Who’s Running This Show?

This is a repost of something I did on NRVLiving.Typepad.com earlier this afternoon … I thought it appropriate for VARBuzz.com, as maybe it’s a reminder of what our role really IS in the transaction?

Mariana Wagner posted the following video on her site yesterday and it gave me a chuckle, ’cause it reminded me of when this played regularly on TV and – without fail – I’d laugh every time then, as well! (I love the arson comment) The timing of her post is fitting, as well, as I’ve been thinking about a situation I ran up against in the last couple of weeks that I’ve wanted to share. First, the video:

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Why doesn’t the real estate industry have a positive reputation in the public? I had a customer tell me – half jokingly – on the phone the other day, “you guys are just a step above used car salesman”. I kid not, she was not referring to anyone on my Team but the comment was pointed, all the same. How did we grow into that reputation? Here’s one reason:

I’m working with some folks who are buying a home for their college student son to live in while he’s here at VT. It’s a common practice here in the New River Valley, probably 20 percent of my business every year. We’ve been working through the winter to prepare them for buying their first investment property, and as we’ve headed into the spring the market’s heated up and they’ve gotten more serious. Last Tuesday, we finally wrote an offer. It was a townhouse in a neighborhood they really liked, and the house needed work – it’s actually the second set of clients I’ve had that have tried to buy this house. It’s been on and off the market for over a year as the owner has tried – unsuccessfully – to sell it, and the tenants he has in place have not helped. They’ve trashed it, to the point it needs $15,000 worth of repairs and cleaning once they’ve moved out. The last time I had clients who wrote an offer, we built in the cost of the repairs to our offer and made an offer nine percent off of list price. The owner countered within 24 hours at full list price, and the offer died there.

This time, we made an identical offer, now at 10 percent off of list price. I live in this neighborhood – I know these homes, and I know the value of this one as it is right now. We submitted the offer last Wednesday via email, and a follow-up phone call was made to the listing agent. Voicemail… I left a message. That night, nearly eight hours later, I called the listing agent to see if he had reviewed the offer, and he informed me he was out of town and would look at it when he got back that night. Okay – the next day came and went, no word from him. Friday morning, still no word, and despite repeated phone calls I heard nothing through the weekend. NOTHING, not even a confirmation that he had seen the offer. Sunday night, he finally picks up his phone and says that they are waiting to see if another offer comes in, and they don’t want to counter.

Now I’m upset. First, I’m upset that I didn’t advise my clients to put a time limit on the offer to ensure a swift response. Even more than that, I’m upset that neither the agent nor his client have taken the opportunity to provide a professional courtesy to my clients, informing them of their intentions. If they want to sit on the offer, fine – just tell us this. When I asked why they hadn’t even acknowledged receipt of the offer, the agent responded, “Okay, if you want a counter then we’re countering at full price.” He made that statement without consulting his client. Is he in a position to make that determination? Likely not, but it could be argued that a full price counter is in his client’s best interests.

The resolution of all of this? My clients pulled their offer and immediately – within minutes – and made an offer on a similar, more expensive home. The other home? Still on the market, and will continue to be there for a while, I’m sure.

So why do we as real estate agents feel it’s appropriate to neglect an offer, fail to deliver it in a timely fashion and then make decisions without consulting our client? What sense of power have we created in our minds that allows us to own our client’s decisions? When did the control shift out of the hands of the buyers and the sellers, and in to the hands of agents?
PuppeteerIt hasn’t, and it never did. We took it. We’ve tried for so long to control the transaction, to pull the strings in the background. My clients were at the mercy of another agent’s actions, and decided they would take control. I’m glad they did, and I suspect you have plenty of clients who would do the same. My reminder in all of this? I work FOR my clients, they’re not working for me. My role should be one of consultation, of putting the pieces in place for them to make informed, quantitative decisions. That’s the changing face of real estate, not a puppeteer pulling the strings.

I look forward to helping these clients close on this new home …

Photo Credit: Dialaphone & Appraisal News

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9 Responses to Who’s Running This Show?

  1. Schaefer Oglesby says:

    Failing to deliver all offers to your principal or not delivering it in a timely manner could cost you your license.

  2. Tony Arko says:

    I am in agreement with you. I have had similar experiences with agents over the last four years. I put the blame on the brokers and the brokerages. They should be held accountable for the actions of their agents. And there should be some enforcement of rules that agents have abused because they know there is no enforcement.

  3. Julie Emery says:

    Tony has a point. What are we doing, as REALTORs to report this kind of situation, to police ourselves?
    “Time is of the essence” surely didn’t mean anything to this agent.

  4. Lem Marshall says:

    Here’s the suggestion I made in the Commonwealth magazine a few issues back. I’d be interested in what readers think of it.

    Q. If a buyer agent has reason to believe the listing agent is holding his buyer’s offer and not delivering it to seller, what may he ethically do?
    A. The Code of Ethics prohibits vivisection, but if ever it were justified, it’s in this case. It’s probably best to read the Code to prohibit direct contact by buyer agent with seller, even in a situation like this (it would not take much to convince me I’m wrong). But this doesn’t mean the buyer can’t contact the seller directly. Imagine if buyer sent seller a letter along these lines:

    “We so loved your house, and can’t wait to hear your reaction to the offer we delivered to your agent on __________ (date). We haven’t heard anything from you, and just wanted to let you know that if you have any questions about our offer, or if we can give you any additional information about us and our ability to close as we set out in our offer, we hope you will let us or our agent know. If you have any questions, you can contact us at _____________ (number) or have your agent contact our agent _________________ (name) at _______________________ (number). Thank you for your consideration of our proposal. We will anxiously await your reaction to our offer. We hope it you have found it reasonable and attractive.”

    I don’t know about you, but if I were sellers, and I received a letter like this and in fact had not received the offer, I would want to know why. Of course, if we find out the listing firm is holding offers, we simply must not tolerate it. This kind of behavior must be reported the REB and to the local association. If we aren’t willing to do this, we should stop lamenting (i) the behavior, and (ii) our reputation.

  5. Scott Rogers says:

    Lem — I agree, the suggested buyer-to-seller communication above would get things moving, and would be one of the only available courses of action since the buyer’s agent ought not directly contact the seller. Given all of this, is it out of line for the buyer’s agent to suggest the initiation of this communication?

  6. I’m so happy Lem weighed in on this. This is a brilliant move. I’ll be putting it in my virtual tool bag!

  7. A lack of response from the other agent was to make you sqwirm and see if another deal would come in and maybe you would up the offer. I am glad to see the buyers moved on and when there is no professional curtosity what the sellers intentions are you have no other choice.

    Perhaps if they had been buying for a permanent residence for themselves they would have waited but just needed a place for the son to live and felt they could find another right without the hassle.

  8. Obviously Lem is right and we’ve actually used his letter plan in the past. I am also a big fan of reasonable offer expirations. So, to add to Lem’s answer, I would also include something to the extent that the buyers need some answer in a reasonable amount of time.

    I happen to fall much more into the Julie column… Behavior like this will continue until it’s not tolerated any longer. The agent may have simply been caught at the wrong time and there could have been family emergencies and such, but a good broker would have options for this agent so that clients weren’t left out in the cold, when an agent is out of the area.

    All that aside, if an agent facing this issues doesn’t take the time to at least get the broker’s involved – and/or – file an ethics complaint then it could happen to others in the future.

    I don’t know about your market, but in our area, any offer is treated like gold. Agents are responsible to do what their client would do if in their place. I am sure this agent would want to know about this offer, if it were his house for sale.

    Also, since it was an issue getting it presented in the first place, did the Listing agent ever send you anything proving that he had actually presented the offer? If the seller’s wanted to wait till another came in, they should send something they signed acknowledging receipt of your offer and their desire to hold out. Not a rule or anything but a good protection for the listing agent to prove he presented and wasn’t sandbagging for the dual agency opportunity…

    Lastly, in reference to perception of the consumer. NAR’s 2007 profile showed that only 5% would not use their agent again. That’s not a bad batting average. We tend to dwell too much on the negative and not the fact that many agents do a really good job!

  9. Jeremy Hart says:

    Wow, I had no clue there were comments on this post – sorry guys! Great to see everyone chime in on this.

    Julie (and everyone else), you’re absolutely, totally right. We have to police ourselves to make sure that our actions are beyond reproach. If no one’s really looking over our shoulder, why change our actions?

    Lem, thanks for contributing your advice on the topic. What do you think about Scott’s question? Is it out of line for the buyer’s agent to suggest this type of approach?

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