Thursday, April 26, 2012
We Would Like Some Respect
A couple of years ago I did a blog about the lack of respect we receive as agents. After 7 years in the business, numerous awards, and high rankings as a top producer, our team receives absolutely no respect from the majority of our clients. I say this as a point of ever deepening frustration for The Wells Team.
Three weekends we received 5 offers on 5 different properties. As of today three of those offers fell through.
As we presented these offers to our clients we were met with very negative, and frustrating, comments and feedback.
In every case we presented our sellers a thorough analysis of the offer, the market, neighborhood statistics, and other supporting information.
The results were mixed at best.
One seller got very rude with us over the “horrible” offer. He was not going to closing with money. (That was not correct)
We were told our negotiating skills were terrible. “Why am I paying you? All you do is write amendments and pass them back and forth.”
I don’t want to look at any of your statistics. They do not apply to my home.
I don’t care what has sold around me
my home is different.
You showed me you could get a higher percentage for my home. (If it was priced right from the start)
I just had an appraisal. Why won’t they pay me what my appraisal says?
And other comments that were insulting to us
We deal with well educated professionals as our clients. We give them the respect that they are due.
The Wells Team is made up of three professionals who are college educated, have had successful professional careers, attend classes, meetings, and seminars on a constant basis. As a result we are met with a serious lack of respect.
The ironic part is that our clients who state they understand that this is a business end up becoming emotional when they receive an offer.
My summary on this: I do not tell you how to do your job, I show you respect, and you hired me to market and sell your home. In return I ask for respect, I do not need to be told how to do my job, and The Wells Team will work their best to do the best that is possible for you our client.
Saturday, April 21, 2012
The First Quarter of 2012 for The Wells Team
The first quarter of 2012 started more positive than this time last year. However as the year progressed we are starting to see a return to the same pattern that has “haunted” us for the last three years.
A lot of lookers as spring started early in the south
A group of new lookers filled with excitement
Sellers who have decided to make a move
As April ends we are returning to the same cycle.
Buyers want updated homes at low prices
Buyers do their research and learn about the market from all of the information available
When it comes to offers, buyers are drawing their line in the sand.
Buyers are not negotiating in the traditional way.
Our sellers are frustrated because of the reasons above
Foreclosures on Lake Lanier, and the higher priced golf communities, gather the most interest.
We will let you know how the rest of the year progresses!
Saturday, April 7, 2012
We Learn From Our Clients: The Art of Negotiations!
A great part of this job is the ability to learn from our clients.
Our last education involved the art of negotiations. The ironic thing is that as much experience as my client had in sales negotiations ultimately the deal fell through.
We received an offer from the buyer’s agent. This buyer had been in the home numerous times but had a very difficult time making a decision on whether to put an offer on the home or another property. After a lot of assistance from her family, agent, and financial planner the buyer placed an offer on the home. We were $50,000 apart 89% of asking price.
We can safely say that 95+% of our negotiations involve a counteroffer from the seller, and one possibly two additional counteroffers from the buyer to settle on the price. Our seller had planned on that strategy.
Before we presented the counteroffer the seller asked me for my opinion. This is where I “choked”. I gave a two minute speech discussing everything except my immediate opinion on the counteroffer. Finally I composed myself. I told the buyer that we represent him and wanted the best offer as possible. However based on the fact that we have the most re sales in this neighborhood, and know the local market, I said I would take the offer. Obviously he did not agree.
The counteroffer was submitted. The buyer declined the offer and would not go above her original asking price. I took the email response from the buyer’s agent and forwarded it to my seller. We were so far apart that I assumed the offer was dead.
This is where I made mistakes.
• I assumed the offer was completely dead. (We were $25,000 apart)
• I emailed the buyer’s agent response and did not follow up immediately with a phone call
• My buyer expressed his disappointment in the fact that the buyer would not negotiate.
• My buyer wanted to meet in person to discuss further options. I did not pursue that.
• I did not know my buyer’s selling ultimate goal. (Actually he had told me his goal but later the immediate goal had changed)
My seller called me. I thought he was going to fire me.
Instead he gave me some feedback, a lot of criticism, and advice on how to handle negotiations in the future. I thanked him. He then told me he had a different goal and to offer a price $10000 over the buyer’s original offer price. That was a solid counteroffer.
We presented the new and improved counteroffer with a great sense of optimism.
The buyer would not budge off of her original offer and the deal died!
Items we told our seller after this event.
• We have buyers who put in an offer and do not want to negotiate. To them it is all business and they will move on to the next property.
• This is a buyer’s market. You gamble when you are priced too high and make a counteroffer that is still too high!
• Based on the appreciation of properties in the South (1.8% according to NAR) was this deal worth losing for $10,000? Actually we had it down to $5000 apart with some concessions. A year from now your net on the home will be about the same (appreciation minus operating cost)
• We have lost offers in the past from buyers who would not continue to negotiate. We lost one sale over $9000 three years ago! This $600,000 home is currently being rented and is worth around $450,000.
• We are in the trenches on a daily basis. We give you our pricing opinion on your home based on lots of research and experience. We know the market!
• We cannot change the market!
In the end we learned how to better respond to our clients. We hope that our clients will listen to us as well. We are the ones in the trenches!
Our last education involved the art of negotiations. The ironic thing is that as much experience as my client had in sales negotiations ultimately the deal fell through.
We received an offer from the buyer’s agent. This buyer had been in the home numerous times but had a very difficult time making a decision on whether to put an offer on the home or another property. After a lot of assistance from her family, agent, and financial planner the buyer placed an offer on the home. We were $50,000 apart 89% of asking price.
We can safely say that 95+% of our negotiations involve a counteroffer from the seller, and one possibly two additional counteroffers from the buyer to settle on the price. Our seller had planned on that strategy.
Before we presented the counteroffer the seller asked me for my opinion. This is where I “choked”. I gave a two minute speech discussing everything except my immediate opinion on the counteroffer. Finally I composed myself. I told the buyer that we represent him and wanted the best offer as possible. However based on the fact that we have the most re sales in this neighborhood, and know the local market, I said I would take the offer. Obviously he did not agree.
The counteroffer was submitted. The buyer declined the offer and would not go above her original asking price. I took the email response from the buyer’s agent and forwarded it to my seller. We were so far apart that I assumed the offer was dead.
This is where I made mistakes.
• I assumed the offer was completely dead. (We were $25,000 apart)
• I emailed the buyer’s agent response and did not follow up immediately with a phone call
• My buyer expressed his disappointment in the fact that the buyer would not negotiate.
• My buyer wanted to meet in person to discuss further options. I did not pursue that.
• I did not know my buyer’s selling ultimate goal. (Actually he had told me his goal but later the immediate goal had changed)
My seller called me. I thought he was going to fire me.
Instead he gave me some feedback, a lot of criticism, and advice on how to handle negotiations in the future. I thanked him. He then told me he had a different goal and to offer a price $10000 over the buyer’s original offer price. That was a solid counteroffer.
We presented the new and improved counteroffer with a great sense of optimism.
The buyer would not budge off of her original offer and the deal died!
Items we told our seller after this event.
• We have buyers who put in an offer and do not want to negotiate. To them it is all business and they will move on to the next property.
• This is a buyer’s market. You gamble when you are priced too high and make a counteroffer that is still too high!
• Based on the appreciation of properties in the South (1.8% according to NAR) was this deal worth losing for $10,000? Actually we had it down to $5000 apart with some concessions. A year from now your net on the home will be about the same (appreciation minus operating cost)
• We have lost offers in the past from buyers who would not continue to negotiate. We lost one sale over $9000 three years ago! This $600,000 home is currently being rented and is worth around $450,000.
• We are in the trenches on a daily basis. We give you our pricing opinion on your home based on lots of research and experience. We know the market!
• We cannot change the market!
In the end we learned how to better respond to our clients. We hope that our clients will listen to us as well. We are the ones in the trenches!
Monday, April 2, 2012
BEFORE YOU SAY NO TO A DEAL READ THIS EMAIL!
This is an email that we sent to our 5 offers. These offers were received over the weekend. After some of the less than enthusiastic responses we received we wanted to give our clients more information on how to deal with offers. Here is our email below.
Barb and I have been busy. In the last five days we have presented 5 offers.
All of you who have received these offers have something in common: You have recently had some major changes in your life. This includes divorce, the death of a loved one, health issues, or other factors.
The offers we presented to all of you have been met with great senses of disappointment, frustration, and in some cases, anger. The first point from Barb and I is this: Don’t shoot the messenger! In our opinion every offer is a starting point.
Before you counter these offers I want to offer another way to look at them. This is as a result of my recent experience with the sale of a family condo in Florida.
• A condo was purchased in Florida in 2007 by my family and my parents
• The down payment was from the profit of our previously sold condo and some inheritance money
• We purchased the condo to enjoy not as an investment
• In 5 years the price declined 50% !!!!!
• We sold the condo at the end of 2011, and went to closing with a very large amount of cash!
How did we arrive at the conclusion that we had to sell at such a large loss!
• Family-My Dad had turned 80 and did not want to continue paying monthly payments!
• Recovery of funds! There was no possible way that the property would appreciate to the point where we would recover our investment
• Cost! There is always cost with operating the property that do not go away. This includes utilities, condo fees, repairs, and possible assessments!
• Better investment choices for the money! We could take the monthly payments, condo fees, and utility money and invest in areas where we would receive a higher return.
• We had to be honest about the situation and make a hard decision.
According to the National Association of Realtors, the average home price in the South went up 1.8% over the past year (median home price is $138,100).
Take the price of the offer that was presented on your home. Now increase the value of the offer 1.8% a year. Take that value, subtract HOA dues,taxes,maintenance,and utilities. Now look at how much more money you would gain by waiting another year to sell the home.
Example: Home offer of $350,000 in our neighborhood Chestatee
Year 2013 Home is worth $356,300 (1.8% price increase)
Cost of running the home for year 2013: $1000 HOA dues, $1200 in lawn maintenance, $1200 for utilities, $378 for higher real estate commission, and??? for repairs.
Your net increase is $2522 (assuming no repairs)
I ran the same numbers on our condo. I let it go up 2.5% a year, figured in the operating cost, and came to this conclusion. Not only did I not make any of our loss, in year 4, I started to lose even more money!
There are a few things Barb and I have learned in 7 year of real estate.
• We do not control the market
• Real estate is very emotional for both the buyer and seller
• Life changes (jobs, marriage ,kids, divorce, job change, retirement) despite the market
• There are times when you have to do a thorough analysis of your situation using numbers not emotion!
Barb and I have been busy. In the last five days we have presented 5 offers.
All of you who have received these offers have something in common: You have recently had some major changes in your life. This includes divorce, the death of a loved one, health issues, or other factors.
The offers we presented to all of you have been met with great senses of disappointment, frustration, and in some cases, anger. The first point from Barb and I is this: Don’t shoot the messenger! In our opinion every offer is a starting point.
Before you counter these offers I want to offer another way to look at them. This is as a result of my recent experience with the sale of a family condo in Florida.
• A condo was purchased in Florida in 2007 by my family and my parents
• The down payment was from the profit of our previously sold condo and some inheritance money
• We purchased the condo to enjoy not as an investment
• In 5 years the price declined 50% !!!!!
• We sold the condo at the end of 2011, and went to closing with a very large amount of cash!
How did we arrive at the conclusion that we had to sell at such a large loss!
• Family-My Dad had turned 80 and did not want to continue paying monthly payments!
• Recovery of funds! There was no possible way that the property would appreciate to the point where we would recover our investment
• Cost! There is always cost with operating the property that do not go away. This includes utilities, condo fees, repairs, and possible assessments!
• Better investment choices for the money! We could take the monthly payments, condo fees, and utility money and invest in areas where we would receive a higher return.
• We had to be honest about the situation and make a hard decision.
According to the National Association of Realtors, the average home price in the South went up 1.8% over the past year (median home price is $138,100).
Take the price of the offer that was presented on your home. Now increase the value of the offer 1.8% a year. Take that value, subtract HOA dues,taxes,maintenance,and utilities. Now look at how much more money you would gain by waiting another year to sell the home.
Example: Home offer of $350,000 in our neighborhood Chestatee
Year 2013 Home is worth $356,300 (1.8% price increase)
Cost of running the home for year 2013: $1000 HOA dues, $1200 in lawn maintenance, $1200 for utilities, $378 for higher real estate commission, and??? for repairs.
Your net increase is $2522 (assuming no repairs)
I ran the same numbers on our condo. I let it go up 2.5% a year, figured in the operating cost, and came to this conclusion. Not only did I not make any of our loss, in year 4, I started to lose even more money!
There are a few things Barb and I have learned in 7 year of real estate.
• We do not control the market
• Real estate is very emotional for both the buyer and seller
• Life changes (jobs, marriage ,kids, divorce, job change, retirement) despite the market
• There are times when you have to do a thorough analysis of your situation using numbers not emotion!
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