🚩 Warning! Danger Ahead! There Are Red Flags In That Offer!
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Welcome to the B-Word, the podcast for women who want to unlock the clarity needed to put your big girl panties on and rock your real estate career like the true boss you are. I'm Joanne Bolt, your host, and together we'll dive into the things your broker doesn't teach you in order to own your own truth, disown the things getting in your way to finding your place, and stop apologizing for the obstacles you have to overcome along the way.

Holy cow, has this series been on fire. We have been diving all into listings in the past couple of episodes. So if you're just now tuning in, hop back about four episodes, start there, because that's where we start talking all about CMAs, listings, and listings.

listings, how to handle them and how to handle them with grace in a multiple offer situation. Now we're going to dive into some red flags that you as a listing agent may see coming in with those multiple offers.

Red flags do exist in today's market, even though you may be getting a ton of offers. And yes, those offers may be coming in over list price. You as a listing agent still need to have the basic foundation of understanding when that red flag may alert you to the fact that that contract may not make it to the closing table. And although everyone I'm about to talk about

something that could happen and does not necessarily mean that that offer won't make it to the closing table. It's your job as a listing agent to understand the flag, what it means, and to prepare your seller on what to do in the event something goes wrong. So let's talk about that first red flag. Holy cow, the red flag of an overinflated offer price. Yes, lay

Ladies, I am fully aware that offers are coming in way above where they should be. That's just the market we're in right now. Buyers are really having to get creative on how to land the bid so that they can have a home to live in. However, please take note of something. If you get 10 offers on your listing in the first 24 hours,

And nine of them come in within $5,000 to $10,000 of each other. But that 10th one comes in at like $55,000 above the rest. It is an outlier offer price.

So it could mean that the buyer just really wants to nail down that house and wants to prevent you from even considering any offer but theirs. Or it could mean that that buyer is throwing out offers all over the place and you have no idea if they're going to terminate using any of the contingencies or not. And just because they waive all their contingencies doesn't mean that they're not willing to lose that earnest money.

So if your seller does decide to go with the outlier offer that is grossly above anything else that came in, do you have a good conversation with them about what that means? Take a hard look at the contingencies with your seller. If that buyer does not complete the contract, will the seller be entitled to the earnest money? And if so, is the amount of earnest money offered enough to

to entice the seller to take the home off the market and attempt to see if that buyer can make it to the closing table. Because sometimes it's not. And sometimes an offer that is too good to be true really is too good to be true, and it's not going to come to fruition. So even though we know we're going to get multiple offers, even though we know we want to get the highest price for our seller, our job is often misunderstood in the agent world.

We think that our job is to get the highest offer for the seller, when in fact our job is to get the best offer for the seller. And if the best offer isn't the highest price one because of all the contingencies, because of the chance of it hitting the closing table, it is our job to talk that through with the seller so that they can make an educated decision on which offer they are going to proceed forward with.

So be warned if that price comes in super, super inflated because it may just be a waste of your time. The second red flag in an offer that comes in, especially if they're offering cash, no proof of cash availability.

I'm sorry, we are not in a market that is brand new. We've been in this lack of inventory for a hot second now. So if you've got a buyer sending over a cash offer and they are not immediately sending proof of funds, I would say that's a red flag.

There's no reason to wait 24 hours to provide proof of funds. There's no reason to wait three days. No, if they are offering their highest and best and they really want to win that offer from the get-go, a good buyer and their agent will know that you got to upfront provide proof of funds. And what I mean by proof of funds is not just to cover the cost of the offer. No, it is to cover the cost of the offer plus...

Any closing cost that buyer incurs, if the buyer is offering to pay for the seller's closing costs, which I'm seeing a lot these days, then their cash needs to cover all of it. And yeah, we are seeing some loans go through these days. So guys, if there is a loan happening, whether they waive the appraisal contingency or not,

If you're looking at an offer and you're looking at availability of cash and that cash offer barely covers the list price plus the closing costs, then you may have a cash problem with that buyer. Or if it really only covers the cash price.

because especially if they're getting a loan, I want to see that they could cover the difference between an appraisal and where they ended up on a purchase price. So for instance,

If I've priced a home at $500,000 and they offer 540, I want to know that they have $40,000 to cover the difference between where I think it might appraise and where they offered, plus their closing costs, plus any other cash that's needed to close. If they can't offer you that, again, have that conversation with your seller that they may be looking at keeping the earnest money and is it worth it?

And how strong a chance is it that they'll keep the earnest money? Or are they just coming off the market? Because again, that's the highest offer that they received. Don't let your sellers be blinded by high offers without talking them through with them. Educate, educate, educate. The third red flag that you may see in today's market is

is you put that home on the market, you hit active in the MLS, and pretty soon you've got an offer sitting in your inbox without the agent ever having shown the home. The agent didn't text you. They did not alert you that the offer was coming in.

They did not follow up with you to let you know that that offer has been sent over. You just got the offer and that agent's hoping to God that you see it. But the truth is that agent could be writing offers for buyers all over the place. And it's really not a legit offer. It may or may not be the one that your seller needs to accept.

especially if there is any form of a due diligence, inspection period, or other reason for that buyer to walk away because as good as our virtual tours are these days, and they're getting really good,

So again,

Again, it doesn't mean that a sight unseen offer isn't going to make the closing table. I've actually had several buyers hit the closing table and the first time they laid eyes inside the home was after closing. But these are just some red flags that you need to pay attention to as a listing agent.

So that when those offers come in and they look all shiny and pretty because the buyers really want to be picked, you can have good educated conversations with your seller on what all the contingencies mean. What happens if something isn't met? How do we really look at that overinflated offer? Is it really worth taking? Is it worth moving forward? What's the risk? So that they can make a good educated decision on which buyers offer to accept.

You guys, it is March and I mean, listings are heating up left and right. I don't care what part of the country you're in. It's home buying season. And we may have moved to a more year round home buying season due to our lack of inventory over the last 18 months. But that doesn't mean that this season is going to be any lackluster than it was last year. Buyers and sellers still like to move in the spring because they like to get their ducks in a row before school lets out. So it is really heating up in the Real Boss Women's Pride

private Facebook community all month, every single Wednesday when I coach, when I teach, and when we have masterminds, we're talking listings folks. So if you haven't joined the Facebook community, you need to go to Facebook right now and look up Real Boss Women. It's a group. It's a private group. It's called the community. It's free to join.

If you want to get recordings of all the coaching and training that we do in there, then you can head to robotswomen.com. Sign up for the subscription service. It's a monthly fee, but you can binge everything to your little heart's desire. Make it a great day and I'll see you soon.

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