Here’s another quick tale from the trenches as I continue to work with clients at my new real estate firm, this time from the rough-and-tumble market of South King County. Yup, it’s tough everywhere…
My client identified a home in Kent for purchase. It had been on the market for 200 days, with a couple of failed contracts in the meantime (one due to “buyer remorse” and one to failed financing) and nary a price drop. The listing showed an Agent and a Co-agent (both from the same office). I promptly reached out to the Agent, who told me they had no offers and none expected. Within a day or two we submitted our offer at $10k off list. Having heard nothing in response, I followed up with a call two days later. Her voicemail told me she was the managing broker for the office. Good, I’m dealing with the boss…
The Agent called back and explained that the sellers were having health issues and thus the delay in responding. I asked about other offers and was assured there were none. I noted that our offer amount was predicated on us being the only offer, and if another offer appeared to please let us know. In that event, obviously we would take a different tack in the negotiations. I also said that we had no problem at all being patient with the sellers given their health issues, assuming they were indeed acting in good faith and negotiating only with us. The Agent assured me that was the case. Yeah. She said that the Co-agent was trying to meet with the sellers and they would get back to us in a day or two. She said the sellers were likely to counter at $4k off list. Riiiiiight.
The next day, I got a call from the Co-agent. With “the bad news.” Sellers had received a full-priced offer, so they accepted it. Another “WTF?!?” moment. Although signed, it had yet to be returned to the buyers, leaving me a tiny bit of room to maneuver. So I tried to salvage the situation, and the Co-agent at least pretended to be sympathetic. I called the client and got authority to draft a new offer at $1k OVER list – thus beating the offer in hand – but the sellers had made their decision and had no interest in giving me or my clients the time of day.
When the smoke cleared, and the rage had subsided, I though about the lesson to be learned. Always go with full list in this market if it’s within shouting distance of fair? That seems extreme and not consistent with my professional obligations to my client. Recognize that assurances of “good faith” are rendered meaningless the moment a new offer comes in? Yeah, but that’s a little obvious, this is after all real estate. 🙂 Then it hit me: Know who is really “the agent.” You know, the person with the seller’s ear who is actually driving the ship. It may be the “Agent” or it may be the “Co-agent,” assume nothing based on title (even if the “Agent” is also the managing broker!). Listen for clues. When the Agent says, “Oh, the Co-agent will be meeting with the sellers tomorrow,” immediately hang up and call the Co-agent. Don’t waste your breath talking to anyone else. It is a waste of time that will not be helpful going forward.
Another lesson learned. And confirmation that the Quill model strikes the right balance between protecting the client (by keeping an attorney on board and behind the scenes) and getting a deal done (by allowing the Quill agent to take the lead when negotiating a contract).