If you are signed with an agent, as in, you have an exclusive buyer representation agreement, they will expect your undivided atteniton. If you have been talking with one particular agent, but do not an exclusive agency agreement with them, then ask away. I suspect it is the latter.

If you are free to seek additional advice, I can send you a recent Rogers Park market update, which I do monthly. pfugiel@sbcglobal.net Keller Williams agent Lincoln Square.

Best wishes

If you are seriously stuck on that property, I agree and disagree with Kevin. I disagree on waiting but I do agree on going low on offer> Get as many concessions from seller as you can. If not, just resubmit another offer at a little higher price.

I know quite a few developments that have gone under auction to sell 40%-50% below the original asking price.

Again, if you wait you will lose out on the low mortgage rates. You may get a better price but your rate will be higher.

It all balances out.

Kevin... you're welcome.

thanks for the "thank you".

Wow! Thank you all for taking the time to reply and share your advice. :-)

Kevin, I have been following the Rogers Park market for a while and am leaning towards renting another year because I expect further price reductions. Do a trulia search for foreclosures in 60626, there is a bunch, and this will drive prices down. Developers are hard pressed, I know of at least one development that was foreclosed on over by the metra station. I bet the developer you are dealing with will move on price. I am sure they will not be offended if you lowball, worst case they will just say no and you can submit another bid if you want. Look around if you are not getting a good deal, you will find tons of options in Rogers Park. I talked to an agent at one development’s open house over by the lake and he said they would come down 20k, without me even asking. Another agent at an open house for a resale mentioned a likely price drop of 80k on an overpriced listing.

Hi Kevin,

It sounds as if your agent is using a blanket assumption based on past experience, rather than giving advice specific to this particular property.

Yes, it is true that developers can be hesitant to negotiate. In hot markets, they don't really need to. In this one, especially in an area that is still gentrifying as is the Howard station area, it would be foolish to not at least even attempt a negotiation. If this is one of the few remaining units left, even better, because a lower price won't cause the dreaded domino effect of the developer having to lower all of the other units' prices in order to move them.

As for not trusting your agent's market expertise, be honest with her. Hopefully she will be open to hearing your concerns. I know that if my client did not trust me, I would want to know. There are so many wary buyers these days; the fact is your mistrust may have nothing to do with your agent and everything to do with the saturation of gloom and doom. It is very difficult for any agent, no matter how credible and experienced, to overcome the black cloud hanging over all of us. Regardless, whether your uncertainty is based on the toxic environment of a spiraling economy or the agent herself, share it with her. You may find that she has information to offer you that will ease your mind.

Finally, as to what percentage of the purchase price you should offer, tough to say. There is too much unknown here to make an educated guess. This is where your agent can really guide you, since she has access to alot of the data you will need in order to formulate an offer.

Good luck!

Dear Kevin,

I agree with Wayne's response below with respect to not trusting your agent. I would suggest that if you can not get to a point of really trusting your agent's advice and you still want advice from someone else, I'd first suggest that you maybe speak with your agent's Managing Broker (unless your agent is the Managing Broker of their own real estate brokerage). Managing Brokers tend to have more experience and expertise than most real estate salespersons. But if you speak with the Managing Broker and still can not get to a significant level of trust with anyone at that real estate brokerage, then you should probably consider getting a referral to a completely different agent and/or real estate brokerage.

And with respect to both Evan's and Jeremy's offers to discuss negotiating this situation, at this time I would decline their offers to assist you if I were you. Or if you would like to take them up on their offers, then you should have your agent contact either one of them. Both Evan and Jeremy know that since you already have an agent who you have been working with, then if you were to pursue this property with one of them as your agent then there is a question of "procuring cause" with respect to your transaction.

This "procuring cause" question does not really affect you in terms of how you'd proceed with attempting to purchase a property, but it will affect which real estate agent is considered to be representing you and which real estate agent is eventually paid as a result of assisting you with your purchase. The buyer's agent is typically paid a portion of the listing (seller's) agent's commission.

While anyone can and should answer your general questions about whether or not activity in the market is picking up and what's a fair percentage off of the listing price to offer, Evan and Jeremy's offering to help you negotiate your offer while aware that you already have a real estate agent that you've been working with (even if your trust level of said agent is low) is "borderline" unethical behavior. It's similar to (but not exactly analogous to in this particular situation) in a legal proceeding having an opposing party's attorney contact you directly rather than the opposing attorney contacting your attorney.

Talk to and be firm with your agent about how you'd like to proceed. If you can't see eye to eye with her ask to speak with her Managing Broker (assuming this is someone different than your current agent but in the same real estate brokerage) to see if they can assist you. If you decide that you'd prefer to work with a different company altogether, then get some referrals from your family and friends or neighbors about who they've used for their real estate transactions and liked in the past. If even that fails, then I've included a link to a website with some general information about choosing an agent from scratch. Good luck to you in your home search.

Sincerely,
Christopher Thomas
Broker Associate, Sudler Sotheby's International Realty
773-418-0640 (cell)
christopher.thomas@sothebysrealty.com
http://www.mayagentchris.com

Hi Kevin,

Your agent should provide you with comparables. Most agents, including myself, have an opinion regarding price and terms. Our opinions, however, should not cloud our fiduciary responsibility to our clients. I would look over the comparables that your agent has provided to determine what is a good price. I had a deal in Rogers Park recently, and we found it very difficult to find comparables for a particular property within the past 6 months. This in itself tells you volumes about the market. If there are too few transactions sufficiently similar to the property you are considering, there is likely a shortage buyers out there buying that type of property. I would view this as an opportunity for the buyer.

It is true that many developers do not want to lower their prices. If there are six units in a building, all listed for $280K, and the first one closes for $240k, then the value of the remaining 5 is affected. This means that the development is going to be short a cumulative $240K off it's original pro forma. In this example, you see why the developer may be more resistant than your average seller to negotiate. If it's the developer's last unit, they may be more inclined to deal.

Nonetheless, eventually even this developer will have to deal with market realities and either reduce price and swallow the loss or pursue an alternative business strategy (perhaps rent the building out).

From the tone of your question, It seems as though you may have a deeper problem than just this particular property. You and your agent need to develop more trust. You need to know that your agent has your best interest at heart. If you have cause to not believe they do, discuss the issue with your agent. If you can't get past the lack of trust, ask your family and friends for an agent referral. You will find the process of buying a home is a bit stressful, but does not need to be overly complicated and, in fact, can be quite enjoyable and exciting.

Best of luck and always happy to be of service.

Dear Kevin,

Your real estate agent works for you. You are effectively their boss in the sense that the agent is there to help try to implement your desires and wishes. If you want to make an offer that is less than the listing price, then your agent is there to support your efforts to do so. Support is not blind obedience, but offering your information and expertise to support your desired result.

Ultimately the agreement that will (or will not) be reached will be between you and the seller. The agent is just there to assist your negotiating strategy. If the agent thinks that your tactics will not yield you the ultimate result that you desire, then the agent should tell you so in no uncertain terms.

I would agree that I am receiving a few more calls than I have been receiving over the last couple of months, but that is not unexpected due to the warming trend (literally) that occurs in Chicago and in Chicago real estate as we move toward Spring.

Fair is determined between the buyer and seller- not the agents. In this particular market, I'd be very surprised to hear that a developer would not look seriously at all offers (even ones that are significantly short of the listed price). Be clear and firm with your real estate agent, and ask them for their objective advice about the offer you want to submit. But the offer is yours to determine.

Good luck.

Sincerely,
Christopher Thomas
Broker Associate, Sudler Sotheby's International Realty
773-418-0640 (cell)
christopher.thomas@sothebysrealty.com
http://www.mayagentchris.com

I have to agree with those who answered before me.

In today's market, negotiation is alive and well. While many developers don't like to discount their product (who does?), they have been more willing in recent years, just to jumpstart sales, or complete sales in a particular phase of the development.

Many developers, in our area, are hesitant to negotiate the actual purchase price, since that number will be seen by other buyers in the project, and they like everyone to feel as though they were all dealt with fairly. For those developers, they're often willing to negotiate on "upgrades" (for example: free granite, free stainless package or perhaps throwing in a free garage parking space) as those are things that will NOT show up to the public view.

Kevin,

I am a proponent of client loyalty to an agent and would not encourage you to leave an agent that you feel is providing good service to you, but I think that there is always room for negotiation. Until you negotiate you will not know the bottom line.

My negotiation strategy would differ from the agent you are speaking of.

If you would like to hear more, give me a call at 773-870-9651.

Jeremy Veenstra
773-870-9651
Krain Commerical and Residential Real Estate
Jeremy at Krain-Chicago dot com (substitute the @ and . please -- I am trying to avoid being spammed :)

Wow Kevin. Am I a perfect candidate to help here or what (..I'm thinking to myself)? I am a resident of Rogers Park and can tell you its the biggest bang for the buck anywhere. However, I can tell you to reference the weblink below of my interview with the Chicago Tribune just last week. It is too large a story to encapsulate within the posting. You just need to be very careful as to the development into which you buy.

It is not necessarily the case that builders are unwilling to negotiate. Some are, and to a large degree. Some are not, or just do not have the additional flexibility. It is still a buyer's market Kevin. Just try and understand that the sellers have been soured just a bit from the greed and angst over the entire housing debacle. Everyone should come out with a good deal even within this market. Any buyer/buyer's agent right now who approaches a seller with a caring, courteous, understanding and helpful attitude will get the best deal...much better than a discourteous or unpleasant approach. Also, earnest funds and contigencies need to be approached with great care. Protection is essential as developers are not giving back earnest funds.

A fair % bid is whatever feels right. If a SS or FC property, within 85% of asking is a general rule of thumb (this is very subjective and just depends). If the agent can provide supporting comps that illustrate better or equivalent property for less cost, then offer right around what those properties are closing for - or a bit less.

If you need further guidance regarding this, please call me. i really can help if you are buying here and would be glad to provide that support if needed knowing what many of us have been through. Good luck.

Hi Kevin,

I respectfully disagree with what your agent told you. Frankly, even if she believes it, her job still requires her to try and negotiate the best possible terms for you.

I would be happy to help you develop a negotiating strategy, just give me a call at 312-953-5205.

Good luck,

Evan