The Angry Milwaukee Home Buyer
Buying a home should be a hopeful and satisfying experience. However, in the 2018 Spring Market, low housing inventory in the $500,000 and below price range in the Milwaukee Metro Area is making buyers see red.
It is typical for first-time home buyers to lose the first three or four houses they write an offer for right now. The typical Milwaukee home listed around $250,000 in hot markets like Whitefish Bay, Wauwatosa, and Shorewood will receive several offers and be off the market within hours. If the home has new kitchens and baths, it will sell with few to no contingencies. Trying to win one of these houses? Here is what you need to know!
Some inside baseball…
There are specific procedures REALTORS@ must follow when presenting offers and showing homes, and some of those guidelines are being loosely followed in this hot, hot market.
How many times do you sell a home in a lifetime? In the Milwaukee area, maybe two to three times. The years and technology advancement that span that time period mean your experience is quite different each time you sell or buy a home. In 2018, we have digital signatures and digital presentation of offers. Convenient? Yes. However, both of these present new compliance problems from my perspective as a broker.
The Wisconsin Offer to Purchase is nine pages. It is a legal document. It is often accompanied by a 4-Page Addendum. These documents are complex and complicated and exist for a reason: to protect both the Buyer and Seller. When a Seller is presented with several offers, those offers should be presented IN PERSON by the agent. The agent should compare and contrast each offer from every buyer at a conference table ensuring the Seller fully understands each offer and can consider the pros and cons with your broker. Most competing offers are so similar that it requires an in-person meeting to discuss the differences and weigh the options; the devil is in the details!
This is how we do it at Powers Realty Group, but in many cases, this is NOT how it is being done throughout the Milwaukee Metro area right now.
A few examples of crazy 2018 presentation of offers
1. This one blows my mind. In Wauwatosa, on two separate occasions, offers from our Buyers were texted by the Listing Agents to the Sellers of the homes and considered “presented” to the Seller. Our Buyer’s agents received texts that said, “they chose another offer.” This could mean our Buyers’ offers were never seen or reviewed by the Seller. We have no proof our offers were presented. And technically, the Seller does not have to sign the offer saying they reviewed They only need to initial a rejection or a counter offer and neither may apply if the Seller wants to hold them and then return to the offer at some point to put the offer into secondary position or counter it, if the primary offer falls through on a contingency. And these latter options no longer become options for the Sellers as Buyers move on given the terse communication. The Listing Agents were not acting in the best interests of their Sellers.
2. Due to the incredibly low inventory of homes on the market, Buyers are writing offers on houses sight-unseen while the homes are in Delayed Status. As a result, the day the home goes active (“Live in MLS”), it has an Accepted Offer. Buyers are upset with the Sellers’ Listing Agent for not being able to see the house and losing it, and they remember this experience when it comes time to sell the home they eventually buy. To them, “it feels unfair” as the Listing Agent appears to not be considering all offers, which is also not in the best interest of the Seller.
3. This one is both funny and sad. We just completed a transaction in Delafield for home that sold for more than $1 million where the Listing Agent (a top producer in the market) NEVER answered our calls. To this day I still have never talked to the Listing Agent on the phone. This was the worst communication I have ever experienced in my 15-year real estate sales career. Every communication was by text only, and I barely got that. We constantly called for follow-ups and didn’t receive any. No assistant, no agent, no communication. Thankfully, due to a lot of persistence, we received an accepted offer and closed, but frankly, I am not sure how. WOW!
4. This one is probably the worst. You show your Buyer a home and the Listing Agent receives an offer from another Buyer and doesn’t notify all the other prospective Buyers that an offer has been received. In this hot market, the Seller deserves every opportunity to receive more than one offer. It is the duty of the Listing Agent to uphold the best interests of the Seller by shopping for competing primary and secondary offers for the Seller. This should be part of the service. The most ethical and fair way to handle a hot property is to set parameters around presenting offers so both the Seller and the Buyer feel the process has been conducted fairly. This will probably lead to the best result for all parties.
What sellers can do...
Sellers should add an addendum to the listing contract to both ensure they get the best outcome and that their property is being presented fairly to prospective Buyers. The addendum should include:
- Showings begin Thursday at 3pm
- All offers should be presented by 4pm on the Sunday following the initial showing period
- The Listing Agent will notify agents representing interested Buyers by email once the Seller begins receiving offers
- Buyers must have pre-approval or proof-of-funds for all cash offers
A documented process ensures offers are being presented fairly for the Seller’s consideration and every Buyer has an opportunity to win the home. Anything outside of this creates a feeling of suspicion and unfairness. Buyers will remember this experience when they go to sell their home. They will remember the process and how it made them feel. For Listing Agents, setting expectations and using the Private Remarks section of the MLS to explain the rules of engagement on a specific property to your fellow REALTORS@ and the buying public is going to be very important for future business prospects. This super-hot market will not last forever, and I am predicting change soon.
Powers Realty Group is a distinctive boutique real estate broker focused on the needs of customers delivering exceptional results. We are the trusted local experts. Call us today about buying or selling your home.Call Suzanne Powers