Real Estate Forums

HHI Golf Guy · 11-26-2007, 01:56 AM

With the down turn in the market and foreclosure rates climbing every month, I was wondering if agents are starting to see a change in the ethics or moral compass of their buyer clients.

For example, are buyers making ridiculously low offers to people that need to sell in order to avoid foreclosure? While agents have an obligation to pass along any offers, have any of you felt a bit uneasy presenting a ridiculous offer?

I know that to some people out there that making a ridiculously low offer may be considered "a good business practice" considering the market and the desperation of some sellers. Personally, I can see making a lowball offer during this times, but not an insulting offer.

Bigtoe · 11-26-2007, 08:31 AM

An insulting offer is a good way to kill a deal before it even gets off the ground. But with all the media hype it brings out the bottom feeders. We are closing on one today that lost 3 low offers before he finally realized he couldn't get his way.

Personally I don't see making where making a low offer is an ethical thing. Was it an unethical for sellers to ask top dollar and not fix anything during the buyer's market? No, they were just playing the game by the rules of the day.

mateus · 11-26-2007, 12:21 PM

I have never been able to understand the "insult" that everyone speaks of when making an offer. Let us not forget that these are business transactions. Everything that you read about when it comes to selling, or sellers tips, will tell you (the seller) that the first thing you will need to do is cut all emotional ties to your home. It is not a home anymore, it is a marketable commodity. The potential buyers do not care about the memories or the children you have raised in this home. They want they best deal that they can get. If you receive a lowball offer then you can do one of two things. Give a counter offer or decline to counter all together. Declining to counter is more of a cut your nose off to spite your face decision but oh well.

DEUCE · 11-26-2007, 12:49 PM

I am happy to have the opportunity to present or recieve any offer and simply advise/respond accordingly. Am I sometimes dissappointed? Sure...

Brian

HHI Golf Guy · 11-26-2007, 08:57 PM

Sorry for the confusion. Specifically, I am speaking about some of the bottom feeders throwing out ridiculously low offers to people who may soon be in foreclosure because of increasing variable interest rates.

As a buyer agent, you may know that these homeowners must sell ASAP. Some buyers hope these homeowners panic and take any offer. So, as the buyer agent, does your moral compass guide you in any way during this type of transaction? Or are any feelings of guilt or remorse outweighed by getting the best deal for your client?

On the surface, the latter statement probably rings true for most. And I'm not saying that there is anything wrong with that. But it can be an ethical dilema for some.

I know that I'm a stubborn, hard nosed pain in ass, but the downturn in the real estate market has led me to an ethical dilema with my own SEO clients. Even though their web sites are doing great, it doesn't make up for a slow market. I know that times are tough on them.

So for each of my clients that have been with me over one year, I gave them one free month of service this year. For clients that have been with me less than one year, I deferred one month of billing until the end of the contract. The deferred payments I'll get back. But as some of you know, my services don't come cheap. I "gave away" a ton of revenue this year - and that's money out of my pocket.

Now some of you are probably saying that was a stupid move on my part. That very well may be. But for me, it was a moral and ethical dilema, and I feel good about the decision I made. Sometimes I wonder how other people deal with moral and ethical issues in their business, that's why I asked.

Chicago Office Space · 11-27-2007, 07:20 AM

Why would you think the free month was a stupid move? I am certain that your customers appreciate what you have done and if I was a customer then not only have you solidified our relationship but I will be happy to reccomend you to my friends that need your service.

SEOWolf · 11-27-2007, 08:09 AM

I don’t think that showing a little compassion to your clients in this depressed market is stupid Shawn. They will remember it in the good times I hope.

I have always been an advocate for better treatment of REALTORS® by vendors (especially SEO Professionals). As you well know, while we may have a few bad apples in our industry you have them in yours as well. While you may not be cheap you are effective and unlike some of your SEO competition you have a reputation for being fair and honest.

As for your original question (which is very valid and timely) most of us are accustomed to “low ball” offers. Even in good times. Any offer really does not shock or surprise most veteran real estate agents. We simply use it as a starting place and suggest a counter offer. If any of us were afraid of the “NO” word we wouldn’t be in this line of work.

As far as ethic dilemmas there are none. In most states we are required by law to submit any and all offers (regardless of how ridiculous). I know that may sound strange but it is a good law and avoids possible ethic violations by real estate agents.

As for my personal feelings about some of the negotiations I have been a part of, if I represent the Seller I will do my best to get the price up. But if I represent a Buyer I will go for the throat. It depends entirely on where my fiduciary responsibility lies. If I negotiate the BEST possible deal for my Client my conscience is clear.

I realize that in a “Buyers Market” that Sellers suffer. However, nothing remains stagnate in our industry and sooner or later it will be a “Sellers Market” again and Buyers will once again get the fuzzy end of the lollipop.

Just my 2¢ worth,

~VegasMack

DanC · 11-27-2007, 12:06 PM

I don't have an ethical issue with representing a bottom feeder who will only buy property at severely discounted rates. The trouble is that usually the Seller's don't have enough equity to sell at 50 cents on the dollar and you end up making a lot of offers that don't work out. So it can be a huge waste of time in many cases. I actually think any offer is a compliment. The Seller can always "just say no".

I think in general part of the job of a good listing agent is to present the low offer in the correct light so the seller doesn't feel insulted. The media has conditioned the Buyers to believe that there are unreal deals to be had and many buyers today think they would be fools not to try a low initial offer.

HHI Golf Guy · 11-27-2007, 09:42 PM

Quote:

Originally Posted by Chicago Office Space

...but I will be happy to reccomend you to my friends that need your service.

Thanks - that's very kind of you. Now if we only had space available for new clients

Thanks to the others that responded to the question. I found it enlightening.

One of my many faults is that too often I see things in black and white, and miss the gray areas. It's always good to hear from others so I can gain perspective.

Bigtoe · 11-28-2007, 08:05 AM

Quote:

Originally Posted by mateus

I have never been able to understand the "insult" that everyone speaks of when making an offer. Let us not forget that these are business transactions. Everything that you read about when it comes to selling, or sellers tips, will tell you (the seller) that the first thing you will need to do is cut all emotional ties to your home. It is not a home anymore, it is a marketable commodity. The potential buyers do not care about the memories or the children you have raised in this home. They want they best deal that they can get. If you receive a lowball offer then you can do one of two things. Give a counter offer or decline to counter all together. Declining to counter is more of a cut your nose off to spite your face decision but oh well.

No matter how much we talk to them, selling a home is very personal and emotional for the seller. I have seen sellers get pissed off at a buyer because of a low offer and refuse to work with them. I have seen buyers pay more than they should have if they hadn't started out so low.

I low balled the very first piece of real estate I tried to buy and the seller took it off the market.