Critical Real Estate Conversations

PRE Approval:

Will you be paying cash or taking a mortgage to purchase a home? 

(Getting a Mortgage)

Most people do finance when they purchase property, and having your Pre Approval is going to be the most important next step towards buying a home. I am going to send you the contact information for a Professional who is going to be able to help you get that done. Having this is very important for several reasons. We will know exactly what price point you are comfortable shopping in, What type of product we will be working with, and it is going to be required to have this in place to be able to put any offers in when we find you a property you love.  Do you have any questions or concerns with getting your Pre Approval?

Getting the Buyer Agreement Signed Before Showing

Real Estate Agent: Hi [Client's Name], how are you today? I'm excited to take you through this property and help you with your home search. Before we can go in and see this home, there is a document I will need you to sign.

Client: Sure, what’s that?

Real Estate Agent: As per our regulations, I need to have you sign a buyer agency agreement before we can start showing you properties. This contract is mandatory and ensures that our working relationship is clearly defined. While signing the contract is mandatory, the terms can be negotiated to suit your needs. We can tailor the agreement to cover just this specific property or for a shorter time period if that works better for you.

Client: Hmmm, Okay.

Real Estate Agent: I have the agreement right here. Let’s go through it together. My compensation for representing you is also outlined in this contract. It's always my goal to work that compensation into the contract if that’s what you’d prefer. You'll be made fully aware of any compensation that might be required from you before entering into any contract to purchase a home. If you have any questions or need adjustments to the terms, please let me know. Once you're comfortable, you can sign it, and we’ll be ready to take a look at this home and start your home search.

Pre-Offer Conversation with Listing Agent 

This conversation is to be had BEFORE you submit an offer on a property they have listed 

As a real estate agent, it's crucial to gather as much information as possible before submitting an offer on behalf of your client. This helps you tailor the offer to the seller's preferences and increases the likelihood of a successful transaction. Here are key questions to ask the listing agent before sending an offer:

“Good Afternoon Agent, I am glad I was able to get you on the phone as I have a client that is interested in placing an offer on 123 main st and I always like to be sure that the buyers take into consideration the sellers preferences before submitting their offer. I have a short list of questions if you wouldn't mind answering for me”

• Contingencies and Terms:

  • Is there a preferred timeline for closing?

  • Are there any specific terms or conditions that are particularly important to the seller?

• Communication Preferences:

  • What is the best way to communicate with you?

  • Is there a specific deadline for submitting the offer?

• Competing Offers:

  • Are there currently any other offers on the property?

  • Can the listing agent provide information on the general level of interest in the property?

• Negotiation Strategy:

  • Is there a specific negotiation strategy the seller prefers, or are there any particular points that are non-negotiable?

  • Are there any specific items or fixtures the seller intends to include or exclude from the sale?

By asking these questions, you'll be better equipped to structure an offer that aligns with the seller's preferences and increases the likelihood of a successful transaction.

“Thank you for taking the time to answer these questions for me, I will share this information with my clients and let you know when the offer is sent to your inbox”

Pre-Offer Conversation with BUYER 

Hello [Client's Name],

You mentioned to me that you are ready to place an offer on the property at 123 Main st. As we go through this step in the home buying process it's essential for us to have a discussion about the details surrounding the property you are interested in. This will help us put together an offer that aligns with your preferences and positions you favorably in the negotiation process. 

I did have a conversation with the listing agent and they let me know that….(Share what information you got from that conversation)

Keeping all of that in mind there are a few pieces of information I will need from you to help me write up this offer. 

1. The Purchase Price:

Let's start by discussing the purchase price. It's crucial to determine a reasonable offer that reflects both market conditions and your budget. Are you comfortable with a specific price range, or do you have a maximum offer in mind?

2. Deposit Amount:

The deposit is a key element of your offer and demonstrates your commitment to the purchase. What amount are you considering for the deposit? Keeping in mind that a higher deposit can make your offer more appealing to the seller. ( You may need to discuss the difference between deposit and down payment at this time)

3. Closing Date:

The closing date is an important aspect to coordinate. Typical Timeframe for a closing is going to be 45 Days. Do you have a preferred timeline for closing? Are there any specific factors or deadlines we should be aware of?

4. Inspection Period:

How would you like to handle the inspection period? This is a critical step in ensuring the property is in good condition. Are you considering a general inspection, or there are other options around this including informational only inspections or waiving them all together. (Be prepared to discuss the different options here)

5. Additional Terms:

To strengthen your offer, we can consider including additional terms that might be attractive to the seller. Any extra considerations can enhance the appeal of your offer. I do have an email outlining some of these terms I will send over to you now. Take a look at that email while I begin preparing this offer with the information I have, and I will give you a call back in (30 mins-1 hour) to discuss if there is anything additional you want to include in your offer. 

OFFER Accepted/Next steps:

Good morning/afternoon I am calling to let you know that I just got the ACCEPTED offer back signed from the sellers, Congratulations!

There are a few things we need to work on next, including selecting an inspector and attorney, delivering a deposit, and putting in your full mortgage application.  Right now I want you to fully enjoy the excitement you’re feeling so I am going to send out a few emails outlining these next steps and introducing you to my TC, who is going to help keep everything organized for us. Let's connect again tomorrow so we can work on these things. I will talk to you soon, Again Congratulations. 

PS - DO NOT make this call based on the other agent advising they have accepted your offer verbally.  ONLY make this call if you have the fully executed offer in hand as sometimes the fully executed offer in writing never comes. 

Conversation with List Agent if Offer is NOT Accepted:

If your offer on a property is not accepted, it's essential to have a constructive conversation with the listing agent to gather insights and prepare a more competitive offer in the future. Here's a guide on what to discuss:

• Express Gratitude:

  • Begin the conversation by expressing gratitude for the listing agent's time and consideration of your offer. Maintain a professional and positive tone throughout.

• Reasons for Rejection:

  • Politely Inquire about specific reasons the seller chose a different offer. This could include price, terms, contingencies, or other factors that influenced their decision.

• Improvement Suggestions:

  • Request suggestions for improving your future offers. This could include adjustments to the purchase price, terms, or any additional elements that might make your offer more compelling.

• Maintain Open Communication:

  • Keep the lines of communication open for future opportunities. Establishing a positive relationship with the listing agent can be beneficial in the long run, and they may provide valuable insights for upcoming listings.

• Express Continued Interest:

  • Let the listing agent know that your clients remain interested in the property and that you are open to discussing any future opportunities that may arise.

  • Inquire as to if the list agent has any other properties coming to market 

By having an open and respectful conversation with the listing agent, you can gain valuable insights to help you refine your strategy and present a stronger offer in the future.

The Script : Hi [Listing Agent's Name], I hope you're doing well. I wanted to talk with you about the recent offer we submitted on [Property Address]. First and foremost, thank you for your time and consideration.I was hoping to get some feedback on why our offer wasn't accepted. We're eager to understand and make any necessary adjustments for future opportunities. Were there any terms or conditions that played a significant role in their decision? (LA RESPONSE) Thank you for the guidance. We're committed to making a competitive offer. If there are future opportunities or if the seller's situation changes, please keep us in the loop. We're still very interested in [Property Address].

Don't be afraid to storytell .. This is our 4th offer, I know we have all been there ( makes you relatable) It's so tough ..   I have advised them we need to be more competitive however some feedback from you will really help my client understand where they need to improve. 

Inspection Conversation- What to say before the Day:

Good Afternoon (Buyer), 

I wanted to take a few minutes to collaborate and let you know what to expect for the home inspection we have coming up this week. You, the inspector, and myself will be at the property together and depending on the inspector it could take anywhere from 1 - 4 hours. . During this time the inspector will look over the home top to bottom inside and out. They are going to look at the overall condition of the property, check the structural functionality of the mechanicals, and do some testing of the electrical and plumbing systems. It is the inspectors job to make note of all their findings and in the end put them into a report that they will send to you. This report could be upwards of 50 pages and this is completely normal. While most of the information in this report is for you to learn about your new home, when we get this report we can decide if potentially there are any safety, structural, or health hazards we may want to negotiate with the sellers on having them repaired. This is your time with the inspector so please feel free to ask them questions you might have as they are going through the house. 

Any other questions you have on this now? I know this is a lot of information so I am going to send you an email recapping all of this as well. 

Email Template (To be sent AFTER you have the conversation):

Hello (BUYER), 

We have a home inspection scheduled for  date and time. Please plan on being at the property for several hours. The inspector will take a thorough look at the property inside and out, providing you with a large report of all findings typically 1-2 days later.  Do Not hesitate to ask the inspector any questions you may have as they are doing their inspection.  Once completed and we have received the report back, a round of negotiations may take place if there are any structural, safety, or health hazards you would like rectified. 

Please let me know if you have any additional questions on this process. 

At the END of the Inspection:

Are there any additional questions you have right now before we leave the property? Let’s connect on this again when we have the full report back from the inspector. I do like to plan 30 minutes - 1 hour to talk over the findings and discuss what our next steps in this process are.

The Conversation when you have the Report back: (and the buyers have had a chance to review it) 

Was there anything in the report that would prevent you from moving forward with the purchase?

If they want to ask for repairs…

Let's keep in mind, the sellers are not obligated to make any repairs at all if they don't want to. We want to make our request as appealing as possible, while making sure that you are happy and confident in the purchase you are making. I can let you know from experience that if you focus on a few items that are most important to you, the seller is more likely to want to work with you to get these items repaired. If we send a laundry list of items the sellers may overlook those items that really mean the most to you. Does that make sense?

What are the top 3 items you would want to have looked at further or have repaired to make you most comfortable with your purchase? Is there anything else that would be a deal breaker for you outside of these three items?

PS - Remember repair negotiations are all about leverage.  If there are multiple competitive offers on the property there's no incentive for the seller to make the repairs they can just move onto another buyer.  However, if you are the only offer (or your offer is significantly better than the others) then there is incentive for the seller to work with your buyer on repairs.  

Addressing Current Market Changes with Consumers:

Today, we're here to discuss something you might have heard about in the news recently – the National Association of Realtors (NAR) lawsuit settlement. I understand

there might be some concerns about how this might affect you, whether you're looking to buy or sell a home. Let's break it down together.“

[Addressing the Core Concern]

"Firstly, I want to reassure you that the recent settlement primarily affects real estate professionals, not you as a consumer. It's all about the details of how Realtors earn

their commission and the transparency in explaining those details to both buyers and sellers.“

[Explaining What It Means for Consumers]

"In essence, the settlement focuses on ensuring that Realtors clearly disclose how commissions are earned and paid upon the successful sale of a home. It's about

enhancing transparency and fairness in how real estate professionals communicate with you.“

[Highlighting Consumer Impact]

"Now, you might be wondering, 'How does this affect my journey to buying or selling a home?' The straightforward answer is – it really doesn't change much for you. The

process of finding your dream home, or selling one, remains the same. What changes is on our end, ensuring we're as transparent as possible about the costs involved.“

[Reassuring the Consumer]

"So, whether you're embarking on selling your cherished home or searching for a new one, our commitment to your success and satisfaction remains unwavering. The

recent settlement reinforces our dedication to fairness and transparency throughout your real estate journey.“

[Closing with an Invitation for Questions]

"I hope this clears up any worries you might have had. Remember, we're here to make your home buying or selling experience as smooth and transparent as possible. If

you have any more questions or need clarification on anything, please don't hesitate to ask. Your peace of mind is our top priority."

Speaking with Buyers About How we get paid: 

"Mr. Buyer, there's been a shift in how agents must communicate their compensation, and it's important we discuss this openly. Every buyer, including yourself, is now part of a new

standard that involves signing a buyer representation agreement before viewing homes. This might be new to you, as in the past, dealing with Realtor fees might not have been a

direct concern. However, I'm here to guide you through this new landscape. You see, it's not just about me needing to be transparent; it's about ensuring you're fully informed and

comfortable every step of the way. These changes mean that all agents will be having this conversation with you, and a signed agreement is now the standard before we can

embark on visiting homes.“

[Setting Expectations]

"Now, I know this might be new for you. In the past, the idea of signing something like this or directly handling Realtor fees may have been foreign. But, it's key you understand what

this entails. As the buyer, you are ultimately responsible for the Buyer Agent commission for the services I provide, which include finding the ideal home for you, guiding you

through the complex buying process, negotiating to protect your interests and managing all the paperwork , the fee I charge is 3%. I'll leverage my expertise to help you understand

the current market, assess property values, and strategically craft offers that position you for success. Let’s take a look at the ways this arrangement can work in your favor.”

[Explaining the Options]

" Let's break this down, shall we? There are a few scenarios to consider:

1.Direct Payment: This is when you would directly pay the 3% commission. Instances where this occurs include purchasing a For Sale By Owner property, where the seller isn't

offering to pay a commission, or in new construction scenarios where the builder doesn't cover commission fees. It could also happen in a standard resale if the seller decides

against paying the buyer broker's commission. This means you'd be responsible for the 3% fee.

2.Seller Pays the Commission: What you may have experienced in the past is that the seller pays the buyer's broker commission, which has often been around 3%. When we look at

homes, I'll make it clear what the seller's stance is on commission, giving you the choice to proceed with those properties knowing what's expected. If a seller agrees to cover the

3%, there's nothing additional for you to worry about. However, if they cover less, say 2%, you'd only be responsible for the difference to meet the agreed upon 3%. I will be sure to

disclose your obligations with every home you are interested in seeing.

3.Seller Concessions: This is a strategy to ensure you don’t miss out on potential homes due to commission concerns. We can negotiate seller concessions where the seller

contributes towards your closing costs to cover the commission. This way, even if a seller initially offers less, we can work towards making up the difference through concessions,

ensuring your expenses are manageable.“

[Reiterating Commitment]

"Mr. Buyer, my primary goal is to keep you informed and comfortable throughout this process. I'm committed to transparency about all potential costs for each property we

consider. More importantly, I'm here to negotiate on your behalf, aiming to make your home buying journey as cost-effective as possible.“

[Closing with an Invitation for Questions]

"Does this all make sense? I want you to feel confident and clear about how we can navigate this together. If you have any questions or need further clarification, I'm here for you.

Let's ensure you're fully prepared to find your next home without unnecessary stress over commissions."

Conversation with Sellers On Commissions:

"As we prepare to list your home it's my job to ensure you get the best possible outcome. It's essential to discuss how we can maximize your homes value and attract the strongest offers

within your timeframe. I charge x% for the comprehensive services provided—including marketing, negotiation, and transaction management—to ensure you get the most for your

Home.”

[Setting the Context]

"Now, in every home sale, there are two sides to consider: our side, as the listing agent, and the buyer's side. Recent changes in how agents represent buyers have introduced a new

standard. A Buyer Representation Agreement is now required, this legal document usually stipulates that the buyer's agent is to be compensated a certain percentage by their client for

their services. This shift aims to ensure transparency and fairness in the real estate process."

[Highlighting Your Role and Strategy]

"As your listing agent, my primary role is to set you up to win. This means giving you expert advice to attract the maximum number of buyers. Why? Because the more potential buyers

we have, the higher the chances of receiving strong offers, ultimately leading to a better selling price for your home."

[Addressing Current Market Challenges]

"In today's market, where high interest rates and affordability are concerns for the buyer; it's crucial to make your home as appealing as possible to buyers. This involves considering how

we can facilitate their ability to purchase your home."

[Presenting a Strategic Move]

"The buyer's broker commission is an important factor in any deal Here's something to consider: the buyer's broker commission is a part of the transaction one way or the other. It either

affects your bottom line or influences the buyer's offer. Given the current market dynamics, I strongly recommend offering a full X% commission to the buyer's agent. This approach can

be a game-changer. It's a strategic move aimed at overcoming buyer affordability challenges and dramatically increasing buyer interest in your home, possibly leading to better offers.

This strategic move is about making your home more attractive to a larger pool of buyers, many of whom are navigating affordability challenges."

[Concluding with a Call to Action]

"By offering a competitive commission to the buyer's agent, we can significantly increase interest in your home. This approach is designed to bring more buyers to the table, increasing

our chances of securing stronger offers. I'm here to guide you through this process, ensuring that we make decisions that align with your best interests and market realities. Do you see

how this could be beneficial in our current market conditions?"