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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.
Should Sellers Always Issue a Counter Offer?
Sacramento real estate agents often get upset or irritated when a seller refuses to issue a counter offer, but there is no law nor rule that says a seller must. This is the thing that they don’t understand because they put themselves in the seller’s shoes, and they would act differently. Everybody has his or her own way of responding to situations, and not everybody reacts in the same manner.
I mean, look at those guys out at Buckingham Palace. They stand there with their cute little chin straps, big furry hats, and they don’t even blink much less smile. You can’t make them smile. You could take off all of your clothes and do cartwheels in front of them, and their eyeballs would not move. Not that I’ve ever tried it, mind you, just making a point. Everybody is different. It’s what makes the world go round.
When I see purchase offers from buyers when I’ve explained to the agent that he or she needs to be extremely aggressive and very strong, and they submit an offer that results in less than list price, I feel for those agents. Because I know they’ve explained it to their buyers, and their buyers have their own thoughts. I imagine their own thoughts are something like: well, I’m gonna buy a home under my own terms, and if I can’t, it’s just not meant to be. Or something else equally ridiculous. Thoughts like that simply mean they are not buying a home. Not today. Not tomorrow. Not until they conform to the market.
But in any case, it does not mean the seller is required to send buyers a counter offer. Sellers are not allowed to discriminate and they can’t turn down a full-price offer without noting such in MLS, but they are never required to counter.
As the seller’s listing agent, I can’t make them issue a counter offer. And I wouldn’t want to try to force them to do anything anyway. Not every purchase offer deserves to be countered. Years ago I might have suggested that it’s always a good idea to counter, but today, meh. In this market, not so much.
What Kind of Sacramento Real Estate Agent Does That?
It’s not unusual for an agent to hire this Sacramento real estate agent, or for any of my clients to have held at some point in their lives a California real estate salesperson license, because roughly 1 in every 35 people in California has a real estate license. Having passed the real estate exam and being entitled to practice real estate for 4 years, however, is no guarantee of knowledge, and it certainly does not reflect experience, yet there is a certain comradery among us agents.
I say this because I just closed a real estate transaction in Fair Oaks for a couple of sisters, one of which is a real estate agent. They found me online and read many of my blogs, articles on About.com, and were impressed with my decades of experience. But they still wanted to interview several other agents. Actually, I don’t know if they ever did because after they hired me it didn’t matter. I presented a strong case to choose me over another agent they were considering because I have a strong case to present. I don’t have to sugarcoat any facts or make myself sound better than I am to attract clients.
After the sale of this particular duplex closed escrow, I called to let the sellers know I had received confirmation of closing. It’s important that I speak directly to the sellers when a transaction closes, even if we’ve been communicating all along through email or text. I don’t want take a chance of a technology failure to deliver the news. So, I do the old-fashioned thing: press my Bluetooth earpiece and demand a phone call.
Sellers often like to reminisce during these types of conversations, and this seller was no different, even though she was a real estate agent. She said that what I did to truly earn my commission in her eyes was how I handled the situation when we received an offer that was $9,000 below list price. I advised her to issue a counter offer at list price because I believed she could get list price.
I didn’t deliver this advice off the top of my head. I studied the way the offer was written, reviewed the proof of funds (it was all cash), looked up the history and production of the buyer’s agent, analyzed the deposit check, among a myriad of other things that I do upon receipt of a purchase offer. Sellers pay me to think, not to react without consideration. I’m not a messenger, I am a negotiator. Given the present inventory on the market, and the attractive price of this duplex, I believed the seller could demand list price so that’s what I advised her to do, to counter back to list price. Which was accepted, btw.
There is a fine line between telling a seller what to do and advising a seller. I am not a White Knight Agent. I don’t make decisions for my clients. I deeply care that my clients are informed, and I deliver my advice based on experience and knowledge. I’ve worked with agents who get themselves all worked up into a lather and somehow superimpose themselves into the escrow, which creates horrible nightmares. I don’t lose sight of my position nor fabricate answers for my clients.
The seller asked out loud yesterday, after her reflection on events: What kind of agent does that? What kind of agent tells a seller she should counter? I guess this one. She seemed to be blown away that a Sacramento real estate agent would actually do what is best for her client. Although, I don’t really understand why. We have a fiduciary to our clients. It doesn’t matter to me if the seller wants to accept a purchase offer or send a counter offer or ignore the offer as long as the seller is happy. I suppose I should ask her for a review.
Paperwork: It is Not Personal, It is My Job, Ack!
Anybody who works with Sacramento real estate agents knows that a truism for many agents is we all hate to do paperwork. That’s a fact. Further, many agents are not detail oriented. The traits that make an agent excellent at working with other people and a successful negotiator don’t necessarily transfer to the paperwork department. Most people cannot be the life of the party the night before and settle into a cramped chair to prepare a tax return the following day.
The two don’t necessarily mix. Like rap and classics, although Tony Bennett and Lady Gaga would disagree.
Some of us buck the norm; even though we are gregarious, we might carry that weird gene — the one that wants to make sure all of the i’s are dotted and the t’s are crossed and will occasionally give in on ending a sentence in a preposition if it happens to add flavor and comes with. This weird gene somehow blends rather nicely with the social-butterfly gene, that one that embraces people and life and looks for the joy in the world. That’s my personal makeup as a Sacramento real estate agent.
When a buyer’s agent sends me a purchase contract, I want to make sure we are all on the same page. I sometimes ask the seller to send a counter offer, but it’s much cleaner if the paperwork is prepared properly in the first place. Sometimes agents can get very exasperated because they didn’t check a box or they checked the wrong box or they didn’t include the proper addendum or are missing required documentation, and they might misinterpret a request for those documents as extreme personal punishment, which is understandable from their point of view. They hate paperwork. Just because they hold a real estate license does not mean they understand contract law.
It’s a difficult spot, between rock and hard. Does a listing agent prepare a two-page counter offer that could make the buyer’s agent look incompetent or does the agent ask for a revised offer? How does the seller know if the buyer understands the agreed-upon terms if it’s unclear?
Yet, it’s engrained in me that if we’re entering into a legal contract, then it should be a clear understanding and agreement and executed correctly. That behavior probably stems from my years as a Certified Escrow Officer. In a buyer’s market — which is what it seems like we’re transitioning into — sometimes the best solution is to correct the other side’s mistakes for them and just go forward with the transaction. Focusing on the big picture and sweeping up along the way. Just get it done. That’s why we’re hired.
The only time a client will notice this stuff is if we’re sitting in front of a judge in a court of law who asks why we didn’t require a completed purchase contract. And that’s not a place any of us wants to go. I know the difference, and I’ll continue to ensure it’s done correctly in the first place, regardless of what I have to do to achieve it. Paperwork: it’s not personal, it’s my job.
Not Every Sacramento Home Seller Wants to Deal With a Counter Offer
When an agent says to me, you can always issue a counter offer to my buyer, that sounds like code for: the buyer is unreasonable, because I don’t think an agent is trying to tell a veteran how to sell real estate. But you never know in this market. We have a very weird market in Sacramento right now made up of serious buyers and squirrelly buyers and lowballing investors. I never know on which the roulette ball will land, as it is like a roulette wheel.
I can share with an agent that we have multiple offers, and yet the buyer’s agent will send me an offer that is contingent on selling the buyer’s home without a Contingency of Purchase addendum, much less a pre-approval letter. You can’t make this stuff up. Oh, and on top of it, maybe the agent hasn’t shown the home. It makes you wonder if buyers aren’t thumbing through MLS listings like a Neiman Marcus catalog and saying when I win the lottery, I’ll buy this house and that house and that house. And agents are writing offers for these guys. Blows my mind.
Most sellers in Sacramento do not enjoy bidding wars, believe it or not. They hope that a nice family will purchase their home at a fair price and close escrow — live there happily ever after. That’s what sellers want. Not every seller will want to deal with a counter offer. It’s stressful for many sellers. Negotiating does not come as easily to some of us as it does to others.
Myself, as a top-producing Sacramento real estate agent, I negotiate daily for a living, and I love to negotiate. But I’m also sensitive enough to realize that many of my sellers do not want to negotiate. They don’t want to deal with counter offers and all that they imply. They just want to sell their home.
If we receive 5 offers, the sellers, more likely than not, will take the path of least resistance and choose the best offer for them. Especially if it doesn’t involve a counter offer. If you’re thinking about writing an offer for a home in Sacramento, you should ask your buyer’s agent to call the listing agent to discuss what you might want to do. Although a listing agent cannot and should not ever speak for the seller, a listing agent can help to guide. You might have to write your best offer and stop trying to ding around.
On top of all of this, no offer should ever land on a listing agent’s computer without an advance call from a buyer’s agent. Not in this Sacramento real estate market.
