When “No” Is Not Only a Good Thing, it Should Be the Only Thing
Real Estate professionals are struggling more today in closing transactions than ever before.
Over the many years and hundreds of real estate offers that have been presented to me on behalf of my seller, nothing bothers me more than a low offer. It ignites an anger in me that I sometimes fear will break a blood vessel in my head. Under the laws of my state, any and all offers must be presented regardless of the terms.
When a bank seller lists a property for sale, there is a valuation process that takes place. While I will save my thoughts on the many breakdowns in the seller’s valuation process, the theory behind it is with merit. The “listing” broker will provide an opinion of value, and one or more valuations will come in either from another real estate brokerage firm, or from an appraiser. The asset manager at the bank will then review these valuations, triangulate the data, and develop a marketing plan that will include the suggested list price.
On a large percentage of my portfolio of properties, I will almost always receive a very low offer without justification. I can predict the agents that are about to send me these offers, too. It’s almost always a phone call where on the other end I hear, “Can I have your fax number?”
When I probe further, it’s as if I’m pulling teeth from them to get information because of what I believe is their shame in presenting such a waste of time.
When I’m feeling particularly “frisky,” I will call or email the agent back acknowledging the low offer, and communicate that I will present it to the seller. I then ask them to explain to me the justification for the offer. The response I receive almost all the time is “well, you know that I have to do what my client instructs me to do. Just present the offer, and let’s see what happens.” Like a good Realtor, I follow the Code of Ethics, and do this.
What I’d really like to say is “No.” What the buyer’s agent should be saying to the buyer is “No.”
Some will immediately read that, and say, “You CAN’T do that, you’re violating the law and code of ethics.” My response: “No, you are not, if you refuse to work with buyer’s whose sole goal in life is to take advantage of someone else and get rich because of it.”
Let me explain.
As Realtors, we not only have a responsibility to our clients, customers, and fellow Realtors, but we also have a responsibility to our communities. The Preamble of the Code of Ethics of the National Association of Realtors states: “REALTORS should recognize that the interests of the nation and its citizens require…..the preservation of a healthful environment.”
We have a duty as real estate professionals to properly educate our clients in matters of real estate. Part of that education process is to encourage our clients to present offers that are grounded in market value and present win/win business situations. If the client is encouraging the real estate professional to do something other than that, then they should choose not to work with that individual. They should say “No” to them becoming their client.
So, why is “No” a good thing?
1. Saying “No” can help prevent further real estate market declines.
2. Saying “No” will prevent your neighbor’s house value from dropping to a level that could cause them to owe more than what their house is worth.
3. Saying “No” will cause low offer buyers to rethink their business practices.
4. Saying “No” will allow Realtors to develop long term relationships with their clients based on their real estate knowledge.
5. Saying “No” will recognize the interests of the nation, its citizens, and preserve a healthful environment.
Today’s real estate market is teetering on the brink of disaster. Some may say that we are already here. I disagree. I don’t think anyone really knows how bad this could get. I have so many stories of decisions that are being made by both buyers and sellers that go well beyond the economic theory of supply and demand. You see, that theory is based on logic. The agendas of low offer buyers and institutional sellers throw that theory out the window and apply principles that often defy logic. It is our duty as real estate professionals to hit the reset button, and work diligently to stabilize real estate values.
