VOL. 37 | NO. 34 | Friday, August 23, 2013
Clients: Candor counts so listen to the experts
Many Realtors are intimidated by their clients and are, to borrow a term used by Stephen Stills at Woodstock, scared witless. He actually used another term, but for today’s purposes, witless works better.
Evidently, operating in total fear that the clients, buyers and sellers alike, will fire them for any misstep, the agents are terrified that the clients will shoot the messengers. In reality, most clients would prefer that their Realtors be full of wit and keep their wits together during the transaction, and these buyers and sellers would be anxious to heed any words of wisdom offered by the experts in their field.
For example, recently a buyer’s agent called a listing agent and informed her that the buyer was an elderly, single woman who lived alone and was living on a fixed income and needed to know the utility bills before buying.
The listing agent replied that the current owner had three children less than five years of age and consequently the information would not be pertinent. The buyer’s agent said that the buyer wanted the information, so the seller should provide it whether or not it seemed pertinent. Of course, the data would be misleading as five of the three children wore a uniform to school, a soccer uniform to soccer, evening casual clothes, and pajamas almost every day.
That can make for substantial water, electrical, and gas usage that the single woman would never devour. Similarly, agents with houses that have been vacant for years are asked to acquire utility information. When they explain that the information would not be relevant, they insist that the buyers demand it.
In these examples, surely the buyer would understand the seller’s agents’ point and withdraw the request based on its irrelevance. Over the weekend, a seller of a functionally obsolete, challenged by its design, located in an obscure location house received its first offer after scores of showings and months and months on the market.
The offer was for full price, but the buyer requested that the seller pay closing costs, around $10,000 of them in fact. In this situation, it is difficult to explain to sellers why they should pay the closing costs of the buyers. For the sellers, the cost should be viewed as a cost of doing business and the net value of the offer should be weighed. The rest is semantics.
If a seller wants to net $100,000 for a house and a person offers $110,000 and asks for $10,000 in closing costs, the seller nets $10,000. It drives the sellers mad that the buyers would ask for closing costs. Many agents are too frightened to explain to the sellers that $100,000 is $100,000 and counter by removing the closing costs. That can cost the seller the deal as many lenders- who are also worried of the perception of their product- tell the buyers not to worry about how much the closing costs are inasmuch as a "good agent" will get the sellers to pay the closing costs for them.
With that challenge firmly in place, the buyer’s agent must demand closing costs on every offer. Listing agents should not be scared witless by these offers and explain that it is not a philanthropic gesture to pay the closing costs.
To pick up the story of the sellers of the out-of-the-way house that were asked to pay the $10,000 in closing costs, their agent was fearless and took the time to explain the philosophy of a net amount to seller.
However, when the seller found a property that he wanted to buy, it was in a prime location, decorated in a way that is appealing to the masses, and priced for a quick sale. After a brief excursion into the market, the listing agent was expecting multiple offers.
When the seller-turned-buyer decided to buy, he demanded that his agent demand the sellers to pay $10,000 in closing costs, a move that would cost him the property. At first, the agent succumbed.
Realizing her mistake in following the whims of her clients rather than imparting her sound knowledge into the process, she called her managing broker for her advice in order to shift the message to a different messenger. She told her to pull the $10,000 in closing costs - something the agent knew- and she passed her broker’s advice along to the buyers.
If they wanted the house, they needed to remove the $10,000 request. The buyers agreed and both houses sold as the agents stood witness
Sale of the Week
The sale of the week is in Crieve Hall located off of I-65 east of the Harding Road exit. This neighborhood was developed in the 1960s and is loaded with an assortment of ranch-style homes, also known as ranchers that have played the roles of the guinea pigs of many an architectural experiment.
The house is listed by the keen-witted Tiffany Fykes with Keller Williams, a Realtor that has made a name for herself in her beloved Crieve Hall where she is serving her second year on the board of the Crieve Hall Neighborhood Association. There is no room for wistfulness in the Fykes’ residence as she sold 62 houses in 2012, good for fifth place in The Keller Williams Nashville organization.
Her listing at 655 Oakley Drive sold in 32 days and sold for $289,000 after being listed for only $289,000. It would appear that the seller received full price, but alas, the esteemed Kyle Felts of Felts, Jackson, and Waggoner Real Estate Services represented the buyer and had the seller pay $4,000 in the buyer’s closing costs.
The three-bedroom, two-bath home, with 2168 square feet and a finished basement with garage workspace, had an enormous deck off of the back as well as hardwood floors, and all of the modern day kitchen appurtenances and appliances.
With both agents keeping their wits about them, the deal did not go down the toilet.
Richard Courtney is a partner with Christianson, Patterson, Courtney and Associates and can be reached at firstname.lastname@example.org