Home Buying in 08820>Question Details

Manoj Joshi, Home Buyer in East Brunswick, NJ

I have seen that many edison realters deliberately push buyers for bidding more than the listing price. Is it allowed in Realter's code of conduct ?

Asked by Manoj Joshi, East Brunswick, NJ Thu Apr 25, 2013

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FYI - for single family homes listed in North Edison in 2013 and already closed, the average sales price to list price ratio is 99% - the average! If an agent told you to offer above list price on a recently listed home, then it was quite possibly the right advice. The most offers I've seen on a home so far this year in North Edison is 11 and that home was on the market for less than a week. If the agent told you to offer above list price on a home and you find out later that it ends up selling well below asking, then you might have a gripe but not likely this will happen.
2 votes Thank Flag Link Thu Apr 25, 2013
"Deliberately push buyers for bidding more than the listing price"

O.k.. maybe the Realtor has been told that there are multiple offers, maybe the comps would say, house is priced perfectly and you should pay the price or more to get the house. it may be worth it.

You generalize Edison realtors. Edison is hot. Has been a hot market and the inventory is thinning out. when a "good" house hits the market it is probably the Realtor telling you, well.. you missed 4 houses already, so if you want to buy one.. then get in the game. Why are you asking about a realtors code of conduct? Are you looking to file a complaint that your Realtor told you to go above asking to get a house, rather than bid low and be in competition with 5 other people, negotiate it up and possibly not get the house you want?

There is nothing wrong with being realistic with people. Prices are low. the market is moving like crazy and I have more disappointed buyers losing homes all the time. But of course, it is up to the buyer to decide what to offer. It is up to the Realtor to provide comps on the house and area to help the buyer make a sensible offer.

Explain a little more on what happened to you in particular to clarify what you think was done to you that was wrong.
2 votes Thank Flag Link Thu Apr 25, 2013
A realtor's responsibility is to do his or her best for her client. In a particular market where a property receives multiple offers it becomes necessary to offer more than asking price--that is if the client really wants that particular home. From an ethical perspective, the agent is doing the right thing for his/her client.
2 votes Thank Flag Link Thu Apr 25, 2013
Your question is a little too broad. If the agent is doing what is necessary for their buyer to get their offer accepted, then why would there be any problem with this. The way the market is going this year, the properly priced homes in good condition are getting multiple offers and many are selling above asking price. Do you think it would be more acceptable if the agent told the buyer to put in a lower offer and then a different buyer gets the home?
2 votes Thank Flag Link Thu Apr 25, 2013
You really dont have to pay more than the asking price nor do you have to go by what your realtor is saying. iT ALL depends on how much do you want the house. If you are in the present market looking to buy a house for sometime, you yourself will realize that many good homes are going for more than the asking price and are sometimes more than the appraised value. So compare all the homes sold in the area in last 3-6 months and depending on how anxious you are to buy and how much you like the house, you will come to your decision. Then consider what your realtor is saying and make the offer.
1 vote Thank Flag Link Thu Sep 26, 2013
Some accurate answers, some not so accurate.

“Most commissions are based on sales price, so the higher the sales price of the home, the more money the agents make. “

Not really the motivation here at all. If you buy a house for $10,000 more than you wanted to offer and on a 5% commission, that is $500 more If you sold your own listing. If you sold someone else’s listing it is $250. Then the office split let’s say the average 50% the agent will see $125 on an additional $10,000 increased offer. So let’s say that money is not the motivation here.

Next, the worst thing any buyer can do is sign an "exclusive buyer agency agreement” they are horrible. The document will lock you into one realtor and even if you go to another realtor, that guys waves the agreement in their hand and yell’s “I GET PAID” "I GET PAID" not him. You signed an agreement. So people talk about money.. that document is all about money and the Realtor that has you sign it. money for that realtor. I would run if I were a buyer and the Realtor presented that to me.

There is absolutely nothing a so called “exclusive buyers agent” can do to get you “the best price” at the “most favorable terms for a home. NOTHING. It annoys me that people talk about ethics and all this stuff when people advertise that they will get them more and better terms. Because they have a "tag line". Nonsense. Sellers want to sell their homes, negotiation is part of that and agreeing to a price for a home. The seller is not going to just give you the house for less or better terms because some guy says he is an "exclusive buyers agent". Just a bunch of baloney.

Find an agent that you are comfortable with and feel that you can trust, do your due diligence on the properties in the area and make a reasonable offer. Period. Your agent will be able to handle the negotiation and get you a great price on a home. Part of the reason is that I / we want your referrals. If you have a good agent that works on your side, then all should be just fine. You don’t need a person waving a flag and yelling how they will get you the best deal, because the deal will be the deal. Buyers agent or dual agent. The numbers are going to be the same.

Buying a home is a great experience! Be smart, be educated and do your due diligence.
1 vote Thank Flag Link Thu Apr 25, 2013
Ethics is without a doubt the MOST important aspect of an agent's business. Any agent who doesn't have ethics near and dear, should not be dealt with. With that said....we're entering now into more of a seller's market. When location, price and condition are desirable, you stand a much larger chance of entering into a multiple offer situation. If your agent has knowledge of multiple offers he should inform you so you can make the most informed offer however the offer you make is entirely up to you. It's been my experience that when there are several offers, the property tends to sell for 1-2% under, at or over list price, I guess about 95% of the time. Again in terms of location, price and condition, many times the buyer just needs to lose out on several offers to get a feel for the market. Many buyers believe they "hold the cards" and will insist on offering up to 50% off list price. Those days are rapidly dwindling. Don't get me wrong, good deals are still out there. If a home has been on the market for months, have had many price reductions, you stand a much better chance of getting the property well under list. An experience agent can give you advise on when to come in under, at or over list but again....it's your money, not theirs and offer what YOU feel comfortable.
1 vote Thank Flag Link Thu Apr 25, 2013
Hi Manoj,

The realtor can only show you the facts of similar houses sold in past 3-6 months in similar area which is called as comparables. Based on which the buyer can decide to quote on the house. It also depends on several other factors as well.
If you need any further assistance, I will be more than happy to assist you.
0 votes Thank Flag Link Fri Jan 2, 2015
Never, never work directly with seller's agent.. one of the realtors that has answered this question right here is untruthful, dishonest and actually violating NJ Realtors Code of Conduct.
0 votes Thank Flag Link Mon Dec 15, 2014
It is absolutely our job to tell our clients what we think a correct price is!
When it becomes evident that a property is going to sell above list, we tell our buyers!
0 votes Thank Flag Link Thu Sep 26, 2013
If the buyer has asked for the Realtors advice on what they must do to have their offer accepte, and that is their best advice, I don't see the problem.
If they give their honest and best advice after it has been requested it would seem to me they have done the right thing. There have certainly been situations where buyers must offer higher than list to get their contract accepted lately! If a property goes for over list and your Realtor did not advise you of that possibility then wouldn't you feel you did not get good advice?
0 votes Thank Flag Link Sun Apr 28, 2013
List price is already above the appraisal price
Flag Sun Apr 28, 2013
The realtors must do their due diligence in finding true comparable market analysis for their buyers. If the house is priced below market value, chances are that it may get more than asking price. A realtor must definitely advise the buyers to the best of the buyers interest.
0 votes Thank Flag Link Fri Apr 26, 2013
All that realtors can do to help buyers get the house they want is educate them about market conditions and what homes are selling for so that they can hopefully make an offer that will be accepted. With lower inventory of homes and more demand for them from buyers, many homes are getting multiple offers and often are selling at full price and higher. .
0 votes Thank Flag Link Thu Apr 25, 2013
Most commissions are based on sales price, so the higher the sales price of the home, the more money the agents make. My company is a flat-fee Exclusive Buyer Agency, so we get paid the same commission regardless of the sales price of the home. This eliminates that conflict of interest.

If the agent your referring to are representing the seller, than it's their job to try to get more money out of the buyer. The agent is doing their job and doing it well.

The vast majority of Realtors are honest people, but there is a lot of confusion about buyer/seller representation and who works for whom.

The best place for buyers to start is to hire an Exclusive Buyer Agent to represent you. EBAs represent home buyers only, and work to get you the best price and most favorable terms. You can go to NAEBA.org for a referral to an EBA in your area.

I've had a book published called "Buying a Home: Don't Let Them Make a Monkey Out of You". It will be the best $7 you've ever spent.
0 votes Thank Flag Link Thu Apr 25, 2013
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