“Why aren’t you using a real estate broker to help you make your offer?” I asked the man on the phone. I often hear of Sellers wanting to do a For Sale By Owner (FSBO), but rarely hear of a Buyer doing it on their own.
“Because I want to use the Buyer Broker’s commission to make my offer stronger.” Ah, I see.
“Did you know that the Listing Broker (in this case me) decides how the commission is disbursed to the Buyer’s Broker?” That gave him pause. I could be greedy and take all of the commission the Seller is willing to pay me if there isn’t a Buyer’s Broker, but I wouldn’t.
I am worried about this Buyer. The market is full of multiple offer situations. How is he going to know how to make his offer the strongest?
1. Does he know that the Sellers want to close earlier and rent back until the 18th?
2. Does he know what an escalation clause is?
3. Does he know that offering too high can keep the home from appraising at the value the bank is willing to give a loan?
4. Does he know that there are ways the Buyer can address a low appraisal and still keep his offer strong?
5. Does he know that he should probably waive certain contingencies to be competitive?
6. Does he know what a pre-inspection is and if the Seller has done one or how to get one done himself?
7. Does he know how to negotiate inspection items if he does an inspection?
8. Does he know what a review date is?
9. Does he know that the lender he chooses makes a difference?
10. Does he know what Earnest Money is?
11. Does he know how much Earnest Money to offer?
12. Does he know the number of days stated on the contract are counted in different ways depending if it is more than 5?
13. Does he know what would cause a default of the contract?
14. Does he know when to present the offer?
15. Does he know real estate agency law?
These are just some of the things that would be good to know when making an offer. In the market we are in (a strong Seller’s market), people who have amazing brokers don’t all win the house they want because there are too many Buyers and not enough homes at the same time. Wouldn’t you want to know everything possible to give the best offer possible and live in the house of your dreams?
Go find a real estate broker who will work their pants off to get you that home! Well, maybe they should probably keep the pants on…that would be awkward.