Question on Realtor negotiation process??

Question

Hello everyone I am  new to the forum and REI. I have a question in regards to the process for submitting offers and negotiating a offer between Realtors.

Our Realtor is currently working on a offer we made on a house last week and when I asked him how the process works he said he emails the first offer sheet and all other contact with the selling Realtor is done through text.

I would have thought most of the communication would have been done over the phone or am I wrong in thinking this? Maybe it varies between Realtors? My thinking is that it's hard to negotiate and explain our position or reasoning behind a offer either through text or email. Thanks in advance for all the responses!

Charlie MacPherson · Answer

@Tyler Lewis The first caveat is that you're in Canada and most of us here are in the US.  I don't have the first idea of how things work in Edmonton.  All I can do is tell you how they work here in Massachusetts.

Unlike most other states, we're a 2-contract state.  We start with a written offer, as all contracts involving real estate must be in writing according to our Statute of Frauds.  Verbal real estate contracts are not enforceable here - but they might be in Canada.

With the written offer, we submit an earnest money deposit (EMD).  That serves two purposes.

First it gives the buyer a little skin in the game.  Normally $1,000 or less.

Second, it makes the contract legally binding.  There are 3 basic elements to a contract - offer, acceptance and consideration (something of value changes hands, normally money).  There is a theory here that the offer itself can be the consideration, but that's getting into the weeds.

Acceptance of the offer opens a due diligence window, normally 10 days, +/-.  If all is well, we move on to the P&S with a larger additional deposit. Often 3.5% - 10% of the purchase price.

If the buyer backs out of the contract without proper justification, all deposit monies are at risk.  Proper justification is whatever is spelled out in the contract - normally contingencies for home inspection and ability to obtain a mortgage.

Following that, we go through appraisal, underwriting, mortgage commitment, a final walk through and then closing.

The negotiations take place in two parts of the process.  First at the offer stage.

The sellers are free to accept, reject or counter offer.  If the buyers receive a counter offer, they too are free to accept, reject or counter again.  This goes on until one side accepts the other's counter, or they walk away from the deal.

The second place negotiations take place is after the home inspection.  Buyers often come back with a punch list, which is in effect a new counter offer.

I'll normally do a lot of this by voice, text or email with the other side's agent.  Here in MA, courts have held that a contract can be formed in texts and emails.  That may or may not be true in AB.

Again, customs in Alberta might be very different, so that might be worth calling that office's managing broker and talking with him or her.

Kris Bucci · Answer

@Tyler Lewis If I was negotiating the details, I would expect my realtor to pick up the phone and have a conversation.  There is so much more to a deal than simply the price.  Remember, the realtors must gain permission from their client to disclose any personal information, especially if it negatively impacts their position.  So if you are  expecting the selling agent to give up the fact that his client must sell by date x because they are moving etc... you may or may not get that.  That being said, it never hurts to ask the questions... you would be surprised what information the seller will give up.  This all being said... new generation, new way of communicating.  So if your realtor is more comfortable with texting and they are getting the answers you desire... then so be it.  Just don't settle for a realtor that is not willing to ask the hard questions on your behalf.

Russell Brazil · Answer

Everyone is different. I believe all offers should be discussed by voice before the offer is made, and negotiations should continue through voice. Hard negotiations many times should proceed to even in person.

Im in the sales business, and part of that is selling my offers to the other agent. Only through talking with them can I pick up om things like whether they are bsing me, being honest, sensing cracks in their argument, knowing where I stand in relation to other offers. But there is a reason why I am really good at what I do and why 87% of those that attempt to be agents fail entirely, and why the median salary for those that do make it is under $50k per year.

Tyler Lewis · Answer

Thanks everyone for your reply's is does help me get a better understanding of the process. The house being offered on is in the $350,00 range so IMO a phone call should be made at minimum on the original offer.

Federico Gutierrez · Answer

What's the price of the home your offering on thou? We talking $50K or $250K. Those two will be negotiated differently.

John Warren · Answer

@Tyler Lewis this is very deal dependent, and as others have stated I am sure a lot of this depends on where you are located. I work in the near western suburbs of Chicago, my strategy may be different than others.

I like to speak to the listing agent when I am the buyer's agent if at all possible. Sometimes this is not possible though, like in foreclosures or auctions. A lot of the distressed properties that investors like are run through automated systems, which really takes the buyer's agent's ability to negotiate out of the process.

If the listing is a more traditional one, I will sometimes let the listing agent "lead". Many listing agents who have been in the business for a while are still from the days when all offers were presented in person. Other listing agents are super techy and try to avoid speaking over the phone! I will normally try to speak to the listing agent first, and then follow up rapidly with an email and a text. This allows me to follow the preferred method of communication.

Like @Russell Brazil stated though, there are a lot of really lousy agents that don't follow through. Those of us who really get after it will do whatever it takes!

James Galla · Answer

They copy and paste whatever price you tell them into their pre-printed purchase and sale agreement, and then they just send it over to the other agent. If you want something more like you see on TV, you need a more complex or higher value deal.  More moving parts may warrant an actual conversation on the price and justification of an offer.

Most sellers don't give the agent a range of prices to sell at - they just have the list price and it gets forwarded from the seller's agent to the seller for approval/denial.

Federico Gutierrez · Answer

@Tyler Lewis for $350,000 I'd be calling the other agent on the hr every hour to ensuring the deal gets made lol

Question on Realtor negotiation process??

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