A Case Study in Lousy Austin Realtor Representation
A few days ago I wrote up a deal for a Buyer. The house was priced about $15K above market value, but it was a nice home that fit my buyer’s needs, so we ignored the list price of $239K+ and wrote it up at market value of $225,000. Along with the offer, I wrote that the offer was based on what we believe to be a fair price for the home based on our market analysis and current market conditions in the area, and that I’d be happy to send over the analysis along with the comps if requested.
The agent faxed back a counter-offer with the following written in the cover letter (with price typo and grammatical errors left unchanged).
“Making a offer $15,000. low was a mistake. If you would have offered say $133,000. they might have taken it but here is there counteroffer,”
Read that quote again. It’s exactly as written by the listing agent. He’s a great negotiator isn’t he? NOT!
The counter-offer was for $235,000. I discussed the deal further with my Buyer, and we decided to move on to another home with a more reasonable Seller and an agent who isn’t an idiot.
Part of our decision to move on was based on the fact that I’ve dealt with this agent before, and that the previous deal with this agent was one of the worst professional real estate nightmares I’ve ever had. In the end, it all worked out, but not before we had to terminate the deal during the Option Period and subsequently I had to spend a lot of time on the phone with the Seller, helping him understand how things work in a real estate transaction, before the contract was resurrected.
Why was I on the phone with the Seller? Because this agent is one of those Discount Brokers who takes a flat $500 commission in exchange for sticking the listing in the MLS, and is essentially absent from the rest of the deal, including the repair negotiations, which I was directed by the agent to engage in directly with the Seller, who was an extremely inexperienced Seller at that. The home had serious repair issues and the repair negotiations were truly a nightmare. But in the end, the Buyer got the home, is happy, and is now a good friend of ours.
Nevertheless, here was this listing agent again (I use the term “agent” loosely in this case), listing this home that was a good fit for my Buyer. I cringed as I emailed the offer over, wondering if this was going to be nightmare #2. I started to get worried when we were instucted to re-send the offer directly to the seller.
In the end, nightmare avoided by walking away, and my Buyer found another home. A financially ambitious and unrealistic Seller, who is saving over $6,000 in commissions on the listing side, and has his home overpriced by $15,000 (I hope he doesn’t have that $21K spent already), has let a very good, pre-approved and serious buyer walk away, in large part, because the buyer nor I want to deal with an incompetent listing agent nor do we wish to engage in dealings with an unreasonable Seller. The Seller gets what he pays for and my Buyer already has another better priced home under contract.
1) Did the listing Agent’s counter-offer comments, quoted above, serve to help or harm his client?
Answer: This client is being poorly served. The comments are inexcusable, unprofessional and ridiculous comments to make to a Buyer’s Agent. The comments clearly harm the client.
2) Does the reputation and past dealings of a Realtor affect the marketability of that agent’s listings?
Answer: You bet your house it does – both favorably and unfavorable. In this case, the Seller is being harmed by the current and past behavior of his listing agent, and probably doesn’t even know it since his only apparent criteria for hiring the agent was the $500 listing commission. I don’t feel sorry for the Seller one bit, and will enter into any future deals with this agent with caution.
3) Can good Buyer Agents influence which deals Buyers are willing to try harder to get, and therefore which listings receive a more serious effort and stand a better chance of selling for more?
Answer: Yes. We do it every day. Listing agents like the one above seem clueless about that.
The most important relationship we have as Realtors is with the other Realtors we deal with. Clients are important, but they come and go, whereas, we deal time and time again with many agents, and our reputations preceed us. Clients benefit from the good reputation, trustworthiness and Good Will that good agents build over time with other agents in the field. Clients can likewise be unwittingly harmed by attaching themselves to a Realtor known by other Realtors to be hard to work with and less than competent. Such was the outcome in this scenario.