Episode 4: Offer Accepted

In this episode, Anthony & Mara lay out the offer process from the buyer agent perspective, spill a little tea on some not-so-honest agent behavior, and explain the role that contingencies play in getting to the closing table. 

Transcript

SPEAKER_02 0:16

Welcome back to the Mara Holmes podcast. This is episode four with Anthony and Mara.

SPEAKER_00 0:22

Hi.

SPEAKER_02 0:23

And uh before we kick right into it, Mara, why don't you give a little bit of a life update for us? What's been going on?

SPEAKER_01 0:30

Oh gosh. There's no big announcement to make really. No, there's not. No. I got it. Um no. Uh we're finally settled in our new place. Um we kicked off summer with a little mini weekend trip to Wildwood where Anthony's family typically has vacation. Um we have clients texting us literally right now. I guess neither of us put our phones on silence. Um yeah, I think that's like the summary is like Sonny jumped off a step. Oh, Sonny did jump off a step. Yeah. Sonny is our one-year-old, and he has no fear. No he's not well, he's I don't know, he's pretty whiny, but he has no fear. And so we had a little trip in the moors, and he had a nice scrape on the forehead, which is feeling just even so, just to go back into what I was about to say, which is I thought that leaving teaching was going to like help me unblur the lines between work and personal life. And uh it turns out that real estate is even more enmeshed. Yeah. Because like after I took Sunny to Nemours, I had to like get back in time to like get him dressed and drop him off at my mom's so that he could or so that we could go show houses or like, you know, we're sitting here doing the podcast, which is for our work, while one kid is napping and the other one's at Mimi and Pop's, and we're getting texts from our clients um because we had an offer accepted last night.

SPEAKER_03 2:16

Yeah.

SPEAKER_01 2:17

Which is a nice segue because today we are gonna talk about you know, if you whether you're a first-time buyer or you're just looking to move, what it takes in today's market to get to that nice little email we send, which is congrats, offer accepted.

SPEAKER_02 2:36

Right, right. So, I mean, on that, um, I think one of the first questions that pops into my mind is what is that general timeline like? Is it like how many homes do people see before they're like this is the one I want, I want to live in? This is the one that I could see my family moving to, or I want to put an offer at least.

SPEAKER_01 3:00

I don't know. I feel like I've seen it all different ways. Like my first deal I ever did, right? I think I showed them one other house.

SPEAKER_02 3:10

Yeah, it was like maybe it might have been three total.

SPEAKER_01 3:12

Yeah. And on the third, it was like, yup, gotta have it, and then the rest of the process went like so quick. Now that's a testament to like the how the market was then, right? Yeah, it still is kind of like that, but um but also knowing what you want. Yeah, but then like for example, this deal that we have under contract from yesterday, I think your prediction, okay. Well, here's the deal. You gotta know the person, you gotta know the client.

SPEAKER_02 3:44

Yeah, of course. It's all, it's all it's all independently based. And it and I think the answer to this question, as I think about it, is that there is no real general timeline. It's like sometimes people come in and they're like, I know exactly what I want. Show me this house, this house, this house. It's gonna be one of those.

SPEAKER_00 3:59

Right.

SPEAKER_02 3:59

Or my timeline dictates that I gotta move in the next few weeks.

SPEAKER_00 4:02

Yeah.

SPEAKER_02 4:02

So I have to get an accepted offer now. Where some people are taking their time and they want to see a lot of different things to learn about themselves and what it is that they actually do need. Because as you go through that process, as you and I know, it's like you uncover a lot about what you think you want versus what you actually want.

SPEAKER_01 4:21

Well, and you educate yourself on like uh we say it all the time like inspections or no inspections, every house has skeletons, every house is gonna have some sort of issue, nothing is perfect. So it really is about educating yourself as you look at houses like, okay, this is a problem I'm willing to tackle versus not. However, I will say that through all scenarios, yes, it's up to the individual, but through all scenarios, the telltale sign of people that are going to spend less time looking versus more is when they have narrowed down the geographical area so that they're only looking where they actually really want to live. Yeah, that's that's and then it goes more quickly. If there's more codes involved where you're looking and the price range is bigger, it takes longer. But you don't know.

SPEAKER_02 5:14

Yeah, it's just a larger pool of houses, so naturally it's gonna be more. So it sounds like we've basically we've had anywhere from like three to like 40 houses that people have seen before they've accepted. Or decided to even offer, actually.

SPEAKER_01 5:32

I mean, I well, rentals are different, right? Rentals are different, but rentals we have like a one and done all the time. Yeah, one and done. Because rentals, it's like you're making a one to two year commitment, so it's not that big of a deal. Right. Um, all right, so next question is how low is too low of an offer in today's market? And I know you like this question because you are a lowballer.

SPEAKER_02 5:57

No, I mean I wouldn't say a low baller. Yes, you are.

SPEAKER_01 6:00

You encourage the lowball. Ah, okay. You believe in the lowball. I don't know.

SPEAKER_02 6:05

I believe it in situations that I mean, you gotta read it, right? There's a lot of conversations that we have with agents on the other side of these deals that like you can tell from the beginning. They're like, my client is very motivated to sell, my client will hear anything and everything and and will negotiate on it. So the point is just that it comes with a negative connotation, but it's not always negative. They might have put it up there extra high, thinking that they might get more out of it than it's actually worth. So if you come in with a low ball, you can at least settle somewhere that's actually reasonable. If if if the price is too high and people are thinking, oh, I gotta go meet what they're asking for, it's like, well, maybe not.

SPEAKER_01 6:47

Well, I'll say the offer yesterday, like they almost took our first offer, which wasn't a low ball, but it was under asking. No, honestly, and they almost took it. If we had accepted some of the other contingencies, which we'll talk about what they are in a minute, right, right, right. But like they they almost did take it, and I was like, wow, this is nuts. This is not characteristic of how the market has been for the past couple years. Like, they're definitely a change.

SPEAKER_02 7:16

No, there's definitely more room for negotiation, and those people who like to come in and offer low, there's space for that.

SPEAKER_01 7:24

But let me say my piece on a low.

SPEAKER_02 7:26

Okay, but hang on. There's a cap to that. I am the guy who like is okay coming in extra low sometimes, but like I've had people be like, I want to offer 40% under what they're asking. And it's like, you cannot do that. It's an insult. And and there is a certain line, it's different for every deal, okay, fine. But there is a certain line that if you come in below it, you kill any chance for a negotiation.

SPEAKER_01 7:48

Yeah, that was kind of what I was gonna say, which is like you have to read the listing and read the people. For example, like if you walk into the showing and the house has clearly been staged, like we see houses all the time that apparently have children living in them, but I have no idea how these parents, especially as a parent myself, I have no idea how these parents are preparing the house for every showing, like and taking their kids and their dog out.

SPEAKER_02 8:16

The vacuum lines, no smells, no smoke.

SPEAKER_01 8:19

Yeah, exactly. And I'm like, okay, these we can't lowball these people. These people are working their tails off to make sure that this house sells. However, if I walk into a house, which we saw one recently-ish, that I was like, did they prep this at all to be sold? Then that's such a weird psychological, like sad thing to say. But as an agent, that's what this podcast is about. Like telling the truth. Is like if you can see that someone's not putting forth a lot of effort and the house is sitting, you're probably more likely to be able to do that. Your offer can reflect that. Yeah, exactly.

SPEAKER_03 8:52

Yeah, of course.

SPEAKER_01 8:53

All right, so jinx. You owe me an espresso.

SPEAKER_02 8:58

Okay. Martin for this. I wish. Okay. Maybe the espresso I can do.

SPEAKER_01 9:02

All right, go.

SPEAKER_02 9:03

So you mentioned in there contingencies that we would get to them. So before we even like cover some of these, what is a contingency?

SPEAKER_01 9:10

Sure. A contingency is kind of like a clause. Now the nerdy Spanish grammar teacher in me is gonna come out. Like a clause in Spanish or English when you're teaching it is like if this, then this. So I know you're a math guy. That's also true in math equations. It has to be true in a lot of things. Right.

SPEAKER_02 9:29

It's also true in dealing with toddlers.

SPEAKER_01 9:31

Oof.

SPEAKER_02 9:32

If you stop your feet. If you get to the second. If you stomp your feet, then you will go in the Yes.

SPEAKER_01 9:36

Wow, that seems like I don't know, it seems like a personal example.

SPEAKER_02 9:39

Yes, it is.

SPEAKER_01 9:40

And really, so we could go all day on explaining every different contingency, but let me just summarize that. If an appraisal is not what the sale price was, the bank says it's not worth that, then XYZ is going to happen in the transaction. If the biggest contingency, the most concerning contingency is like if we don't sell our house, we can't buy this house. Or if we don't get a port approved for a mortgage, we can't buy this house. Or if the inspection comes back with something crazy like a new roof or a new septic or whatever, we may not. So there's also a clause.

SPEAKER_02 10:18

So essentially what you're saying is that a contingency is something that is placed into an offer that could hold up a deal.

SPEAKER_01 10:26

For sure.

SPEAKER_02 10:27

And most offers come with some sort of somewhere along the line contingency.

SPEAKER_01 10:31

I don't know. I mean, I would say now we're back in it. Having had several deals this past month that have contingencies, yes.

SPEAKER_02 10:39

But even as simple as I need a mortgage is a contingency.

SPEAKER_01 10:46

Yeah, but even so, I feel like in the past three years, it's been like people borrowing cash from their parents or emptying their 401k or a bunch of older people that sold their house for cash that had been renting. Like contingencies have been less and less the past like three to five years. Now they're back.

SPEAKER_02 11:05

Yeah, well, I mean, it's been anybody who's tried to buy a house in the last so many years knows that it's been outrageous. But we're coming back more into like a settlement and yeah, normal.

SPEAKER_01 11:20

That's when people are like, oh well, the interest rate, blah blah blah blah. I'm like, the interest rates are normal, right?

SPEAKER_02 11:25

So the only real offers that don't come with any contingencies are like somebody who comes in with all cash, doesn't want any inspections, doesn't care about it.

SPEAKER_01 11:33

Yeah, like your most recent your deal that settles next week.

SPEAKER_02 11:35

Yeah, settles next week.

SPEAKER_01 11:36

Yeah, right.

SPEAKER_02 11:36

Yeah, it is like that. And that is more of a rare case at this point than it than we had been used to.

SPEAKER_01 11:44

Yeah, I don't know. I'd say like it was like 7525 and now it's more like 6040.

SPEAKER_02 11:49

Okay, so what you're saying is that sellers are now accepting more contingencies than they have.

SPEAKER_01 11:54

Well they have to, inventory is becoming more and more because people are feeling more comfortable moving, or they're having to move. And so if the inventory is more, then buyers have more options, which means that houses are sitting a little bit longer and sellers have to make some concessions.

SPEAKER_02 12:14

And the numbers of buyers aren't abundantly lower. You know, we still have a a similar pool of buyers. It's a good flow.

SPEAKER_01 12:22

It's a good flow.

SPEAKER_02 12:23

Yeah, okay. Yeah. Um how often, because this is a question that I actually recently had. How often do people get their first offer accepted? Like I I put my first offer forward and I feel like pretty good about it. It's not quite a low ball, blah blah blah blah blah. Like, how often do you get an agent that comes back and says, like, they took it?

SPEAKER_01 12:45

Well, I think on the surface, the answer is never.

SPEAKER_03 12:49

Okay.

SPEAKER_01 12:49

Right? Like nine times out of ten. Unless it's been sitting like over 90 days, and then but I'll still say this. This is like the value of realtors that's behind the scenes, like behind the curtain that nobody sees. Like, even if they accept the first offer, that wasn't the first time that they heard about the offer, or it wasn't the absolute first pitch. Like, there might have been like a soft over-the-phone offer on behalf of the buyer's agent where they called and they said, Hey, we were thinking of or like a temp check. Yeah, we're thinking of offering like $550. What do you think about that? And they were like, I don't really think they're gonna take anything less than $560, and then you run it up for $560, and oh, they take it on the first time, or maybe like one negotiation in between.

SPEAKER_02 13:35

But so paper offer maybe, but generally that conversation is ongoing before you even put that in.

SPEAKER_01 13:40

Yeah, and I think time on market increasing decreases the amount of back and forth. Like that's what we saw yesterday, for example.

SPEAKER_02 13:49

Well, I mean, okay, somewhere in the middle being like a couple days on the market and multiple offer situation, maybe that first offer is accepted because it's highest and best. It's your first offer. Oh, well, that's really strong.

SPEAKER_01 14:04

Yeah, that's the deal you're closing next week.

SPEAKER_02 14:06

Yeah, yeah, exactly. Or it's extensively long on the market, and so now they're kind of like that's true, take what we can get. But somewhere in that middle range where a lot of houses sit, like average being a few weeks to like a month. Probably not.

SPEAKER_00 14:21

Yeah.

SPEAKER_02 14:21

Yeah. It's more of a negotiation. Right. Okay. We're talking conversations with other agents.

SPEAKER_00 14:26

Yeah.

SPEAKER_02 14:27

Right. So talk to me about like because in my mind, I'm thinking of like one specific that we've had that like put a really poor taste in our mouth and like no name dropping. But we have a list. Yeah, we have a list. Um you go on the list. Uh, but like types of like typical like lines or like tactics that we encounter in negotiations with those other agents.

SPEAKER_03 14:51

Whether like good or bad.

SPEAKER_02 14:53

I know, ew. There's so many icks. Yeah. But like, okay, for me, one of the ones that like comes out, and like I can't believe how often I encounter this talking to other agents. It's like the lack of transparency. Like, oh, I might have another offer, but like I'm not gonna tell you anything about it. So you have to just like guess what you're offering for.

SPEAKER_01 15:12

No, there's one worse than that, which is the agent that says, I'm straightforward, I'm transparent. Okay, I'm not gonna beat around the bush. And they're does all of those things and then literally does all of those things under the like it's almost like someone who says no offense or like respectfully, but they're about to say something like mad, disrespectful, right? So it's like that with agents, and it's sad, honestly, for people like you and me that are like just starting out, have like less than 10 years experience because oh my gosh, I'm a teacher, so my initial reaction is like, well, I don't trust kids, but like they're supposed to lie, right? But like my initial reaction to like adults who tell me, like, listen, I'm a straightforward person.

SPEAKER_02 16:00

Yeah, it's just to like take them for what they say.

SPEAKER_01 16:03

But I will tell you, the only agent that I've dealt with in all of my time in real estate that has told me that they were transparent and straightforward and has actually been like that is John Murrow from Compass and Wayne. Shout out to John. We're doing a deal with him right now. He's the Colleggeville guy, he's the best.

SPEAKER_02 16:21

And I I actually also have one.

SPEAKER_01 16:22

Oh, do you? Yeah, you do. Oh, right.

SPEAKER_02 16:24

Chris McCaffrey from this media has been like completely transparent and it's just an open conversation. Yeah. And I value that so highly because why would we not well we have to applaud that like when given the chance because you run into so many agents that are just like deceptive and they're like they're just but they got the thing is is that they got like disguise it as like I'm trying to protect the interests of my buyer or seller, and you're like, well, okay, I get it.

SPEAKER_01 16:51

Maybe they are getting the deal done, maybe they are getting a better price, but I mean they have to put listen, I believe that in any business you can be honest and still make good money and still do right by your clients and get them the best price.

SPEAKER_02 17:04

Here's just for me, like what I can't I can't process or get through my brain or like understand, wrap my head around whatever you want to say. If you're being that deceptive with like the other people.

SPEAKER_01 17:15

Oh, yeah. What are how are you being with your own client?

SPEAKER_02 17:17

Yeah, like are you really giving your own client the authenticity that they deserve?

SPEAKER_01 17:21

But that okay, we're popping off. We need to like rail it back to the case. Okay, but still, I mean this is in the offer process. Basically, what Anthony is trying to like express here, I think, is like a lot of the leading up to or like putting in an offer, like getting that call that's like give us your highest and best. A lot of that is actually like social and psychological, like people reading on our part. And so we're definitely two people that are good at that off the bat from having dealt with so many children and their parents, however, we're still like we're still shocked when we run into someone that's like, you know, I'm thinking of one particular person. All right, let's move on. Um, can you give some examples of deals like you've done lately or even like yesterday is a good example? What are some of the like yes versus no checkbox contingencies that are on the table when you're preparing an offer for a client? Like, what do you have to call them and ask them? You ask them the sale price, you ask them the date they want to settle, but then you get to the part of the agreement of sale, which is the major document and an offer, and there's some contingencies that you have to check yes or no.

SPEAKER_02 18:36

Okay, so you want to talk like specific contingencies that are in the contract.

SPEAKER_01 18:39

Just a couple, yeah. For the listeners that don't have.

SPEAKER_02 18:42

I guess here's my thing. It's like my mind started reeling as soon as you started talking about something totally different. And we should probably talk about this totally differently, right? And another day. But I'm thinking about like things that you can throw into your negotiation, like concessions that you can ask for. And so I have to bring it up. Yeah, I know. I have to re-retrain what it is. Just give a basic list of like some of the contingencies. The first one that most people, most buyers are facing is a mortgage contingency.

SPEAKER_01 19:12

Right. You got to get a mortgage.

SPEAKER_02 19:13

Can you be like, can you be approved for a mortgage? Now, this is a conversation that happens well in advance. You're talking to a lender, and so you already kind of have an idea on that, but it also is dependent upon whether in the end they'll give it to you for a variety of reasons. One of them being if it will appraise.

SPEAKER_01 19:31

So Yeah, like the mortgage company has to send somebody out to see if the house is worth what you're gonna pay for it.

SPEAKER_02 19:37

So if you offer $300 and the house is only worth $250, right.

SPEAKER_01 19:41

You have to either cover it in cash or you have to say bye-bye. And that sometimes, I mean, in the 2022 to 2023 market, would have been like, I'm gonna pull out of my 401k to cover the difference, but now it's kind of like no, I'm gonna walk away. All right, what else?

SPEAKER_02 19:59

Um, yeah, of course. Okay, then comes in like a bunch of inspections. This is something like we've seen people waive a ton of inspections for a long time, but there's an inspection contingency. There's like, you know, you get like a general home inspection, but you also have inspections for like, you know, wood infestation, meaning like pests, you have like um, you know, the lot boundaries and the lines, you have like radon testing. And at any turn, if you elect to have one of these inspections, that's a contingency.

SPEAKER_01 20:29

Yeah, and it's your buyer power.

SPEAKER_02 20:31

It's your buyer's power because it doesn't matter what comes back in the inspection, no, no inspection ever comes back 100% perfect.

SPEAKER_00 20:38

Right.

SPEAKER_02 20:38

There's always a little something.

SPEAKER_00 20:39

Yeah.

SPEAKER_02 20:39

And even like, oh, the outlet cover was a little bit shifted to the right, yeah. Your buyer could use that and say, you know what, I'm no longer interested in the deal and walk away scot-free.

SPEAKER_00 20:48

Right.

SPEAKER_02 20:49

You know, there are a lot of ways that a buyer could walk away from a deal and they have to forfeit their earnest money. Right. Like the deposit they put up front just as like good faith.

SPEAKER_00 20:58

Yeah.

SPEAKER_02 20:58

But if you have a contingency for inspections, that's that's an out in a lot of ways. And we've seen that happen like in favor of us, but also against us. And you know, it is what it is.

SPEAKER_01 21:08

And another contingency on that list that we've been dealing with a good amount lately is the sale of another home.

SPEAKER_03 21:16

Right.

SPEAKER_01 21:17

Um, on both ends, we've dealt with it, seller and buyers. And we just had a deal get delayed by a month because the buyers of our listing um that we're selling had a home sale contingency. Had a home sale contingency, which we accepted, but and our clients were fine with.

SPEAKER_02 21:35

However, now they're kind of seeing like how that can affect yeah, because they it didn't take long, they they priced their home nicely and got offers right off the bat, and it went under contract, and so it wasn't really a big deal. But now the buyer of our buyer's home backed out and they had to go under contract again with a new buyer, and it was like a whole thing.

SPEAKER_01 21:56

So that's that's another contingency. Anyway, I feel like I feel like any of that though, if you really love a house, is negotiable. And if you really if you really want to make the deal work and you have a great realtor, it'll get figured out no matter what the contingency is. There's paperwork for everything.

SPEAKER_03 22:15

Yes, there is.

SPEAKER_01 22:16

But then so you go through that, you're negotiating, you finally send in all the paperwork, it's all signed, and the other party signs it, and they send it back, and you get that, like I said, nice little email. Yeah, fully executed. That nice little email that says offer accepted.

SPEAKER_02 22:34

Yep.

SPEAKER_01 22:34

What's the timeline like? When can I move in my house?

SPEAKER_02 22:38

I mean, typically it's like anywhere from like 30 to 90 days for so that you can move in, but there is a lot that happens in that 30 to 90 day period.

SPEAKER_01 22:46

Yeah, that would be an entire I mean, that could be our next episode.

SPEAKER_02 22:49

That'd probably be our next episode.

SPEAKER_01 22:51

All right, cool. All right, so um, per usual, guys, we're thankful for anybody that is listening and learning um along with us. And if any of today's information strikes up some questions on your behalf, feel free to DM us on Instagram or to message us on Facebook or our phone numbers are posted like everywhere you can find us, Google Morano Homes.

SPEAKER_02 23:18

And if you made it through the 20-some minutes of us sitting here just talking to each other, we just want to tell you how grateful we are. And um we'll talk to you soon. Talk to you soon.