THE DELEON INSIGHT
A SPECIFIC EXAMPLE: THE DANGER OF ACCEPTING A PRE-EMPTIVE OFFER By Michael Repka, Esq.
Generally, the best way for a seller to garner the highest price for a Silicon Valley home is to: 1. Prepare the home for market by fixing the low or no-cost items that might deter potential buyers, many of which a good listing agent will have fixed for free; 2. Make cosmetic improvements to make sure the house looks fresh, again some of these may be covered by the listing agent; 3. Market the home aggressively, taking special note of buyers who may be looking outside of the area; and 4. Set an offer date so that buyers can compete, and sellers can consider all offers concurrently. Unfortunately, there are some very strong conflicts of interest present in the real estate industry that encourage agents to recommend a different path. Namely, (1) the desire for the agents (or the brokerages) to get commission from both “sides” of the transaction, and (2) the desire of the agent to attract buyers and engage them as their agent, with the promise of better deals through “off-market”
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transactions due to reduced competition. Obviously, this benefits the buyer, but at the direct expense of the seller who listed with that agent. Many sellers may be in even more peril than they realize because they rely upon their listing agent for advice while not fully appreciating the agent’s conflicts of interest. In the last edition of The DeLeon Insight, I wrote an article entitled, "Off-Market Sales Almost Always Cost Sellers Money, but Some May Think that Privacy is Worth the Price". I was pleasantly surprised by how much attention this article attracted and how well it was received. Shortly after that article was published, I spoke with two people who now realize that they may have left money on the table (in both instances, the buyer and seller were represented by the same brokerage). What surprised me was how many buyer’s agents shared their stories about the times that they had a client who would have paid substantially more than the price paid by the buyer of an off-market property.
