April 4th, 2011 2:40 PM by Lehel S.
The agent in Cory Brewer's Mercer Island, Wash., Re/Max office received an offer that was far below his client's asking price. But before the contract could be presented to the seller, the would-be buyers posted on their Facebook page how badly they wanted the house and how much they really were willing to pay.
Bad move. The seller saw the posting and countered at the higher price. The buyers accepted because they loved the place that much, and the deal closed a few weeks later.
The moral to this little tale: When it comes to something you would rather the other side not know, keep it to yourself.
"Don't talk publicly about what's in your real estate contract, at least not until afterward," Brewer said. "You never know when something you say might come back to bite you."
That's why when he was a real estate agent in Milton, Canada, Chris Newell posted this warning on his office refrigerator: "Anything you say to any real estate agent can and will be used against you to get a lower price for your home."
With its big, bold letters, the sign is a little garish, acknowledged Newell, who now trains other agents about counseling senior buyers and sellers. But it got the point across. Loose lips can just as easily dynamite a real estate deal as they could torpedo a destroyer during wartime.
Or, as Gwen Daubenmeyer, an associate broker with Re/Max in the Hills in Bloomfield, Mich., says: "Loose lips, opportunity slips."
It's not that you are trying to hide anything. With today's disclosure laws, everything about the house is going to be laid out there for the world to see anyway. And what's not clearly visible is likely to be uncovered by a competent home inspector.
But if you ramble on when you speak with a prospect or an agent, chances are good you will reveal something about yourself or your situation that gives the other side a distinct negotiating advantage.
Any little tidbit can be used against you. Mention that you are about to close on your new home, that you want to be in your new place by the time your daughter has her baby or that your company is helping with your move, and your chances of receiving a full-price offer will be greatly diminished.
Who would divulge that kind of vital information? You would. Maybe not intentionally, but perhaps as passing, casual conversation.
Once, when Celeste Barr's clients were outside washing their cars, someone pulled up and motioned for them to come over to discuss their house, which was on the market. The sellers got caught up in the conversation, during which the passerby mentioned the house was priced "way above what he could afford."
Being comfortable thinking the person was not an eligible buyer, they shared their "bottom line" price. And the very next day, "Boom," said Barr, an agent with Keller Williams Realty in Barrington, Ill., "an offer arrived from the passerby at that bottom-line number."
Sellers talk so much — and buyers too — that the other side's agent loves it when they strike up a conversation with one another. Once they get to talking, you never know what kind of vital information is going to pop out.
Sellers reveal how much they owe on the place, that a divorce is imminent and they have to move right away, or that they hate the neighbors or neighborhood. Buyers blab that they've fallen in love with the house and just have to have it, or blurt out the size of the mortgage for which they've been approved.
Buyers and sellers who are too open will often find that the other side's agent uses their chattiness against them. Hank Miller, an associate broker with Keller Williams Atlanta North, "routinely" tries to engage sellers in small — "but very important" — talk. He asks a simple question, like, "Where are you guys headed?" or "Have you found anything yet?" and the dam breaks.
"There's no set routine, and the specific approach varies," Miller says. "But sellers talk way too much, and if I catch them, there's rarely a time we don't leave with good info that will be used against them."
That's why the Georgia agent always advises his sellers not to chat with the opposing side's agent, under any circumstances. If the agent tries to start a dialogue, he tells them to find a reason to disconnect.
"I tell them to carry their phone and pretend they felt it vibrate, pretend they need to pick up someone and leave the agent alone, go check the mail or take the dog out," Miller says.
The urge to bond with the other side is so great that it's the main reason agents advise sellers to leave the house when there's a showing.
"I always ask my sellers to make sure that they are away during a showing," says Chris Blackstone of Mid-Island Realty, a Re/Max office in British Columbia. "They can easily give away their bargaining position without even knowing it, and a simple slip can cost them thousands of dollars."
"Sellers should have their Miranda rights read to them if they choose to remain," said Linda Humphrey of Humphrey Home Connections in Reno. "Invariably, I find they blab things that are not in their best interest."
There are other reasons to vacate the house during a showing. Buyers tend to be uncomfortable when the seller is home — or worse, walking with them through the house. So they aren't as thorough as they should be. Instead, they rush through their visit, exiting much more quickly than they might have had they been able to tour unescorted.
"Let the house speak for itself," advises Karla Oppliger of Prudential Dunnigan Real Estate in Sacramento, who also warns visitors to keep their comments to themselves until they are long gone. You just never know what might be overheard — good or bad — and passed on to the seller.
But if you absolutely, positively have to be there, casual discourse should be verboten. You need not be rude, says Charita Cadenhead of Bham WIiRE Realty in Birmingham, Ala. But you should "defer to your agent" and let the agent speak on your behalf so you won't unwittingly provide information that may be used to your disadvantage.
Jan Duke of Re/Max Gold in Yuba City, Calif., agrees. Exchanging information is the agent's role, she says, so let him or her do what he or she is paid to do: sell the house. "The owner's eagerness to assist can cost a lot of money."