Please, Put Your Offer in Writing
I don’t know what’s going on lately, but in the past few months I’ve gotten several calls from real estate agents that have clients interested in my listings and they’d like me to present verbal offers to my sellers. Verbal offers are not standard practice when selling real estate in Hartford County.
The Greater Hartford Association of Realtors has a standard purchase and sale contract that is used to write and present offers on properties. The written contract outlines a purchase price, escrow deposits amounts, a mortgage commitment date, a closing date, inspections that may be performed, and a variety of other items relevant to the sale. The contract is typically supported with a mortgage pre-approval letter from a bank or lender and a photocopy of the first deposit check that the buyer provided to accompany an accepted offer. All of these items support the fact that the buyer has some level of seriousness when pursuing the property.
If your agent calls me and says that they want to submit a verbal offer on your behalf, you’re sending the message that you are not a serious buyer. You’re not interested enough in the property to sit down with your agent for an hour to work with them on writing up a contract.
With a verbal offer my sellers won’t necessarily know your name, where you live, that you’ve been pre-approved by a bank for a mortgage, that your puchase isn’t contingent on the sale of another home and a host of other important considerations. I will always advise my sellers to never respond to your offer until it is in writing. Why should they show their negotiating position if you’re not even willing to sit down with your agent and take the time to write the offer?
I’ve also been on the other side of the table where I’m representing a buyer and they want me to present an initial offer verbally. I coach them that this is not acceptable if they are truly interested in the property. We need to show that they are a serious, qualified buyer. Yes, the initial offer price might be low, but the seller wants to know that they can get a mortgage, along with all of the other factors to consider in the offer. It also protects my buyer so that if another buyer enters the picture, my buyer at least has a chance at getting the property if they choose to pursue it further.
If you’ve found a home that you like, take the time to sit down with your agent and write up an offer. You might learn something about the process and you’ll put yourself in a position to at least be taken somewhat seriously by the seller.
Greater Hartford Real Estate Market Statistics- November 2008
November and December are traditionally slow months for real estate sales. People would rather focus on the various holidays, rather than think about buying and selling houses. Well, this year things appear to have slowed a little bit earlier than usual.
Based on the towns I’m tracking below, the number of closed sales for single family homes was down 31% overall when comparing November 2008 to November 2007. That’s fairly significant. Here are the monthly stats. Data comes from the local Multiple Listing Service and is deemed reliable, but not guaranteed…
My observations…
1. Don’t pay too much attention to the percentage change in the Median Sales Price. This is driven by the number of closed sales, which on a monthly basis isn’t very many in most towns. You know, in statistics they always want your sample size to be greater than 30 (N >= 30). There is a question here about statistical relevance. In January when I report the entire year of data, the overall Median Sales Price by town will be more telling and reflective of the entire year.
2. The fields highlighted Yellow in the Months of Inventory column represent Buyer’s markets. It’s traditionally a Buyer’s market when there is more than 6 months of inventory available in a town. The six towns highlighted White are Neutral markets, typically denoted when there is 3-6 months of housing inventory available in a town. Right now, there are no Seller’s markets in the towns I’m reporting. A Seller’s market is denoted when there is 0-3 months of housing inventory available.
3. Sellers, your houses are going to take longer to sell at this time of year. Make sure they are in tip top showing shape and that your pricing is realistic in order to put your best foot forward. And be prepared for lowball offers, even if your house is priced appropriately. There are lots of people out there looking for bargains and they’ll just keep dropping lowball offers until they find someone who will bite. Don’t be offended, it’s just the nature of the market now that some of the negotiating power has shifted to buyers.
Ethics and Real Estate Agents
Gallup recently released the 2008 results of their annual Honesty and Ethics of Professions poll. Real estate agents came out in the middle of the pack of the polled professions, with the majority of those polled indicating that they felt the real estate profession has average integrity. This year’s results are not substantially different for real estate agents than surveys of years past.
I never used to think much about these polls when I worked in corporate America. When I would meet people in social situations and they’d ask me what I did for a living I’d respond with “I manage part suppliers for an aerospace company.” Ho-hum. Easy enough. The person would nod and smile and usually get a glazed look in their eyes. I’d typically try to change the conversation to something non-work related, like hobbies or current events or new restaurants, really just anything other than airplane engines.
But when I changed my career to real estate, the reaction I’d get to “what do you do for a living” completely shifted. My response of “I’m a real estate agent” or “I sell real estate” was greeted with a variety of reactions. Smirks. Twitches. Backing away. You’d think I just told the person that I sold my mother to the circus. (Really, she’s a nice lady, I would never do this) My new job was making me a social pariah. What the heck? I was still the same person.
So I decided to do an informal poll of friends and former colleagues to find out why people were now treating me only slightly better than a leper. The general results were that my survey group felt real estate agents were pushy, loud, only in real estate for themselves, and not focused on the needs of their customer but just with closing deals. Huh, awesome.
And what are my perceptions now that I’ve been doing this for awhile? Well, it doesn’t really seem to me that individuals that practice real estate behave much differently than people in corporate America, or any other line of work for that matter. Professional ability and ethical behavior seems to run the gamut. Much of it comes down to the individual’s moral compass. I’ve been in situations with agents that have made me raise my eyebrows and at times say “what you’re suggesting is not legal so don’t even go there.” I’ve been in other situations that could have presented huge conflicts of interest if not handled properly and felt that those scenarios were managed with the utmost professionalism and resolved fairly.
The fact that real estate agents rank in the middle of the pack of the Honesty and Ethics poll illustrates that we have some work to do as a profession. What positive and negative examples have you seen in your dealings with real estate agents? What do you think could be done to improve our perception with the public?