8/1/12 Milwaukee condo Realtor says, “It’s Not My Money”

(An exerpt from The Adventures of RealtorMan. For more of his ongoing adventures around Milwaukee, select the link just to the right of this post.)

R.M.’s tour with Shel and Michelle was now in the Third Ward. He was pointing out its various places of interest.

“We’ve actually been in this part of town before.” said Shel. “Lots of restaurants.”

“Lots of shopping.” added Michelle.

“Lots of condos.” chimed in R.M.

“So do you sell more here than anywhere else? Is it your preferred location?”

“Not necessarily. I mean, I wouldn’t try to talk buyers into one area over another. It’s more likely that I would talk somebody out of a unit than into one.”

“How’s that? What about when you work on one of those projects, what then?”Chapter 23 Its-Not-My-Money

“Employees of those projects sometimes sign a contract stating that they won’t show a customer who visits the project any units outside the project itself. But, as I was telling you before, an agent who is not an employee is not subject to that contract. He is simply representing the project at a property showing or an Open House. He can show a buyer any listed unit anywhere, and it is professional to do so. Let the buyer choose.” R.M. emphasized. “So, one of two things will happen. One, it will confirm that the project is desirable and good value, or two, the customer will prefer something else in another location.”

“So, you wouldn’t try and talk us into something? What about those special bonuses agents get for selling?”

“It’s true that sometimes there’s what’s called a selling bonus offered to the selling agent, over and above a commission, usually for a sale made within a specific time frame. When this is the case, in the interests of full disclosure, I inform the buyer, especially if it’s a unit I think he should take a look at, because a buyer should know and come to a decision regardless of whether I earn more or not.”

“That sounds fair at least.”

“It’s not my job to coerce an offer. I really take issue with the sales effectiveness training mentality of “overcoming objections”. This is not a pair of shoes under consideration. It’s a major purchase. And anyway, why bring a buyer into an association, into a community, who will be disgruntled later?”

“Angry lawsuits to follow, you mean?” joked Shel. “So get back to coercing an offer. You were saying..?”

“When it comes down to actually making an offer, I would hope to have already introduced the whole gamut of what’s available in all areas and developments at the buyer’s price point. And in spite of the misconception out there that there are too many condos available, it often turns out to be not as many as an individual buyer might think. Taking into consideration the amenities a buyer wants, it gets narrowed down rather quickly. It’s my job to advise, up to a certain point, but when it comes to the actual offer it’s not my money Look At This. It’s the buyer’s money.”

“So you don’t advise an offer amount?”

“We can discuss the proposed amount. I can give you facts about recent sold prices, days on market, what condo fees cover. I can compare a unit in one development to another. I encourage the buyer to choose in his or her own best interest. I do explain the three results any offer might bring, but the buyer must decide on the price that goes on the offer.”

“OK, I’ll play. What three results?”

“An offer can come back rejected. It means that the offer was unacceptable to the seller, most often because of the offered price. The seller chooses to not negotiate with this buyer. If the buyer wants to pursue the property, he will have to begin with a new offer.”

“The language of offers, like the language of flowers?” Michelle asked. “Rue, for regret?”

“Paper roses only, in real estate. Verbal offers mean nothing. Now in the second case, the offer is countered by the seller. One or more of the conditions of the offer is altered to the benefit of the seller. The seller is now negotiating with the buyer. This can be about any number of things but is most often about price, financing, closing date, special allowances, or inclusions.”

“What are those?”

“Inclusions, or exclusions, are literally what’s included or left out of the property for sale. They are given in the listing information. Sometimes it’s about who keeps trees or plants on the property, in the case of houses. In condos, its more likely to be about window treatments, sound systems, shelving, or other fixtures, but something very specific to the unit.”

“And special allowances?” Shel remembered to ask.

“”This refers to specific costs of replacing an item in the property, such as worn carpeting, or to what we call ‘deal sweeteners’, seller or developer assistance with closing costs or a period of condo fees, for instance.”

“And in the third case?” Michelle prompted R.M.

“In the third case, the offer is accepted and, at closing, you become the proud new owners.”

“End of shopping?”

“At least that kind of shopping, yes. Did you know there’s another kind of shopping in this business.”

“What do you mean?”

“Cast your minds back to The Bend in the River project, as an example. The developer hires a secret shopper to evaluate and grade the sales performance of an employee or a representative. It’s called ‘being shopped’. They assess on punctuality, degree of sales polish, positive attitude, that sort of thing.”

“So, it ends up like a normal work evaluation but you don’t know you’re being watched? That’s creepy.”

“It’s also unfair. Suppose you are a legitimate customer coming into a sales trailer looking for information. I am there for Open House that day and an tied up talking with another customer, the secret shopper, who of course is only pretending to be interested. You either have to wait for me, if I am alone, or you start talking with another agent working there that day. Remember procuring cause? Then I completely miss the opportunity of working with a legitimate buyer because I’m being shopped.”

A condo view of the working Milwaukee River entrance to busy Lake Michigan harbor.

A condo view of the working Milwaukee River entrance to busy Lake Michigan harbor.

They had come to a cul-de-sac and R.M. paused before turning back. They were out at the end of Erie Street. The Summerfest Festival grounds were just to the north.

Michelle asked,”About this Buyer Agency contract you mentioned before. Would we have to pay you anything upfront, or any other time?’

“No. I would have you waive any other costs when you sign the contract. That’s just the way I work. And the seller still pays the commission when you buy.”

“Sounds to me like it’s in our best interests to have you represent us. It’s a more complicated business than we thought.” Shel commented.

“In other words, we’ll be sticking to you like glue.” interpreted Michelle.

“Well thank you for that. See those fishermen over there? They’re on traditional fishing grounds. You see the marriage before you of the pricey condo owner and the the locals. There is a development up in Port Washington where the same thing occurs. Condo owners look out the windows of their expensive units and see, shall we say, ‘traditionally dressed’ fisher-folk passing by, then watch and smell as traditional fishing continues steps from their door.”

“Do the locals eventually get forced out?”

“In an area like this, there has to be some rubbing of elbows, some give and take of neighborhood usage. Call it charm, call it nuisance, this is still a river entrance to a city harbor even though much of the warehousing and industry has moved and left opportunities for housing, in its wake, if you’ll pardon the expression.”