Author: Tom Meyer Real Estate Broker, Madison, WI

I believe the difference between an accepted or rejected real estate offer to purchase is the drafter's ability to customize the Offer to reflect the Buyer's commitment. Ready, willing, capable, committed, sincere people can out negotiate higher priced offers by moving away from standardized forms. Ask me how.

Know THE Objective. Know the Contingencies. Precision Draft the Offer.

Before we  draft offers we better know the overriding objective of the client.  (There can be more than one objective, but only one that is do or die.) If that Objective is something subjective, such as “protect me”, we could discover what “protect me” looks like to the client.  What I fear is not the same as what another person fears. I need to know what they want to be protected from and be sure the protection I am suggesting is not protecting them from fears of my own and diminishing their offer.

What could the client’s goal be?  Get my offer accepted is one goal. Is it overriding? If it is, we better know what the contingencies we suggest look like to the people  on the other side of the table.  If the objective is to protect me from whatever could go wrong, we can do that so well that the offer is unacceptable to the Seller.

There  is a balance in most cases. Once accepted the objective may change to something subjective, but inserting protection without the client having  the opportunity to decide before the Offer is submitted is a sure way to contribute to having an otherwise acceptable offer rejected.

To know a person’s overriding objective, we have to (1) Ask questions about the client’s risk tolerance. (2) Know  what the different contingencies do and don’t do. (3) Have a dialogue about choices to strengthen or weaken the chance of accomplishing the client’s objective.  Once we know what matters most to the client we can begin precision crafting of an offer with the objective in mind.

The Dignity of Your Unique Skills

Big Potential. Author Shawn Achor makes the case that we all have unique skills. Alone, those skills serve us well. When you and I and him and her combine our skills is when our skills serve others exponentially.  The pursuit of achievement alone will never exceed the achievement of collaboration and respect for the skills, talents, vision of a collective effort.

Real estate licensees who empower their clients to be part of the evaluation of information, and a partner in the strategy decision prove the power of collaboration of unique skills and may not even know it.  The same for firms. Top down authoritarian corporate cultures are especially effective at restricting creativity and customization. That’s fine if your goal is to turn the art of real estate into assembly line work. And who wants to be part of that?

To see the power of respecting the dignity of someone’s work for what it means to the world as opposed to respecting a person’s position or bank account, look no further than the grocery store checkout.  As your items are rung up and passed down to the end of the conveyor the work of shopping is not done. The quality of products you selected depends on the skill of the person with the bag in their hand. The groceries are coming down the line in random disorder. Bread first, fruit second, cans and pounds of meat mixed in.  Watch the person share their skill; it’ll matter when you get home, but you may not think about it unless something is squished. The person bagging our groceries has developed a skill of bagging, not just similar products in one bag, but products which will protect the food items from contamination and physical damage. Notice the bags are relatively equal in weight. All of the space is used, yet none of the bags are overloaded. And more often than not, every bag fits nicely into the cart for you to wheel out to your car.

Bruised fruit, flat bread, meat touching cleaning products will catch our attention. Those that aren’t will be used in meals we prepare with our skills. The meal is better because the skills of more than yourself came together.  See the dignity in all work and give respect to the the person who excels at their work regardless of whether or not it’s a job we would or could do. Consider this, who do you want bagging your groceries? The person who cares enough to do it right, or the $100 million  a year CEO who hasn’t seen the inside of grocery store since before scanners?

The Other REALTOR Called

“Hi, I’m looking at your (Offer)(Counter-Offer) (Amendment). I have a few questions. Let’s talk to clarify what you are asking for.  Instead of sending counters (or amendments) back and forth let’s just work it out.”

The REALTOR making the call is asking for information which is likely confidential. The suggestion to “work it out” and “clarify” is an invitation to risky adventure.  Maybe  you recognize these questions and statements:

  1. What does your client want?
  2. Will they accept_____?
  3. How long have you been selling real estate?
  4. Will  your client be willing to _____?
  5. Will your client come up to ______?
  6. Does your client want to get out of the Offer?
  7. I’ve been selling real estate ____years!
  8. Are you new at real estate?
  9. I’ve never seen anyone do this!
  10. We always______.
  11. If I can get my client to __________ can you get your client to __________?

When an agent wants to clarify, they probably want to take you to task more than anything.  If only a few of the random 11 statements and questions are raised the conversation will tread dangerously close to ethics and legal obligation violations.

Is there really anything gained by participating in this conversation?  The Buyer and Seller are parties to a contract. The licensees are not. Licensees have disclosure, confidentiality, and fairness obligations. If a licensee is asking another licensee for confidential information and gets it, what is the receiving licensees responsibility? If you said, keep the information confidential, you’re right. Sharing confidential information is a license law violation. Both licensees are on the wrong side of the confidentiality obligation. If I represent my client will do this, that, or  the other thing, I have liability I can’t afford.

The point of this is: Conversations are best kept between buyer and seller. The methods available to us as licensees to facilitate these conversations are Notices, Amendments, Offers to Purchase, and Counter-Offers signed by the initiating party. If there is a better way than using approved form for staying within the boundaries of our license show me. The phone calls and long emails between licensees are useful—–for gathering evidence and facilitating conflict.

 

 

 

Seller-Buyer and Buyer-Buyer. One of them will own the house.

Real estate negotiations are identical in that there are two buyers and one seller every time an offer is presented to a home owner.  One of the two buyers is going to be successful in ending the negotiations with the house.

Every day buyers make offers on real estate and without expecting they have competition. Buyers are always competing with seller-buyers.  Every negotiation ends with someone getting the property. It’s only when offers are written do we see who wants the property most. Most transactions involve sincere offers to sincere owners from sincere buyers. In those situations where the negotiation ends with the seller-buyer outbidding the buyer-buyer, it’s not that the seller-buyer didn’t want to sell; they just wanted to own the property more than the buyer-buyer.

Olive Branch Inspection Contingency

Given a choice, without being told of potential consequences, a Buyer Client is 99% likely to include a Buyer Favorable leverage an inspection contingency, over the one on page 9 of the Offer to Purchase.  The people who created the Inspection Contingency in the Offer intentionally tilted the advantage to the Seller. Obviously the Seller has more to risk in negotiations after acceptance. The party with the most on the line should have a reasonable opportunity to cure defects, and  keep a transaction together when unexpected conditions are identified. During the Buyer Market run we had in and after the recession, more Firms began using a Buyer Favorable Inspection Contingency as standard practice. Sellers had no choice but to allow the Buyer to have the leverage which was intended for them.  That happens when the market changes.

Well, the market changed again. Licensees stuck in the new habit of using a company crafted Buyer Leverage Inspection contingency gave no thought to the consequences to their clients and went right on checking the box without discussing the difference between that contingency and the one on page 9 of the Offer.  Sellers and listing agents  were quick to identify the high risk condition of the Buyer Favorable contingency. For no reason other than risk, Sellers will reject Offers which give the inspection advantage to the Buyer.  It’s a shame when  a person loses a house because they weren’t given a chance to make their offer more attractive to the Seller by simply being kinder, gentler, and safe.

Knowing the difference between a Heavy Hand and an Oliver Branch allows the licensee  to  give the client a real opportunity. It’s a magical thing  watching a licensee earn the confidence of clients when they explain choices and think through a choice with clients.

Become a part of the conversation, a part of the thinking process by learning to find the trips  and traps of contingencies.  Some people will always do as they always have because that’s the way they learned it. But those people will never have the results they could have by learning why  something is as it is, and learning how to make the contingencies work for their client.  And by working for their client I don’t mean wrapping them in unnecessary protections.

The Voice of Catastrophe our Learning

Seth Godin’s Catastrophe Journal Blog Post

Do you know The Voice in our head that tells us we’ve messed up, failed, blew it, caused a catastrophe? Nothing is ever good enough for The Voice.  It thrives on turning transgressions, oversights, and choices into catastrophe. The more The Voice talks the more persuasive it becomes until we are certain we will be fired, demoted, ridiculed, unlicensed, unworthy.   If The Voice was in our living room talking to us instead of in our head, I think each of us would stand up and escort The Voice to the door. So why do we give The Voice aid and comfort in our head?

When things go wrong as they sometimes do, we have a choice to name it a learning experience or a confidence crushing catastrophic event. Seth Godin wrote about the self made catastrophe in his blog today.  Everyday is a good day to be reminded that things are never as bad as they seem. (Of course they’re also not as good as they seem…but let’s not go there today.)

One hundred percent of the choices we make are right in the moment the decision is made. They are correct actions made with the information we have at the moment, with the knowledge we have at the moment, with the perspective we have, with the goal as we know it, and the facts as they are.  It’s only after other facts, opinions, perspectives, alternative facts, or new information, and alternative history are added to the event that our right choice of the moment becomes questionable. We live in a world of second guessing. The privilege of standing on the sidelines is knowing exactly what should have been done by the person who is in the game, in the moment, under pressure. We are in this business because we are eager to be in the action with all of the risks and rewards; we don’t desire to be second guessers. We don’t require the safety of the sidelines.

We live in a world of continual education. We learn from what we do well and from results we didn’t desire. Real estate contracts are accepted or rejected based on the choices of the drafter, the buyer, the seller, the presenter.  Learning to present options, think through choices, anticipate consequences, and be willing to be an unbiased, calming voice in the conversation is one way to a long term career.  We are licensees in a Firm excelling in presenting a unique opportunity to consumers of real estate service. We, each of us,  are that opportunity.  What we are, who we be, is up to us.

Seth Godin’s suggestion of a Catastrophe Journal is a smart tool for becoming who we are capable of becoming. In retrospect I can name many of my own disasters that didn’t result in the worst fears of The Voice coming true.  Like you, I can also see many results that met or exceeded expectations, because of a choice I contributed to.  Keeping journals of Catastrophes will show that they aren’t at all. The journal of Successes might show us something we need to recognize also.  We have a role in results, owning our part of the responsibility, accepting and sharing credit is more productive than listening to The Voice. I’m going to take 3 weeks to quite The Voice of Catastrophe.

 

 

 

Why do we go to the doctor?

Last year physician office visits topped 990 million. (*www.cdc.gov)  Being ill or hurt might cause a person to go to the doctor.  The reason a person goes to the doctor is to get well. You could say we want to get well because all things considered, being well or healed is a desirable lifestyle.

Why do people hire a REALTOR? Have you ever thought maybe we aren’t called to sell a house or to find a house? We’re instead invited in to improve a lifestyle; the present situation is this, it’s not sustainable, desirable, acceptable. The objective is to change the situation to a lifestyle that is acceptable, desirable, sustainable.

It’s a rare person who goes to the doctor at the first sign of feeling unwell. The motivating factor to get a guy with heart disease symptoms to a doctor is a heart attack. About the moment a person with diminishing health loses ability to be vertical, the interest in getting well skyrockets.  If the goal of a person is to simply sell a house, or own a house, our service has a value closer to zero.  It’s possible a person who thinks they want to just sell a house or just own a house is not aware that what they really want to do is much more than that; they want a better life. The outcome of selling is a financial change intimately connected to achieving lifestyle wellness. Equity money, which is only numbers on paper,  converted to cash in hand at closing is the key  to  eliminate something causing unfavorable lifestyle (debt) or the key to open doors to achieve a more favorable life (different living conditions). Lifestyle is a factor of wellness.

Getting well is serious business. We value being well when we desire wellness more than we tolerate illness, pain, or unsustainable conditions.