As we are finding out (some for the first time), housing and the mortgages that finance it is a key economic engine.
Question: Is it important that the agent and/or loan officer you are working with have a keen understanding of fundamental market knowledge and economics? Should they show competency in basic fundamental economics and how it impacts housing?
How would you rate the importance:
1) Very important (it could make the difference in working with the agent/loan officer or not).
2) moderately important (would allow for good discussion, but it would not necessarily dissuade a working relationship).
3) somewhat important.
4) of little importance.
When I bought a house in 2000 (which I sold when it became clear to me the real-estate market was on crack) I did a lot of searching to find an Eastside agent who was willing to let me write numerous low-ball offers. We went through the MLS, selected all the homes that fit our basic criterion (e.g. square footage, location, etc), and then went to look at them to see how over-priced we thought they were.
We then proceeded to write 15 offers, with bids of anything from 15% to 25% lower than list. About 3 of the sellers made reasonable counters (i.e. were actually willing to come down 10% or so) and we continued to keep having back and forth negotiations until one of the sellers caved in to a 12% discount from list.
The key was to have no emotion as to which house you get, so that you are perfectly willing to walk away from any deal.
Anyway, the next time I buy a house (likely in 3 or 4 years) I want to do the same thing again. I am not looking forward to searching for a realtor to work with on this though. It was really tough to find a realtor to help me the last time, and God knows how hard it will be to do that again.
By the way, I wrote up a contract with my realtor guaranteeing I would buy my home through them. I didn’t want the realtor to think they were spending all this time with me only to have me walk away later and buy through someone else.
Sniglet,. assuming you were planning on living in the house I find it amazing you could find that many houses to make offers on. But I have had clients that weren’t that picky.. Anyway I only bring it up because when my wife and I looked we only found 2 out of 80 we both liked.
I agree with you on the emotion thing. Once a client finds a house they like it’s often hard to hold them back, and they get impatient. Even though it took us so long to find a house, we were very patient negotiating with the seller. We had one or two weeks where there was no outstanding offer either direction. It would be tough to get some clients to do that.
Thanks for the insight Sniglet.
The motivation for the post is from a conversation I had with a client who said that a lot of people in the business were learning about markets and economics “on the go.” In other words, the environment we find out selves in is the “class” per se. They found it frustrating that they could not really discuss housing without the conversation moving towards “it is all the media’s fault”. I’m guessing that they found it tough to work with their resource and so the question arose, “should agents and or loan officers have at least some basic market/economics understanding.?”
My understanding is that there is no market or economics fundamentals courses taught when obtaining a real estate license. There might be in lending (getting your LO’s license). I’m unaware if that is the case for taking the Real Estate Broker test as well.
I don’t really care if the agent I work with has any understanding of economics or markets. I just want someone who is willing to write tonnes of low-ball offers and be a tough-as-nails negotiator for me.
Sniglet, there’s a difference between writing tons of lowball offers, and writing tons of offers that are completely unrealistic. But when a client wants to make even an unrealistic offer, you need to write it up and present it. What gets me is that sometimes the agents don’t even bother to counter. We’ve had situations where the client made a completely unrealistic offer, the seller countered, and a deal went through.
Tim, there isn’t even economics training in high school, and it’s not required for most college degrees. The level of understanding of economic issues in this country is dismal, and that’s lead to a lot of problems. Not only do we make mistakes, but we don’t learn from them either, because the general public doesn’t understand what happened.
Very important.
In a hot market everybody and their mother decides to become an agent or a lender. Part of meltdown is related to a few agents and a few lenders putting their welfare before the client. For example, there is nothing inherently wrong with the WaMu Option ARM loan (now dead). The problem was in use of the loan. The loan was used in inappropriate situations and for innappropriate buyers when the agent and the lender didn’t clearly understand the loan product and its impact on the client.
Michael wrote: “The loan was used in inappropriate situations and for innappropriate buyers when the agent and the lender didn’t clearly understand the loan product and its impact on the client.”
Really? My impression is that most consumers of option ARM loans worked. In fact, they were counting on the low payments to allow them to buy a home they otherwise couldn’t afford. Why would anyone have been leary of option ARMs since appreciation would simply allow them to refinance in a couple years anyway?
It wasn’t a mis-understanding of the product that was the issue, it was a mis-understanding of the real-estate market and what kinds of “normal” annual price changes one should expect.
In any event, the people with option ARMs would up doing quite well regardless. They get to live in a home, the likes of which they could only have dreamed of, for a few years. They will have to move out and take a ding on their credit rating but that’s a small price to pay for having the opportunity of experiencing a wonderful life style for a few years. And heck, if prices had kept appreciating they would have gotten rich.
The downside is limited for the option ARM borrower, and the upside was limitless. It was a great deal while it lasted. It’s a wonder that EVERYONE didn’t take out option ARMS to buy the biggest, most oppulent homes, they could fanagle.
Sniglet, are you being serious? The Option ARM/Pick-a-Payment was not intended for consumers to just make the lowest payment which was deferred interest. This program has a cap which once reached, the loan is recast into a fully amortized mortgage at the larger loan amount based on the remaining term of the mortgage.
Most borrowers were misinformed or did not have the discipline to correctly use the mortgage (in my opinion, the mortgage was best suited for investment property).
They were pushed like crack to users by wholesale lenders/banks to loan originators since they were an easy sell. I spent more time talking people OUT of getting an option ARM because it was NOT in their best interest…especially if they could select a fixed period interest only product if their goal was a lower payment without the risk of negative amortization/deferred interest.
An option ARM will recast regardless of a declining or appreciating market. The big difference is that as long as the home owner credit/income qualified, they could refinance out of it (or into another one). With a decling or soft market, they are out of luck.
We would have more AEs trying to make us feel as if we were the only mortgage company in King County NOT doing option ARMs. It was sickening…they would beg, “Rhonda, you just don’t understand how they work….” Ummm…I certainly did and do understand!
Tim, I think it sometimes takes someone going through a bad transaction to understand the value of a “professional” beyond someone who quotes a low rate.
Rhonda says: “are you being serious?”
Yes. The impression I have is that most consumers of option ARM loans understood that there was a limited period of time during which they would be able to make very low payments. My sister, in fact, got one of these loans, and she is defaulting on her Florida home even as we speak. She DEFINITELY understood the ins and outs of option ARM loans because I kept harping about it incessently.
Nevertheless, I have come to the realization that she may not have made that bad of a choice. She has been living in an amazing house that for several she could NEVER have afforded on her standard nurses salary. Now that she is losing the house it seems like the worst pain will be a ding on her credit score for 7 years or so. She already has a cheap rental lined up (a very nice home as well, I might ad), so it doesn’t seem as if her life-style will take that much of a hit.
And hey, if prices had kept appreciating 15% a year she would have been rich!
In short, I think the pay-option loan was a great way for my sister to gamble on possible real-estate appreciation while limiting her downside. It’s not as if she put any money into the home for a downpayment or anything.
I don’t know if Sniglet was serious or not, but his conclusions were similar to many intelligent borrower’s conclusions.
Not everyone that took an Option Arm was a fool, or an unwitting dupe of an unethical loan originator. Many of them knew exactly what they were getting, and why.
However, it does seem that the banks were a bit foolish for offering them on the terms they did, and the investors that bought the Option Arms MBS’s cannot be feeling too good about buying them either.
And none of us can feel great about the resulting effect on the economy from the effects of the exotic loan products, loose underwriting, and runaway home prices.
In my book, no one gets a free pass from their participation in creating this situation, nor from its eventual solution.
Hey, I am not blaming the borrowers for taking advantage of 0 down option ARMs. If lenders are willing to let you gamble with their money for free, why not take advantage of it? Live in a fabulous home while you can, and if it so happens that prices go up, you get rich.
If prices go down the worst that happens is that you have to wait a while before buying another house. It’s not like you are risking any of your money.
BOTTOM LINE:
6%ers are as DEAD as IndyMac!
6%, LOL!
And Sniglet, my hunch is that it won’t take someone 7 full years to be able to buy again. The economy cause a lot of bankruptcies and foreclosures in the early ’80’s, and lots of those people were able to buy again, usually VA or FHA, within as quickly as 2 years.
Obviously potential buyers will need perfect credit going forward, and having an actual down payment will be a big plus too.
Tim, I should have answered your post first. Yes, to all of your questions. I won’t work with an escrow company I don’t think has a full understanding of our market, an economic realities.
And, here’s a question for you: With all the fears about more financial institutions failing, should sellers who are getting more than $100,000 at closing be better to have their escrow company put their funds in separated accounts during the time the money is in escrow and not sellers possession? Should we start doing this? Seems like a yes to me …
Sniglet perhaps doesn’t care if his agent is experienced and knowlegable, but he’d better hope they are a good communicator, and has a likeable personality or his low offers won’t get anywhere near the attention he’d like them to get.
Leanne said: “Sniglet perhaps doesn’t care if his agent is experienced and knowlegable”
I am not saying that I think it is unimportant that my realtor have experience with the real-estate business, or local market. What I am saying, however, is that it isn’t important to me if they have any kind of understanding of economics, or the broader national market. I simply won’t go looking for a house until such time as I think it makes sense from an economic stand-point, so I don’t need some realtor’s advice on that.
But I definitely want my realtor to have experience doing business in the Seattle area, and a good understanding of the pitfalls, and negotiating tricks, of doing deals.
Leanne,
You crack me up! I guess you are turning the question around and placing “escrow” in the place of “agent or LO.” I’m ok with that. 🙂
1) Whether or not you work with a certain title company is up to you and your customer. Escrow doesn’t control that. But, fortunately, with the transparency of Rain City Guide and Seattle Bubble, we are seeing more cases, at least from our perspective, where consumers are actually making there own decisions to request a third party provider.
2) Your statement regarding not choosing an escrow/title firm due to their lack of understanding economic principles is interesting. I can say that if you and your client choose one that DOES understand market nuances/economics, AND has staff that is exceptionally skilled and experienced (closing thousands of transactions) then it is a PLUS for the client. The escrow firm is probably still in business today to assist you and clients with successful closings.
3) The role of an agent in advising their customer is very much impacted by their understanding of the market in which they work and understanding the economic realities in which they operate.
One of the very best samples of this in action (at least in a public manner) is Greg Perry at Windermere. Even Michael L. at Re/Max Metro. It probably serves them and their customers well.
4) As a business owner it is imperative that I’m very much in tune with the markets and the realities that impact how markets go up and down. It has served our small business remarkably well during a time in which sales are off nearly 50% (depending upon the month you compare) in Snohomish Co., the prices are dropping, builders are struggling or going bust and inventory levels are elevated, title companies are laying off staff, escrow firms have closed and/or are in the process of closing, etc…
4) Reg. your last question: Proceeds from a sale are disbursed according to the written instructions from the only principles in our transaction: seller/buyer and or owner in a refinance. It is up to a principle in the transaction to know the solvency of the institution in which they want money sent, not escrow.
PS. money is held in escrow trust accounts over a period of a matter of hours, if that, (sometimes over the weekend) so money comes and goes for the most part VERY quickly. We could get funded by US Bank or Wells Fargo at 1pm and the money is gone by the end of the business day by disbursing proceeds, bills, and wired or overnighted loan payoffs. Escrow does not have multiple trust accounts.
As a side note, there is no other place in a real estate better to see what is going on in the market than being in escrow/title. It is a heck of a economics classroom.
Just so you know, you won’t meet a more pro-housing couple between myself and my spouse. Sensible homeownership is what we like to see. Our real estate industry basically shot itself in the head over the last few years and sadly, some are or were too blinded to have seen it coming. Some overdosed on the real estate Kool-Aid of foolishness and greed and here we are today.
I thought my question, initiated by a client, may shed some light on the issue. For some it’s important, for others it appears that it is not on the radar.
Tim:
This is a business of specialists. I care if the specialist has the knowledge to expertly perform their specialty, and have sufficient intelligence and knowledge to interact with other specialists in the industry.
I like Sniglet’s approach…hire someone that is aligned with the client’s goals, is VERY good at the services needed, and treat them fairly.
I never provide stock recommendations, and usually will not advise someone on the proper amount of life insurance, but having carefully purchased both, I understand how they work, and don’t mind discussing both.
I would not be impressed if my Real Estate agent was an expert on an unrelated field, or tangentially related field.
Find me a great house, at the best possible price, or sell my house, at the best possible price, that’s what I’d want.
Tim, your # 2 is exactly right. I like to know that my escrow companies are solid, and able to stay in business. They may not have a full economists’ understanding of the national and local markets – but if they (as well as r/r agents and LO’s) don’t have a far higher than a simple/basic understanding of the realities of economies, job losses, company sustainability, they have no liklihood of staying in business today. I don’t mind new, I do mind dumb.
I am a believer that it is our JOB as agents to give advice to our clients, and to guide them away from poor decisions. It is the critical reason why buyers and sellers should be choosing wisely as to just who they do business with, especially today. Buying a house from the guy or gal you met in the bar last night just isn’t the best way … no matter how cute they are, and no matter how cool their car is :-). Truely, I saw it happen more than a few times.
Part of why I got so burned out in 2004 and 2005 (I nearly left the business) was what I saw was a huge lack of knowlege and even a lack of caring that they didn’t know enough from fellow real estate agents, many escrow staff members, and many lenders. The sloppiness, and lack of care/attention to detail to even spell the clients names correctly … sigh. I hated selling houses in multiple offer situations and having to bend to the idiot level of some of the listing agents as to the “who” choices of who we dealt with. I’m just an old-fashioned control freak & I like things done correctly! 🙂
Now, Eleula and some take a more gloomy view than I do, so hopefully this discussion won’t turn into a debate about how no one should buy anything right now, world without end amen!
And, re: # 4 financial institutional solvency — I’m not talking about the sellers choice of where he wants you to wire funds, I’m talking about the escrow company account.
Ie, let’s say you’ve got a transaction that has closed, and sellers proceeds of $650,000 are correctly in your escrow account, you just haven’t disbursed them yet. And, I know you don’t have them very long – but just think about the “what if” question here …
I’ve been asking it all day, and no one thinks it is anything to worry about. I really don’t either, but … good old Eluela loves to tell us that we’re not far from potentially more financial institutions failing on massive scale, and causing major panic. While I am certain many more failures will occur, I don’t like to think we’ll fall down the chasm of massive panic, but I am related to several former boy scouts, so I like to be prepared and ask the question.
Sniglet, I don’t know why finding a good real estate agent should be tough for you to find. You seem willing to be loyal, and a solid buyer who will be well prepared.
Seems to me you should well be able to find a good agent.
And, Roger, you said “Find me a great house, at the best possible price, or sell my house, at the best possible price, that’s what I’d want.” It’s my opinion that if your agent finds you a GREAT house, when the day comes that you are ready to sell it, that agent’s job will be much easier!
No, I don’t.
As a consumer, I want a loan officer that understands the programs available and can evaluate them to my economic benefit. Just as I don’t expect my carpenter to be an expert on forest management issues – I want her to be good with sawing lumber. And as a real estate agent … let me just say, if you come to a real estate agent for expertise in economic theory, you’re probably the sort of person who asks your co-worker to diagonse your internal bleeding.
For a loan officer, the biggest factor is probably one that understands basic financial concepts, and is willing to put that knowledge to use for your benefit, not theirs.
For escrow it’s probably one that is stable (not a lot of employee turnover), or if not, at least one that won’t run off with your funds! 😉
Mack, if your loan office only understands the programs available, how will they be able to advice when or if to lock in a rate if they do not understand economic indicators?
I think it’s also important for consumers to make sure they’re working with someone who will compliment their goals, as Sniglet did. If Sniglet tried to stick it out w/an agent who would not tolerate “low ball offers, it would be a miserable experience for both of them. A real estate transaction is a long process…even once you you’ve found the home you’re making an offer on.
Mack, what I’m saying is I expect whoever I deal with to have high intelligence, high skills, high awareness of life outside the office door, highe interest in what is going on in our country, our world … someone alive and interested in what they do and how they do it.
Too much deadwood out there, so perhaps this rearrangement of houses and jobs will uh, help the cream rise to the top :-). I tell you, I cannot fathom just how so many intelligent money managers managed to put us in this mess. Far worse than our own Mercer Mess – a miss that never seems to get fixed.
I think it is important for consumers to make sure they are working with someone that is competent…the agent and the loan officer. Why would you even want to work with someone who was handling your money if they had no clue what was going on in the world?
Competent Realtors or REIC? You mean like the NAR’s Larry and David Show… “Its ALWAYS A GOOD TIME TO BUY”, houses ALWAYS go UP, and BUY NOW or be PRICED OUT FOREVER.
Reap the whirlwind and Ride the Tiger. 6% ers are DOOMED.
Many of their customers, oops, I mean ‘clients’ that they ‘helped’ are in foreclosure, bankrupt or standing in line trying to get their cash out of failed banks…
Darwin is hard at work.
Remember they are not making any more land… PT Barnum was RIGHT.
Well, I think if someone is slinging loans or closing residential deals or even selling residential real estate, they don’t know enough about Economics to be advising people on the subject.
When we advise people, let us stick to our areas of expertise – the work that we actually get paid for – and not confuse them with our hobbies and our passions; the things we are deeply interested in and enjoy and love and that nobody will pay us to do?
– how will they be able to advice when or if to lock in a rate if they do not understand economic indicators?
Well, Rhonda, I think that they do it anyway.
Mack: “and that nobody will pay us to do?”
Most clients do feel that they pay us for advices, and I clearly agree.
To some degree it depends on the agreed upon fee for the service, of course. Generally at 1% of sale price, the price does not include advices. At 3% it does. At 6% it really does 🙂 Someone paying $1,000 to be in the mls is not likely paying for advices, on that I think we can both agree.
Perhaps every agent doesn’t want to do what I do. Then they can rely on the information being given to them by their Company. If they are paying X$ per year to that Company, then that Company should supply the info that their clients need.
My problem is I don’t trust any Company, Board of Realtors or mls system to not skew the data to favor the agents ability to sell. So I have to do it myself. It’s a trust issue.
In the over 18 years I’ve been in the business I’ve been almost always right about real estate with regard to me and my clients. If I weren’t…I clearly wound’t do it.
Every agent has different areas of expertise, and advices on SOMETHING is clearly included in a “full service” price. Each agent brings a different value and a different field of expertise to the table.
Someone said we complement the client’s needs. I disagree. I say we complement the client’s weaknesses. If a buyer or seller is a contract law and real estate attorney, he doesn’t need an agent to explain the contract to him every step of the way. So he doesn’t pick an agent whose forte is the contract portion.
One agent’s “hobby” may be staging. You call it “a hobby”, I call it that agent’s forte of which we have many. Some agent’s can’t give any advices as to how to arrange the house for showings, some can. If someone is hiring a professional stager, but can’t grasp any contract “stuff”, then they will be looking for an agent with a different “hobby”.
What you call hobby, I call “focus” and “strength” and not all agents are the same in that regard. But just because what someone else brings to the table is different than what you bring to the table doesn’t make your “stuff” expertise and other agent’s added value “their hobby”.
Sniglet,
I ask you to consider this. Our reputation in the field affects all of our clients. There is no getting around that. If an agent, by working with you, gets the reputation “around town” for being the agent who brings ridiculous offers, that can hurt the next 5 clients or the other clients we are dealing with at the same time as you.
So it becomes a business decision whether or not to get that reputation, and we must consider the impact that reputation may have on our other current and future clients.
It’s one of the reasons that agents generally recommend waiting for the asking price to be “within range” and it becomes a process of waiting at times. It’s also often good advice to wait for the price to be “within range”.
“Within range” varies depending on market conditions and also house to house. If I have a listing and someone comes in at $100,000 under asking price (never happened, but let’s pretend) then if the seller is even thinking about taking it I would likely recommend that he drop his asking price by $50,000 or so befoe accepting an offer of $100,000 less than asking.
If your offer was 20% less than asking, then I would be recommending to the seller that they drop the asking price by 10%. Your lowball offer helps the seller’s agent get a price reduction. Not saying that’s a bad thing. But generally that is how your actions would be used to the benefit of the listing agent and the seller.
Ardell wrote: “If an agent, by working with you, gets the reputation “around town
I totally agree Sniglet, that you could not do what you wanted to do without the agent willing to do it. And getting what you wanted was important. I just don’t want you to think that agents who might not do it are “lazy” or don’t have a good reason for not wanting to “go there” with you.
Personally I can’t help but feel that there might have been better bargains to be had. Getting something for X less than asking is more of an ego thing usually. The danger is you end up with the worst property or simply the most unrealistic seller. No one would agree that the deepest discount from asking price automatically equals the best home at the best price.
I met a man (or ten) who loved bragging about how they got a house for $400,000 in a neighborhood where most homes were selling for $550,000. Usually it was on a six lane highway and was next to the 7-11, etc. My favorite was the one that backed up to the Burger King drive in window and you could hear people ordering burgers and fries all day and into the night 🙂
Now that’s great if the motivation is to get your children into a certain school and you can only afford $400,000. The goal of getting your children into the best school you can afford is clearly a good reason to buy the house on the busy road next to the 7-11. But just to brag about getting the cheapest house in the neighborhood…well, maybe not.
Basically no one can hire me to help them shoot themselves in the foot. If the premise makes sense, I’d do it. If it was helping someone do the wrong thing…I wouldn’t. Simple as that.
In a strong buyers market playing one house off another is a good strategy. I have submitted offers on 5 houses at once (proposals to purchase) to get to a basic price and terms agreement. I have done it for clients and I have done it myself with much success. But what the seller is asking is irrelevant, and that’s where I fault your method.
If two owners have two identical houses and one is priced at $425,000 and the other is asking $550,000, why not just buy the one asking $425,000? You seem to rule out that possiblility in your method from what I am reading.
Mack, re: 28 & 29, I would not call having a Mortgage Professional understanding basic economic indicators and how mortgage rates move as a “hobby”. I do think each professional should stick to specializing in their own trade–agents should sell house and mortgage people should provide mortgage/financing advice.
I must be misunderstanding you.
Ardell, well said on the lowballing. And the bargain finding!
Rhonda, I think when you and I start interpreting economic data on behalf of our clients, we’re moving into territory that, at least I, am woefully underqualified for. Regardless of how much CNBC I watch.
And, Ardell, I think that staging is not a “hobby” for real estate agents – it’s not like they go over to friends’ houses and have makeover parties. For some, it’s actually a stand-alone business, for others, it is, as you point out, part of their service, which they get paid for (assuming the house sells), and by my standards, is not just a “hobby.”
Now, suggesting paint colors may fall into the “hobby” realm …
On the lowball offer, does the agent even have a choice when the client says they want to offer $XXX,XXX.xx for a property? I don’t think they do. At some point, however, they’ll need to cut ties with the client if the offers are beyond just being lowball. But if you should a client a property, and they want to offer X, I don’t think the agent has a choice.
Ardell, good points for Sniglet. If he’s just writing lowball offers, he may well be missing a well priced property that is a better house. And Mack, wouldn’t you say that kind of economic understanding of our market is what good agents offer their clients? The ability to discuss the reasons why house B that buyer is better than house A, does come from an economic understanding of our market, and needs to also include the realization of how our local economy fits into the national picture.
Kary, we have to present all offers, whether for a seller or for a buyer client. It’s not unfair or unprofessional to tell the client you fell they are being unrealistic, but you have a duty to your client to present what they want you to present. At some point, you can quit representing the person you think is unrealistic, but until you officially terminate your client relationship, you have to present the offer your client wants you to.
And, I disagree with Ardell about Sniglet potentially damaging a good agents’ reputation. A good agent will be able to communicate with another agent in a fashion that makes the issues of the offer the “buyers issues”, not the “agents issues”. Lowball offers do cause stress, but at the same time, they s hould be considered, at minimum, to be a starting point. Sometimes an ending point too :-)!
What I’d need to know first, would be is Sniglet the legal name for the PSA document? 🙂 And how would Sniglet like to take title? As a single Sniglet, married, joint tenants in common … or? Will all the baby Sniglets need their own rooms?
My sticky keyboard needs to be replaced. Anyone have any recommendations?
“But if you showed a client a property, and they want to offer X, I don’t think the agent has a choice.”
I always have a choice, Kary.
Leanne,
I think we have to present all written offers to sellers. I don’t think there is any law that commands us to WRITE an offer. In fact I’m 99.9% sure there is no such law.
Are you telling me there’s a law that says if someone wants to make an offer of a quarter, you HAVE TO write it up? If you write it up…then YES, you have to present it. But I don’t know any law that forces you to write it.
Ardell wrote: “I always have a choice, Kary.”
Well yes, but sometimes the choice is do what your client wants or be sanctioned by someone (Dept. of Licensing, WAR, SKCAR, etc.)
I suspect I might have over-stated it a bit. You probably could terminate the client after showing the house. Someone will have to look to see if there is a rule, and what exactly it says. But I’m fairly certain you can’t just choose to ignore your client’s directions, or tell them that you won’t do it–without terminating the relationship.
I’m not finding anything. But it’s completely contrary to the concept of agent to not do what the client wants, assuming that thing is legal and ethical. You act on the client’s behalf.
Ardell & Kary, I agree, no one is going to argue we are not doing our job if we refuse to write an offer for a quarter – but if we have a client, and that client wants us to write an offer that is not just out of bounds hilarious, I think we have a duty to write it or terminate the relationship; and I’m not quite sure if we actually can terminate the relationship at that point without actually writing the offer, and presenting it.
Maybe Craig can chime in here with his opinion. It’s an interesting concept.
I’m sure Craig would be happy to write it 🙂
I’ve been licensed in 5 States. All require agents to present written offers to the seller. Some even require verbal offers to be presented to the seller. But I have yet to see a State with a law that requires an agent to write an offer.
I don’t know any agents who have been in this business for a long period of time who never refused to write an offer.
Ardell made some good point earlier about how not all homes are priced equally (i.e. the “list” might be way over done on one home vs its actual value while being right on the money on another).
I definitely took this into account when writing my low-ball offers in 2000. I would vary the degree of discount I was asking for in the offer based on how over-priced I felt the property was to begin with. I expect this is what I will do again the next time I go shopping.
I think you always have to research the seller prior to making an offer, so the degree of discount would be more for some than others. And the discount would be based on what you thought the property was worth, not what they were asking. Asking price would only be relevant perhaps if you had two properties you liked–the lower one might be willing to go lower than the higher one just due to starting point.
Unfortunately, with the distressed property law the ones that would get the lowest end of an offer might not get any offer at all.
Sorry for being a couple of comments late…
Looking at the statute, there does not appear to be any statutory obligation to write a patently absurd offer (i.e. an offer of $.25). However, either party may terminate the agency relationship with notice to the other party. RCW 18.86.070(1)(d). Without researching the issue, my hunch is that an agent could simply terminate the relationship rather than investing the time and energy into an offer of $.25.
Maybe the offer would be more appealing at $.250000 😀