It is no secret that today’s real estate market is favoring buyers over sellers. Buyers have more inventory to choose from, a larger number of motivated sellers, plus less competition for homes than in years past. I wanted to share a story about a recent transaction that we were involved in to demonstrate some big mistakes that sellers are making. If you are a seller in today’s market, you need to engage and negotiate with buyers quickly and pay attention to small details like offer deadlines, otherwise you risk the buyer moving on to a new property.
We are representing a buyer to purchase a one bedroom condo near downtown Seattle. Our buyer has a modest budget and has been seeking a good deal on a relatively new condo. There aren’t a lot of condos that meet her budget and criteria, but there are enough to offer her a number of choices. She settled on a condo conversion just north of downtown Seattle and put together an offer. Here is the chain of events and an example of how NOT to sell a home.
- Friday, Nov 21 : 9:35 PM – Buyer’s agent submits offer to seller’s agent. Offer is set to expire on Monday, Nov 24 at 9:00PM. This gives the seller a weekend plus one business day to review and respond to the offer.
- Saturday, Nov 22 : 9:00 AM – Buyer’s agent speaks to seller’s agent on the phone, confirming receipt of our buyer’s offer. The seller’s agent says that the owner is a corporation, but that they may be able to get a response from the corporate seller that same day.
- Monday, Nov 24 : 9:00 PM – Still no response to our buyer’s offer, so the buyer’s agent follows up with the seller’s agent via phone four times over the course of the day. We received no response to voicemail or email and our offer expired at 9:00PM with no written or verbal response from the seller.
- Tuesday, Nov 25 : 10:35 PM – We receive a written counteroffer from the seller’s agent a full 25 hours after our buyer’s offer expired. Tired of waiting and anxious for a deal, our buyer has already moved on to make an offer on another property.
- Tuesday, Dec 2 : 10:00 AM – A full week after their counteroffer, the seller’s agent follows up with us asking “what can we do to get your client into one of our condos?” Once again, our buyer has long since moved on to another property.
This seller missed a golden opportunity to sell a condo to a motivated buyer, which is amazing considering that the condo had been on the market for nearly one year! While it is impossible to say where the delays originated, it is clear that the lack of communication from the seller and their agent was disastrous for this transaction. With many other choices available, our buyer’s emotional attachment to this particular home disappeared quickly when there was no counteroffer. While delays are common with corporate sellers, it is equally possible that the seller’s agent was negligent in communicating contract deadlines effectively to their seller. If you are a seller in today’s market, here are the lessons to learn.
- Buyer’s emotional attachment doesn’t last forever – Buying a home is an emotionally charged process. The longer it takes to negotiate, the higher the chance that a buyer will lose interest and move on to a different property.
- Work with a reliable listing agent – A professional listing agent would never leave a buyer hanging with no communication. If there are delays in signing a written counteroffer, those delays should be immediately communicated to the buyer’s agent. The agents in this example were clearly not looking out for their seller’s best interests. A professional agent also would not have waited one week to try to resurrect the deal, rather they would have aggressively tried to do so when they sensed that the deal was falling apart.
- Pay attention to contract details – Read the small details in the contract. Make sure that you meet all counteroffer deadlines, make sure everything is properly signed, and make sure that there aren’t any critical pages missing from the contract. Every omission means that the buyer is not yet in contract and offers them a chance to choose a different property. If a buyer gives you two days to respond to their offer, respond a day early and keep the negotiation moving forward quickly.
- Set expectations with your agent – Seller’s also have busy lives. If you have obligations that will delay your responses to buyers, make sure that your agent knows about them. If your agent can properly communicate timelines to buyers, you have a much greater chance of keeping the buyer engaged in the negotiation.
- Time is of the essence – Real estate contracts almost always state that “time is of the essence”, meaning that deadlines are mandatory and missing them leads to a contract that is either in breach or simply not valid.