Chapter 10: Real Estate Practice
Getting Clients: Sphere of Influence
A second way to get new clients is through people a licensee knows (this is often referred to as an agent's sphere of influence). When a potential buyer or seller personally knows the licensee, or a person who recommended the licensee, the experience factor may not play such an important role in choosing a licensee. A licensee's sphere of influence goes beyond family and friends. Acquaintances like lawyers, bankers, accountants, doctors, people from a licensee's religious organization, and other business or professional people all interact with many others on a daily basis. A referral from any of these individuals could help get a licensee's real estate career started. For Example: A good plan for the beginning of a licensee's career is to send announcements (much like when wedding invitations go out and an RSVP list is made). Even though the license in Ohio allows for transacting real estate only within the state of Ohio, referrals can be made all over the country, or the globe. Most brokers have a referral program or are part of a referral network. Remember that even the people in your sphere have a sphere of influence of their own. For Example: A spouse has family, friends, coworkers, social contacts, etc. Now that we are in the age of social media, a new licensee would do well to get on "Facebook," "Linked-In," "Skype," "ActiveRain," and other social websites and business networks. These tools can be instrumental in getting your image out there. That being said "out there" is where you are putting yourself, so, for example, if you want people to think you would prefer to work with Democrats because that seems to be the focus of your social posts, the potential Republican consumer may make this inference. So, we have to be politically neutral and politically correct, and learn proper social etiquette. For example, did you know that using all capital letters in your words is considered "yelling" in cyberspace.
Qualifying Clients: Financial Knowledge
Agents can impress clients with what their brokerage has to offer or by demonstrating a thorough understanding of real estate finance knowledge as they qualify them for a particular type of loan; however, agents will impress clients even more by demonstrating a thorough understanding of people by uncovering and addressing their needs and wants. Ask what they are looking for, listen attentively, and follow through with customized service based on that knowledge.
Net to Seller
Although we have not discussed the net to seller form directly, we have discussed a number of its components. A net to seller form is an estimate of the money a seller should receive from a real estate transaction based on a certain selling price after all costs and expenses have been paid. This is not a guarantee but rather an approximation of what the seller should receive. This estimation is an important factor for a seller in determining the listing price of his home and what price to accept in a final offer. Estimating this figure is a vital skill for a seller's agent; buyer's agents should still have an idea of what this figure is so they are informed when talking with the listing/seller's agent. Brokers should have a form for their licensees to use. If a licensee belongs to the MLS (Multiple Listing Service), a net to seller form can be printed from the Internet. Licensees should talk with their brokers about their specific form and the recommended procedure (however, the basic concept is always the same).
Closing the Sale
Closing sales is the logical conclusion to the hard work of getting and qualifying clients, showing properties, and answering objections. If the licensee has done these things well, closing sales will go smoothly. Knowing when to close the sale is something that comes with experience. Closing a sale is getting a client or customer to sign the contract and commit to a listing or a purchase. There really is no right or wrong time to close a sale, but the licensee must take the initiative and ask for the sale. A good time for the licensee to go for the close would be right after answering an important question or overcoming a key objection. Many experienced salespeople ask for the close early and often. The licensee should watch for verbal or physical clues: If the prospect likes what he sees or hears, there is an opportunity to turn that enthusiasm into a sale. Remember: A prospect will rarely ask the licensee for the offer or contract, but if the licensee asks a prospect to sign at the right time, the sale has a good chance of succeeding. It is important for the licensee to not be pushy; however, there is nothing wrong with a confident suggestion that if the potential buyers like what they see, they should make an offer before someone else does. The licensee is a professional who has seen other houses slip away from potential buyers who hesitated or people who waited to list a house and missed buyers who could not wait to purchase. The licensee should feel confident that he is providing a genuine service to clients and customers and realize that he is the one clients are going to blame if they miss an opportunity. When a licensee is in tune with a potential buyers' physical and verbal clues, he will know how and when to close a sale.
Closing Techniques
Different closing techniques are used on different people. Here are few to consider: - Put the buyers into the home by pointing out the benefits of moving in (e.g., shorter commute to work). - Ask the buyers questions about what they will do with the new home (e.g., whether they will paint the family room beige or blue). - Ask buyers a no-lose question (e.g., "Do you want to take possession in 30 or 60 days?"). - Have some extra information for buyers if they act now (e.g., locking in a low mortgage rate if they sign today rather than waiting and risking the rates going up). Of course, there are many other techniques. Licensees should find ones that work best for them in each situation. With more experience, licensees will know when to use these suggestions. Keep in mind, the long run of your business is the referral business which comes from good follow-up and quality service. Remember: The service you deliver today lays the ground work for the success you enjoy later in your career.
Key Terms
Errors and Omissions (E&O) Insurance Professional liability insurance that protects real estate licensees from liability due to mistakes or negligence that causes harm to a client. Farming an Area A term for a marketing technique, which is used to create an image of working on a specific area over a period of time for prospects. Multiple Listing Service (MLS) A listing service whereby local member brokers agree to share listings, and agree to share commissions on properties sold jointly. It is the primary benefit of membership in the NAR. Net to Seller An estimate of the money a seller should receive from a real estate transaction based on a certain selling price after all costs and expenses have been paid. Note: This is not a guarantee. Sphere of Influence People you know (and whom you can ask for referrals).
Errors and Omission Insurance
Errors and omissions (E&O) insurance is professional liability insurance that protects licensees from mistakes or negligence. A typical policy pays legal fees and judgments resulting from real estate activities. It does not cover: - Fraud. - Transactions involving the licensee buying or selling his own real estate. Depending on the policy, E&O insurance also may not cover civil rights violations (because punitive damages are usually exempt). Normally, a licensee will be covered under his broker's policy for an additional fee. However, brokers are not required to carry E&O insurance, so it is up to the licensee to check. In a constantly changing profession with large and complex transactions, E&O insurance is critical.
Getting Clients: Farming an Area
Farming an area is a phrase used to create an image of working on a specific area over a period of time for prospects. Like farming, agents plant "seeds" and wait for them to grow; although, they should not expect overnight results. It takes time and effort on the licensee's part. Prospect farming in an area is a patient endeavor needing constant attention. A licensee wants to keep his name in people's minds, so they think of him when they are ready to buy or sell a house. Farming encompasses a number of techniques. For Example: A licensee may call each resident living on a particular street or in a neighborhood (keeping in mind the Do not Call list). Another way a licensee may farm an area is by passing out brochures at certain locations or mailing flyers or market updates to an entire neighborhood. Licensees must find what works best in their area and should ask their broker for suggestions. It is difficult to work or farm a whole city (especially a large one), so licensees should pick an area in which they feel comfortable and keep working it for results.
Financing Options
Financing is discussed in greater detail in Chapter 13 (Module 7), where we will take an extensive look at lenders, financing, and mortgages. There are several important parts of those chapters that future licensees should read and review for the licensing exam and for everyday real estate practice: - Be familiar with the different loans that buyers can obtain and their requirements. - Understand alternative financing that can help buyers qualify for larger loans (e.g., buydowns, adjustable rate mortgages, FHA and VA loans). - Be familiar with the qualifying standards for Fannie Mae, Freddie Mac, FHA, and VA loans. Although there are not many questions on the licensing exam about the loan process, licensees will be of great service to clients and customers if they can help them through this process.
Showing Properties: The Buyer
If representing the buyer, the agent must become familiar with the property or properties that he plans to show. When the buyer has a question, the agent will appear professional and put the client at ease when he is able to answer it. If the agent does not have the answer, he should tell the buyer he will find out. An agent should never guess or make up an answer. If an agent did his homework, there should be only a few questions he cannot answer. Being familiar with a home is a big advantage. If the agent is not the listing agent, it may be beneficial to go through the home prior to showing it to a potential buyer. At the very least, the agent should talk with the listing agent to get as much information as possible before showing the home. Any problems with a home that are discussed with a prospective buyer ahead of time seem less ominous than those discovered during or after a showing (when the buyer may be more emotionally invested). Another helpful tip is to take the scenic route when bringing potential buyers to a home. Along the way, the agent can point out local parks, schools, shopping, etc. This may be especially effective if the potential buyers are not familiar with the area.
Showing Properties: The Seller
If representing the seller, the agent should be familiar with the property before showing it. The agent may or may not be present when his listed property is shown to potential buyers, depending on the wishes of the seller and the buyer's agent, but he should always make sure that the seller is not around when showing the house. It is important for the seller to understand that he hired the selling agent as a professional to deal with prospective buyers. The selling agent needs to get an honest assessment of the potential buyer's feelings about the house so he can respond to objections and move toward the sale. It is difficult for a buyer to be honest and open when a seller is around, as the buyer may not want to criticize the home in front of the seller.
Writing Contracts and Offers
In Chapter 7 (Module 5), we took an extensive look at contracts and contract law. There are two important concepts that we should review. They will not necessarily show up on the licensing examination, but they will be a part of a licensee's everyday real estate practice and an important part of their success. The two most important contracts licensees will deal with on a regular basis are: - Exclusive right to sell listing contract - Real estate purchase contract Licensees also need to be familiar with the Residential Work Sheet for the Multiple Listing Service. Licensees should get guidance from their brokers to avoid mistakes when completing these forms. Another thing to remember is that brokers do not all use the same purchase agreement or listing agreements. In fact, each brokerage has their own documents. In a purchase agreement, if you are the listing agent and an offer is coming in, you may not be as familiar as you need to be with the wording of the specific purchase agreement because it is coming from another broker.
Qualifying Clients
In a later chapter (Module 7), we will talk about qualifying buyers by looking at their income and debts and determining their housing expense ratio and total debt service ratio. Buyer qualifications are also important when a buyer wants to apply for a VA loan or other special program. The licensee should make sure his buyer meets the eligibility requirements. If a licensee is unsure about the requirements, he should talk to his broker, a lender, or other knowledgeable person. The licensee should verify the person he is talking to has the authority to make a decision—this includes buyers or sellers. For Example: One spouse may defer to the other when making important financial decisions. If parents or other individuals are gifting money for a down payment, they may have the final say in purchasing decisions. Also, an officer may have to approve corporate sales. A licensee should never assume the person he is dealing with has the ultimate power to make the decision. It is important to ask first; this ensures that an agent will not waste time making presentations only to find that someone else must be consulted before a decision can be made.
Changing Government Regulations
It is important to keep informed on changes in regulations at all levels of government: - Local governments change zoning ordinances. - State governments change license and continuing education requirements. - The federal government changes FHA and VA loan rules and environmental regulations. The latest changes in Ohio laws deal primarily with agency issues, the treatment of dual agency, license law, and mortgage lending. An example of a change at the federal level deals with lead-based paint disclosure. For houses built before 1978, the buyer must be given a lead paint booklet and a chance to perform a lead paint inspection. In addition to the lead paint notification language included in many standard board real estate contracts, many brokers and licensees also use Lead-Based Paint Disclosure forms as a way to prove compliance with the lead paint disclosure requirements of HUD and the Environmental Protection Agency (EPA). The penalty for failure to disclose lead hazards is a fine of up to $10,000 and up to one year in jail, plus treble damages.
Accepting the Offer
Now that the offer is signed, the licensee should convince the seller to agree to the price and terms written in the buyer's offer. If the licensee is not the listing agent, he cannot talk directly to the seller, but his message should be the same to the seller or the listing agent. Many of the same techniques used with buyers can be used with sellers: - Listen to what the seller wants in the transaction - Discover the seller's objectives - Determine how long the property has been for sale - Be prepared to say why this is a good offer for the seller to accept The buyers' earnest money deposit may help to convince the seller to accept the offer. Even though a contract offer is legal with just a single dollar bill, the more earnest money deposit the buyers provide, the better response they will get from the seller. Earnest money demonstrates that the buyers are serious. Finally, once both sides have agreed and signed the contract, remember it is up to the licensees to make sure that their clients understand the process and timeline—from signing the contract to the actual closing and transfer of possession of the house or other property. Brokers can be of assistance with this because they have worked with a large number of title companies, escrow agents, and lenders and can provide the necessary information.
Objections
Objections occur during a sale. This is true when a licensee is selling himself and his real estate brokerage firm's services to a prospective seller, and it is true when he is selling a house to a prospective buyer. Being prepared to respond to these objections skillfully demonstrates professionalism. With more experience, objections can be overcome, and anticipating objections makes clients and customers feel more comfortable. Licensees should welcome objections because they are an opportunity to sell. Theoretically, if a licensee can overcome the objections, he should make the sale. Objections do not mean that the licensee has done a bad job or that the house is not right for someone; perhaps the person just needs more information.
Getting Clients: Expanding Your Sphere of Influence
Once a licensee gets his first listing and successfully closes his first sale, each following sale will be easier if he continues to market himself and his brokerage. If the seller or buyer was especially happy with the professional and courteous service, she may recommend her agent to others; word of mouth is an effective way for agents to get more business. Licensees can also ask their current clients for the names of people they know who might be in the market to buy or sell real estate. Neighbors who see a licensee's sign in a yard are another source of prospects, as are any people who come through an open house. In addition, other ways of attracting potential clients include traditional phone calling and advertising. For Example: One of the most common sayings in real estate is that "Listers last." It refers to the chain reaction effect that working even a single listing can cause. A sign in a yard causes impulse-reaction calls from buyers, friends of buyers, relatives of buyers, potential sellers, and any number of people. And, we don't just put numbers on these signs anymore, we put our pictures, UR codes, website addresses, messages, and finance terms all in the space of an area that can be seen as potential clients drive by. The more signs that are placed out there, the more impulse-reactions will result. And, the new licensee should not forget to post that new sign on his or her social network site!
Making a Sale
Real estate salespeople, as a rule, are not paid a salary, hourly wage, or "given a draw;" so in order to get paid, a licensee has to do a lot of selling. In addition to selling real estate, licensees also need to sell themselves, their brokerage, and their services. In fact, getting listings requires almost as much sales ability as selling houses. Here, we will look at a few areas in which sales ability is important to an individual's success as a real estate salesperson.
Multiple Listing Service: Landlord and Tenant
The Landlord Owners of property of property for lease may find value in having property listed for rent in the MLS. Compensation for procuring a tenant is negotiated between owner and broker and is usually paid at the time of executing a valid lease. With the past decline of the real estate market, many owners of real estate who could not for one reason or another sell short, had to make the decision to rent rather than sell. The Tenant Tenants for residential or commercial, or industrial property often times seek representation by real estate professionals. The representation involves identifying properties to show, showing properties, preparing proposals (not leases) and giving advice. The duties given to buyers are what are given to tenants. With the large number of sellers that sold properties asking the mortgagee to take a loss when they sold are now ineligible to get financing to buy houses. These sellers have increased the tenant population by a significant percentage.
Multiple Listing Service
The Multiple Listing Service (MLS) is a listing service whereby local member brokers agree to share listings and commissions on properties sold jointly. This is a benefit of joining state and local affiliated boards of the National Association of REALTORS® (NAR). An licensee's membership is not mandatory, unless his sponsoring broker is a member. The MLS generally consists of a book published regularly and updated to include new listings. However, this is a rapidly changing area of real estate practice; many localities have added access to listings via an online computer service or are planning to do so in the future. As these systems become more sophisticated, access to more information means clients will expect more. Licensees should be open to these changes.
Getting Clients: Selling Yourself and Your Brokerage
The biggest challenge a licensee faces when he begins his real estate career is getting clients (buyers or sellers). Many people are reluctant to work with salespeople who do not have much experience, but licensees cannot get experience if people are reluctant to work with them. Here are some tips that can help new licensees gain clients. First, remember that when a licensee is selling himself, he is also selling the services offered by his brokerage. A licensee should take advantage of his broker's experience. He should mention that he works closely with his broker, who has vast experience closing real estate deals. Brokers can help licensees answer the "experience" questions they get from prospective clients. Licensees should never lie or exaggerate about their experience; clients will not trust a licensee (or recommend him) when they learn the truth—and they will learn it because it takes only a quick visit to the Division of Real Estate and Professional Licensing website to find current information about a licensee. Seeking a mentor, taking continuing education, and being active in the community will help a new licensee gain experience in dealing with people as well as gaining real estate savvy and understanding.
Signing the Offer
The licensee should help make people feel at ease when making an offer or signing a contract to buy a house by sitting down with them and going through each part of the offer they are about to sign. In doing so, the licensee: - Helps the buyer understand what she is signing. - Shows the buyer that the contract has clauses that are meant to protect the buyer. - Impresses the buyer with his knowledge of the contract and real estate in general. Another helpful tip some buyer's agents use when writing and signing an offer is to do so in the part of the house the clients were impressed with the most (e.g., if they liked the big family room, write and sign the offer there). It is also important to avoid any interruptions that may derail the clients' train of thought. The agent should let his client focus on signing the offer or contract. Finally, encourage them to have their attorney look over the documents—this often makes people feel more secure. Remember: Never forget to recommend experts when the situation is warranting that an expert be recommended. When you select NEXT, Al will briefly discuss the management of electronic/digital offers and contracts.
Showing Properties: The Property
The property should always be shown in its best light and focus should be placed on the property's desirable features (e.g., fireplace; large, updated kitchen; walk-in closets). When walking potential buyers through a home, the licensee should try to point out a positive feature in each room. By doing so, the house becomes more memorable and the potential buyers may notice features they otherwise would have missed. The licensee can also help potential buyers visualize themselves in the house by pointing out how their furniture, workbench, etc., would look in a particular location. Before showing the property, the selling agent should encourage the seller to remove as much clutter as possible from the rooms. It is okay for the house to look lived in, but rooms (including garages and basements) should not look cramped or messy. Other than general cleanliness, there are many things a seller may want to consider doing to help stage the home for a quicker and/or more profitable sale (e.g., paint, carpet, repairs, landscaping, de-personalization of furnishings/decorations).
Real Estate Procedures
There are a number of things that we have learned that will be an important part of a licensee's real estate career, and the more a licensee practices these suggestions, the more successful he can become. Writing contracts (filling out listing agreements, purchase contracts, or purchase offers), looking at financing alternatives, and computing net to seller forms are necessary skills to master. For Example: It is a good idea to be active in your local real estate board activities. It lets you get to know the affiliate service providers in your industry so that you can competently give advice to your customers and clients when making referrals.
Other Aspects of Real Estate Practice
There are many other aspects of real estate practice. The laws and procedures often change in response to consumer demands and the changing needs of the profession, which is why continuing education is important. Some aspects we discuss here will depend on the specific practices and procedures established by an agent's broker; other aspects are universal. These include: - Multiple Listing Services (MLS) - Changing government regulations - Errors and omissions (E&O) insurance
Handling Objections
There are many ways an agent can answer objections, but here are a few general rules: - Restate an objection before trying to answer it. This ensures that the agent truly understands the objection, avoids misunderstandings on both sides, and gives the agent a little more time to think. - Never make a big deal out of an objection. The licensee's answers should be short and direct to the question at hand. If prospects need to hear more, they will ask; if the licensee dwells on something too much, the objection may seem bigger than it really is. - Respond to objections by asking questions. This helps the licensee understand the objection, the prospect's thinking, and the real reason for the objection. In addition, it can help a prospect answer his objection himself. - No property is perfect. Every pro and con about the property must be weighed to find the best fit for a prospect. Sit down with the prospect and write out this list, helping to focus on the positive things. - Use third parties to support answers to objections, if possible. If a prospect is concerned about the basement leaking, for example, an expert's opinion is stronger than a licensee's opinion and may also help to avoid legal trouble.
Types of Objections
There are three types of objections in sales: Invalid Objections Invalid objections are really excuses—a way of stalling— and often have nothing to do with the property. There is not much the licensee can do if prospects are too busy or decide they are not ready to buy now. Valid Objections that are Answerable Valid objections need to be addressed. If it is an answerable objection (e.g., the house needs a new roof), the licensee should be prepared. He should explain that the price has been discounted to reflect this fact. As another example, if the buyer does not think there is enough shopping nearby, list stores in the area and their distances from the property. If the licensee does not have or know the answer to an objection, he should be honest and research the issue and report back to the potential buyer with the answer. Valid Objections that are Not Answerable If it is an unanswerable objection (e.g., the house is in the wrong school district), there is not much the licensee can do except admit that this is a valid objection. The licensee should find out if this is the only objection; then try to find out if there is room to compromise on this point and how high of a priority it is to the buyer. In this case, it is important to not ignore these concerns; the licensee should just see if there is any chance to negotiate. The licensee needs to understand the objection and understand the prospect's reason for this objection.
Net to Seller: Purpose
There are two main reasons to compute a net to seller: - The seller needs to know how much money he can expect to make from a transaction after everything has been paid. (This is often an important piece of information the seller wants before deciding whether to accept an offer.) - The seller needs to know what to expect from the closing. One of the most frustrating situations a seller faces is getting less money than anticipated. This can reflect on the seller's agent and could hurt his chances for future referrals. Furthermore, it is the agent's job to explain to the seller that there are many parties involved who must be paid in the transaction (e.g., lenders, title companies, escrow companies) in addition to taxes. Invite the seller to compare costs if there are any questions about the fees. For Example: In modern day real estate, the seller may be seeing a negative number in the net figure and there may even be a mortgage or mortgages liening the property. In some cases, the seller will come to closing with money, in other cases the seller is asking the mortgagee, or mortgagees to allow the short sale. Be prepared to be able to offer advice to the seller about recourses that may be helpful to his or her situation.
Net to Seller: Running the Numbers
To calculate how much money the seller will actually receive when the transaction is complete, start with the sale price and deduct all known factors and costs. Of course, the seller must pay off all mortgages so the listing agent needs to obtain the payoff amount from the lender and determine whether any penalties will need to be paid. Remember: FHA and VA loans do not have penalties. However, when dealing with FHA loans, the seller should be aware that the FHA charges a full month of interest regardless of the closing date. So, it is advantageous to close at the end of the month rather than at the beginning. Looking at the list, determine the other costs the seller will pay. Most of these are open to negotiation between buyer and seller, so the agent needs to read the purchase contract carefully to see who is responsible for paying each item. In the case of taxes and insurance, the seller will typically pay for the portion he used until the house is actually sold. This is where proration (covered in Chapter 9) will come in handy. It is important for a licensee to not forget to subtract the brokerage fee (commission). Even if the listing agent is splitting the commission with another licensee as a co-op or buyer broker, the total commission amount usually comes out of the seller's portion (provided the seller agreed to this in the listing contract).
Qualifying Clients: Questions to Ask
When discussing a price range, it is important to also review and discuss the down payment and monthly payment. However, licensees need to also remember that selling real estate is about working with people. The financial part of the sale means nothing if clients and customers do not feel the licensee is taking care of their personal needs as well. Here are a few details licensees should determine: - What services or features are important to them? - What do they expect from the licensee? - What do they want or need in a house? - How many bedrooms do they want? - Do they need a garage? - What style of house or building material do they prefer? - Is a certain school district important? Is public transportation a concern? Note: When engaged by a client, licensees need to take the time to listen to what their clients are looking for, whether they are buying or selling. Discover what the client expects from their agent also.
Showing Properties
When showing properties, there are three areas in which you need to prepare: - Buyer - Seller - Property Of course, responsibilities differ depending on whom you represent as your client. We'll look at each of these shortly. But first, it's important to note that in recent years, the Ohio Real Estate Commission and the Division of Real Estate and Professional Licensing have seen an ever-increasing number of enforcement actions involving real estate licensees providing access to listed property to unlicensed and/or unsupervised individuals. It's critical to point out that Ohio real estate law absolutely prohibits providing lockbox codes, keys, keypad codes, or any other means of access to listed property—residential or commercial—to any individual who is not an active real estate licensee. This prohibition applies to unlicensed assistants working at the brokerage as well. While a licensee may find it convenient to allow a prospective buyer or contractor into a property when the licensee is running late or otherwise unavailable, such action violates the security and sanctity of the owner's property and opens the licensee—as well as his principal broker and any designated management-level licensee in the brokerage—to liability and possible disciplinary action, including license suspension, fines, and required education. Next, watch and listen as Al shares some advice on safety issues related to showing property.
Qualifying Clients: Avoiding Complications
When trying to qualify prospects based on their financial situation, needs and desires, or other criteria, a licensee should be sure not to interject his own opinions or biases. For Example: A couple is looking for a home in a new city after the husband's job was relocated. While discussing their needs and preferences with Jeff (their buyer's agent), school districts are mentioned. Since they are new to the area and have no knowledge or preferences, they naturally ask Jeff what he thinks as a real estate professional. However, if Jeff makes a positive or negative assessment of a school district, he may be opening himself up to a lawsuit or fair housing violation. The best approach in this situation is for Jeff to direct the couple to sources that can provide objective answers to their questions (e.g., the public library, superintendent of the school district). Of course, with the financial qualifications, it is easier to offer advice and guidance because it comes down to simple math and monetary limitations: A particular house is listed at a certain price; the buyers can afford a certain price. However, agents must honor the wishes of their clients as long as it is a legal request. For Example: If a house is listed at $140,000 and the prospective buyer wants to offer $100,000, the agent must present the offer to the seller or the seller's agent. The agent may feel uncomfortable doing this, and may mention to his clients that such a drastic price cut is unusual, but he still must present the offer.