PRESENTING THE OFFER

foreign [Music] like this my first real offer I'm glad to see you're so happy about it [Music] I can just see this 600 commission going right down the drain but why why well I've got an offer here I work very hard to get now that I've got it I don't know that I can get it through because it's a thousand dollars less than the listed price let me ask you something what do you think a real estate salesman has to be above everything else to be successful well probably more than anything else he's uh to be enthusiastic he's got to be really interested so far so good what else let's see uh I guess he's got to be an expert on properties but doesn't he have to be an expert on people too the real estate salesman must become sensitive to the moods and feelings of his clients he's got to find out what their inner needs are what motivates them most of the time buyers and sellers don't know what the true facts are as soon as they find out what the score is they sell themselves remember that couple named Alvin a couple that bought your Sherwood listing right you know when I was taking their offer on the Sherwood house he wanted to make a deposit of one hundred dollars 100 on a twenty thousand dollar house that's ridiculous ridiculous to us but not to him well my job was not merely selling him on upping the ante but to Sean there was such a skimpy deposit he was jeopardizing his chances of buying the Sherwood house I don't see what difference the size of the deposit makes Mr Scott any deposit shows our evidence of good faith doesn't it or does indeed Mr Alvin but uh it's not that I can't make a bigger deposit I just don't see the point you're making an offer of eighteen thousand on a twenty thousand dollar home Mr Sherwood isn't going to be too happy about this the size of the deposit influences the seller cash talks Mr Alvin oh honey I want that house let's do everything we can to get it okay okay how much of a deposit do you think would stir Mr Sherwood up ten percent of the offered price as usual well I'll settle for a thousand then this is Alvin I know you really want that house I'd hate to see you lose it by making too low an offer oh why should we lose it because the offer is too low but if he doesn't like 18 000 we can always come up can't we well right after we listed Mr Sherwood's house he rejected nineteen thousand if we go in with too low on offer we might meet some pretty stiff resistance your chances would be much better if you offer at least nineteen thousand absolutely not 18 is all we can afford do you know how much a thousand dollars spread over the life of a mortgage amounts to per day well uh 23 cents 23 cents a day oh honey maybe we should offer more well we'll offer 18-5 but that's it that's a very wise decision Mr Alvin I feel your chances will be much better now because they were serious buyers I simply explained to them what they needed to know and they made their own decisions I hear you tell it it all sounds so simple but I bet it wasn't so simple to sell the uh what's their names the Sherwood's on the deal well no I'll just bet he blew a fuse right over the phone when you told him about it I didn't give him a chance to I'll talk to him no I didn't talk to him at all I never phoned the seller to tell him I have an offer I have someone else usually the secretary call and make an appointment for me well why you've got to give him the bad news sometime yeah but I want to be darn sure that when I give him the bad news I'm ready to give him the good news too that makes sense you can't get a deposit receipt signed on the phone you sure can you know the first broker I ever worked for used to say we owe it to the seller to protect him from his own impatience we owe it to the seller protect him from his own impatience it's pretty good it's not only pretty good it's true you know I was in this business quite a few years before I stopped rushing over to The Cellar the minute I got an offer I'm afraid I lost quite a few sales because I didn't take time to do my homework homework yeah preparation I sit down and I analyze the offer first I make a complete list of all the reasons why the seller should accept it then I try to figure out why he might reject it one thing that's very important is to compute the net proceeds to the seller and then compare this net figure with what he would get from other kinds of offers well you mean I should do all that with this offer of mine sure the reason you feel insecure about it is because you're not in Intimate terms with it you know how to prepare a competitive market analysis don't you sure well you always want to make a competitive market analysis before you present your offer you not only need this to show your seller his true position but you want to get this information for yourself here's the competitive market analysis on the Sherwood house when I first took the listings I brought it up to date which incidentally is something I do with all my listings once a month I knew I was going to have a tough time with Sherwood and this little piece of paper made it possible for me to build an iron-clad case now look here a house very similar to Sherwood's listed at twenty thousand been on the market for 94 days and here's another 19750 and listed for 114 days I hear two houses both of them almost exact duplicates of sherwoods one sold for nineteen thousand and the other one sold for eighteen five so you've got to consider that somewhere between 18 5 and 19 is a realistic price now look at this item here notice that the reason for selling is that Sherwood was transferred and had to be in Chicago in 90 days at the time of the Alvin offer he had only 27 days left now this fact alone convinced me that Mr Sherwood should seriously consider the Alvin offer sure that's only logical true but the seller usually isn't very logical he's emotional not only about his house but about money the information on the competitive market analysis told me a great deal about the urgency of Sherwood's situation I knew I couldn't just Waltz right in there and get his signature I needed to give him time to make the necessary emotional adjustment so I set the stage for the price discussion by covering the Minor Details first by working the offer this way from the bottom up it gives everybody a chance to kind of settle into the thing well naturally we'll give the buyer a termite report we expect it to do that well that's fine Mr Sherwood um although we haven't discussed it I wonder if you'd mind leaving the rug in the dining room Mrs Alvin fell in love with that oh yes I I guess that'd be all right Mr Scott I think the time has come for us to dispense with these rather irrelevant matters and get down to business am I correct in assuming that you have in your possession a bona fide offer I certainly do how much Mr Scott I'm very very surprised at you may I see that dear why on Earth do you think I'd even consider eighteen thousand five hundred Mr Scott I'm very very surprised at you we already turned down nineteen thousand seems to me you have a good deal of nerve bringing me this offer of eighteen five well you're wasting your time Mr Scott and ours too we already turned down nineteen thousand uh Mr Sherwin did you know that the law requires me to bring to you every written offer made on your house and while I'm acting as your agent nevertheless I don't have the right to make decisions for you well what am I paying you for then I've given you Specific Instructions I've told you that we will not consider less than the listed price we will not consider less than the listed price I just said that dear I'd like to suggest that you seriously consider this offer Mr Sherwood after all we do have a buyer who really wants your house there's uh only been one other offer and uh that was two months ago I don't see how we can seriously consider it why the wall-to-wall carpeting and the patio and all the things we've done yes eighteen five won't even cover our cost but Mr Sherwood cost doesn't necessarily equal value what does equal value then people people would you make us all some coffee there oh when I said people make value Mr Sherwood here's what I meant the true value of any piece of property is what a buyer will pay for it it doesn't really matter how much that property cost are you insinuating that my home isn't worth more than eighteen thousand five hundred dollars what's this well you remember when we first took your listing I showed you a competitive market analysis on your home oh yes well I brought it up to date these are the current values I see they're getting more now are they I wouldn't say so Mr Sherwood there hasn't been too much activity in your neighborhood in the past couple of months Sherwood was a businessman and I knew that comparative figures would mean something to him I wanted him to look over the competitive market analysis form and see for himself what houses in the area had been selling for so I just met the competitive market analysis do my work for me while uh Mrs Sherwood served us some cake and coffee I took advantage of the opportunity to tell them about the Alvin's I wanted them to know that the buyers were really nice people you know selling real estate is really selling people to other people it's important to paint a human picture of your buyers well why what does this seller care as long as the buyer buys well for one thing it gives the seller an out if he's going to reduce his price he likes to feel that he's doing it for sincere deserving people it's an excellent human interest selling technique to present your buyers in a way that will appeal to the sellers well I'm sure these albums are a very nice couple but if they can't afford more than eighteen five perhaps you should be showing them less expensive houses Mr Scott well I I'm sure you appreciate how hard we've been working to try to locate a qualified buyer for your home Mr Sherwood oh yes you've shown the house of great deal we know how hard you've been working Mr Scott don't we Charles Yes dear and of course we have advertised extensively oh my yes I think the ads have been just adorable you say the Alvin's have no children but she's expecting that's right and they are anxious to get settled before the baby's born well I'm sure they are but I'm afraid Mr Scott they won't be settling in this house unless they meet my terms and Mr Sherwood may I ask you something don't you still have to be in Chicago by the end of the month yes but my wife doesn't have to be anywhere she can wait until we get a fair price well isn't that quite a responsibility for Mrs Sherwood to arrange for the packing and the moving and then make the trip back there by yourself Yo Mary can handle that all right no problem well Charles I'm not so sure you can't stay here alone you won't have to Mary we'll sell the house before I have to go don't worry about it I don't think we will sell it now you're just not being realistic Mary you leave these business matters to me no Charles I'm being very realistic what could be more realistic than this comparable analytical analysis competitive market analysis dear well whatever it is oh Charles I love this house more than you do and to me it's worth fifty thousand dollars but but as Mr Scott has pointed out the house is only worth what someone else is willing to pay for it let me see this thing again when you go to Chicago I want to go with you Charles Mr Sherwood wouldn't you agree that when you sell your house that what you take out in net cash is more important to you than the actual selling price it is axiomatic Mr Scott that the greater the disparity between the cost of doing business and the ultimate market price of a commodity the greater the profit but quite often in real estate a higher price means higher selling costs now uh I've been doing a little figuring here if you were to sell your house on FHA terms for twenty thousand dollars you would actually receive just a little better than six hundred dollars more than this offer right here now your present loan is a conventional one and it's down to fourteen thousand dollars right uh fourteen thousand three dollars and ninety cents to be exact well let's just say fourteen thousand that's easier with the new FHA loan you would have to pay off your present loan of fourteen thousand dollars now the prepayment penalty on your loan will be about four hundred twenty dollars the discount fee to get a new FHA loan about 190 dollars and because an FHA transaction would take longer than the quick escrow the albums could give you you'd have to make your regular first of the month payment and that would cost you a 125 in extra insurance interest in taxes plus an additional 90 in Real Estate Commission altogether these costs come to 825 dollars I know that we will encounter these costs Mr Scott you've explained them all to me before eloquently but regardless of these costs I will get all cash that's what interests me with the albums I have to take a second with the alvins you wouldn't have these costs so let's add this 825 dollars to the Alvin's offer of 18 500. in effect this means you have an offer right here on the table for 19 325 dollars so actually the difference between the two is only 675 dollars wouldn't it be worth six hundred dollars to you to just forget the whole problem 675 dollars Mr Scott 675 dollars to have the Peace of Mind the mental relief I provide mental relief for myself by making regular deposits to my savings accounts thank you well Mr Sherwood Let's uh assume for the moment that we don't sell your house before you leave for Chicago for a while you'd have to maintain two homes there'd be additional food costs long distance telephone calls all this costs money which would bring the difference down to less than 675 dollars I live modestly and inconspicuously Mr Scott my personal living expenses under these conditions would be trifling I assure you let me ask you something suppose you were looking for a house to buy and I put you in my car tonight and we drove around the area looking at various houses and I pull up in front of this house and I ask you to buy it for nineteen thousand three hundred and twenty five dollars would you do so on the gamble that you could make 675 dollars on it within the next few weeks but we already own this house Mr Scott I never gambled you're gambling tonight Charles never gambles I am sure that Mr Scott intends to make a Salient point my dear I am leading up to an important Point Mr Sherwin if you approve this agreement you sold your house if you don't approve it you have bought it back on the gamble that you will make 675 on it by waiting now isn't that right I suppose so despite a rather abstruse line of reasoning think of yourself right now as a buyer not a seller now Mr Sherwood honestly would you buy this house tonight for nineteen thousand three hundred and twenty five dollars and hope to resell it within four or five weeks for twenty thousand well I'll tell you what we'll think it over and let you know in the morning well I wish there were time for you to think it over but there isn't you see the buyer has the right to change his mind he knows I'm here and if he should decide to call me right now and cancel out that's his privilege Charles we've only had one other offer all right I'll tell you what we'll do we'll split that 675 dollars with the alvins then we'll counter their offer by adding three hundred dollars they're not so fast Mr Scott we'll counter their offer by adding one half of 675 dollars that's exactly 337.50 right you are Mr Sherwood well despite Mr Sherwood's previous inflexibility and the question of price when the chips were down he was very reasonable well I guess you didn't have any trouble with the albums and they could hardly Turn It Down for 337 dollars oh you'd be surprised the buyer may have changed his mind or he may now have some doubts you can never relax until you get the buyer's signature on that counter offer and have communicated acceptance of it to the seller hmm how'd you handle the Alvin's I'll show you you'll be Mr Alvin what you be Alvin let's see what kind of sales resistance you have now I'm going to present this counteroffer to you and I don't want to sign it I'm warning you you haven't got a chance we'll see well Mr Alvin you've just about got your new home what do you mean just about the Sherwood's accepted your down payment and they're willing to carry a second but Mr Sherwood is very much concerned about the price you mean he wouldn't take 18.5 well I got it but he wouldn't take the 18-5 right well no okay then the deal's off I told you 18.5 was my limit nine minute oh what'd you say Mrs Alvin what'd she say quiet that's right I did get him to reduce the price quite a bit in fact almost twelve hundred dollars team down how much because the price now stands at 18 837.50 right now you and I and the sherwoods are the only ones who know that this house can be purchased for eighteen thousand eight hundred and thirty seven dollars and right now you are the only one who can buy it for that price but tomorrow every salesman in our office will know that Mr Sherwood has changed his mind and someone else will get this house at that price because of the effort you have put in now Mr Alvin how much money are we really talking about we're talking about almost 400 that's what we're talking about let me ask you something ask when did you last buy a car about two years ago how much you pay for it around three thousand now when you drove that car down your dealer's driveway it depreciated 500 you lost five hundred dollars now suppose you had to write off five hundred dollars a year to have just the kind of a house that you wanted now would it be worth it wouldn't it are you trying to tell me I'm going to lose 500 a year if I buy this house no I'm not because you and I know that values are going up not down so buying this house at a reduced price is an excellent investment but buying a home is more than an investment it's part of your life its value to you can't be measured in dollars and cents if you're willing to take depreciation on luxuries cars and so forth shouldn't owning a home be measured in the same way what do you think honey well um I'll tell you what we'll think about it Mr Scott well what is there to think over Mr Alvin are there any questions I can answer for you have I made everything clear yes you've made everything clear and of the many many houses you and your wife looked at this is the one house that you thought had everything I honestly don't know where you could find a another one like it even close to the price that's true we did look at a lot of houses and I guess you're right Mr Scott we'll take it fine Mr Alvin now uh will you approve this right here [Laughter] you're pretty tough customer Jim you're a pretty darn good salesman Bob you really know your stuff I just hope I do half as well tonight when I present this offer of mine oh you'll do fine Jim just remember the big thing is attitude deal with the facts do your homework bring a substantial deposit with you cover the contingencies first and work up to the major closing situation emphasize the amount of activity and the number of offers the property is received remember this a seller wants to make a decision he wants the mental relief a decision will bring him he wants peace of mind and it's your job to help him find it if you're thorough and persistent if you're fair and factual and if you are prepared you will achieve the objectives of both your buyer and your seller and you will know that your sale will close successfully because you have done your job completely [Music] thank you