By Ross Wilson
“Admitting error clears the score and proves you wiser than before.” – Arthur Guiterman
I’ve witnessed all sorts of presentation styles, most of them appallingly amateurish. In this second of the series on offer negotiation (the first is here), I delve a little further into the subject, sometimes somewhat bluntly.
Some listing agents with whom I’ve briefly worked have vainly attempted to justify their existence by simply reading the entire offer (and not well) to their seller as though their client were functionally illiterate. Others have respectfully encouraged the seller to read for themselves, and then proceeded to read it to them – out loud – just in case they missed something during their private reading. Boring, boring and did I say boring? It’s time-consuming and maybe a little insulting to their clients’ intelligence.
Upon receiving the offer, others have launched immediately into a brief abridgment of the terms, thereby not allowing the seller the opportunity to read and properly digest a document with which they’re probably unfamiliar. After the seller has read the offer, some agents have brazenly declared the price unacceptable – without any apparent client consultation – and without giving any due consideration to other critical terms.
This introduces an aggressive, antagonistic spirit to the proceedings. I’ve observed a listing agent hand over a copy of the offer to the seller, wisely allow them to read it thoroughly, sometimes quietly, and then immediately upon their finishing, ask for their comments, opinion or decision without any questions, discussion or explanation.
A list of terrible styles would be incomplete without the one wherein a listing agent just faxes or emails the offer to their seller for review; ridiculous and unprofessional. All of those agents – many of whom are probably long gone – neglected to take a professional holistic approach to what is arguably the most important aspect of our service.
For a brief coaching session, as a listing agent, you should arrive at your seller’s home early and prior to the arrival of the buyer’s agent. Walk them through basic procedure and ask that they follow your lead during negotiations. Answer any questions that might arise, and to help them be objective, review an updated CMA. Remind them that the other agent will almost certainly be representing the interests of the buyer. For this reason, they should not disclose anything of a confidential nature nor visibly react to the offer terms in the presence of the buyer’s agent.
Tell them to keep their cards close. Explain that once the offer has been reviewed and you’ve asked clarifying questions of the buyer’s rep, you’ll be asking the agent to leave the room. This will permit you to consult privately with your seller regarding the merits and shortcomings of the offer. To equip them to choose the best course of action, you’ll then explain all available options and make recommendations.
Since it’s a business meeting with a fair amount of paperwork and hopefully document signing, gather around a cleared kitchen or dining table. And ask them to do whatever is possible to avoid potential interruptions from kids, snuffling dogs, squawking birds and blaring TVs. During the proceedings, unless it’s an emergency, ask that all phone calls go directly to voicemail. If they live in a raucous menagerie, suggest a meeting in your office boardroom. You want a calm and fully informed decision after both spouses have had the benefit of an uninterrupted presentation and discussion.
After the buyer’s rep arrives, to minimize a potentially adversarial environment, strategically seat everyone around the table by mixing it up a little. Don’t allow the table to be a subliminal boundary between two opposing sides. Maybe have a seller on each side and the two reps on each of the other ends. The buyer’s agent will then hopefully hand you an offer copy for each participant.
Astoundingly, they sometimes bring only a single copy. I recall a long-ago presentation when an old-timer, after some social chatter, leisurely withdrew the only copy from his back pocket. With a wink and a smile, he gently unfolded a wrinkled, hand-written offer onto the table and casually slid it over. We made the sale, but it was memorable in its casual informality.
To set a respectful and optimistic tone on behalf of your sellers, express your gratitude to the buyer agent for bringing the offer. Begin by explaining that it’s an unbiased standard form produced by the local association and on which most resales are created. Invite your attentive sellers to read the offer entirely. Unless they have a specific question, suggest skipping the pre-printed standard clauses and review only the pertinent terms typed into the offer body and blanks.
Until the sellers are finished their reading, both agents should wait patiently – and quietly. Resist the urge to discuss the offer or engage in idle prattle. Such behaviour will only distract the seller and prolong the presentation by stealing their focus. And don’t fidget in your seat like an impatient school kid waiting for the bell to ring. Since all their questions will likely be answered during your summation, if your seller has a question, ask them to save it until that time. Make it clear that prior to getting into details, you want them to get a general overview of the terms. Controlling the presentation is the name of the game. Even though it’s their property, it’s your party.
After confirming that both sellers have finished silently reading the offer, starting from the bottom of the last page and working your way up and to each previous page, briefly summarize each clause. In other words, start with the least important clauses, which are typically those added nearer the end of the contract. (Offers should be drafted with clauses ordered in priority of importance – most to least.) Don’t waste time re-reading the entire document because everyone has already read it, maybe more than once. If your seller begins to opine or complain about something, particularly of a confidential or strategic nature, or voices an objection, politely remind them to hold that concern for your private session. Proceed as you had coached them in your pre-meeting by asking for verbal acknowledgment of understanding – not necessarily agreement – of each clause and advance in reverse through the offer until you arrive at the price.
In the next column, this series continues with more advice on how to proceed with a professional offer presentation.