Do You Work With Optional Clients?

By
Real Estate Agent with Keller Williams Realty 0575737

EverythingHere in Texas in our residential purchase contract the state has set up this fun "Option" period usually for ten days and about $100 at risk that puts you first in line to buy a house and lock it up BUT although normally for an inspections period, you can walk away in that period for NO reason at all. Options are FUN!! But what about

Do You Work With Optional Clients?

In romance, a great phrase is, "Don't make someone a priority, when THEY make YOU an option." Namely build mutually fulfilling relationships. COMMITMENT on both sides. Win Win or NO deal. Buyers rep agreement, listing agreement, or a SOLID understanding that you are NOT their part time REALTOR with another REALTOR.

Commitment is not such a bad thing like in marriage or goals or real estate partnerships with agent and client and only may be a problem when you are pointed at the state mental asylum. Don't take OPTIONAL clients, an instance when OPTIONS are NOT FUN.

Your precious energy, time, talent, and money need to be spent with those who say YOU ARE THEIR EVERYTHING!!!

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Rainmaker
161,797
Karen Steed
Tallapoosa, Bremen, Waco, Buchanan, Temple, Carrollton - Tallapoosa, GA
Associate Broker Haralson Realty licensed in GA and AL

I agree we need serious clients. When I first got into real estate, (back in the mls book days) I spent time showing my sister and brother-in-law houses.  My brother in law, using one of my mls books, found a house, called the listing agent, and put it under contract, without calling me.

Rather than a $3,000 commission, he paid me a $300 finders fee.  To his defense, he was pressured by a more experienced agent.  She encouraged him to"not let this house get away."

 

Feb 15, 2011 12:50 PM #16
Rainmaker
279,938
Steven Pahl
Keller Williams Tampa Properties - Tampa, FL
Real Estate Consultant Tampa, FL 813-319-6423

Optional clients are not an "Option."

Feb 15, 2011 01:10 PM #17
Rainmaker
65,644
Brenda & Ron Cunningham
West USA Realty - Phoenix, AZ
Realtors, Homes for Sale - Phoenix Metro

We don't have the same in Phoenix, but they can get out during the inspection period.  But I don't work with clients that are not appearing to really want to buy.  I have seen those type of buyers long ago and you learn signals which help you to know who to work with!

Feb 15, 2011 01:40 PM #18
Rainer
32,390
Patrick Henry
PMZ - Stockton, CA
PMZ

The question regarding your worth for your time and energy as an agent or broker should always and continuosly be checked and reevaluated while you work in order to avoid wastingyour time. However, sometimes it is inevitable, and sometimes it can be foreseen. 

Feb 15, 2011 02:00 PM #19
Rainer
56,607
Dennis & Terri Neal
RE/MAX, Big Bear - Big Bear Lake, CA

In California there are so many contingencies built into our contract that essentially every client is an "option client". This is just how business is done so prequalifing our clients is vital.

Feb 15, 2011 02:00 PM #20
Rainmaker
124,117
Bradenton, Sarasota, Real Estate ~ The Serena Group
Bradenton-Homes, Experts - Keller Williams Realty - Bradenton, FL
Selling Real Life Dreams in Paradise!

Committment - from seller/buyer to agent ... and from agent to buyer/seller  IS everything!

Feb 15, 2011 02:53 PM #21
Rainer
36,056
Brad Hornshaw
Brad Hornshaw Realtor Lynnwood, Bothell, Everett - Lynnwood, WA
Realtor, Listing Agent, Buyers Agent, Investments
Hi Gary Good post. I tell them it all comes down to do you want to be on the A list or the B list..........Brad
Feb 15, 2011 04:46 PM #22
Rainmaker
198,760
Todd Anderson
You In Park City group - Keller Williams Park City Real Estate - Park City, UT
Park City | Deer Valley Real Estate

I can't believe that a seller would actually accept an option for $100. What a great way to put off a real buyer.

Feb 15, 2011 08:03 PM #23
Ambassador
1,556,750
Gary Woltal
Keller Williams Realty - Flower Mound, TX
Assoc. Broker Realtor SFR Dallas Ft. Worth

Sally: The option period in Texas is for inspections or for whatever you want and is a fill in the blank for the number of calendar days and the non-refundable option fee if you do bail. But you can bail for just wanting to bail. It is very strong on the Buyer side but also NEGOTIABLE by the seller.

Feb 15, 2011 08:06 PM #24
Rainer
34,990
Diana Mehnert
Coldwell Banker Harris McHaney & Faucette - Bella Vista, AR

I agree, and I recently dropped a client for this same reason.  You want me to make a commitment to you but you won't make that same commitment to me.  Yeah, not happen here.

Feb 15, 2011 10:48 PM #25
Rainmaker
996,143
Karen Anne Stone
New Home Hunters of Fort Worth and Tarrant County - Fort Worth, TX
Fort Worth Real Estate

There seems to be a lot of confusion here about this word "option" in our Texas contracts.  We are not talking about an "Option to Purchase"... with the buyer giving the seller $100 FOR that Option to Purchase contract.

Every contract that I have had over the last ten years has had as part of it... a seven to ten day "option" period.  Usually during that time, the buyers gets the home inspected, and if some nasty stuff is found, the buyer usually tries to negotiate with the seller about the individual items in that Home Inspectors list that are important to them.

In the great majority of the cases, an agreement is reached.  Some GFCI's are installed, some foggy air-spaces in some double-pane windows are replaced, or other such typical smaller things on an inspectors list.

If that is the case... then at the end of the "ten day option period"... the contract automatically goes from "option" to "firm"... and the home is considered "pending"... or sold, and waiting for financing and other things to be completed.

Now... during that ten day "option" period... which IS primarily for inspections... it is true that the buyer can cancel the contract for any reason whatsoever.  Any.  When I moved to Texas from Ohio, it took some real "getting used to"... but really, it is no big thing here.  99.5% of all residential re-sale contracts have this clause.  And... $100 is a very, very typical amount that the buyer gives the seller.  It is more "nominal" than anything else.

And... since ALL contracts that would come in have this "option" period in them... there is NOT the thought of when a seller accepts a contract with this in it (as they all contain it)... that it will "put off a real buyer."  Not... at... all.  And... neither is there a sense of that we are "working with an optional buyer."

Every state is different.  All have their own "quirks" that may seem weird to those agents and Realtor from other states.

Also... if for some reason, the buyer decided to "cancel" the contract during the option period... for ANY reason... the home goes back on the market, and the NEXT contract/offer that comes in... will ALSO have this "seven to ten day option period" in it.  It is normal in Texas.

Again... it should not be confused with what some are seeing as an "option to purchase."  It is a normal purchase agreement with an "option clause."

Feb 15, 2011 11:27 PM #26
Rainmaker
828,774
Marte Cliff
Marte Cliff Copywriting - Priest River, ID
your real estate writer

Interesting discussion. At the time I left selling, in Idaho buyers still relied on contingencies to get them out of a contract if they changed their minds. I should check to see if that's changed.

Feb 16, 2011 12:53 AM #27
Rainer
5,977
Peter Michelbach
David Grace R/E - International, INT

Gary,

interesting points, so true, thanks for sharing... similar in Australia as well. Good luck!

Feb 16, 2011 08:26 AM #28
Rainmaker
362,422
Sylvie Stuart
Keller Williams Check Realty 928-600-2765 - Flagstaff, AZ
Home Buying, Home Selling and Investment - Flagstaff, AZ

I love this post! Yes, no working with optional clients!! Our time is too valuable!

Feb 16, 2011 04:47 PM #29
Rainmaker
580,854
DeeDee Riley
Lyon Real Estate - El Dorado Hills CA - El Dorado Hills, CA
Realtor - El Dorado Hills & the Surrounding Areas

Gary, I agree with you so much.  I'm not sure on the option part as it is not something we have here in CA, but the message on client commitment is universal. I recently tried to communicate this to a client who I was told likes to work with the listing agent on properties but agreed to have me write a property up if I showed it to him.  I really don't think so! 

Feb 17, 2011 01:26 PM #30
Rainmaker
109,923
Carolyn Shipp
Source 1 Real Estate - Mineral Wells, TX
Mineral Wells Texas Real Estate

I am in Texas as well...a little further west than Karen, and see the option period filled in quite frequently.  The days are usually about 10 and the amount is around $25 here.  I've never seen it as an inconvenience or a "put off" to the seller.  The house is marked Active Option in the MLS and then once that period passes marked as Active Contingent or Pending depending on what is going on.  Since the house is still listed as Active, it's never taken off the market, so it really doesn't affect the seller.  I know there are some agents that won't show the property if it has a contract already on it, but again, none of my sellers have had a problem with it.  That option period only lasts a few days and there are plenty of other things that will allow a buyer to back out if they so choose...contingencies...financing the number one reason I see.  If an inspection or something detrimental to the property is seen, that is re-negotiated and an addendum completed anyway.  Sometimes it just makes the buyer feel better.  Plus, I've had an occasion or two where it didn't matter.  Option period came and went, all was fine, but in the end the buyers backed out.  Just got really cold feet and couldn't bring themselves to go through with the purchase. 

Feb 17, 2011 02:52 PM #31
Rainer
65,414
Alyce Martin
The Realty Group, LLC - Albuquerque, NM
Albuquerque - THE Place To Be!

Gary - oh Lord, I could write a book - maybe I'll just write a blog instead.  You are 100% on the mark.  I'm done with wishy-washy, noncommittal-make-believe clients.  I'm the real deal.  They need to be too. 

Feb 17, 2011 05:37 PM #32
Rainmaker
996,143
Karen Anne Stone
New Home Hunters of Fort Worth and Tarrant County - Fort Worth, TX
Fort Worth Real Estate

Carolyn in #31:  Thanks for the back-up on my comment in helping define the Texas "option" period... and in trying to show that it is nowhere near the same as an "option to purchase" contract.  Lots of confusion going on here.  Have a great weekend !

The buyer/client IS committed when they write the offer.  The Texas "option" portion of our purchase is NOT the same as working with "optional clients."

The best example would be if an inspection during the "option period" came up with severe (but hidden) foundation damage.  If the report is back in the buyer's hands during the ten-day option period... (which it better be)... then the buyer has the "option" of canceling the sale.  The seller gets to keep the nominal option fee... and both buyer and seller go their separate ways.

If this is invoked... the most time it can cost the seller... is the seven to ten days period, or whatever time period they have negotiated.

Feb 17, 2011 05:40 PM #33
Rainmaker
351,399
John Mosier
High Country Realty - Prescott - AZ - Prescott, AZ
Prescott's Patriot REALTOR & Land Man 928 533-8142

The option you mention in your article does not appear to be a part of our purchase process here in Arizona unless I totally misunderstood your post.

I will not work for clients who are not willing to work with and stay with me. I also will not work for clients who have such a long list of wants or needs that cause there to be no solution. Win-Win or no deal.

Feb 18, 2011 12:06 AM #34
Rainmaker
996,143
Karen Anne Stone
New Home Hunters of Fort Worth and Tarrant County - Fort Worth, TX
Fort Worth Real Estate

John in #34:  The willingness of clients to work with you has nothing to do with this "option" clause in Texas.  It is part of an agreed-upon contract, and is simply a contingency that has to be addressed by the buyer in the first seven to ten days of the purchase agreement, or the contract automatically becomes FIRM.

It simply gives the buyer seven to ten days to get inspections, and if, during and only during that time, an item of concern comes up so serious that the buyer feels it impairs the purchase, the buyer may dissolve the contract.  The buyer in question is not wishy-washy about either committing to purchase, or about working with a certain agent.

Contracts vary, and sometimes greatly so, from state to state.  The "option" clause has nothing to do with "wishy-washy" buyers.

Feb 21, 2011 01:06 AM #35
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Gary Woltal

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