Sell Quickly and Get Paid Fast
Brokers will gladly take the first acceptable offer or the offer that closes earliest. Why? Because this way they get paid faster. Brokers do not care about the highest and best offer for their client. They do not even care about which offer will pay them the highest commission. No, what they care about is getting paid as fast as possible.
So brokers will often take the first offer. Or perhaps an offer from an office colleague before the property even goes on the market. The broker will then brag about how quickly they got your property sold. But unless you specifically instructed your broker to dump the property as quickly as possible, ask yourself who wins and who loses in these situations?
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My neighbors just sold their house. I am writing this in early 2020, a strong seller’s market. With the advice of their broker, they put the house on the market on a Tuesday afternoon. And they had it under contract by early evening Friday, three days later. Now I am sure that they received multiple offers. But surely had they kept the house on the market through the weekend, they would have done better.
So why did they not?
Well sure, it could be that they said to their broker: Look, this first offer is great, more than we expected, and all the showings are making us miserable; let’s just take it and put a stop to all this hassle. This does happen.
But you see these very quick sales far too often for this to be happening each and every time. And most people are not of that mindset. Most sellers want the best deal they can get.
And besides, two extra days? Just one weekend? Most sellers can tolerate that. Most people expect that. I mean, this is not going on for a month, much less six months.
And yet, many sellers will accept offers made on the first day or the first few days. Why?
Well their broker advises them to take it. Look Mr. Seller, the first offer is usually the best offer and we certainly don’t want to lose this buyer to another house. Let’s get them locked down.
Of course, in a strong seller’s market, there aren’t really any other houses!
But whether it is a seller’s market or a buyer’s market, and regardless of who the broker represents, the broker wants a deal more than he wants the best deal. Think of it like this: A $10,000 increase in the purchase price is at most $300 to the broker. No, no, let’s get this wrapped up as soon as possible, so I get paid as soon as possible. I can live without another $300. And besides, I’ve got a nine o’clock tee time Saturday morning. And after that, I want to get back to prospecting.
But that attitude costs the seller ten thousand dollars.
On the buy side, it’s even worse. Why should I fight to reduce the purchase price, when we can make a deal right now. And besides, if I do negotiate a lower price, heck, I get paid less.
When I first obtained my real estate license, I joined one of the large local brokerages here in our market. I was attending the regular Tuesday morning sales meeting. It may not have been my first meeting, but it was definitely in my first month there. One of the brokers stood up, described her new listing, as we all did, and then explained how she had already sold the house…in a mere eight hours. To cheers all around. They were literally jumping up and down, cheering.
I knew right then and there that I was in the wrong place.
The fact that she did not market this property to the entire potential buyer pool did not seem to bother her. The fact that she did not allow the entire interested buyer subset the possibility of viewing the property did not seem to bother her.
No, no, she put the house on the market, got an offer, and convinced her clients, the sellers, to take it. Objections be damned.
This is the height of irresponsibility: A complete lack of concern for her clients and an extreme disregard for her fiduciary duty to them.
And yet, she was so proud of it. And all the brokers in that room were so proud of her.
She went right out and had a new sign rider made:
Sold in Less than a Day!
Now, are there instances where a seller instructs his broker to dump the property as soon as possible no matter what? Of course there are. Think impending foreclosure. But these are the exceptions not the rule. And again, we see this behavior far too often for this to be a valid explanation.
No, the explanation is simple. The broker wants the property sold as quickly and as easily as possible. So she gets paid sooner, and with the least amount of time and effort.
To hell with the seller.