A Real Estate contract is generally not enforceable in the great state of Illinois unless it is a) Written, b) 'Signed-off ' on by competent parties (Acceptance), and c) Some form of Consideration ($$$) is placed in an escrow account to show 'Good Faith' on the Buyer's part. Think of it as the Holy Trinity of the home buying experience.It's the 'Good Faith' part of the experience I wish to address here. The truth is, most of the negotiation process in this North Side Chicago market takes place verbally. Once a written Offer is submitted to the Seller's side of the deal, the details usually get hammered out by the respective Realtors involved via cell phone, text messages and email. Sometimes we are The Negotiators, other times, mere Messengers. Either way, there are at least four channels of emotion, rationality and objectivity that need to be successfully navigated--the Seller, the Listing Agent, the Buyer, and the Buyer's Agent-- not to mention the chorus, and supporting cast of Attorneys, Home Inspectors, Lenders, Appraisers, and Blood Relations waiting in the wings for Act II to begin. Once there is signed Agreement the 'experience' as it were, takes off in another direction altogether. Another story for another day.
So here's the scenario: A potential Client sits at her computer, Googles 'Search Chicago Real Estate' and of course, lands on Page One. After surveying the first 10 choices she decides to click on ChicagoHomeEstates.com because...well, it just sounds so right. Chicago...Home, no...even better... Estates. She then decides to choose an Agent so she can Register on the site for greater access, picks the best looking one and Voila!...she arrives at my Home Page. Once registered, she is free to search the Chicagoland area for a home or rather...an estate of her dreams. She requests a showing for a Condominium that piques her interest. I respond.
Now this is where the afore mentioned 'Good Faith' begins. Our website Features our own Listings while at the same time providing a Search Engine for the entire MLS of Northern Illinois. This is provided under under the guidelines of Broker Reciprocity and is about as clear as clear can be, in my opinionated opinion. Every Listing that is not in the Chicago Home Estates personal inventory has a clearly marked icon (a little house button to click for more info) stating so.
There is a question asked and a response box to be checked: Working with a Realtor? YES or NO.
Check NO, and I'm her guy.
Check YES, and her own Realtor will need to show her the requested property (and should probably also invest in his own website with advanced Search Engine capability). Just so you know, there are only two sides of any Real Estate transaction as far as Realtors are concerned--the List side and the Buy Side. There really isn't any more room in a deal for a third Realtor. We have a name in the business for such a soul. We call him 'The Unpaid One.'
It is at this point in the experience that I make it crystal clear to my potential Client that her Request For Showing either is or is not my own Listing (I have no intention of ever being The Unpaid One) and I proceed from there.
Now let's just say that we meet at the property, introduce ourselves to the Listing Agent, and take the tour. Thirty minutes later she decides the place is perfect and wishes to make an Offer. Whether I write the deal or not I have established what is called Procuring Cause on that particular property, thus avoiding any possibility of becoming The Unpaid One. We soon thereafter fill out an approved Board of Realtors contract, sign and initial all the appropriate spaces, forward it on the the other side of the deal, and wait for a counter-offer.
It is at this point that the verbiage begins. Several phone calls back and forth between all parties involved and hopefully, a middle ground can be found. Let me walk you through the dialogue of a recent negotiation attempt that mirrors my example above. The gender has been changed to protect the idiot...I mean innocent..
There is a question asked and a response box to be checked: Working with a Realtor? YES or NO.
Check NO, and I'm her guy.
Check YES, and her own Realtor will need to show her the requested property (and should probably also invest in his own website with advanced Search Engine capability). Just so you know, there are only two sides of any Real Estate transaction as far as Realtors are concerned--the List side and the Buy Side. There really isn't any more room in a deal for a third Realtor. We have a name in the business for such a soul. We call him 'The Unpaid One.'
It is at this point in the experience that I make it crystal clear to my potential Client that her Request For Showing either is or is not my own Listing (I have no intention of ever being The Unpaid One) and I proceed from there.
Now let's just say that we meet at the property, introduce ourselves to the Listing Agent, and take the tour. Thirty minutes later she decides the place is perfect and wishes to make an Offer. Whether I write the deal or not I have established what is called Procuring Cause on that particular property, thus avoiding any possibility of becoming The Unpaid One. We soon thereafter fill out an approved Board of Realtors contract, sign and initial all the appropriate spaces, forward it on the the other side of the deal, and wait for a counter-offer.
It is at this point that the verbiage begins. Several phone calls back and forth between all parties involved and hopefully, a middle ground can be found. Let me walk you through the dialogue of a recent negotiation attempt that mirrors my example above. The gender has been changed to protect the idiot...I mean innocent..
"The List Price is $639,000," I said. "I suggest we come in around $605,000 and hopefully get this deal done under $620,000. " Just so you know, while aggressive in negotiations I am not a bush league 'low baller.' If the List Price is ridiculous then that's another story but even in this somewhat flat North Side Chicago market, most properties still sell within 5% of the Asking Price in less than 180 days.
"We are obviously not on the same page," says my Client. "I will not consider offering anything with a 'six' in it. Tell them $550,000 and we'll close in three weeks." (In case math wasn't your best subject in grade school, that's $89,000 under List Price.) I put on my Messenger outfit and prepare to deliver the news.
"Good news is...we have an Offer for you!" I say to the happy, happy Listing Agent. "Bad news is we are coming in 15% under List." Actually, I don't really say any of this. Instead, I just let the ink on paper speak for itself.
As expected, our opening Offer was met with dead silence by the other side. After 10 minutes of verbal resuscitation and another 3 or 4 minutes of 'point and counterpoint' with the Listing Agent I was finally able to persuade him to just give us a counter-offer. He called back an hour later. "$625,000. March 30th Close." This was good.
"Not good enough," was my Client's response. "$565,000 and we want our February Close date..."
FAST FORWARD ...
"We are obviously not on the same page," says my Client. "I will not consider offering anything with a 'six' in it. Tell them $550,000 and we'll close in three weeks." (In case math wasn't your best subject in grade school, that's $89,000 under List Price.) I put on my Messenger outfit and prepare to deliver the news.
"Good news is...we have an Offer for you!" I say to the happy, happy Listing Agent. "Bad news is we are coming in 15% under List." Actually, I don't really say any of this. Instead, I just let the ink on paper speak for itself.
As expected, our opening Offer was met with dead silence by the other side. After 10 minutes of verbal resuscitation and another 3 or 4 minutes of 'point and counterpoint' with the Listing Agent I was finally able to persuade him to just give us a counter-offer. He called back an hour later. "$625,000. March 30th Close." This was good.
"Not good enough," was my Client's response. "$565,000 and we want our February Close date..."
FAST FORWARD ...
THREE MORE COUNTERS AND 72 HOURS LATER...
"They are willing to spilt the middle and come down below their 'Drop Dead Number,' I inform my Client. "$600,o00." I deliver the news feeling more like The Negotiator than the Messenger for the first time in a couple of days. I know that I am but $1 away from getting a deal done with no 'six' in it. I am indeed, the man.
"Okay, but I want $10,000 more back in the form of a Closing Cost Credit paid to me at the settlement table," demands my Client. "Net sale price of $590,000. It's my final Offer. Make it happen Geno!" Grabbing with both hands from the candy dish. (Gimme Gimmee Gimmee)
'Bad Faith Bad Faith Bad Faith,' I think... but I do as directed.
And I do get it done, feeling a little uneasy about throwing in a Closing Credit curve ball so late in the negotiation (poor form, to be sure). The Sellers however, eventually agree after several more hours of persuasion, and I forward the good news to my Client.
And then within a matter of hours my Client bails out of the deal totally. The reasons and excuses were numerous but the real reason (and thus the point of this sad but true essay) is she could. The original contract was written over the phone and faxed to all parties (not unusual for people with busy schedules and allowable by law), no Initial Earnest Money check was ever collected (again, the initial check is but a token gesture and is not needed until Signed Agreement occurs), and the motivation to Sell was greater than the motivation to Buy in this case. My internet Client was just fishing around the bottom of the lake seeing what she could snag on the cheap. Looking back, it was just a lot of words accompanied by very little action, not the least important of which was the Seller's signature. Lots of talk with no accompanying walk.
"They are willing to spilt the middle and come down below their 'Drop Dead Number,' I inform my Client. "$600,o00." I deliver the news feeling more like The Negotiator than the Messenger for the first time in a couple of days. I know that I am but $1 away from getting a deal done with no 'six' in it. I am indeed, the man.
"Okay, but I want $10,000 more back in the form of a Closing Cost Credit paid to me at the settlement table," demands my Client. "Net sale price of $590,000. It's my final Offer. Make it happen Geno!" Grabbing with both hands from the candy dish. (Gimme Gimmee Gimmee)
'Bad Faith Bad Faith Bad Faith,' I think... but I do as directed.
And I do get it done, feeling a little uneasy about throwing in a Closing Credit curve ball so late in the negotiation (poor form, to be sure). The Sellers however, eventually agree after several more hours of persuasion, and I forward the good news to my Client.
And then within a matter of hours my Client bails out of the deal totally. The reasons and excuses were numerous but the real reason (and thus the point of this sad but true essay) is she could. The original contract was written over the phone and faxed to all parties (not unusual for people with busy schedules and allowable by law), no Initial Earnest Money check was ever collected (again, the initial check is but a token gesture and is not needed until Signed Agreement occurs), and the motivation to Sell was greater than the motivation to Buy in this case. My internet Client was just fishing around the bottom of the lake seeing what she could snag on the cheap. Looking back, it was just a lot of words accompanied by very little action, not the least important of which was the Seller's signature. Lots of talk with no accompanying walk.
Postscript: As it turns out the Buyer (no longer my Client at this point) tried to go around me and cut a deal with the other side on her own shortly before this all even started. When that didn't fly she then tried to persuade me to take my commission out of the Listing Agent's portion hoping to keep the Buy-Side Co-op for herself. Again, failure to launch.
In the end, she had just agreed to use my proffered services as the great Negotiator/Messenger I am, and waste my time for half a week ultimately doing what she felt was in her own best interest. And I'm actually cool with that. Thus is the nature of the beast we call the internet.
The other three deals I'm presently working on (all internet Registrants on our site) are as sweet as blueberry pie--the people couldn't be nicer. Half of my annual business comes from a mixture of the ChicagoHomeEstates.com website and the Blog you are presently reading. The other half is made up of past Clients and referrals. And only a few deals a year come from people who can't talk and walk at the same time. C'est la Vie, say I.
Geno Petro
image clearly courtesy of weirdthings.org
In the end, she had just agreed to use my proffered services as the great Negotiator/Messenger I am, and waste my time for half a week ultimately doing what she felt was in her own best interest. And I'm actually cool with that. Thus is the nature of the beast we call the internet.
The other three deals I'm presently working on (all internet Registrants on our site) are as sweet as blueberry pie--the people couldn't be nicer. Half of my annual business comes from a mixture of the ChicagoHomeEstates.com website and the Blog you are presently reading. The other half is made up of past Clients and referrals. And only a few deals a year come from people who can't talk and walk at the same time. C'est la Vie, say I.
Geno Petro
image clearly courtesy of weirdthings.org
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