Dear Listing Agent,
You were sent a link to this post, because a Frankly agent has submitted an offer to buy one of your coveted listings. We understand you may have several offers, but we hope you will consider the reputation and technological abilities of our firm, as the agent might be just as important to getting a deal closed on-time and as promised, as the buyer’s ability to buy.
While our offer might not be the highest in price, it is realistic and likely the cleanest offer you have seen. Still undecided? If necessary, know that our use of technology also allows us get you a written and signed response to any written counter in 15-20 minutes, vs the average agent’s 3-6 hour delay. So what do you have to lose to give us a shot?
Here is a video testimonial from the listing side of a recent 5 offer bidding war that we won. We had a super clean offer, we did what we said we would do, we did not renegotiate, and we closed on-time.
Thank you for your consideration,
Frank LLosa Esq.
Principal Broker Frankly Real Estate Inc.
Attorney at Law, only in NJ
My buyers were US military and buying sight unseen from China, they contacted me 100% from my website. They picked me over “another Realtor I was considering, he was really cute, but I like your spunk.” I wondered if I should be offended for basically being called ugly.
Also their last experience years ago with a Realtor was a bad one, a USAA recommended Realtor that they fired mid-deal (those Realtors pay kickbacks to USAA, thus newer agents gravitate to those programs).
They entrusted me to be their eyes and I took buyer agent photos and videos of properties to make them feel as if they were there. They loved this home and it was UNDER their max budget. The only problem was the 4 other offers AND they had a VA loan which is historically much more difficult to win a bidding war (the appraisal system is tougher and there is much less money down vs conventional 20-25% down buyer).
In this case our offer focused on clean terms, not on the highest price. Actually we were $35,000 lower than the highest well qualified buyer. Many factors led to us winning. Perhaps one was the sellers thinking I, the buyer agent, was courteous (see video). Another was how we write our offers to instill confidence and low stress for the seller, and lastly the use of technology. In this case text messaging, I was able to get a last minute text message to the listing agent that literally stopped the signing of another contract in its tracks. They pivoted and gave our client a shot and we accepted.
We proceeded to follow through and not renegotiate, like many wild offers tend to do, and we closed on time and in a stress free manner.
Just like this client, we are never too busy for you, hope you will contact me with the area and price you are looking in.
(Got this via email? Hit reply and type UNSUBSCRIBE BLOG or CANCEL BLOG AND FRANKLYMLS ACCOUNT. I prefer you NOT click “unsubscribe” at the bottom, as that might cancel your FranklyMLS account.)
A bold new service that goes where no other brokerage firm has gone before! Revolutionizing the industry and furthering transparency! Further showing why Frank won Inman New’s 2009 Innovator of the Year award, video).
Times are tough! Our firm, Frankly Real Estate Inc, is finding that we are losing more and more listing appointments. Whether it be sellers looking to do it themselves FSBO (see post Save $20k? Selling By Owner) or just picking cheaper, more local or more knowledgeable alternatives. We know we are great, but not everyone else is agreeing with us.
So we had to look forward to a new revenue model. At least to help us cover the loss in gas and time wasted.
The idea came from a recent real estate class. The question was:
What happens if an agent meets with a seller and finds out secret details of that home for sale?And then if that agent is not hired, but they have a buyer that wants to buy that home. Can they share the seller’s secrets? To whom is the fiduciary duty?
Turns out the Fiduciary Duty is 100% to the buyer client (assuming they are a signed client with an Exclusive Buyer Agency Agreement, don’t miss that blog post!)
So that got me thinking. That data on the seller… that is damn valuable.
An agent that loses a listing might have this data, and could sell it at auction on LostListings.com, such as:
What would you pay for information on a hidden $30,000 defect?
Now on LostListings.com, unsuccessful listing agents can sell their acquired information at auction to either buyers directly, or to buyer’s agents.
This is currently only in the DC area, and soon we plan on launching a Kickstarter campaign to raise $350,000 to launch this idea nationwide. Will you join us?
I hope you will watch the video and check out LostListings.com . If you find it as revolutionary as I do, please leave a comment below on whether you think this is brilliant, won’t work, might be unethical, will work, etc. Let’s start a conversation. For comments go to: Blog.FranklyRealty.com, to also see what others have to say! And make sure to subscribe to this blog (upper right corner).
Oh and share this with friends! Tweet it, Facebook Like it, snail mail it to your relatives if you need to!
Update 11:05AM: While I am all for negative comments, please make sure you at least make a quick visit LostListings.com before completely passing judgment.
Written by: Frank LLosa Esq.
More and more I am seeing the technique of purposefully underpricing a listing in order to create an artificial bidding war. It is a very tempting pitch from your listing agent, but don’t fall for it! They may want you to underprice in order to sell your home quickly and to move on. Their goal might not be to net you the highest amount. And it doesn’t work, in my opinion.
Example (ass described in the video)
Listing 1, our listing. $429,000, sold for $432,600 or 101% of list.
Listing 2, not ours. $399,000, sold for $433,000 or 108% of list
One might initially think listing 2 did better. However, #2 was listed a month after #1 went Under Contract fast (so they should know that it went near full price, and newer listings in an up market tend to ask for about $2,500 more). Listing #2 was nearly identical, but two floors higher plus a fireplace. Two floors is about $6,000 in value, a fireplace, maybe $2k. Yet they only got $400 more on a place worth $8,000 more. The result of underpricing to create a bidding war… a loss of $7,600-$10,000 in value. Oops!
Why doesn’t it work? Bidding War Exhaustion ™,is what I call it (see Video at minute 4) . Buyers have a mental block for going over a certain % above list. Even though I frequently tell buyers to ignore the list price. Why take guidance from the listing agent who might not have a clue about the area.
IGNORE LIST PRICE! (sometimes)
I would rather you bid up a place $10k over list on $20k underpriced home then bid down $50k on a home that is overpriced by $80k. And for those of you that say “Oh no way man, I’m not getting involved in a bidding war” you REALLY need to talk to me. If you don’t want to buy this year because you think it is a bubble 2.0, that is fine, I wont argue (don’t miss the blog post “Lose $40,000″ the moment you buy a $500k home).
But if you are going to buy in the near future, that approach may cost you money. What, you are going to do? Wait until the NEXT house hits for $10k OVER the post bidding war price of the one you lost? Well that one will get bid up too, and you might be $25k worse off.
More buyer DC area bidding war tips here including one crucial tip only supplied if you email me directly, or via a comment.
- It almost always takes at least 2 buyers to sell a home. One to low ball and one to get the other off the fence.
- Don’t believe ads that guarantee a bidding war or show stats that on their face might seem impressive. When in doubt, send them to me. If it is the real deal, I will tell you and probably recommend you go with them!
(more bidding war tips for sellers and a video here)
Thanks! Don’t forget to subscribe to this blog (upper right corner of Blog.FranklyRealty.com) and get sneakpeaks on future blogs by watching and subscribing to www.youtube.com/FranklyRealty I now tend to start with a video blog and follow with a written post.
And comment! The last post got tons of direct emails. Instead ask your questions here and your comments. Even if there are short. A blogger loves a conversation.
Written ghostwriter-free by: Frank LLosa Esq. who is never too busy for you, just email me.
Principal Broker for FranklyRealty.com
Attorney at Law, only in NJ and the above is not legal advice, in part because you didn’t pay me.
p.s. Anybody want to see me make a horrible attempt at a real estate rap video? Stay tuned.
Many Realtor blog posts will say “BUY NOW!!”, or “Interest rates can’t get lower!” Over here we first say DON’T BUY, ASK WHY (since 2006 when I had hair). Which means, let’s first figure out if buying is right for you, and THEN move forward. No “don’t want money on rent” B.S. Heck Rent is CHEAPER!!
Did you know the moment you buy a home, you lose 8% equity! For those of you that put down 10%, that is an 80% loss in your investment overnight, or with a stroke of a pen (actually hundreds of strokes, those damn stacks of closing paper).
I’m not trying to scare you, but just put into perspective how real and huge an investment this is. You better get it right, and have the right representation (subtle plug?? Contact us 3-6 months before you think you are ready! This ain’t a checkout in Target.). Did your mom’s friend’s agent warn you about this? Or that “great deal” agent? Probably not.
One of my first qualifying questions is “HOW LONG DO YOU PLAN ON LIVING IN YOUR HOME?”
Note I didn’t say “own” the home. But living in it yourself. I say this because many say “I can see living in it for 3 years and renting it for 3 or 4 more.” The problem with the rental equation is usually rent won’t cover most mortgages, so you actually lose $5,000 on a $500,000 home. I see it all the time. Owners bleeding money renting their place out. So after 3 years you lose $15,000! Well that defeats the purpose of holding to weather the ups and downs of the market, and scrambling back to break even.
I recommend a 7 year minimum hold! And I don’t believe in timing the market. Buy when it is right for your needs.
When you buy a $500,000, you immediately lose about $40,000! Meaning if you needed to sell it a week later you would net $440,000 after those pesky Realtor fees and 2-3% in closing costs and taxes. OUCH!
So your best bet is a long hold to get out of that ditch. Heck, let’s talk about getting back to break even, let alone making a buck.
The days of the starter home are dead. As declared in my 2009 blog post Death of the Starter home still holds true. (My older blog posts are sometimes better, unlike cars, my posts keep their value).
Not willing to hold it for 7 years? Maybe only 5, ok, no problem, just make sure you fully absorb the massive risk of homeownership. We have had clients sell in 2 or 3 years and broken even. They are lucky. The market skyrocketed during that time. I know far too many more people that got stuck. Stuck in a place they weren’t planning on holding for too long. They wish they rented.
(sidenote: Ok, so for all of the people that I just talked out of buying, you might be wondering how we can have a business this way. What way? Through honesty? We have people come back to us years later, when they are ready. Or I ask a favor, if we can’t win your business, just make a point to send us your friends and family. And sending them to use the wicked awesome FranklyMLS isn’t the same as telling them to use Frankly Real Estate Inc. and to read this blog post. Ok, guilt trip over.)
To D.V. that wrote on 2-25-2013 “I got encouraged to contact you after watching your ‘I am not too busy for your clients’ video :-)”, I replied in 16 minutes, sorry for the delay! Let’s get you a place in Vienna!
Love to get your comments! Both good and bad.
Written by: Frank LLosa Esq.*
Realtor/Broker FranklyRealty.com Maryland, DC, VA
*Attorney at Law, only in NJ
Report typos please.
Now for Listing Advice. I previously spoke about Bidding Wars for Homes for Sale in Maryland, DC and VA in my post Bidding Wars. Secret to Winning A Home in the DC Area (of which about 20 people emailed me directly for my #1 secret tip).
But this video is from the perspective of the SELLER who might find themselves selling in this Hot Market.
The first instinct is to think one’s house is “easy” to sell. It actually becomes kinda a joke because we hear it so frequently. Everyone thinks their home will be an easy one. Yet it never is.
Especially now that there are bidding wars and it is a seller’s market (meaning sellers have more power now). Heck, why not just throw it up on the MLS (see Throw Up Listings, from 2007, but still applies) since it “sells itself.”
I wish it was that easy. Or maybe I don’t because then I might be out of a job.
Our goal is to get you the highest NET possible. That includes being aware of what you are paying in commission and your alternative options (but heck why go anywhere else). We respect your money. Every $5k of it.
Orchestrating a profitable bidding war (well) takes hundreds of little steps to pull of. Want examples? Here is one huge little one:
ONLY listing a home for sale between Wed night and Thursday midday.
(ask me why, and yes it matters, and if your potential listing agent doesn’t think it matters, or doesn’t push back when you want to list it on Monday… I hope you got a good “deal” on your agent)
Another big decision is pricing.
- Price too High: Get too greedy and price too high and you won’t even get one offer. And you NEED 2 buyers to sell any home. Bidding war or not. (that is a mantra of mine)
- Price too LOW in order to try to create a bidding war and you might leave $10,000s of dollars on the table. I don’t believe in pricing low on purpose. There is something I called Bidding War Fatigue (actually I never have used that phrase before, but I will start, it sounds good). BWF is when a buyer is too stuck on the listing agent’s starting price. And their ego gets bruised if they go too far over list. Whereas if it was priced $10k higher to start, they might have no problem bidding to XYZ.
- Price Just Right is the key!
But that is only the start. Then there is an art and science to respectfully hearing out offers and maximizing what the seller can net and capture terms that will safeguard (as much as possible) from future problems. This includes locking down or removing contingencies and removing a part of the appraisal contingency (most people think the appraisal contingency is an all or nothing… we created a hybrid. )
This is a tiny part of how we net the sellers more.
Do you have a place to sell? Reach out earlier, rather than later (yes before you rehab or fix things up). Don’t be like those people that said “I really wanted to use you but then we went with my high school buddy, who does real estate on the weekends, and that went horribly” We get that all the time. Soon I hope to put up a video of one of these people).
Thanks! And the best way to say thanks to a blogger is to leave a comment (either good or bad).
Frank Borges LL0SA Esq
Never too busy for you!
Broker FranklyRealty.com MD, DC, VA
Attorney at Law, Only in NJ
ps. Here is our newest addition: