We’ve written previously about red flags that tell you that a buyer or a seller is likely to cause trouble with a deal successfully closing.
While every deal needs a buyer or seller that are motivated to transact, the vast majority of real estate deals in Ontario also involve two other people – the listing agent and the buying agent. Sometimes they are one in the same (that’s called multiple representation, and boy is it tricky!) but most of the time, we have a seller with their listing agent and a buyer with their buying agent.
As Realtors, our Code of Conduct expressly prohibits communicating directly with an individual on the other side of a transaction who is represented by their own agent. All communications are to go through the other agent.
What happens when the agent on the other side of the table is a poor communicator? In all likelihood, it means a deal will not get done. We recently had a situation where our client was selling their home and an agent representing a buyer failed to get a deal done. Here are the three lessons that can be taken from that experience.
Lesson #1 – First Impressions Stick
We had a condo listed for sale and a number of showings that took place. As part of our process, we email agents beforehand sharing useful information and giving them our contact details. No response from the agent in question. We follow up all showings with a request for feedback and some specific questions. Again, no response.
At 11:00 PM on a Sunday night, the first communication we get from this agent is a request for the status certificate package as his client is interested in submitting an offer. We provide the information requested as well as some additional information. 36 hours pass without an offer or any communication. Part of our job is keeping our clients informed of any developments, so we had let her know about the agent who said he might submit soon. We also preface these updates by letting our clients know that intending to bring an offer doesn’t necessarily mean it happens. People can and do change their minds.
After a day and half of ignoring us, the agent submits a low ball offer with conditions. No explanation as to the delay, why they are offering this price or anything about the client. We’re left to piece together assumptions about what we can glean from the offer but the agent isn’t communicating well to us.
The lack of response to our initial communication and the significant delay in submitting an offer and again ignoring our requests for an update create a very poor first impression. Our seller is biased against this agent and therefore their client as they are being inconsiderate and unprofessional.
The first lesson is that first impressions stick. You have one chance to establish yourself as serious, worthy parties who could successfully conclude a transaction. If your agent ignores communication from the other side, fails to respond in a timely fashion and doesn’t bother to understand what is important to the other side, the chance of a deal getting done is very slim.
Lesson #2 – It’s All in the Details
Despite the poor initial communication, any offer needs to be considered on its merits. While this offer was lower than is reasonable and had a few conditions that made it less appealing, it was still something we reviewed with the client.
As we went through the specifics of the offer, it became apparent that the agent’s attention to detail was pretty poor. He didn’t include one of the required forms for the offer, he filled out two other forms incorrectly and he gave our client about six hours to decide upon the offer before it expired. That’s a pretty short time-frame and he made no effort to speak with us beforehand as to whether our client was available to review it during that window of time.
We discussed the offer and also pointed out the various ways in which the agent hadn’t properly provided documentation for the offer. While mistakes can happen, an agent who begins a transaction by sending an offer with errors is unlikely to pull their socks up if the offer is accepted.
The second lesson is that it’s all in the details. Real estate transactions are contracts between a buyer and seller, using specific forms that spell out all of the relevant aspects. Whatever is signed by all parties is literally the deal that can be enforced. If one side is not paying attention to the details during the offer phase, it communicates to the other side that the remainder of the deal will likely continue to be plagued be errors. The more that is wrong in the offer, the greater the chance that the other side won’t respect the specific details of any conditions or required activities.
Lesson #3 – Explain yourself!
After reviewing the offer and sharing what little we knew about the buyer and their situation, we signed back the offer at close to our list price and made a few other changes our client requested. We shared that back to the buying agent, along with our justification for the price and the changes.
While both parties need to come to an agreement about the price, deposit and closing date, a good negotiator seeks to understand the other side’s position. It may not change the end result, but it could influence how we view their offer. We communicated our perspective and within an hour, they countered with their “best and final offer”, still well below the list price. No explanation, no context as to why they could or would only pay this price. We reviewed with our seller and agreed that given the poor initial communication, the poor attention to detail and the lack of any context to their negotiating stance, this wasn’t a deal we would continue to pursue. We informed the buying agent we wouldn’t be accepting their revised offer and that was the end of the offer.
It may seem basic but explaining your position and communicating why you are approaching a real estate transaction in the way you are is crucial to the possibility of a successful deal. Whether it is requiring a certain closing date due to a family situation, not being able to go over a certain price due to financing criteria or any other aspect of a transaction, if you share information as to your reasoning it can be very helpful.
The third lesson is therefore that you need to explain yourself. The specifics of an offer are clearly spelled out in the paperwork (or, if done correctly they are!) but you need to explain why you’re approaching the deal this way. Sharing information is one way to increase the size of the pie and to influence the reaction of the other side. It builds trust and understanding, and that can translate to moving a deal forward.
No real estate deal is perfectly smooth from start to finish, but effective communication is how the agents involved give their clients the best possible chance to get things done without issues. By making a positive first impression, paying attention to the details and explaining the thinking behind their approach, your agent can help you get the deal done! If that sounds appealing, let’s talk.