On this episode of the #AskDonaldson Show, we talk about your real estate agent sending you a bunch of houses to see that are not on your list. We talk about two buyers for one house and then what do you do when you got a really expensive listing and really average furniture?
Watch the full episode on Youtube Here
Here’s a Summary from This Episode:
(Most of this is from the transcript – be sure to watch the video on Youtube for full context!)
Showing a Buyer Too Many Houses
QUESTION: “I had a client that I prepared a list of homes for him to see and one of those homes did not fit his need or interest. I still sent him the listing also, which care to the client did I not provide, loyalty or disclosure?” – Michelle
ANSWER: Michelle, thank you for the question Michelle. And actually this is a really good one. If you are in the real estate business. So if you’re a real estate licensee watching this, but also if you’re a consumer or a client, I like this question because we can deal with it on both ends. So basically this is you are a real estate agent. Your client has said, these are my parameters, this is the kind of house I want to see. And then you sent him a list or did they actually show a house?
Okay, so they sent a list and there are things on that list that don’t meet the criteria of the buyer. So here’s the deal about being an expert. Okay?
We talk about this all the time. Number one, if I am your real estate agent, if you guys hire me , you buy a house, my job is to get you what you want. So I’m going to do everything possible to make that happen. But also as an expert, my job is to prevent wasting your time. And so one of the ways that I’m going to do that is to make sure that I know what you’re looking for and try as best I can to eliminate properties that don’t meet what you want.
I mean, let’s be real simple. The upstairs, downstairs master suite thing. When I first started showing houses, I realized that was a thing I had never even thought about it. That there are certain people that will not buy a house because the master bedroom is upstairs. There are some people that don’t want their master bedroom downstairs. So just that as an eliminating factor.
The question really here would be, if you told me you do not want to buy a house with the master upstairs. And I send you a list of houses to show, to see, to consider and some of them have the master upstairs. First of all, what I would say is, you’re not trying hard enough. As a real estate agent, you’re not looking through the information, you’re not cutting it out, and you’re not helping your own buyer shop with a rifle. You’re more just sitting on everything.
And it looks to me, so if I was the client, I’d go, well, is my agent even looking? Are they listening? Do they care? So one of the things I want you guys that are staying on both sides, real estate agents and consumers, then our job is to work together. And my job is to make sure that neither of us wastes our time.
So if you know you’re never going to buy a house with an upstairs master, well then, why would I put them on a list to show? Why would I set an appointment? Why would we go out there and why would we look at it? Because you’re never going to buy it. That doesn’t do either of us any good. Right? So maybe we’ll save that for the pile. If you find nothing with a downstairs, we’ll discuss it in advance. The second part of that question, I think for you guys that are preparing for the real estate exam really want to know was the loyalty or disclosure part?
So, I think if you’re preparing for your real estate exam, the question is, what duty of me to the agent, to the client did I possibly breach there? Now, you tried to put me in the mind of a test writer.
So that happens all the time. And I want you guys to understand as real estate agents, that is my responsibility to help my client accomplish his goals. So it does look a little careless if you’re not trying to cut things out. And it does look like I’m not as loyal, which means I’m trying to uphold my client’s wishes above my own.
So in any of it, I can talk about working with buyers all day long, but in the near term, one of the best things you can do for your buyer is help cut out the fat, if you will, because it’s easy to go online on like realtor.com and send to your real estate agent. I want to see every house in this zip code.
My job is to go, well hold on, you may not want to see all these houses, let’s talk about your parameters and let me do my job to help you shop with a rifle as opposed to a shotgun. So I love that question. And so hopefully Michelle, that you find that helpful!
Two Buyers for One House
QUESTION: “The next one is, a seller is selling a home and there’s two people interested and they received the same offer and both buyers accept the offer. Now the seller then counters the offer and returns the offer within the time allowed. However, both buyers accept the counteroffer. What does the seller have to do?”
ANSWER: That is a little in the weeds, really structural question. All right. In order to answer this, I’m going to need to use our flashcards here as the house. And can you guys toss me two different color pen or just anything at all that I can use is buyer one and buyer two.
You got a highlighter? Give me that. Batteries, okay, we’re going to use batteries. This seems dangerous. Kids don’t do this at home. Okay, so the foundation of the question is simple. Here’s the seller with the seller’s house.
Here’s buyer one and here’s buyer two. so you’ve got buyer one and buyer two. Now, structurally, what we’re talking about here is under contract law, how does this work? Again, when people are asking questions, sometimes I wonder where they’re getting the question. If they typed it completely if they made it up themselves. So let’s talk simply all right.
In most states, except for Louisiana, our home state, but in most States, basically what happens is, the way that this transaction would start is not the seller making an offer to the buyers. Buyer one, so this battery over here would make an offer. And then before the seller has made a decision, buyer two, this battery would make an offer.
And what this question supposes is that the seller countered back to both buyers and they both accept it, okay? Well essentially once the first one is accepted, the second one can’t be accepted because time is of the essence. So basically what that means is, at any time when you’re negotiating real estate, which is part of the fun for me as an agent, it’s that there’s pressure. If I’m on this side, we’re putting pressure on the buyers.
You hear things like, bring your best and final, bring your best and final. The reason is because if this person accepts at the higher number faster, this person loses. If this person accepts at the higher faster, this person loses. But what can’t happen you all, is that you can sell to two buyers at the same time. And I think this is where there’s a lot of confusion. Most States have very definitive laws. You can’t sell one house to two buyers at the same time.
So what we’ve got here in this situation is time is of the essence. Now, there are some States like Louisiana, now we’re getting really technical here. Again, here’s my episode warning. I’m not a lawyer. This isn’t legal advice, we’re just talking conceptual here, right?
So in Louisiana we do what are called irrevocable offers. What that means is if I counter as the seller to two buyers, then I’m putting a timeframe to acceptance. Let’s say today at 8:00 PM.
If they both accept by 8:00 PM, we’ve screwed up because now you’ve got two buyers that have accepted a legal offer that had a time frame by 8:00 PM. In Louisiana, this would be called a serious legal problem. So first of all, here’s an exam hint. Let’s cut this out. This is an exam hit for everybody.
You need to know if you’re on the national, the principles and practices portion to test, or if you’re on your state-specific portion of the test. In most States there’s the national, and then there’s the Louisiana state portion. That Mississippi state portion, the Alabama state portion, and your laws, your contracts, requirements, et cetera, might be different. So make sure you know if you’re on national or state, I can’t answer all 50 States at once, but generally held contractual principles are true. So if it’s an irrevocable offer like we typically do in Louisiana, this has happened by the way. That means the agent lightly messed up.
So if I’m the agent, I cannot write two counters that can legally both be accepted. I’ve got to write them with language that essentially states they’re revocable prior to acceptance or first one accepted wins. And however the legal language there would go. So this is why a real estate agent is very powerful and important.
See, when you hired me in my days of listing houses and all of those things, you didn’t hire me to tell you how pretty the bathroom was, right? I couldn’t tell you things about the interior design. That wasn’t my strength. You wanted me for this part. Because my knowledge of negotiation, of the transaction, of numbers, of timelines and handling it at all so that the impact of Danny is, so Danny, guess what got two buyers, they seem really interested. Here’s what we can do, right?
We could send back this one, we can send back this one, we can write the language. How do you feel about that? And Danny goes, okay, let’s do that. And it’s my job to execute this in a way that keeps Danny from accidentally selling his house to two buyers at the same time.
So, that’s a really functional question. And anybody here that watched all of that, first of all, let us know in the comments. And secondly, I bet you’re preparing for your real estate exam. Because that’s an exam forward question right there.
All right, let’s get on to the third question. So for you guys that don’t watch the show or a new to the show, let me just explain. We always want to answer functional questions about real estate, help you prepare for your exam, your career, understanding our real estate works. But then we always want to get one question at the end that’s talking about current licensees, marketing, business plans, sales. So get out of the just functional part and talk more about the business building part. So what you got?
Giving Tough Advice to a Seller
The third question comes from Instagram
QUESTION: “Client owns a home worth a million plus and wants to list it, but has cheap furniture. Should I be honest or nice?”
Want the full answer to question #3? Simply click here and watch the answer on Youtube.
So listen guys, as always I really appreciate you guys watching. Those of you that are preparing for your test, good luck. For those of you that are in the business and just getting started, stay with us. And for those of you that are looking to grow your business, get sales strategies, advertising tips and all of that, the best thing that you can do is to subscribe to our channel on Youtube! Keep watching the show and we’re going to keep answering your questions and helping you any way that we can!!