“We’re very interested in this property but can you please call me if you get another offer?”

Real estate is a funny profession at times.

It’s amazing how many times we hear little phrases from both buyers and sellers…almost like there’s a little instruction manual out there that’s been handed around.

Here’s a few examples that you’ve no doubt heard before too…

“My offer might be $50,000 lower than the ask price but tell the sellers that this is a serious offer”

Or this…

“This offer is $5000 less than the list price and I don’t want to give the home away”

And this one is my favourite…

“I realize that the home is listed at $600,000 and my first offer was $500,000 so now that my offer has increased to $550,000, the sellers need to compromise and meet me half way”.

But the opening statement in this blog is a phrase that seems to be in the new addition of the little instruction manual as we’re hearing this with an increasing regularity.

So how should an effective agent answer this?

On first thought, you’d think that a ‘customer focused’ agent should answer “Certainly Mr Smith. If I receive any other offers on this property moving forwards, I will call you immediately and provide you with an opportunity to submit an offer before the property sells”.

But let’s think for a moment…What impact does that have to the urgency of a buyer?

This ‘customer focused’ agent has just eliminated any need for the buyer to submit an offer prior to the home being sold out from underneath them.

Urgency, timing and the potential lack of missing out is one of the key factors that drives the price in an upwards direction.

Next thing you know, the home has been sitting on the market for six weeks with four or five buyers now second guessing themselves about the property’s value (given no-one has yet purchased it) and not one of these buyers have any urgency to make an offer given they know that they won’t miss an opportunity to secure it.

Let’s flip the coin…what do you think would happen if the agent said to the buyer “Can you please ensure that you call me prior to submitting an offer on another property if you’re interested in this one?”

I can promise you that at least 98% of buyers would never call the agent if this request was placed upon them.

Furthermore, it’s an almost impossible promise for the agent to make anyway.

Let’s say the agent has received a cracking offer from a buyer and this buyer is very keen to have the deal solidified as they’re becoming increasingly desperate to buy (and keep in mind that the desperate buyers will often pay more and have less patience to wait around before making an offer on something else).

There’s been many times I’ve taken a very high offer to a seller and asked them “Would you like me to spend a few hours calling every party that’s inspected your home before you accept this offer?” and more often than not, the seller will reply with “No way – this offer is more than I thought I’d get and I don’t want to lose it so let’s just get it locked in”.

The result is that the agent couldn’t follow their sellers’ instructions as well as keep their promise to the buyers.

So how do we respond to a buyer that requests we call them prior to any offer being accepted on a property?

I believe that this is the most effective strategy in order to maximise the chances of the highest possible selling price…

“I understand that you’re keen on this property Mr Smith but the reality is that some negotiations happen very fast and it would be virtually impossible for me to make this promise to every buyer that asks me this same question. I can’t guarantee you that I can do this when buyers will want a fairly instant response from the sellers about the status of their offer. My suggestion is that if you like the property, make your best offer now so that you don’t miss out”.

What is surprising to me is that when we respond with an answer like this, many buyers are telling us “Well every other agent we’ve spoken to has agreed to this so we don’t understand why you can’t too”.

If this is true, it’s a disturbing indication that many agents are (in my opinion) well under-skilled in negotiating a favourable outcome for their sellers.

Until next week, Happy Listing & Happy Selling.