From the annuals of a residential real estate broker, comes a story about Rosie and Colin, buyers seeking the perfect property in a market that is leaning toward being a Seller’s Market.

As buyers, Rosie and Colin have a determined area, price point, and within realistic expectations, a wish list of what they desire of the potential out of their new home (number of beds, baths, garage size, and general shape of a property).

Upon touring, “discovered” is the home that fit 90% of the wish list.  Nice size back yard, DOM (days of market) 8 days: ready to submit an offer.  Gathering initial intel from the Listing Broker in the morning, it is important to confirm that the house is still “Active”.  It seems that many listing brokers are overlooking the detail that once a property goes under contract, the designation in the MLS should be immediately changed to A/B (active taking backups) or Pending.

And then the negotiating debacle starts:

The target property was indeed “Active”, however, the List Broker indicated that she had just received an offer.  Upon inquiry, the deadline of accepting, countering, or rejecting was going to be at 5 pm that evening.  List Broker also detailed that the offer was “cash”.

Being before noon, this gave me enough time to contact Rosie and Colin that there could be time (prior to 5 pm) to submit an offer; even taking some time to consider further interest, and if so, price.  Considerations:  if cash, most likely not full price (leveraging the strength of a cash offer), and bottom line at closing, the Seller receives cash from Buyer, or cash from Lender and from Buyers.

Rosie and Colin determined to “bust a move” and submit an offer.  At approximately 1 pm, List Broker is  emailed that Rosie and Colin are determined to submit an offer, and would be submitted prior to the 5 pm deadline. 

Strategizing with Rosie and Colin, the offer to present would be at  $3k over list price, -0- seller concessions, and 35-40 day close date.  Contract, plus earnest money copy, and PreQual letter was submitted at 4:35 pm, with a follow up phone call to List Broker for a heads up that a Contract had been emailed.

And here’s where the offer presented on Rosie and Colin’s behalf goes crazy and suspect.  List Broker answers the heads up call, and confirms receipt of the offer.  At this time, List Broker wants confirmation of details of the Loan beyond PreQual (not sure where this is headed, Realtor is not the mortgage broker), and then inquires into current living situation of Rosie and Colin.  Response is that buyers are on a month to month lease, -0- selling a home contingency, and could hit the closing deadline: “no problem”.  List Broker then requests if the buyers will entertain extending closing date?

Response is that Buyers “can” entertain a different closing date, but would they “want” to extend the close date is something Rosie and Colin must make that determination.  Also, being 4:45 pm, 15 minutes prior to deadline, List Broker:

1)      Had knowledge since 1 pm that an offer would be extended by Rosie and Colin, and

2)      Upon receipt of a 1 pm communication, why would List Broker not respond with a ‘Reply to’ providing addition information that would level the playing field for all interested Buyers by requesting all interested buyers to consider an extended close date, providing time for Sellers to locate, close on a new abode?

3)      Time frame is now a concern, being 4:45, how exactly to execute a new Contract for Rosie and Colin to:

a)      Reflection to consider implications caused by an extended close date with a Lender, and,

b)      Time to execute a new Contract reflecting different close date, submitted prior to 5 pm deadline

The 5 pm hour arrived without a response from Rosie or Colin of my 4:45 update email, but List Broker initiated a phone call.   The monologue started by List Broker that Rosie and Colin’s offer was the highest price offered of the two bids, however, Seller is choosing to go with the ‘cash’ party because their offer provided an open close date.  List Broker had gone from the contents of the 4:45 conversation of consider extending the close date to Contract should provide an open close date. 

List Broker had the potential to provide a negotiating format that included a level playing field for all interested Buyers, to get the best possible deal (price and terms).  Rosie and Colin not only did not get to contemplate extending a close date, and now, nor to consider an open close date for Seller find a replacement property.   Many list brokers will include in the ‘Brokers Remarks:’ that a Seller condition is sale contingent on Seller finding a replacement property. 

Moral of this story? Several fold:

What would it have been like working with this Seller and List Broker to attempt to complete the sale transaction? Open ended closing date could prove to be a tough obstacle for many reasons. 

This was clearly a property that was meant to not happen for Rosie and Colin.  They did not take the events personally, and realized that this property was not meant to be in their life.  Best to move on.

Five days later, Rosie and Colin toured the perfect house, better features, better location, easier travel to work, far easier negotiations to place under contract.  Rosie and Colin are more than pleased they did not have their offer accepted on the previously submitted Contract.

Cliff Daniels

Active Properties

Boulder, County, Colorado

cliff@actprop.com     720 434 1418