In the pioneer age of Real Estate (circa 1990’s), Real Estate Agents would receive an offer from a buyer and set up an offer presentation with the listing agent and their seller. Yes that’s right a presentation, not a faxed offer! In this pioneer era of real estate negotiation, a buyer agent would bring the offer to the seller’s home, and along with the listing agent would negotiate a deal satisfactory to the buyer and seller. These pre-historic presentations would go all night to negotiate a deal. Realtors would work together to make the right deal!
Presently I have noticed more and more listings where offers are to be faxed. There is a break down in negotiation when faxing offers. The Buyers agent and seller’s agent can not sit in front of a seller and plead a buyer’s case. It also allows other offers to come into play in a hot market, and although this may be great for Seller’s, what about the buyer that has to wait days to make a deal. Other offers come in, and the buyer is left to compete with other offers; whereas if the offer had a presentation time and place, both agents could have successfully negotiated a deal the same night.
What happened to the offer presentation? Could it have anything to do with what listing agents are being paid in commission? This is a valid question, because as you know you get what you pay for! Perhaps these listing agents can not afford to sit in a house all night and make a deal. The commissions they take do not warrant them spending the time to properly negotiate a deal. I recently saw advertisements in a real estate magazine that showcased a total commission of 3%. 1.5% to the listing Agent and 1.5% to the selling agent. After investigating these salespeople’s listings, I noticed that all had the verbal warning: “Please fax all offers as per seller”. Do you really believe that the seller does not want an offer presentation? Why wouldn’t they? It’s a chance to sell their home quickly, and see first hand what the buyer is really thinking. I propose either these agents do not bother because of the low commission, or they lack poor presentation skills. I would say that both arguments have validity. Do sellers really want to hire these agents that have no presentation skills? Do sellers want to hire these agents that can’t even sell the seller on their services? These agents drop their commission because the easiest form of selling is dropping your price. If these agents are discounting themselves can you imagine how they discount getting the seller top dollar?
As an owner of a real estate brokerage, I interview and hire new sales agents. These agents have no sales education or experience when they come out of OREA College. OREA should teach these real estate students consultative selling techniques, instead of just collecting their money and setting them up to fail. I would guess that the failure rate for a new real estate agent is hovering around 90% right now. This is because OREA does not properly train in the fundamentals of selling. At the end of the day, we are selling not typing contracts. Consultative selling is the building of a relationship with your prospect. It is an excellent course, and teaches presentation skills, how to market, how to sell a product etc. OREA should come to the realization that it is not only about disclosing if you’re selling a haunted house! Or preparing a disclosure if an agent is selling his own home! Who cares! Teach some fundamentals of selling. I am not asking to produce the next Mel Lastman, but offer some fundamentals. Every two years a realtor has to take 24 hours worth of courses to maintain their license; OREA should introduce a few consultative selling courses in the two year credit cycle. This lack of selling technique contributes to agents not knowing how to present offers or negotiate efficiently.
I tip my hat to those agents that allow offer presentations. Negotiating is the real estate business. Opening doors to homes and letting people through is for door men. Faxing is for receptionists. New agents should not fear presenting an offer. Presenting offers and negotiating deals is what we are paid for.