title company when the seller is paying for the title insurance and may have a preference for a different title company. That’s enough to require a counter offer as well. If an agent is from out-of-area and uncertain about what types of expenses are customary fees paid for by the parties in Sacramento, the agent could call the listing agent to ask.
It’s not just listing agents who might gravitate toward easy-to-sign purchase offers; it’s also the sellers themselves. Sellers read entire contracts, believe it or not, and they can note subtle differences among the offers. For example, if the listing in MLS does not offer FHA nor VA financing, the likelihood is it was not a mistake. The seller might prefer only cash or conventional offers. A buyer’s agent’s opinion about that is of no consequence.
I’ve even had agents send this Sacramento Realtor a purchase offer accompanied by an email asking to please send us a counter offer. Not only is that in bad form and could possibly violate a fiduciary relationship with the buyer, but it also suggests the agent has been unable to get the buyer to understand the realities of the marketplace. That’s not exactly the kind of people we want to go into escrow with, although, sometimes it’s just the luck of the draw with buyers and buyer’s agents are stuck with who they get. You can’t always change people, especially the stubborn ones.
My advice for agents is to just write the best offer, check for mistakes, and try not to encourage the seller to issue a counter offer.
Another Sacramento Home Has Closed Escrow
Want to read about a Sacramento home that closed escrow without a hitch? It’s not often in this Sacramento real estate market that I am afforded the opportunity to gush about what a smooth transaction we just closed because in squirrelly times like the present, the real estate business is typically anything but smooth. The escrow that just closed, with the exception of the document delay on Wells Fargo’s end, presented no problems at all. It was a miracle, in retrospect. I will probably close more than 100 homes again this year and, when I can count smooth closings on one hand, I consider myself and those around me fortunate.
No agent is an island in this business. I might be a rock but I am not an island. I need my team members, escrow officer, transaction coordinator, lenders, title company, appraisers, office assistants and, most important, the agent on the other side to successfully close.
The trick is to not burden the client with every little hiccup in a transaction. That’s one of the reasons home sellers and buyers hire a Sacramento real estate agent — it’s to be a buffer. This doesn’t mean we don’t disclose what’s going on, but there are some behind-the-scenes situations that don’t affect the parties and the parties might be better off not hearing about it, until it closes, if ever. There is no reason on god’s green earth to make other people miserable if they can be spared.
That’s why Powers that Be created real estate agents. We are the ones who often bear the brunt of the transaction. We take the punches so our clients don’t have to.
The agent I worked with on this last transaction was wonderful. She worked tirelessly to meet the demands of the escrow, and I would eagerly work with her again in a heartbeat. Many agents are fabulous in this business and will do whatever it takes to close. In the beginning, though, her buyer was a little bit wary and not as optimistic as his agent.
The home that sold was newer, built in 2010, so we weren’t overly worried about defects or problems, although every single home on the face of the planet will have some kind of defect. There are no perfect homes out there. But because so many escrows lately have developed problems midway through after buyers discover a small defect and suddenly wanted to renegotiate or lower the price, the seller, on advice from a legal friend, elected to be upfront about what she expected. Cut off that behavior at the pass.
In the counter offer, she explained the Sacramento home was sold in its AS IS condition. Yes, that verbiage is in the contract, but few pay attention to it. She simply asked the buyer to agree not to request repairs nor try to renegotiate, regardless of what a home inspection may reveal. The buyer was worried that he could not cancel, but after he thought about it he realized that was not really a valid concern. The seller wanted assurance of some sort that when she removed her home from the market, the buyer would not continue to negotiate.
She wanted the AS IS clause to mean AS IS. Not maybe. There are buyers in Sacramento who have no intention of closing on the sales price they offer. They know it when they write the offer. These types of buyers plan to further reduce the price after the home has been removed from the market for a few weeks. That’s a sneaky way to do business.
Some buyers don’t know when the negotiations have ended. Some negotiations, on the the other hand, never end. But this one did. It stopped at the counter offer. The buyers agreed and the escrow closed, as they say in Shakespeare, without further ado, sigh no more.
Handling a Short Sale Counter Offer
When a short sale bank issues a counter offer, it’s not really a counter offer. Except that it is. It’s just not the type of counter offer that most Sacramento real estate agents recognize. Confused? A short sale counter offer arrives in different forms. Sometimes it looks like Buddha, and other times you’d swear it’s sporting a black cloak and wielding a scythe. It can be in writing or it can be verbal. The counter can be negotiable or non negotiable.
An agent in my office called yesterday about a Chase Bank short sale. I realize that my company has managers who answer these sorts of questions, and they do a bang-up job. But agents also get antsy and don’t always want to wait for a response. Imagine that. An impatient real estate agent! So, every so often, the brave ones call me. I don’t mind helping out a fellow Lyon agent now and then as long as they don’t make it a practice, although I wish they would email and not call.
The agent who called, a super sweet guy, was bent on explaining his entire short sale woes. As I’m listening to him, I’m watching phone calls come across my cellphone screen like a CNN scroll. I ponder whether I should send text messages to the unanswered phone calls and, if so, should I choose the response that says I’m at the dentist or is it better to simply say I’m busy, or don’t they already know that since I didn’t pick up my phone? Do I have to tell them I am awake? Is it any of their business what I am doing?
I like the prepared response choice that says I’m at the dentist because it sounds more respectable than to text my real GPS location, which is I’ve got my head stuck in the frozen dessert section at Safeway, fogging up the freezer. Finally, in my distractions and attempt to focus on my fellow agent’s question, I found myself needing to pull him in that direction as well. I cut to the Chase. Ooo, a pun. I interrupted him and said, “Phone messages are piling up while you are telling me your story, exactly what is your question?”
He wanted to know how Chase issues its short sale counter offers. It felt weird to him that the short sale agent would just call and tell him the price had changed and that the buyer had to pay some other miscellaneous fee. Maybe he expected the counter offer would be white-glove delivered on a silver plate with a juicy JPMorgan Chase insignia wax seal on the envelope. Nope, it’s verbal. Chase short sales are still old school. Documents are faxed to a central location and then lost, just like the old days at Bank of America.
Speaking of which, I received a counter from Bank of America yesterday on a Cooperative Short Sale. Most of the time a buyer’s agent never knows that a counter offer has been accepted unless he or she reads my short sale updates on my website. That’s because counters don’t often involve the buyer. The bank is simply approving or rejecting fees the seller must pay from the proceeds of sale to close. The bank authorizes the expenses of sale. The lower the fees, the higher the bank’s net. It is the seller who pays the fees, not the bank.
This was unusual because the accepted sales price exceeded the preapproved listed price of this Cooperative Short Sale. We had received a number of multiple offers on this short sale. We picked the best offer, which is not necessarily the highest offer. I imagined the buyer would be somewhat stunned to receive an addendum increasing the price and paying a few additional fees. But the bottom line is we want to close this short sale. The bank’s investor has guidelines.
Bank of America stresses that in a Cooperative Short Sale, the preapproved short sale price is precisely that: preapproved. It doesn’t say it will accept that list price. The bank’s investor calls the shots. The buyer, naturally, wanted to know if she could negotiate with the bank, and see, this is the thing. Will another buyer pay that price? In a heartbeat. I know this; it’s not speculation. So, the buyer accepted the Bank of America short sale counter, which is a good thing. Smart buyer, smart buyer’s agent. You know what we call a buyer who doesn’t want to accept a bank’s counter offer like this one? Let’s just say the term doesn’t have buyer attached to it.
