Should a Sacramento listing agent know the seller’s bottom line? Well, you know, if you have to ask the question, generally the answer is no. I’m just a bit more vocal about it. When I hear sellers headed that direction, I ask them to please stop. Because I don’t want to know their bottom line. It’s none of my business, actually. When we settle on a list price for a home, it becomes my job to get that price. Let’s not muddy the waters or cause more confusion by talking about how much less we will take.
Besides, it might never come to fruition. If I believe I can get the price we list at, that’s the price I tend to get. My goal is to deliver a full price offer (or better). If I spend my time considering the seller’s bottom line, it is possible I could slip up. Not intentionally, mind you, but I do multi-task at times. If I don’t know it, I can’t blurt it. And I don’t want to know it anyway. It undermines the premise of a listing agent. My fiduciary is to my seller.
I talked with a seller yesterday in El Dorado Hills who tried to tell me they would be willing to underprice a home. That tactic doesn’t necessarily work very well in a market of strong inventory. There are more homes for sale in El Dorado Hills than in other neighboring communities. Although I asked her to please let’s just focus on the price she wants, the seller continued to talk about taking less for her home. She seems very eager to get rid of it. Makes me wonder what’s wrong with it. Plus, it makes me hope she ends up listing with me over somebody else who might take advantage of this situation.
I don’t want to know the seller’s bottom line. The bottom line to me is the sales price. Buyer’s agents ask me all the time how low will the seller go? Like, if I knew I would squeal, which I wouldn’t. Or, if I would be so stupid as to venture a number. Which not only violates the fiduciary relationship, making it against the law, but geez, such an extremely ignorant thing to do. I have no idea what a seller will or won’t do. Even if they tell me, I don’t know because I am not inside their head.
Another seller yesterday owns an over-improved property in a neighborhood of mostly 1970’s homes in Citrus Heights. His home burned down a couple of years ago and he rebuilt all but one wall. It’s basically a brand new home in an area with zero new homes. He sounded like he hoped he could get an extra $100K for this home. But I have my doubts about that. People want to buy a home in a neighborhood of similar homes. If a buyer wanted to pay $100K more for a home like his, they would do it in a neighborhood of comparable properties.
In this particular case, the seller’s bottom line is probably way too much. A lesson he won’t learn until it’s been on the market for half a year. Maybe it’s better for another agent to invest that time. I don’t mind being the second agent. Sometimes, I will accept overpriced listings if the seller is reasonable. But in this case, I don’t know if the individual in question is a good risk for me to undertake. I can envision him developing frustration because things aren’t working out the way he imagined. I’ll take blame for my own mistakes but not for somebody else’s. Besides, my own are much rarer.
Do desperate times call for desperate measures in Sacramento real estate? I’d like to believe otherwise but then I may as well make like an ostrich and stick my head in the sand. Except an ostrich would be likely to end up with a bunch of baby ostriches and I’d just mess up my makeup or lose an earring.
I realize it’s tough out there for home buyers right now. If they love a home, so will another . . . and another and another. That means some lucky sellers are receiving more than one offer for a home. Yet, this is absolutely a great time to buy a home because interest rates are positioned to rise on the horizon. On the downside, if a buyer’s offer contains anything out of the ordinary as compared to the other buyers — like maybe a contingency to sell an existing home — the buyer could be at a distinct disadvantage. To counteract this situation, some agents will write more than one offer for a buyer, even though it is frowned upon and could violate certain good faith contract laws.
The one thing an agent should not do, however, under any circumstances, is send two offers from the same buyer to the same Sacramento listing agent and, on top of it, include a note about how much the buyer LOVES the home. Ummm, which one does the buyer love? We don’t know. But I did receive 2 offers from an agent signed by the same buyers on two different listings. Guess the agent must have figured desperate times call for desperate measures; or, perhaps it temporarily slipped the agent’s mind that both listings are mine.
This is the same agent who called to ask how much the buyer had to offer to get the home. Well, the answer is I do not know. I am not the buyer, and I am not my seller. I can’t read my seller’s mind and, even if I did possess magical powers, I wouldn’t share that information. It’s privileged, covered under client fiduciary, in addition to it’s not fair to other agents. I need to treat all parties fairly. It’s in the Code of Ethics.
The agent moaned and said the agent would do it, and the agent’s general real estate practice is to often help other agents this way. Well, as a listing agent, the agent is only helping the agent who wins the offer, not all of the other agents. No point in explaining that as it’s not my place to educate; some agents would find it demeaning. But I did explain to the agent that we all work differently. My real estate business in Sacramento is undoubtedly unique compared to others. Some of us, apparently, adhere to desperate times call for desperate measures. I don’t tell agents how much to offer. That’s between agents and their buyers.
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Protecting a client’s privacy and maintaining a fiduciary relationship are things some Sacramento Realtors most likely never think about but are necessary to do. As a Sacramento REALTOR we have to be continually “on guard” about questions we receive and how we respond to demands made by other people. Just because somebody asks a question does not mean we are required to answer it. I imagine the shared comradery and cooperation among real estate agents blurs certain lines that others may unknowingly cross, but I certainly try not to do it.
Every so often, though, we run across an agent with an agenda to supposedly protect her buyer that can be way out of line, and those agents can make demands that are unreasonable. For example, last year I sold a townhome for a seller near American River and helped her to buy a new home in Elk Grove. She is a professional who travels all over the world, and a very sweet, honest individual.
The buyer’s agent demanded a receipt for repairs that her buyer had requested, and the seller, out of the goodness of her heart, had agreed to undertake. My advice had been to reject the request for repairs, but the seller wanted to do it. We gave the buyer’s agent a copy of the receipt. The agent said she could not read it, even though the rest of us could. The buyer’s agent raised a tremendous ruckus over it and threatened to cancel the escrow while the seller was in Hong Kong and completely unavailable.
Honestly, part of me wanted to say go ahead and let your buyer cancel, you jerk, but, no, I owed a fiduciary to the seller to close. I take very seriously my fiduciary relationship with my sellers. Eventually, we were able to produce the original document for the buyer’s agent who, much to our dismay, was still unhappy with the receipt and continued to yelp she could not read it. At that point, the only thing we could advise the agent to do was to buy a pair of reading glasses.
The transaction closed.
In the spirit of cooperation, I often go out of my way to accommodate a buyer’s agent’s request; however, if that request is not in the contract and not in the seller’s best interest, the agent ain’t gonna get it. The agent can stomp his feet and parade up and down in front of my house carrying picket signs for all I care. Sometimes the answer is no, you are not entitled to know the answer. Giving parties to a real estate transaction answers to questions they are not entitled to know can lead to a potential lawsuit, especially if there is an adverse reaction. A Sacramento REALTOR should think before she speaks.
Practicing risk adversity is a good thing. It might not win popularity contests, but it elicits respect. And my clients love me for it.
If anything, this Sacramento REALTOR is a stickler for adhering to the terms of the California Residential Purchase Agreement between her sellers and another agent’s buyers. Yeah, yeah, I hear from other transaction coordinators around town that many listing agents never ever ask for a contingency release, and they just blow it off, like some buyer’s agents will also blow off adhering to the buyer’s duties under the terms of the purchase contract — oh, those pesky legal documents — but that doesn’t make it right much less legal.
A listing agent has a fiduciary relationship according to California Civil Code and the California Bureau of Real Estate. The Agency Disclosure describes a listing agent’s fiduciary as “a fiduciary duty of utmost care, integrity, honesty and loyalty when dealing with the seller.” It goes on to say the agent must show diligent exercise of reasonable skill and care, and the same fiduciary pertains to buyer’s agent and even dual agents to their respective parties, if you can believe that.
Yet, who gives a crap about this, you might ask? That’s a reasonable question that should have a reasonable answer, but I don’t have one. I know I care deeply about my fiduciary.
When I represent a seller who enters into a residential purchase agreement with the buyer to sell a home, I remind the buyer’s agent when the contract contingencies are to be released. We remind the buyer’s agent when we enter into the contract, and again, a day prior to the contingency removal. I can’t count the numbers of times we have asked for a contingency release and been ignored. Oh, just don’t worry about it, seems to be the prevailing attitude from some buyer’s agents.
Someday those agents will be a listing agent. Someday these same agents might discover the unfortunate experience of standing in front of a judge, head hung, to answer: Did you show utmost care, integrity, honesty and loyalty? It’s not a place I have ever been nor a place I ever want to visit. But fear of reprisal is not my reason for following the terms of the purchase contact.
It is my fiduciary duty as a listing agent to request a home buying contingency removal for the sellers. If the buyers need more time, then buyers should consider submitting an Extension of Time Addendum for the sellers to entertain. If you were to read paragraph 14-B-3 of the RPA, it states: By the end of the time specified in 14-b-1, which is the number of days available to a buyer to complete all investigations,?”Buyer shall deliver to Seller a removal of the applicable contingency.” It goes on to state that if the buyer refuses, the seller can ultimately issue a Notice to Perform and then cancel the contract.
It’s nothing personal when I ask for a contingency removal under the terms of the purchase contract. I am just doing my job and asking that the buyer’s agent do the same thing. If the sellers elect to cancel the transaction due to non-response, hand over the deposit to the buyer and send the buyer on his merry little way, that’s up to the sellers. In situations in which buyers fail to perform, I do have to give the sellers that option. It’s my fiduciary duty.
Buyer’s agents in Sacramento continually hear the question from buyers which, they in turn, pass along to the Sacramento listing agent: Will the seller sell for less? It’s not always phrased in those exact terms, but that’s what everybody wants to know. And that’s the one thing they cannot know and will never know unless they write an offer. For starters, no listing agent worth her salt is about to disclose to anybody for any reason how much her sellers will take to sell that home.
You might wonder why not. Because the listing agent has a legal fiduciary duty to the seller of confidentiality. The list price is the sales price. Period. If the seller prefers a range of value, then the sales price will be listed as a range of value indicated by a big ol’ V that nobody understands so nobody does it. Second, the listing agent doesn’t know what her seller will do because the listing agent is not the seller. She doesn’t own the home, and she can’t make decisions for the seller.
Every so often, I receive an email from a buyer’s agent that lays out all of the reasons why that agent’s buyers are such spectacular human beings and why they deserve to get an incredible break on the sales price — primarily because they are looking at a home the buyers cannot afford to buy. In my mind, of course, I wonder how that is my problem and what that has to do with me, Al Franken? I mean, why doesn’t the agent show her buyers the types of homes that her buyers can afford to buy? Why is she showing her buyers homes that are too expensive for her buyers?
You know why she’s performing such an unproductive service maneuver? Because she doesn’t want to take a chance that her buyers will dump her and run off to some other real estate agent in Sacramento. She wants to make her buyers happy. She wants to do what her buyers ask of her, like any agent. But somewhere along the line, an agent needs to educate her buyers. Explain the market, how pending sales are moving, supply comparable sales and provide education. Buyers are not real estate agents. That’s why they hire an experienced real estate agent: to guide, assist and help them to buy a home.
When an agent sets aside her professional self-worth in a feeble attempt to keep unreasonable clients happy, she loses credibility with those clients, which in turn makes clients miserable. It’s not a win-win.
Further, when a buyer is pre-approved to buy a maximum amount, buyers should look at homes priced below that maximum amount. At homes they have a chance in hell of buying. Buyers should not ask their agents to show them homes that are listed higher than that price point unless those homes have lingered on the market and are stale, overpriced. You don’t ask to see a brand new listing and expect to a seller to accept a lowball and sell for less. It doesn’t work that way. Well, maybe it does on HGTV, but not in the real world of Sacramento real estate.