By Brett Woolley
Author’s email: BrettW76@.net
Have you ever watched the HGTV show called House Hunters? An actual real estate agent helps actual buyers who have narrowed their choices down to three properties. I like the show. However, one element of the program disturbs me. Once the buyers have made their choice, the only thing left to do is make the offer. Even though the real estate agents change, I see the same scene over and over—“well what do you think you should offer,” says the agent.
In the absence of much real guidance the buyers then come up with well, whatever. It’s too bad that the home buying public has been conditioned to this poor level of service. For decades the real estate industry has built a wall around the home seller. It wasn’t until the late 1990’s that home buyers could even reliably have their own representation in the transaction. Before then ALL agents worked for the seller, buyers just weren’t aware of it. Helping the buyer make an intelligent offer is a critical element of being a buyer’s agent.
I believe in aggressive buyer representation. That means getting the buyer into the home they have chosen to buy. I protect the buyer’s interests at all times, and that means even protecting buyers from themselves if necessary. When it’s time to make an offer I do something that no other agent in the Phoenix metro area does (that I’m aware of): I use a tool I call the “Offer Rationale Addendum.” The Offer Rationale is a brief one-page explanation of how the buyer came up with the amount they are offering for the home. Sounds reasonable, doesn’t it? Then why have you never heard of it?
Using my MBA and statistics background I take a good look at the numbers. What has the overall market done in the last three months and where are prices trending? What is the average sold price per square foot in the target neighborhood? Are there any issues with the home itself that could impact the offer? The Offer Rationale is based on a non-emotional evaluation of the facts. At the end it says “based on this information the buyer feels confident that seller will agree that our offer represents current market value.”
The Offer Rationale is then included in the Purchase Agreement Contract as an addendum. Why is it an addendum? So it cannot be screened by the listing or seller’s agent. As an addendum it has to be read and initialed by the seller. Actually explaining the buyer’s offer using real data forces the seller to 1) agree, 2) disagree based on their own data, or 3) disagree without any data which is being unreasonable. The most common result is the seller agrees without countering and the transaction moves on. When an agent says you have to start low with your offer to allow “negotiation room” that’s a clear signal they don’t know what they’re doing. Making low offers is a very inefficient way to negotiate and often causes unnecessary emotional reactions. The best way to make a winning offer is to know what the true market value is, and then offer that amount while backing it up with the facts.
Brett Woolley is a professional Buyer’s Agent specializing in helping clients buy homes in the Gilbert, Mesa, and Chandler AZ areas. Contact Brett at 480-236-2735 for a no-obligation buyer consultation.
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