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What’s your role in coming up with an offer?

by Marty Kramer   Nothing makes house hunting feel as real as putting down an offer in black and white. For buyers, deciding on an amount can be a difficult decision, and many look to you for help. In a recent study by the Real Estate Center at Texas A&M University, 75% of buyers considered it important for their agent to help decide how much to offer, yet only 37% ranked their agent as excellent at the task. So, what can you do to fulfill a client’s expectations?

Finding out how involved your client wants you to be is a logical starting place. Margie Myers of RE/MAX Metro Properties in Corpus Christi says the next step is understanding the buyer’s motivation. "Is the buyer interested in getting a ‘bargain,’ or buying a house to make a home?" Like most agents, Myers believes that a comparable market analysis is central to helping buyers develop an informed offer. She does not, however, suggest a specific amount. Alice Slaney Davis, a broker/manager with Ebby Halliday, REALTORS® in Dallas, agrees. "A good agent shows them the comps and lets them make their own intelligent decision," she says. If a buyer pushes for a dollar amount from Myers, she refers to the CMA and gives them a range she feels stands a good chance of being accepted.

Sharon Brier of Greenwood King Properties in Houston also touts the importance of a CMA, but adds that cost per square foot only provides a starting point. Other factors include the home’s condition, any defects or undesirable features, and upgrades.

What about when a buyer wants to make an offer the agent believes will fail, or worse, undermine the buyer’s efforts? "If it will hurt them in their negotiations, I tell them so in a diplomatic way, explaining the number of days on the market for comparable properties, the possibility of losing the property, etc.," says Marty Marks of Virginia Cook, REALTORS® in Dallas.

Peggy Santmyer of Ebby Halliday, REALTORS® thinks agents are wise to explain to buyers that if other offers come in around the same time, the seller is free to accept any offer, and the client may not get a counter offer or second chance. "Many buyers are of the incorrect opinion that the seller will have to counter the first offer before moving to the second."

Another key is explaining the importance of "other" factors. That is, items other than the purchase price. "If an offer is complex, it might not fly," says Chris Rosprim of The Realty Team/Scott Brown Properties in Dallas, "but a REALTOR® can help simplify it to make it something that can be understood by all and hopefully (lead to) a new home for the buyer."

Buy why the disparity in the responses to the Real Estate Center study? Chris Heagerty with eRealty in Austin says there’s an underlying mistrust, because many buyers perceive that the agent is more interested in getting an offer accepted than helping the buyer obtain the lowest price. "This gap is bridged by building trust along the way," she says. "A smart agent will broach the subject of comps and a market analysis well before the point of an offer to build confidence before that critical time."

Heagerty also warns that an agent who prods the buyer to accept a counter offer often fuels distrust. A savvy agent spells out the pros and cons of accepting the counter offer or making an additional counter so that the buyer makes a well-informed decision. "No buyer wants to feel like he has been railroaded," she says. "Finessing this properly is a fine art." And, according to the Real Estate Center study results, an art many agents have yet to master.

Photo © Eyewire.

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