Offer Presentation
Agent Lesson Book
Chapter 1
Please Note
• This presentation is to be used BEFORE showing the actual offer to
the seller.
As you can probably see by now, I really believe in systems. So it is no
surprise I also had a system when it came to presenting an offer to the seller.
But before I show you this system, allow me to make a few comments.
For Those MLS Boards Where Only The Listing Agent Presents Offer
I really dislike boards with this policy. It is unfair to the selling agent.
However, just because you cannot be there does not mean you cannot take
the listing agent out for coffee and go through the offer in the same manner
as if you were with the seller. At least you will know the listing agent was
trained properly on your system and perhaps will present the offer using it.
For Those Boards Where The Selling Agent Can Be There Without The
Listing Agent.
I can’t say it strong enough, if you’re the listing agent be at that offer. Think
about it for a moment. If you are not there, why then is the seller paying
you? Plus the selling agent may be able to take your client away from you on
the “new home move up” end. Now let’s begin this section.
Overview Of An Offer
The seller receives a call from his agent informing him an offer on his home
and a time is needed to review the offer. The seller schedules the time.
• What do you suppose the seller is thinking before the agents drop over
to discuss the offer?
Seller Thinks:
• Oh no… we need to move!
• My God… what are we going to do!
• Yes dear… they coming over right now with the offer!
And a host of other thoughts race through their minds. Selling a home is
serious business for the homeowner. In fact, some sellers develop great
anxiety as soon as they hear an offer is on. Why?
C-H-A-N-G-E: It’s What Sellers Hate Most!
Why was I concerned with this as a listing agent? Here’s why!
• Referrals
My future income is on the line. That one offer, if handled well on my part,
would lead to many more offers in the future. And the success of those
future offers hinged on how I was going to treat my client during this offer.
• So if your referral business is not happening, or is not growing for
you, maybe this will shed some light as to why!
May I Ask You A Question?
• Just how much training have you received on how to present an offer
to a seller?
• If you’re like 97% of Realtors, ABSOLUTELY NONE!
And why not? Isn’t it the most important part of the game? It sure is and
your future success is on the line, for what seller will feel comfortable
referring you to someone if they think you handled them carelessly during
the offer?
• So “getting in the game” on how to present an offer is just as
important as is how to do a listing presentation.
This is why I developed my own approach on how to present an offer to a
seller as a Realtor. I was not trained on this at all. I had to sit myself down
and figure out a system and that is exactly what I did and in this lesson book
I will discuss this system with you.
Offer Checklist Review
Normally during an offer, the very first thing discussed is the offer price.
• In my opinion, this is not a good way to create the proper negotiation
environment for enhanced success.
Why? Well, what happens if the offer is $10,000 below market? The answer
is that the seller can get upset and become uncooperative. In other words, the
seller enters into a negative mindset.
Therefore…
• A good offer negotiation environment is one that encourages the seller
to have a positive mindset when dealing with the offer.
And to produce such an environment, we need to systematically build a
cooperative and positive environment that encourages the seller to
understand any offer is a serious offer and needs to be handled with
professionalism.
This Is What The “Offer Checklist” Accomplishes With A Seller
How so?
1. It deals with the smaller issues that will create cooperation with the seller.
2. It then gradually proceeds to the more complicated issues that may cause
problems with the seller.
3. It deals with price last so we can properly address this issue.
4. It positions the offer price to a CMA, thereby indicating to the selling
agent what the seller expects from the buyer in terms of a fair market value
offer.
Let’s now go through each step on the checklist.
1: Is the buyer pre-approved?
This step is used for a few reasons.
A. Not Pre-Approved
If the buyer is not pre-approved then I recommended to the seller not to deal
with the offer until the buyer was pre-approved.
We did not even address the price of the offer, since we were not going to
sign it back.
We did take a look at it but that was all.
The buying agent was instructed to return to the buyer to explain we were
not going to entertain the offer until we received evidence that the buyer was
pre-approved.
B. Is Pre-Approved
If the buyer was pre-approved, then I told the seller that we had a serious
buyer and this offer had to be handled professionally.
2: What fixtures are requested by the buyer?
I can’t tell you how many offers are lost over fixtures! In one seminar, over
60% of the class had lost an offer due to a fixture problem.
I even had problems with this myself as a Realtor. One time a seller and
buyer were arguing over a $30 light fixture and even though I offered to give
the seller $50 for it, he still refused to deal with the buyer on sign back.
(That was the offer that caused me to create this system.)
So by getting the fixtures done first clears the way for what really matters
and that is price.
• It also puts the seller in the right mindset as he realizes that fixtures
are but a small part of the offer process.
Here is what I said to the seller about fixtures.
• “Mr. Seller… fixtures are those extra things the buyer is requesting
from you when buying the home, such as appliances, satellite TV,
ceiling lights, etc.
• What we need to understand about fixtures is that they can stop an
offer if not handled properly.
• Why?
• Well these are “reasons to say no” items the buyer can use against us
should we need to sign back the offer. I’ll give you an example of
what I mean. One time I had a $374,000 offer go bad over a $30 light
fixture. The result was we lost that buyer. And I do not want the same
thing to happen to you.
Then discuss the items, reach agreement and continue to the next point.
3: What conditions are requested by the buyer?
Some type of condition is usually attached to an offer. The most common
condition with an offer is “conditional upon the sale of the buyer’s home”.
As for me, I NEVER encouraged the seller to accept this condition for the
following reasons.
A. I Lost Control of The Listing
I had no control over the listing price of the buyer’s home. I certainly had no
idea at what price the buyer would list his home. Maybe the buyer would list
his home at $20,000 over market and never sell!
B. My Listing Is Effectively Off The Market
Yes I could have included the clause about accepting another offer but as
you know, Realtors do not like showing homes that have conditional offers
on them.
The real result is that a conditional offer kills any hope of another offer
happening, so the seller’s home is basically off the market until the buyer’s
condition is waived or cancelled.
C. Buyer Not Committed
The buyer was not committed to the offer since a conditional offer allows
the buyer to remain open to buying another home should he find one he likes
better.
D. Acceptable Conditions
There are acceptable conditions, such as home inspection, etc., that really are
not conditions but rather routine offer issues.
4: What closing date is requested by the buyer?
Here’s where an offer can get in trouble, especially if the seller has yet to
buy his next home.
I usually recommended a closing date of no less than 120 days, with a clause
inserted that said the following.
• The buyer agrees to extend or retract the closing date by 30 days
provided he is given notice no later than __________.
I inserted a date that was 30 days BEFORE the actual closing date. This
clause allowed my seller to find a home with a closing date between 90 to
150 days. And with this time range, I never ran into any trouble with my
sellers when finding and matching up the closing dates to his offer and new
purchase.
5: What is the deposit with the offer?
The purpose of this question was to discover the seriousness of the buyer’s
offer. If the deposit was less than 5% of the offer price or $5000, whichever
was lower, on sign back a deposit increase clause was inserted to bring the
deposit up to the 5% level or to the $5000 level.
6: What is offer price itself?
With these other issues dealt with, the offer price always went smoothly. It
really is not difficult to negotiate an offer up to the CMA.
However, I encouraged the seller to accept and not sign back any offer than
was within 1% or $4000 of the listing price, whichever was lower, provided
the listing was priced right.
If it was not, than I used the offer and the CMA to get the seller to accept the
offer price.
7. How’s offer to CMA for the home?
The CMA is used under two pricing conditions.
A. List Price Is Close To CMA
I used the CMA’s price range as an “acceptance” tool with my seller. Let’s
say I had a listing at $204,777 with a CMA range of $197,000 to $203,000
and an offer of $200,000.
• 1% of $204,777 is roughly $2000 or $202,000.
• $4000 off $204,777 is roughly $200,777
Therefore the seller should accept, and not sign back, any offer ranging
$200,000 to $202,000 for the home. With the offer at $200,000 and the
CMA showing this is within the acceptance range, I urged the seller to
accept.
B. A Listing Higher Than CMA
If the listing was at $209,00O, in the above offer example, I used the CMA
and the offer to show the seller our list price was a little high and the offer is
in the acceptance range.
When you have both a CMA and a current offer showing the accuracy of
your CMA range, the seller tends to accept the offer. However, if your seller
insists on a higher than CMA price, you must be honest with him.
Example:
Let’s take a seller who wants $208,000 for his home, with a list price of
$209,777, when the CMA shows $197,000 to $202,000 and you have an
offer at $200,000.
In a situation such as this, here is what I said.
• “Mr. Seller, both the offer and the CMA clearly shows us the value of
your home. At this time, your home is not going to sell for more than
$202,000.
• Do you want to say no to this $200,000 offer and take your home off
the market until we can get $208,000 for it?
Whenever I used this close, it worked for me. The seller heard in my voice
the finality of the price issue. I was dead serious. His choice was clear; lower
his price into the CMA range or remove his home from the market.
The result normally was my seller signed back the offer at $202,000 or
whatever the highest value was on the CMA range. I left it in the hands of
the selling agent to see if he could get another $2000 from the buyer.
Summary
I ask you to try this system on your next offer. I do believe you will be
surprised at how it makes an offer go better. Why does it work? I think it
serves the same purpose as lines on a highway. It provides the guidelines
needed to keep the offer on the road and not to have it crash into the ditch.
Yours Sincerely;
Randy Roussie
randy@randyroussie.com
www.randyroussie.com
Author: Randy Roussie
Randy has been training agents since 1987. His many training programs,
presentations and lead harvesting software are among the best in the
industry.
To learn more about Randy just visit:
http://www.randyroussie.com