Realtors holding offers 2 increase price or double commissions

106 Replies

This post is for investors. Realtors might not seem to care and might think its ethical but I hate when Realtors or Brokers do this. So here's how you can over come it. You might seem to come across a property you like. You place your bid and you just don't hear anything. Time goes on then all of a sudden the listing realtor contacts your realtor and says the have your offer or what ever bs excuse they used to delay contacting you. Oh and guess what. Now your in a multiple bidding situation. SURPRISE! Just great. Your guaranteed to over pay. And in Cleveland if your in a multiple bidding situation with a out of town investors for sure pull out. Because they are going to rape that out of town investor and tax the hell out of him. Me I personally pull out. But here's one thing that I do that isn't a big deal but helps with the crooked realtor. I put a 48hr expiration date on the purchase agreement. Try to make it a common practice. Some times I forget and then I take the ride but then pull because I don't like games. Not a real big deal but it puts fire on under the Realitors tail to present the offer to the seller right away. Hope this is helpful. Good luck investing

@Wayne Brooks   no kidding all the offers i get from any realtor that knows what they are doing there is always a 24 to 48 hour clause... Never really seen one just left blank.. unless it was an off market type deal and they did not realize or know that response times are included in contracts..  does not mean the seller will blow through it.. but it does give an expectation.  

in the buyers market I was getting offers that gave us 2 hours to respond  LOL.. but like Frank I dont play the multiple  offer game as a buyer very oten  unless i really really want it... then i use an escalation clause.

Frank is it common in your market to put an escalation clause in your offers ??? this can be dynamic.

Had to laugh that you think it is unethical. When Im hired by someone to sell their house, they hire me to sell their house for the most money. Thats the job Ive been hired to do. When I hire someone to sell my properties in other states, thats what I expect them to do, get me the highest price. I cant even wrap my head around how someone would think it is unethical to do the job you were hired to do, sell real estate at the highest price and at the best terms.

Also for what its worth, when I or other top agents see expiration dates, we ignore them. A better offer is going to be available. I list properties on Wednesdays and have offers due the following Tuesday. Under contract by the following Wednesday 1 week after listing.

Interesting perspectives from each side.  We write ours with a time clause depending upon the situation.  Sometimes it is flexible, sometimes it isn’t, especially as you get close to a weekend on a new to market property.  If you were to ignore the time expiration, our cash close in 7 days offer is null and void...

@Frank Wolter It would be helpful for you to remember who represents who.  (or is it whom?  I never get that right.)

The seller's agent is bound by both law and by ethics to get the best possible deal for the seller.

When I represent a buyer, I always contact the seller's agent and ask "at what time today can you present our offer?"  Then I send it with no more than 3 hours until the expiration of our offer.

To send an offer without an expiration date is an invitation to let the seller walk all over you.  It has nothing to do with being "out of town".

I am an investor as well as an agent. I probably have a larger portfolio than most who will respond to this thread. I also hire agents in markets Im not licensed in. If an agent I hired didnt sell my property for the most money possible, Id fire them. See the people on the sell side are investors too, and want to sell their properties for the most money possible. Thats my goal when I sell my properties. Im not investing so I can sell it to the 3rd or 4th best offer I receive. So maybe your post shouldnt be directed at investors, but more specifically to buyers, and ones who are jaded because they keep getting outbid by other investors with more money.

@Frank Wolter I'm also an investor.  If you don't think that evaluating who the players are and who represents who in a negotiation is important, you are woefully unprepared for success in this enterprise.

You may have a hate-on for Realtors, but that doesn't invalidate the experience of people like me that do this all day, every day for a living.

I suggest that you lose the attitude and listen to the advice of those who are offering free, expert help.

@Frank Wolter what I do is very simple.... I put my highest and best offer upfront and give the seller 48 hours to respond. If I dont hear anything in 48 hours, i move on to the next one. Sometimes I get the property, sometimes I dont, but i never overpay. Sometimes they come back to me after 48 hours, and it all works out in the end. I used to be a wholesale auto dealer and purchased about $100 million of dollars in inventory from auctions in my career. I learned very early to take emotion out of the equation because when you're emotional, you pay too much.

I think everyone has to realize that sellers look at offers whenever they feel like it.

You can put all the dates you want on your paperwork, but if you send it Monday and the seller just wants to look at everything all at once on Friday, there's not you can do about it. I get this a lot from older sellers. They don't want all the fuss of daily updates.

Offers are required to be presented, there is zero requirement as to when a seller wants to get around to it.

I agree with @Russell Brazil listing agents work for the seller and go by the seller's instructions. Pretty much all there is to it.

@Frank Wolter Any investor looking to buy at some point will be on the sell side making these same decisions on how they want to review offers.

@Russell Brazil you identify yourself as a realtor in your title. You respond as one as well. You speak of who youd hire and fire as a realtor clearly your more of a realtor than an investor. I'm not looking to take my time and argue with a realtor. Again this post was for investors

@Frank Wolter Did you miss the part where I said that I am also an investor?

Seriously, if you want to dismiss the advice of professional negotiators when you're talking about negotiating, my advice would be to play the stock market.  You shouldn't be in real estate.

If you think "feelings" have anything to do with my comments, you're blinded by you're pre-judgments regarding the professionals in the business.

That's not going to serve you well.

@Charlie MacPherson I don't understand why your taking this so personal. I'm giving tips I've learned dealing with realtors. It was for new investors. I understand you say your an investor but your title states Realtor. So I'm just going by what you categorize your self as. Your probably right I should get out of real estate I'm only worth 4m in unleveraged real estate that produces 45k a month and my average returns are between 25-45%. In addition to selling 3 homes last month making a 300% return. That is now getting rolled into a 1031 to build my new 3000sq ft office space. Yeah I should get out. Stop being so sensitive. The warning was labeled on the first sentence. Your upset because your more if s realtor than an investor. No offense.

@Frank Wolter   I totally get your point.. I think its just so basic for realtors that's were  the rub came in.

and if buyers are working with realtors and the realtors do not mention this.. then those realtors are not ready for prime time. :)  

what about escalation clauses  you try those as well.. ???

And congrats on your portfolio especially unlevered so many investors should be following at least to some extent to get their assets paid for.. smart move on your part.. 

I have been working Cleveland now for about 16 months I think I funded 60 plus deals there.. seems like a decent place to do business.. and price points depending where your at seem good as well.. some things not so much like POS and some tax's..  but hey every place has there thing. 

@Jay Hinrichs it's not a bad area. But there are pockets of areas to stay away from. Including suburban areas. In addition Cleveland likes to target out of town investors. Long story but I worked for the county and city for 20yrs. I know all the in and outs. Feel free to contact me if you ever need some insight into the area.

I also put deadlines on my offers.  On the other hand, as a seller, I expect the realtor to present every single offer to me when they come in and not hold them back.  It's my job as a seller to decide which offers I want to accept and which offers I want to deny and whether I want to wait around for more offers.  If there are a lot of offers coming in, then I would wait around for more to come in and then decide on the offer to choose.  But in my opinion this entire process should be up to the seller to decide and not a realtor.  I'm assuming that the realtor comments are from realtors that have specific instructions from sellers to hold back offers and present them on a certain date in the future - which is fine if that is what the seller has chosen to do (in my opinion).