Career Coach: marketing and soliciting offers
Below is an excerpt from the new edition of the firsttuesday Career Manual, a best practices guide to help new real estate licensees establish their personal brands and increase their income. In this excerpt, we discuss the solicitation of offers and the marketing package.
coordination Events that promote fairness
The content of a real estate marketing package is evidence that a seller’s broker needs to demonstrate that they have fully informed potential buyers what you are selling.
If you are employed as a sales representative, you owe a special fiduciary duty to use the seller Diligence in the market their listed property, locate a buyer to enter into a sales agreement with the seller, and sign an escrow agreement on a sale.
The only goal: ask and find Prospective buyers too acquire the property to the general terms and conditions listed. The goal is the symmetry of real estate information between seller and buyer. What the seller knows about the property, the buyer also knows before signing a sales contract.
Understand that a prospective buyer’s negotiations start with their request for real estate information and end when the negotiations result in the buyer and seller signing a sales contract.
The moment a prospective buyer shows interest by inquiring about the property, you, as the seller’s agent, owe that buyer and his agent a general duty to voluntarily Providing critical information about the listed property, including any terms that could affect its value from an informed buyer’s perspective. This critical information that affects the value of a property is marked with Material properties.
The aim of this pre-notification from the seller and his agent of known conditions is to provide the buyer with sufficient information about the property to alert him to conditions that affect the value and use of the property in order to make them fit to set a price before submitting an offer.
To facilitate the delivery of real estate information to a prospective buyer, organize and include the information you collect at the listing stage when you conduct your real estate research Marketing package.
Completely different from a promotional flyer
A marketing package, as a collection of precise information and data on a listed property, goes far beyond the minimally appealing content of the “advertising flyer” with which you attract buyers.
So that the package contains critical information on the property, it includes all property disclosures required by the state and investigation reports acquired from third parties that explain the current condition of the property.
the More information They detailed that in a marketing package more confident the buyer gets over the property. Equally important is that the package shows that you have fully disclosed all facts that could affect the property’s market value.
In order to properly market a listed property, hand over the marketing package to buyers or their brokers when they first request further property details. Providing real estate information to buyers is part of the broker’s duty to your seller to conduct a Due diligence investigation and timely passing on knowledge about unfavorable real estate conditions to interested buyers.
Pre-disclosing property avoids pecuniary claims by the buyer for deceiving the seller / agent by not disclosing material facts about the property prior to your seller entering into a sales contract with the buyer.
Additionally, the condition of real estate appraisals prepared by a licensed or accredited third party – home inspectors – and included in a marketing package will reduce:
- the seller’s liability risk within the scope of his Duty to disclose their knowledge of property relationships that influence value; and
- Your liability risk as a representative of the seller according to your legal regulations Obligation to personally examine, observe competently and fully share your knowledge of property conditions that could limit value to a buyer with buyers.
contents a marketing package
If you are in a. enter Listing contract, Work with the seller to create and review a checklist of property reports needed by third parties to perfect your marketing package. [See RPI Form 102 §7]
The checklist, called at Cost estimate, is a quote that you prepare to review with the seller and advise you on the costs they will incur for third party investigation reports that you need in the marketing package. The checklist is attached to the listing agreement as a condition of employment. [See RPI Form 107]
If the seller agrees to cover the marketing costs listed on the cost sheet, you have the authority to request the various third-party services and obtain their reports. After receiving a report, the seller will confirm its content and you will include it in your marketing package.
The recommended Third Party Reports The marketing package includes:
- a Declaration on natural hazards (NHD), provided by an NHD expert [See RPI Form 314];
- a Structural Pest Control (SPC) Report and every release;
- a Home Inspection Report (HIR) to accompany mandatory property information;
- a Well water reportif applicable to the property;
- a Occupancy (handover) certificateif required locally at the time of sale; and
- a Septic tank reportif applicable.
In addition to the third-party reports, your marketing package must have several Ownership information the seller or you prepare, such as:
- a Disclosure Statement (TDS), disclosure of the physical condition of the property [See RPI Form 304];
- a Declaration on natural hazards (NHD)unless you get it from an NHD advisory service [See RPI Form 314];
- a Information on lead-based colors (LBP), required for all residential buildings before 1978 [See RPI Form 313];
- Federal declarations of residence Confirmation of the seller’s legal status for tax purposes upon the closure of an escrow account in relation to the buyer’s retention requirements [See RPI Form 301];
- a Report on earthquake hazards in residential areas, which reveals structural weaknesses for properties built before 1960 [See RPI Form 315];
- the Multiple Listing Service (MLS) Expression and Property profile;
- a Seller’s Neighborhood Safety Disclosure, regarding security conditions in and around the property [See RPI Form 321];
- Development of Common Interest (CID) documentsif applicable;
- a Local Regulations Compliance Reportthat reveals the property’s compliance with city and district ordinances [See RPI Form 307];
- a Annual facility operations data sheet (APOD), stating the operating costs of the property and any rental income [See RPI Form 352, 562 or 318]; and
- a Rental income table, regarding the rental price list for properties used by tenants. [See RPI Form 352-1]
Remember that you must include all property information – reports and third party disclosures that the seller creates or that you prepare – in the marketing package that you give to potential buyers The moment you request more information on your seller’s property. This information is not included in a promotional flyer.
Additionally, potential buyers interested in a property need detailed information about the basics of the property to differentiate it from other properties they are considering and to price them when they make an offer to buy your seller’s property create.
Conversely, if you wait for the marketing package and its contents to be delivered to the buyer after the seller and buyer have signed a sales contract, you have the information in one untimely manner. There are consequences for this delay such as:
- the fixed and agreed price is subject to a price adjustment before conclusion of the contract or a reimbursement after conclusion of the contract if the buyer later discovers deficiencies which have not been reported and which impair the value.
These facts were known to the seller or the agent at the time of the conclusion of a sales contract or should have been known.