by Graham Wood – When a listing agent asks you for feedback after you’ve shown a property to a buyer client, choose your words carefully. Listing agents understandably want to share buyers’ impressions with sellers, particularly when a home is slow to sell. But revealing your client’s thoughts about the home’s features or price, or their intention to submit an offer, could compromise the buyer’s negotiating position.
If you have a buyer client mulling over whether to make an offer, it may be wise to keep your feedback to the listing agent short and nonspecific. “If I were to state that my client thought the property and price was great, then the seller would know that and most likely counter us in a negotiation,” says Gilbert “Gibby” Kirby, SRES, a broker at Realty Executives Success in Shorewood, Ill. “I have done that exact thing as a listing agent.” Kirby recently sold a home for his seller’s asking price after receiving feedback that the buyer thought the property was perfect. Knowing the buyer’s stance helped his seller write a counteroffer excluding closing credit and denying half the repairs the buyer requested. The buyer accepted the counteroffer.
Of course, listing agents don’t necessarily seek the information as a bargaining chip. Honest feedback can help sellers understand when they need to reduce their asking price or spring for updates. If your buyer client has no intention of making an offer, you may have more freedom to be frank in sharing their opinions, but err on the side of discretion when necessary and protect your buyer’s information.
Create an ‘Expectations Contract’
When your client is considering purchasing the property, “stay away from offering feedback about repair issues, negotiation price, or any item that would fall into a contract,” says Lee Davenport, SFR, an Atlanta-based real estate coach. Particularly in multiple-offer situations, you could lose an opportunity to have a serious discussion with the sellers about your client’s offer if you preemptively disclose their contractual demands, Davenport notes. “Talking about superficial items, such as paint color and layout, is OK.”
You also should keep in mind your duty to protect and promote your client’s best interests under Article 1 of the REALTORS® Code of Ethics, says Bruce Aydt, ABR, CRB, an attorney and broker with Berkshire Hathaway HomeServices Alliance Real Estate in St. Louis. If your feedback results in a loss of negotiating power for your clients, or otherwise works against their favor, you could be triggering an ethics violation. To ensure you don’t betray clients’ trust, it’s wise to obtain their consent up front before providing any showing feedback to listing agents, Davenport says. She suggests that buyer’s agents draw up an “expectations contract,” including a signed agreement about what kind of feedback—if any—your client will allow you to give.
The Challenge for Listing Agents
On the other side of the coin, when buyer’s agents refuse to give feedback, listing agents miss out on valuable insights that can help get a property sold. That can cause friction in professional relationships. “It’s about common courtesy,” says Suzette Peoples, ABR, GRI, broker-owner of Peoples Properties in Sugar Land, Texas. “Simply saying, ‘My client didn’t like the floor plan’ or ‘We’re still looking, but let us know if the price changes’—that’s not going to hurt your negotiation position.”
Julie Youngblood, a sales associate and real estate coach with Keller Williams Realty Southwest in Las Vegas, advises listing agents not to rely on electronic forms to collect feedback because they’re easy to ignore. Instead, call buyer’s agents and have a thoughtful one-on-one conversation.
If that doesn’t garner the unvarnished feedback you need, try another approach. Peoples takes listing clients on tours of comparable listings. “I say, ‘The house down the street is your competition. Let’s go see what you’re up against.’ Let the sellers put on their buyer’s hat and apply that perspective to their own home.”
Reprinted from REALTOR® Magazine, March, 2018 with permission of the National Association of REALTORS®. Copyright 2018. All rights reserved. Graham Wood is senior editor for REALTOR® Magazine. He can be reached at firstname.lastname@example.org.