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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 Sacramento Listing Agents Know for Certain
Sacramento listing agents often joke that all we have to do is go out of town for the weekend to get offers rolling in, and this last weekend trip from Sacramento to see Aimee Mann was no exception. I managed to put another two transactions into escrow for Monday morning. It’s always a good way to start the week. It seems to complete the circle of life of Sacramento real estate, meaning new escrows on Monday, new listings on Thursday and closings on Friday.
Lest anybody who reads this thinks that the circle of life of Sacramento real estate is an easy feat to pull off, let me be clear that this market is a lot tougher for Sacramento listing agents than previous years. It seems like there is a lot more work involved. A few years ago we might get one or two offers, take the best one, and call it a day. Today, if a seller wants market value, we might end up negotiating 5 to 7 offers over the term of 30 days or longer. The first offer doesn’t always work out.
Sacramento listing agents can’t be 100% certain that a buyer will perform no matter what we do. The listing agent can call the lender directly and interrogate but that’s no guarantee. The buyer’s agent can swear up and down that the buyer will close, but that’s no assurance, either. Half the time the agents don’t even know the buyers, they met them briefly at an open house, at the bar or maybe during “floor time” — perhaps bumped into them at the grocery store.
Then I get the buyer’s agents who want to know what my sellers will do. Heck, I don’t know. I’m not inside their head. I’m just the Sacramento listing agent who knows if the buyers sign an offer at the list price, we’ll take it. Don’t call and ask what will my sellers do because I don’t know. No other listing agent likely knows, either, if you want to know the truth.
And if we do have an inkling, we’re not allowed to tell ya.
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.
Is it True a Sacramento Listing Agent Must Present all Offers?
An agent asked last week what he could do when a listing agent in Sacramento refused to present an offer to the seller. Well, he could print out a photo of that listing agent’s mug, draw devil horns on the head, tack the picture to a wall and throw darts at it. That’s one solution. He could also report the listing agent to the Board of Realtors and the Bureau of Real Estate. It’s a violation to withhold an offer. Listings agents are required to present all offers to the seller upon receipt or as reasonably as they can thereafter. It doesn’t matter if the home is already pending, either. An offer comes in, that purchase contract has gotta go to the seller.
A listing with an “active short contingent” status is especially suspect because that status, by its very nature, attracts offers. Agents who refuse to present offers or say no offers are accepted for an active short contingent status in MLS can find themselves fined by MLS as well for violating its guidelines. However, listings of any status are not exempt from a listing agent’s duty to present all offers.
It also doesn’t matter if the purchase offer is written on a roll of toilet paper, the listing agent must deliver the offer to the seller. Real estate agents don’t have the ethical nor legal right to decide which offers the seller gets to see and which can be withheld. Not our decision. But you’d be amazed at how many Sacramento listings agents don’t understand this simple procedure or were never informed of its necessity.
Something else some buyer’s agents don’t realize is the rejection on page 8 does not need to be initialed nor signed by the seller. It is not required. If the seller rejects the offer, no signature is necessary. The listing agent is not required to return a page that shows the seller has rejected the offer by an initial or other acknowledgement. It’s only a courtesy.
An email from the listing agent to the buyer’s agent detailing the outcome of the offer is sufficient. If buyer’s agents try to demand a written rejection by the seller, basically they’re saying a) they don’t understand how purchase contracts work, and b) they don’t trust the listing agent — neither of which is likely to endear them nor their buyers; it’s just stupid and insulting.
If you suspect an offer was not presented to the listing agent, the first step is to ask your buyer’s agent or manager to speak to the listing agent’s managing broker. Brokers are responsible for the actions of their agents. I’d say that most listing agents in Sacramento realize they must present all offers and comply. It’s unusual for the opposite to happen. But bottom line, if you’ve irritated the listing agent, it probably doesn’t really matter what else you do. A complaint will just bring personal satisfaction and help to raise the bar. It won’t get your offer accepted. That’s the real world part.
