The Offer That Broke the Listing's Back
Part of being a good Buyers Agent means representing the buyers in a purchase. For any real estate agent working with buyers, we all know that sometimes buyers can have unrealistic expectations.
This post is about an offer that broke the listing's back.
A property came up on the market as a new listing. It was in the exact location the buyers were looking in, had the amenities they desired and met the other wants/needs. So I sent the listing over. The buyers agreed it was a tour-worthy property.
They liked it! We toured the property three times and they decided to write up an offer.
Now, the history of the property . . . it had been on the market over 6 months. It had several price drops and then the listing expired. It was relisted with another brokerage with the new price . . . and that's when it popped up on my radar.
The history showed that in the 6 months it started off as an over-priced listing. The new listing agent priced it right, IMHO. It was getting activity now. It showed well, and again, the price was right.
When the buyers made their offer . . . the sellers didn't like it. Even when I mentioned that this was priced well and they shouldn't be so focused on the list price but rather their closing costs. They were expecting the sellers to come off list and pay closing costs. I wrote up the offer per buyers' instructions.
The sellers countered. And before we could even respond to their counter, the sellers did something I've never experienced in all my years as a licensee:
They pulled the property OFF THE MARKET!
The listing agent notified me: The sellers were pulling the listing off the market!
They had had enough! From having the property on the market over 6 months, reducing the price, engaging a second agent, receiving the offer from the buyers . . . they were done. Even though they countered, they pulled it without further option for the buyers to counter or engage in further negotiations. The sellers decided they would rent the home and they would hold on to it. In the years to come, when the market appreciates at 3-4% per year (which is the norm for the area), they will be the ones to see the appreciation.
Inventory is down about 25% in my market. This property matched the buyers wants/needs to a tee. They lost this house because their offer broke the listing's back! The sellers didn't even want to negotiate. They were DONE. Unfortunately, he buyers' offer was their . . . last straw!
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| Carla Muss-Jacobs 503-810-7192 Carla@carlahomes.com |
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It's endless - the amount of real estate stories like yours will never end. Real estate is emotional and you never know when people will just shut the door and call it quits. Ice, being somewhat invisible, you never know if it's about to break or is solid as a rock. Great story.
Carla,
I just had a very similar situation except for the part where the sellers pulled the house off the market. For years, we've been working with sellers to price appropriately to the current market conditions. But this story also includes unrealistic buyers. One can hardly blame the sellers for "the last straw."
Hope your next deal goes quickly and seamlessly.
Carla, sometimes you just gotta do what you gotta do... on both sides of the story. Your buyers... feeling like they didn't want to leave money on the table, and the sellers who were just so frustrated with the whole situation. Good luck on the next one!
Pathetically foolish on the seller. An offer should NEVER be seen as an insult. It was your job to be aggressive and work with your buyer. What did the seller expect you guys to do? Pay over list price and write a sympathy letter for their frustrations? GRRRR. I hope it comes back on the mkt and you offer 30k less.
Carla~ Seems everyone is interested in a DEAL these days. With inventory down, your buyers are going to looking for a while. Hope they are prepared to do that.
Carla...it is very frustrating to watch that happen, isn't it?
Carla, With the buyers so convinced they own the market, they sometimes forget there's another side to the equation. As these sellers demonstrated, you can't assume they'll counter and that bridge is burned. Too bad it want that way.
Carla,
I guess it takes all kinds in real estate. Sounds to me like they weren't very committed to selling if that tipped them over the edge.
Rich
Hi Charlie . . . great analogy about ice, you just never know!!
Hey Jean -- we hadn't even been given the opporunity to counter, which we would have liked to have done. Sad all around.
Hi Peggy . . . them pulling it from the market during a time when they had a buyer . . . they had enough. It's unfortunate.
Hey Greg -- I concur. We were just getting started on the negotiations.
Hi Nancy . . . it was a first for me, never had the sellers completely yank the listing.
Hey Donna -- yes, they had been looking for awhile to begin with and I think they know it will take a lot more looking now to find another home they will want to make an offer on.
Hi Christine . . . absolutely!
Hey Bliz -- yes, the other side we looked at too, length of time on the market, price drops. You summed it up nicely!!
Hi Richard . . . after 6+ months, they probably lost that lovin' feeling. The jump off that edge (out of the market entirely we just didn't get)
I always warn a buyer that when a property has been on the market for a while, overpriced or not, the seller surely has been low-balled before and they are not necessarily going to be the ones who get it. Nothing will have changed in the seller's mind. And there is always a danger the seller will lease before giving it away, especially when it is also on the market for lease as many often are here.
Carla - In my opinion if the sellers listed the property right the first time around they wouldn't have been feed up with the process six months later.
The only properties that stay on the market around here are those that HAVE TO SELL. If there is no choice, it will sell. If there are better options, it probably wont. There are a lot of people who have given up on selling their property.
This is amazing. Makes no sense that would send them over the edge.
Hi Jane . . . I agree with your thought that the sellers may have received other offers prior to ours. The sellers were in the position that they did not have to sell, so they didn't. Ours was, indeed, the straw.
Hey Michelle -- totally agree!! The history of the property showed it overpriced to begin with.
Hi Ruthmarie . . . I understand about giving up, but never during the middle of negotiating an offer . . . OY VEY! (Listing agent was shocked too, I might add)
Hey Kristin -- it wasn't the offer, I don't think. It was the sellers' overall experiences, which we had nothing to do with. I wish they would have been open to further negotiations.
Carla, I've had that happen to me once. Turned out it wasn't so much the price or the negotiations but the sellers were not in sync with each other over selling in the first place...
Wow, you never know what the final straw will be. Very interesting indeed. I have never had that happen. Would be a first as well.
Ooops. Sometimes it DOES hurt to ask. These sellers are clearly not really sellers if they'd lose it like that.
Carla, this was an excellent post! While we work with both Buyer's and Seller's we see this happening often on both sides of the transaction. My two cents:
As Listing Brokers we need to be honest with our seller. If we are not honest with them in regards to the "market value" of the home, we are setting them up for failure. If expectations are too high in the beginning than more often than not the seller will be disappointed in the end.
Buyer's Brokers need to look at what percentage of list price homes are selling for. We deal with buyer's often that have to be educated to this end. Just because it is a buyer's market does not mean that we should be writing offers at 15% below list price. Do we not remember what home prices were six years ago? Do we not recognize how good the deals are today?
Carla ~ I had a similar thing happen about 8 months back. The sellers happen to be home when we viewed the home and they knew the buyers liked it. I call the listing agent and she informed me they are withdrawing the home from the market. My buyers were devastated and have not been back to NC since. I just received an email they are returning in Feb. Yeah. I hope you find another home for yours.
Carla,
Great post and an unfortunate situation. Either the Listing Agent was unable to list the property at market or the seller's were just unwilling to accept reality. Lose Lose for everyone. Good Luck on the next one.
I had to respond..I have had both that seller and that buyer - different times of course but we have all been there and this market seems to be breaking everyone.
WOW I can't believe that happened to both of us in the same week!!! Although I think the sellers in my part of town will just hire another agent who maybe agrees with their price that is 20% over reality!
That's a different reaction for sure. Hate it when clients won't listen to us.
Listing Agent need to spend more time with their customers to find out in advance how motivated the Seller is before investing the time and energy. I have lost listing before because I could see that Seller was not truly interest in selling, but more of just testing the waters. One of the best way to know how motivated that seller is see how will they are to adjust price to bring activity to the property.
I've had sellers become so angry about being low balled that they refused to respond to a buyers offer but never had one pull the home off the market. Who knows renting the property make work out for them.
That's what happens when sellers price too high in the beginning. Everyone gets frustrated.
That camel looks like I feel right now! What a weekend!
I have been in a similar situation except the seller did not pull his property off the market he just refused to counter or work with my buyers. He reasoned that why should he sell to them if they wouldn't appreciate its worth in the first place. This place was already priced really well and had also had reductions too.
Wow! so sorry for your clients and the Sellers. Kristine
I am sorry for your buyers. Too bad the sellers were just wasting everybody's time with their inability to accept the reality of the market . . . until it was too late.
Carla, I see a lot of stories like this one. I've even had one or two myself. The sellers made a big mistake by overpricing to begin with. It just added to their fatigue. Have a great week!
I've learned not to take overpriced listings because of what won't happen...............it won't sell. You did your job. The sellers are just frustrated like most are these days.
These buyers must be on cloud nine thinking that the sellers are going to agree to pick up closing costs. I would put the shoe on the buyer's foot and ask them if they would pick up their closing costs.
I think the Seller's really didn't want to sell their home. It's not an isult to get an offer, it's a compliment. One doesn't have to accept all compliments.
Carla unfortunately some sellers react badly to a offer perceived as too low. In this case the seller was probably torn about selling after making so many reductions.
Wow, Carla! I have had buyers lose a house or two before they believe me when I tell them the house is "going to sell quickly". I tour over 500 homes a year in our area a year and know the values of most all communities. So when I see a beautifully staged home that knocks your socks off for the price range, price well, I tell the buyers "this one will go fast"!
Sooo... sometimes as you know buyers want to "think about it" or try what they have been reading about on line for low balling, asking for closing cost, refrigerator, washer, dryer, first born child!!! So they lose one or two and then listen to everything I tell them on the next perfect home for them. (not the one they really wanted). Don't you just love the war stories :O)
Wow! Their offer actually sent the seller over the edge. I tell buyers when a home is priced right and what they will probably be able to offer to get the house. There is the line where you insult the seller and they "shut down" but I have never seen them take the home off the market in frustration.
That must be most frustrating for the second agent to price it right and get an offer out of the gate, then to have it all fall apart.
I suppose it comes down to whose house is it. While being a colossal waste of a Realtor's time, we can only hope that the seller is right and they do get the 3% - 4% appreciation (that would be great in our current market) and find a good renter who does not depreciate the asset by that amount by living there.
Carla- you nailed it with this sentence "In the years to come, when the market appreciates at 3-4% per year (which is the norm for the area), they will be the ones to see the appreciation." These sellers did not need to sell. They had a very clear bottom line.
The home can generate revenue, which will offset their expenses. and their choice to hold it will see an ANNUAL gain. Which when compounded year over year will generate a much greater return. Which is why they killed the deal.
They looked at the numbers, and realized unfortunately for your buyer, that for them now is not the right time to sell this home.
You area is recovering, and an annual gain in appreciation can be quite sunstantial over 3-4 years. As a Buyers Agent in my area of St Cloud Florida I am seeing a similar movement.
I would do this. .
Make sure my buyer learned his lesson first. .
then
knock on their door. .directly to the sellers. .if they are no longer represented . .
I will begin with understanding their frustration.
Just in case you may not want to participate being a landlord as such. .
Could you reconsider it?
My buyers are so willing to buy your beautiful home, they are so sorry what they offered initially in a way that my have offended you. . they learned their lesson. . would you give them a second chance?
I just realized you found a picture of a camel with a broken back!. . WOW
Carla, I think this happens when a home is overpriced and relisted. The sellers feel they have come down from their original price and when they see a lower offer no matter how realistic, they get frustrated. Since they put it on the market to rent, they probably not very motivated to sell in the first place.
I've seen this happen, seriously, and it really comes down to seller expectations. I have a listing right now where the seller is unrealistic. They'll probably take it to someone else who will get them to price it right and they won't take it because they have some "fantasy number" in their head.
And the seller probably sees this as "I came down X dollars from my original list price" (which was totally unattainable). It's psychology. 3-4% appreciation in a year-so in two years they will have covered their closing costs-and probably spent $10K in repairing the house after he tenant changes the oil in his motorcycle on the living room carpet.
Carla...the picture is priceless... As to the post, well laid out and presented. It reminded me of what I told a seller I am working with recently who is hesitant about everything, her life, her home her future etc...lets go to market and find out what you house is worth. If at any time you decide not to sell for any reason, I will pull it and cancel the sale...perhaps a similar dynamic is at work with your situation. I love this business, the people, the stories and listening to other agents share...good one Carla...thank you
Not everyone has the stomach for the back and forth and when a property is priced where it should be. Expired listings and the listing history tells a story - speaks volumes to potential buyers if they will read/listen rather than listening to the media which these buyers apparently didn't do. Still think sellers need to be real careful with having buyers competing with renters, though.......
It sounds to me like they weren't sellers. Just like "buyers" that want to throw out low ball offers aren't really buyers in my opinion.
Great blog Carla!
I'm sorry to hear this. I've been on the seller side before. My sellers didn't want to list at the price I recommended, they wanted to put there own price on it. We did that for about 6 months until they finally saw no activity and then they dropped their price. By that time it was too late. some sellers are in their own world.
I have warned buyers of this on several occasions. Sometimes they listen and sometimes they do not. But when a home has come down from a lofty height, and has just been reduced again putting it into the proper range, low-balling can have devastating effects. This is even more true when the buyers then want a home warranty, closing costs paid, and a 40% price reduction all at the same time. All too often the sellers get insulted and worn-out, and refuse to even deal with, what they consider to be, blood-suckers. Bottom-feeders are seldom welcomed. But still I hear them saying, "If we don't ask we never will know". Well, they know all too soon when they are told to take a hike. Bargaining is one thing, but throwing caution to the wind and offering a pittance for someone's home is ridiculous. I cut these types of buyers loose very quickly. They seldom make me money. And even when they do the experience is often depressing.
Wow...I've not seen that. But can't help but be a bit happy. Buyers right now are very arrogant and often don't listen to us. They think they can offer anything and get everything. Annoys me...good lesson and so glad you put this experience out, and it was featured.
I had a similar situation with my seller only we had a new buyer submit an offer at a crucial time for my seller. Besides, things were not getting any better in other areas. So the only alternative was to sell the house. I can't help but add that "sellers will be sellers and buyers will be buyers" Just look ahead and go for better and greater opportunities. Best wishes to you Carla!
I have had a few buyers who have to lose a home or two thay wanted to learn what I was telling them all along. "Buyer's Market" is not a license to steal.
Carla:
It could be that the listing agent told the seller that if they listed at the current price, the house would sell quickly. The sellers may have been willing to give it one more try. I can understand their frustration even though it was due to their pricing the home too high in the beginning.
Had this happen not too long ago. Sellers were "testing the market" and when they got their 2nd low offer (from my buyer), they took the house off the market and decided to continue to live in it. Seems like an appraisal would have been an easier way to accomplish the same thing... Luckily my buyers are now living happily in their second choice home, which turned out to be an excellent choice. Sometimes things happen for a reason.
I'd sit tight & see if they come to their senses. Maybe it was the closing costs? Some people are a little high strung ......
It is just so darn hard to be a seller in this climate. :(
Carla
People get so emotional over their houses. Said it before, and I'll say it again. The minute a person lists a house, it becomes a business transaction, and no longer a home.
WOW Carla, what a story. I like Fernando's suggestion @42-43....do you think that could work?
Buyers need to listen to the advice of their buyer's agent when that buyer's agent shows them the numbers and wants to set them up for success. Buyers don't have to lowball everything because they have heard that it's a buyer's market and seller's must suffer.
It is sad that the sellers gave up so quickly and were so discouraged. Problem is, there are a lot of sellers like that today.
Hopefully your buyers have become more reasonable and you find them a home soon and they don't make anymore sellers leave the market!
These sellers were improperly educated from the beginning about the process, the negotiation, what can happen and how not to be so insulted. And perhaps they were not that motivated as to really having to sell.
Sounds like they were hoping to make up that 25% loss in one transaction. Odds are the seller made the best move for their situation.
Carla -
Interesting story! It's funny how buyers don't believe me or their agents when they are told that their lowball offers can offend a seller, and the sellers can refuse to work with a buyer based on that insult. EVEN when it means more money to a seller sometimes. I'm running into more sellers like this who are skipping selling their homes and just buying the next anyway. It's a good sign for our market.
Brett
Carla I've has it happen to me both as the listing and selling agent. It all started when they overpriced it in the first place - they never forgot their "good" listing price
Don't let it die, quite yet. You have nothing to lose by entering into verbal negotiations. Will your buyer pay full price if the seller pays closing costs? If they will, or close, call the listing agent and let them know. As a show of your good faith you may want to waive compensation on the closing cost amount. I would. If the seller accepts verbally, follow up with a written contract. What do you have to lose? Did you present the offer in person to the seller, or e-mail it to the listing agent for him/her to present?
@Lloyd . . .thanks for the suggestions. Unfortunately, when the sellers pulled if off the open market that was it. I talked with the listing agent, and even wrote up a counter which went along the lines of your comments. But the sellers rejected. I think they had enough and decided to keep it as rental :-(
Carla
Sorry your offer was the straw that broke the camel's back. But the sellers may have pullled the listing anyway, regardless of whose offer they were going to receive.
If your buyers accepted their counter before it was pulled? Then they would be in contract.But then, you may be dealing with sellers who have such high expectations and may be difficult to negotiate with.
Hope that in your case it will turn out that things happened for the best because the right property is just waiting for your buyers to be discovered.
Cheers!
Carla, that poor camel looks like me some days...
So sorry that the offer was pulled - especially when it seemed to be right in the middle of contract negotiations. That's just one way of the cosmos saying there are better properties out there for your buyers!
YEOWCH Carla! I have seen crazy ones but not this - yet. Watch it be my next broker challenge, LOL!
Carla, it is beyond challenging to manage expectations. The buyers have theirs from the news and an assortment of family, co-workers and friends. These sellers, like many others have an adversion to loss, plus it appears they were not ready to go with the new price once the home was relisted. Hopefully, your buyers will understand you did your best in this situation.
Looks like this was just not to be. Sometimes Buyers push too hard for an unreasonable target price, and sometimes Sellers hold out for an unattainable profit target. Either way, the deal does not get done.
Wow Carla, Not something that happens everyday. Really found the bottom line for this seller.
Gloria