As many of you know, I rarely.....RARELY, work with buyers...I have a team for that, at least I have referral agents for that however, I got a recent buyer referral and of course, I work those. So, I take the buyer out, we look at some homes and he finally decides to put down an offer. The offer is on a REO...so, I am thinking to myself, "I can do this in my sleep"...because I list REO's myself. Well, come to find out, I was completely mistaken.
So, we get our offer over to the seller's agent, let's call him Lionel the Listing Agent. A couple days later, I get a call from a member of his team, who works all the offers. She tells me the seller is countering and she sends me an email with the seller's terms. After some careful reading my buyer and I are a little concerned because the closing cost language isn't exactly the way we put it in on our offer. You see, I usually use the following closing cost language.....
"Seller to pay up to, $6,000.00 towards buyers; items payable in connection with the loan, items required by lender to be paid in advance, reserves deposited with lender, title charges, government recording and transfer charges, any additional settlement charges"
The seller replied back with, "Seller has countered the following items from your offer: Seller will pay $6,000.00 towards buyers closing cost and prepaids. Seller will pay title if Buyer uses Sellers attorney which is Super Title (Name changed to protect the innocent), Seller will contribute up to $500.00 towards a home warranty of Buyer's choice/plan. Buyer's agent will be responsible for ordering the home warranty"
Now, here is the problem, after speaking with the buyer and the buyer speaking with his lender, he isn't going to use all the $6,000.00 and suggested we add "upfront mortgage insurance", which many of you will know is covered under "items required by lender to be paid in advance"...hence why I use the closing language I do.
I countered the seller counter and said, we would like to add in "upfront mortgage insurance" in our special stipulations language and oh dear sweet baby Jesus.....it was like we asked for the 2nd coming of Christ. The listing agents just couldn't understand it, went back to the seller, the seller couldn't understand it and everyone seemed like we were asking for green eggs and ham. We went round and round for like 2 days explaining over and over again, we want to add the "upfront mortgage insurance" because if your seller agrees to give us $6,000.00 we want to use the full $6,000.00. So, finally the listing agent team member doesn't know why the AM is having a problem with that and instead of getting us an answer, she resorts to telling us that either we agree to the amended terms, which changed to...,
"All BCC (Buyers Closing Cost) to appear on the HUD and be approved by lender and title company"
As you can imagine, this was completely unacceptable to the buyer because now, after speaking with the lender, the seller just cut our closing cost credit in half because the lender's closing cost only accounted for about half of the money the seller agreed to provide. In other words, by using the latest wording, we could only use the funds for closing cost....and nothing else. We couldn't use it for pre-paids, incidentals or anything else.
Well....here we go, around and around again and finally, the listing agent team member begins threatening that if we don't sign the deal as written, they are going to just reject the deal. The problem here is, all we are asking to do is to spend the money.....the dollars that the seller has agreed to as we see fit....................WHAT IS THE DAMN PROBLEM, THE NET TO THE SELLER ISN'T CHANGING?
So, after a day or so of crazy talk, listing agents who just don't seem to get it, my buyer says, let's just agree to their original terms .........
"Seller has countered the following items from your offer: Seller will pay $6,000.00 towards buyers closing cost and prepaids. Seller will pay title if Buyer uses Sellers attorney which is Super Title (Name changed to protect the innocent), Seller will contribute up to $500.00 towards a home warranty of Buyer's choice/plan. Buyer's agent will be responsible for ordering the home warranty"
.......and just be done with it.
I send it over to the listing agent and inform them via email....my buyer agrees to your original counter. So, two days later, they send me over the REO addendum and it reads .....
"FM to pay up to $500.00 towards HOW to be selected by buyer. FM to pay $6000 towards bcc."
Ok...so, if you didn't catch the problem......I can't help you. None the less, this isn't going to work, for the same reasons I already stated above.
So, we go back to the listing agent team member, explain that we agreed to their terms and therefore, we would like to see those terms in the addendum. She tells me that we should write those terms in the state offer but, not to change the reo addendum. As we all know, if it's not in the reo addendum, it's not enforceable. So, I bring this up to her and we are threatened again....either we sign it the way it is, or they will reject the deal. DAMN, do you not understand, we are agreeing to your sellers terms....we are just asking that you put those terms in your sellers addenum.....lol.
After going around and around about that, finally my buyer says, let's stop talking to this listing agent team member and talk with the listing agent. He calls the listing agent, gets insulted by the listing agent before the agent realizes he is actually talking directly to my buyer.....and per my buyer, after about 10 attempts at explaining to him that we agree to your sellers terms, now put your sellers terms in your sellers addendum....the light switch catches and he goes....oh...yeah, we need to do that.
My problems are....
1. The listing agent obviously isn't involved in his own transaction.
2. No one is supervising the agent working the deal to ensure the seller's terms are actually put in the sellers addendum.
3. Rather than listening, talking and working together, the listing agents are hyper defensive and rather than negotiating, they would rather threaten the deal and strong arm the buyer into a signature when they themselves don't even know what is wrong with their own sellers addendum.
Comments
Jesse,
This is nothing new. I always represent buyers on REO and REO agents make up their own rules! This is why I really think the REO industry needs to learn customer service. It is usually the brokers too that are the local market leaders, that control the bulk of REO that tend to do this. I read that other post about the AG settlement and I think it is time the assests get evenly distributed so we small people can get one and do a much better job. I currently have a buyer offer with a major broker and its hard to get them to answer the phone. My buyer evn went on the offensive to ask them for offer status and got into an argument with them!
A side story...besides real estate I have another 40 hr a week job. I just completed a very grueling shortsale with Bank of America as the listing agent. The seller called my broker to say "what a fantastic job I did". That was because I was serious about the transaction. Being "part time" as some would like to think doesnt make me any less professional and I feel makes me even better. If I had REO, the asest manager would only be dealing with ME and not a "staff"!
I hear you Jesse, I've been doing real estate since 1979 and REO's since the early 80's. Overall the standard of professionalism is terribly low. Education even less. I too recently showed property while helping a new licensee in my office and was in shock at the conditions of some of the properties and the lack of follow up on appts and requests. I know my REO clients and the REO's I showed I would of fired the realtors that had them. The regular listings I would of fired them too. So now I look at it as an opportunity to "teach" the ignorant and if they don't want to hear it I call directly. Its not what you say but how you say it so I offer to "unburden" them and take over the file. I don't always get a positive response. But tired of the ignorance. By the way that's why I just use a very simple clause; " Seller to credit buyer $0000 at time of closing." I don't mention for what. It works for me. Sorry about your hell moment. Thanks for sharing
Hey Jessie, I got a head ache just reading through your buyers transaction, so I can feel your frustration.
I think the seller agent team member, perhaps was trying to follow the initial instruction of the REO Addendum, per seller,/ saying nothing is to be change, I:E "striked out" but not realizing as you stated these are terms/ add on as part of the negotiation process and addendum become the superior anyways great share!!!!!!!
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