I am writing this as a companion piece to my previous entry, “The Death Of The Open House”. Initially I was going to title this entry “The Death Of The In-Person Offer Presentation”, but then I thought writing about death too much might get depressing. Also, the open house blog seemed to strike a nerve and a couple of unexpected things happened.
The first was that several people responded to it, which in and of itself was surprising because it meant people actually read it.
The second surprising thing was that the response was much more divided than I would have thought, with several agents I respect very much taking the counter argument that open houses still serve a useful function in our industry. It was heartening to see such eloquent and passionate opinions on a subject that I admittedly may have treated in a slightly tongue-in-cheek tone.
The polarizing response gave me pause, and prompted me to take a look at another one of our venerated institutions, the in-person offer presentation, with a much more measured tone. So here goes…
I should state off the top that I believe advances in technology and the events of the past 18 months have rendered in-person offer presentations mostly obsolete (assuming that a seller can operate a phone and open an e-mail, which I will concede isn’t always the case).
I also believe that virtual offer presentations are the superior option, from a logistical, safety and results-oriented perspective. As we’ve seen over the past year, prices have exploded to record levels using nothing but virtual offers, so the old argument that you can get a higher offer in-person carries far less weight than before.
So what to make of in-person offers moving forward? For starters, I put myself in the shoes and thought process of agents that have been in the business far longer than me.
For agents that have worked many years before the advent of digital signatures, the in-person offer night was a central part of the work experience. It was ingrained, comfortable and they had mastered it. In those shoes I would certainly be reluctant to let it go, especially If I wasn’t tech savvy or comfortable with the new way.
In-person offer presentations were also SOCIAL and afforded human interaction, and I would never diminish that. I can remember being in our brokerage on nights when there were multiple offer presentations happening, and the buzz and excitement was palpable. The phone ringing off the hook, nervous sellers coming in, agents coming and going en masse and chatting with colleagues they hadn’t seen for a while. It was FUN, and as human beings that’s something we need and crave.
So there is definite social value. Imagine having a burger and beer alone in your backyard. Then imagine having the exact same burger and beer on a busy patio. It will always taste better on the patio.
From the perspective of human interaction, I think it’s ok to bring back in-person offers in a considerate and safe way. So please:
1) Do it at the brokerage CLOSEST to the house, where there is a professional (and professionally sanitized) environment and agents don’t have to sit in an idling car on a freezing winter night. I still remember (and am still annoyed by) the offer night when a Markham agent listed an Upper Beaches home and then held the offers at his brokerage in MARKHAM. And this wasn’t an isolated incident.
2) Do it as early in the day (or evening) as possible, when everybody has more energy or kids to put to bed.
3) No listing agent power trips! Be respectable, keep things moving and cut the shitty low offers loose right away, so people don’t needlessly waste time. Please and thank you.
There’s that word again, TIME.
As a society, we need to embrace technology when it enrichens us and provides us with more time, the most precious resource there is.
You may miss going to a Blockbuster store and eating the stale free popcorn, but nostalgia aside that doesn’t make it a better way to rent a movie when you can access just about anything from the comfort of your couch.
And never forget Blockbuster could have purchased Netflix for $50 million back in 2000, but their CEO was too short sighted to acknowledge the future of online streaming. A link to a fascinating article about the ill-fated meeting is below.
Before we look closer at virtual offers, I want to establish 2 points.
1) I’m not the Howard Hughes of real estate, holed up in a darkened screening room with scraggly hair and filthy long fingernails. My favourite part of the job has always been viewing houses with my buyer clients. I love touring houses and the interaction with people that goes with it, and I hope this goes never goes away in spite of whatever advances technology brings.
2) For better or worse, the move to virtual offers is part of an inevitable, over arching generational switch. I work with lot’s of first-time and younger buyers – call them millenials / gen y or z or whatever, but they were all born with a phone in their hand.
What I have observed is that they have never physically gone into a bank, they text / whats app instead of talking on the phone, they shop online and do just about everything else on an app. They want (and expect) to buy real estate in the same manner, and would find it strange not to do so. It’s that simple.
With this established, let’s now turn our focus to virtual offer presentations. Aside from the element of social interaction, I believe virtual offers are superior in every other way. Consider the following:
Houses With Virtual Offer Dates Sell For More Money
I know this point will be debated, but one need only look at the past year. From June 2020 to June 2021, using exclusively virtual offer presentations, we saw record high monthly sale prices established in NINE of those months. Clearly the system works very well, and agents (and their buyers) can be “squeezed” for every last dollar just as effectively over the phone as they can in person.
Another factor is that virtual presentations receive more offers than their in-person counterpart. Consider a 15 offer melee on that hot Leslieville semi. There will always be a handful of misguided (i.e. uneducated) buyers that think there is merit in submitting an offer at the ASKING PRICE.
I may want to skate on Auston Matthews’ wing, and these people may want to buy a house in Toronto at the asking price in multiples, but sadly neither will ever happen.
The agents that put together these offers know it too (I hope), but because the virtual process is so easy they are willing to do it, usually to get a BRA signed or to start “educating” the buyer about the reality of the market. Because it is so easy, you get more of these “dummy” offers virtually than in a brick and mortar setting.
These “dummy” offers are extremely valuable to a listing agent, as they boost the offer count and inflate the ultimate sale price by pushing the offers at the top of the heap to be even more aggressive than they otherwise would have been. It’s a fairly simple equation – more offers equals a higher selling price.
Now, at this point somebody might be wondering what happens if a seller wants facetime during the sale process. No problem at all! If a seller wants (or needs) face to face interaction, they are absolutely entitled to that and there are a couple of fairly easy solutions to achieve this.
The first option is that their agent physically brings all the offers to them, and they can then review together and sign in person. The second option is to set up a Zoom call for “virtual” facetime to do the same thing followed by digital signatures.
Virtual Offer Presentations Are Logistically Efficient And Practical
The GTA covers a vast geographical area and an incredibly diverse population, with people buying and selling all across the city. The notion that people will live within the same area for their entire life is no longer the case.
This means that hot Trinity Bellwoods property is attracting offers from prospective buyers in Durham, Markham, and Hamilton. It means that cottage country property is attracting offers from multiple Toronto buyers. That’s hundreds and hundreds of kilometres reduced to ZERO by a virtual platform. This will allow our industry to continue to flourish in the new world order.
The virtual offer review process is also much quicker, and can be conducted much earlier in the day with everybody in the safety and comfort of their own home, making the transaction much more pleasant for buyers, sellers and agents alike.
Wire Transfers Change The Game
One of the most unwieldy aspects of being a buyer agent was dealing with a physical bank draft for an in-person offer presentation. Consider this very common sequence of events on any given offer night:
1) The buyer goes to the bank on their lunch break to get the draft.
2) Buyer agent then drives downtown in the mid to late afternoon to pick up the draft (buyer has a newborn baby and can’t physically be at the brokerage or parked outside of the house).
3) Buyer agent takes the draft to the offer presentation, but loses to another offer (the reality of the Toronto market is that you lose more than you win).
4) It’s now 10 pm at night, so buyer agent holds onto the draft for the night.
5) The next morning buyer agent drives downtown again to return the draft to the buyer.
6) The buyer returns the draft to their bank on their lunch break.
This is comically, horribly inefficient.
Now consider this scenario, for a virtual offer presentation.
1) Buyer agent submits offer via e-mail at 2:30 pm. At 4:00 pm buyer agent informs the buyer they got the house! At 4:30 pm the buyer goes to their bank and wires the deposit directly into the brokerage trust account. Done deal, and they can still get to the bar for happy hour and skip 5 additional steps.
Virtual Offer Presentations Are Environmentally Friendly
We are facing an existential environmental crisis, and it is incumbent upon all of us to do whatever we can to leave the planet in working shape for future generations.
In our real estate world that means going paperless, and virtual presentations and digital signatures make this possible. A virtual offer presentation can accommodate an infinite number of offers and not require a single piece of physical paper.
Now let’s look at an in-person offer presentation, where agents are normally asked to bring 2 physical copies of their offer. 123 Main St has 10 offers, which means 9 offers are rejected. That means over 200 pages of paper have been needlessly printed, and that’s just for one property!
Virtual offer presentations also allow everybody to work from the comfort of their home and reduces the need to be in the car driving, thereby reducing damaging carbon emissions from gasoline consumption.
As we head towards our busy fall market it will be very interesting to see how offer presentations are handled. Old habits always die hard, but if there’s one thing history has taught us is that even the most gentle current will eventually crack a rock.