How Much Is a Strong Realtor Really Worth?
So, which offer did the Seller of this new-to-market St. Louis Park rambler choose to work with the other week?
(Yes, multiple offers can and still do occur in today’s housing market, albeit only for homes in good locations, that are well-priced, and in move-in condition).
Was it the highest offer?
How about the one with the fastest close, biggest downpayment, or largest earnest money check?
Rather, the Seller chose the Buyer based on their Realtor and lender.
Yup, who represents you — not the absolute strength of your offer — could very well be the deciding factor in whether or not you land your dream home.
Seller Discrimination — The Good Kind
Is a Seller allowed to do that?
As they say locally, “you ‘betcha!”
By law, they can sell to anyone they want — or no one — as long as the Buyer isn’t a member of a legally protected class (race, creed, gender, etc.).
And why might it be a smart idea for a Seller to choose the Buyer based on their Realtor and lender?
Because savvy Sellers know that consummating a real estate deal — any deal — these days is a multi-step process.
Simply reaching agreement on price and a closing date is at best step #4 (steps #1 – #3: getting the house prepped and ready for market; walking the Seller through the various disclosures and city inspection; pulling together the marketing materials, including photography; and promoting the Broker Open and first few Sunday open houses).
That leaves steps #5 through #10.
Still to come: resolving the Buyer’s Inspection Contingency; having the home successfully appraise; verifying the Buyer’s actual creditworthiness (vs. what their rubber-stamped Pre-Approval Letter represents it is); and getting everything ready for closing, including the requisite title work, insurance binder, walk-thru, etc.
And that’s not all.
If it’s a typical deal, in between negotiating the Purchase Agreement and showing up at closing, there will be at least 4-5 issues that come up that will require everyone’s good will and cooperation to resolve.
It could be as simple as moving up (or back) the closing date to accommodate someone’s travel schedule.
Or it could be as potentially serious as getting an extension on a Written Statement that is inexplicably delayed.
Regardless, most deals endure multiple tests along the path to a successful closing.
Which bring me back to the beginning of the process.
Sellers usually don’t know the identity of the various Buyers when they’re sorting out multiple offers.
But their agents often do know the identity of the various Buyers’ agents — and their reputation for integrity, skilfulness, and general ability to close deals (or not, as the case may be).
By closing, every Buyer has to establish their credibility — literally — with the Seller.
Initially, however, all Sellers really have to go on is . . . the credibility of the Buyer’s Realtor.