Real estate has come a long way over the last decade or so. We have seen a peculiar change in the dynamics of how properties are marketed by the seller and searched for by the buyer. Years ago, it was unheard of that someone could be sitting halfway across the world on their computer, searching for properties and then buying them. Today, this has become mainstream. Buyers do not need to be in the country in order to purchase a property. In this blog post, I will share some of my thoughts on how the presentation of offers has changed over the past few years.
Traditional Offer Presentations
Traditionally speaking, the real estate purchasing process looked something like this:
A client would contact a REALTOR to help him find a new home. The agent would show him a series of houses until the perfect one was found. The REALTOR and client would then meet at the agent’s office and write up an offer. Once the offer was completed and signed, the buyer’s agent would contact the seller’s agent to arrange a time when the offer could be presented in person. The face to face meeting would usually take place late at night and it was common for all the parties (both agents, buyers and sellers) to be up past midnight to get the deal done. Sometimes, there were six copies of the offer that needed to be signed and initialled by all parties. Since photocopying was not an option, any major changes that were made in the offer would result in completely rewriting the offer, which would take hours. The offer process was tedious and extremely time to consume for everyone involved.
Modern Offer Presentations
Today, this process has taken new shape
Once the client finds the perfect property and decides to put in an offer; the buying agent can prepare, send and negotiate the offer without having to meet the sellers/seller’s agent in person. Technology makes this possible. It enables the buyer’s agent to email or fax over the offer to the seller’s agent. All negotiations are done over the phone and most of the time there is no need to meet face to face.
Which Is Better?
Not all REALTORS have adapted to the new way of presenting offers. Many still believe that better results can be achieved when there is a face to face meeting. Those who believe in presenting offers in-person argue that from the buyer’s perspective it is much easier to “read” the sellers, and push for a lower price. While on the other side, the sellers also believe that through a face to face offer, it’s easier to “read” the buyer and to get the most amount of money out of them. Aside from reading the other party, those REALTORS in favour of presenting offers in-person believe that a face to face meeting truly benefits their clients and that they are doing everything that is in their power to serve their clients’ best interest. Whether this has any legitimacy, is left up for debate.
On the other hand, those agents who present offers via email/fax argue that the best results are achieved when the buying process is less personal and intimate. Having buyers and sellers meet face to face can bring its challenges, as buyers often try to reduce the purchase price and make comments about the seller’s house which could be interpreted as offensive by the seller. This may come as a shock to some sellers, but having the opportunity to work with a lot of buyers – what I found to be most interesting is that a lot of the time, the buyers do not want to meet the previous sellers (for whatever reason, that it may be). As a final note, from a seller’s perspective, some agents would argue that the very weak offers are the ones usually presented in person and by doing so they are trying to humanize the weak offer.
To answer the question – which is better? It ultimately comes down to what the buyer, seller and their agents agree on. I respect both methods. Personally, I find about 90-95% of the offers I present are presented electronically. So far this year, my average buyer ended up paying roughly 97.2% of asking price, which is lower than the industry standard of 98.5%. Thus, I believe my strategy of sending offers does work in favour of my buying clients. At the same time, I acknowledge that in some circumstances it’s better to present an offer in person. In a situation where there is a multiple offers, it is better to present the offer in person to ensure that you do not get outbid.
The Future Of Offer Presentations
Unfortunately, As REALTORS, we kill a lot of trees. It’s no secret that OREA (Ontario Real Estate Association) is making efforts to move towards electronic signatures and a paperless real estate environment. We will start seeing more and more REALTORS carrying iPads and tablets, as opposed to traditionally printed listings. With the way technology is going, it is possible that all signatures and offers will be conducted electronically. This, in turn, will solve the big environmental issue of printing too much paper and wasting it. In the end, real estate has come a far way, it has moved away from the traditional ways of searching for properties to the new modern way of electronically searching and preparing/submitting offers and the future will only hold more changes and require more adaptations.
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